By Joe Marconi
We, automotive shop owners of America, must take the opportunity of a lifetime and turn it into a bunch of success stories. What opportunity? Look around you. The world is in turmoil. COVID-19, social unrest, uncertainty about the presidential election, the economy, how are we going to get out kids back to school, on and on and on.
While the world is spiraling out of control, we have the power to make big changes to our auto repair shops. And it can all be positive!
First, the average age of a car in the U.S. is about 12 years old, attaining well over 200k on the clock.
Second, Uber, taxis and limo companies are suffering. Guess why?
Third, the motoring public in the foreseeable future will be traveling by car, taking road trips like they have never did before.
Fourth, the roads are packed with motor vehicles, as more and more people prefer their own car as their primary means of transportation.
Fifth, as the cars get older and older, more of them will be out of factory warranty.
Sixth, independent auto repair shops have a vast amount of training, resources and replacement parts.
Seventh, the overwhelming majority of cars being build and sold today are still internal combustion engine powered cars. If you factor in the expected average age of car these days, we can safely bet that those gas engine cars being sold today will still be on the road in 2033 and beyond!
Eight, You need more? That's not enough!
Get your plan in place. Get your prices in line with making a profit. Don't give anything away anymore (I am mostly referring to checking, testing, diags of any sort!) Offer world class customer service. Be a leader of your employees. Show the world what you are made of!
Hi guys, first time posting to the forums.
I am a new shop owner, recently purchased an A/C machine.
Do you guys have standard pricing you follow? Pricing for leak checks, price per pound of refrigerant, top up if required? Let me know your A/C pricing matrix. Thanks so much for the help!
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.
View full article
We use Mitchell and I find myself constantly changing the prices that it spits out even though I set up the pricing matrix... Anyone willing to share how they split it up and what figures they use? I want to give a fair price but I also don't want to short myself,
By Elite Worldwide Inc.
By Bob Cooper
When we had our first taste of cash, we realized its beauty. Regardless of whether it was a weekly allowance for doing household chores, or payment for mowing a neighbor’s lawn, we can all recall someone paying us with cash. It put a smile on our faces, and allowed us to buy the things we often dreamed of.
As we matured, many of us found ourselves fixing our neighbors’ cars in our driveways, and we were often paid in cash for those services as well. To this day we pass this learned sense of gratitude along by giving cash to people that do small repairs around our houses, and by tipping the server at our favorite restaurant. The intentions are good, and it comes as no surprise that the recipients are always appreciative. Unfortunately, when we become business owners, that practice of paying others with cash is one practice that has to come to an immediate end, and here’s why…
As a business owner, I too know how tempting it can be to give an employee a cash bonus when they’ve gone above and beyond, or when you’ve had a really good week. Their eyes will light up, they’ll smile from ear to ear, it’s not viewed as something that is subject to being taxed, and it’s something they can quickly spend. Unfortunately, at the very moment a shop owner hands an employee cash, there are a number of unintended consequences that occur.
First of all, as the money transfers from the owner’s hand to the employee’s, the owner is signaling to the employee that they are someone that cheats on their taxes. Although the employee knows that there are many people who cheat in this way, it stands to reason that they may very well conclude that if their boss cheats the government, there’s a good chance they can, or will, cheat the employee as well. Yet it doesn’t stop there, because at that very same moment the employee is also drawing the conclusion (rightfully or wrongfully) that the owner will be able to make other cash payments to them, and that they may receive a part of their regular pay (if not all of it) in cash.
Unfortunately, things can quickly become far worse, because if the employee becomes disgruntled, and is no longer with the company, they can make life miserable for their past employer by reporting them for making unreported cash payments. In such cases the government is often more than happy to not press any charges against the employee in return for them testifying against the employer. Any shop owner that has ever been through a tax or labor law audit knows how agonizing (and expensive) such investigations can be, and if that’s not bad enough, if the agency is able to demonstrate tax evasion, it can quickly go from a tax liability for the shop owner to a criminal case.
Now let’s change gears and talk about where that magical, off-the-books cash comes from. Most shop owners that pay their employees in cash (under the table) have a method of generating the cash they’ll need. The most common method is they’ll take cash payments for repairs, and never record the sale on their books. More often than not they don’t realize that making these decisions can be devastating as well.
First of all, by not reporting all of their sales they are opening themselves up to IRS audits and possible criminal charges. Additionally, the majority of their key performance indicators will be off, which makes it harder to judge the true performance of their shops and see the real losses. Furthermore, when it comes time for them to sell their shop, this is when the decision they made to try to save a few dollars by not reporting all of their income, or by paying their employees with cash, comes back to haunt them and often destroys everything they’ve built over the years.
When their shop is listed for sale, any reasonable buyer will want to see and discuss the financial statements. If the potential buyer questions the reported sales, and if they’re told that in reality the sales are higher because some of the sales were not reported (or there is a second set of books), then any reasonable buyer will walk, because they’ll rightfully conclude if the sales figures are not legitimate, why should they presume any of the other numbers to be correct, and why should they trust anything else the seller might say? Ironically, some shop owners feel that all they’ll need to do is simply not tell the potential buyers about the cash transactions, but unfortunately, what they don’t realize is that any intentional misrepresentation, or intentional omission of anything that is considered material in such a sale, is cause for a lawsuit.
Is there a solution? Well, I have some really good news for you, and it’s that “Yes, there is”. Better yet, I know that this solution works because I have helped hundreds of shop owners make the transition from cash, to operating very successful businesses that abide by the law. Here’s all that you’ll need to do.
First, make sure every single dollar that comes into your business is properly reported, and make sure all your employees are paid in a matter that meets with all the legal requirements. If you have an employee that demands they be paid in cash, then one thing is for certain; You have the wrong employee. Secondly, do the three things that all the top shop owners in America do: hire the right people, abide by the law, and hire an accountant that knows how to reduce your tax liabilities in every possible way (that conforms with the law). If you follow this path, you have my promise that you will have a more profitable, successful business, you’ll be able to sleep well at night, and you’ll never have to worry about something as simple as cash destroying your life, destroying the value of your business, and destroying the reputation you have worked so hard to create.
“Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers coaching and training from the industry’s top shop owners, service advisor training, peer groups, along with online and in-class sales, marketing and shop management courses. You can contact Elite at [email protected], or by calling 800-204-3548."
View full article