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Coronavirus (COVID-19) Shop Business Impact


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Has the Coronavirus (COVID-19) impacted your auto shop business? If it hasn't yet, it has the potential to do so soon. Please share what you are currently doing, how your business is impacted, what plans you have in place, etc.

Some things to consider:

  • Do you have a plan in place should you or one of your employees become ill?
  • With school, event, and business closures, how will this affect your shop?
  • Are you sending anything to your customers in terms of sharing your plans around keeping your customer and employees healthy and doing your part in your community? Many small and large businesses have been sending email communications to their customers.
  • Are you marketing to your customers in terms of not delaying car repair, should there be a need to temporarily close?
  • Are your parts suppliers sharing their plans, should the pandemic affect supply chains? 
  • Are you stocking up on business and shop necessities?

Please share your experience in this topic and stay healthy!

In the media:

The coronavirus and its growing tally of sick and dead victims around the world have been roiling financial markets, prompting countless hand-washing reminders and ruining more than a few vacations, and that’s before anyone knows exactly how widespread the effect will be on the automotive industry, including your local repair shop. Source

“By mid-March, the shortage of supplies will be felt and members are projecting they’ll experience disruption through May or June,” even if operations in China soon get back to normal, said Stacey Miller, senior director of communications at the Auto Care Association, a trade group representing 150,000 auto aftermarket and service businesses. Source

 

CDC Corona Virus Auto Repair


 

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25 minutes ago, Joe Marconi said:

Alex, we have seen a 40% drop in business the last three weeks. The worst drop in business in my 40 years. I made a post, by the way, under Joe's Tip.

Here's is our plan:

  • We have daily meetings with emoloyees to maintain our aim to keep oursleves clean and our customer's car clean
  • We wipe down customer's cars before we get into them. The areas we are in contact with.
  • We launched more radio spots to let people know that we are taking precautions, we will santize your car before and after we work on it. 
  • We are also promoting that we will pick up and deliver your car if you wish not to come out of your house
  • We are offering a Deep Cleaning of the HVAC system at cost, $39.95...Usingb BG Kits.
  • We purchased cases of small hand sanitizer and are gvivng them out to our customers
  • No overtime and we may need to cut hours.
  • No non-essential spending
  • I have advised my employees to also not to spend any money now, unless necessary
  • I have some employees take vacations now, We need them when business returns
  • Don't panic
  • Stay postive
  • PRAY!

Let's share our ideas and beat this thing!!!

Thanks for sharing @Joe Marconi, good plan! If anyone is looking for Joe's topic, please click here

9 minutes ago, xrac said:

Business here has not been affected but I suspect we will start to see things change starting this week.  

@xrac glad to hear things are still normal by you! Seems that last week things really shot up in terms of closings, panic, and especially in states where there are a large number of reported cases. Here in lower NY, schools are closed next week and the rumor is that they might be closed into April. This coming week may be even more active as numbers start rolling in from more and faster testing, due to the private sector getting in on it; quest, lab corp, etc. 

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15 hours ago, xrac said:

Everything went crazy on Friday. Schools are closed, all meetings of any size canceled. I am sure we will see a decline this week due to the craziness. My wife and I are staying in. She is high risk due to age, past chemo, and a weakened heart. Fortunately so far Indiana only has 12 confirmed cases and nothing close to our area. 

Smart decision to stay in, some people think they are invisible and it won't affect them. Better be safe than sorry in my opinion. I think this week we may see cases spike all over the country adding to the craziness as testing ramps up.  

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With everything closed some folks take advantage of the extra time to get their car fixed. We've been busy the last couple weeks but I expect everyone will stop spending money and going out very soon. 

I must say that this year has been the slowest on record since we opened in 2010.  I just paid the lowest tire bill I've ever had in 10 years. Maybe it was fear of the virus in January and February who knows but we didnt sell very many tires this quarter that's for sure. 

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Our March was super strong thru about March 13.   Then I noticed about a 20% drop for 2 days.  Then on Monday March 16, we dropped 80%.  This kept up until Friday, then only down about 20%, then down 90% for 2 days, and on Monday, back to just a 20%-30% drop.    We have a local radio show Wheels with Ed Wallace.  He always has dealers on and they were discussing their repair business and it was pretty much mirroring what we saw.     The drop-off seems to coincide with the Shelter in Place order issued by Dallas County (our local news source), as it was announced many days before taking effect.   Our county, north of Dallas, is acting more sanely and issued a "Work Safe" order... aka social distancing.  Regardless, auto repair and parts sellers are considered an essential businesses.

I was contemplating shutting down Tue (today), Wed and Thur, but given yesterday, I'm open today.   Not sure what comes next.

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Agreed. We'll come back strong.

Here's another angle on Corona Virus impact....  I needed to send out an (Westcreek) finance application for a customer's large repair bill today.  Tried to do it and found that they are not accepting new applications.   Finally read their notes and they are saying two things (my reading in-between the lines):  1) Your credit score today is NOT an indication of your ability to pay.  We can no longer reliably judge/predict your creditworthiness.   Maybe you were laid off yesterday, etc.  and 2) We might soon have a cash flow problem on our already outstanding loans and need to keep a hold of our cash until we understand the impact. 

I would guess if these guys are pulling back on credit, others might be doing the same.   New car loans? 

 

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We are about 1 hour from New York City. People here are being extremely cautious. My business is down 90% or more.
Joe was mentioning the PPP Loan. Waiting for the details to come out on that.
Sounds like the PPP will help a lot of shops make it through a couple tough months.

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We are experiencing what others have posted here in Richmond, VA.  (Midlothian).  I submitted all of the documents for the SBA Disaster loan Thursday (3/26/20).  We have not heard back yet.  I am curious has anyone else applied and how long did it take to receive a response?

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Good day!

We had to close, we are in mandatory shelter at home by the County for the next 14 days, ( March 28th to April 8th).

Not many cases of coronavirus down here, but there are about 7 cases in Brownsville,TX.

6 are trip related and the other it's under investigation.

School is out and a lot of places are closed.

...For us, a shop going on it's 7th year mark, we started the year with our sales at hi.

In January we increased our sales by 27% & February by 22%.

Things went down by Mid March, when all of this started.

We're going to wait till April 8th and hope for the best and go back at it...

In this particular area, we are at the peak, hopefully, Things will start going back to normal.

I can cover the expenses for this April, but coming May it's a different ball game..

Regards

 

Juan Pablo(JP) Sepulveda 

 

 

 

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We have been looking into PPP loans and unemployment. I am a one man shop. Information for both as refers to the CARES act is limited. I've been told by my accountant that PPP will not cover self employed owners just employees salaries. Not sure that is true, But we have decided to close temporarily and apply for unemployment. Government has not released all information yet and my state won't let me apply for either yet.

Juan. I feel your pain. Like you hoping for better days soon.

See you on the other side brothers !

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5 hours ago, moyersauto said:

We are experiencing what others have posted here in Richmond, VA.  (Midlothian).  I submitted all of the documents for the SBA Disaster loan Thursday (3/26/20).  We have not heard back yet.  I am curious has anyone else applied and how long did it take to receive a response?

I do remember reading that some businesses are already engaged and making progress, but I don't remember the specifics.  Here's another resource that is chock full of information from other small businesses of all types.   Check it out:   https://www.reddit.com/r/smallbusiness/

I did at least find someone who has completed the process: 

When the Disaster loan website started, the process included creating an account, then providing all documents.  Later, the business would receive an email with some confirmation that it was received. I guess this was overwhelming.  They've changed it to download the applications and submit it "blindly" by uploading your documents.   The latter process is not sending out emails.   

Someone posted a note about not using the blind upload process, but instead suggests mailing documents to [email protected] :

It may not really be necessary to panic because one person answering the phones at SBA didn't understand how the blind upload queue is being handled / processed.   All in all, things are moving so fast, that clarity and surety are both lacking.  

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@bantar Thank you so much for this information!  It is greatly appreciated and I will email and mail the documents requested asap! I did breathe a bit easier after reading the post you shared concerning the approval.  Again, thank you so much for your time to share!

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I just wanted to share my experience today.  I took the advice and emailed all of the documents for the SBA Disaster loan to [email protected] .  I received an automated reply :

 

Automatic reply: Small Business Disaster Loan Application

 
Thank you for reaching out to the U.S. Small Business Administration Disaster Assistance Customer Service Center. If you are attempting to submit an application for an Economic Injury Disaster Loan as a result of COVID-19, please visit our new streamlined application page and apply at https://covid19relief.sba.gov/.

 

If you have any additional questions, please feel free to reach back out to us via email, or call our Customer Service Center at (800) 659-2955. Individuals who are deaf or hard of hearing may call (800) 877-8339.

 

Thank you in advance for your patience,

 

SBA’s Disaster Assistance Customer Service Center

 

I went to the link above and is was automated application (all questions that were on the paper form were asked).  Once completed I received the following.

image.thumb.png.62f0bd77f9d2223c36709bbb10e883eb.png

 

I just wanted to share my experience!  Thank you for all of your support!

 

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22 hours ago, bantar said:

SBA Training Powerpoint Released on April 3 2020

https://www.sba.gov/sites/default/files/articles/EIDL_and_P3_4.3.2020_COB.pdf

NOTE:  On slide 15, it says this about the EIDL quick advance / forgivable payment:  Up to $10K depending on # of employees

Great info @bantar 

PDF attached for record.

EIDL_and_P3_4.3.2020_COB.pdf

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We just submitted our application for the SBA Paycheck Protection Program. Two different accountants said it is a no brainer. It will pay for all the employees and us the owners for 8 weeks plus money towards rent/lease and utilities. And we don't have to pay it back! No fees either!

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We spoke to our accountant, bank and read the paperwork.  The only stipulation was that at least 75% needed to be used towards payroll and the rest to utilities and rent for an 8 week time period. Any money left over after that time period will have .5% fixed rate. We plan on using all the money towards our employees & expenses so I am not sure what conditions we need to worry about?

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I own a gas station with repair bays and my staff of 14 is now down to a staff of four including myself. Some left because of warranted pre-existing health conditions but a major portion of my gas island staff left because of fear. My shop is in North East NJ in the shadow of NYC. Positive test results and fatalities in my county are unfortunately the highest in NJ so it is easy to understand that my employees are fearful.  I am very grateful for the staff members who have soldiered on and stayed with me. If I succeed at obtaining this SBA Loan Paycheck Protection program how could I send a paycheck to everyone that stayed home because of fear? What message does that send to my other staff members who stayed with me and worked? Two choices: Stay home, watch tv and get a check in the mail OR come to work every day, expose yourself to this terrible virus and get a check handed to you. Not a difficult choice to make. As Joe mentioned “read the fine print” which is a very valid point. Unfortunately life right now is beyond hectic and filled with long hours, major business disruptions, heightened tension caused by the threat of contracting this virus coupled with the fear of bringing it home to family members and now we also have to read the fine print. That is a job that I hate to do (I think by nature most mechanics avoid fine print thinking they can figure it out on their own) so I am following Joe’s second suggestion and we will be reviewing all options with our accountant tomorrow morning.

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Technicians that we kept on to work are angry at the amount of money  that people are getting on unemployment for sitting home doing nothing .  Our techs are working extremely hard, are somewhat overloaded,  and putting themselves at risk by exposure to potential areas of the virus. I'm open to ideas as to how to address this    @Joe Marconi . 

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On 4/7/2020 at 6:37 AM, Joe Marconi said:

There is no easy answer to the question about unemployment and the additional federal unemployment. Human nature kicks in as those that have not lost their jobs feel that it is unfair.  

I have communicated to all my techs the reality of what is going on.  We have seen sales drop more than 60%.  I had to make a choice, and the employees that I selected to lay off were those that I felt were the ones that were most expendable.  The employees that I did not lay off are the ones that show ethics, leadership and high morale.  

I am correct with my plan and decision?  Who the hell knows. I am learning on the fly like all of us. 

...to answer your question, YES, that's the right "Business Decision" (key word Business).

I know it's hard, I myself have been in that situation on previous Jobs as Dir. of Op's.

You keep the staff that align with your business Mission & Vision statement and go from there.

These are the best employees to have in this kind of situations.  I am sure the compensation will come later on.

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  • Alex pinned, unpinned, featured and unfeatured this topic

Although we are not out of this yet it does seem that there is a glimmer of light at the end of the tunnel which I am very thankful for. Hopefully repair work will pick up as our country starts to come back on line and recover. Unfortunately that may take longer than we think and already I am hearing radio spots from large dealers in my area informing the public (possibly my customers) that their service department is open for business. Radio spots aren’t cheap and unless you blanket the air waves your regular customers may never hear your message. Our shop management system, BayMaster, recently released an update which allows me to send mass text messages and the timing for this new feature could not have been better. It took me less than five minutes to compose and send out a short text message to over 500 of my customers indicating that we are open for gas, open for service work and our revised business hours. Almost everyone in our area has reduced hours so I feel including that information is very important. Most of our country is shut down and our customers do need to be reminded that we are open. The response was almost immediate with inquiries about state inspections, oil changes and various other service work along with many customers expressing their gratitude for us being open and available if needed. If your shop management system is capable of sending out mass text messages I strongly suggest using it. 

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Our shop is located in Orlando- we have decided to stay open . Business is down Considerable. Worst in 38 years. 
 We feel it is important to stay open for our fleets and Department of transportation accounts. We furloughed our part time tech @ the onset . More out of concern for his age and health concerns . 
As long as we can bring in enough revenue to meet payroll and contribute to rent we will remain open . We have enough retained earnings to ride out the storm. 

We spoke with our banker about the payroll loan  his response was it is a loan do not think otherwise. 
As we shy away from debt we will not pursue at this time. You really need to educate yourself on the fine details. Top line sounds wonderful but my gut reaction is it it sounds to good to be true is it ?

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We just got our money too! We have two local banks and I applied through both. One came through with the paperwork within a day while the other did not respond until the money was gone. That bank just sent an email that said we could pre-apply in case the SBA added more funding!

We are thankful. The bank highly recommended paying payroll and utilities straight out of the account they set up which has been a little stressful since payroll is Monday but I think I can swing it. This will be a huge help during this time.

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  • Have you checked out Joe's Latest Blog?

         3 comments
      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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