This Auto Glass Week Keynoter Interviewed a Number of AGRR Shop Owners. Here’s What He Found.
By Tara Taffera
There’s a reason it’s called financial planning—you can’t run a business without having a plan when it comes to the finances, yet auto glass companies often don’t have a plan in place.
It’s a scenario that has played out all over the country for decades. You start installing auto glass, you realize you are good at it, the customers follow, and you start making money. But then you realize you have to manage said money. That’s where the wheels often start to fall of the auto glass truck.
Experts such as Justin Krane, president of Krane Financial Solutions, has worked with small business owners for the past 11 years. He’s heard it all when it comes to companies without a financial plan. Krane will speak to attendees at Auto Glass WeekTM on Friday, September 6, and AGRR inter-viewed him to give you a preview of his valuable advice.
AGRR:You will be speaking to the auto glass industry about creating financial health for your business. First give us some of your background so we know your areas of expertise.
Krane:I started out as a financial advisor about 25 years ago at a Wall Street firm. I worked my way into financial planning and became a Certified Financial Planner® professional. There is an element of that called financial life planning, which is helping people identify want they want out of their life. I started my own firm in 2008 to work with business owners: I love business! I started to realize that someone who is an entrepreneur has more control over their financial life and could have a greater potential to fund their personal goals. So I taught myself how to understand financial statements and started working with business owners to help them understand their business goals.
I have worked with a fair amount of product-based business owners—owners who have a staff of people who deliver the service or product they are offering. Some of that has to do with inventory and a lot has to do with hiring other people to deliver the service you are selling. What that means is if you are in auto glass you have to go buy the stuff then deliver it to customers. That involves putting out cash, and tracking what you just bought. If your gross margin (which is basically the sales price minus the cost to make and deliver what you are selling) is not profitable enough you won’t be able to pay yourself a salary, take money out of your business and live. If you are not tracking any of this you are guessing and making decisions on unknown numbers. And of course labor costs have to be factored in as well.
Auto glass business owners know they need to do this but they feel like it is all on them, and they wonder how they can do it and feel like they are in control of what is going on.
AGRR:So what happens when they put these strategies into practice?
Krane:It’s like a glass of wine. It’s like a massage. It’s like feeling the sun hit your face and lying out on the beach. It’s no stress and peace of mind. It’s an amazing cup of coffee.
AGRR:To prepare for your presentation, you have spoken to some auto glass business owners. Tell us about the common threads you have found and how you can help them.
Krane:The commonality is that you can’t do everything on your own. You just can’t. You have to create some sort of team of people who can help you. You only have two hands. One of the people with whom I spoke said he knows how to install auto glass—now he has to figure out how to manage the money. I will tell people like him how to make a plan and follow through.
AGRR:What is the biggest thing that surprises you when you work with business owners?
Krane:The thing I am surprised about, but that also is very cool, is the passion they have in their businesses. I love that feeling. I am not surprised they don’t know their numbers. They aren’t put on earth to do numbers, they are put here to do glass.
AGRR:What is the biggest mistake many business owners make when it comes to finances?
Krane:Number one is not having clarity on their numbers. Not tracking drivers of sales and identifying what they are. Thinking that marketing is an expense and not an investment. Not clearly being able to calculate the ROI of investing in their business. Taking too much risk in business and not being smart about it. Managing their cash flow. When to pay, I could go on …
AGRR:Do you work with companies who want to expand into other markets?
Krane:All the time, and this is where it’s all about cash flow management. There is a whole difference between profits and cash. Let’s say you do auto glass and want to go into window film. Let’s say you generate cash of $16,000 a month but you now you have to take $5,000 out to live on per month. Now you have ten grand left. How much money do you need to start the film business? If you need 50 grand how quickly can you make money off that? If you can’t make it for five months, then the auto part is funding the film part which means you can’t take the five grand out to live on. So you are robbing Peter to pay Paul.I find a lot of times that companies are in way over their head. They don’t think about the time it will take to get an ROI.
AGRR:Why should people come to your session?
Krane:They might be able to find hidden money in their business. They could be throwing money away, hiring the wrong people and not paying themselves first. They will find out they are not clear on what their core focus is and how to invest to serve that core focus.
AGRR:Please share a success story or two of a business owner you worked with who realized great results after putting some of your advice into practice.
Krane:Paying down debt by far is a big one, whether its business, credit card or mortgage debt. When you have a plan of what to do with the cash you generate you will have success.
AGRR:Do most business owners have a plan?
Krane:They have a plan in their head but they can’t articulate it or narrow it down to four bullets of what they have to do to implement it. If you want to hire another employee, for example, you need to put a plan into place. Make sure there is enough cash to hire the employee, for example, if its $4,000 per month, set that aside. This means you may not be able to spend the money to redo your website. You have to make a plan.
AGRR:Are you looking forward to speaking to this group and helping them strengthen their financial part of their business?
Krane:Yes. We’re going to learn, get real, have fun and learn how to implement ideas.
Tara Taffera is the editorial director for AGRR magazine.
To view the laid-in version of this article in our digital edition, CLICK HERE.