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Banks are preparing for an ‘economic nuclear winter'
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HarrytheCarGeek, in Automotive News
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By Joe Marconi
Due to COVID-19, many repair shops experienced a severe economic downturn, some with a drop in sales over 50%. Without a strong cash reserve and/or SBA funding help, many shops would have gone under.
My 40 years as a shop owner has taught me to always have a cash reserve. However, never would I have ever imagined a downturn like the one with COVID-19.
So, how do we plan for the next financial crisis. And, it will happen. Perhaps not as bad as the the virus crisis, but it will happen.
Here are a few things to consider: Have a separate, and hard to access, cash reserve bank account that has least two months of expenses. Also, secure a line of credit for at least one to two months of expenses. Also, know your numbers, keep payroll in line, and make sure your prices are fair to you too, not just your customers. Keep in good standing with all your vendors and keep your credit score high!
The bottom line here, is truly the bottom line. To weather the next financial downturn, you need a strong balance sheet and net profit to the bottom line.
What other strategies are you considering or implementing?
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By Mark Johnson
In an effort to update the group with all the most recent developments, we are happy to inform you that on March 20, 2020 the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.
This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee's own health needs or to care for family members.
The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks, their personal health or the public health measures needed to combat the virus.
To learn more about how this will work or how to access up to $2M in Federal SBA disaster loans call us at 954-324-0803 or book a time in our calendar https://calendly.com/markjohnsontaxplanner/45strategysession.
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By Joe Marconi
Usually the winter drops off in sales, but along with car counts. This year is different. Customers seem consumed with debt and worried about thier finances, and putting off needed vehicle maintenance. Not good. In the long run this leads to breakdowns and larger repair bills.
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By Joe Marconi
So far for winter 2020, we are having a better than normal season. This is good news since, late fall sales fell. I am hopeful this will continue. Sales of new cars fell last year, with the average age of cars on the road are at an all time high. Near 12 years. And the scrappage rate has greatly declined.
What are you seeing in your area?
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By Gonzo
Semper Fi Bob was well into his late 80’s when I met him. He’s quite the talker, and he’ll never run out of things to tell you. I like old Bob. We have a few things in common, not much because of the years between us, but just enough that we can relate on quite a few subjects. We both served in the USMC. Of course, the years we served were decades apart, but even with the differences in time served, we still could “talk-the-talk” like two old veterans who just got their discharge papers. Bob had a problem with the horn buttons on his ‘92 Buick. It was the kind of horn that has its buttons and the air bag all built as one piece. He didn’t have the money to replace the entire airbag, but he did want to get that horn working somehow. I thought I could get it to work even if I had to “rig” something up, but that was OK with him. With his advancing years catching up with him, his hands weren’t the best. Most of his strength had faded with time, and so did the ability to straighten his fingers all the way out. I had to come up with a way that he could hit the horn button with the palm of his hand, rather than with a finger tip or thumb. Not a big deal, actually if he didn’t mind the look of an old style horn button attached to the edge of the air bag (so it didn’t interfere with the air bag operation) it could work just fine. Now Bob, being Bob, talking was his gift, and finding somebody with a little military background, and stuck in the driver’s seat of his car was all he needed to tell one of his stories. Bob hopped in the back seat and leaned over to watch what I was doing. As I worked on his new horn button, he told me all about his time in the Marine Corps. Fascinating story; I could have listened for hours. In fact, I made sure I took long enough for him to tell his story in full and without any interruptions. He told me about his time in Korea, in Inchon actually. It was a cold winter when he was there. A bitter cold wind and heavy snow was only part of the horrific condition he had to deal with. He went on in great detail how he was just a young kid who didn’t know a thing, and how you would be talking to someone one minute and the next minute the fellow Marine sitting right next to him froze to death. When he told me that part of his story I had to stop and turn to him to ask, “That really happened, just like that, Bob?” With a stone cold look on his face he said, “As sure as I’m sitting here talking to you, my friend.” I don’t think he was kidding. He was dead serious, but it was as if he was telling me a story from a distance, but at the same time, a story where he was actually there in the mountains of Inchon still fighting the bitter cold. I think it’s a way for time and age to allow a person like Bob to separate themselves from what was probably a terrible event in their life. I certainly have never experienced some of the things he was telling me about, like the chow, the hours of watching for the enemy, or how his boots didn’t have much in the way of insulation, so you put on as many socks as you could along with any straw or grass you could find. Bob made a point to tell me that if you needed to run to the “head” (bathroom for all you none GI type) … well, you tried to wait as long as you could, because exposing yourself in that kind of cold could be the end of you… and I don’t mean just “your” end that’s exposed. I finished up my little project and gave it a try. It worked just fine. “Hop up here Bob, and see if you can make it work like this,” I told him. Bob made his way into the driver’s seat and gave his new horn button a try. A gleam came over his face, beaming from ear to ear. He had to try it a few more times, and each time the smile kept getting bigger and bigger. “Don’t you know I needed that horn! Mercy, there’s some little kids in my neighborhood who get out in the street to play, and I just want to toot my horn to let them know I’m coming. Thanks partner, ya done me right.” The old Marine got out of his car and opened his wallet, “How much do I owe ya?” “Bob, it was an honor to do this job for you. I can’t take a thing.” “You most certainly are, Marine!” he said to me as he palms a twenty in my hand. “Thanks Bob, I appreciate that, but I really appreciate the stories. You know I write a column for a magazine, and I think I’d like to tell your story if that’s OK.” “Sure, not a problem. Go right ahead. I think I’d like that.” You don’t shake hands with Bob, because of his crippled hands; his way of shaking hands is to “bump” knuckles. Good enough for me. It’s the thought that counts. Then Bob turns to the car sitting in the bay just in front of his car. With whatever strength he had, he did his best to straighten one finger and point at the car in front. “I’ll never get over seeing this,” he said. It was a Kia Sportage in for a no start condition. I made the assumption it was because it’s a Korean car, and I thought it must be bringing back some of those painful memories he had as a young man. “I understand where you’re coming from Bob, it’s a Korean car. I understand completely; it’s something your generation had to deal with on the battlefield where your friends had died. I’m sorry it brings up some bad memories for you.” “That ain’t it,” he said as he walked closer to the car, and pointed directly at the name branded on the back door, “Killed – In – Action.” I think my knees buckled a bit when he said that. I didn’t know what to say next. Bob waved good-bye, and pulled his car out of the shop, and tooted his horn as he made his way down the street. I see old Bob once in awhile, still driving the same car, still tootin’ his horn. I don’t think I’ll ever forget his story of how he served our country. He’s one of the last of that generation, a much simpler time, before computers, before cell phones, and when KIA stood for only one thing. I’m proud to have served my country, I’m even more proud to have met a great man like Bob. We should all be as lucky, and we should all remember what his generation and many others have done to keep this country free. So the next time you see a Kia, think of it as something other than a car, think about my friend Bob. Then, say this to yourself: Semper Fi Bob, Semper Fi.
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