By Dennis Poter & Brody Garland, K&L Gates
The dust has finally settled, and 2021 has ushered in a unified Democratic government, with President Joe Biden occupying the White House and Democrats controlling both chambers of Congress, both by the slimmest of margins.
The 117th Congress will be defined by two new and competing dynamics: unified government bringing the opportunity for the Democratic Party to execute an ambitious legislative agenda, in some cases by simple majority votes, while the narrow majorities in both chambers will embolden the bi-partisan center and promote moderation.
The Georgia runoff election victories of Jon Ossoff and Raphael Warnock delivered the 2 seats needed to even the partisan split to 50-50 in the Senate. With the inauguration of President Biden, this means that Vice President Kamala Harris will break all ties on votes in the Senate. Senator Chuck Schumer (D-NY) will ascended to the role of Majority Leader. With the even split, the work of the new Senate will be contingent on power sharing agreements and cooperation with his minority counterpart, something we last experienced in 2001 when the Senate was briefly 50-50.
A shift in the majority has also ushered in new leadership on the Committee level, with Senate Democrats holding Chairman gavels for the first time since 2014. A notable new Committee Chair is Senate Committee on Commerce, Science & Transportation Chairwoman Maria Cantwell (D-WA), who will have jurisdiction over highways, shipping, transportation security, interstate commerce, economic development, and technology. Senator Roger Wicker (R-MS) continues his efforts on the Committee as the Ranking Member.
With the narrowest of possible majorities and a group of moderates anchoring the center such as Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), the legislative agenda will not skew as far left as some might expect, but it is important to remember that control of the chamber does furnish Leader Schumer with certain procedural advantages that may embolden him – control of floor time and which priorities receive votes, reconciliation measures (which will allow Democrats to pass some big ticket items with a simple majority), the ability to uncoil certain Trump Administration regulations via the Congressional Review Act (another procedural tool that requires only a majority threshold), as well as more leeway to advance President Biden nominees.
On the other side of the Capitol, Nancy Pelosi (D-CA) was re-elected to serve as Speaker of the House for the 117th Congress. A condensed majority, coupled with the voting restrictions of COVID-19, threatened to challenge the Speaker’s fourth run at the gavel, but in the end just 5 members of her caucus voted against her or abstained. Speaker Pelosi will possess the gavel, but election losses have narrowed her ruling majority, creating opportunities for moderate Democrats and frustrating the ambitions of the progressive left. On the Committee level, Rep. Peter DeFazio (D-OR) returns as Chairman of the House Committee on Transportation & Infrastructure, alongside Ranking Member Sam Graves (R-MO).
In addition to changes in leadership and shifts in the governing majority, the new Congress will add over 60 new members to the rank and file. Below is a list of the new members of the 117th Congress. Many of these Members will be joining the Transportation & Infrastructure Committee where they will have a voice on issues important to NATM’s members. With the highway reauthorization expiring in 2021 and continued drumbeats for infrastructure investment, it is expected that President Biden and Congress will seek to make bold decisions in this area. NATM has already begun engaging in these discussions and will continue to promote its legislative agenda.
We encourage NATM members to get involved in the Association’s government affairs outreach, particularly if you see your Member of Congress on the list below and would be willing to invite them, when COVID-19 protocols allow, to tour your facility, meet their constituents, and learn more about the light- and medium-duty trailer manufacturing industry.
Dennis Potter is a Government Affairs Advisor and Brody Garland is a Government Affairs Analyst at the law and lobbying firm of K&L Gates, where they represent NATM and other clients on legislative, regulatory, policy, and political matters. Mr. Potter can be reached at email@example.com and Mr. Garland can be reached at firstname.lastname@example.org.
NATM is pleased to announce the launch of the NATM Resource Library! In line with the Association’s mission and the 2019-2022 Strategic Plan, NATM is excited to provide members with relevant educational information that’s easily accessible. This long-awaited member benefit will streamline how NATM members receive the latest information regarding new technology developments, best practices for manufacturers, HR, and administrative needs as well as a host of other topics. The NATM Resource Library provides members with a sense of community via live chats, member profiles, and comment threads on the articles.
The NATM Resource Library also provides the Association another opportunity to lead the industry in safety. NATM is proud to offer a library of resources specifically dedicated to trailer users—a highly requested resource. This area dedicated to trailer users is just another way the Association is working towards educating this audience on the importance of compliant trailers, trailer safety, and the NATM Compliance Verification Program.
Members can access the NATM Resource Library by visiting www.NATMShop.com.
Once on the site, navigate to the top right-hand corner where the Log In bar is located. Click on this bar to create a NATM
Resource Library username and password. Make sure to either use a NATM member company email or indicate the member company name while logging in.
NATM staff will approve the log-in request so the NATM Resource Library can be accessed. Once approved, log-in and navigate to the top of the site page where it says “Resource Library” and click.
Once on the NATM Resource Library landing page, members can either utilize the search bar or browse through the five categories: Technical, Compliance Verification Program, Membership/ Marketing, Business Administration/HR, or Consumer Information.
This exclusive benefit will be updated regularly with new articles and topics ensuring NATM members have access to the latest information regarding the trailer industry.
Questions? Reach out via the chat box on NATMShop.com or by email at email@example.com.
An Excerpt from “You’re the Problem (and the Solution)” by Bob Clements and Sara Hey
Many of the dealers we work with put themselves last. They put everything and everyone else first—their employees, their expenses, their sanity—until there is nothing left at the end of the month for them. When we start talking about cash flow, it’s not uncommon to hear an audible gasp as this is a subject that dealers don’t want to touch with a ten-foot pole. In my mind, I think that’s because there are major misconceptions around cash flow and money in a dealership. Many times, it starts with your employees. Your employees assume that, since you own the dealership, you go home at the end of the night and count your piles of cash, which is all locked in a secret room in your house that you designed specifically for that purpose. If you are doing that, more power to you; but, if you’re not, you are like most dealers around the country.
While your employees might see money coming into the dealership, what most employees don’t see is the large amounts of money going out of the dealership. They assume that since you sell X number of units a year, you just put that money directly into your pocket. They don’t see the cost of the equipment, payroll, payroll taxes, liability insurance, workers compensation, building maintenance, or any of the other hundreds of expenses you have to pay from your ever-thinning margins. They may assume you are filthy rich with no care in the world and can’t reconcile why you aren’t driving an expensive sports car to the dealership every single day. We all know that the scenario many of your employees have created in their heads may not be reality.
The struggle, many times, is how you bridge this gap of the misconceptions that the people around you (and maybe even you) have around money management inside of your dealership, with the changes that need to happen in order to have a profitable and thriving business. And heck, a happy and full bank account.
So, let’s work on changing the misconceptions that you walk into your dealership with, and start taking your profit before anything else. The idea of taking your profit first may seem a little (or a lot) overwhelming. So, how do you do this without feeling like you are going to faint every time?
1. Make the decision that things aren’t going to remain the same.
In Habit One, we talked about our surviving-versus-thriving vision. Surviving is a fine place to be, but not a place you want to stay. You are not doing anyone any favors being the last one paid, or not being paid at all. You have put too much time, sweat, and tears into your dealership for it not to provide you with the life you want. So, plan to take your profit first. Step one is to make the all-in, scary decision that you are going to make a change. This means that you choose, from now on, to pay yourself first, even when things seem like they are getting tight.
What you are getting ready to do makes a lot of logical sense from a numbers standpoint, but emotionally it will feel uncomfortable. As you begin this process and experience this discomfort, you will have to make the decision over and over again that you are going to require your business to pay you before anything else gets paid. So long are the years of looking at your P & L statement and seeing that you made a profit but have no idea where it went. So long to paying yourself but not cashing the checks. You are going to know exactly where it went because you are taking it out on a regular basis.
The decision you are getting ready to make is that you, maybe for the very first time, are going to take control of your cash flow, and not let your cash flow take control of you. How do you do this? You do this by creating a budget that pays you first. What is left, after you are paid, is what you have available to pay your employees and the other expenses that come with running your dealership. What do you do if there isn’t enough? You either need to increase your revenue or decrease your expenses. I wish there was more to it, but there isn’t. You have to make the decision to deal with being uncomfortable, so that you can gain control of your dealership, your life, and your sanity.
Do you know what the easier, but disastrous, option is? Letting your cash flow take control of you. Do you know what will help you be profitable and help you sleep better at night? You, taking control of your cash flow. It’s up to you. Do you want easy or do you want money in the bank? This decision is solely up to you.
2. Start with 1 percent.
So, you decided to choose money in the bank, over easy, or at least you are really starting to consider it. How do we start? How is it that after this decision your bank account will start reflecting the choice?
To start, I want you to pick a percentage that you, as an owner, are going to take as profit or retained earnings out of your business, as well as a salary. It doesn’t need to be big, but I need you to get used to taking a paycheck. So often, the dealership owners we work with take a little here and there out of the business, wait until the end of the year, and hope to see something left in the bank account.
So, instead of taking the approach that doesn’t work, pick a percentage that you want to set aside as profit or retained earnings, and an amount of salary that you deserve for all of your personal investment, risk, and liability. Then, off the top of your budget, deduct the percentage you’ve decided on from the profit that is produced and set it aside. Then, deduct the amount of your pay. The portion that’s left is what you are going to operate your business on.
If just simply reading this is giving you incredible anxiety and possibly heart palpitations, start with 1 percent off the top. That’s it. One percent of every dollar of profit produced in your dealership should be deposited in a separate bank account. This money is for your use. You can hold it as retained earnings, pay yourself as a distribution or dividend, or maybe begin to reimburse yourself for money you have previously invested into the dealership. How you do this may be decided by how your business is set up: sole proprietorship, LLC, S Corp, or C Corp. Connect with your CPA to make sure you are taking this money out of the business in the correct way for your situation.
Here’s an example of what this looks like. Let’s say you expect to gross $100,000 in revenue next month. From that you generated $9,000 of gross profit in sales, $10,000 in parts gross profit, and $7,500 in service gross profit. You now have a $26,500 pool of gross profit to run your dealership for the month. You would take 1 percent out of that amount ($265). Then, let’s say you plan to pay yourself $3,000. You would deduct that amount.
$26,500 – $265 – $3,000 = $23,235
This leaves you $23,235 to operate the dealership on for the month.
Moving forward, look at the next month. You know the season will begin to slow down and you anticipate bringing in only $80,000. Using the same percentages as before, sales would produce $7,200 of gross profit, parts would produce $9,600 in gross profit, and service would produce $6,000 in gross profit.
So, your gross profit pool now has $22,800 in it. Take the 1 percent ($228) and set it aside. Deduct your gross salary of $3,000 and the rest ($19,572) is what you have to run your dealership on for the month ($22,800 – $228 – $3,000 = $19,572).
If you fear it will not be enough, then now is the time to consider how to increase revenue or decrease expenses. No matter what, don’t leave yourself out of the equation. This will force you to consider other approaches to fix the problem. If you are wondering how I came up with the gross profit numbers, I used our balanced dealership approach. As we work with dealers, we work to have 60 percent of gross revenue generated by sales, 25 percent by parts, and 15 percent through service. I used a 15 percent gross profit margin on sales, a 40 percent gross profit on parts, and a 50 percent gross profit on labor.
The most important part of the exercise is that you created a habit of paying yourself first. Is 1 percent where it ends? Absolutely not. You should work toward the goal of putting 10 percent of every profit dollar produced into your pocket. I know that seems like a huge number when you are simply celebrating a 1 percent payment to yourself, but it is possible.
Something interesting starts to happen when you give the business less money to run on. You and your team will find a way to adjust expenses and force your business to run on what is available (or you will find new ways to make money).
Think about it this way. If you were given a brand-new tube of toothpaste, how would you use it? At first, you might be overly generous with the amount of toothpaste you put on your toothbrush. If some extra fell off and landed in the sink, it wouldn’t be a big deal. However, if I were to give you a tube of toothpaste with only a small amount of toothpaste left in it (and you couldn’t go buy any more for at least a week), how long could you make it last? My guess is as long as you needed. In fact, I bet you could make that toothpaste last two more weeks! When you feel like there is an excess of resources available to you, you typically get careless in using them. However, when you feel like what you have is scarce, you use it more wisely. That’s exactly the mindset shift that I need you to take on in regard to your money. Take what you should off the top and learn to run the dealership on what is then available or left over.
3. Put your 1 percent (or more) somewhere you won’t touch it, and have someone hold you accountable.
Where you put your money is equally as important as taking the money out. Now, I’m not saying an account in the Bahamas is the answer; that just looks shady. But you can’t leave your money in the same account that you pay your expenses out of (or an account where you will be tempted to loan it right back to the dealership—we know you do this!) because you know as well as I do that the money will be simply absorbed, and your hard work and determination will be all for nothing. When that happens, you feel defeated and wonder why you even tried.
So, open a separate account simply for this money. That’s all you want to put into this account. Maybe you know yourself well enough to know that a separate account at the same bank won’t do and you need to move the money to a different bank that is not linked in any way to the business. If that’s what you need to do, just do it. There is no judgment here. Our focus is simply that we want you to get in the rhythm of having your business pay you, as the owner, on every single profit dollar that is generated each month.
Some of the dealers we work with go one step further when starting to implement this change. One of our advisors has his dealers send him a picture of the “off the top” check as proof that they are taking it out of the business. Above that, he asks them to tell him what they are going to use the money for. Sometimes it is to accomplish a goal they have set, maybe it is designated for something fun, or at other times it’s simply to help them survive. Now, you may or may not need that accountability, but I will tell you, if you aren’t currently paying yourself on a regular basis from your business, at first, it will feel strange. And, if you need someone to tell you that it’s okay to pay yourself first, I’m here to tell you, IT’S OKAY!! In fact, it’s critical.
4. Consider doing something fun with the money you are earning (at least in a small way).The last step is the best step. This is where you get to dream a little. Think about something you would like to do and how you could use this money on something you and your family would enjoy. Maybe it can go toward a vacation or furniture fund, savings for a lake house, or just a night out at your favorite restaurant. You have worked hard to generate this revenue in your business, and now is your time to celebrate your hard work, risk, and focus. So, pick something fun and do it.
Now we need to turn our attention to another matter. Let’s say that after you take out your salary, there is not enough money to cover all your expenses, specifically your employee expense. It might be that you are overpaying your people. Let’s walk through how you should calculate what each employee, by department, should be earning.
For 15 years, Monica Johnson has been a fixture of NATM and an invaluable contributor to the Association’s success. On Jan. 31, Monica will be joining her husband in their next great chapter —retirement!
In 2006, NATM hired Monica to assist with part-time administrative work. She quickly proved herself to be capable, versatile, and meticulous with details, and as such, she started supporting the Convention, member services, and the NATM Compliance Verification Program. While in this role, Monica became the master user of NATM’s membership database, serving as a resource to her entire team. On top of this, Monica has also been a vital part of NATM’s onboarding process over the years. Her expansive knowledge of NATM’s programs and processes as well as her innate teaching ability and endless patience have made her a key trainer for new staff.
As NATM’s staff structure continued to evolve, and Monica continued to prove her adaptability and attention to detail, she was promoted to Trade Show Director, working with exhibitors and overseeing registration. She helped to streamline processes and sold out the trade show floor year after year. In this role, Monica also led the transition of the Association with the unenviable task of switching membership databases —a project which took many months and long hours to carry out. Monica quickly learned the new system and again trained her fellow employees. Not long after, Monica played a significant role in transitioning NATM’s Convention booth sales process to an online software—a transition which has paid dividends in time, resources, and user ease since its implementation.
In 2017, as the NATM staff again evolved, Monica was approached to take over the role of Quality Director, handling NATM’s Quality Management System and ensuring its adherence to ISO 17020, an international standard for certification bodies. Monica was the perfect fit for this role. Her attention to detail, expansive knowledge of NATM and its processes, and ability to work independently and self-motivate set her apart. While the Quality Director role was not one that Monica had envisioned for herself, it was her commitment to what is best for her team that led to her taking on the role willingly and with fervor.
Monica is a “Jane-of-All-Trades”, the best example of a utility player. She knows it all because during her 15 years she has done it all. She provides historical perspective, but is equally invested in change and progress—she truly lives a life devoted to continuous improvement. Monica has spent her tenure being a reliable, hardworking, and loyal member of the NATM team. She has taken on new roles and changing responsibilities with incredible grace and flexibility. She is trusted by her entire team to do whatever needs to be done and to do it well. She will be leaving the Association better than she found it.
As Monica embarks on her well-deserved retirement, NATM will miss her immensely. The NATM staff will miss her steadfast approach to all tasks, her willingness to pitch in, and the baked goods she would bring throughout the year —but most especially the giant tray of goodies around the holidays. She treated her coworkers like friends, she cared deeply about everyone, and she showed that in countless ways over her 15 years with NATM.
NATM wishes Monica well as she settles into the full-time role of wife, mother, and “Grandmama” to four adorable grandsons! May this next chapter be filled with things she loves most!