#72 - NCM 20 Groups with Brent Carmichael

Hey guys, this week we've got Brett Carmichael. He is awesome. He's a 20 group moderator for years. Like 30 years now, right? Not really, but for a while. But he is with NCM and he does buy here, pay here groups, retail groups across the board. NCM is one of the leaders and if not the leader in 20 groups, he's going to educate us on what goes on here, what you should do when you're at a 20 group, what it costs, everything you need to know to be a really good 20 group member. So thanks for being here. Brent, say hello to everybody.

Good afternoon to everybody. A pleasure being here. Very flattered and honored to have the opportunity.

You are listening to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson. Thank you so much for tuning in. Let's do this.

Appreciate your time. Thank you so much for joining us. Give us just a quick, quick background. What do you do? Where'd you come from? How did you even get into this crazy world of trying to. It's like herding cats, right? You got a bunch of dealers in a room. It's just gotta be maddening.

Pretty much. Pretty much. With all due respect, it's a daycare center pretty much for most of these 20 group meetings. But conversing, exactly, exactly. Yeah. Adult language, that's for dang sure. Kind of got into kind of a long story short, as far as a resume is concerned, quit college actually to go to work for a subprime, deep subprime lending. B loan 1989. Exactly. Well, I'd been, what was that? I guess five and a half years in college at that point. I had a drafting and design and mathematics double major with education minor and had just decided that I was kind of tired of college. I was actually working at a bingo hall, believe it or not, part time in college. And one of the regular players, her husband was a regional manager for a company called Security Finance, which is a B loan, kind of the precursor to check cashing and those kind of things back in the day. So he was in the hall one night and just walked up to me and had me his business card, said if you want to make any real money, give me a call. So I called him and they put me to work as an assistant branch manager and I quit college, worked for them for a little over six years. I was a regional manager for them and left them and got into Buy Here Pay here in 1996, a finance manager for a small dealership in northwest Arkansas. And for some silly reason they promoted me to vice president in 99 to run the entire operation for him. Was with him until 2007. The company sold to a publicly traded company in August of 06. Found out that I really wasn't cut out for public life and so resigned and actually came to work for NCM as a moderator in 2007. Was a dealer client of NCM. I was in their buy here, pay here 20 groups for the better part of 4 or 5 years before I left. So something that I enjoyed. I always enjoyed the training aspect of management and developing of people. So it was something I thought I would enjoy doing. And they were nice enough to give me a job in 07 and been there ever since. So this is my 13th year now with them as a. I guess my official title is moderator, instructor, Consultant I think is what my business card said. Because I do 20 groups, I do classes, I do on site consulting and training. So that's the 32nd version of my life right there.

What year you said, what year did you go into moderating?

2007.

Okay. Right before the big collapse, huh?

The big collapse of the new car side. Yes. And that was something that definitely affected over the NCM because we. A majority of what we do is new car 20 groups. Probably 90 to 95% of our business is new car dealers. So yeah, I came in at probably the worst time to be on that side of it, but pretty much the best time to be a buy here, pay here moderator for sure. Because we had I think two groups is all at that time. Two or three groups is all we had to buy here pay here at that point. And we're very fortunate. When I came on and have the resources that we grew it to. I think we've had 9 or 10 total buy here, pay here 20 groups at our hype. So I mean like I said, it was a great time to get into it from that side of the business for sure.

And that store you work for, was.

That Carhop or what was. Well, Carhop is the one that ended up buying us from the publicly traded company that bought us. We were bought out by First Cash financial services in 2006. August of 2006. I left February of 2007 and then it subsequently sold or the dealership side and the inventory side sold the car. Hop in. I believe it was August or September of 08. Okay. So it wasn't even two years later that First Cash kind of exited the business and sold the carhop. So I know Carhop did not buy the receivables. Obviously I wasn't working for him at that point but still was in contact with some of the people. I don't think Carhop bought the receivables or anything. I think they pretty much just kind of bought the locations or the name and I know they've subsequently closed quite a few of what were our locations at that point. I think we were the time we got bought out I think we were 11 or 12 locations and then when Carhop took it over I think they'd grown to 16 I guess maybe at that point.

So, so let's. So we've got, we've always talked about 20 groups and Jeff and I are you know, full disclosure in ADA 20 group and I have been since 14 or 15. There's a lot of people though that listen to us and don't know what a 20 group is and Jeff and I are on the inside of a 20 group. So describing 20 groups or you know, we can describe it our way. I want you to really, you know, give us the elevate elevator pitch on why a dealer should be in a 20 group and what it is and why it works.

Well let's start with the why for I mean the what it is first. I guess the best way to describe it is a best practices or peer performance group is the way I kind of like to describe it because again I do more than just buy here, pay here 20 groups and at NCM we do more than just automotive, we're in other industries as well. So again the easiest way to explain it is we get together with 18 to 20 like minded business owners and discuss best practices obviously not in competing markets. So that way we can be completely forthright with all of our financial information on those. So another way I like to Describe it is a 20 group is access to 17 to 18 other consultants that are feeling the same pain that you are been through the same things that you have been that you can lean on not just the three times a year when you're in a meeting but 365 days a year. Hey, struggling with this sales pay plan, struggling with this, how can I get help? And you've got access to that through a 20 group. And again then the financial part of it, the monthly composite reporting the tools that are available help you compare, see how you're doing not only against the peers in your 20 group but I know as an NIA because I was a member of a lead EM20 group as well back in the day. Just different metrics to take a look at benchmark group average but just kind of a good report card monthly on how you're doing against industry and against and against your group.

Yeah, we almost. The current hot term is a mastermind group. You know, that's kind of a similar thing. You've got this mastermind group of like minded dealers. And the beauty of the used car industry is that really we are geographically landlocked. So I don't know how that works with other 20 groups and other industries where there really are no physical borders to your product. We can, I mean, I can give Luke all of my best ideas, all of my best marketing topics, all of my best. I don't have any issue sharing with him all my secrets because I know he's not a competing market to me.

Right. And again, it's the same with the other industries as well. I'll give you an example. I do. I mentioned before, I do a charter motor coach group. We do have boundaries there where some of those can overlap with each other. So, you know, it does restrict you coming to that. But I've got a Finance 20 group that I do as well that we don't restrict because we really don't talk about any financial data as far as profit or loss. It's just a collections and underwriting group. So then we don't have to restrict. I can have five Dallas dealers in that group or three Little Rock dealers in that group. Because all we're talking about is how to effectively collect and underwrite customers. So we're not talking about a P and L. We're not talking about a sales or marketing strategies. There's really no competition for that. And we've done a very good job. We've had that group now for 10 years. We've done a very good job of the first time somebody starts talking about what are you doing from a sales or marketing standpoint. Well then I put down the hammer and say, hey, that's not what we're here for. We're here to talk about that. But the one thing I enjoy about our 20 groups, and I'm sure you guys are the same, we almost intentionally try not to have too many of the same business model dealers. I mean, I've got groups that have lease here, pay here, buy here, pay here, low, acv, high ACV kind of mixed in the groups. We try to keep ours more along the lines of size. So sales volume, obviously portfolio size. But we like or our group seem to like a diversity in business models because I think it would probably. You guys have been in groups long enough, you know as well, if Everybody was a $6,000 ACV selling 40 cars a month. How long is that 20 group going to last? Not very long, because after two years, we already know what Jeff does. We already know what Luke does. There's nothing new going on there. So I think that's another benefit is the different models in each one of those groups, because even the groups I was in, There was probably seven different. Different business models within a 17 member group. Always keeps it fresh.

Yeah, and I want to speak to that, because that is super important that you brought that up, Brett, because, you know, I have. I have my. My business model, which I think is vastly different than most of the people.

In our 20 group.

Pokey down in Alabama has his own business model. Right. And Jeff in. In Utah has his own business model. And Steve Gregg is selling RVs all over. All over Texas. And, you know, and it's just so interesting how. And I can't tell you how much I've grown my business because I'd gotten away from. From a lower acv, but by being in this group, I've been talked back into what made my money to start with. Right. And so it's just. That is so important that the size of the business is one thing, because I think the size. Size matters, of course, but I think with size, the size of the business matters. But the business model, as long as you're buy here, pay here, and you're in the same group, even if you're not buy here, pay here, There is so much that can be gained by looking at everybody's different business model. I'm glad that y' all seen the value in that.

And that's the issue we had when I, you know, I petitioned to be in the group. I mean, now, and I'm a small fish, you know, I'm my portfolio, my sales. I'm very small. But I like to think that I'm, you know, kind of feisty, and so I can bring some new ideas and some new insight. And so it sometimes does limit if all your dealers in the group are a $5 million portfolio, and then you stick all your 10 millions in another group, because sometimes the guys with $10 million portfolios don't want to be in the group with the $2 million portfolio guys, because they don't think they can learn anything from these little dudes. And so having more of a vertical group structure I like, because I feel like we can learn. And as little guys, sometimes we want to see the $10 and $20 million portfolio people and get close to them because that's where we may want to go, is to be like them instead of just kind of everyone being like you said, everyone's the same.

Exactly.

Can get stale real quick. Which is probably another argument for mixing it up. I mean, I feel like every five years they should blow all the groups up and reorganize.

Oh, man, there's too many. The friendships made in those groups, I'm.

Not sure I was gonna say.

And that's.

But they can go back to the days when I was a member of the group. We were started out kind of in the middle of the group and then got on an aggressive growth plan to where we were the largest by far, obviously, because when we sold, we were 50, almost 60 million. And so in our 20 group, we were in both of them in the lead, Them and the NCM both. We were the largest by far. So everybody's always looking to us and we're going, well, there's nobody in here. I mean, there's some great operators in there, don't get me wrong. And you guys have mentioned this, even the smaller guys. And I was a little frustrated as a member for a while going, man, you know, we're big and nobody's got the same problems we do. And, you know, we're debt structure is this, and nobody's got debt. And then it took me a while to start looking at the guys like. And I wasn't in a 20 group with pokey back then, but I'm fortunate enough to have him in one of our 20 groups and had some of those 2 million and 3 million dollar guys in there that went, you know what? Life was simpler then. Why can't we run 60 million like Jeff's running his 2 or 3 million dollars. I mean, you know, he's focused on cash flow and these things. Why shouldn't I be focused on those, too? So there's benefits to having a wide range. And that's kind of what we try to do, is it's not all 5 or 10 million. It's up to like 7 or 8 million. So you'll have two up to 7 or 8 or just below 10. And that's kind of a subset of a group. And then we'll go 10 to 15, 20, maybe 25 mil. And then there's other members of that group. And the way that we kind of tried to structure ours is so if you grow, you can graduate into the next group up. So if I get over 8, 9 million, and I want to be in a group where I'm kind of in the middle and there's people bigger than me, then we try to have groups for that. And if you get to 25 or 30 million, you want to be with the guys. If you want to be with the Steve Greggs, you want to be with the 40, 50, 60 million dollar guys. We've got a group for that too. So you can kind of graduate up. And we try to keep a range of, like I said, it kind of starting out to 7 or 8 mil and then kind of graduate. So you do get, you know, a $7 million guy with a 2 million. And there are differences there. Typically 7 million maybe.

What point as a dealer should we join a group like guys that are out there, that are small, that are a couple, you know, sales, mom and pop operation. We know that there's a time commitment and there's a financial commitment to these groups. You know, steep at times when you get your fees, your pro rates, your travel costs, your time out of the office. What would you suggest, like, when should we look at these?

Well, part of me wants to give you the sales pitch and say everybody should be in a 20 group.

But right now that's Luke's sales pitch. He fully believes it.

I mean, I do too, but I have come across, and again, when I was a member, I would say everybody need to be in one. But now being on the moderator, consultant side, I have come across quite a few dealers who just don't need to be in a 20 group. And there's a couple of reasons for that. Some of them, it may be mom and pop operations where they do have to be gone for three or four days three times a year, and they're the only one there. So while they're in the meeting, all they're doing is on their phone or taking phone calls, and they don't have really the time in their business to put into it the expense side of it to me, and I'm sure you guys groups are this way. You probably either learn something that's going to earn you or save you what it costs you for the entire year to go to a 20 group at every meeting. I mean, you should find something there that either saves you your 7, 8, or $10,000, whatever it is, a year at each meeting. And if not, then you should talk to your moderator about, hey, we got to start working this out. So I do something that recoups my cost. You know, we always look at a 3 to 1 ratio. If you're going to borrow money and buy here, pay here for every dollar you borrow, you want 2 in receivable or $3 in receivable, depending on the size of your ACV. Same thing to me with your 20 group investment. If it's going to be $10,000 a year, then I need to be in a group or have access to the information to generate that two fold or it's either 20,060 savings or earnings on something like that. And then again, I've come across some dealers where, because numbers are important and you guys know that from your composites as well, have some dealers, believe it or not, that just don't have the ability to produce numbers on a monthly basis. And I was going to say, Jeff, I've come across guys, believe it or not, last year in consulting that were truly running their business off Excel spreadsheets. I mean, really did not have a formal DMS or anything like that. And I go, hey, that's great, it works. But to try to get into a 20 group, we need to be a little bit more and we'll work with them. Whatever DMS they're on or however they're doing, we'll do whatever we can to get them in. But there are just some dealers out there that are probably just either not from a business standpoint, like you said, a financial standpoint that just don't either have the time. In theory, we would want all 25,000 estimated buy here pay here dealers to be a 20 group. But do understand that it's just not for everybody.

I want to comment on one thing you talked about, about taking something away that makes you money. And I want to give a real world example and I want everybody to listen to this, this how important 20 groups are. I was always against doc fees, 100% against them, didn't think it was a good thing. And I sat in the old 20 group and ranted about it and they all looked at me and said, you're 100% wrong. Nobody cares about it. Charge it, you're 100% wrong. And I finally, after the law in South Carolina was straightened out, I said, all right, that one argument in 2016 with the rest of my 20 group has made me $180,000. Okay? That is one thing that I can directly attribute to 20 groups. So that's how important it is. So that's such a big, a big deal there. The next thing I want to talk about is just the financial piece of it and you talking about dealers, number one, not knowing their numbers, not number two, not being able to produce their numbers. And it has given being in a 20 group has given me a business education, business that I can't put a value on every month. Putting those numbers in makes me a better business owner because I can now look at my balance sheet and my P and L and tell you if something's wrong or tell you where it is or how much I spent here, how much I spent there. It is so important. And most dealers do not know how to do that. But being in a 20 group, putting in those numbers every month makes you a better business person.

And again, having the access to them and get them so you can compare them every month to see how you're doing against everybody else. And unfortunately, I have a reputation as maybe not the best phrase in the world, but I'm a numbers Nazi with our groups because the one thing I hate, and I'm sure you guys hate this too, you get to a meeting and there's a number wrong, somebody put it in wrong, and it skews everything. Or every month you get it, somebody put in, they collected $10 million that month when it was only $1 million, and you go, what are we doing here with this?

So you've been in a group of Pokey before?

Still am still. Like I said, he is a member. And yes, every. But I. I review the composites every single month before they go final for air.

So I love you, Pokey. I'm just. I'm just playing.

If you guys send him this, Luke.

He'S taken a while. We've had him out for, I guess, three or four years. Dan, I would say we are about 95% there with accuracy on his composite report.

I guess he's in one of your service groups.

No, he's actually in an NIADA service group. He's in one of my full operational groups. We'd love to have him in one of our service groups.

How many 20 groups is Pokey in? Like three or four.

He's in a service on Niada, full operational, and then a full operational with us. So he's. I know he's in three.

He just likes to travel.

He does. I don't blame the governor. He's the governor of Alabama. So.

So what? What is the cost per year if someone who's not in a group? What do you see the average cost per year being for a dealer in a group that doesn't travel all over the world like some of the big boy groups do?

Well, those are you guys as big boy groups, Our big boy groups. I mean, their. Their big meetings are Fort Lauderdale. They're not Costa Rica, I guess we do, we go to Grand Cayman every now and then. A couple of our average group is gonna run dues, are gonna run around 1000, $1200 a quarter. Ours are priced based on the number of members in a group. So the more members of the group, the less, the less depending on what the group wants. So a good average I'm going to say is probably 45 to 5 grand a year in dues. Pro rate for US average, 300 to $500 per attendee per meeting. So if only one person comes, you're looking at another 1500 bucks. And then like I said, if you're going to throw in flights and hotels on top of that, usually quote, if only one person from your dealership comes to a meeting, it's going to be somewhere in the 7, $8,000 a year range. Total, total. If you don't fly first class and you don't have to have the presidential suites at every one of the hotels, then yes, it should run seven to eight grand. I'd probably, if I put a number on, it's probably 10 grand. I think I mentioned that earlier. It's about 10 grand for our average because we have. Most of our dealers usually bring somebody with them. Yeah. To the 20 grid meeting. So I'd say 10 grand a year.

Yeah, I think we're averaging 10 to 12,000 a year. And I think that's a, I think that's a good number that dealers should look at. But I promise you, you'll get it back.

And I'm going to use the old sales pitch on this. 10 grand a year, if that helps you sell three more cars a year, it pays for itself.

Pays for itself.

And I promise you you'll get three cars. It's $20 a car sold is how I put it to some people because our average dealer is selling 4, 40, 50 cars a month. So, yeah, you figure 10 grand a year divided by 500, it's $20 a car. I mean, that's what it's going to cost you. And I promise you, you should. Again, depending on your group. And I know a lot, I know the group that you're actually in, Luke, you're going to get that back. Oh, yeah. Easily you're going to get that back.

You know, I might be sometimes referred to as a know it all. And I probably, probably been labeled that once or twice and so, and I probably talk too much. But the first way to fix it is to admit it, right? But I walked in and I've told this Story before. And I walked into the first group I was ever in thinking that I knew it all, I was not gonna get anything out of it. But I went and I figured out fast. I didn't know much and I learned a lot. And then I walk into the second group, I am, which was just buy here, pay here. And again thought that I knew everything. And I have figured out quickly that there are people younger than me in this group that know more than I do, and there are people older in this group that can teach me a lot of things. How do you see the evolution of the normal dealer walking into one of these? And what does it, what does it look like to a moderator? What does it look like to the rest of the group? Because I think, I think a part of it is people walk in. Some people walk in, I think afraid, and others might walk in cocky. What, how does this work? How do you fit into a group like that?

Well, the biggest thing that I see that concerns me is I talk to dealers all the time and say, I'm not ready for a 20 group yet because I'm struggling or I don't have this. And those are the ones you want to say, well, now is the best time to join a 20 group. And then we have members that we get. They go, you know what, I'm just not getting anything or learning anything anymore. Or I already know everything. And I get those as well. Prospects to say, well, you know what, I'm doing really well, I'm making this kind of money and doing those things. And we say, okay, that's great, but do you think you can get better? And to me, that's the key. And I've come across those members that come in and they think that their numbers are really good. And then we put them in a book with 17 or 18 other guys. And yeah, sure, on 15 or 20 lines through a 17 page composite, they are on the left hand side of the page. But then there's always seven or so pages that they're on the right hand side of the page. And for those not in a 20 group, you want to be on the left hand side of the page. You don't want to be on the right hand side of the page. Right hand side is bad, left side is good. So I haven't come across one yet that we've ever put in a book that was a left sider on every single page across the board. So we've always found them that we can help. But handling Those within a 20 group is more along the lines of we try to point out, hey, here's where you're doing well. But also if you, we're here in this, we don't say you're doing bad necessarily in this, I would say, well, Jeff, you know, if you could move this number, $10 a car sold. Do you realize that? $60,000 a year kind of thing. And that's how we really try to handle the guys that are operating at a very high level already and just trying to get them to that next level. Just say, look guys, it's $3 more per open accounting collection dollars. If you can get that. Think about what that is. 3,000 accounts a month, that's, you know, here's an additional cash flow if we can get you to that level. So that's what we strive to do with all of our members in there. It's not try to pigeonhole them into, okay, you gotta be this way. Because benchmark is this number. You need to be there. It's Jeff, here's where you are here. Benchmark is probably not who you want to be necessarily because volume is going to be here, whatever. So within your model, let's maximize your model. Not necessarily try to make you always say left side of the page on every page. I haven't found a dealer yet, knock on wood. Thirteen years, that can be a left sider on every single page.

Something's got to give.

Sometimes it just does.

Yeah. And it reminds me, so I had, my original group, had a bunch of old school operators, been around since the beginning, you know, the Bonicelli's and George Mammarella. And they were at every single meeting and they have been for probably two or three decades, I don't know. And pages of notes, you know, and these guys were solid owner operators. The Bonicelli's, they know how to do it right. They did it 100% perfect. Yet they were coming to every meeting and still taking pages worth of notes. So you're, you're always learning. There's always something you can learn. And I know even maybe people who have been in 20 groups for a while, sometimes you feel a little burnt out or you feel a little like it's the same stuff over and over and over. And I'm coming away with less notes each time I go. Maybe you could speak to us on that. What do you see are some of the dynamics of the most successful 20 groups? Because each group has its own dynamics. Some are very, you know, buddy, buddy. And all we want to do is hang out and go to the bar the whole Time and some of them are very, you know, challenging. They want to challenge each person or I mean, do you have any characteristics or recommendations for us that are in 20 groups where we could strengthen our group?

Well, one thing I think that makes our group so strong and I'm sure it's probably familiar with you too with the groups that you guys are in as well, is our groups are actually managed and run by the group. So each group has a leadership committee in there. They set their own agendas. Obviously in yours they pick the dates and the places that they're going to go as well. But they're the ones that set the agenda. They have an executive committee that's in charge of that. And we've been very fortunate. When I first got to work with ncm, one of my biggest complaints with the group that I was in is they were seemed to be more interested in the location than the meeting itself, which is what I had heard. I'd never been to a 20 group meeting before. I got into Buy Here, Pay Here and the company I worked for owned Chevy and Dodge Chrysler as well. So I actually got to attend one of those. And their meetings were 8 to noon and then we were playing golf or whale watching or something like that. And I thought, hey, that'd be kind of fun for a while. But you're flying all this way, paying all this money, what are you bringing back outside of really cool photos and those kind of things? So our groups now we've had those members in the past and I've actually, to be quite honest, I've had a member tell me that the reason they resigned is because their group started choosing more economical places to go. And he was just flat out honest. He said, hey, I can. The group had picked going to Nashville, beautiful city, love the city. But he said I can go to Nashville anytime I want. I don't want to be in a 20 group to go to Nashville. And it was a group that was going to Nevis and Costa Rica and they were going to these places two and three times a year. And he just said, look, that's not what I want. I want to be in a group that goes to nice places. We understand completely. That's kind of not the dynamic of where most of our groups have gone. So them being self governed, I think now they have a majority, in fact pretty much all of our groups now it has become more about the meeting than the location. The locations they still go to nice places, don't get us wrong, but it's more when we get there we have to do a lot of homework for our meetings. They had to report their December numbers for 120 group by yesterday because they have, I was going to say, you guys know how tough that is, December, any month, to have it in by the 8th of the month, have everything in and done and wrapped up. And they've got seven separate exercises that all have to be done as well. And this is for a meeting that starts next Thursday. So all this stuff's got to be turned in a week ahead of time. I compile it and send it back out. And that's kind of the direction that they've decided to go. Now some of these things, you know, we had brought up as exercises I did as a dealer, they've chose to do them. So now they kind of do these things on their own. So they kind of self govern themselves and they decide on who their leadership is going to be in their executive committee. They have a chairperson, junior and senior member. If any members aren't participating, leadership's job is to step in and you know, hey, your homework's not getting turned in, your numbers aren't good. So we've been very, very fortunate over the last, again, 13 years, but I would say probably more in the last seven or eight that they've really strengthened and gotten to be more about, hey, we're here to get business done. Yes, we'll go out after group dinner and we'll go out and have some Diet Cokes and we'll go do some fun things. But they've typically got the attitude now that they either come in early or stay late if they want to have a good time.

Yeah, I agree. That's, that can. I've not been in a group that's, that's crazy like that. But I've heard some, some stories and I really appreciate people who come to 20 group to learn because that's why we're there. So, okay, now I'm in a 20 group. Can you hit on the best way to attend a 20 group? And what I mean, you recommend one person there that listens the entire time and asks a question, then maybe one person to take notes. Or should we bring people? And who, if we should bring people.

Who should we bring?

What do you think the best dynamic is? And, and how to, as soon as you get into a 20 group, how to actually be good at it, be good at going to the group.

Well, who should attend? In my opinion, and like I said, a lot of our groups have taken on this as well, is they want the main decision Maker, not necessarily the owner of the business. And an example of that would be 40% or so of our current buy here, pay here. 20 group members also have new car franchises. We don't necessarily want the owner of the Chevy store coming to the 20 Groove meeting when they're gonna sit there and go, you know, I don't know what we do here. I'm gonna have to ask about that. So. And I'll be honest with you, when I first took over some of these groups, they had as part of their profile that the owner had to be at each meeting. And we got a lot of these. Well, I'm not really sure what we do or I don't know what that number is. And then the groups have all kind of changed their profiles to, we want general manager, who has direct decision making authority over everything in there. So that's kind of what our groups want at the meeting. Now, again, joining a meeting, we would want the owner there for the first meeting so everybody can meet, vote on that kind of thing. But moving forward, it would be the decision maker that they would really want at the meeting. As far as bringing other people, our groups have specific bylaws for their groups that mention who can and cannot attend a meeting. Now, you can ask, you can submit your request to bring your sales manager, but our groups have kind of said, okay, what session do you want them sitting in on? Because we may not want a sales manager, collection manager, shop manager, setting in on maybe the composite discussion when you talk about the P and L side of what the business is doing and those kind of things. So there's kind of an approval process as to who you can bring and what sessions that you want them to go through. Having said that, in the 13 years I've been doing this, there's never been a guest who's been refused access to a 20 group meeting. And typically they're only bringing upper level managers. They are bringing general sales manager, general collection manager, something along those lines. Not very many. I'm trying to think. Again, a lot of meetings over 13 years. You know, I can't remember somebody just bringing a salesperson to a 20 group meeting unless there was a specific guest speaker, maybe a Joe Verde training or something like that, where they brought somebody. But typically it's management level that come bringing multiple people. Obviously, from a moderator standpoint, the more people in the room, the more ideas, more input that you can get. I don't know how big you guys. The group that you guys are in as far as members, but I've got one that's 22 members. That can be 45 people in the meeting room, which sounds great, but you can't get a lot done when you've got that many people, you don't get to hear from a lot. So there is a tipping point to too many people and not enough. And that group actually almost had to put in place like the January meeting, which is our typically our numbers heavy meeting. It can only be the principals. We can't bring anybody else because we just don't have the time and space. But yeah, if you want to bring two so somebody can take notes and somebody can stay on Facebook. That's when Luke brings Alexis.

More pleasant for him to bring his wife than him on his own. I feel like he behaves better. So that's good.

Oh, we like that. I mean a lot of our groups are that way too. Where spouses will come typically the one meeting a year. Some of them will do what's called a resort meeting in the summer. And so typically that's where spouses are. The January meeting. Very few, depending on where it is because it is pretty numbers intense while we're there. But I would say 60% of the members probably have wives at most of the meetings at that point.

I was there just to keep me under control and make sure and make sure the rest of the 20 group is giving me heck on things that she's been giving me.

But she also works in the business.

Yes.

Very hands on and I have reasons to be there.

There's member spouses that to this day that have been in the group since I took over their groups 13 years ago that I have not met their spouses yet. Oh man. Yeah, I know. I mean it kind of surprised. When I was a member, my wife would go once, of course, working but not in the business would go maybe once every other year, those kind of things. But yet I hate to say there has been a few that I still not met their significant others.

They're trying to keep them away from their attitude with the group.

And you guys know this. You have some of those guys that we just call, call, you know, the 20 group guy. So it's that it's kind of their release. They're the normal, average everyday guy. They get to a 20 group meeting.

And they show up at 11 o' clock to the meeting.

Yeah. Hungover and yeah. You know, that's the balance of it. And my recommendation for people that are getting into a 20 group or in one is obviously contribute during the meeting. You need to speak up. You need to say something, but also get involved after the meeting, in between. It's those late night conversations you have during dinner or drinks with the guy next to you that really bring a lot of the value because you're able to ask specific questions and get direct feedback from guys that are in your group. And I think back to my early 20 group. And yeah, those, those late nights sitting with, you know, George and Randy and these guys that had been in it forever and could really look at you and say, hey, man, here's the stuff that I want to say to you that I'm not going to say during the meeting, but now that I've had a couple drinks in me, I'm going to loosen, you know, I'm going to.

Tell you the truth. Well, Jeff, Jeff has an advantage because he doesn't drink.

So.

So he remembers everything that you talk about after the meeting. I don't have that advantage.

One of the things, I guess kind of hurt my ego, to be honest with you, a little bit. And again was a 20 group member and completely agree. And most, in some cases got more out of the group dinner or the two hours after the meeting, before we left for group dinner, sitting kind of at the bar, talking at the end of the day, then during some of the meetings. And, you know, I guess when I got on this side of it, that kind of hurt your feelings a little bit when you hear a member saying, you know, I get more out of the drinks than we do the meeting and you go, ow. That kind of hurts. But then you go, yeah, but that structure, there's things that come up that don't think about and then you want to dive into a little bit deeper that maybe not for the whole group and just for some of you. So, yeah, I completely agree. You can get just as much out of lunch the hour before you go to group dinner, a little time after group dinner, even riding to the airport in some cases that you take just as much out of that.

I'll tell you something I've also learned over the years with 20 Group, whether it's me bringing my assistant general manager, Isaac, or with Alexa and I going away for 20 group meeting, we can also do a lot of strategic planning about the dealership while we're away. Maybe we take a day ahead of time to do that. And I think that's very important too, because you're already in business mode. It's not like you're on vacation. You're in business mode. You can sit down and knock something out for half of a Day and then go tour the rest of the day. But it's really a good time to. To strategically plan, forecast, budget, whatever you need to do. So I'd recommend anybody in a 20 group, if you're not doing that, it's a really good time to do that strategic planning.

It's a great point. I've got a couple of our larger dealers that their management staff, because they are 10, 12, 15, 18 locations, their senior general sales manager, general collection manager actually come in the day before the meeting and they kind of have their own meeting that day, then attend the 20 group and some of them do it afterwards. They kind of all three come to the 20 group meeting and then, you know, we adjourn at noon. So they'll stay that next day, that afternoon to kind of sit down and game plan. Okay, here's what we Learned at the 20 group. What are we going to take back? Because they know once they get back, the chances of being able to sit down and really kind of devote time to it aren't going to be there. So that they take the time to do. That's a great point. It's a great point.

And for most, for people that don't know, 20 groups are typically one full day plus the dinner that night and half of the next day. So you're not taking a lot of time out of your business. Is that the same schedule y' all run on?

Yeah, except for all of our groups do a site visit at least once a year. So that is always a two and a half day meeting. So there'll be one day in the meeting room, one day, full day for the entire site visit and then a half day. And for most of our groups, those are in. Well, our management group, our service group, it's in the spring meeting finance groups in the fall. But all the other full operational groups typically do theirs at the October meeting.

Yeah, I like that.

Other than that, they're day and a half, so you can fly in and most of ours are Sunday, Monday, Monday, Tuesday, fly in on Saturday, you're home on Monday, depending on whether you want to come in early or stay late. But yeah, you're kind of out of the dealership. No more. We like it no more than three or four days at the most.

The one last, I think we've talked about 20 groups a lot, Jeff, and I see you have on our notes here talking about industry trends. I know that you see so much across the board and across the country on what's going on in our industry. Can you talk about anything that you see that maybe is up and coming, that may not be on everybody's radar or may be on our radar.

I had to do an article already. I do one every year for Auto Dealer monthly for the projections for 2020. And they really, to be honest with you, weren't much different from 2019. I don't see anything disruptive being a key phrase right now, really for our industry. As far as buy here, pay here, even deep subprime, I think inventory is still not going to be as cheap as we want it to be. I think there's still going to be a little bit of hold back there. This is going to sound strange, but I think the biggest challenge, believe it or not, is technology. From a DMS standpoint, I think we are in at best 20 years behind where we probably should be. We don't have anything new. It doesn't look like. I mean, there is a couple of companies out there that are kind of starting to get into this side of it, but we don't have a CDK or rentals and rentals for buy here, pay here. And I think that's going to become more of an issue in the coming, not only year, but possibly years at that point. Because the current and again great relationship with all of the DMS providers out there, don't get me wrong, but we're just lacking for what we truly need from a sophistication level to really maximize our businesses. And I think it's going to become.

More of a problem.

And I don't think it's been too much of a problem in the past, but I think that's going to be more of an issue that we're facing moving forward from an economic standpoint. I think, to be honest with you, I don't see anything that's going to change status quo at this point. I just don't.

Do you see leasing getting stronger as a substitute for buy here, pay here?

I don't, to be quite honest with you, Jeff, because the main benefit, I guess, to leasing is the deferred sales tax, right? I mean, that's in my opinion. I think that's probably the biggest benefit to it from a cash flow standpoint is going to be the deferred of sales tax. Now, there's some states where it's not. I think there's 17 that it's not. So it wouldn't be a big benefit. If you're in Tennessee, you do it. You got a 9% sales tax rate, you do it. Bankruptcy, those kind of things helps as well. But still, part of the things that are holding it back is availability of capital. Still aren't a lot of people that want to loan money on lease here, pay here, or even buy those. So if you ever wanted to sell them. So I think until there's more resources available there, I don't think it's going to be the way of the future. And again, Texas dealers will never do it because they lose their deferred sales tax at that point. They're already deferred. I mean, it would cost them hundreds of thousand dollars a year in cash flow. And the benefit on the other sides of that, that's not a high bankruptcy state. Some of the other things there just probably wouldn't be worth it at that. Yeah, so I looked at it, to be honest with you guys back, because our dealerships were in Arkansas, Oklahoma and Missouri. And in Arkansas at one point we were limited to five points over the discount from a user standpoint.

Yeah.

And we looked at it back then because in fact, for a two year period, we're like five and a quarter percent was the max interest rate that we could charge. So we looked at it back then, but nobody was doing it back then. And we're talking about the late 90s, early 2000s. Vicarious liability just been capped at $100,000. Back then, we just did not want to be the first guy on the block to have one of our customers hit a school bus full of kids and go, okay, where are we on the liability side of this kind of stuff? So we looked at it and I got a lot of dealers that have looked at it and kind of kicked the tires with it, but then they start looking. Well, the accounting side of it's a little different. And again, I'm going to come back to the DMS situation. You've basically got right now, two DMS is out there specific to buy here, pay here, that can handle lease here, pay here.

Yep.

And that's pretty, I mean three. I mean, I'm not going to denigrate Wayne Reeves, but I mean ones that for somebody that size that are going to do those. So you really only have three.

Yeah.

And that's it. So if you want to do lease here, pay here, you have three DMS choices that can actually account for it the correct way where it's not going to be a bookkeeping nightmare at the end of the month.

And it comes back to making sure that technology has caught up with us and what we're doing. Brent, I really, I mean, we've taken so much of your time and this is so much great information for all of us to digest and listen re listen to this podcast hopefully. Where can people get in contact with you if they have more questions or if they want to get signed up for 20 group? Where do we find you?

Well, I just I give the cell phone if they want it. It's area code 9137085976 call text email is B Carmichael C A R M I C H A e l@ncmassociates.com or obviously they can just go to our website ncmassociates.com either one and just hit search buy here, pay here guy or Brent or whatever and it'll bring up anything that they need to know.

And you've got retail groups and you've got buy here, pay here groups and you've got service groups and every finance.

Collections groups and bus groups and we got them all. We've got them all. I've done them all at some point or another.

So thanks a lot, Brent. That was great. It was great.

Yeah. Awesome information, Brent. Thanks so much.

Appreciate it guys.

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