Wake up, Buy Here, Pay Here people. It's a beautiful day. Go grab yourself another cup of Joe and say hello to Jim and Michelle Rhodes on the Buy Here, Pay Here morning show. Take it away, you two. gracious uh we are like um I'm ready to go camping I've got my fishing shirt on it's time it's camping day we were going to be gone today and decided to hold back and do podcast wrap up a couple of emails and important conversations that are in motion and then hit the road and and uh we're headed for a lake that we visited last year and uh it's above 9 000 feet in elevation it'll be chilly yeah we've got all the stuff packed which is nice because it's like 100 degrees at home right now so um chilly as in it'd probably get down to 40 yeah um at night which I'm super super excited for and it's been a really interesting uh um jim and I prepare for these things very very very differently I get super excited about like I'm planning meals and like what kind of ex I'm planning for experiences more than anything it's like what kind of things do I want to experience while I am there and what can I bring that won't take too much room that will enhance or create the experience so There's a lot of different fun stuff that I, you know, I brought a speaker and Jim's like, why aren't we just going to be listening to the sounds of the woods? And it's like, because I went camping once and it was really, really cool. This person had this, like a karaoke machine that did laser light shows. We put it up underneath the tree so you could see all the lasers through the leaves and then had music playing. And so we have this little nighttime sky thing that we use at night and I brought it. And it's going to have to plug in. But I just want to try to experience that because Jim's never experienced anything. Honey, you can do that in our backyard. Oh, I can. You can do that in our backyard. What you can't hear is screeching bald eagles. So you missed the chance to hear. In the middle of the night? No, no. Cause this is a nighttime activity. So, okay. But all right. So we're excited to go camping. We are. We have different motivations. We have different motivations. Jim is fishing. I'm chilling. Like it's so nice. Cause no cell service. It's like completely, completely, completely unplugged. I remember last year when we went, we had to drive about an hour and then all of a sudden our phones are going bing, bing, bing, bing, bing, bing, bing, bing, bing, bing, bing, bing. I mean, I think you start losing service well before you get up. I mean, even to the dirt road that goes up to the lake. So it'll be, we're definitely going off the grid and we've got a lot of projects in motion. So we kind of made sure we got all the stuff in the hands of the people who were able to keep the project moving while we're away and we'll just go unplug. So I'm excited about it. And I'm making faces cause I don't know what I did yesterday when we were doing yard work, but my hip feels like it's out of socket or something. So yeah, Jim's like, should we go see a chiropractor? Like, no, it'll be fine. No problems. Okay. Um, howdy Rudy. Rudy E. Oh, Rudy Enriquez. Good morning. Good morning. In Austin, Texas area. Alrighty. So are, uh, would you have any announcements before we get started on the actual, we kind of got back past, uh, the Carolinas. Um, I hope that, yeah, we haven't had, we haven't talked to anybody yet that went to the mastermind. So I'm looking forward to hearing how that went and all of that. Sure. Definitely be talking to some people on that. Um, no I think the only other announcement is um I would say that we're we're looking to get group five filled for v8 and that is dealers with 500 to 2 000 accounts and the way we're doing those groups now is we don't start the group until we have commitments like signed commitments from at least four so we're just looking to get that group started and I've got a number of people we're talking to on that but if you want to get in a group with 500 to 2 000 accounts reach out let's get you in v8 group 5. That's it. Okay. Shall we start into our topic of the day? Yes. Yeah. So this came about for a couple different reasons. I mean, we're all the time talking to people who are kind of in this stage. And I think we see a lot of stuff on social media that kind of reminds us again and again about, you know, dealers diving into the buy here, pay here space. Or sometimes it's entrepreneurs. Oh, yeah. They may be past dealers. They might be. You poor thing. Yeah, I'm really in a lot of pain right now. You know, it was interesting this morning when we were having coffee. We were kind of making coffee. You went in the house to do something and you said, here, write a list of all of the things. And so, you know, I wrote a pretty long list of all of the things. And I thought to myself, yeah, I've learned a few things. I'm in the last what we've been doing this together for years. three and three and a half years, learned an awful lot. And so Jim was, Jim was, good morning, Shelly, was, as he looked through it, he's like, okay, so let's just consolidate here and here and here. And he's like, yeah, that's a, that's a good list to start with. So Yeah. Yeah. You, you go ahead and what, so the topic of today is the top avoidable mistakes when you're new. And, you know, those of you who listen to us know that our, we, we work with dealers that have been in all stages of their growth or their development. Our calling card is, um with coaching is coaching new dealers into the space I think that's where we've that's where we started my career that's what I've done most yeah that's why the cash flow forecasting tools and the materials and all that stuff to kind of help people get started but yeah in that work you just come across um people in a certain stage whether they're coming out of a retail independent business or franchise business or maybe they're just entrepreneurs and just starting in the car business overall and we've done those like obviously there's a lot more education involved. Like they don't know the basic terminology of some of the things that, you know, we would be familiar with in the car business. Right. But that, that happens. And so I think it's the nature of, you know, just doing startup work. I've called them launch packages. Like with the, that we're launching into buy here, pay your space. And I just, in this morning, I'm thinking about the topic. I'm thinking through the thread of the people that I've seen step into it and withdraw from, Typically within a year or two. Well, and there's something we didn't write on this list that I think is like the first thing. And we do have, for those of you who are new in the industry, if you can go to YouTube or Buy Here, Pay Here Institute, bhphinstitute.com there's a free uh video series called the first 10 things to know before getting into buy here pay here and that's a really great place even if you're like a year into it um to start there because it's it may bring some things to um to your awareness that you weren't aware of before and and um but one of the things that that I think when we talk to new dealers that wasn't on the list is a paradigm shift and and you know because we see we see dealers come into the space from franchise guys that just like cars and then we accountants or whatever And there's a couple of different layers to a paradigm shift that I think that it's really, and one of them might be on here. One of them is this is not like regular car sales because it's not about sales. You're a bank. And so you need to look at it as like, I'm not selling cars. I'm creating loans. Yeah, and I think that is definitely true. And I think people can do a search in our YouTube channel for paradigm shift because we've done a whole lot of stuff around that. But I think the thing that I was thinking about in that context is you see people step in and obviously they... They don't fully grasp, first of all, the ability to forecast cash. We'll talk about that. But then they don't fully grasp the demands of the collection side of this business, at least to do it well. They understand what it is to call somebody and ask for a car payment, but to really have success in those first 100 contracts. How many dealers are out there that would say, dudes, it's not about selling a car. It's about how well you collect. it's it's about how you underwrite and how will you collect but it's not about having a rock star that can sell a lot of cars because if they're if yeah yeah that's another that's that's that's the first that's the first five minutes of a three to ten year relationship good I'm glad you're thinking about that way because I think that's the part that I would say and we've had conversations like there's some conversations in this year that come to mind where we've had people you know um So one of the things I put on here is when you're two sales and gross profit minded. So one thing that I don't recall ever really even sharing with you in much detail is that I have seen, if I think of all the dealerships that I've seen enter the space and then fairly quickly withdraw from the space. I mean, and not without... probably some cash penalty. They got hurt in the process probably. But some of these, I'm not necessarily directly involved in their business. We meet them, we talk to them. Sometimes they engage us, sometimes they don't engage us, and then they go on down the path. And then sometimes you'll hear from them later and they're exiting already. And it's like, okay, so the pattern that I see in that, and this is something I would just ask dealers to be watchful of and just entrepreneurs to be watchful of, There have been a number of cases where I've had somebody who was a sales, they came from a sales or sales management background, and they sold some investors on or an investor in joining them and creating this business. And then we've seen multiple people that have done that, right? Yeah, of course. And I think the thing is, when you see that and you see that a higher percentage of those have failed and why? Because they can attract an investor based on these margins and wow, look at these margins and look at the high APR and there's a lot of room for error and it's true. It's absolutely true now, but that's an incomplete truth. Yeah. Fahad wrote, seems that many new operators that fail, they expect overnight success. And to get real return in even the best case scenarios, you need a couple of years to see the real money. And I mean, I absolutely went on. It's all about long term. And, you know, I, I agree. I just I wanted to kind of add that comment in there because it is. It's true. And it's, it's more, it's probably two years back when I was doing those Fahad, when I started doing cashflow modeling and built my own forecasting tool back in 2005, a lot of the forecasting I was doing, and I did a lot of consulting in the late two thousands, like to help dealers all over from east to west. And, uh, So, and doing a lot of that forecasting, I used to be able to say that depending, of course, on Bali, there's a lot of different levers here, you know, in a modeling assumptions like this. But most of the models that I used to run, the dealers would get cash positive in like the nine to 15 month range. obviously if they stayed on track and these things, as long as they have a plan and are watching certain things, it's like, that is so doable that, that yeah, can limit charge off losses. So your portfolio doesn't, but that's, isn't that where you're saying where they get to that point, they're covering their overhead, but are they, are they in the black? Well, there are three different stages of black in my way of thinking about it. You're first going to cover overhead, and then you're going to cover the cost of replacing the inventory that you're selling. So that's, operationally speaking, that's positive cash. And when I say reaching positive cash, that's usually what I mean operationally. And then the last one would be income tax, because if we've had that much success, we've grown a business to reach cash positive, we probably have experienced a lot of profit along And the IRS wants their share. Yeah. Some of it over to the RFC and so on, but we still are probably, we've got an income tax element to think about because then we can't, we can't really just take all the surplus cashflow and go buy a bunch of yachts. And now the tax bills. Yeah. That's true. Oh, come on. I mean, I want my toy. We have a lot of, there's a lot. Our bank accounts are fat right now because we've been collecting payments and, and, and, Yeah, it's like we've watched that as well, where you can spend your way off of a cliff or support others off of a cliff or, you know, lots of things where you're like, I've got all this money coming in, but it's it's getting moved into places that are not helping you be successful in the long term. Right. So there's so many layers to this. I mean, I think we could we could stay here all day and never go fishing, but we I'm going fishing. Yeah, but there's a lot more to cover here. So let me kind of get to the other ones. I would say faulty structure is another one. OK. And there's some different parts of structure here that you've heard me talk about, too, traditionally. And I would say the other one is, and so you could say faulty or incomplete structure. Okay. from investors, capital, that kind of thing. The second one is structure of the deal with the consumer. Yeah. And I think as I think about our role as advisors, one of our chief roles is to mitigate risk and that is to help dealers save them from themselves create a healthy structure that gives you some room for error you're going to make some mistakes you're going to have some charge-offs and you're you're going to be learning as you go there's a lot to learn here and so I think what we're trying to do is create two types of structure that will protect them and then the third one I think about is one that I remember a conversation with jason gosnell at buckeye many years ago and I think um it's absolutely true and my own way of thinking about it it's um there's a three-legged stool in the buy here, pay your business. And so that structure would be dealership for the sales entity, RFC for the finance entity, because you need that for tax purposes, unless you're leasing, right? Then you avoid the second leg there. And then the last one would, and I could argue that even if you're doing leasing, you're still going to capitalize your entity somehow. And so applying some of these same things that we would apply structurally would you know, would still be appropriate. And that's just about discipline. That's about building it into business plan and then staying disciplined to that plan. And then the last one, the three-legged stool, not surprising Jason Gosnell would say the third leg is reinsurance. And I have come to understand the kind of the opportunity that exists in reinsurance. And I think if dealers would get familiar with that from the beginning, it doesn't mean it's for everybody. It doesn't mean it's right in every single situation, but it's something that I think is an appropriate strategy to, you know, develop in a, in a buy here, pay here business. But most dealers don't really start looking at that until they've been in business a year or two. And there's some reasons for that. Yeah. And we've, but we've seen dealers that have been in business for a lot longer than that. And then they start their reinsurance and it's, it's like, it takes a little bit of time to start to see that, that turn. And, and, More than one dealer. I think that for the majority of dealers that get like a good structure with their reinsurance and have a good reinsurance, which is, you know, a lot of different pieces to that, that they are like, why did I wait so long? Because, you know, Jack Carter was like, you know, we think of the dealership as wealth building, right? Reinsurance is... Reinsurance is a wealth builder. It's a wealth builder and it's also how you support and protect your customer and your asset. Absolutely. I think you and I could have a pretty rich conversation on that and we can bring some guests. But I think that subject alone is something we can talk about in terms of the operational elements so that... You've got some things to think about there, not just the wealth creation and that part is how you manage accounts and how it saves repos and so on, which takes me to another element. I'm reading Robert Hernandez's comment because I try to do that before I post them. There have been times that I've posted stuff and it's like, oh, I should not have put that on the air. So I'm reading through. Go ahead and go to the next one. Okay, so the next one for me would be volume formula. so this is this is hard to break down I think we've done episodes on that too try searching the volume formula on uh our on our um youtube channel but I think the volume formula for me is like for dealers to grasp this idea that you really want to hit a green zone I'll call it in volume you don't you don't want too little because there's some math there that's just hard math that you can't hide from if you don't do enough volume to cover overhead and some of these kind of things then it's it's really a lot of effort and a lot of risk without the reward side of it and so you know we're always talking about reward to risk and I think so I would just say it's kind of goes back to the cash flow modeling thing like inadequate planning and forecasting when you don't plan well and you don't have a good forecast and there's there's some good tools and I would say there are There's some methodology that has kind of developed that helps to better predict a lot of this thing. And I think this is something that I would urge dealers to seek out because it's important in terms of making that plan. And people might look at that and when they see that, one of the things I can do in my own modeling is I can change the volume from 10 sales, because I meet a lot of dealers who, what if I just did eight sales a month? I just don't know that this business, I typically tell people, If you're talking about 10 or less sales a month, I just don't know. Unless now if you've got a retail business or body shop or something else that's supporting overhead, that's different, right? Yeah. Well, there's, there's a, and, and I, I want to kind of, from what I've learned in the last few years, you know, we, we encourage people not to move too fast. Sure. Um, because that can be dangerous too. It's like you're spending too much money. You're done all the things, but it's, we also encourage people to not move too slowly. And the reason why this volume formula for the first thing is because all of that money that goes out to overhead, um, that you're having to cover out of a coffer that the business is not making, you will never see again, ever. There is no return to that money. So the faster you can get to the point where your overhead is covered and you've got all the pieces, just the overhead is covered, The majority of the money that gets put into the business beyond that is about creating contracts and earning assets. And it's money you will see return. Correct. If you structure it well. If you structure it well, yeah. So yeah, that money, obviously those portfolios can come back. And I've said many times to your point, it's like the portfolio, surprisingly, our buy here, pay here portfolios of customers with poor and marginal credit, That's actually not even the riskiest part. And people are like, well, that's another episode. I'm just saying those things perform typically with any kind of management and attention. They'll perform in a certain range. Yes. As long as you know, that's what what's what you teach is, is there is people say it's unpredictable. It's like there is a level of predictability. Customer is the same all across the country. It's it's the customer is the same. The market may be a little bit different, but the customer is always the same. And yeah, that you. Yeah. And I got sidetracked. Robert, we're going to get to yours as soon as we get to the bullet point that that's associated with. So just don't think that I'm ignoring. So then the other piece of that is going to be philosophy for me. This is about... The thing about, let's see, where's philosophy? Right here. So I started years ago, I called it the third P. And P&P, typically when people say P&P, most often I hear them referring to policies and procedures. And of course, any business needs policies and procedures and a strategy. What I simply suggest, and this obviously comes about more because of our work with White Hat Way, and you start to begin, because I was writing articles years ago around policies philosophy. It's like, I think for you to really be successful in this business, uh, when you look at the people who have been decades in business, there's a philosophy that they adopt. They bring a certain attitude to the approach to customers and, uh, So I think philosophy is, and you know, you've heard me say it plenty of times, dealers will be starting their business and they'll ask me, Jim, where should I, you know, how often should I, how quickly should I repo? Where should I set my APR? All the kind of questions that come up in the context of, and this is where I think, you know, we see people go on on social media and ask this question, how long before I should repo? I'm new to this. I'm like- wow, that's such a big question. Like there's so many things to think about in drafting your approach and your philosophy about the business and how you want to be known in your community. And so, and there's also obviously things that are state specific. Oh yeah. And there's, there's stuff in that philosophy, you know, like even just that repo, which is a very, it's, it's a heavy straight line question because it's like, do I let this asset, Just continue out there without collecting it or whatever. But, oh my goodness, I haven't had any protein this morning. I'm sinking camping already. Let me pick up. I was going to say golden circle. Just make sure. Because that's a really great... If those of you who are looking for, like, I want to define my philosophy... Watch The Golden Circle from Simon Sinek. And there's actually a bunch of books that he's done and all of that. And that will help you get to your why, your how, and your what. And if everything can filter through your why, then... We like to see people have a purpose in Buy Here, Pay Here beyond. And when we say purpose, we don't mean, well, I'm getting a Buy Here, Pay Here because I want to get rich or make money. We're not talking about financial parts. We're talking about... what, what's your real motivation for showing up for work every day? And, you know, besides the getting rich, I mean, there's gotta be, and especially if it's going to permeate your whole culture and your team and your whole operation and your, your relationship with your customers in your community is like, there's philosophy first that we would want to talk about. And we want to introduce that. We talked to a lot of dealers that are new or that are thinking about getting in. And, um, you know, we, we really have like, what is your why? And, and, And there are people we haven't taken on because it's like your why is not in alignment with what we teach. And I love the stories which make a really strong why for people. It's like, I've been in a situation before where I've had to, I've needed this, or I've had family members be in a situation before where they've needed this kind of solution and they have been abused. They have been, you know, taken advantage of all of the things. And so I'm here to do it and help people navigate this. I mean, cause it's a hard thing to do, but it's like, I'm doing it to help. Yeah. Yeah. And then, you know, you got to mean it though. I mean, you say it, it's one thing to say it, but do you really mean it so that you're going to, you're going to write your policies tomorrow? But it's about writing. You have to have those, these things written down. So as you're going through your policies, it's like, does it do this? Does it do this? Does it do this? It can't just be something in your head because then you can change it, but it needs, you know, when, when your needs, sorry, strongly advise, um, that, that you really define your why and, and, um, Well, because it's going to inform all of those policies. It's like, how can I help somebody write a policy about how quickly to repossess or any of these kind of things without understanding the larger philosophy and the approach that they're bringing to the business? Are they thinking long term or short term? Obviously, we teach long term over here. So I think that's going to affect that. the recommendations that we're going to make. And I just think the other pieces, like we touched on the paradigm shift. And I think that that's something that, you know, we, we know that, you know, that's going to be a thing. The last one that you had up there before we moved into this, Vic Everett's like, not the riskiest part. Yeah. Jim, you're scaring me. Let me tell you a big risk is part of your overhead. It's your overhead. It's like, and from the one before to Fahad also said, thanks for addressing many smaller dealers never get pitched these products and there's no reward for many of these products yet. And so it's like, yeah, yeah. We've had people like they're looking for a quick fix. Like when can I expect to get this money back? It's like, no, it's like Taylor bird just told me, you know, he said he had a conversation with somebody and he said, I would ask you to think of, of, of reinsurance is not how you buy cars next month or next year. It's more about how do I buy my yacht in 10 years? I mean, and I think that's really a good way to think about it. Cause if you really think about it, as a wealth building thing and as an operational tool. Years ago, I used to put aside the wealth building and just say, I just want to look at it as a way to solve my internal operational problems, make my customers happy, and keep these cars on the road. And we were just talking about getting into the business because you want money, the wealth side. This is a piece that can create wealth but it's all about supporting the customer that's that's what the whole I mean it's about supporting the supporting the uh the asset and your customer that's what all reinsurance is for is to support the customer and the asset and and that that um you know so that's already like I'm helping and I'm you know this is not about me but I'm doing this because it allows me it gives me the tools to help it gives me the tools to you know to to make sure that that the asset is is a collecting asset too yeah I think if you back up a step you can say back to the thing about the private equity groups investors getting in the space we know that it's true that You know, you'd have a hard time finding products that have more ROI and well, more. gross profit and APR, right? You get both the gross profit and the APR and the margins on those are pretty significant. Why? Because it's a customer who's in a tough spot. We're taking a lot of risks to provide that. And so there's a lot of APR there and a lot of markup. Now you would look at that and say, okay, well then that's attractive to some people looking for a high return and maybe a high risk, high return kind of thing. But I'll give you one quick example. I had a group reach out to me. I won't say who they were, where they were, but they reached out to me and said, hey, we've already started a dealership. We have somebody who's very experienced in cars and they're going to start a dealership and we're going to provide the funding. And this person says we can sell a lot more cars and blah, blah, blah. And I heard a lot of things that were inconsistent with what I would typically recommend for somebody who's newer to the space. I then heard them say, They asked me to perform some analysis. So they shared with me their portfolio history and their early portfolio. I want to say they were maybe eight, nine months in when I met them. The portfolio performance was awful. And I made some suggestions and told them how we would play a role if we wanted to step in and help straighten some of that out. They didn't end up engaging. And then I went about a year and a half, didn't hear from anybody. And then when they reached out to me, they were looking to sell. They were looking to get out of the business and they were, they were doing it kind of discreetly. And I thought, man, that's a shame because you know, you have the capital. They were, they were the kind of firm who could supply the capital and they made the decision to divest from buy here, pay here. And I don't know the story. except for what I just shared with you. You knew the beginning phase and then what happened a year or so later. And I saw no recipe for fixing what was broken. And so it just sounds like ultimately their portfolio didn't perform. I mean, if you go back and look at all the people that we know that have exited the business in this post-COVID period, there have been a number. People can name the names of the parties that have exited the business or been through a bankruptcy. Most likely the portfolio didn't perform. And I don't know that to be true. I haven't seen their numbers. I'm just saying if it didn't work, it's most likely the portfolio, which takes me back to Vic. Vic said, you know, I told Vic here, he commented like, you're scaring me if the portfolio is not the riskiest part. The portfolio with good management... Decent underwriting. There's good tools out there, which takes me to the last thing. I just realized we never got to, and then we'll wrap up. I want to get, before we go to the last thing, I wanted to, because Robert, it's a long one. Buyer-payer success is all about knowing how to manage money. I've seen the largest buyer-payer operators that have moderated national and state associations and conferences to find out a year or two later that they closed shop. National operators that have also closed shop have gone to become consultants. Mm-hmm. It's scary too. Best advice is to start small and grow slowly. Also, be on the top of financial statements and don't use your business's cash flow for personal investments. I think he's leaving some stuff out based on my experience. And he's not wrong. It's not that Robert's wrong. But it's one of the reasons why I wanted to... Because there's a lot of good insight there. Is the idea, and I didn't see it on your bullet points, is most young dealers... don't know what they don't know right I mean they just simply don't and so it's like we and how many of you have have been watching the the buyer payer success and and a dealer who's new in business asks a question that it's like hey what is this thing that I've heard of it's like oh They don't know what they don't know. Now, to ask those questions in a forum like Success, you're going to get So many different answers. And sometimes it's from people that are currently driving themselves off a cliff or, you know, there's some that are like super successful. So be careful about who you turn to for advice. But the bigger thing in there is if you don't know what you don't know, it's important to surround yourself with people that do know the kind of questions that you should ask, which is your state associations and your national associations. Because there's a lot of things there that they can make you aware of. And, you know, there's... uh, I can understand how, cause I've, I've been there, all of that, that, you know, I'm, I'm starting a new business and I don't want to join an association cause I got this, I can figure it out, all of that. And, you know, I've, I've been there. This is an association that, or this is a business that really, um, uh, uh, big questions can kill you. And so to be able to join an estate association or find a really, really great mentor or a coach or whatever that can help you ask the right questions. Yeah. And I always say, you know, and I just started saying this a year or two ago, like, i find that I meet a lot of dealers and I'll say this to them jokingly obviously when we're meeting them sometimes it's like you're at the stage where you don't even know yet which questions to ask yeah you don't know what you don't know what you don't know so it's like the thing is it's there's there's pieces of this and some of them are big and they'll bite you like it's there's some stuff out there that obviously that's again back to a coach is really risk mitigator and I'm not saying this to sell our coaching because we're actually getting to a place where we're doing less and less one-on-one coaching so I think anybody can reach out to me. They're hearing my voice. They can reach out to me, and we'll put you in touch with coaches who can help solve whatever it is you're facing. But I think backing up to the same thing, it's like I think if you hop out on Facebook and you ask a question and you get 10 answers, I think it's important to remember that out of the 10 people that responded, They may not be the ones that are doing it the best. They have their own opinions and they're offering their opinions. They also may be in a different state than you are and are bound by a different set of rules that are state specific. They can also have a line of credit. And so their business strategy is defined by a line of credit or certainly shaped by a line of credit. And so I think you just have to kind of... You know, it's not this simple. To me, it's like the thing about, you know, Robert put consultant in quotation marks. It's like consultant is a dirty word in a lot of spaces, a lot of segments. Why? Because, you know, when coaches come in and they don't have they just rush in, they spend two days and they just kind of get a cursory look and they make some suggestions off they go. There's no ability to help. And I think the bigger concern for me there is that if I can't really understand the larger picture and the larger strategy, like this is where there's so many different business models and strategies and buy your payer and they can all work at different levels. But it's like, we have to first understand what is your strategy? Like, what are you wanting to do? What's important? Are you, What kind of philosophy and approach are you bringing to this thing and timeline? Yes. And maybe it's not the right business for you. Oh, absolutely. Let's learn that before you sink in a bunch of money. And just going along with this, national organizations see all of the different types and structures of buy here, pay here. So they can answer a question in a more holistic fashion. A lot of consultants, when they see a lot of different ways that businesses are doing things, what it is that they're doing and they're able to see, um, you know, they're like a 10,000 foot level of like what's working, what's not working when you're talking to just a dealer that's giving you their opinion. Um, uh, I love it when I hear dealers ask questions before they answer. And usually those that ask questions before they answer are involved in a 20 group or something like that because they recognize that they are aren't the only way the way they do it is not the only way to do it. And that little things can make a big difference. So whoever it is that you choose to turn to, um, for help, um, you know, state association, a consultant or a dealer that has a lot of experience of hearing other ways of doing it and can see the value and be able to put pieces together. I, those, that's what I would, um, encourage if you're going to find someone to work with, that it be someone like that. Sure. And so the resources, you know, when I say foregoing researchers, obviously there's a ton of, well, there's some free resources out there. Like we obviously have some material on YouTube and all of our podcast stuff. There's tons of free stuff out there, but it's not as much as like some other industries. Like, you know, we're a kind of small industry, kind of narrow. And it's not that there's not some education, but when I think about resources, there's going to be things like, there's group coaching and then there's individual coaching. We can get off the whole thing about 20 groups, whether it's coaching or education or what a 20 group is, but the same thing with V8. Like I don't personally think of V8 as a coaching solution. Now we coach in our beginner group, But mostly that's a service where we bring people together and let them learn from one another. And we can add our expertise, like our experience in certain areas. But that's not why we're there. We're really there to moderate the conversation. But there's, you know, between 20 groups and V8 groups and these kind of solutions where people can get in there and get some exposure to other business models and other ideas. You know, that's that's really big. Obviously, Facebook is good to a point. It's just or social media overall. It's good to a point, but there's just some big stuff you're never really going to learn. And I think it's part of that's because if I'm if I'm the coach, I need to understand what you're trying to achieve in order to better answer your question. Yeah. Yeah. So this is why I think it's hard for people to begin to get answers on social media that really get to the thing. But it's all part of the thing. I think the last thing I wanted to cover was the thing about systems and technology. Oh, yeah. That was one of the big things we were talking about this morning. Yeah. So, you know, dealers and look, part of the part of why people are attracted to buy your payer often is the. independence of it. It's part of what I was attracted to it. Like I liked the idea, even though when I first managed for the first three years or so, I was not independent. I was employed by somebody who was following a system. And so I was using their system. But when you step in as a dealer, one of the nice things about it, I get to create this business the way I want to create it, which is beautiful that the adaptability of that and the flexibility and being able to kind of march to the beat of your own drum is fantastic. that brings a set of problems. If you don't have a blueprint, you know, some sort of a playbook to follow, then you're likely to make a lot of mistakes and some of them can be really expensive and some can even be catastrophic. And some can be really difficult to back out of. Right. And, you know, that brought to like what we were talking about this morning is that The one technology that just about every dealer agrees on is you need a DMS. You need something that's going to book a deal. And your choice in DMS is it affects all the other softwares and all the other, because some of them don't integrate with this payment processor or they don't integrate with this underwriting tool or they don't integrate with this. Or they don't have the ability as you grow and mature to scale what it is that you're wanting to look at. Right. So I think on that subject, I might just put in a mention that I was just recently thinking that I think October is probably the right time for us to do that software forum. Oh, yeah, yeah. We have a software forum that's coming up. So we'll probably schedule that away from other things, and people can participate live in that if they are able to. But, yeah, I think when it comes to technology, and DMS is the easiest one because everybody has to – well, I say that. We still hear some people that are – still out there thinking about a DMS cause they're still on ledger cards of some kind, but, but yeah, that's okay. Like that's obviously their choice. But I would say when people say that, you know, this is the software I recommend, we like it. And then I think, well, is that the only software I've ever used? Because if you, if, if you use a certain software and it's adequate for your needs, that's fine. But, What I think that leaves out is you might not know what you're missing. You might not know. Yeah. Some of the other dealers paying $500 a month. And it's not, it's not like bells and whistles, but it's about being cleaner in your data, being clean, you know, having things integrate so seamlessly. And cause I, I can, I can, uh, we have a lot of dealers on a, um, an underwriting tool that some of them they can work a deal in an underwriting tool and it just pushes directly into the DMS and others that it's a great underwriting tool but now you have to go in and manually enter all the things that you were working on and so it's just there's there are And it's hard, like I'm not in the business of selling software, right? So I meet with people that are new and I'm trying to advise them based on what I understand. And I'll introduce them to the top three or four providers that we're familiar with and let them go do the demos and cyber themselves. But even in that scenario, it's hard for me to, I'll typically feed them a list of questions, be sure and ask them how they handled this and make sure that get into the details about certain things, because it's not until you're in business that you fully appreciate how important this thing will become. And so that thing, you know, you're talking about doing it in October about the DMSs. That's a big thing. And so it would probably be a good idea. And I think we've talked about this, is that those questions... that we suggest dealers ask the DMS are questions that we'll probably be bringing those up during this thing. I don't want to be the only one there. I want others to help us drive. My thought of the way we'll do that is we'll prepare the list of questions with some help from others. And then we, as a team, will go out. I mean, we'll find the people who can also help do this. And we will go out and meet with them and ask everybody the same set of questions. And that's not going to just be... That's going to be... tech stack like the actual structural part of how the software works where the data lives and it's going to be reports and it's going to be you know a related finance company handling all these I remember um you know you say tech stack that's something you learned because I understood tech stack and um so and it's something for a lot of dealers out there they've probably never heard that term before but it's important yeah and I think it really is it really is and it's one of those things that can you get by without the latest tech stack and the best technology or newest technology can you get by without I i suppose you're just missing out on some features that I find are highly valuable so it's a question of would you be able to utilize those that's not anything it's it's it's a value question it's like yes I'm going to spend more for this 20 group. What am I going to spend to be in a 20 group? Well, okay. A lot of dealers say that that's the best money they spend. They get a nice multiple on that. So is it an expense or is it an investment in the business? And I would say the same thing could be true about software and all the other technology that we're going to talk about is like I wrote an article years ago about is maybe think beyond the price tag. Because I think those kind of decisions are really valuable. Of course, I'm a value buyer anyway, so I think this way. But I think if you look at it from a value perspective, not just a cost perspective. Not a price perspective. Yeah. It's like I think dealers might make some different decisions around some of these things. And you could go on and on through the list of all the different things. Well, it's funny because you hear people talk about, well, they look at a price tag where one is a couple hundred dollars and the other one is a thousand dollars. And it's like, oh my gosh, that's so much. Well, it's two deals that you're collecting on in two years. Two contracts taking care of your DMS. And so, you know, for me, how my brain works is that when you can and you do this with some of the things that we do with our with our with our clients, like you're saying you need. 37 deals to cover all of your overhead. And so it's that, that also includes your, your software when we're doing this, all of that. And so when you look at it like that, it's like, all I have to do is bring in another two deals. And then I've got the expensive software that's going to pay me in dividends or whatever it is. I mean, that's it. Having the tool, the access to the tool is, even though it's an expense early, it's like I can do an extra two deals. I can do an extra whatever. And a lot of dealers are very budget-minded early, and that's appropriate. It's just that when you think ahead to... You spend that for the first 18 months and now you're doing a software change because you've outgrown your software. We've got a couple of clients right now that are going through software changes and it's just like their radio is silent because they're just like, it's probably one of the hardest pieces of technology in your business to change is your DNS. It is when you're on inadequate software. Well, but there's I mean, we've had the conversation before about like I'm moving from this to this and they're saying, no, we won't give you the data because it's ours or whatever. There's so many questions that when you shift that it's it's it's it's something that we, you know, dealers go radio silent because it's like they are so invested in getting all of this stuff done. What does that cost you? what yeah saved in software yeah I think that's the part that's just hard I see dealers going through it and they're they're getting by on some budget software again we're picking software as an example but it's like um if you're some budget product and now you get to a point where you outgrow it and now the pain and and time like it's hard to measure that yeah it doesn't show up in your bank accounts but it's like the actual time that you're having to invest in the the headache factor of having to make a switch. And we do talk, the DMS is probably the most overarching of all of those decisions. And then there are, you know, there are others that are not as, they're not as you can switch from here to here. And it's just, it's not that big of a deal. Right. But there's that DMS part is the biggest one. I would say one of those that's up there is your underwriting software too, can be. Because of how that underwriting. There are dealers listening saying, what is underwriting software? There really are. Yeah. But it's like, you know, this is part of where you have to recognize what's available, what's available. You, you look at what kind of tools are out there. There are systems that can really simplify things. Some of that software, some of its other systems tied back to software that I would say in my view of DMS selection is, I do view a DMS as being kind of the heartbeat of your business. It's really a core element because a lot of the other pieces, policies and procedures being among them are going to best be tied back to and internal controls are best written around software. So, you know, You don't want to have to rewrite your policy book, you know, if you change softwares because, you know, the new one doesn't have the same systems, whatever. So it's just the cost of making a switch. And so, you know, dealers knew. And I always say in the reinsurance piece and all this stuff related finance company, let's focus on getting it out of the gate and getting you profitable. Because if you can't get enough car sales, you don't need that stuff. You know, you don't need if you can ever get enough traction in your market to create enough sales to really justify staying in business. You don't need any of that other stuff yet. And so let's focus on getting volume, you know, and making sure we can collect the accounts. And then we figure the rest of stuff out as we go. But for me, it's really just about getting out the gate and verifying that you can produce enough business. to stay in business. And now we can start to kind of regroup. And so I talk very specifically about that with new dealers, about how to kind of do that in stages or phases. And so, yeah, I think that's part of what we would recommend. But I just think the big thing that when I look at dealers who are new, that I just think they don't know which pieces to ask about. And I think that that naturally comes about when you can find somebody who really cares enough to go deep inside what it is you're trying to accomplish. And again, we, you know, we can put people in touch with coaches. One of the things to also be watchful about, I'm glad this came up is in your head. Cause I haven't heard it yet. Go ahead. When you're out there looking for resources and you're asking somebody, who would you recommend for this? Yeah. ask yourself, and you can ask them, do you have a financial interest in that? Are you giving me only the list of people who are? There are. And that's something, you know, us being vendors is that we're very well aware that there is, in a lot of cases, a financial reward for bringing business into, you know, like different vendors. And so If that's a big deal, that's a big deal. If it's not a big deal, it's not a big deal, but it is a thing you need to be aware of. Just in normal life, when I need to find someone for whatever, I will ask, for instance, I moved to Utah. I needed an OBGYN. Okay. And so I called the hospitals and I said, I want three of the best that, that, you know, that are going to. And so when you ask for multiples that, that, you know, you know, you're, you've, you've got options there and that, um, that, you know, uh, and then the next question I would, I usually ask for that is, um, when I was calling the hospitals is like, if there was a problem. Mm-hmm. who would I want in my corner? And all of them said this person. And I was like, that's who I'm going to then. But it's not just who should I go to? It's like, give me three people that are good in the space. And so that can be used for a lot of different things too. And usually when we have a new client and someone's coming in and they're like, what should I do? It's like, let us introduce you to Um, usually it's not just one, but it's usually two or three carriers that we know the people they, you know, they, the, they're, they're, it's, it's a, it's a good company to work with all of that kind of stuff. And we can introduce you to those people, but. Yeah, I think the only thing I'm just trying to drive home on that, I don't want to be unclear about this. What I'm saying is when you ask people for referrals, you just have to look and say, okay, are you referring me because they're a partner? Are you referring me because they're one of your sponsors? Or are you giving me a list of multiple ones? Because I'll just tell you, when I come to this microphone for the podcast in the morning, I'm speaking to dealers, right? I don't serve more than one master here. I'm speaking to dealers and I'm interested in the success of the dealer. So what I'm simply saying is I want to make sure the dealer has complete information so they can make a good decision for themselves. And that just means you got to got to be able to find the people who can or the place where you can, can go get the information and find out who all the parties are. And we will always do that for people. We'll always give a list of the parties that we know and we'll happily share what we know. And, and you know, when, when we see something happening in social media and people are like, who should, um, we might go silent because all the people that we would have already been, you know, represented, or we might come in and say, before you make your decision, consider this. Yeah. Like if I feel strong about somebody else, I definitely would recommend that you be sure to include this, be sure to look at this option before you make a decision. And it's not, and it's not that we're saying this is the only option. It's like, Oh, there's lots of options, but one option hasn't been mentioned or whatever. And, or, or, you know, or, or, strongly advised because this is a really good option amongst all of the things. And the conversations I have with dealers, if somebody reaches out to me and I make a few introductions or give some names, I'll typically say, they'll ask me, well, what about so-and-so? Somebody mentioned this name. And I'll say, I've heard good things about them, but I don't know their people. I don't know them. I don't know who they are. I mean, they might be great. We just don't know them. Typically for us, it's about the people behind the product. So we want to know. And people have been around for a long time so that they've got enough of a history to have some good feedback. Because we certainly get feedback. Solicit or not, we get feedback across the industry. So, you know, today's topic on startups, you know, what what are the avoidable mistakes? It's you know, it's interesting as I as I was kind of looking at this whole thing holistically is. The first year is a pretty big deal for a dealer because most capital won't touch you. RFCs you don't do until you're about a year in and your reinsurance typically don't want to do that until you're like a year in. There's a little more to that RFC, but. Well, except for like a, like a warranty, you could probably put that in. Different thing. Like I'm saying the RFC for the related finance company, not the warranty stuff. Okay. Okay. So I really do. And I need to go fishing. Yeah. Actually, no, I don't fish. I sit on the bank and color. That's the way I remember it. You know, I, I, I caught my first fish with Jim. It's true. She did. Yeah. And I caught my second and my third fish with Jim. And I think that's about it. But I enjoy, I enjoy watching him fish. Well, camping with Michelle is fun for me. The first time I went camping with Michelle, when we were, we were still dating and I just, I should probably think about marrying this woman. Cause I think we, we'd been dating for less than a month and I'm like, and, and I was working in the tech space and I business suits and I was, you know, flying all over the place. I was gone two weeks of every month meeting with clients and, and all of that. And I, and so I, I was not like earthy. And so when I was, when I said, Hey, let's go camping. And Jim's like, because Jim comes from a family that was hunting, fishing, farming, out in nature, a lot of that kind of stuff. And I know we're obviously wrapping up the topic with camping again. But so Jim, when he'd go camping, he was used to hot dog on a stick. Yeah. peanut butter and jelly sandwiches. And I made berry cobbler in a Dutch oven. And I mean, I love cooking over a fire. It is so much fun to me. I thought we'd be having little Debbie snack cakes out of the box. And then she, she pulls out this cobbler and went, wow, you camp differently than I do. I do. And you know, it gives me grief about it. It's like, you work too hard. It's like, but this is my joy in camping. Yeah. And your joy is in fishing, sickle fishing. And it's all, it's, it's so, so good, but it's, I'm, I love like unplugging and playing Laura Ingalls for four days. And it's fun. And I'm the beneficiary of her. A great cook and can cook over a campfire. So, so let's talk to car and go. Okay. Right. Yeah. All right. Well, everybody, thank you so much. I know it's a Monday. We've had quite a few people listening in today for a Monday. And so, obviously, this is a topic that people are like, oh, this is an interesting thing that I would like to hear what they have to say about it or something. Yeah, for sure. If there's anything that we can do to help you, please do not hesitate to reach out. We are only a text message, Facebook Messenger or phone call away. And help you with leading you to different softwares or whatever or all of this stuff. Yeah, feel free to reach out. Before you wrap up, I'm throwing a quick thing in the comments. The first 10 things to know. You mentioned that earlier. First 10 things to know before getting into the business. Absolutely. All right, everybody. Have yourself a great week. And we are off to catch some fish. Can't wait to tell those stories when we get back. All right. We'll talk to you later. Thanks. Bye.
