Pros and Cons of Staying Open

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CARES relief on COVID-19 for small business

How do you know when to close the shop during a time when 40 percent of the country is sheltering in place?

Even if you are an “essential business” with auto repair or ignition interlock services, is it wise or ethical to remain open at this time?

Industry members offered good advice on the topic on a conference call Monday night led by Tony Dehnke.  Here are some pros and cons (with the names of speakers removed):

One retailer said Florida shops are in a particular bind because when registering a car audio shop in Florida, you are considered an auto repair shop.  So, if you want to close and collect business interruption insurance, you can’t, since you are not obligated to close. “As much as we’d love to close, we’re in a position where we can’t,” he said, adding, “In Florida, we haven’t started to see that slow down yet, but we know it’s coming.”

Another retailer said his insurance company does not consider a pandemic cause to collect on business interruption service anyway.  He was concerned about staying open as there might be a public backlash later.  “On the other side of this pandemic, when business comes back around, recognize there is the potential for a pretty big backlash…[ against those who]  stayed open when they should have closed.  Me personally, I’m not willing to take that risk.”

Shipping is also becoming a problem.  One distributor cautioned, “If you are in a state that may shut down, you have to be careful with local delivery drivers.  They may not deliver to you but to a local hub. With UPS, if you are … going to have a package shipped … to a local hub, make sure you have the owner’s name and the employee’s name on the shipping label. They won’t release the package without the proper ID. It has to be that person.”

12 volt group on open or closing stores
Tony Dehnke leading a discussion of over two dozen car audio industry members

A supplier added that when the package is not picked up at the hub, the supplier gets charged for storage and returned shipping, which can be a big charge for a large order of subwoofers and amplifiers.

He said,  “We’re checking almost every order with our carriers. They are requiring that we verify someone will be there to pick the package up. It is very laborious, something we’re having to deal with in addition to all these other concerns.  There’s concerns about getting paid on the other end [by the dealer].”

He suggested looking at the question of whether to close or remain open as a math problem. “It’s something occurring at an exponential rate. At some point, no matter how careful you are, someone in your circle …will transmit it into your environment and you pick it up and have a chance to transmit it to someone.  You can work apart, but we share bathrooms and tools and buttons that operate garage doors.  No matter how careful, you will have some lapse.  At this point maybe some of you are looking at this and saying, ‘I shouldn’t close.’ but in a week it will be clear to all that we need to take a break and help flatten this thing out.”

Several store owners noted there was a big difference in the bravado of last week versus their employees’ true feelings this week.  Where some had said they want to work through this, when asked again this week admitted they preferred to stay home.

Dehnke said, “Make sure you have one on one talks with the guys.” Even if you close, check in on your employees on a daily basis.  “If you are an owner, you are a leader and an advisor our counselor to your staff.”

One dealer in a state not yet shut down said “I’m going to keep my doors open with the understanding about safety. We’re being as clean as we possibly can, wearing gloves, sanitizing surfaces, staying 6 feet away from customers.  But until a code enforcement guys tells me to close, we’re going to keep the doors open.”

He continued, “We have a week and a half of work if we need to close the doors and just work on that. There’s just too much momentum.”  But he added, “I may have a completely different attitude later.”

Another dealer said, “We’re a small volume shop.  We don’t have to have a dozen people coming into our shop every day, so our exposure is relatively low.  We understand the safest thing is to close your business….but we have a responsibility to maintain some…financial stability. I don’t think it’s so cut and dry.”  The shop wipes down all cars before and after, employees wear gloves and they wipe surfaces in the shop.

For those switching to appointment only, Dehnke suggested retailers close the door and post a sign saying that you are allowing no more than two people in the store at once and to ‘Please stay in your car and call so we can tell you when it’s safe to come in.’”

Even if you try to stay open, illness may force you to close.  “It’s crippling to anyone who has to close, but at the same time, losing a guy [to prolonged sickness] or 2 or 3 guys will be crippling,” said a shop owner.

Another said,  “If you’re still open, you’re part of the problem. I hate to say it but I agree [with closing] so this thing can run its course and we can get over it sooner rather than later.  For us, we can’t try to remain open and pay all our guys so this is our last day for two weeks.  And we’ve been up all month and up last month and January and now we’re going to shut that momentum off. But it’s the right thing to do. I have kids and you have to think about their safety.”

One distributor in a state not yet shut down said, “I’m surprised how many people are staying open. Our business has slowed down but I’m surprised how many calls and orders are going out the door.”

Editor’s Note: We have not identified the names of Dehnke’s group’s members, so they may continue to discuss industry matters openly and honestly.  Continued group discussions will likely be held on Monday nights at 9pm Eastern time.  Information will be posted in this group: https://www.facebook.com/groups/MERetailLeaders/

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3 Comments

  1. Thanks to everyone who joined in on the call and contributed! Being able to talk with other industry members and work through ideas, get support from each other and have a couple laughs a long the way was truly great! Please let me know about any topics for future calls and let other owners, managers and industry leaders know about the calls and group!

    Thanks for the share Amy.

    Thanks for the feedback in the comments Tony & George.

  2. I agree with Tony, times are tough and one has to choose what is best for family and those around you.
    best regards!

  3. Insurance will not cover loss of business during this time unless you have a special policy.

    Make the decision to close based on your local market versus the sentiment of the New York area. Get employee consensus and evaluate your ability to staff safe.

    Start saving and cutting expenses now. Suspend all non essential services. Target to reserve one month of operating capital.

    Develop plan A and B for reduced schedules (payroll) and limiting hours of operations. If necessary close one or two days per week (slowest days).

    Use this time to catch up on projects or low cost renovations, things you always wanted to do but didnt have the time.

    Are there opportunities that you can take advantage of. Good time to join networks like InstallerNet and other services to drive new business.

    Start thinking about the come back. Dont try to figure out when it will be but what you will need to do to keep up with the demand. Have a plan.

    If you have done all of the above then congratulations and good luck!

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