151 - "Ask Me Anything" with Michael Smith & Lucas Underwood
October 1, 2025 - 00:57:35

Show Summary:

Firefighting your week away? Lucas Underwood and Michael Smith chart a clear path from operator to investor, showing shop owners how to turn daily chaos into durable, transferable value. Human capital takes center stage with culture, trust, and leadership systems that make great work repeatable and businesses sellable. They unpack exit strategy myths, the three “languages” of success (repair, leadership, finance), and why abundance beats scarcity every time. Expect practical plays for full transparency DVIs, customer stewardship, and quality control that builds loyalty instead of skepticism. The message: compete on value, not price, and future proof your wealth while your team and customers win too.

 

Host(s):

Lucas Underwood, Shop Owner of L&N Performance Auto Repair and Changing the Industry Podcast

 

Guest(s):

Michael Smith, Chief Strategy Officer at The Institute

 

Show Highlights:

[00:01:00 ] - Michael shares his background in consulting and why he fell in love with the automotive industry after helping shop owners improve profits and quality of life.

[00:03:30 ] - Discussion on how many owners spend decades just getting by without building business value or retirement plans.

[00:06:00 ] - Lucas reflects on how shop owners often fight daily fires without fixing the core issues that cause them.

[00:08:20 ] - Michael explains why every shop owner must define their exit strategy from day one to avoid regret later.

[00:11:20 ] - The two contrast the operator mindset versus the investor mindset and why both are necessary for long-term growth.

[00:14:10 ] - Michael describes the three essential “languages” of success: repair, leadership, and finance—and why all can be learned.

[00:20:00 ] - They dive into how shop culture forms naturally, why it often becomes toxic, and how leaders can “clear the water.”

[00:25:00 ] - Lucas shares how rebuilding culture requires trust, accountability, and servant leadership focused on people first.

[00:28:30 ] - The conversation shifts to abundance vs. scarcity thinking... and how businesses built on abundance outperform over time.

[00:50:00 ] - Michael and Lucas break down why competing on value, not price, is the key to profitability and long-term sustainability.

 

In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.

 

👉 Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/6r8KExJtBgk

 

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Episode Transcript Disclaimer

This transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.

 

Episode Transcript:

Lucas Underwood: Good afternoon everybody. My name is Lucas Underwood from l and m Performance Automotive Repair, and the Changing the Industry podcast. I'm here for another AMA webinar with the Institute for Automotive Business Excellence. And today I have the honor of having Mr. Michael Smith. The main leadership man at the institute joining me.

Lucas Underwood: I am so excited to have you here, Michael. I know. Michael, would you do us a favor and introduce yourself so those that don't know you, don't know who you are yet, can kind of get a feel of who you are and where you came from?

Michael Smith: Absolutely. I am 45 years in the professional space. I grew up. Up to up 31st, 35 years.

Michael Smith: We're outside of the industry that we're in now, and about 10 years ago, I came from the big consulting firms, have experience in private equity holding companies. And I came here about a decade ago to when I met a guy who had three shops and he said, Hey. Can you help me take a look at what I've got?

Michael Smith: I'm not having enough fun or making enough money to keep doing this. I gotta change something. And I dug in with him. And guys, I gotta tell you I, I fell in love with this industry. So I've been here focusing primarily on this for almost. Almost 10 years at this point. And I bring, I have never fixed a car in a shop in my life, so I don't come as an owner operator.

Michael Smith: I come from the owner investor perspective, from the outside investment perspective, the high performance business building perspective. I bring different things to the table which is fun to be here. Lucas, it's really fun to be able to share what I know with the people here. This is a hard business and a hard industry, and we got awesome people here.

Michael Smith: So it's my privilege, my friend.

Lucas Underwood: Absolutely, sir. Absolutely. And you know, a after I got to know you a little bit and got to pick your brain a little bit, I began to see that you had a different perspective on business valuations. That you had a different perspective of why we were doing this.

Lucas Underwood: And it's something we often lose in the automotive space, and I think it's very valuable for you to be here with us for that very reason. Because I go to work to fix cars. And you go to work to make sure that I make money while fixing cars and make sure that I have something to leave my children generational wealth.

Lucas Underwood: And it's bigger than just money, right? Like it, it's a sustainable business. It's something that isn't as taxing for the next generation. It's smart business. More than anything else.

Michael Smith: I'll tell you one of the first things I learned when I got here was what a challenge our industry is.

Lucas Underwood: Yeah.

Michael Smith: And it's, it can become a daily urgent to urgent issue, one after the other, and then the days fly by.

Michael Smith: And the week starts on Monday and you know, before you unlock the door, it's like, okay, here we go. And then the hell storm starts, if you will, for lots of folks. And then you crash your way through the week and Friday afternoon you're trying to get as many cars out as you can and then the doors lock and you're like,

Lucas Underwood: oh.

Michael Smith: And then, you know, maybe you have a weekend and you pick up and do it again. And I say that only from the perspective that you can do that for 30. 35, 40 years. You're exactly right. And the end, back to the value question. Doing that in such a way that you're just getting by no investment perspective, no money, set aside, profits are, when they do finally show up and they're stable, you pull it out because you're not sure if you're gonna see 'em again.

Michael Smith: And time flies by. And the sad statistic is, and I'll turn it back over to you, 75% of owners of privately owned companies, and I actually believe it's more in our industry, they, this is the quote. Profoundly regret. The way they exited because they didn't know what they were doing. And I've got stories under my belt knowing all the people we know.

Michael Smith: $120,000 for your shop, that's what you have to retire on at 65. How can you retire at sixty five, a hundred twenty five grand? You can't, you end up working somewhere else. And that literally, we've talked about this, that's why I'm here. I don't want that for as many people as we can touch and help. Right.

Michael Smith: That's literally what. Yeah,

Lucas Underwood: so absolutely a hundred percent. And you know, we I met you the first time at Leadership Intensive and some really interesting things because. I'm not gonna lie, Michael, the first interaction with you, I thought, this guy's trying to convince me to sell my shop. This is some wonky proposal, like one of those weird deals.

Lucas Underwood: Is this a Ponzi scheme? What's this guy up to? And then the second meeting that I was in that you were at, you said something that I thought was extremely profound and you said venture capital and private equity realized that nothing exists without human capital. There is no profit without human capital, and they understand the value of human capital.

Lucas Underwood: And so if you don't understand the value of human capital, why are you doing what you're doing? And I thought that for, well,

Michael Smith: Lemme add to that. Some of the finance guys get it. And what I mean by that is you can play a pu