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bantar last won the day on August 31

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    Kwik Kar at Craig Ranch
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    8990 Stacy Road, McKinney, Texas, 75070
  • Type of Business
    Auto Repair
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    Shop Owner
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  1. I've analyzed this to death and the results are surprising! I started another thread a while back with the title Dirty Tricks because I couldn't tell who was telling me the truth and who was lying. They are all lying (thru confusion, omission and complexity though) as well as telling the truth. There are SO MANY numbers to review. I've tracked these numbers extensively. Lets start by describing the charges. There are 3 main charges: Interchange, CardFees and Processor Fees. The Card Fees is a collection of charges that hit both Debit and Credit charges. The only fees your processor can manipulate are the Processor Fees. All else is determined by your mix of CC and Debit charges. I don't have enough time in the day to separate the Card Fees from Processor Fees, but overall the fees are a small percentage. Year CC %sales Debit %sales Processing Fee = Interchange + Fees 2021 53.2% 42.0% 1.60% 1.16% 0.44% 2020 52.3% 43.1% 1.59% 1.12% 0.48% 2019 59.1% 37.3% 1.77% 1.18% 0.59% When I look at these numbers above, I see that my total processing fees are more closely tied to the mix of CC and Debit sales. This is why having my CC terminal default to Debit is a great feature! I read the above as I'm paying Interchange + 0.5% in fees. I believe the card fees to be approximately 0.40 to 0.43%, which means that my processor fees are 0.07 to 0.10%. This is the surprising part. The processor isn't making much. Since you are hovering at 2.2%, then you potentially have 1.04% of fees to consider, assuming interchange of 1.16%. There is room for improvement. For grins, assume that card fees are 0.4%. Your processor is making 0.64%. Ouch! High rates and lots of junk fees likely. SpotOn is offering you a fixed rate, when in reality, you are better off with Interchange Plus (fees) pricing. Spot on is saving you about 0.2% if there are no other hidden fees. This is still too high (depending on volume). While it may be taxing, get more quotes, including an Interchange Plus quote. Your Processor Fees of per transaction and % of transaction are the variables that swing with sales volume. I'm currently paying: Credit Card Rate - 0.05% + Interchange (all cards including AMEX) Debit Card Rate - 0.00% + Interchange Credit Transaction fee - 0.05 cents per transaction Debit Transaction Fee - 0.05 cents per transaction I did save some money with my last switch, but now, I'm not sure that I can save much more now. And I'm happy with my processor, so I'm staying put.
  2. Interesting. It took me a long time to wrap my head around premium OT when it was in the same pay period... the easy kind of figuring. I did not even consider the longer term problem, (but then again, I don't have such bonuses currently). I may change my payroll label to Premium OT as well. Right now, it's just a different pay rate that the employees don't really understand, but also don't complain about. Thank you. This was very helpful and insightful. And I'll admit that at first, I assumed that my payroll company was taking my input and generating the correct output. Once I understood the issue, I could then see that they did nothing to help. Garbage in, Garbage out. I quit feeding it garbage.
  3. Question... When you pay your Monthly and yearly bonuses, you recompute the effect that these payments had on OT hours worked during the covered period (month, year)? So, you'd pay Bonus + OT makeup wages as a result of this bonus? Is this correct?
  4. Started a new thread based on a comment from: Are you paying your employees what they deserve? Thanks to CTC who warned that we need to be Compliant in our pay plans, I called the Dallas Office of the Dept of Labor Wage and Hour Division to check on my compliance. Very friendly and knowledgeable. Didn't even ask who I was. I encourage you to call. However, what she said was super-complicated if it's the first time that you've heard it. It still hurt my head on today's call. The goal of this message is to explain OT calculations and then to explain the flat rate pay as related to OT. I'm only presenting this to give you background before you call W&H yourself. I'm not an expert on W&H. This focuses on non-salaried employees who are eligible for OT payments. Background: In general, OT pay is more complicated if you have variable pay plans (bonuses or extra payments). Regular hourly folks working OT get 1.5 times their "regular rate" (which is the same as their hourly rate). If they don't get any extra pay, this is easily computed. When variable pay is involved, we need to know how much the employee is really making this week. That is, we must calculate their "Regular Rate" because the variable pay (bonuses) increases their normal hourly rate. When we pay OT, we must pay 1.5 times their "Regular Rate". This is a protection for the employees to ensure that they are being fairly paid even though their pay rate varies week to week. Regular Rate Computation: Figure out the employee's total compensation for this week (we are ignoring OT for this calculation). Divide this by the total hours worked this week. This is their regular rate for THIS week. For example: Joe makes $10/hr and earned $100 bonus this week while working 50 hours. His total pay for the week is $10 * 50 hours + $100 bonus = $500 + $100 = $600. His Regular Rate is $600/50 hours = $12/hr. When you pay him OT, you will be paying him 10 hours * 12 Regular Rate/hr * 1.5 = $180. This is added to his base rate of 40 hours * $10/hr, so this week, he makes $400 + 180 = $580 + $100 bonus = $680 total pay. There is a shortcut to computing regular rate that I find faster to compute. Just take the variable pay (bonus) and divide it by the hours worked. $100 bonus/50 hours = $2/hr Joe's Regular Rate is $10+$2=$12/hr. His overtime rate is $12 * 1.5 = $18 (instead of $15). Using ADP (and other payroll systems): For employees that are getting OT with variable pay, I create a separate pay line in my payroll. Line 1 is 40 hours at their normal hourly rate. Line 2 is OT hours at Regular rate. The payroll software multiplies the regular rate * 1.5 to calculate their OT pay. Regular Pay Line: 40 Hours @ $10/hr OT Pay Line: 10 Hours @ $12/hr Flat Rate: Per W&H, Flat Rate still requires OT pay if more than 40 hours are worked. Therefore, we are required to compute a "Regular Rate" to pay OT. This means we need time clock records. W&H suggested a few different ways of computing it for Flat Rate employees (one was a weighted average, but I didn't dig into this). Also, minimum wage must be adhered to as well. I threw a few examples of pay (flag bonuses, incentives, make-up hours, etc) at W&H and in the end, it didn't matter what the mix of payments were. All payments are combined to compute a Regular Rate. This can be bonuses for flagged hours or bonuses for sales or it could be 20 hours of flag and 20 hours of guaranteed pay (to equal 40 hours). What mattered was how many hours did the non-salaried worker work? What is their regular rate? Pay OT using the Regular Rate.
  5. Great feedback. Thank you!!! I called the Dallas Office of the Dept of Labor Wage and Hour Division to check on my compliance. Very friendly and knowledgeable. Didn't even ask who I was. I encourage you to call. However, what she said was super-complicated if it's the first time that you've heard it. It still hurt my head on today's call. I think I can explain it, but it belongs in a separate thread. I will post that shortly.
  6. Makes sense, but I believe that this is an implicit belief that the independents are cheaper than the dealer. As they say, Perception is 9/10's of reality. When you compare door rates and the dealer is cheaper, then there is a natural inclination to think it's a better place to take your vehicle... They know my vehicle very well and are priced right. This is when rate alone is considered. You said "and getting things done faster and less expensively." Labor Rates <= Dealer are easier to understand. Labor Rates > Dealer are tougher to explain. Some actually understand that independents are working in their best interest and value this over rate. We are less expensive when we are not selling them unneeded services, but not all customers recognize that as a needful concern. Often, over/pushy sales is the impetus to abandon the dealer. And there's a group that just hates the dealer, so we win by not being the dealer. I meet a lot of people that do ALL of their services at the dealer. Occasionally, we are given the opportunity to be the first one with whom they "cheat" the dealer. These folks are often nervous and need reassuring. I'm in alignment with the spirit of your message. I'm doing my part to win over as many customers as I can, knowing that I have to sell against giants.
  7. I've not had a single negative reaction to our labor rate rise. We're higher than one of the local Honda Dealerships and some others too right now. It did enable me to pay enough to steal a shop foreman from a local dealer. Deal is done, but not consummated yet (vacation, and notice standing in the way). I'll remain nervous until he's on board. Having great people further supports our labor rate. Price is only one variable in the value equation. I did raise my European lube prices. I'm only seeing reactions from 8-9.5 quart VW owners so far and had but a few declines. Frank, $125 sounds the same as $129.99. Push it a little more.
  8. I'm getting paid for used oil, however, we have negotiated pricing thru our local buyers group (club). A provider might be paying one shop and yet charging others depending on the deal struck. Pricing changes as the market does. I'm happy with $0 and above, Where are you located? TX or CA?
  9. I'm interested in understanding this more. There must be some mitigating factors that make this stand out and it may very well impact us directly, but as written, I don't understand it. There's a real caution in your note. Can you elaborate more on the specifics of the law or rule being violated? It'll be easier to probe our local labor boards with a known concern. I've been on many bonus plans that were based on numerous "if you do this, you get this" criteria and some "if WE do this, you get this" too. Examples: No Individual Contribution: If business exceeds $X revenue or $Y in GP, then you will get a bonus. Individual Contribution: If business exceeds $X revenue or $Y in GP, then you will get a bonus, but it will be factored by your Review Rating (Bonus * Ind Factor) It can be greater than or less than the full amount. 5 = 125%, 4 = 100%, 3 = 75%, 2 = 50%, 1 = 0%. If you complete Project X in 6 months, you get 2 times $Y, in 8 months, you get $Y and if >8 months, you get $0. This bonus only applies to Project X. If you are working on Project Y or Z, there is no bonus plan. If you complete Project X with < 50 mistakes, you get $Y, < 25 mistakes, $Z, and <10 mistakes, 2 times $Z. Multifactor Bonuses: On Time > 95% of the time = 25% of your bonus, Have a good attitude 25%, Team completes Project G in 3Q 25%, You also complete Project X by Jan 3, 25%, with a chance to earn 2x 25% if completed by Nov 30. All Bonuses are Cancelled (except) Plan: Director level and above will get paid 50% of your normal bonus, but all lower levels are being paid at $0 because we missed our revenue targets. Yep, I was on this plan too. Bonuses are often designed to encourage a desired behavior or outcome. Often the right behaviors lead to the best outcomes, so they are related. In this business, we are saying that we will pay you a percentage of sales for every hour of sales that you personally work on. Frankly, the criteria is only that you performed the work. Our desired behavior is to encourage productivity and also to reward you for your contribution to the business. If you are a 2x producer, you get 2x the reward.
  10. We started with 1 Tech, then hired another after 6 months, but not because we were so busy, but more to cover more shop open hours, bursts of work and illnesses and vacations, etc. Now mind you, during this time, we're not selling 100% of our hours, but my techs were being paid for 100% of their time. This was a conscious investment. Didn't hire the 3rd until the 4th year. Each hire was an exercise in waiting for sufficient pain before hiring, followed by panic of whether the timing was right. While we were growing, beginning of 2nd year, I had a copycat competitor open up 1 mile away. They were heavily-capitalized. 7-8 months later, they shut down and then it reopened 7-8 months after that under a new name. They ran heavy staffing and had way less business than we did. But high expenses wear down big balances fast. Again, I was in a panic, because I didn't know how they would affect my business while I'm just trying to survive. I kept service levels up, expenses down and outlived them. On rent and landlords, this is not my expertise. I know a little from my friend that owns and leases shopping centers, office buildings... Free rent is calculated as such.... He want's 100K in free rent. I want 8% return on my money and want it back in 3 years. Calculate the needed return, increase the base rent.... forever. Next question, what are his odds of survival and how much can I collect if I have to sue him later for unpaid rent? This is factored in too, with less free, or higher rent or both. Make sure you find out about TripleNet, or whatever the lease terms are. What building expenses are you responsible for? Your rent might or might not include property taxes... My annual tax bill is huge. It can devastate your cash balance. Tax man doesn't care if you are making money or not. I'd say the tax payments were my biggest panic moments. Letting go of so much cash felt uncomfortable. You are looking at rent between $30K to $45K monthly. These are big numbers needing big sales. How many of months of cash do you need in the bank? There's no right answer. It depends on how fast you can grow to cover it. So far, I've followed each plateau in earnings with an increase (investment) in expenses... new people, raises, benefits, equipment. We're still growing and I don't expect to level off for another 2-5 years. See the theme? Startup = Panic. At least for me. How do you know if any decision is right? I'm still in startup mode, but I've managed to replace PANIC with worry. Here's an interesting story. A car wash opened up next door to me and I talk with the owner monthly at least. During his first 3 years, he lived in a constant state of Depression and Anger over the challenges of getting his business up and running. It never rains here in the summer and yet he opened up to a 2 week monsoon... which meant he was closed during his grand opening. I talked with him a few days ago and the depression is gone, but anger remains. He's starting to get close to his revenue goals, and about 2 months ago, a sign went up for a new car wash about 1 mile away. He told me that they will just go broke... there's no way to make any money here! Who knows.... but he too had to carry this business for quite a while before breaking even. Although, I'm not sure that he's done that yet.
  11. Startups are hard. We're in a trust business and it'll take a while to build volume. Your rent will start on day 1, whether or not you are selling hours. I thought I had more than enough cash to make it and it was dicey for a while. At the end of year 3, is when I went from wondering about success to wondering how to handle increased volume with reasonable turn-around time. Ignoring mortgage, I broke even in 6 months on operations only, but was managing staffing levels and inventory and tools purchases closely. I'd say, don't focus on profit.... focus on survival. Assume the worst and plan for even worse. Goal #1 is to survive. Goal #2 is profit. They say cash-flow is king and they are right. I'm on prime property... a very busy intersection in a Neighborhood Market Walmart anchored shopping center (still waiting on it to be built). This delay killed expected traffic and thus car count. (BTW, sadly, I didn't plan for this). In one sense, the increased visibility born by increased building cost is a marketing expense. Personally, I think it has tremendous value, but.... It helps, but you'd be surprised to know that I have people drive thru my firelane to reach the Walgreens next door and 2-3 years later, they finally realize that I'm here. We're often invisible until needed. Maybe when they drive thru my other fire lane to reach the Walmart, they will see me then.... or not. I too don't see many businesses, etc while I'm driving, but dang, they should take notice of MY business when they are driving, shouldn't they? I'm also in a wealthy community. Too much wealth is bad as they can either fix this car or just go buy a new one. But, on the flip side, everyone in the family has a car or 2. And let me finish with a note about my ProForma projections. They were wildly optimistic. Yet, I planned them as a pessimist. As it turns out, I was a lousy pessimist. I made some bad assumptions. I missed many big expenses, such as city mandated inspections, fire, water. But I had to live with the hand I was dealt. Hope this helps some.
  12. Now that we are doing my new C Tech's first payroll, my manager just reminded me that he is $15/hr + $5/flag hour. This is better as we did want to maintain a competitive rate to reduce turnover. My previous pay plan was Wall Time or Flag Time whichever is higher. My new pay plan is now Hourly + a Flag kicker.
  13. Big balls, little brain. Not sure which is more impactful in my decision making! 🙃
  14. I just hired a new C tech at $15. He finished tech school and is overall a good C Tech and limited tools. My old B ($22) and C ($18) techs both left to take a job paying $1300/week with 50 hours required. Given this, it would seem we have a local market range for C Techs of $15-$24/hr.
  15. I've increased my labor rate by $20/hr yesterday. The main reason for doing this is to pay the best technicians what they are worth and maybe a bit more than that. Related, but a whole different beast is that I'm about to significantly increase my Quick Lube pricing. This one will be harder to implement as it's somewhat of a commodity with many other nearby competitors that may or may not follow. I've absorbed many COGS price increases without increasing the oil pricing in 4 years. My strategy is to let gasoline pricing hit $3/gallon (not there yet here in Texas... about $2.75/gal). Once it hits $3/gallon, we can commiserate with our customers about those high gas prices... "it's the reason" that we had to raise our prices. My goal will be a big enough bump to last 1-2 years (but with this rampant inflation, it might be short lived). I'm somewhat nervous about this move, but it has to be done and it will be done.

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