PPP Update, New Delivery Playbook, Turn Liquor into Cash
Originally Published : April 13, 2020
Please Please Please
(approve the damn loans already)
Dear HL Clients,
Was I hallucinating or did I hear Mr. Mnuchin promise a few weeks ago that loan money was going to be available like the same day? Hold on. Just as I thought, Google confirms that’s what the Mnan said.
Why the hell do they have to lie about everything? He could have just said “It’s a shitload of money and we will get it out as soon as we can so just be cool” and we would have been cool. But now we all have our applications in and there ain’t nuthin’ left to do but sit around and wonder a) if we are getting the money, b) how we are going to be able to comply with their dumbass rules and c) how long will it take for every muscle in my body to completely atrophy? Seriously, can someone please give us a break already and just approve and disburse the cash so we can at least start planning a few things and paying some bills?
In other news….
Introducing the all-new, custom HL P5
To make sure that when you get the cash, it becomes “forgiven”, we are excited to unveil a new program called The P5 (Post PPP Protection). This service will provide hands-on assistance to our clients that have opted to do the original PPP application filing themselves, and now have questions and seek guidance on their path forward as the major hurdles and complications start coming into focus.
For those of you who have already engaged us to handle, rest easy. You already get all of these services and TheP5 is only for the cowboys and cowgirls out there who have applied on their own.
This package will be offered at a flat fee of $1,500 and will include the following:
Exclusive Introductory Webinar – Upon signing up, you will be extended an invitation to join an exclusive, introductory webinar, where you will hear the newest guidance on the PPP and what comes next, directly from lawyers, accountants and SBA experts. You will also have the opportunity to submit questions and have those questions answered live.
Quick reference tools – We will provide you with a loan/spending calculator; “cheat sheet” of PPP rules; personalized schedule/calendar of key dates and information. This will help keep you on budget, on course, and will provide you with some basic mile-markers and helpful guidelines.
Ongoing Support & Advice – You will have access to lawyers, accountants and SBA professionals, who can help answer your PPP-related questions (i.e. as they relate to labor/employment issues, corporate governance issues, tax implications, general accounting practices.)
Forgiveness Application – Purchase of this package also includes having our accounting and SBA professionals file your forgiveness package with the bank on your behalf. This is potentially the single most critical part of the process. Having the assistance of experienced professionals in making this filing will prove to be incredibly valuable, as this is the filing that determines how much of your loan will actually be forgiven (provided that you also adhere to the guidelines throughout the eight-week forgiveness window)
For any questions about The P5 please email Joseph Levey at: [email protected]
We Went To Jared
It’s Aliiive! by Jared Lewis
Cash Flow Management should always be at the top of your list of priorities but it has never been more important than now. Once your doors reopen, optimizing your cash will be critical to making it through the business crisis we know will extend well beyond the end of the health crisis.
One thing you can do is resurrect your dead inventory and turn it into cash.
Here are a few steps you can take to improve your liquor purchasing and inventory practices to prepare for reopening and beyond.
- Safeguard your current inventory. If your business is closed, make sure that all liquor products are out of sight and secured behind lock and key. Check that refrigeration is functional and that room temp storage areas won’t fluctuate in a way that could cause spoilage. Kegs should be disconnected, C02/Nitro lines turned off at both the primary and secondary valves and ideally, your draft lines should be flushed and left filled with water.
Remember that every 1K of inventory you have on hand is worth somewhere in the range of 4-6K of revenue.Preserve every last drop, you’re going to need it.
- Assess what’s in stock.. Conduct a shelf-to-sheet inventory to account for every ounce of alcohol you have. Now, consider what you sell the most of (your POS can be helpful with this), how quickly you turnover less popular products and what items are collecting dust with no chance of ever being sold. In their recent article on this same topic, our friends at Sculpture Hospitality site that across their thousands of accounts, roughly 80% of alcohol revenue is derived from 20% of stocked products.
- What this means is that the emphasis for your stock holding should be on ensuring that the 20% of your core products never run out and the other 80% of your products only have minimal holding” says Gareth Hollows of Sculpture.
- Convert dead stock to cash. Sculpture points out that on average, their bar clients carry 6-10K dollars of excess inventory. If you are at the low end of that range you’re looking at 30K of unearned revenue sitting on the shelf. When you reopen, you will eventually need to make purchases but converting dead stock first will soften your spending and get revenue coming in the door without cash going out.
Right now, work on rewriting your cocktail and wine lists to incorporate aging inventory.Focus on creating delicious offerings that will sell products that wouldn’t otherwise sell themselves, especially those that were up to now not available for purchase.If you’ve got lots of low inventory wines or beers, consider a chalk board menu that can be easily updated as items run out.
Want to talk cash flow, inventory and financial management? Reach out:
201 220 2668
DELIVERY PLAYBOOK REDUX
A couple of weeks ago, we put together our Delivery & Takeout Playbook, a how-to guide for those of you that have stayed open and are offering delivery and/or takeout services. We will be releasing an updated version of our Playbook tonight, which reflects the recent changes in applicable law as they relate to certain workplace health and safety restrictions, as well as some additional best practices that we strongly suggest you consider implementing ASAP.
If you’ve already registered and received the Playbook, you’ll automatically be receiving your brand spankin’ new copy in your inbox later this evening. If you haven’t signed up to receive a copy, you can do so at: https://forms.gle/ZRoXutrUN5ncdigw6.
And especially if you’re considering using those PPP funds to reopen and start operating in some capacity, make sure you know the do’s and don’ts. You know what they say about an ounce of prevention….
Loan Talk with Heather Kirk
– No news yet from NYC about the continuity loan – same as yesterday, there will be a second phase of documents needed but first, you have to receive approval from the first phase of review.
–EIDLs – we are seeing advances/grants trickle in from those done a long time ago. Looks like the new system of up to $10,000 (based on the number of employees – $1,000 per employee) is in effect.
– No major changes for the PPP applications either – Chase appears to be one of the few (BIG) banks that is actually approving applications and sending out money. BOA and Citi just keeping asking for additional information.
Well, I’m about to leave the apartment for the first time in a month. Heading to ye olde pharmacy and, if my legs still work, will attempt to riverdance my way between the flu drops. Hopefully, on the way I’ll run into a flower that I can sniff or just about any other sign of my favorite season.