By Joe Marconi
First, let me clarify one thing: I AM NOT THE EXPERT. But there are things about the PPP that concern me. Such as this quote fron the SBA: "Forgeven amounts will be considerded income for federal tax purposes." So, if you get a forgiven loan in the amount of 100,000- that will be added as income?
And, the fact that we need to rehire to full staff by June 30, 2020. So, in an area like mine where we don't expect business to return for 6 months or longer, I need to rehire to full staff, with 60% of sales down, use the SBA PPP to make payroll???? This is insane economics.
I do not want to rain on anyone's parade here. Being in NY, I got hit early and got hit hard. We are going on more than 8 weeks with little to no business. I too need financial help.
Look, the point is take it slow and get all the information from a pro. This is what I need to do too. Please get the advise from your banker, your attorney, financial advisor and your accoutant.
The only true way out of this is for business to return to normal, through sales and revenue.
By Elite Worldwide Inc.
Complimentary Webinar - Handling Staffing and Unemployment Issues During COVID-19
Guidance from Top Employment Experts
We know how difficult it has been for shop owners to navigate through the employment issues that have come with COVID-19, so we decided that we needed to help. Elite has arranged for SESCO Management Consultants, the top experts in HR and Employment Law when it comes to auto repair shops, to hold a special session to help shop owners through the greatest COVID-19 employment challenges.
In light of what the industry is going through, we've arranged for this session to be held free of charge.
Join us next Tuesday (4/7) at 10:00 Pacific Time, and learn:
How to ensure you're complying with the Families First Coronavirus Response Act (Paid Family Leave).
Everything you need to know about employer and employee coverage
The most important considerations when it comes to leave use and pay requirements
How to sort through staffing, unemployment and other operational issues
The answers to any questions you may have Seating is limited, so Click Here to reserve your spot today.
Wishing you the best,
Your Friends at Elite
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 Joe Marconi
With Mother Google literally tied to our hands, through our cell phones; are part margins becoming more difficult to achieve? Traditionally, shops use a 50% part margin, which they deserve. But, we live in a world today where part prices are so transparent that maybe we need to rethink this.
Consider this: What if we concede on prices? Hold to a suggested list…BUT…raise our labor rate to offset the loss in overall profit. In other words, keep your parts prices at a margin the consumer will not question, but raise your labor to make up the part profit?
This is being discussed around the country and there are shops that have implemented this strategy. We can’t give up our overall gross profit, so is this a viable option?