My world: Everyone at the software companies are working remotely. The chocolate factory shut down yesterday due to not be considered an essential business. The chocolate elve had already left due to health concerns. I handle all the commercial rentals myself so no impact:
I don't intend to lay-off anybody...if this stretches into June or July...then we may look at cutting salaries by 25 to 50%. With the $1,200 everyone is getting already from the gov, and the 4 month unemployment (+$600/week additional), if we have to do layoffs, then the Team will not be totally without funds.
SBA states to file for both. You can always turn down the EIDL $$$ if you get the PPP $$$
Not sure through the various posts if I answered this or not (apologies if I had not), but I've heard that you will be able to use PPP to re-finance any existing EIDL loans. I believe this will be the mechanism to ultimately make the EIDL effectively forgivable as well...
But the advice above I believe to be solid: Apply for both and keep the ball moving forward....don't hesitate! You do not have to fund even if approved. keep your options open!
Lots of unanswered questions at this point, but I'm hearing that much of these questions will become clearer early this coming week. [Reply]
Originally Posted by Trivers:
An SBA rep just told me something very important about the EIDL.
They are so swamped that they have changed their initial documentation requirements.
They have changed the immediate filing of a requested EIDL from 6 docs to fill out and upload to ONLY TWO.
This streamline version enables them to assign a application case number to each submittal. THEN an SBA processor will contact you to ask for additional documentation.
BUT, he stressed, never ever give out that case number. You and the SBA will be the ONLY ones to have it. If you get a phone call, and the person asks you for the case number, YOU ARE BEING SCAMMED.
After staying after bankers all day and speaking to my CPA and mililo, i would definitely recommend a few things mentioned here.
Get in touch with your banker. They'll have info for you. Start getting some numbers together of what your normal expenses and payroll per month are just so you have it all ready.
I am not sure about the EIDL. I don't think i'm going to fill that out right now, i'm gonna see what happens with these other options first. I'm hopeful that if we can get thru the next 2 or 3 months, things will settle down a little bit. [Reply]
Originally Posted by mililo4cpa:
Lots of good things in your post!
1. First and foremost, let me comment on the last part first: You're a person like everybody else, but you also have the concern of the people under your charge. I'm amazed at the business owners I work with, because even under normal circumstances, being a business owner is hard work and you bear all the risk. Just by your response, I can tell you are 100% on your game right now, no matter how exhausting it may be.....you are doing an awesome job protecting your people, business and liquidity right now....far better than a lot of business owners I'm dealing with right now.....Keep up the good work, and don't let up!
2. Keep communicating with your team....even if its for 15 minutes a few times per day to update on things, that will give them encouragement. Again, you've done the right thing by having the all hands, but keep giving situation reports frequently
3. 100% right thing to have people monitoring recent developments, laws, etc. and vetting that with CPA, bankers, etc. Lots of news going around, not all of it firm, so keeping your ear to the ground is important....kudos again!
4. good that you have a built in scenario in case somebody becomes sick. Would it be feasible to keep some key inventory items in a separate location or storage so that certain items can continue to flow even if you are shut down at the main facility for cleaning?
5. Inventory: I'd focus time and attention on moving items / turns. You may ultimately need to make decisions on whether or not we will be "full service", or focus on items that are continuing to turn. Obviously, the longer something sits, the more carrying cost on that item, and certainly more cash that is absorbed for items sitting. It sounds like you have good, stable cash position (i.e. strong balance sheet), but if not, I'd only replenish essential stock and may even discount non-moving items.
6. Be real with the situation: Nobody wants to hurt people, but if it's the right thing to do to keep the business afloat, then don't hesitate. Don't mean to sound harsh, but think of it this way: If you have 20 employees, would you rather lose 2 -3 people now, or risk 20 later?
Also keep in mind that Family First Act goes into affect April 2nd, which can give your employees additional 80 hours of paid leave for COVID reasons, on top of already accrued time. This is reimbursable to the business eventually, but is cash out the door upfront....if you're making personell moves to conserve cash, I'd do so sooner rather than later.
Also keep in mind that most states and the Feds have greatly reduced UI requirements for COVID, and are making it easy for people to get cash in hand, not to mention adding more and longer duration benefits. Obviously, it's not the best thing to put somebody on UI, but I do think there is concerted efforts on Govt. to really help most impacted people. Again, may make the decision a little easier if you ultimately know its the right thing to do. Also note that most states have work share, where people can apply for UI for the "impacted" part of their week. For instance, if you keep somebody on part-time, they can get UI for the difference in their 'normal' full-time position and the wages they earned on part-time work. EACH JURISDICTION IS DIFFERENT, SO PLEASE RESEARCH THIS FOR YOUR AREA!
7. Had to be blunt here, but the likelihood of people looking you up on-line is probably slim to none. So listing "OPEN" on your page, while definitely something you should do, likely isn't really doing much for you. Here's what you need to do: Whether you have this electronically or people have rolodexes full of customers: CREATE A CUSTOMERR CALL LIST AND GET YOUR PEOPLE CALLING THEM IMMEDIATELY - EVERYBODY YOU CAN THINK OF! Let them know you're still open for business, let customer know how you are keeping your people safe, visitors safe, and most importantly you have ample stock and ready to deliver.
Call those customers you haven't been doing business with (you don't know if your competition is open or even able to supply them, and I'd guarantee that most of them don't have the inventory or cash that you have, so they may not be able to sustain business).
Heck, call your competitors, ask if there is anything you have that they need, and vice versa, so that all customers can be serviced....form a strategic alliance with other like businesses to swap inventory.....Sell your ample stock to others that may need the inventory themselves....
With key customers: you're not worried about them paying you, you're worried about the timing of when they can pay you, so if you have inventory, get it to them and work out payment terms through this period. Your customers will remember that you were there for them in tough times
This is going to sound bad, but nows the time to review and refresh your pricing. I'm not talking about gouging people, but I'd look at every SKU you carry, it's turns, and carrying costs, and marking to the appropriate level. Most small businesses don't do this frequently enough, and an extra 1 - 2 % over the long haul (even if you have to discount today due to COVID) goes straight to your bottom line.
Have your employees blast out on their social media that their business is open, they are working, and to communicate that to others.
Communicate communicate communicate, but be the initiator, not the order taker!
8. finally, keep regalar communications with your bank on the refi. This is how they earn their money, so they should be able to tell you appropriate things about your re-fi in relation to business loans. I personally would not hesitate to apply for any and all things COVID related, even if ultimately you don't need them or use them, but you want to keep that option open. Just let your banker know that's what's happening, and unless they stringently object, keep the SBA / COVID / PPP options moving forward
Don't know if any of this helps, but hopefully there's a few nuggets in there for you. KEEP UP THE GOOD WORK, AND MORE THAN HAPPY TO DISCUSS THIS AT ANY TIME (noting that even if you don't want to discuss with me...make sure you have somebody that you can have these discussions with that can help you through this - there is no shame in asking for help!) With that said, you're doing a fantastic job and keep working your plan!
4. Keeping inventory at a separate location is something we've discussed but decided against. We stock > 15,000 SKUs and there are hundreds of best sellers and we often sell bundles of multiple items. I think we'd lose so much shit and run out of inventory to fulfill some orders at the main location. Plus space is limited at our secondary site. I really feel like our best course of action is to be able to respond quickly when someone gets it. We'll still have people at the remote site who can take orders and provide ETA's to the customers.
5. For the past few years we look at a rolling average of the past year to determine how many of each SKU we sell per day. We exclude periods when we had no stock available. Then we just set a goal of how many days worth of each SKU we want to have in stock and it tells us when to place an order. We can change that goal for a specific vendor or product if it can take longer to receive or is frequently on backorder.
6. We're very up to speed on the UI benefits and will do that if needed. I'm hoping that I continue to need my full staff. We'll see.
7. Actually, I'd say that at least 80% of our customers have already visited our website that day or are on it when they call us. Our stuff is very specialized and they typically have a SKU or application for us when they call. I'm not at all saying you're wrong that reaching out to past customers is a bad idea, I just don't think it's as important in our situation as it is in others. Again, I agree that this wouldn't hurt and could help. I will have a couple employees do this on slow days.
We have Dynamic Pricing that updates every day based on competitor's prices and stock status.
8. Okay. I've got nothing to lose by talking to my lender. Thank you for putting it in perspective.
I've got key employees who I'm comfortable discussing it all with. My wife is a good sounding board as well. I may have more questions for you. I truly appreciate your time!
I really need to wrap my brain around all of the different loan programs. It feels kind of overwhelming and I just haven't had time to dive in. [Reply]
Originally Posted by IA_Chiefs_fan:
4. Keeping inventory at a separate location is something we've discussed but decided against. We stock > 15,000 SKUs and there are hundreds of best sellers and we often sell bundles of multiple items. I think we'd lose so much shit and run out of inventory to fulfill some orders at the main location. Plus space is limited at our secondary site. I really feel like our best course of action is to be able to respond quickly when someone gets it. We'll still have people at the remote site who can take orders and provide ETA's to the customers.
5. For the past few years we look at a rolling average of the past year to determine how many of each SKU we sell per day. We exclude periods when we had no stock available. Then we just set a goal of how many days worth of each SKU we want to have in stock and it tells us when to place an order. We can change that goal for a specific vendor or product if it can take longer to receive or is frequently on backorder.
6. We're very up to speed on the UI benefits and will do that if needed. I'm hoping that I continue to need my full staff. We'll see.
7. Actually, I'd say that at least 80% of our customers have already visited our website that day or are on it when they call us. Our stuff is very specialized and they typically have a SKU or application for us when they call. I'm not at all saying you're wrong that reaching out to past customers is a bad idea, I just don't think it's as important in our situation as it is in others. Again, I agree that this wouldn't hurt and could help. I will have a couple employees do this on slow days.
We have Dynamic Pricing that updates every day based on competitor's prices and stock status.
8. Okay. I've got nothing to lose by talking to my lender. Thank you for putting it in perspective.
I've got key employees who I'm comfortable discussing it all with. My wife is a good sounding board as well. I may have more questions for you. I truly appreciate your time!
I really need to wrap my brain around all of the different loan programs. It feels kind of overwhelming and I just haven't had time to dive in.
Thanks, and keep up the good work! you're doing better than most of the business owners I'm dealing with! Anything you need, I'll be more than happy to talk about.
P.S. The loan situation is confusing as he;;...I've read so much and heard so many things...keep pushing every day, and there will be answers that come! [Reply]
Originally Posted by Hog's Gone Fishin:
I own and run two LLC's but have no employees and don't actually draw a salary myself. Do I qualify for anything???
Possibly SBA EIDL (this assumes some type of economic impact) [Reply]
Originally Posted by mililo4cpa:
Possibly SBA EIDL (this assumes some type of economic impact)
Well after looking into it and I don't have employees BUT I do send out 1099s and that should make me qualify. Thing is I don't know yet if rents will come in, my two highest renters are in the restaurant business so I know they are shut down. [Reply]
Originally Posted by Hog's Gone Fishin:
Well after looking into it and I don't have employees BUT I do send out 1099s and that should make me qualify. Thing is I don't know yet if rents will come in, my two highest renters are in the restaurant business so I know they are shut down.
This is my question — do they calculate it based strictly off payroll or does it include freelancers/people who get 1099s. [Reply]
Originally Posted by Hog's Gone Fishin:
Well after looking into it and I don't have employees BUT I do send out 1099s and that should make me qualify. Thing is I don't know yet if rents will come in, my two highest renters are in the restaurant business so I know they are shut down.
Now you have me wondering.
I send out multiple 1099s, but no one actually works for me full time either. The mother fucking multinational cock sucking packer oligarchy sure a hell hurt my income and are still doing so via workforce shutdown rumors and other market manipulation tools. [Reply]
Originally Posted by ghak99:
Now you have me wondering.
I send out multiple 1099s, but no one actually works for me full time either. The mother ****ing multinational cock sucking packer oligarchy sure a hell hurt my income and are still doing so via workforce shutdown rumors and other market manipulation tools.
