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Hunt Demarest is a Senior Accountant at Paar, Melis & Associates, an accounting and tax firm specializing in automotive repair shops. Hunt is a seasoned CPA passionate about optimizing team management and development, empowering shop owners with financial insights that drive greater success for their businesses. Armed with an economics degree from Penn State and an accreditation in business valuation, Hunt shares his wealth of knowledge as host of the podcast Business by the Numbers, where he provides valuable insights into finance and accounting. Leveraging his expertise, Hunt authored the book Wrenches to Write Off’s, guiding shop owners through the intricacies of tax season preparation and execution.
In this episode…
In the fast-paced world of auto services, understanding the nuanced differences between tire shops and traditional repair establishments is not just a matter of industry insight — it’s a key to financial success. The commonly drawn parallels between the two often overlook significant differences.
According to Hunt Demarest of Paar, Melis & Associates, tire shops are often compared to traditional auto repair shops without accounting for the significant variations in their revenue streams and profit margins. He explains that understanding the fundamental distinction between the two is crucial for realistic financial expectations. While a classical repair shop might achieve a 20% net income target, tire shops face a more challenging goal due to lower profit margins on tire sales. Hunt argues that a rule of thumb is that it may take about double the sales for a tire shop to achieve the same net income as a traditional repair shop.
On this episode of Gain Traction, Hunt and host Mike Edge unravel the intricacies of the automotive industry. Hunt’s unconventional journey from an engineering major to an accountant sets the stage for a dynamic conversation. They explore the challenges of running an auto repair business, emphasizing the crucial role tires can play. Hunt’s expertise shines as he provides practical insights into setting realistic financial targets and highlights the significance of analyzing gross profit in dollars per hour.
Here’s a glimpse of what you’ll learn:
- Hunt Demarest shares what he learned when he was a snack bar employee
- Why experience working with the general public can be valuable
- What attracted Hunt to become an accountant?
- How Hunt’s accounting expertise can benefit auto shops
- Valuable business advice and observations from Hunt on multiple facets of tire and auto repair
- The best movie Hunt has seen in the past year
- Why you shouldn’t hire your brother-in-law as your accountant
Resources mentioned in this episode:
- Hunt Demarest on LinkedIn
- Paar, Melis & Associates
- Todd Hayes on LinkedIn
- Joe Adams on LinkedIn
- Glenn Piccolo on LinkedIn
- Adams Automotive
- AutoShop Answers
- Mike Edge on LinkedIn
- Tread Partners
Transcript
Announcer:
Welcome to the Gain Traction Podcast, where we feature top automotive entrepreneurs and experts, and share their inspiring stories. Now, let’s get started with the show.
Mike:
Welcome to the Gain Traction Podcast. I am Mike Edge, your host. Before we get started, I want to give a quick shout-out to some friends of mine. I’d like to shout-out to Todd Hayes, Joe Adams, and Glenn Piccolo of Adams Automotive in Houston, as well as their Auto Shop Answers Training. I had them on Gain Traction recently, and it was a great interview with these three gentlemen. If you haven’t listened to it, I encourage you to do so.
Today’s episode is brought to you by Tread Partners, our parent company. Tread Partners specializes in PPC marketing. I know everyone knows how to do it, and everyone already has somebody doing a great job for them, but are you sure? Do you have a partner that specializes in this industry only and specifically? Did you know that you can get an outside assessment of what you’re doing right and wrong as it pertains to your PPC digital marketing budget?
Tread Partners discovered tens of thousands of dollars per month in wasted spending with Google for its clients and those that just wanted an unbiased audit. Many of these shops were very successful already, but Tread showed them that they could spend less and still do more. So what are you waiting for? Get your audit today. Check Tread Partners out at treadpartners.com.
Out guest today is Hunt Demarest. Hunt is a senior accountant at Paar, Melis & Associates. He specializes in working with automotive repair shops. He is also the host of By the Numbers Podcast. Hunt, welcome to the Gain Traction Podcast.
Hunt:
Thanks for having me, Mike.
Mike:
Glad to have you, man. I’ve listened to a few of your podcasts and everything, and just fascinated with your story. There’s two topics that, as we got to know each other, that I thought would be interesting to cover with folks. Before we get to that, let’s do a little biographical here. Tell us about who you are, where you came from, and what was your first job.
Hunt:
Cool. I appreciate you having me on here. Like you said, we already had a good conversation, so excited to share some of this stuff. First job I ever had was working at a snack bar, and I think if nothing else, gave me an appreciation of like, “All right. This is why I need to go to college and learn how to do something else and not be stuck in here in 100 degrees Maryland summers every single year.”
Mike:
Nice. You also learned a lot about the public too and dealing with retail, I’m sure.
Hunt:
Exactly, right. Yeah. Also, maybe not a whole lot about cleanliness, because I was the person collecting the money, making the food, and all kinds of stuff in-between. Now, later down the road, I’m like, “You hired a 15-year-old to run, essentially, a mini-restaurant here,” so hopefully not many people got food poisoning.
Mike:
Oh my gosh. That’s … I had a little experience. My parents owned a convenience store and I almost forced all my kids to go get a job in a convenience store because you deal with every level of the socioeconomic group that comes through. You deal with every attitude that comes through, and I think it’s important just to learn how to deal with people, and that was a great education in a short period of time.
Hunt:
Oh, 100%. Even now, owning a business, that’s what I always say, and even talking to the shops we work with. The cars are easy, and more or less, the tax returns, the financials, that’s the easy part. The hard part about running a business is the customer side of it. Just personalities, how you deal with it, and even internally with just the team of like, hey, you might want to say one thing and that could work for one person. You say it to someone else that’s a little bit sensitive, and you have kind of a different result than you’re shooting for there, right?
Mike:
Oh, yeah. It’s very interesting. To the public, it’s a great sharpening tool for your communicative skills at an early age, and having to deal with … Most of the time, you’re in your first job or something, so you’re dealing with people a lot older than you, right?
Hunt:
Yeah.
Mike:
There’s a little superiority complex they usually have about … and they look at your position like you’re just a pawn to them, and you’re trying to help them out. Yeah, so interesting. Tell us … You got your education. You went into accounting, or was that always your outlook that you were going that direction?
Hunt:
No, that was not always my outlook, and everyone always, “Well, how did you get into the accounting stuff?” It’s like I’m not some weirdo that’s like, “You know what? I just love addition and being in a dark room with Excel spreadsheets.” When I first went to college, I went to Penn State for school and when I originally went there, like most people, I had no idea what I wanted to do, but deep down I knew that at some point, I wanted to work for myself. I don’t really take orders that well. I want to do stuff my way. Over the years, I think I was a good employee by a lot of things, my skills, but I want to work for myself and set my own direction.
I originally went as an engineering major, and after taking one or two of those math classes, I was like, “Yeah, we are not going to be doing this.” Ended up just still not really figuring out what I wanted to do, and ended up choosing economics, which I’m, looking back on it, really happy that I did so. My mom is a CPA and actually is a college professor that teaches accounting. I really didn’t ever have an intention of going into that field, I don’t think, because I didn’t really know what it entailed.
Like a lot of people, it’s like, “All right. We’re doing cash flow statements. We’re doing income statements,” which is what I do now, but really, going back to the people side of it, hey, we’re using these financials, we’re using these tax returns to help people. “Hey, do you want to understand more about your business? Do you want to make more money? Do you want to give less of that money to the government?”
The problem-solving aspect was really what attracted me to this, and then where it synergizes with this industry and what you do as well is I’m a huge gearhead as well. And so, my knowledge and expertise is obviously tax and accounting. I’m dangerous as a mechanic, but blending those interests has been really cool for me because, obviously, it’s my passion. It’s what I like. Cars are my passion. Accounting and taxes is my job. But just being able to connect with clients on a different level of, yeah, I know more than the average about cars and stuff like that.
Mike:
Well, it puts you in a very comfortable spot with, for instance, this audience right here with Gain Traction. The folks that may be listening to this, the shop owners, et cetera, you understand what they’re up against and so you already know the questions to ask. It’s not like you’re trying to learn a new industry right now.
Hunt:
Yeah, and this industry is not rocket science, but it has its intricacies to it. How can I help someone understand their business more if I don’t even understand how their business works? If you have someone look at a financials of any regular repair shop, maybe it’s a tire retailer or wholesaler, if they don’t understand how this industry works, really their only advice is, “Mike, you want to make more money, sell more or cut your expenses,” which is like, “Well, yeah, you don’t think that I thought about that before?”
Well, let’s talk about margins. Let’s talk about ratios. Let’s talk about efficiency. Again, how can you look at this and say, “Hey, your techs are 70% efficiency” In some industries, that’s really good. In other industries, that’s absolutely terrible. If you don’t have that deeper knowledge, you can only get, really, those surface-level conversations.
Mike:
Yeah, no doubt about it. When you knew you wanted to go into accounting and you realized that was the direction, and obviously, you like cars and the automotive side, did you go to a firm that already specialized in that? Or were you kind of like the first leg in that firm that focused on it?
Hunt:
No, and so …
Mike:
This is your first firm.
Hunt:
Yeah, so this is my fist real job as accounting … I guess, first real job in general. I’ve had some other random ones over the years, delivering, repairing hot tubs, which was, woefully unqualified for, but, hey, he paid me well and he was my lacrosse coach, so I’m not going to say no to that. But no, the accounting was kind of a natural fit. One of the partners, Jason Paar, who’s still my partner now, I’ve known him for 20 years. I believe I was a sophomore in college, and coming home, “What the heck am I going to do this summer?” He was like, “Hey, want to come work here?” I was like, “Yeah, let’s try it out.”
They had already specialized in auto repair shops. We celebrated our 30th anniversary at Paar, Melis last year, and 30 years ago, they started this business specializing in repair shops. Now back then, a little bit different. They came from a regional firm that specialized in gas stations, or service stations that have pumps. Over the years, as you know, the Wawa, the Royal Farms, the Sheetz, independently owned Exxon stations are less and less common, so naturally, the pivot was over to the repair side of things.
Mike:
Gotcha. Very interesting. Well, couple of the topics that you and I were excited about talking about, and I think it would be great for our audience, I think they’d be very interested, was we were going to talk about gross profit dollar per hour analysis for tires versus looking at percentage and the differences in financial targets, tire versus auto repair.
Hunt:
Yeah.
Mike:
You want to take off with that and talk about some things like what shops face and what they may not be considering from an accounting standpoint, bookkeeping standpoint?
Hunt:
This is where we just start rattling off percentages and just lose people, but seriously, a lot of this is how I like to talk to shop owners. I feel like sometimes, when you talk to accountants, they’re trying to prove, “Hey, Mike. I know more than you,” so the whole conversation is to confuse you to just show my superiority of, “Hey, don’t ever try to understand this yourself. This is only something that I could do,” which couldn’t be farther from the truth. We’re doing tax 101, accounting 101. These are basic businesses, and if you don’t understand what I’m sending you, then you’re getting no value from me.
A lot of times, we deal with only shops. 99% of our customers are auto repair shops. Now, auto repair shop is a broad spectrum. I got tire shops in there. I got heavy-duty shops in there. I got diesel shops, European shops, restoration shops, so they all have their little intricacies to themselves, and where it gets tricky … This is not an indictment on coaching companies or anything like that. That’s not what this is meant to say, but the biggest thing that I hear sometimes is guys having unrealistic expectation about what their business should be doing. Like, “Man, I was talking to my coach, and they really think that this looks bad, or that looks bad.” It’s like, “They’re trying to put you into a category here, which you just truly do not fit in.”
Tire shops are a great example because if I’m going to look at a classical repair shop, 50% parts, 50% labor, doing a million dollars in sales, half of that money is going to be labor sales, which, probably, making 60-plus percent margin on it. Half of that’s going to be parts margin or half of that is going to be parts sales. We’re probably making, again, 50% or better on it. Overall, if you look at that sales for that shop, about half of the sales coming down through there are going to turn into gross profit to pay their overhead.
Now, you swap that around and you say, “Hey, that is not a repair shop. That’s a tire shop.” You’re probably going to have 60, 70% of that being tires sales, and the rest of that being a mixture of parts and labor on there. What they’re trying to do is saying, “Hey, that tire shop should make the exact same amount as this regular repair shop.”
The big thing I have to go back and say is, “How do you expect to make the same percentage margins here when you’re selling tires at a half, or maybe even a third of what the margin of that guy down the street’s selling, that brake caliber, or that rotor, or that brake pad, or whatever it is?” And so the target, generally, for a shop is a 20% net income. Got a million dollars in sales, 20% of that or 200 grand should fall to the bottom line.
For a tire shop, especially if they’re doing any sort of wholesale on it, 20% is a very, very unrealistic goal for most people. Generally, as a rule of thumb, when I’m looking at a tire shop compared to a repair shop, it’s going to take about double the sales to make the same net income when you’re comparing a tire shop to a true, classical repair shop.
Mike:
But when you and I talked about this, we talked about how you utilize tires to get that long-term customer and where you can make money with certain designated bays, selling tires, et cetera, and the labor, and the difference there, right?
Hunt:
Yeah, and so this is where I’ve learned so much over the years just by talking to clients and understanding this. Naturally, I’m a curious person, so if I see someone that’s doing pretty bad, I’m going to start asking questions outside of what I see on the financials just to get a better understanding of, hey, what makes the good people successful? What are people struggling with that is hindering their profitability?
This is where percentage and dollars comes into play. Everyone loves to talk percentages. Everyone loves to talk margins because it’s scalable. Hey, percentage of a million dollars in sales is translatable into someone doing $10 million. Percentages don’t pay the bills. Percentages don’t buy cars. Percentages don’t even buy tires. Dollars and cents do, and going back to what we talked about before, if you look at that, you’re like, “Man, this business makes half the percentage margin that that business does. Why would I ever want to do that?”
Mike:
Yeah.
Hunt:
That’s where the tire side of it, you can’t just look at the percentage. Because on the surface, if you look at percentages, I’m never going to sell tires. Making 15% margin on tires versus 50% margin on brake pads, “We’re not doing tires,” but the difference is is who’s doing that work and how long it’s taking them.
I did my homework before this one, so I didn’t have to hear me struggle through mental math on here. If I take a classical repair shop, and let’s say their average repair order is 400 bucks, and they’re making 50% margin, they’re going to make $200 on that repair order, but let’s say it takes them two hours. Really, what that breaks down to is you’re making $100 of gross profit an hour. It took you two hours to make that 200 bucks.
Now, flash-forward, and you’re taking a look at a tire invoice. That invoice is probably going to be double that. Tires are getting expensive, just like everything else. Let’s say that that repair order is $800, but that includes four tires, maybe we’re making 30 bucks a piece or something on it. Mounting and balancing, another 20 bucks a tire. You’re looking at this overall, and that percentage is going to be less. Maybe 30% or even worse, but how long does that take us to do that? We’re making about that same $200, probably a little bit more in gross profit.
Most guys are slapping a set of tires on there, mounting, balancing, getting that person on the road in maybe an hour. So you’re looking at it and saying, “Hey, we’re making the same amount of money, but this is way less efficient because only a quarter of this is going in my pocket versus the repair shop, a half of it is.”
That tire job just took you an hour, so even though you made $200 in gross profit, you did that in an hour versus the guy down the street, took him two hours to do that. And so if you’re looking at that same shop that’s … tire shop’s doing two million, repair shop’s doing one million, they’re probably doing that with the same people in the same amount of time, which is where you can have the kind of margins and the kind of profit dollars that people are shooting for, and obviously, recognizing as well.
Mike:
Well, and I know our parent company, one of the things they talk to a lot of shops … If you’re just a repair shop, they say, “What we’ve noticed is …” We deal with multi-locations, so that’s our strength. If you’re not into tires, it’s hard to grow that multi-location. You have to provide tires in order to win that initial business. A former guest of mine, Darryl McClay, he talks about this exactly. He said, “You get the tire customer in, you get them for life because they come back for the free rotation and the other things that you provide. The free flat tire repair, et cetera.” He said, “But you’ve built a relationship around the tire.”
Ultimately, they’re going to have other problems too, and they like … Look, we all like the one-stop shop. It just makes life easier. I’m not taking anything away from just auto repair guys, because if there’s good shops out there, by all means, I’ll go to them, or whatever if the right people are there, et cetera, but tires do make a difference.
Hunt:
Well, for sure. Again, this is the kind of stuff that I see, and you could apply that same mentality to doing state inspections, emissions, and all kinds of things. If you’re looking at the specific thing and if you’re looking at the specific profitability, that is one metric on there. But also, hey, are you opening the door to other competition? If you’re a one-stop shop, you do emissions, inspections, smog, tires, you name it, there’s no reason for your customer to ever go anywhere else because you provide everything.
Especially the guys, when we look at on the inspection and emission side which really pays no money on it, why do we still have so many people that do it? Because if you don’t do the emission on it, they go to another shop, they have a really good experience, they’re like, “Okay. Hey, maybe we give them a shot. Hey, they did the emission. They saw that I needed brakes.” “Now, they’re going to pick up that job, not us.”
Same thing with tires. Hey, if you’re looking at it, yeah, we just proved that you can make money on the tires, but if someone else is going to that shop down the street that is the one-stop shop just for tires, you don’t think that they’re going to get a DVI? You don’t think that they’re going to get a sale on some of that deferred maintenance? I’m sure that they will, and if they’ve got someone that’s good at selling, they might just pick up and steal your customer too.
Mike:
Well, it’s very interesting because I have gone to folks that, just personal experience, I couldn’t get into a bay. Not that I didn’t want to wait for the guy that I liked, and the shop, and et cetera, but I need my wife’s car back. I don’t have an extra timeframe here, and I don’t want to get into a rental situation or whatever, so I go to the next best option.
Next thing you know, he finds something else on the vehicle. “Okay, fix it.” I’m not going to … I don’t divide that line and go, “No, hold up there. I’m taking that back to my primary shop.” It’s just not going to happen. Then the challenge he faces, the primary, I just had a great experience or whatever you want to call it. A great experience, the price is right, everything. They got me in and out. Okay. Now what happens the next time I got to make a phone call? Now, I’ve got a choice that I didn’t really consider before.
Hunt:
Yeah, and I would say even just the metric on pricing. I’m young, and so I don’t look like I’ve been doing this as long as I have been, but just over the years … When I first started, there was no Tire Rack. There was no sort of competition out on the internet, and about halfway through my career, Tire Rack came in and became a big player, and really shifted up the market of what shops did. Because for a while, everyone had their idea on, “Hey, we’re trying to make this, 20% margin, 15%, 20 bucks a tire.” A lot of different ways to slice it up, and then when you have the Tire Rack come in and some of these big box getting into the game, these guys quickly realized, “Hey, if I don’t have the volume, I can’t even touch their prices. Their retail price is less than my wholesale price.”
And so we started to see this huge split of how people tried to do this. Some people tried to go down that road, and they tried to price shop, and they tried to price match, and they realized pretty quickly, “We’re not playing on the same field. We do not have the same buying power. We cannot compete on price.” What a lot of guys ended up doing, they either said, “Hey, we’re not doing tires. We are no longer going to offer that service.” And a lot of the guys took a look at, like you said before of, “Hey, they are not here because we are a tire shop. They know that we do not have the volume or the buying power. It’s convenience.”
“Hey, if you go and you take your car, I’m going to finish it up. I’ll do the brakes. I’ll do the suspension. You take it down to Mike’s place, and he’ll put tires on there.” You know that you’re going to get it for cheaper. Most people, efficiency, convenience. Time is money. “Yeah, I know I can go get it somewhere cheaper. It’s already here. Can you put the tires on?” No, you don’t need to blow me out of the water on price. We’re pricing based on convenience.
What I’ve seen over the years is we had margins 15, 20% or so, and those dropped down. Most of my guys still selling tires that’s not their sole source, margins are back up because they’ll be upfront with a customer. “Hey, you know what? It’s here. It needs tires. We can put it on there. No, I’m not going to kill you on the price, but you also aren’t looking for cut-rate prices because you know where I stand.”
Mike:
Yeah, and most likely, just because it’s a local shop like that, you’re going to have that better, friendly service for the future. You get those deals where you get rotations, or you get flat tires, or whatever the situation may be. Especially if it’s your wife or one of your children, then you just got that comfort just like if you’re out of town, hey, just run it over here. They’ll take of the … They’ll fix the problem, and it just makes things easy.
Look, I’m a very relationship-oriented buyer, and I think about about that. It’s kind of like you and I have probably bought software, and number one, the question with software is, what’s the support? I mean, at the end. Great, the product looks awesome, but I know it’s going to break somewhere. I’m going to tear it up. I’m going to do something wrong here. Who do I call? Don’t have the support, I don’t want the software.
Well, the same thing. I’m that way with whatever I buy. For the future, who do I call when there’s a problem? It’s not an if. It’s going to be some issue I’m going to have, and I need to know who to call, and it’s not a problem. I mean, that’s not the issue. I just want to know how to resolve it.
Hunt:
Yeah, which is kind of funny because if you ask most shop owners, they would have the same exact feedback. A lot of times, I hear some of these questions about, “Well, should we do this? Should we do that?” It’s like in every other business besides yours, you are the customer, not the owner.
Sometimes, I feel like a lot of self-employed people lose sight of that, of like, “Well, hey. Should I charge credit card fees? Or should I do this?” It’s like, how do you feel when you go to a business and they charge you a credit card fee? Well, I freaking hate it. It’s like, why would your customers feel any different if they do it to you? Same thing. You’re saying, “Well, hey, why do you choose to do business with them, not them?” “I love them. I can count on them. They’re always there when I call. They do it right. They stand behind their work.”
It’s like, well, nowhere in there did you ever mention price. For most people that really listen to their customers or really ask, actually, they’re not there because they’re the cheapest. They’re not there because they have the best coupons. They’re not there because they discount this stuff off. If you really poll your good customers on this, they’re there for everything other than price, but for some reason, a lot of shop owners look at themselves of, “Hey, I need to make sure my prices are cheap because that’s why people love me.”
Mike:
It’s fascinating. I had a customer in my life, he had 19 bays. His name was Tim. Super nice guy. One of the sharpest guys I’ve ever seen in the tire and auto repair business, but just as down to earth as you could imagine. I watched him with customers one day, and this guy was pulling off his lot while he was talking to me, and he was always on the phone or just right in the middle of his shop’s business. He was just in it.
This guy was pulling off. He said, “Hey, Gary. If you hear that noise again, you just bring it back. We’ll take care of it.” I looked at him after that guy drove off. I said, “You’re awesome, just the way you deal with people.” I said, “I’ve been to a ton of shops,” but I said, “Just the way you deal with people.” He said, “Look, we’re going to fix it. If you bring it in here, we diagnose it, and we tell you the problem, and we tell you what we can do, then we’re going to fix it, and if we don’t, bring it back. I’m not going to charge you any more because I had it in my mind that we were going to have it fixed. I gave you the analysis and everything.”
I just love that attitude, and guess what? His business has thrived enormously. I mean, no one in his market goes anywhere else. Just put it that way, because he’s a hands-on owner. It’s a little different situation, I get that, if you’re a multi-location place. He ended up having two stores, but that’s the way he ran them. For a customer, I could feel his customer was always comfortable and satisfied. They were very much like the … very busy shop doing millions of dollars in one shop, but they had so much of the people that walked in would just drop their keys on the counter, “Call me. Let me know what’s up.” Man, that just doesn’t get any better than that. That’s a compliment, right?
Hunt:
No, and a lot of that also is the kind of customers you’re dealing with. A lot of times, and my business is no different, you take a look at incidents or stuff that happened and you have to step back, and look at this and say, “Hey, did we do the right thing, and this was not the right customer? Or did we do the wrong thing, and this is the right customer?” and that’s very tricky.
For the guys that remember and made this mistake of running Groupon campaigns back years ago when that was really popular, it’s like, “Hey, you want to pay money to have some knucklehead drive two hours for a cheap oil change?” It’s like, not only did you lose money on that, you’re never going to see that guy again. That’s not the kind of customer you can build a business off of. A lot of times, I would equate the automotive industry very similar to my business. You’re dealing with a lot of people that don’t really understand a lot of what you’re doing.
How many people just look at a car, and it’s just A to B? It’s an appliance. They couldn’t tell you the difference between the camshaft and the tie-rod. It’s all Greek to them, but what they’re going for is they want to have that trust. They want to be able to say, “Hey, you’re never going to be able explain to me how variable timing works, but you’re explaining to me that, hey, you’re going to stand here. I trust what you’re saying, and you’re going to fix it.”
That’s why building that rapport is so much more important because you need that level of trust where it’s like, “Hey, just drop it off, Tim. Give me a call when it’s done. I trust you. I know you’re not going to steer me wrong.” Unless you do something egregious there and you don’t fix it, you’re probably never going to lose that customer, even raising your rates five bucks, raising your margin 10%. It’s that intangible that people forget sometimes.
Mike:
Well, you kind of said this earlier another way, but really, if you want your customer … It’s like you said. You’re a customer in every situation other than your own shop. I mean, the one you own, so just the whole golden rule thing. Just, if you want to be treated a certain way, treat everybody else the way you want to be treated. Usually, that’s going to work out real well for you.
Hunt:
Yeah, in the long run, right?
Mike:
Yeah.
Hunt:
Sometimes, you get jaded. You’re like, “I helped out that employee. I helped out that customer,” but it’s like, you know what? There is karma. It might burn you now, it might burn you later, but down the road, people will remember, “Hey, he always did the right thing. He always stood by his work.” Versus, “Hey, you’re messing around with people, stealing their money, pencil whipping,” and stuff like that. Hey, you will make more money this month. You will make more money next month. You might even make more money this year. Eventually, that’s going to come around, and you’re going to have to pay the price on that.
Mike:
Well, Hunt, we’ve come up against our time, but if someone wants to reach you and talk to you about accounting for their shop, how do they reach you?
Hunt:
Yeah, so check us out online at paarmelis.com. Also, like I said, Business by the Numbers Podcast comes out on a weekly basis. On our website though, we’ve got free resources. We’ve got a benchmark report comparing KPIs for shops all around the country to see where you stand up. Also have a couple books on there too to give you a better understanding about your finances, taxes. All free resources, and be happy if you can take a look at that and get some knowledge. If you want to talk more about how we could help you out with your business, yeah, there’s a way on there to reach out to us as well.
Mike:
And Paar, Melis is spelled P-A-A-R M-E-L-I-S.
Hunt:
Daggum.
Mike:
All right. Back on a little bit of biographical stuff. Let’s go with a really tough question here. What’s your favorite movie of all-time?
Hunt:
Favorite movie of all-time. See, this is a tricky one. We just took the whole team away for a retreat and they asked me that. Favorite movie of all-time. That’s a hard one for me, but this is a cop-out answer. I would say that my favorite movie that I saw this year is Asteroid City.
Mike:
Oh, really? I didn’t see that one.
Hunt:
Okay, and if you haven’t, next … I watched it when I was on a plane, and that’s if you fly American, they have it free on there, so next time you travel somewhere, I would recommend checking it out.
Mike:
All right. We have a segment too called Make Us Laugh. You got a good, funny, professional story? You got to keep it clean though.
Hunt:
Yeah, and so this one is … I’ve told this story before. I actually was teaching at a conference, and found out later that the person I was talking about was actually in this room, so-
Mike:
Oh no.
Hunt:
… we’ll see if they ever notice it. Yeah, well, they should be ashamed of themselves, so it was … I had only been, probably, working three or four years, so I was dangerous, but I would say my confidence wasn’t at 100% where I could call people out like I would now. I would treat the situation a lot differently, but new client came onboard. They were based in North Carolina, and just like any new client, “Hey, we need your previous year tax returns.”
They sent me over the last, I would say, five years of tax returns, and so there was five federal tax returns, and there was only three state tax returns. Essentially, every other year, there was a tax return, and that was back at the time, I think he even faxed this stuff to us. Right now, it’s all email and PDF. I call the client up and I say, “Hey, we’re missing something here. I got these three years for North Carolina. These two years are missing.” He kind of laughs at me and goes, “You’re joking, right?” I was like, “What’s going on here?” He’s like, “We don’t file state tax returns every year. Those are only something that have to be filed every other year.”
Again, I had not been working very long, and I was like, “Man, did I just learn something today?” And so I go back and I asked someone I worked with, and they just laughed at me. They thought I was messing around. So it turns out when I dug in more, his brother-in-law was actually his accountant, and had somehow come up with this tax law that only needs to file every other year.
Now, anyone here in North Carolina, pretty much any state out there knows that that was 100% untrue, and for some reason, this guy had only been filing tax returns, and he’d been in business a good while, every other tax year. That was the first learning lesson for them, as a new client is, “Hey, unfortunately, you’re going to be having to pay me to file these North Carolina tax returns every single year,” and also, he blames his brother-in-law.
Brothers-in-laws, over the years, have given out the worst tax advice ever, from what I’ve heard from my clients. Realistically, what I think the brother-in-law is is it’s either themselves, but they’re trying to get away from this stuff, or it’s actually their own brother, and they don’t want to admit that their blood related to this person that generally gave them pretty bad tax advice.
Mike:
Oh, that’s brutal though. Did you tell this one story one time when the guy was in the audience?
Hunt:
I told it, and then later on … I told this story, I was teaching a class, literally, on taxes, and the reason why it’s important to talk to your accountant and not trust advice from people. And after the class, came up and said, “Hey, been a long time. I haven’t talked to you.” I was like, “Oh my god.” I don’t even think he knew that this story was about him.
Mike:
Oh, that’s … Well, listen, Hunt. Thank you for being part of Gain Traction Podcast. It’s been awesome.
Hunt:
I appreciate you having me on here.
Mike:
Absolutely. To all our listeners, thank you for being part of the podcast. If you’d like to recommend a guest, please do so. You can email me at [email protected]. Till next time, be safe, and have a great day.
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