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?
Hello everyone, I am suggesting we have a thread with comments that only relate to information regarding help for businesses or communities affected by recent events.
I will start the thread by listing relevant links I have at this time:
the U.S. Treasury Department has released a draft application for the Paycheck Protection Program (the
new forgivable loan program) created by the CARES Act. The Paycheck Protection Plan application process starts
Friday, April 3, 2020 and those eligible and interested in applying should begin that process as soon as possible:
- For a top-line overview of the program:
https://home.treasury.gov/system/files/136/PPP -- Overview.pdf
- If you’re a borrower, more information and links to SBA lenders http://www.sba.gov/ can be found here:
- The application for borrowers can be found here:
Importantly as well, we have included links to Small Business Administration (SBA) resources that will help navigate
the government subsidies, loans and programs available:
- The SBA’s Local Assistance Page, https://www.sba.gov/local-assistance which provides local resources and
information on offices and other resources around the country;
- Lender-Match, https://www.sba.gov/funding-programs/loans the SBA’s tool to find local banks and lenders
based on your needs and;
- SBA’s Coronavirus Resource Page:
I currently employ a mechanic and friend who has been with me for about 20 years. He was formerly a transmission rebuilder, but we have switched to mostly reman units and have no need for a rebuilder. His pay has remained the same despite his value declining. I am currently paying him roughly $100,000 a year. The problem i'm having is that his skill set is not near that pay level anymore. He does light diagnostic and basic managerial work, but I am not confident enough for him to run the shop for more than an hour. With the current state of the industry our numbers have gone down a bit over the last two years. While still being profitable, I can't help but think about the extra income that would be available by terminating this employee, I just dont know how to do it. Any advice on how to do this? I like him as a person and have known him a very long time, but I feel his is paid about twice as much as he is worth. Any help wouldbe greatly appreciated.
By Mail Shark
Before approving your next database mailing, run down this checklist to ensure all of these steps have been taken to validate the quality and accuracy of your mailing.
Utilize the National Change of Address Service (NCOA)
Every year, millions of Americans move, and this undoubtedly includes some of the customers in your database. This can be a problem when you pull your database to use for sending out a direct mail campaign, as you may have customers that have moved and no longer live at the recorded address.
If these customers have moved outside of your trade area, and you were to send a direct mail piece to them, you would essentially be wasting your marketing dollars by sending direct mail to customers that are simply no longer there.
The good news is, there is a simple solution. You can have your direct mail partner run your database against the USPS National Change of Address (NCOA) service. The cost of doing so is very minimal and worth the small additional cost to ensure the quality and accuracy of your database.
NCOA is a database maintained by the U.S. Postal Service, and includes all of the individuals and companies who have completed a form to change their address in the previous four years.
Here are a few things you will find out by running your list through the NCOA process is:
Addressee has moved, and a new address could not be provided. New address information is provided. The recipient moved without providing a forwarding address to the USPS. From here, these previous customers that have moved can easily be removed from future mailings.
Remove Your Customers From New Acquisition Mailings
Most shop owners who are using direct mail to target their database of current customers are also sending out new customer acquisition mailers to target new prospects, either by carrier route or by specific make, model, fuel type, etc.
In doing so, it’s important that you request your direct mail partner to remove these current customers from your new customer acquisition mailers. It’s a waste of money to send your customers a new customer acquisition mailer when you are already targeting them by sending them a retention or lapsed customer mailer. It will also send your current/lapsed customers the wrong message. Your marketing and message to new customers should not be the same that it is to current or lapsed customers.
This is also an easy fix, simply request that your direct mail partner suppress your customer database from your new customer acquisition mailers. The only caveat in doing so, is for general auto shops that are removing their database of customers from their carrier route mailing—there are guidelines that must be met for carrier route mailings in order to receive the maximum discounted postage rate. These guidelines are as follows:
Your mail must be sorted in walk sequence. This is the exact order that the postal carrier walks/drives on their carrier routes. In addition, your mailing must follow the 90/75 rule. The 90/75 rule stipulates that you must mail to at least 90 percent of the total residential addresses, or at least 75 percent of the total combined number of residential and business addresses in each carrier route. Since you, as an auto shop owner will never want to mail to businesses, this means that you must mail to 90 percent of the total addresses in a carrier route to maintain the lowest postage rate.
If your mailer falls below the 90 percent guideline, there are three different levels of postage that your mailer can potentially fall into. Each level represents an additional cost of per piece postage above and beyond the standard rates.
Additional Saturation Mail Postage Rates (*As of 1/1/2019)
High density plus: Mail at least 300 pieces in walk sequence order (additional postage would be .01 per piece).
High density: Mail at least 125 pieces in walk sequence order (additional postage would be.019 per piece).
Basic: Mail at least 10 pieces in walk sequence order (additional postage would be .104 per piece).
Make Use of the Coding Accuracy Support System (CASS)
In addition to running your database through the NCOA process, it’s important to ensure your direct mail partner is also certifying your database mailing list through the Coding Accuracy Support System (CASS). This process will standardize your mailing file, verify that each and every address in your mailing file is valid and complete, as well as update any addresses that have been changed and/or has become outdated.
Executive Vice President of Sales
Email: [email protected]
Zombie Cars “Brains, Brains, we need Brains!” Zombie cars? What’s a zombie car? Way back, when we used points and condensers and later the basic electronic ignition systems, cars didn’t need brains (ECM – Electronic Control Module), but that all changed in the mid 70’s on some imports and pretty much on everything else by the time the 80’s came around. Some of these brains were only cursory, and didn’t actually control the car, but merely watched for emission issues, while others played a major role in the actual ignition spark or fuel delivery systems. Most of the engines in those early years, still used the same basic type of distributor setups (with a few exceptions) as their earlier counterparts that used the old tried and true points and condenser type of ignition systems. During those cross-over years it was rather easy to slap a different distributor in it, or change the existing points distributor over to electronic ignition (which worked quite well by the way). These days...it’s not that easy. These computer systems have become so entangled into the engine functions and nearly every other system that it’s impossible to bypass the fuel or ignition systems as we did years ago. However, there are still a lot of people out there that have hung onto some of the cars from that era. Most likely they've been kept parked alongside the garage as a future project or hung onto for some sentimental reason. Some (very few) are in great shape, others… well, they look like zombies already. What makes them zombies? The brain… the brain… they need brains! Just this past week I had several of these faded paint monstrosities lined up in the parking lot. (They never come alone… always in a pack.) For starters an old dilapidated 1986 Dodge pickup with a slant six. This old rusted, tilting to one side relic had been at another shop for a tune-up, but as the story was told to me by the owner, the other shop tried to start it when a fuel line ruptured and caught the old truck on fire. Luckily, they managed to get it out, but the damage was already done. The main harness from the firewall to the distributor, coil, charging system, blower motor, oil sending unit, temp. sender, and the starter wiring were completely melted into an unrecognizable mass of plastic and copper. It was my job to bring this dilapidated hulk back to life. However, the original spark control computer had melted as well, and was unusable. Worse yet, the brain was discontinued eons ago with no replacement parts anywhere to be found. This zombie needs a brain, and there doesn’t seem to be an easy way to get one. At this point the only solution was to do away with the electronic brain and try to refit the old slant six with a much simpler ignition system from a decade earlier if at all possible. A lobotomy if you will. (Dr. Frankenstein would be envious.) Then there was this 2002 Mustang that moaned and groaned while dragging one foot into the shop. It needed a new BCM (Body Control Module). Call the dealer, call the parts warehouse, call everybody! Anybody! Is there a brain for this car? Nope, discontinued. Seems this particular BCM was a rather rare brain out there in zombie land, and at the time, nobody was setup to rebuild them. It seemed this car was destined to wander the city streets with the rest of the zombie mobiles. At the same time this was going on, in comes a 1982 Ford Bronco with the original Variable Venture carburetor still on it. Ok, not a brain, but just as bad. It qualifies as a zombie for sure. Trying to find a suitable replacement these days is a challenge. Ten or twenty years ago this would have been no problem to find a carb. kit (if you dared) or the Holley conversion kit for it, but not today. This trend of bringing back the dead looks like it’s only going to turn into the next zombie apocalypses. As these electronic systems get more and more complex the likely hood of your family truckster turning into a zombie is just a matter of time as each new model comes out. In some ways, I believe the manufacturers have thought this out long before there was a potential of these cars becoming zombies. In my youth it was nothing for me and a few friends to grab an old car out of a junk yard and raise it from the dead. Ya just had to throw a few shots of gas down the carburetor, add a few wires and a fresh battery and fire it up. The rust would fly, the engine would clatter, the smoke would billow out from under the hood, as the exhaust roared out of every crack in the manifold. Those days are long gone now. They may have engineered a longer lasting engine, better paint, and for the part, the interior can hold up to the ravages of time, however, the electronics, are their weakness. Although, these zombie mobiles seem to be coming out of hiding more often than ever before. Reviving some of these early electronic zombies may happen, but on the other hand, it may be a futile effort. The truth of the matter is… these resurrections are not as easy to do as it was so many years ago. There are countless problems that have to be overcome to bring some of these rusted heaps back among the living, especially if you’re in an area that requires emission testing. Just trying to bypass some of those early electronic brains when a replacement part can’t be found can be a real challenge. The good news is that there are a lot of guys out there tearing these brains apart and rebuilding them. But even then, there are some zombie cars that will never make it and eventually die from the lack of a brain, while others wander aimlessly from shop to shop still searching for their elusive electronic gray matter. Even after you manage to find a brain for these living dead vehicles it’s likely something else is going to go wrong. After all, being cast aside for so long, all the hoses, belts, and gaskets have dried up. Something will more likely fall off just like you would expect from any other zombie wandering around. And, you know, just as soon as the latest zombie joins the living something will undoubtedly come tumbling to the shop floor. Whether it’s coolant, oil, a belt, or perhaps no#2 connecting rod, something is not going to stay in place. Just like in every zombie movie I’ve ever watched,.one of them will always have an arm or leg falling off. It sure seems that these zombie cars follow right along with that same affliction. It’s safe to say, these relics of the early electronic era of the automotive world are in some respects the car equivalent of a zombie: half dead, half alive…and in search of a brain they may never find. So don’t be surprised if you’re at the next traffic light when an old faded-rusty-dented car with a shattered windshield, screeching brakes, with plumes of dense low hanging smoke creeping along with it, don't be alarmed, it’s just another car beginning its transformation into a "ZOMBIE CAR".
View full article