PPP Loan Forgiveness and Simplicity In Your Business

The Small business show episode 338 for Wednesday, July 29, 2021 greetings folks and welcome back to the Small Business show or to the Small Business show. The place, the show where we spend our time small businessing here in Durham, New Hampshire, I'm Dave Hamilton and in.

Lafayette, California, I am Shannon Jean. How are you, sir?

I am good. Evidently it turns out Wednesday is the 28th, not the 29th. Who knew?

You're ahead of the game, Dave. Always. Always.

I live in the future. That's how I do it. Yep, that's it. That's how I do it.

I'm excited to talk about. We had a great pre show ramble that we covered a lot of great topics about improving this show and experimenting with new things and I'm excited about the future.

Yeah, I'm excited about when the government gives me money. As a small business owner that that happens very rarely.

Rarely.

It has happened twice in my career as a small business person and both of those times have been in the last year with both of the payroll protection program loans. And I wanted to take a minute and just remind everybody that it is probably time for you to at least start thinking about filing for your PPP loan forgiveness if you qualified for the second round of PPP loans. If it's not time for you. It all depends on when you got your loan and all of that stuff. But your bank will almost certainly at this point especially have an online system for you to if you applied online for the loan initially, then you almost certainly have an online system to apply for forgiveness for this loan. And important to check in for sure you want to go check in if it's not yet time and it almost certainly is, but if it's not yet time, you can start organizing your paperwork. I always for both of these, I have made two folders on my computer, one for don't Send and one for do Send because there's going to be some paperwork that they might need from you. My don't Send file is the one where I build like the spreadsheets so that I know what I'm tracking and all of that stuff, the things that they don't need to see. It's not like I'm keeping two sets of books here folks, right. But you know, keeping that organized so that when the day comes and you're online filling out this form, you've got what you need in a folder where you can just grab it and be like, yep, yep, here you go, here you go. Takes 10 minutes. And you know and you're off to the races. If you, this being that this is payroll protection. If you actually run payroll, meaning you, you know, you use a payroll service or do it on your own, but you're actually paying employees, you're filing nine 41s and all stuff, they are going to want to see those 941s. That's one thing that you're going to want together for the second round. The other thing that you're going to need to do is show them that your revenue for a quarter is down year over year from 2019 to 2020, because that's what qualified you in the first place for the second round of pay per payroll protection loans is that you were down. I think you could, I think you think you had the choice of either it being full year or just one quarter of the year.

That's correct. Yeah. Just do a quarter. So you pick your worst quarter.

You could pick, you pick your worst quarter?

Of course.

Yeah. You pick the one that was down the most or down at least I think it was 25%.

Yes.

Yep. So you're going to need to generate, that's probably not a report that you already have. You're going to need to go into your accounting software and generate a report that shows your gross revenues down, you know, 30% or 25% and, and, or your profits. I forget which way it, it worked, but I think either one can, can show.

I think it might be revenue.

Yeah, I think it's just gross revenue. Yeah.

Yeah.

And so you gotta, you know, go make that report now if it exists, which it should, you know, because 2020 is over, as we all know. You should be able to say, okay, well, you know, like for our business, for, for we didn't qualify with all the businesses, but, but certainly with one of them, actually with two of them we did. And it was Q2. Right. That was down for us because every, everybody pumped the brakes for a little while and then things actually picked back up nicely in Q3 and Q4 for us. But Q2 was, you know, we hemorrhaged comparatively year over year because nobody was doing anything. We didn't know what was happening. So take a look at your Q2s if you run QuickBooks. But most accounting software let you do this and do a, a year over year comparison report and that's all you need. Save that one page as a PDF. My advice is share exactly the information that you need and nothing more. Right.

That is very good advice.

If it's Q2, that's great. Like if I, if I showed them Q3 where we were up and Q4 where we were up, I don't think that they would disqualify us from forgiveness because the rules say you only need 1/4 down.

But I introduced that.

Right. I don't need to confuse the process. The idea is someone is going to go through this and you want to make their job as easy as possible. So don't make them figure out which quarter it was. Show it to them. Right? Just give them that PDF and you're good to go and that should make life easy. I've applied for one of them already. Like I said, there were two businesses I had with, with PPP loans for the second round and I've done one of them and gotten the forgiveness already. And the second I actually need to do. And it's a, it's that time now, which is why I was thinking about it. So. Yeah.

And in case you didn't know as well, they changed the rules and you do in the. Originally you had to deduct the amount that you got as the Eidl advance that they gave you, but they changed that rule and you do not have to deduct that amount from the PPP forgiveness.

That's right. That's right. Yeah, yeah. And my accountant, it was weird and thankfully he understands it because it, it started getting a little bit fuzzy for me. But we, for the first round, obviously we got our money in calendar year 2020. We got our forgiveness in January of 2021, but, and I said, so I think we have to, you know, cross the bar line with that and, and covered over two years. He's like, no, no, no, no, no. He's like, if the forgiveness was for 2020, you count that as having happened on December 31st. And he took care of that. So check with your accountant before you just start willy nilly changing these things. But my guy was very clear on it. He's like, no, no, no, no, no. This is how it's done. I'm like, okay, it's fine, it's all good. Makes life easier if it all can zero out in the same calendar year.

Yeah, yeah. Looking at the faq, it looks like you need to submit that loan forgiveness application within 10 months of the completion of whatever that covered period.

That's right.

You are selecting.

So, so you've definitely got time because the second, the second period only started this year. I think so. Yeah. Yeah.

But get it on the calendar, Keep up with it. We'll check in with you on this from time to time. Just to remind you that you don't want to miss out on this, this opportunity to get those forgiven.

Hey Shannon, I know you want to talk about our, our, our next topic for the show, which is simplicity. The next thing I want to do is talk about our two sponsors for this episode. First up is SaneBox. Listen, Inbox Zero is a thing of the past. We are all so inundated with email now that it is no longer possible to respond to everything. In fact, it's not about that. It's only about responding to the important things. Removing the fact that email is a soul crushing distraction. And the answer is SaneBox. SaneBox's AI monitors your inbox and then automatically emails from all those knuckleheads that's moved to the sanelater folder. All that's left is your important stuff and your smiles. I have been using SaneBox for probably five, six, seven, eight years now. It is the one service that I use that I say if this didn't exist, the most important thing on my schedule would be to build a replacement for it. It's that good, folks. There's nothing to learn. There's Nothing to install. SaneBox works directly with every single email server or service that's been created. And here's what's cool. Visit sanebox.com small business today and that way you can start your free trial and get a $25 credit. That's s a n e b o x.com small business. Go do it. And our thanks to sanebox for doing what they do and sponsoring this episode. Next up is HelloFresh. Listen. HelloFresh cuts out stressful meal planning and grocery store trips with less prep, less effort and minimal cleanup so that you can enjoy cooking and get dinner on the table. But in just about 30 minutes. We've been doing this. We did it all throughout Pandemic. We've been doing it since the kids are off and it's just me and Lisa and it's been fantastic. It makes things so much fun because you have instructions. And what instructions mean are that one person doesn't have to be the only person prepping the meal. Everybody gets to participate. And now instead of it just being dinner where everybody is engaged, it's dinner prep. It's dinner and then it's after dinner. Sobre Mesa, we like to call it in our house. Really awesome stuff. And HelloFresh gets their produce from the farm to your door in less than a week, which means fresh, high quality ingredients. And this summer, HelloFresh has everything you need to get grilling. They've got grilling bundles, burger packs, surf and turf packs. Yum. All this means less shopping and more sizzle. Go to HelloFresh.com SBS14 and then use code SBS14. Why? For up to 14 free meals plus free shipping. Again, that's HelloFresh.com SBS14and then use code SBS14. Get you your 14 free meals. Super awesome. Super tasty. Really a lot of fun. Our thanks to HelloFresh for sponsoring this episode. All right, man. Will you make it simple for me?

Yeah, you know, I've really been thinking a lot about this topic and I've been, I've been reading a new book that I'm going to mention here in a few minutes and I just, I'd like to spend a little time today, you know, a few examples of simplicity in your business. And, and I want to start with. I was going to finish with this, but I think that we should start with it. It's. It's a quote that I heard is the simplest steps are the ones you don't take.

Oh, right.

Think about it. This concept of not looking at things that are complicated and trying to make them simpler and removing steps change that. Start at zero and think about how many interactions, how many steps does it take to really solve this problem that you may have things. So instead of it thinking about removing, turn it upside down, start at zero. What's the minimum number of steps that we could have in place to solve this problem? Particular issue.

Yeah, right.

What's the minimum. What's the minimum number of steps does that it will take a customer to get to a human. If, if that's your business. Right. If you need to talk with them, what's the business or what's the minimum? A number of steps does it take to process an order, ship it out the door and, you know, get paid. That kind of thing. Really tear it down. Don't, don't go from the top and say, well, it takes eight steps. Now how do we get it down to seven? No, just really rethink it.

Start from the beginning. Don't. Yeah, don't look at what you have. Start with zero.

Zero.

Yeah. Yeah.

So I want to give you. Yeah, so there's a couple things I want to use for examples here. Want to keep this simple and brief, you know, but we all kind of fall in, I think as business owners into this complexity trap. We, we make things too complicated because over time we're trying to solve more complicated problems. Right. It's, I like to call it Complexity creep.

Well, that's. It's the creep because you, you build a simple process and it's like, well, we need to add just one thing to it, and then we just need to add another thing. And it's way easier to just add one thing as opposed to, like you said, tearing it down, starting at zero, building up again. But every now and then you got to tear it down and start at zero.

You have to. And I want to use an example I've dealt with because I'm a product guy and I've sold stuff my whole life with various businesses. Returns are just, you know, a big part of your day. You just have to manage them and you want to actually turn your returns into a competitive advantage, not into a problem thing. So, you know, we got a couple of options. And I just went through this with a couple of purchases that I made, you know, personally. Company A, you buy a product, they send you the invoice. On the invoice, there's a phone number to call to set up a return.

Right.

And you know how that's going to go. You got to wait. You got to press this number, you got to connect with the person. You got to tell them why you want to return it. Okay, well, company B, I buy a product, and inside the box, there's a return prepaid shipping label. With each order, you don't like it, put it back in the box and put this label on it, send it back to us. Which do you think customers prefer?

Oh, yeah, yeah.

I mean, yeah, of course. It's the thing, you know, you have to call, you got to justify, you got to do all the kind of remove the. Just rethink the entire process, you know, even if you don't want to pay for returns, which I think you should, and I have a lot of reasoning behind that and a lot of data, and we could do a whole. We'll do an episode on free returns sometime. Okay, but even if you don't want to pay for those, you can still make it simple. Like, here's the return. You don't want it. Write down the reason and send it back. You know, but that's, that's another step. But those. If you create that simple return process, man, it creates customer loyalty and it creates repeat buyers that, well, I know if I buy it and it's not exactly what I want, I'm going to send it back. But it does not increase your returns. I will argue that till, you know, the end of time. Well, it sounds like you've proven that it does not. I do it with all my businesses now. It's free return. Now I don't pay. I don't offer free shipping. That's my whole nother. Again, we'll do this episode and we'll do a comptech, kind of a combination of those kind of things. But the. Just think about removing those things. Start at zero, you know? And again, just a good example. You saw a label in the box. But another tip that I want to.

So not a prepaid label, but just a label.

Well, I include a prepaid label because.

Oh, you just charge the customer.

No, I don't charge. I pay for it.

Oh. So, okay, so I cover the cost.

It's part of my expense of doing business.

Got it.

But I can tell it does. It has not increased my returns. It has lowered my returns. And my returns are always the headache.

Away from people they feel. Like you said, you've simplified the process. I know that if I don't like this, there's already a path. I don't have to make a phone call. I don't have to fill out a web form. I don't have to make nothing.

Put it in the box before they buy it.

Right.

This is a competitive advantage. It's credibility. You're building credibility. Again, not to make this whole show about returns, but that simple thing you can just really lean into. And the number of new sales I got once I started doing that drastically offset any increase that I saw in returns coming back to me. Drastically. So we'll talk about this more in the future.

Yeah, sorry. Yeah, no, no, that's fine.

That's fine. And I have lots of information to talk about that. But one of the things that I want to also discuss today on this keeping things simple is don't set policies. Don't create systems built around anecdotal problems.

Right.

Make it known throughout your company, to your team, to your employees, that we solve. We put in procedures and policies to solve systemic problems that we start seeing over time and that impact all our customers or our entire business. And of course, we want to solve those specific and unique customer problems for them, too. Of course we're going to solve those.

Right.

But we're not going to come out and set up a new procedure and make things more complicated because of a single customer event. And I found over time that often managers want to do that. Well, this happens. So let's put a policy in place so if, in case it ever happens again. Well, you got to track that stuff. And I think. Think it's very Easy to have that complexity creep if you start setting policies based on anecdotal evidence.

I like it. Yeah.

Yeah, it's important. A few more tips on simplicity so we can keep it simple here. As small business owners, we're often presenting and talking about our business, or we're talking to our employees, or we're talking to suppliers or investors. When you're talking about your business, it's, you know, you've got to keep it simple. You've got to remove distractions, and anything that does not convey your idea of what you get, you know, what you're talking about. And when you're given a presentation, you know, I try to stay away from using, like, PowerPoint and Keynote and that kind of stuff.

Okay.

Sometimes. Sometimes you have to, and sometimes it can be very helpful. And I'm sure you have some feedback on this.

No, it's a crutch, but we can talk about that another time. I use. I use the crutch all the time, but.

I know. Yeah, I know. But if you do, I think, you know, you need to really limit yourself. Start at zero. How many slides do I absolutely have to get this idea across?

Yes.

You know, in my opinion, it's 6 to 8. Is.

Is a good number for how long of a speech?

20 minutes.

Yeah. Okay.

All right.

Okay. Yeah.

Yeah, sure. Okay.

Yeah.

And. And as few words as possible on those slides.

That's right. Because whatever words you put up there, people are reading as opposed to listening to you.

Yes. It. The slide should just back up what you're trying to get across. You know, a few bullet points you don't want to put. I mean, if you can avoid sentences.

Oh, no, no, no, no, no. I. What I put on the. This is a whole other episode.

I know. You know what?

I'm not even going to tell you what I put on the slides. We're going to do it in. We'll do it next week or. Or in. In. In the future.

Yeah, I love that. Yeah. Yeah. Present presentations. We'll do it. I'm putting in our notes right now.

Great.

So. So think about that. You know, less is more. The slides should just back up what you're talking about, not overwhelm it. You want there to be paying attention to you. You're the champion.

Yeah.

Not the picture. Don't lean on it. And we're going to go come back because we're going to talk more about this in the. In the next few episodes. And you know, speaking of simplicity, we've tried to simplify this podcast. The Small business show.

Yes, we have.

We're trying to engage more with you. You've told us that you want fewer interviews. So we are doing fewer interviews. Shorter introductions.

Right.

We're not doing, you know, long introductions about what we're going to be talking about. We're just going to talk right into it.

That's right.

Just going to talk about it. You've asked for more business therapy. We've done more business therapy and we will continue. So our shows are now shorter. Try to limit guests, you know, one a month, maybe two months. If it's really a unique person. We have a, you know, like last week's guest with the backyard workroom I thought was really timely with people working from home.

We're only going to bring on guests that interest us and we're hoping that that means they interest you. But let us know feedback@business show.com because that's how we're going to know.

That's it. We want to engage with you. And if, you know, I'm learning all kinds of stuff about simplicity and refocusing on really important things and eliminating complexity. A great book by Greg McCowan called Effortless. And we'll put a link in the show notes, and that's up at BusinessShow Co, where you can find all the links to our sponsors, the show notes, all that stuff. And you can also get yourself a free download of our mistakes book.

Right.

Businessshow Co. Mistakes. Is that right, Dave?

I think that's right. Yeah. If it's not, it will be by the time it's up. That's right.

Yeah. And so, you know, reach out to us, talk about things that we could do on the show to make things simpler or, you know, less complex and tell us what you've done in your business to simplify and to make things better.

Yeah, that. Thanks. That this is good stuff. I like comparison complexity creep. Shannon. That's. That's the key.

Yeah.

Avoiding or avoiding that. Yeah, for sure.

I agree.

Keep living that charmed life, folks. We'll see you next week.