The Fractional CFO- w/ Doug Higgins

**🎙️ Podcast Show Notes

If your shop is packed with work, your technicians are busy, and cars keep rolling through the doors... why does your bank account still make you nervous?

In this episode of the Mind Wrench Podcast, I sit down with Fractional CFO Doug Higgins, founder of Collision Advisory, to talk about one of the biggest challenges facing collision repair shop owners today—understanding the numbers that actually drive profitability. Too many owners are working hard, yet still making important business decisions based on incomplete or misleading financial information.

Doug shares how his experience leading finance for a multi-billion-dollar company now helps independent collision shops, dealer groups, and growing MSOs gain clarity, improve cash flow, and make smarter decisions with confidence. We also clear up a common misconception: your CPA and your CFO serve two very different purposes. While your CPA helps you stay compliant at tax time, a CFO helps you understand your business today so you can make better decisions tomorrow.

Whether you're struggling with cash flow, questioning your DRP profitability, or simply want to understand where your money is really going, this episode is packed with practical advice you can put to work immediately.

Key Takeaways

• Profit and cash flow aren't the same thing. A profitable shop can still struggle to pay the bills if cash isn't being managed correctly.
• Don't rely solely on your management system reports. Knowing the difference between operational reports and true financial reporting can prevent costly mistakes.
• Know where your profits really come from. Understanding the financial performance of labor, parts, paint, sublet, and insurance relationships leads to better business decisions.
• Forecasting helps you lead instead of react. Looking ahead gives you the confidence to grow your business with fewer financial surprises.

If you've ever looked at your financial statements and thought, "There has to be a better way to understand this," this is an episode you won't want to miss. Doug breaks down complex financial concepts into practical, easy-to-understand advice that every collision repair shop owner and manager can use to build a stronger, more profitable business.

 -Minor Adjustments. Major Improvements.-

 Guest Links

LinkedIn: https://www.linkedin.com/in/douglas-higgins1/   Email: doughiggins@collisionadvisory.com

Website: https://collisionadvisory.com/

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Transcript

What A Collision CFO Actually Does

Rick 0:00

If you've ever wondered uh what a CFO in the collision space truly does, and if you're curious to see if you need a CFO at some point in your repair shop uh journey, this episode's for you. Uh this week I'm extremely excited to share a conversation with my next guest, someone that brings incredible value to independent shops, dealer groups, and small to mid-tier MSOs. Doug Higgins, who refers to himself as a fractional CFO, is founder of Collision Advisory, a financial coaching, mentoring, and advisory business that has recently burst onto the collision scene and is already helping many shops make uh better financial decisions for other shops. So stay tuned. This one interview you really can't afford to miss. Mind rent, so clear, so the Mind Rent Podcast with your host, Rick Sellover, where minor adjustments produce major improvements in mindset, personal growth, and success. This is the place to be every Monday, where we make small improvements and take positive actions in our business and personal life that will make a major impact in our success, next level growth, and quality of life. Hey, what's up everybody? Welcome to the MindRanch Podcast. I'm your host, Chris Delore. Thanks so much for stopping in. If you're a returning listener and haven't done so already, please take a minute and click the follow or subscribe button and then rate and review the show. When you rate and review the show, the algorithms for Apple, Spotify, Google Podcasts, iHeartRadio, Amazon Music, and all the other platforms will see that it's valuable and show it to more people that have never seen it before. And hopefully it can help them too. I would really, really, really appreciate your help sharing this word with your friends and family as well. And if you're a brand new listener, welcome. I hope you find something of value here that helps you in your personal or professional life as well. Please make sure to click the subscribe or follow button so you never miss another episode. If you've been listening to the show for a while, or been on the receiving end of my daily quote of the day emails, or maybe just catch my posts on Facebook or LinkedIn, you know them all about the quotes, right? If you'd like to start receiving my quote of the day emails, there's a link in the show notes to sign up. It's free and you can unsubscribe at any time. If you have listened to any of my Mindranch podcasts in the past, heard me speak at a conference, or just seen any of my social media posts, you know my true passion is bringing value to you, the hardworking men and women of the collision industry, right? Well, not too long ago I met a very interesting person at a conference that had a fresh voice of reason and unique perspective to bring to our industry, and after a few in-depth conversations, I knew I needed to share this voice with you. If you haven't heard of him yet, as he is new to our industry, you will be hearing more and more from him, I can guarantee. This week my special guest is Doug Higgins, founder of CollisionAdvisory.com. Doug is a fractional CFO and is going to share some financial wisdom with us today. So let's get right to that interview. Doug, welcome to the show.

How Rick And Doug Met

Rick 3:10

Thanks for having me, Rick. Excited to be here. Yeah, glad we could put this together. Real real quick before I jump into uh what we're going to talk about today, I just got to share uh a story of how Doug and I met. So we've only known each other since like fall, right? And if you've listened to any of my messages before, you know that I really, really emphasize uh the importance of uh networking and conferences and attending these uh things that are going on in our industry, because you never know what's gonna happen, who you're gonna meet, what's gonna come of it, right? So I think it was last fall at CCG. Yeah, CCG conference. We I was invited to go out to dinner with some folks from uh Statgun, and uh we all met at a at a at a bar where we were gonna have uh a drink and then go get something to eat in their steak place there. So there was a whole group of other people from uh different companies like uh Fiverrless Evercote and uh just you know Stat and uh Doug was there as well, and uh I met him. And anyways, we all ended up going getting a table and having a meal together, you know, a bunch of strangers who don't know each other from you know different parts of the industry. And I'll tell you what, that was one of the best conversations and the best times I had at a at a dinner event like that. And it was just uh the conversation was just incredible, and Doug was a big part of that conversation. So we you know kind of became fast friends, and here we are a few months later doing a podcast. So Doug, it's been we'll be talking about the same things, yeah, right? It's been it's been it's awesome, yeah. He's a very sharp individual, he knows a lot, and he's bringing um uh some real world experience as a CFO for a large company that's outside the collision industry. So uh I won't spoil it for you, Doug. I'll let you uh give us a little intro on your um your background and how you ended up in collision.

SPEAKER_04 5:06

Sure. Uh well, as you said, I I mean, obviously I did not come up through collision. Uh, and I I'll come back to this, but I do think that is useful in this particular case. Um, you know, my career was really operating finance, what I call like operational finance at at a large scale, right? So it was managing the PL. Um I owned a PL for the Midwest division. So I was the CFO for Kroger's Midwest region, um, you know, multiple billion dollars, hundreds of stores, that kind of thing. But but it's the same, you know, largely the same concepts as what you're doing in collision, right? You own a PL, you're trying to run a strategic plan. Um, you know, I I I personally got heavily involved in making capital decisions, which shop owners make all the time. Sure. Do I invest in this equipment? Uh do I uh make this hiring decision, that kind of thing. And we were making those same decisions just at a you know a bigger scale. But but all the concept, financial concepts at least are the same. Um now I I did spend a lot of time doing that after a while. I moved into corporate MA and did some more corporate level stuff. I kind of got tired of that, to be honest with you, because I started getting out of the operational stuff, which really I love to see when I'm either I make a decision or I help someone make a decision and there's an outcome. You know, there's a measurable outcome that you can see on the financials. That is what I get out of bed for. And I was just in a cycle over several years of like I was totally, you know, disconnected from that. And so I had an opportunity um to get into collision. I spent some time doing some research, and I was very blessed and thankful to have the opportunity to get into an MSO, pretty large MSO, independent, large MSO, um, and learned the business, right? And understood the pain that everybody goes through on a daily, weekly, monthly, yearly basis in this space. Now, what's interesting is I came in at a really difficult time, right? Like this industry has over the last few years, it's really been uh um it's just been painful. It's been a struggle for a lot of people. And so I didn't even have a chance to get like my feet under me before it was just like, here we go. Like this is we gotta solve these problems. Um, and so you know, I I like to say that Pain is one of the greatest teachers. Um and and so uh in my opinion, I I couldn't have picked a better time to come in because I learned more through pain than probably uh I I would have otherwise uh learned. So I'm very grateful and excited. And but I I got to the point where I could I kept seeing um you know collision owners making the same decisions um without the clarity. And that's what drew me to to start collision advisory because I wanted to try to bring that level of strategic thinking that I was, you know, at that I had at Kroger to everyone. Um at and that's why, and and the reality is, and we'll talk about this later, but um, you know, most people don't need a full-time Doug. Like it's silly. Uh in fact, almost nobody in this space needs a full-time me.

Rick 8:44

So yeah, so that's that was the fractional CFO piece comes from, isn't it? There you go. I love it, I love it, I love it. And and you're right, you uh you actually kind of came into this right at a critical time. It was a difficult time, but it's also um a key time for someone like you to come into this industry because there's such a need for that level of uh focus on the right stuff in your business to continue to succeed. It's not going to get easier for anybody, but the smarter you are, the more knowledge, the more um uh connected people that you need, you brought into your business, uh, the biggest difference it makes, right?

SPEAKER_04 9:20

So well, and I think too, Rick, you know, one of the things I always say, and I think this is true, regardless of the industry, regardless of the job, whatever got you to the place where you're at today will not get you to wherever it is that you want to go, assuming that you want to change your out your trajectory. If you're in a bad trajectory right now, you like whatever got you to this point will not get you out of that tailspin. Um, and so I think that's where um you know that level of strategic thinking helps you kind of figure out how to do something different. And you know, that's that's what I'm trying to do.

Rick 10:04

No, that's

From Big-Company Finance To Collision

Rick 10:05

fantastic. So um, you know, some of the things I want to talk about, I know we talked a little bit before about this, is I think, you know, my time in this industry, I I spent as most of it as a distributor, you know, in shops every single day, talk with owners and managers and technicians. And um I could see a lot of that, you know, years ago that most of these shop owners really didn't know anything about business. They didn't know how to run a financial company, they didn't know how to watch their their dollars, their you know, their uh most of them didn't even know what a PL was, which is really scary. There's some really big customers I dealt with that did not have a PL and they just relied completely on their uh their tax consultant or their CPA to tell them how they're doing and where they should be going. And I know there's uh um some serious differences between a CPA and a financial advisor. You want to dive into that a little bit? If you're running a collision shop, whether second generation, third generation, or original owner, grinding every day, putting out fires, chasing KPIs, working in rather than on the business, and wondering why progress still feels slower than it should, let's take a little pause right here. As a longtime industry supplier, performance coach, and host of this podcast, I've worked inside this industry for over four decades, and I've learned a few things the hard way. Tools and tactics absolutely matter, but mindset drives everything. How you think shapes how you lead, how you hire, how you grow, and how you show up when things get messy. That's where one-on-one coaching makes a difference. You get focused conversations, real accountability, and guidance tailored to you and your shop are not generic cookie cutter advice. The collision repair business has changed dramatically in the last few years. The technology, the tools, the equipment needed to repair today's new vehicles, customer expectations that vary by generation, OEM certifications and repair procedures, eight ass calibrations, electric vehicles, and the ever growing national technician shortage, it's a lot, isn't it? It can be absolutely overwhelming and very challenging on where to focus first, right? If only I had someone who could help me find clarity in all the chaos. If only there was someone that could help guide me through the changes I need to make so I could create a successful business, increase my net revenue. If only I had a coach that could help me without getting in my way or trying to run my business for me or costing me a fortune. This is where I can help. The goal is simple. Help you make consistent improvements, build sustainable culture, gain better profitability, and shave years off the learning curve. If you're open to adjusting how you think and how you lead, book a free 15-minute discovery call with me right now. No sales pitch, no blue sky promises, just an honest conversation to see if it's a fit. You have absolutely nothing to lose but everything to gain. Secure a spot now.

SPEAKER_04 13:00

Yeah. Yeah, I mean, here's the thing about CPAs. Uh they are absolutely necessary in any business environment. Um, that tax work is is genuinely difficult, right? Like it's hard to do tax work, and you need someone that's a professional to do that work. But to your point, you know, tax compliance and running your business are two different jobs. And I think that people conflate those two things and they bring them together and they're not the same. And I think that's a mistake that uh a lot of owners make is assuming that because they have a good CPA that they're they're good, and that's not gonna help you, right? And uh one of the things that I mean I can't tell you how many owners I've talked to in the last several months, they get a view of their full PL once a year.

Rick 13:58

Yeah.

SPEAKER_04 13:59

In like March or April, when they send their financials to a CPA and they compile them and and do all this stuff that they do, right? To to figure out what their taxes are gonna be.

Rick 14:11

That's like that's a change.

SPEAKER_04 14:16

Total rearview mirror moment, right? And and I I'm trying to help people flip that around and say, no, you need that visibility today. Now, there are gonna be people that say, well, I've got visibility at least to gross profit in my management system, like whether it's CCC or Mitchell or whatever it is that you're using, right? Right. And I my comment to that is I can I can tell you with 100% certainty that there is a massive difference between the gross profit answer in CCC and the gross profit answer that ends up in your financial statement almost every time. I've never, in fact, I've never seen someone even it we were operating it like I was running it, and there was always a gap. And there are reasons for the gap, right? That there's all kinds of things that are in flux, yeah. Yeah, and they and they don't flow through the same way to your to your uh financial statement. So if you're managing from CCC, you may, or whatever management system you're using, you may not even have the full picture in that moment either. And so that's why this, in my opinion, that PL creation on a monthly, quarterly, annual basis is so critical because it also helps you track down issues with the way that you're managing your your process in your management system. Because you might say, oh shoot, I had this thing toggled incorrectly, and it was measuring my paint and materials, you know, incorrectly. And so it was telling me that my paint and materials profitability was one thing, but at the end of the day, what you pay for paint is what you pay for paint, and that ends up in your financial statement. Right. So those two things aren't necessarily the same thing, and you have to have the actual number in order to tell you whether or not that

CPA Versus CFO And The P&L Gap

SPEAKER_04 16:20

CCC answer is correct. So I think there's two issues, two blind spots, if you will. It's that CPA piece, and then I also think it's this reliance on a management system that may or may not tell you the correct answer.

Rick 16:35

No, I would agree with that. So and I've talked about this before is you know not everybody needs a CFO, right? There's small shops, there's medium shops, there's big shops, there's you know, groups of shops. But having somebody you have access to, I think, is is probably more critical. So I would assume that's really one of the reasons why you launched the way you did and what you're targeting the way you're targeting it. Um you getting good feedback from the customers you've been dealing with so far for the past you know three, four, five months or whatever uh on that, where they're going, yes, I just need you probably three times a month, Doug, right?

SPEAKER_04 17:17

Once a week or that's exactly no, that's exactly it. In most cases, that's exactly it. And every engagement that I have, Rick, is totally different. I can tell you, like, they're all they there's no like uh I was telling somebody this yesterday. I don't have this like really structured like pricing menu of like, oh, I want Doug for this and this and this. No, it this is like, hey, you're coming to me, let's create a an engagement that accomplishes whatever goals you have and outcomes that you want. And and I say this too all the time. I wouldn't be a very good CFO if I became a financial burden to your business. That would be a really bad outcome, right? I think like if if if you come to me and you say, and I've had this happen several times, where we review something, you know, I'll usually do like some discovery ahead of time before we enter into an engagement, try to understand like where they're at financially. And I've told some people, I'm like, I don't know if I can help you get any better, like you're doing great. And and I just tell them, like, I'd be happy to check in with you once every six months and just see if you're still doing great, but man, I don't think you need me, you know. And and they're like, well, thanks for saying that. Like, you know, uh, so I I think I'm really trying to find the people that need help and meet them where they are and wherever their need is. Um, you know, I've got some people that I mean, you were talking about CPAs. I I have one guy that is it's a really heavy engagement. He's asking me to act as his like controller and help him rebuild his whole financial infrastructure because he wants to grow. And he had me sit on in on a call with his CPA because I'm on retainer with him. So he can call me any time and he's like, hey, just can you hop on this call with my CPA? And we got on a call with his CPA, and it this is one of like the top five accounting firms in the country, by the way. Wow, and he this CPA wanted my client to pay taxes on a paint pre-bate. Now, all of your listeners know crazy know what a paint prebate is, right? It's where you're the it's the money the paint company puts up front when a shop signs a long-term agreement. And I was like, I was like, no, man, like it's not income. That's that's not income. It's it's effectively a loan against future purchases to an extent. I think the IRS has some term for it. I don't remember. I had to look it up, but because I'm not a CPA, I'm not giving tax advice here, but but um, you know, and we had that whole back and forth, and it's not income.

Rick 20:00

So yeah, I ever've been in that conversation a couple of times as a distributor when customers want us as a distributor to you know invest in their in their collision shop so they can buy a new booth, new framework, or whatever, and explain to them. Listen, no, you're not gonna get a 1099. This is just prepaid uh discount. Discount, you know, and some of them couldn't wrap their head around how that was supposed to work. That's right, it's not a pay tax and all that crap.

SPEAKER_04 20:26

So yeah, but it but to your uh going back to your point, there's everybody's got a different need, and I'm really trying to build something that meets the whatever those needs are, and ever and those are just different at every level. And some people are gonna say, well, that's not a very good business model, and they're probably right. I'm probably I I'm probably gonna, you know, like I I probably should pick a lane, but I'm really trying to help people here, and so it's it's hard for me to to turn anybody away that is asking for my help. And so I've I've just tried to build whatever it is that you know meets them where they're at.

Rick 21:08

Doug, that's not a bad thing, right? You know, helping people is always a good thing, right? So it'll lead to other you're I think the avenue will uh reveal itself at some point, but I'd say keep doing what you're doing as far as just you know trying to help as many people as you can. Um with that,

What Fractional CFO Support Looks Like

Rick 21:25

I was gonna ask you, um can you share like some of the uh the highest risk, the the common blind spots that you're finding out most shop owners don't see soon enough. Um you can come in and actually make some some meaningful difference for their business.

SPEAKER_04 21:43

Well, uh you know, I hit a little bit on it earlier, but um one of the first blind spots that I often see is there's there's a huge difference between cash flow and your operating P L. Your income statement. Now, some people don't have the income statement. We just talked about those folks, right? Like that don't even see it until much later in the year. Those people that don't have this piece are probably operating from their bank account. So they just know, like, okay, and they they probably understand cash flow really well, right? Because they're like, hey, I know that this is going to go out on this day and this thing is going to come in and that sort of thing. So they understand cash flow and don't understand the PL piece. And then you have some people that are actually the opposite, and they have uh they actually have PLs and then they don't understand cash flow and they they can't figure out they're like looking at their PL and they're saying, gosh, it says I made money and my bank account is like depleted. I I don't know what's happening. And so that to like to me, that one is one of the biggest blind spots that I see is this profit versus cash, right? And the these two things, they they work together, but you if you don't understand how they work together, you're never gonna solve the the the mystery of the bridge between those two things. And and so that's one of the biggest areas that I see a blind spot on. The second one that I often see is if you have a PL or if you're managing from your management system, um, is depart what I call like department economics. That's probably not a that's probably more like a Kroger term. Um, but but you a shop has like labor, right? You've got parts, you've got paint, sublet, um, you've got different carrier mixes, right? So like you might have a pay mix that is, hey, I've got X percent of customer pay and X percent is state farm and X percent is progressive. Most folks don't understand their their mix. And the PL, if you if you don't have a if you don't have your PL set up correctly, it's all just blended together, right? And especially if you're relying on your CPA to tell you, they have no clue. They're they're just throwing it all in. It's just like, oh, this is all just sales, this is all just expenses. I they don't care about any of those pieces. And we talked about earlier CCC or whatever management system you're using kind of has some of those pieces, but they may or may not be telling you the right answer. And so that's where I think there's another huge blind spot is this this lack of visibility into the department level economics, if you will.

Rick 24:40

I know exactly what you mean. There's uh like within CCC, I have a couple customers I work with in the evenings, and I've got one of them I've always worked with him on his uh on his PLs, and I found through CCC you can look at your mix, so you can look at all your state farm, your triple A, and by by you know, by department or by brand, you can see what their profitability is on that. And yes, you can how much of a percentage of your business is all those other things that can help you make better decisions on. All right, I think I could feel pretty comfortable dropping my DRP program with this guy because he's 13% of my business and his his margins aren't nearly margin's 42.

SPEAKER_04 25:21

Yeah, and it's like but and and I've got this guy over here that's running 46. Like, man, I should be I should be hammering to try to get as much work in through that carrier if you're a DRP compared to this one. We did that all the time. Uh, you know, when I was in the MSO, was we would compare the economics of of the um the different carriers to try to get to those better outcomes. So yeah, you're absolutely right. All right. Now, to be clear, Rick, though, yeah. One thing I want to say, none of this means that anybody is like bad at business necessarily. It just means that the recording that you're using was built to file a tax return, right? That's what that's the whole point. It it's not built to run a shop, and those two things are just totally different. So it's it's just it's you can't run a shop off of it.

Rick 26:13

No, I I would I would agree. I think um, you know, just for the past 30 some years, shops never really ran it like a business. And I don't know how many I'm not that sharp on it, I don't know how many software companies there are out there that actually do a really good job helping you financially manage your collision business because it is a unique, a unique business. So I don't know if you've seen any not really.

SPEAKER_04 26:38

I I here's what I have seen, and you could probably attest to this. Um, I I actually saw, I'm not gonna get it right, but um, I actually saw a stat recently. It was in the dealership space, which is similar. Yeah, and they were talking about how AI, they I think it was like 84% of people in in dealerships are frustrated with AI and don't feel like AI understands their business, right? I think that has to be true for collision as well. Yeah, and one of the things that you know and I know is AI will probably never understand your business. Like it's not, you're not gonna be able to build it in a way that only knows collision, right? And so I think that um a lot of people are trying to solve that through AI, like they're trying to be like, oh, everything through AI. Yeah, it's like I'll just dump all my PLs into AI, and it's like I could tell you with certainty because I've tried it just to see what it would do, it's total trash most of the time. It's like the outcomes are I mean, it's not bad, but you it it gets you a decent part of the way, but if you don't know what you're looking for or the right questions to ask, you're gonna get to a bad outcome most of the time. Um, it it it might get you further than you are today, but it's it's uh it's not gonna get you all the way. Right.

Rick 28:07

Yeah, that's a whole another discussion with AI. Yeah, we can have that one. Everybody is trying to utilize, and me included, everybody's trying to utilize it for a lot of things in life. And you know, there's a lot of things it's really good at, and the better you get an understanding how it works and what you need to put in uh for prompting and all that stuff, makes a massive difference. But collision, I don't know why collision is so such a bizarre sector of business. Well, there's so many variables, yeah.

SPEAKER_04 28:39

There's way too many variables, but well, and and at the shop level, as you well know, we're talking about very and I think you and I had this conversation over dinner. Um, but it's you know, this is a variable manufacturing business. Literally every car is different that you produce, every single one. So just think about that. Like you can't, there's there's no one size fits all. Like most of these computer systems, because that's what an LLM is, that's what an AI is, it's built around guardrails. Well, this this industry really has none. It's like every single answer is different. And I just told you, right? Like every person I talk to has a different need. So so if I tried to apply an AI to meet their need, it would be wrong

Profit Versus Cash And Department Economics

SPEAKER_04 29:30

because they can't, you know, their need is different than this guy's need or that gal's need or whatever. So that's where the computer isn't quite capable yet of you know jumping over that hurdle, because that's a a bigger human hurdle, I think. Right.

Rick 29:49

I know where you came from, everything was a lot more clear-cut and how you did your job. And you're kind of learning on the fly here what fits with collision and what doesn't. So but you had a kind of a vision, right, when you decided to start collision advisory. And what did that vision look like to you? You know, stretching out, let's say, five, ten years from now. What did that look like for you?

SPEAKER_04 30:14

I mean, Rick, I was like, I you know, I thought in my head, I was like, I'd love to help, you know, five, ten owners a year, like maybe, and and get in front of maybe one new owner a month or something like that, and and and then kind of let it level out and and uh and just try to try to help, right? I mean, at the end of the day, I know I said this earlier, but I want owners to understand what their business is telling them while they still have options. That is the mission right here is know your numbers and then build what's next. That's what I that's what I I don't know where I came up with that tagline. It's it just surfaced at some point. But but right now, that financial picture for all of them shows up too late, or it's in a format that's in impossible to act on, um, whether you know somebody took on the wrong debt or hired ahead of the work or you know, just never saw that they had several locations and one of them was bleeding. I want owners seeing that. And so to me, like I my answer to this would have been different three months ago when I launched it than it is today. I now believe I can probably do have more of an impact than I thought that I could. Um I could see you know this this thing helping a lot more people. I uh and and this ties into something else that I've been and uh you know toying with, and I think I said it to you, but I believe that independent uh owners exist at one of the most difficult but one of the most opportune times probably in the history of collision, because you have these opportunities, uh especially with technology, to move faster and with more conviction, probably than larger players. And so what I'd love to see is for collision advisory to be tied in with as many independent uh uh folks as possible to to build thriving businesses that make it through this difficult time and come out better on the other side. And and I mean, to be honest with you, some of those businesses that I will partner with will probably swallow up some other ones that aren't able to adapt. And and they will take those opportunities to continue to give other people in the collision space opportunities to to grow and to um and to continue to build. So um, yeah, I mean, I could I I don't know exactly what it looks like. Uh I my vision changes probably every day, uh, which is you know the entrepreneur's dilemma. I think I wrote about this recently where I feel like I have, you know, I I've taken on this entrepreneurship moment. And and your you know, your audience knows this. Most of your audience is probably uh entrepreneurs and are full of entrepreneurs. And so they understand this better than I probably do, but you have 15 things that you could do, and you gotta pick something here to to focus on. And I'm struggling

Why AI Struggles With Collision

SPEAKER_04 33:30

with it right now because I think it's hard to do all everything at once. You gotta and I'm trying to help everybody, and so I I don't know, Rick. I I I'm gonna kind of let the the need take me where it goes. Um, and and I'll probably try to sort out some of that stuff on the back end. I have a tendency to say yes and then figure it out, you know, um to somebody that needs help. And so that's uh yeah, I I I I wish I could uh communicate some like clearer vision of like, oh, we're gonna be, you know, whatever.

Rick 34:04

But well, if you did, I'd call bullshit on it anyway.

SPEAKER_04 34:07

Yeah, you probably would, yeah. Although you have seen me, I I do get a little bit um I do get a little bit crystal ball sometimes with some of my some of my stuff. So yeah. This one's harder though, because it's because it's mine, right?

Rick 34:20

And it's uh I'm a little hesitant, but well, you're in you're in a ripe industry right now. Um, you know, as you talked about, you know, trying to help these shops make better financial decisions. I mean, there is a lot of shops. There's you know, third, I don't know what the exact numbers 35 to 40,000.

SPEAKER_04 34:37

30,000, yeah, something like that.

Rick 34:39

And they're not all gonna survive. We all know that. Uh, there's gonna be attrition, there's gonna be people that just age out, they die. There's gonna be shops that you know want to grow two or three shops and then sell to a larger MSO. That's gonna continue to happen. But then there's that sweet spot of independent repairs that are really trying to make their business better. They want to be in it for another 10 or 15 or 25 years. You know, it's maybe the second or third generation uh shops, but they need those pieces to keep them from getting to that spot in their head where they're going, you know what, screw it, I should just sell. This is I'm I'm I'm I'm climbing uphill and it's muddy and wet, and I keep sliding back down. Uh, you know, I'm done with the battle. I think if they had good financials, good advice from someone that knows that side of the business, yeah, and helps them and they listen, right, and make those corrections that could keep them from getting that point in their head where they're going, screw it, I'm done, right? Yeah, there's potential huge potential out there for you. I guarantee you that.

SPEAKER_04 35:43

Well, I think um, yeah, I I like to think, and I don't know, this just popped in my head, but it's like the having a clear vision around your financials is like having a clear windshield, right? Like if you're driving down the road and you don't have a clear windshield, you have no idea where you're gonna end up. And that's the other thing, too. You know, one of the things that even the folks remember earlier we were talking about the people with the clear PL, that's that's only like half of the battle here, right? The other half of the battle is taking that clear PL and then projecting it forward. Almost nobody does that last piece, right? There's a very small sliver of people that say, okay, here's where I am, here's where I've been, and here's where I'm going. And that last piece is what I love to work with people on. Like, and that that's where I'm trying to get everybody that I work with to, but you you have to build the foundation that gets you this piece so that you can point it forward, right? And say, okay, this is now where I'm going. But if you don't have that clarity, you have no vision through the windshield to say, okay, now I know where I'm going, right? And so that that gives you that vision.

Rick 36:58

Yeah, that's a great point. You know, um, knowing exactly where you are with a GPS is is phenomenal, right? It's better than just driving blind, but yeah, not knowing where you're going is is equally as troublesome, right? I was gonna say, I don't think that many people do look forward, they go, hey, I'm doing really good, man. I got my gross profit up to 52%, you know, my nets, you know, 16, which is awesome.

unknown 37:22

Yep.

Rick 37:23

So I'm just gonna keep doing this. No, it's like, okay, where do you want to be in in three years or two years, right? That's right.

SPEAKER_04 37:29

And and with your with your that whatever financial spot you're in, how do you maximize it then too? Right. If you're in a great spot, okay, awesome. What about the shop down the street down there that isn't doing so great? And can you swoop in and purchase them, right? And then and then help all of those people in that shop have opportunities to continue to work. And that's that's a big deal. That's in my opinion, that is one of the biggest. Um what do I want to say? It's a it's a obligation to to some extent of high performers is to extend your high performance so that more people can come in under your umbrella and have an opportunity to excel and to to provide and and work. So I I just I think there's so much there, and I think there's a lot of people that are great, that the great performers, they do the the work correctly and they and they perform the well on the business side, and they don't they don't then push that forward and say, okay, where am I going now?

Rick 38:39

Right. No, I agree. That's a great way to sum that up. So um, we're gonna, as we wrap this up soon, um, I want to ask you just a couple more things. So uh number one, this may sound off the wall, but you came from a pretty normal business model being a Kroger, being uh CFO, right? There wasn't a whole lot of variability, and you understood the business well, did great for them. Coming into Clish's business, Calitha's business, excuse me. What is the most bizarre fact about this industry that you still go, oh my god, I I still can't believe this. You know, I can't believe they operate this way. Is there one thing in particular that's so incredibly unique to this business that you would not expect to see?

SPEAKER_04 39:29

Yeah, that one's tough, Rick. Uh I think just narrow it down to one. Yeah, no, I know. I I um it's tough to do. It's interesting because one of the things that I think I I will answer this. Uh one of the things I think is so similar is that we still get results through people in almost every industry that you're in, right? At the end of the day, you still you still have to get results at the shop level through the people at the shop, and you need to invest in their training and and and get get them to where they need to be to perform the work. I think that um that is probably one of the most, I don't want to say bizarre, but it just it's it's a totally different thing than I was used to. I was used to like the training was pretty basic, right? It's like put groceries on the shelf, you know, interact with customers, that kind of thing. Um, in this space, it's like, okay, I've got to interact with customers, right? I've got to sell at the at the shop level. I've also got the variable manufacturing thing, which is just mind-blowing when you think about it, that you literally have to have a different, you know, whole a whole different blueprint. Every car that you bring in is different. So maybe that's it, is that variability of the manufacturing is just so incredibly complex that it's very difficult to scale. And and that's I, you know, that may be the most interesting thing about this industry is that it is difficult to scale.

SPEAKER_01 41:08

Yeah.

SPEAKER_04 41:09

Right. Because it's not at it's not easy to repeat over and over and over again. And just to be clear, the ones that do do this really well, it's really impressive that they're able to do that at scale, right? And I think you and I have had this conversation, but I think that's actually one of the reasons why this may not consolidate as much as everybody thinks that it will, because it because it's so difficult to scale. Obviously, some have done it already, but um, yeah, I don't know.

Rick 41:42

Yeah, you don't have three identical jobs uh coming in a week. You just don't ever just doesn't happen.

SPEAKER_04 41:47

So I would agree.

Rick 41:48

And there's a a a degree of training that I don't see in any other field to your point. Every single car is different, every car model, right? So manufacturers, yeah, you got some common things, but every single model is different. Uh the training, the tools, the technology that goes into those things does vary. That that is a lot. That's a lot to you know, cookie cutter in into it. Well, I I appreciate your input on that too. I just I just I always think that in my head. I love this industry, but I always thought, why is this is just such a bizarrely different industry. It is crazy. So I mean nothing, nothing compares to any other business out there, right?

SPEAKER_04 42:32

I can't think of any. Really, I can't. I I don't know of any that require this level of skill at the shop level, this level of variability. I I truly can't think of very many that are like that. Maybe like surgeons, right?

SPEAKER_03 42:47

Where it's like everybody is different, everybody's kind of put together the same. Yeah, they are kind of similar, aren't they?

SPEAKER_04 42:53

Yeah, I don't know. Yeah, so we're so collision repair is more difficult than surgery. That's it really is that's the claim we're making on the Mind Wrench podcast right now.

Rick 43:03

Technicians out there, you guys are better than surgeons, right? You got it. Awesome. Well, thanks for sharing, Doug. I appreciate it. Hey, what's uh uh anything coming up for you that we should know about? I know you're uh you're starting to get out there more into the conferences, yeah, uh some speaking opportunities and things like that, which is awesome, right? Yeah, uh, what you got coming up that we should know about?

SPEAKER_04 43:26

Um, I'm gonna be at a really cool conference in September called uh Collision Next. Um Dan Carranza is uh uh running that. And um I we've been kicking around different ideas. Uh I don't know if you saw my uh my news LinkedIn newsletter last week, but it got a lot of uh uh pushback. And uh so it may be that I am going to do an ADOS panel in September uh and talk about uh yeah, ADOS. So anyway.

Independent Speed, Conferences, And Next Steps

SPEAKER_04 44:00

We'll see how that goes. But yeah, that that'll be uh that'll be fun. I'm I'm pretty excited. I think Dan is putting on something. I you've been to enough of these conferences, you know. But one of the things that I personally see in these conferences is that we tend to like go like a mile wide and an inch deep on like a bunch of different and and I I see people's eye, I my eyes glaze over and I'm like, man, I don't like I've heard this like 50 times. Can we like go deep on a topic? Can you actually answer a question, you know, like that that uh has some substance? And so I've been really pushing Dan to try to think through like how do we get people that are willing to like go deep on a topic and say what they actually think without you know worrying about getting themselves in trouble or whatever else. And so apparently I'm getting a reputation for doing that already. So uh Dan asked me if I'd be willing to do that in September.

SPEAKER_03 44:54

Uh so it sounds like I'll be doing that.

Rick 44:56

That's awesome. And that's in September out in California. Yeah, Anaheim. Okay, yeah. I've I've seen some uh some of that um some of the background stuff on that. And I've talked with Dan a couple times. So yeah, I think it's an excellent program they're putting together. And I think it'll uh, like you said, it's gonna go deep on some things that they probably should. So that's awesome. Uh keep doing your uh if anybody uh is on LinkedIn and likes to see some stuff on there, you should be seeing uh a lot of Doug's uh little videos on uh he goes deep on the math for ADAS and things like that. It's fantastic. So make sure you check that out. And I'll leave uh plenty of show notes uh for contact for Doug so everybody can get you know reach out to him and and engage his fashional CFO mindset. I think it'd be great. Anything you want to share before we leave?

SPEAKER_04 45:49

Yeah, I mean, I know I said it earlier, but um the independent advantage today is speed. It is truly moving faster than everyone else. Um and a good independent today can adopt a tool or change a process or make a pricing call or hiring decision faster than a large consolidator can because they have to go through committee and all the other stuff, right? And so, but that only works if you know your numbers um well enough to move with confidence. So uh move with speed, move with clarity, and I think I think a lot of people are going to be able to win in this space. Awesome, great.

Rick 46:32

Thank you for sharing that. Appreciate it. And Doug, as always, it's been a great conversation. I love spending time with you. I'll look forward to seeing you again uh at one of the upcoming conferences. Uh, I'm sure we'll cross paths here soon. So I'll probably have you back on. We'll we'll do a deep dive on ADAS. That'd be great. I love the math behind it, it's awesome. So okay, once again, thank you, Doug. I appreciate you being here. And thank you, listeners, for tuning in today. Hope you got some good value out of this. And once again, uh, if you got any questions on that CFO side of the business, the financials, please reach out to Doug Higgins, okay? I'll leave uh all of his information in the show notes. With that, thanks for being here. Appreciate it. Hey, thanks for listening to the Mind Wrench Podcast. I hope you enjoyed our conversation. If you found value in today's interview, please subscribe, leave a review, and share this episode with others in this industry. You can reach today's guest, Doug Higgins, at collisionadvisory.com. I'll leave Doug's contact info in the show notes. You can find this podcast and much more from me at ricksilover.com or look for the Mind Wrench Podcast on YouTube. We'll see you next time. Well, that's all I had for you today. Thanks again for tuning in. I really appreciate your support, and I hope you have a great week. I can always be reached at www.riksilover.com, or you can find all my social media links, podcast episodes, blog posts, and much more.