 Hey guys good afternoon Tom Stewart here, and I'm with Matt Rick. It's filling in for Liz Trotter today. This is smart business moves Matt, how are you? I'm good Tom good to see you Same here. It's been a been a few weeks What's been going on in your world you know, it's Just trying to get back on top of things with business and kind of come up with a plan to to grow through this and Mostly we're just treading water right now trying to try and just keep what we have but that's you know We've seen some positive trends But there's just so much uncertainty right now that you know, it's hard to it's hard to make concrete plans You know, we put a lot of stuff on paper for how we expect stuff to go this year, but let's be on our control we've had Some discussions here over the last I mean this has been going on for a while, but within Castlekeepers, we're making a bigger push to go to solos and Matt you've been helping us with this Joe Walsh has a few other people and we're You know getting rid of keys. We're going all the credit cards We're you know starting to recruit for people that want to work solo and we've been having discussions about You know is COVID gonna be gone in six months or not and just before we went live I guess it looks like more and more of the evidence is stacking up that we're gonna need to Have businesses that can practice Covid-safe rules for a long time Yeah, I would I'd go ahead and order more masks. I think I Think that we will be wearing masks in social settings for The rest of this year at least I don't think that that's going away I'm seeing more and more evidence. It's a good idea to wear a surgical mask with a cloth mask I I tend to kind of cowboy and just either wear like a bandana or just one of these little things, but I think I'm gonna probably up my mask game a little bit from here on out because I understand that some of these variants are getting a little bit more contagious and You know, I'm out visiting properties and you know Stopping in visiting some of my property managers from time to time and some of those settings are you know, probably more risky than others Yeah, I mean, I've been doing the KN 95 here for for a number of months But yeah, I've seen I've seen studies that are saying if you double mask you're you're you're you know getting a lot more protection Yeah, it's you know, it's it's frustrating because like we all want this to be over But that doesn't really necessarily, you know Take into account that the virus is a living organism that's going to change and adapt and and we don't really have a say in it, you know and The vaccine rollout couldn't happen fast enough and I think it's happening, you know incredibly fat I think we're I think we're in we're in incredible scientific times to look at this and say we just Just pushed out a vaccine in under a year right ten months They got that thing out from the time that we started talking about this seriously So, you know, hopefully they'll be able to keep on top of this But you know, we talked about this a little bit time This this is gonna be somewhat akin to like the seasonal flu or something along those lines where we Where we see this kind of year after year and we're gonna have to find ways to adapt and and you know protect our most vulnerable populations first Yeah, and there's I guess some disturbing information coming out that's kind of Pointing to these new variants are Not only are they more contagious they actually might be more deadly and they certainly are seeming to be more Resistant to the vaccines that are out there Yeah, this is one thing I'll share that that we were looking at earlier This is a relatively short article, but it's good. It was talking about the new variant in Brazil and how oops, how everybody in Brazil is getting sick and We're catching COVID again basically and yeah Yeah, that's that's scary because they talked about in that article is that they in the city that they were I don't remember the name of the city But they were talking about that they assumed that almost 75% of the population had already had a COVID What would you go not an unexposure, but actually had a COVID case So five percent of everybody in the country has already had COVID happening already now Everybody's gonna stick again and they're figuring the only way that can happen is if they're getting sick a second time Yeah, so that's that's definitely You know, that's yeah, because you would think at some point, you know with if there's some herd immunity It would be harder and harder to spread COVID I had kind of thought that was kind of what was going on here in the States as we saw like it kind of speed You know, we that we saw that big spike where you think you'd kind of just keep going up and up and up And then we've seen it started to come down at least in St. Louis and Missouri Where we've had a lot of a lot of exposures like we're you know outside of the St. Direct St. Louis region the rest of the state here I'd say probably 40% of people have been exposed outside of the St. Louis region have had not an exposure But actually have had Have had COVID outside of direct St. Louis Numbers are projected to be higher than what's actually been you know clinically diagnosed. Yeah, I'd say it's 20% in St. Louis like we have You know known cases we have close to 22,000 in the city of St. Louis Which is a city of 300,000 and you know if it's triple that number I wouldn't be surprised That's where I'm kind of coming up with with some of this based on some some projections that are out there But in the in the in the more rural county counties in Missouri, it's much higher Anyway, we're starting to see like a pretty rapid drop-off and a lot of that we were attributing here locally to Hell so many people are exposed. It's you know, there's that that n-number You know, it's harder for the vaccine to hook up with people that have that don't have some immunity. So You know I got I've got whole I've got employees whose whole families have been exposed like it You know, that's just like you know four of them But like I'm talking about like they're extended family They're they're in like they live in some of the adjacent counties that you know more a little more rural a little bit More lax with some of the stuff out there and you know, they've everyone's everyone's at it at them at the moment I think there's only five states of the country that have an n-value greater than one So it's you know, it's at a very high number in terms of number of infections that are happening every day But it's still kind of on the downtrend got a few people here today You know Bridget's with us. Hey good to see you Donna's saying it I presume that she went to solos in April. I think it's the way to go Denise glad to see him at Got a very special guest today Somebody's having a birthday today. I believe hey Leslie happy birthday Do we want to say we're not gonna sing we won't do that But I hope you have an awesome birthday today nice Yeah, but you know back to the solo stuff. I mean, yeah, I think that's a very robust way to build your business to be more to be more Covid-proof in a lot of ways Yeah, I mean I can talk about a little bit how we kind of got to that so we were experimenting with it We were experimenting with it preco that I probably had three or four technicians that we were Set up the solos and we were really loving the experiment But we're just like how do we get this to all the text because there's gonna be so much pushback From your employees to making such a big change even if it's good for them Even if it's gonna make them more money, you know, like so we so when COVID came My wife Angel was in the office one day and we have this like we had this like four week plan on the board to start Transitioning people to solos and she's like scrap that plan. They're all going to solos next week She's like, you don't even know how many more weeks. We're gonna be open I was like, you know, she's like everyone's a solo next week and I was like fine by me Let's see how many of them quit but you know, we did have some employees that were gave a lot of pushback We're like, it's really it's about your safety. We you know, we we dialed it up that way and really it Happened pretty quickly. We made a lot of big changes rapidly So we we bought a bunch of lockboxes and delivered them to our customers and that was a big piece of Again, not needing to come to the office, right? You want to you want to make your your workforce as distributed as possible We spoke with all the customers that like to leave us checks and cash And we said we can no longer take your checks or cash. We still get some I mean, you know, it still happens and and we deal with it I'm talking to my staff now my management team now about how do we get these last 10 stragglers to kind of kind of comply with this for safety purposes and and You know, honestly, it's not good because our employees only come in for you know Once a week and if they forget to give us the checks and we might not see someone's check for two weeks And if you know, yeah for some people that doesn't matter So other people they're probably like well It probably screws up their reconciliation of like when they paid for something what they're looking for to see Like a credit card is so much cleaner. They have their service in the day the charge hits their car You know, it's their it's their bank on that day. It's easy to determine for them Where that you know where that money was for right? So it's I think it's a better system we launched those emails today in Atlanta and we're giving people two weeks and You know, our thinking is we'll probably do like a two week grace period And we're kind of doing this kind of based on how Joe Walsh kind of coached us to do it and yeah, he's got people off after four weeks if You know, they didn't have a credit card on file. I wouldn't even they just wouldn't schedule them You know, honestly, if they want your service bad enough, they'll figure it out I mean, I've got a couple of elderly clients and I told them I told myself I was like they have credit cards They just they're worried about giving out their credit card because they feel like it's less secure The other thing that he was doing though He gave them an option of paying for six months in advance And you know what we offered that and we started making some phone calls and I don't know out of less than 10 phone Calls one person's already taken us up on that once the stroke is a check for six months worth of service Yeah, I think that we've done that in the past and I think if you offer, you know, three to five percent off I think some people some people will look at that and be like I mean if you're if you're like a like a hardcore saver even three percent, they see the value in that they're like, yeah You know, but you know, so that's your credit card processing I think five percent if the money is setting in a checking account. That's three percent more than they're going to get there, right? True that's absolutely true. And if they were going to spend it anyway, they've been long-term customers I mean, I I see that as a win. I see that as a win I don't see I don't see anything, you know, that that's not a bad idea to encourage and we'll probably look at that too kind of go back to that but Yeah, you know, you talk about the advantages of it, you know, you guys have been talking about productivity on the show and You know, there's two kind of numbers that that, you know, oftentimes get get confused, right? Like productivity and efficiency. Have you ever talked about like the difference between the two and like where people kind of get confused? We just started getting into that. So we're just scratching the surface. So so run with it Yeah, so so like efficiency is how much of their time they spend cleaning in the day That's that's important like so you want your teams to be efficient You want them to be spending 80% of their time cleaning But that doesn't tell you how much of their time compared to the bill rate that they're actually doing that's a different number So productivity is and I assume Tom you're thinking of this the same way Productivity is the time that they spend cleaning Compared to the time that they have that they're billed for so if it's an hour and 20 minute job that they're that they're supposed to be doing And they take you know an hour an hour and 25 minutes Then they were you know, 95% productive, you know, their productivity rates 95% Which is you know, not optimal. You want it to be a hundred percent or greater really well the definitions that we use In our world and with the made central productivity is simply the allowed time divided by the actual time Yeah, that's kind of what I was going out without using these that the definitions that you have there is that's very clear there in Efficiency is job time divided by clock time. Yeah, there you go So that's that's you know, those are the two things that that you'll see really so so the efficiency Automatically goes up with with going to solo. So that's the first thing Don't confuse productivity and efficiency, but efficiency immediately goes up with souls because Their their drive time in the morning is cut off because you don't have to pay them to drive to their first property That's just their commute to work now because that's from their home to their first property So that's that's severely cut in half They're only going to do instead of having to go to three four or five properties like you have with a team, right? They're only going to do two to three properties. So there's only going to be Two transition periods during the day at the most probably if they do three properties So again productivity is going to go away. He's going to go way up because you have you have as many as six six transition periods With teams so, you know drive to the first house and then every transition in between plus lunches and The drive and the drive back. That's all really hard to reach your productivity above 75 percent Would you agree with that Tom? That's that's one of the downfalls of teams Yeah, you you're you're a lot less efficient, especially if your teams have to meet in the Out of an office in the morning and kind of get together and all of that thing and then at the end of the day come back at the office and You know download There's a lot of wasted time and You're not social distancing and you're not really being competitive in a world that hourly wages are Gonna be going up. I mean, you know a minimum wage of $15 an hour It's not a matter if it's a matter of when and what's that gonna do to come to industries that have to pay more than minimum wage Yeah, and if you think about it So if you can get your productivity to you know, 10% higher than it was, you know, maybe maybe significantly more I have to I'd have to really look But I see productivity as high as 90% with with some of my solos But do you mean efficiency? I'm sorry efficient. I'm sorry efficiency I'm sorry. See even I'm even I'm confusing the terms right now. So you get them give you a so efficiency So I see efficiency sometimes as high as 90% of solos Some of my solos like to come to the office every day because they want to switch out their cloths every day They don't want to sit they don't want to have dirty ones in their cloths in their car for two or three days That definitely hurts We need to encourage you need to encourage a structure that allows them only to come to the office one Maybe two times a week to really optimize That efficiency that's going to be where you can really get it the last time that they have to even come to the office That ultimately really improves things. So, you know, but if they only have to come one time a day That's better than twice a day. So that's And there's a there's a lot of a lot of merits to this being, you know, the social distancing part You only have one person in the car and it's their own car. You don't have team meetings And you know my model your business model was all built on company cars brick and mortar and You know, I think you know COVID world. I think that we really need to start taking a hard look at that I had 16 cars when COVID started. I have six cars today. I mean I sold cars during this And at some point cars started to sell really well at first I sold a couple at a loss when this first started because I thought the world was gonna end I was like, you know unloading some cars, but by the time COVID was kind of coming to a close I was selling cars at Well above what I would would have gotten at auction a year ago Um, you know selling them to private parties and people like that that were just trying to flip them locally And I you know, I don't you know, I don't want to clean them up and recondition them if I'm selling them. So You know, that's it was you know, there's definitely it was a good time to sell cars towards the end of this You know, we can swing back around to to solos and what that means for for efficiency And all the other safety reasons, you know, if we have time, but I want to make sure that we have plenty time to talk about ppp2 and employee retention tax credit And we've been talking about idle loans a little bit in terms of how that still might have You know some play You want to share matt a little bit about what you've been up to for the last couple of weeks in the In this whole realm So, um Yeah, so I I finished my application for ppp2 last tuesday the first day that it was available to Uh non-minority owned businesses or women owned businesses So some of you might have had a window a little earlier than me if you're some women owned businesses Could apply a little earlier My bank Is a local regional bank. They weren't taking any applications till tuesday. I filled out my application tuesday I was approved by last friday and I was funded Money in my bank account by I believe tuesday. It could have been monday Um, but the the process was much faster than the first time No longer than a week from application to money and ham Pretty much. Yeah, it was very it was very fast Same amount of money as last time based on all the same guidelines um, and You know Very, you know very straightforward. So if you know if you had the the definition of revenue to go after ppp2 You know the 25 percent you know definition of revenue in any quarter in in 2020 versus 2019 I think it's you know, it would be crazy not to do it at this point because you can just make such big Reinvestments in your employees We immediately raised our base pay to 14. I'm I'm really considering already going all the way up to 15 But I'm going to hold off and just see how well we do recruiting before before I You know immediately jump there You know, but it definitely feels good to have that big cushion To make those decisions because we're still generating revenue. We're just generating less revenue than we did uh in 2019 and 2018 so You know, we're still at about Little under 80, you know, we're still a little little under 80 percent of what we were so like so off 20 percent still But because you've changed your business model and you're doing solos your Cost a good You know, we've been talking about this a lot guys We've been talking about this a lot the magic of making changes in your business to get this Loaded direct payroll to revenue down And by making the change to solos you've been able to do that. So your top line is down by you said 20 percent Yeah, and I'm still I'm still able to pay myself very similar to what I was paying before and still make a profit You know on on paper. I actually probably paid myself a little bit more But we took we took a loss in the second quarter of like 63 thousand dollars during coven. So, you know Maybe and maybe carried a little bit forward past that in the third quarter. So You know due to all due to all the changes we made big purchases We made as far as things like that But but overall you exclude out some of that stuff we we are A much leaner much more efficient much more product, you know productive operation and we're making more money per full-time equivalent I I actually have kind of done the math and To do the same number of the same amount of revenue that we did before With price increases, you know to replace 200 clients I only need to add 151 clients because we've raised our prices through this So, you know, we've raised our prices significantly to the point where You know and we're still getting customers and putting them on but we only need to add 151 to replace 200 the 200 that we lost um, so 200 from our our total of little over 700 we're down to about 500 customers now and um And we need we really only need about 36 or 37 technicians to service Uh the company that the the two million dollars versus what was about 45 technicians prior to coven So you just get more out of your employees, you know per day you can get more revenue out of it You're loaded you're loaded direct payroll to revenue is lower now than what it was pre-covid Uh, yeah, it is it is but there's also other there's other things that are down I mean just the the vehicle costs right because that's rolled into that's rolled into the way I pay Um, so, you know getting rid of 10 vehicles is you know, roughly, you know, 5 000 a month or so So that's you know significant amount of overhead cut Um, you know, we've we've moved to making our own chemicals that saves us roughly, you know You know roughly six or seven thousand. There's just a lot of little things I did I did not replace one of my managers when they quit so that you know, that's roughly You know four or five thousand a month. Uh, that's also saved our profitability standpoint. You're pretty much I mean, you know, it sounds like it. You're no worse off than you were pre-covid No, I'm very I'm very secure that we'll be able to if we were to stay this size company and macro another another client We would I would feel comfortable with the income that I'm making and that you know That I can do all the things that I was expecting to do, you know, I'm not gonna I have a friend that owns I've told the story before but he owns some stuff in the live entertainment business He does like sound and lighting and stuff like that for uh, big You know big shows like, you know sling dion as an example It's like he like did a big traveling show with her and and then also like, you know, uh, like grateful that like just spans the Spans the horizon of like who he who he does that they were doing Who's the who's the artist that's like, uh, kind of older country But like smokes weed of trying to think of what his name is uh, you know Yeah, willy nelson they were doing willy nelson's last tour up until last year He does does all kinds of stuff right but like big tours Well, I mean he's like he's at this point where like he got like this one of those main street loans Like 10 million dollar main street loans He's like all that money means is that I don't go out of business But I'm gonna probably work till I die now like so I mean That there's some people way worse off than us. Um, you know On paper, he was a very rich guy before kovid and now he's a very indebted guy after kovid, you know due to this Yeah, I imagine he's got tons of equipment that Is financed to some form of fashion and he's still on the hook paying for all that stuff Even though it's not making any money for him pretty much That's pretty much the deal There's a lot of capital investment in that game Yeah, I mean it's good, you know It's good to be able to finance that equipment too like so it's always good Anyway, that's a whole another thing But yeah, they buy a lot of stuff cash But then oftentimes they buy it cash so they can get a good deal on it And then they'll refinance it later. So you're right. It's it's Um, yeah, it's it's definitely a very highly leveraged business. So Yeah, we're we're not right. He's got a similar business here in Charleston and you know, they are I mean the the bad news part of it is typically in an election year, especially a presidential election year They make a ton of money Doing that type of work and right, you know, that was all kind of buffered down That's a tough all the way around Yeah, they uh, actually he did uh, this guy did there was a big, um, event at the arch grounds here in st Louis when uh, uh went during one of obama's terms I can't remember but there was close to a quarter million people and they did the sound and light there and you you know Everyone said that if you were there, you could hear the speakers on stage Wherever you were like whether you like obama or not. I'm just saying like they did the sound there and the sound was good So like it was very, you know That that's you're right. That's really good. And to do that cost a ton of money and yeah And there's just there's so much so much cash tied up in the equipment if you don't use it. I don't know man It's it's it's tough So that's where our businesses have really been really structured perfectly for this ppp I mean no other business. I know of this is labor-intensive with as little other I just did my ppp loan forgiveness. I did the calculations just because um, I'm getting ready to look at these er tc tax credits for for uh, 2020 as well and um Anyway, so doing the calculations um I ended up just using only payroll because Even if I saved a week, right like I took off a week of payroll Because my weekly payroll is like close to 20 grand or higher like 23 grand or something like that I couldn't replace that one week with enough other expenses to like Even like even get to full forgiveness. So what you're talking about I mean, there's so many different moving parts of this what you're talking about right now Is the forgiveness portion for your first ppp loan? Right and and I and they didn't have all the new things on the on the form on the new form of from the From the sba. So maybe that'll get updated and they'll have like, you know PPE costs and things like that. But but just using the original stuff, um, you know The original things that that were included like, you know mortgage interest or rent or Or utilities, right? Those are the three things that were really on there I couldn't come up with anywhere near enough So I just used payroll because I didn't have to document anything else And I still got my forgiveness window down to 13 weeks So let's let's talk about that a little bit. I think uh You know, most the people that that are part of smart business moves have kind of got their arms wrapped around the application for the ppp2 You know loan and You know, that's probably uh already in the works for most of us or at least there's there's few questions there Um, a number of people I know have already applied for forgiveness for their their first loan their first ppp loan um Talk a little bit about What this employee retention tax credit is and why that matters with the Forgiveness of your first loan. Yeah, let me share my screen for a second. I'm gonna just share. Um, Let's see application window There should be something at the bottom that would say Yep, I'm just gonna go Oh shoot. I need to go. I need to share. Do you have another monitor? Uh You know, that's a big deal. I can share it but as soon as I do that you're gonna Need to take whatever you want to share and just make it full screen and you won't be able to see me Yeah, I need to see So here, uh, let me know when you see this Yeah, you're but here you go Okay, so Let me see, um You're up You go to your spreadsheet. Okay, so this spreadsheet is based on all the employees that I had in, um In 2020 And basically what I did was I ran all their payroll from 720 Till the end of the year and the reason I use 720 was because that's the first week that I'm no longer using ppp And High column day. We're live streaming Well, there's no, uh There's no, uh, no, there's no socials or anything on here, but you so yeah um But anyways, so the the point being um, I looked at all their wages and came up with came up with this number from july to, uh, July july 20th to the end of the year And the reason this is important is you can take these ertc tax credits If you were shut down by a government order or you had a 50 percent reduction in revenue for any quarter And then you can continue to take them until you're back to above 80 percent of your precode revenue for 2019 This is awfully complicated. I'm actually paying a company to help me sort all this out Um, they're going to take 10 off. They're going to take 10 off the top But here's the deal I ended up with gross wages of I came up with gross wages that that would be for this period for About well, I didn't count. I didn't even add this up yet, but gross wages are this We want to say it's going to be a big number Yeah formula Some autosome You have to drag it up. I'll just do each just do the e2 Enter So 551,000 um, and what I what I did was is I ran a formula on this one that said Uh 50 percent were of 50 percent of wages or $5,000 cap and then that came up with 182,897 dollars roughly so What's going on here is Is that is that these ertc tax credits could Could net me another 182,000 dollars in In government subsidies to help me rebuild my business and help me make some big investments But there's no restrictions on this money. That's the thing So once you have this money, it's you can buy you can buy a boat with it if you want to It's 100 restriction free. It is taxable. So you're going to pay 100 You're going to pay taxes the marginal tax tax rate on this 182,000 dollars as as capital gains but I don't know. I guess it could be direct income if you're just a sole proprietor I don't know exactly how it's going to be taxed But I'm assuming it's going to be capital gains because of my my tax structure So you'll have to talk to your own tax advisor, but this is what I came up with today is that And that's above that's on top of This is for 2020 and this is on top of the ppp money that you got in 2020, which are going to be forgiven Yes, so So i'm going to go back off the share But this is this is an important thing for you to wrap your head around if you're If you're you know trying to figure out how to maximize um You know all the different programs that are available to you to get your business back on back on its best possible footing Moving into you know the later stages of 2021 and that's why I feel comfortable making some, you know Making some bonuses to my employees that have stayed through all this and uh and to raising our base wages and things like that I just I just feel like there's that's what they want us to do with this capital And at the end of the day, I'm going to probably end up having more money to feel safe going into 2022 and make some big You know big investments into into growing into 2022 So those employee retention tax credits for 2020 Is kind of a new thing before the last budget and not the budget but the last relief bill that passed at the end of december You couldn't do ppp and the er tc both But that legislation said you could But you can't Yeah, and now it's said you can't do it. You can't do it at the same time Now some people that have used their forgiveness already used the 24 week I I had an interpretation from a company today that said well, they're just going to look at the weeks that it took You to reach full forgiveness and even if you use 24 weeks Don't worry about that and just use use what you projected You you know because you were no longer using capital. You were no longer using ppp after that point That was just strictly for forgiveness purposes. It wasn't Um, it wasn't designed to you know, hold you back from using this program now. So I'm not a lawyer. I'm not I'm not the irs I don't know that that that was a holiday in last night. Yeah I don't know that that interpretation is correct But I don't think I don't think I would I don't think I would count out these these credits Even if you did forgiveness already and and maximized Um, the point is if you qualify for these tax credits it would be worth Taking an extremely hard look at because it could be a lot of money and There's primarily two criteria for 2020 that You have to meet one of the others that correct Matt Uh, yeah, so so you you want to go over them. You you know, I'm pretty well at this point like uh Well, you have to have a 50% loss in revenue quarter over quarter 20 to compare it to 19 Right of us that would be quarter two if we shut down for any period of time. So If you did a hundred thousand dollars in q2 of 2019 and you did less than 50,000 in q2 of 2020 Then you would qualify. No questions asked But then the other piece that's a little bit more ambiguous is if you were subject to a government order That required you to shut down or made business You know untenable or something the language is the language is ambiguous I'd have to read it But it's the language is a little ambiguous and I think that a lot of companies actually are going to qualify for this um For some period of time now again, this goes away once you get back to 20 You know 80 of your pre-covid levels. So if you're in a if you're in a more rural part of the country that just never really took a hit from covet or You know, again, I live in a big city where um, not a big city, but more more urban more You know, they took the stance of of being more cautious on covet. We did shutdowns early and they were mandated um, that certainly hurt us in the time, but um, you know looking back that's what these These credits are for those businesses that were forced to shut down and and and do that so I would take a hard look at and see if you qualify based on government orders too If there wasn't if there was an order order in your area, even if it was ambiguous And unless you made the stance that you were Um an essential business and wouldn't shut down no matter what Then that's probably, you know, that's probably tougher to tough to justify But if you shut down for a single day While you were trying to figure out the you know, the ambiguity of these orders I think you could make the argument that you might qualify and that's where I would that's where I That's why I hired a company to do these for me because they're going to take 10 off the top of that number that you saw Um, so I'm not going to get to keep all of that But the peace of mind to me to know that it's all done properly that it's all basically, you know They're taking the the legal responsibility that that all the hoops are jumped through That's worth that 10 to me. It's just you know a little sleep better at night versus trying to make all these guesses They're going to do their best to You know to to make those those assumptions Yeah, it's kind of tough to to to say with that, you know You know, did the state or local government, you know require you to shut down that is very gray I guess the other question is if you apply And if your interpretation is different than the interpretation of Who's As long as you're being transparent in terms of how you're rationalizing, you know, your your your qualification for it Again, I'm not an attorney or you know a cpa But I don't think there's a tremendous risk because you're not doing anything fraudulent You're following the rules that nobody under you did the best you can that put it into a put it into a Low-yield bond if you're all that worried about it get two and a half percent and you know Pay the taxes on it because they're going to get that money in anyway And if you have to pay the rest back because that because of a misinterpretation You didn't do anything wrong if you can give the money back Now if you go if you go out and buy a boat with it and you know, you can't pay it back So I intend to hold this money as well for a long period of time as a cushion and be You know be just in case the the government ever decides that they were a little too generous and want and want their money back basically We put it in a bitcoin and game stop stock Right Those are those are sure things But I did talk to um, and again, this is just my discussion with my cpa Which might not apply to anyone else here you talk to your own You know tax people But you know we the discussion went the path of you know if we apply for ppp2 In somewhere along the way There's some determination that we didn't qualify because you know the math didn't come out right It's like well worst case it's going to be treated and you're not going to get forgiveness And it's going to be treated as a loan you got to pay back in five years Right at one at one percent. I mean, you know You know again, like if you don't go crazy and use the money on things that are irrational And that's the thing. This is smart business moves. It's not a rational business moves Like you know take this money and go buy you know go buy your dream house or anything That's not what this money is for it's not to it's not to make us rich It's to make our business as whole and to make us, you know make some smart investments in our people Um, but you know at the end of the day, you know part of being a smart business owner is Retaining profits and keeping keeping in your business as much as you can too So don't make you know don't go crazy with with this money if you don't have to To keep your business afloat like, you know Make some investments, but because let's go back to where we were at the beginning of this discussion that There's a lot of data that's been rolling out here the last few weeks that All these variants of covered and you know, what's happening that it's just not going to be as easy as everybody's Going to get a you know a vaccine between now and in the end of summer and this thing's going to be over with it It appears more and more every day that we're going to have to manage Covid for a longer maybe a much longer period of time So, you know, these monies might you might be saying, hey, I don't need the money Well, I don't think that we know enough to know if you're going to need it or not because we don't know where We're going to be a year from now and we don't know if they're going to keep doing bailout bill after bailout bill I mean eventually they're just going to lose they're going to lose the appetite for doing it I mean, it's just it's not going to be politically You know, it's not going to be politically, you know, the thing the thing of the moment Like it just you know, it's just this is life guys get on with it. So As it stands now. Yeah, there are these opportunities that are going to help us But yeah, tom's right. They could they could roll up and go away in the future and not and not present themselves again This is pretty rare. I don't I usually when they do these kind of bailouts and things like that This is not for us. This is for the airlines. This is for big manufacturing and banks Um, I've never I'm not that old, but I don't remember anybody ever bailing out small businesses before so no No, no, this is you're on your own entrepreneurs. This is an unprecedented event and um You know You're gonna, you know I think that we're going to need to make changes in our business to be more resilient In a world that looks more like what it does today than what it looked like a year ago for A longer time than what we thought. I hope I'm wrong But it's better to pair for that that every day is looking more like that might be the case So be ready every day that I don't buy a restaurant during covet is a good day I we've been a ton of joke that I've I've almost invested in two restaurants during covet And every day that I don't do it. It's a good day as this keeps dragging on like, you know I'm like thinking to myself Who dodged a bullet on that first one. Yeah, and um, I've had some opinions on that that There's a lot of a lot of other ways to inflict pain on yourself rather than to do that I'm absolutely. So yeah, I think uh So so we you know, we've talked about the solo model and like, you know some some benefits of that You may still need some teams to operate because you're going to need trainers and qas and things like that to to do that So you're still going to have even though I have like 20 solos now. I still have 9 or 10 team members You know that are you know people that are new hires. They're getting trained and or um, you know qa qas and and trainers Leslie or anyone else that's that's in the the This model is that is that typical for you or do you have only solos? How do you how do you teach people that stuff? How do you train it? She's been doing it for 20 years. Um Linda had a good point here. I don't want to go uh, miss That if they want to pay for six months, she gives them a free cleaning If that was a weekly cleaning, I would love that. I don't know like bi-weekly maybe but monthly that starts to Yeah, I would have to figure out what you know service frequency they'd have to be on where wherever that would make sense but it's a neat idea It'd be about a 5% discount if you were talking about uh, if you were talking about weekly, it's only about you know becomes like a Uh pretty significant discount or a pretty significant, uh discount on bi-weekly even But I think so it makes sense Talk about uh things we needed for taxes this year Uh Well, you're gonna need to you're gonna need to have all your loan numbers together and you know from if you have an idle loan You're gonna need to get I mean this is that's a big conversation. There's a lot. Yeah, that's a whole lot there I mean You know, you're gonna be paying taxes off of uh, you know You're you're the net profit of your business the way you have every year that doesn't really change very much in terms of You know, it could have been could have been a lot worse because there was a time before this last bill passed That they thought that you were gonna we weren't going to be able to deduct the uh expenses that we used to ppp Money's to pay for but now we can so You know, that was a big big blessing um You know, we're into january now So I guess the best time to have had that discussion would have been a couple of months ago There could be possibly some things you could we could have done to Yeah I don't think there was anything really that we knew for sure though Until until just recently like I was counting on that we were going to have a pretty big tax bill because of the ppp So I went I went out and bought a vehicle cash right before the end of the year that I was planning on just appreciating I needed a new vehicle anyway, so Um, you know just something a little bit larger that qualified for 100 appreciation Um, it's kind of silly though. You spend money to save money on taxes But it's something you it's something you need it anyway, so might as well take you know take advantage of that Um, you know those those sort of things you kind of do yeah, tom was saying you probably typically kind of do a lot of your tax planning Into the third quarter. Well, I don't think I'm going to have that tax bill In fact, I think I'm going to be able to carry a loss now and and actually, you know That depreciation is probably less valuable to me now And I might want to have I might have to do a five-year depreciation schedule on this vehicle And it's a little bit less valuable, so um, this is Richard says, yeah, I wonder what question we were yapping to Think about probably about whether she only has solos. So it's only solos. Yeah, okay um only solos and this is a job over seven hours a deep clean uh Elevated vacation rental aren't they all elevated? I guess it's a country. Oh elaborate never mind. I'm a literate I got you a big one Example dollar for dollar tax credit from fouries paid out Oh I don't think it's quite a dollar for dollar and it oftentimes is done directly through your payroll company. I mean at least for me um For the two you get two weeks of of covid pay Yeah, that is I guess you would argue dollar for dollar. It's not Any direct benefit to you. It's just kind of a pass through where you're you're you're paying your employees If they've got, you know, a covet covet issue Yeah, now, is it is it a hundred percent or is it is it some fraction? It never feels like a hundred percent when I put it on there never never quite looks like it It's my understanding is a hundred percent. I mean, I haven't really looked at the numbers, but it was like 66 Percent, but I could be wrong. I I think that might just be the one that's two-thirds for the family leave That one is that one is confusing to me. So I don't know If somebody if somebody's missing work because they have covet or have to be out because they've you know been You know direct So it looks like Bridget does a trainer in solos So robin had a question about a good resource to read about the ERTC. Um, I would so I would go and Search man, I wish I could tell you that I'll try and find the link later Um, there was a link that the chamber of commerce did that was a really good resource on the ERTC Let me google that really quick. I'm on it. Oh, you're looking for it Yeah, the u.s chamber of commerce, uh had a really good link to the new ERTC rules Um, there's I would go to companies that that process these things like synergy partners Uh, it's spelled s y n g e r i synergy partners They are a company that processes these things They've got a lot of resources on their website about About the programs and I mean they're giving out as much information as they can because they just know that it's so complicated That you may end up still hiring them. Anyway, you know, so it's like you know, it's kind of the model of Of uh, you know share as much as you can because you know that it's it's such a complex topic that a lot of people don't Hey, we had a lot of people using that. So I think that might be where I'm getting that 66 number I thought I had it but I might not Yeah, I know you might be on the links of your you thought you might have had in the links on uh smart business moves Yeah, I know we'll look for it. Yeah, I think Yeah, as far as tax planning goes, I think a lot of that's already out the window Now you're just going to deal with you're going to deal with what what you have to find out like How does ppp affect taxes? Well, not as much as we thought originally and You know, if you do these ERTC tax credits, how does that affect your taxes? Well, you're going to get taxed on this money, but there's not all the restrictions that the ppp has so This is the article From Chamber commerce, this is an awesome article that you can't say Let me see if I can But originally none of us were given the ERTC too much Originally that was what we were all going to kind of bank on right like when when we were all kind of deciding to shut down I think this bill was written in nine days And this is the first thing that came out in february Robin start with this article. This is this is the the the place you want to start And yeah, this was the most This was the most logical thing that happened at first like oh, we'll do these tax credits We'll kind of bail all these businesses out It was originally for businesses under a hundred employees like us and you know It was probably the most logical thing that kind of came out at the beginning of this thing And kind of gave me some hope that we were all going to be fine And ppp obviously came out after that There's one more dimension of of this ERTC this Employee retention tax credit that I don't know if we touched upon we talked about the requirements or the criteria To qualify for 2020, but you can also get these for 2021 starting the quarter that we currently are in right, so um And i'm a little fuzzy in terms. Well, the the rule is uh, is it a 25 percent? diminution Just just you're right 20 percent diminution of income First quarter 21 compared to first quarter 19 Yeah, you can use a base period of 20 or 19 either one Or you can use q4 20 compared to q4 19 as well. I believe they'll let you do that as an option But it's only a 20 drop The interesting part about this is if you can use q1 of 21 it gets q12. I mean q1 19 You you got two months of runway here And if you're going to be 18 percent down you might Want to back off your marketing a little bit? I mean i'm just I'm not Maybe I don't mean to be I shouldn't let me take that back. I'm just talking about math here that yeah One could Do some arithmetic come to the conclusion if they gave up a few points of revenue They could make that back up many times over by getting these tax credits for q1 20 And just remember though if you take ppp You know you only have so you only have the weeks that that you are Not using pppp to qualify for ertc tax credits So it's seven thousand per quarter per employee. I mean this is a very rich program In fact, it might have been more it might have been made more sense For me to do this instead of doing ppp at all this like just to The reason I just went ahead and did ppp too was because a it was the guaranteed money b it was It was the tax for your money and see it was the money that that already had a A path to forgiveness already laid out with no, you know, you know, no really roadblocks But you could do the math and see that this potentially could be A very very rich program for some employers now. I don't think our wages are enough to tax You'd have to be paying people, you know, 10,000 a quarter to really max that out Um, you know, but this could be a very very very beneficial program to certain businesses Depending on how they they pay. So it it's uh, it's got some potential to be Very well very lucrative. So again, if you can shorten your forgiveness window in 2021 if you get The ppp again, you can you might potentially have, you know, 14 If you didn't if you could spend all the money in eight weeks, you'd have 16 weeks or something like that 20 There's 26 weeks. I'm sorry 20 Got my math is terrible right now 26 weeks to spend 28 weeks 28 weeks of uh, no got 18 weeks I'm sorry 18 weeks potential for ppp2 yet Or you don't have them yet even if you don't probably you don't have them yet The payroll from january 1st You get the money is this fair game, right? Right. So you have all the weeks that you have here You have all the weeks that you don't, you know, you don't spend through it So you potentially have as as as many as 18 weeks to as few as You know, if you used a, you know 24 weeks to as few as two weeks basically if you used, you know, a 24 week window for forgiveness. So You know, most of us can probably spend the money in 12 weeks, you know, realistically based on two and a half months payroll, so If your forgiveness period is You know 24 weeks then your I'm sorry 12 weeks then you have Uh, then you have 12 you have 14 weeks to to capture these tax credits It can still be again, it can still be a substantial amount of money It could still be as much as again 7 000 a quarter and again, it's per quarter. So you could You could stagger it a little bit in the first quarter and a little bit in second quarter Um, if you were really smart, you might even go three more weeks of this quarter before you get your your ppp money If I would have been really smart that would have been the way that would have been the play to to have You know six weeks of both of both quarters because you can do it It's it's per quarter now. It's you know, so There's there's quite a bit of money there You see leslie's question um You get your ppp money shortly after You apply for it Matt got his within a week And I guess You use the same criteria As you did and the same payroll numbers basically same Same data that you did to get your first ppp loan. So but your ppp money doesn't count as revenue So so you so she's saying like oh, I got my ppp money in second quarter. I'm off. I'm off 20 Well, then this money came in that money should be Yeah, yeah, yeah, okay So what you need to do in your quickbooks if you haven't done this leslie is you need to You need to go back and edit when that ppp money came in And change it to a long-term liability. That way it doesn't show up in your profit and loss column on your profit and loss report Because this is it's it's not it's not income. It's it's a long-term liability Um, so it's just I think you might have it I may be misinterpreting your question, but I think you might have it marked wrong in your quick books What do you think time is that sound like I'm she can answer if I'm if I'm kind of Yeah, I think that's where you were saying because you did receive it in in that quarter But They called it alone I mean it wasn't it wasn't income. It wasn't money that you made from cleaning home. So that should should go on on your balance sheet Okay, yeah, so leslie You just need to go back and you need to go to that transaction when it came in in quickbooks Or have your bookkeeper or if you do your own books Then you need to go back and hit edit and there should be the ability to change it to a long-term liability And you know edit it change it to a long-term liability and then also maybe, you know Notate it that it's your ppp loan one and It it should be very easy to correct that so it doesn't show us income on your profit and loss So when you put your your your P&L up for q2 20, it'll A lot more small lower on the income side. Yeah. Yeah Yeah, and that's the the alternate pay pay period is Yeah, basically if you run two week pay periods the alternate pay period is just what they're saying is like Instead of so instead of saying your loan disbursement date You can actually make your your period start on your first pay period Which I didn't do because it just I pay weekly and it made so little difference But uh, yes, uh, denise. I think that that's what you're talking about. Um So like the two week surprise Beginning pay period like itself like two weeks prior to disbursement Not quite sure Does that mean the start day of the pay day or the beginning of the pay period the pay day the first time You paid any money not not the pay period itself But the the actual day so when you want to switch the alternate pay period or the alternate period for doing your forgiveness You want to make it that first pay day the first time that they got paid if you pay every two weeks So if it's like so me for me My first pay day was probably april 27th So I could have made my my gone to an alternate pay period of april 27th for PPP forgiveness, but I just went ahead and just used april 20th Because it it didn't change enough for me to make it really a big difference to use either one But if you do every two weeks payroll, it probably does And uh, that's what they mean by alternate pay alternate pay period. You are correct Alternate payroll covered period. Yes Yeah, I think that I've found so I found that I've been educating my banker and my My account a little bit on this stuff as we go through leslie. You're not alone. I think this is all I think a lot of accounts get into accounting, you know, because it tends to Stay mostly the same they get some rule changes every year, but the software kind of Kind of solves it for them. I don't think this is just kind of time is the word unprecedented There's just so much information being thrown at them. I don't even feel like they're the best resources a lot of time unless that they are Um, really actively specialized in small business accounting, you know, and they don't like talking about Stuff that that the rules aren't clearly defined and all of this just not it hasn't been tested. It's just It it's too soft and it's like we don't know and they don't nobody knows everybody's just kind of speculating on Really how a lot of this is gonna gonna play out I'll tell you a funny story that I think probably time likes to get these things to end on time But so when this was going on I called my accountant asked him about all this and he had no clue And I was like, dude, you can apply for ppp. He's like he's like, I'm not gonna be I'm not gonna have any loss when I'm like, dude, there's so much uncertainty in the market How could you not take the money? So he went and he went ahead and apply for ppp I talked him into it I was like, you need to really read up on this stuff because other people are going to be asking you this these questions And he went ahead and looked into it. He's like, oh, yeah, I do qualify He has like 16 guys working for him, you know And and there was you know, he wasn't getting paid on time because everyone was pushing their taxes back and everything else So I'm like, there's totally a lot of uncertainty in your industry Even though you're going to eventually get paid. You don't know when you're going to get paid Right. I'm not paying you right now Joked with him like He doesn't even have 100% certainty that everybody's going to pay him. Some people might not be around to pay him Exactly. I mean, I I owe him 2000 bucks and I told him straight up. I was like, I'm not paying you until I find out What's going on in this world? I'm like every dollar I have in my bank account is is money I'm keeping right now So, you know, I'll pay you but just not today. So Yeah, you know, there's there's a lot there's a lot for them to handle there And again CPAs and lawyers like to deal in like concrete things And they tend not to like, you know, all this The speculation and they want to they want to have solid answers and you know, that's this is this is pretty squishy stuff We're all talking about here Matt, we are at the top of the hour Thank you for joining us today. This was uh, this was fun. We haven't done this in a few weeks. Um This is this is useful information and uh, you know, hope everybody puts it to good use rely on your professionals now, you know Lean on your CPA on on this and less is making a point that for what she pays or CPA should brush up and Yeah, we'll tell them that tell them that, you know, you've got friends and you know, fellow cleaning business owners that know more than Then they do make them go into it um We will be back Monday with smart business moves at five o'clock eastern Leslie, I hope you continue to have an awesome birthday. Until then we'll see you monday. Take care