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rpllib last won the day on October 6

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Business Information

  • Business Name
    Midas of Kalkaska
  • Business Address
    202 Elm Street, Kalkaska, Michigan, 49646
  • Type of Business
    Auto Repair
  • Your Current Position
    Shop Owner
  • Automotive Franchise
  • Website
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  • Your Mission Statement
    Our purpose at Midas of Kalkaska is to build trust and create lifelong partnerships with our customers, our community , our employees and our vendor partners. Through these positive relationships built on the core values of trust, fairness and honesty, we will provide value and safety to our customers, support to our communities, security for our employees and vendors, and a reasonable profit for our efforts.

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  1. Your Welcome. It is a tough concept to get your head around. I can only imagine what took place in the past, that caused these complications to become law.
  2. That is exactly correct. The inverse of that, is being sure you know what the effect of those "overtime makeup wages" are when you establish the bonus amount. The way we calculate the bonus is completely up to us. We make sure that when we put a bonus plan is place, the total amount bonused is the what we would have bonused anyway, if we did not understand the process necessary to make non-discretionary bonus's legal. We label the "overtime makeup wage" as "premium overtime" and it is listed as such on all pay reports, checks, and ADP data entry forms. Where we get in trouble is when we create bonus plans that deliver all the dollars we intended to give, and then find out we owe additional dollars for overtime consideration, on the bonused amount.
  3. This entire reply is generally applicable if you have employees that work more than 40 hours per week. Most, if not all, of the trouble owners get into is caused by calculating overtime incorrectly. If your folks work more than 40 hours and you pay some form of pay based on "do this, get that", then their is a high likelihood you will owe additional "premium overtime" on your employees wages. If your folks always work less than 40 hours(actually "clocked" in, assuming you meet the FLSA definition for calculating actual hours worked), there are still other considerations. Contact your local wage and hour division or labor law attorney. We had our awakening in 2016. We have been a "productivity/profit based pay" company for the last few decades, and did it wrong for most of those years. Once we were awakened(without the expense of fines/ DOL audit, Thank You), my head was spinning and it hurt for the better part of a year. I was unwilling to move away from productivity/profit based pay, so instead we made some changes to our tech flat rate pay plan(went to modified flat rate), and implemented a "regular rate/premium overtime" calculation for all employees. Our hourly techs get a monthly bonus with overtime, based on labor dollars produced. Our entire staff receives monthly bonus based on a percentage of "new gross profit dollars generated" above same month, previous year. Our entire staff receives yearly bonus, based on a percentage of "new gross profit dollars generated" above the previous year. The key to all of this, Imo, is understanding the effect(the "load") that meeting the FLSA requirements places on labor margins. Once you have that worked out, and the the plan(s) are delivering the desired margin, the overall results have been very positive in our store. Sales, gross and net profit have been coming into line with what our coaches have been telling us is possible for decades. And I always thought they were nuts! I will admit that this is not for the faint of heart. There is a fair amount of setup, and in our case, a fair amount of Excel worksheets. Monthly and yearly bonus plan overtime are calculated using the weighted average method. Managers, Service advisors and service techs all have "daily trackers" to complete, which they should probably be doing regardless of pay plan. A few of the most important points I have learned: (1) If you have a payroll company, they accept the data you input. They do not keep you out of trouble with the DOL and most of their EULA'a speak directly to this. They are not responsible for correctly calculating overtime on bonus pay plans. Almost every pay period in my store involves a "overtime" field be filled in and a "premium o/t" field be filled in. (2) We still run under the presumption quoted from above: "Per W&H, Flat Rate still requires OT pay if more than 40 hours are worked." (3) Always, always always know exactly what your total wage cost is per billable hour. If you want to know how much you pay "flat rate" or "per billed hour", regardless of how you actually pay, take all the wages (all "paid in cash" wages including regular pay, o/t pay, flat rate pay, vacation pay, holiday pay, bonus, spiffs, ect, not including benefits) that you pay them for a specific period, and divide by the number of billable hours they produced. My service techs cost $33-$38 per billable hour and my tire/lube techs cost an average of $92.16 per billable hour. We have a staff of 10, not including owners, and all of them are on a pay program that rewards for productivity/profit and provides for FLSA compliance. Not impossible, and the value of the "buy in" from staff is what lets us work at the shop 8 hours a week( one day), with no phone calls in between. Just one, of many ways to skin the cat
  4. I was fortunate to be introduced to Bob Ward several years ago. What a difference that day has made in my life. Bob has a knack for structuring exit plans for a perpetual outcome. In my case it involved having a young key employee with the time and energy to make this kind of arrangement work. Young, time and energy are the key words, Imo. There would be no wasted moments in a conversation with Bob. https://www.perpetualbusiness.co/
  5. I agree with the 7% rent factor. I know owners that have 13-15% rent factors and it is a lot of activity and generally not much return. I punched the ARCO location address into a demographic tool that I have been using for a couple decades. I then took that data and pasted it into the attached spreadsheet (column GV). When compared to many other locations shown in the sheet, I would call the mile high view of this location "average good". If you want to see exceptional, look for the Virginia Tire entries. Again, "the mile high view" would suggest that this could be a successful location, but maybe not exceptional and maybe not a place I would risk a 15-20% rent factor. The "raw automotive retail market potential" is based on the idea that the 20k households surrounding your shop will likely be a good indicator of retail potential. It then assumes that household education followed by household income are the most important factors in determining the DIFM (do it for me) potential. The same formula has been applied to every location in the sheet. May be helpful. Definitely does not include other important factors like traffic patterns Caution would be advisable, Imo, if this is the area you are interested in. misc2.xlsx
  6. The right people performing consistently has certainly been a key to my ability to have a life, while owning my business. Some of that, I have to attribute to a healthy dose of good fortune, throughout my career, but especially early on(first 10 years). It was securing a single A tech (started as a C tech) and a service advisor , both with the right attitudes and right work ethic, and keeping them for 25 years plus, that has made the biggest difference for me. Others have come and gone, but having a core team through it all, made an immeasurable difference for me. This is especially noticeable when I compare myself to other owners, who were never able to establish that long term "core team", that still work in their business's every day, and face difficult transition options to the next generation of ownership for their store. Some may call "good fortune", hard work and smart work, which fits in their somewhere, but that has little to do with having healthy key employees that wish to remain living in the area of my store, for their entire career. For owners early in their career, I would suggest finding the right attitudes and grow together. Then start your transition planning a minimum of 10 years in advance of your intended transition time frame. This will give you time to find the next gen team for your business, and grow together with them to a successful future for all.
  7. Automotive Oil Change Association https://www.aoca.org/default.aspx
  8. Don't underestimate the differences between coastal California and very small town rural norther Michigan. The attached report may hurt more than help your understanding of what is possible in your market. It is a 2020 sale s by category report for our two fast lube lanes, which are attached to our 8 service bays. Some of what you listed would be performed in our service bays and not listed in the attached report. I would suggest you join the AOCA, and tap them for all their member resources. If you could find an AOCA member outside of your market(put somewhere in coastal Ca.), that would be willing to let you visit, that's where I would start fast lube by category.pdf
  9. Drive thru lane or lanes(with pits), staffed as a fast lube, for some of the quick services?
  10. I relay this out of appreciation for our good fortune. I would also not want their to be a false impression that the industry was down everywhere. We were up again in 2020 after several years of increases, with only one blip in 2017. Of the 1200 or so stores that I can see increase/decrease numbers for, over 50% were flat or up in 2020. We were down in January 2021 by 20%, over 2020, but only down in Jan 2021 3% over 2018/2019. Things definitely felt tighter this last 30 days.
  11. This is where I started (as stated by others) "Create an exit strategy, or succession plan". I would take that a step further and say "make a personal plan" for your next 20 years. For me, I would by the property, let the rental income be the return on my money, for the time being(assumes no banks or mortgages involved). I would not feel pressured to decide today, what ultimately would be the plan. I would be comfortable in the knowledge, that I just improved my real estate position substantially. But that's just me. My plan is to be no more than a landlord within three years, and that plan is well in place. Here's a good guy to talk to" https://www.perpetualbusiness.co/ You would not have a wasted minute, in a conversation with Bob
  12. I believe he just called us "old guys"! (and rightfully so!) Welcome and congrats on your new shop opening. You truly are from a small town, which does come with a certain uniqueness, as it applies to operating an automotive service facility. I recently shared the following with a group of shop owners. I believe you can find value here if you chose. They require an email address to download the resource listed, but it seems well worth it, and no one has contacted me or solicited me as a result. I have no connection to any of the firms or individuals listed, but I am a fan of good content and simple brilliance. I would concentrate on the book to start. It is filled with core information you will need. Imo, the portion on scaling your new business may be especially useful. Here was my message published elsewhere: "As we look to transition our business to the next generation, I have been assembling resources that I believe might be helpful in ensuring their success. Occasionally one of these resources jumps towards the top of the stack as it applies to core foundational reminders. This book is one of those. https://paarmelis.com/your-perfect-shop-book-download/ It is more of a targeted short story written in large font on a small page format, and an evening read. . The author is a veteran CPA from a firm that specializes in automotive repair shops. They claim 450 auto repair clients, and they do have some impressive stores listed as clients. I like this organization. I have reviewed a few of their podcasts and webinars and they speaks/articulate well. Many of us can find some value here, if we chose. The link below is to a webinar I came across that was put out by one of this firms young CPA's, interviewing an industry coach on a cash flow system that I had not previously heard of nor ever given much consideration. As the concept took hold, I immediately thought "simple brilliance". I have now done what I do, which is to dig into the digital footprint of this "Profit First" concept and underlying for-profit industry. It is essentially the commercial version of the "consumer side industry" built around the teachings of Dave Ramsey. None the less, even after many hours of scrutinizing, I would still call the core foundation of this concept "simple brilliance". Typically, as most stores transition to the next generation of ownership, there can be a substantial change in the reserve cash a business has to operate on. This is one of the places this concept would make a real difference. The other is situations where a business has been in place for many years, but mostly has underperformed from a profit/cash perspective. For those that are not aware, overall we have a profit problem in this industry. Not everywhere, not with everyone, but I would suggest it is more common than not. The webinar is based on a cash flow process that has been lacking in my business for my entire career. It's an hour long and they really don't give you a good picture of it until you are almost an hour in. It is based on this concept: SALES MINUS EXPENSES=PROFIT---WRONG! SALES MINUS PROFIT=EXPENSES---CORRECT!!! I actually burst out laughing when this slide came up. It seems so simple and made sense to me immediately(because I had watched the webinar up to that point) My goal is to make my successor better at running a service facility then I am, and more successful then I am. I have spoken to two of my banks and have appointments with both to discuss further. I meet with Chris Cotton (the coach in the webinar) and we may use him for implementation. He no longer participates in the "for-profit based" company that Profit First is built around, but like me, he believes in the underlying core concept. Early warning. NO ONE likes the part about the bank accounts, but i would contend that it is indeed our bank account balances, we pay the most attention to. " https://paarmelis.com/webinar-the-profit-first-method-for-automotive-shops/ " Randy Lucyk
  13. I really believe the new flexibility act passage will negate most concerns with being able to use the funds correctly, and/or using all the funds. The best advice i have heard today, is to use all the funds for payroll over the new 24 week period(or as long as it lasts), to make the forgiveness end of this a no brainer for the lending institution. The actual quote is: "We recommend trying to spend 100% of the loan amount on payroll over the 24 weeks. That will make the application process much easier since you will only need to provide payroll reports to support your forgiveness application. " and "Although utilities, health insurance, SUTA, and other small costs are still eligible, they become less important. Rather than worry about tracking small receipts, focus on big items that are easy to provide to the lender—payroll primarily, and rent. This should make the forgiveness application process quick and easy." It sounds like we won't even be applying for forgiveness until 2021 since they extended the "rehire clause" to 12/31, and the no interest clause from 6 months to 10 months after the end of the end of the covered period. This quote is worth watching and strongly considering for your 2020 tax planing. I suspect in many cases, profitable shops will have a tax bill in the 20-30% of the PPP funded amount against year end taxes: "At this time items paid with PPP funds are not deductible expenses. There was previously talk that Congress would revise it so the items would be deductible. However, given the favorable changes to the program passed here, there may be less motivation to do so." Every way I look at it, this is one hell of a GIFT.
  14. I also saw using the funds as a challenge, and worried about getting to the end and being surprised by the results. I created a whatif spreadsheet that compares the current week to their average hourly wage for 2019(all the dollars earned in 2019 divided by all the hours worked, and then then that 2019 "hourly average" times current week hours worked. ex: $60,000 earned in 2019 2234 hours worked in 2019 $26.85 paid for every hour worked in 2019 If my guy worked 45 hours in week one of the eight week expense period, and earned 1042.50(using his standard pay and/or productivity based pay plan), but would have been paid $1208.25 using his last year average (26.85 x 45), then we are paying a bonus to make up the difference. In this example, an additional 165.75. The spreadsheet then projects that out over the eight week period and gives us a total to compare against our total funded amount, to met the 75% requirement, so we can make adjustments along the way. We just completed week 3 and are on track to use most of the funded amount. It has really helped us see the end result. We used 2019 wages to determine the amount of the ppp loan, it makes sense to me, to pay them based on no less then their 2019 average, regardless of what their typical pay plan would net them, under the current less then ideal circumstances. You might consider using the 2019 numbers to check current earnings against. Randy
  15. I have begun to plan the next 30-60 days from a staffing perspective, making the assumption that we will receive a PPP loan that will cover 60 days worth of payroll and some expenses. I wanted to find a way to do some "what if's" as it applies to staffing levels during the 8 week "expense period", that any PPP Loan forgiveness, will be based. I suspect we will be be funding our PPP loan by the end of this month, since the time between receiving a loan number and funding of the loan has been set at 10 days maximum. I expect the banks will use up 5 or more days of the 10, just getting loan documents together. It will probably happen pretty fast. I tried all the calculators below and attached. Each has some strong points. I suggest starting with the Inuit (quickbooks) link directly below. I suspect they are the most likely to keep this tool up to date. Might help with planning, as your PPP loans start to get funded If you are looking for forms, notices and/or policy documents, the link at the bottom has a good assortment It does not sound like forgiveness is going to be a "gimme", and will require above average record keeping. The professionals I listen to daily are telling the same message as we heard on the IMDA webinar. Keep the funds segregated and make transfers or transactions in such a way as to make them easily match to qualified expenses. My guys are telling me that the funds from the PPP Loan should have their own bank account or at least sub account, to transfer funds out of. It is the banks we borrow from that will be setting bar, and it sounds like they will be setting it hi to cover their ass, and make sure they get paid. Does not sound like the banks are going to stick their necks out at all, if we haven't done our part. It is sticky enough that CPA's are being warned against acting as "agents" on PPP loans on behalf of their clients. Getting a PPP loan may be a "no-brainer", getting forgiveness, likely not. Intuit® Aid Assist: Navigate Government Relief Programs Intuit® Aid Assist: Navigate Government Relief Programs A free tool that helps small business owners navigate the complexity of federal relief to get access to help whe... Other calculators and lender list below. Fairly well done, excel based calculator attached https://growthzilla.com/covid-ppp-loan-forgiveness-calculator https://www.calconic.com/calculator-widgets/sba-loan-calculator/5e8069a85d2cd70029057ecb https://smartasset.com/insights/ppp-loan-lenders Forms, Notices, Policies https://sescomgt.com/services/covid-19 Accounting Tips https://evergreensmallbusiness.com/ppp-loan-accounting/ Randy Lucyk Midas Kalkaska 231-258-2889 PPP-Loan-Forgiveness-Calculator w example.xlsx

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