SEMA News—June 2020

BUSINESS

SEMA Survey

The Specialty-Equipment Industry Is Open for Business

By Gavin Knapp

Between April 1 and April 7, 2020, SEMA conducted a survey of more than 2,000 people employed in the specialty-equipment industry. The results show that even in these difficult times, our industry is resilient and working diligently to move past this disruption.

Most businesses in the industry are maintaining a positive outlook, as 87% responded that they are “impacted short-term, but will get through it” or are “business as usual.”

SEMA has also created a Coronavirus Updates and Resources page (www.sema.org/coronavirus) and collected links to key information from federal and state government agencies that may impact businesses in the specialty-equipment market.

Visit SEMA eNews (www.sema.org/sema-enews) for daily updates.

Even with “shelter in place” rules in effect in many states, most industry facilities remained open under the “essential” business designations. Two-thirds of industry businesses had not closed any of their sites during this time.

While most businesses remain open, overall sales in April were affected by the situation. Compared to the same month last year, companies were reporting current sales ranging from somewhat higher to down 20%, (34% of responses), down 30% to 40% (21% of responses), to down more than 40% (33% of
responses).

More than half of the industry’s employees continued to work from the company site, as the large number of production, technical, logistical and retail positions can only be done at the jobsite. The strength of the industry is shown in the finding that 82% of employees were still on the job at their worksite or from home.

SEMA News—June 2020

BUSINESS

SEMA Survey

The Specialty-Equipment Industry Is Open for Business

By Gavin Knapp

Between April 1 and April 7, 2020, SEMA conducted a survey of more than 2,000 people employed in the specialty-equipment industry. The results show that even in these difficult times, our industry is resilient and working diligently to move past this disruption.

Most businesses in the industry are maintaining a positive outlook, as 87% responded that they are “impacted short-term, but will get through it” or are “business as usual.”

SEMA has also created a Coronavirus Updates and Resources page (www.sema.org/coronavirus) and collected links to key information from federal and state government agencies that may impact businesses in the specialty-equipment market.

Visit SEMA eNews (www.sema.org/sema-enews) for daily updates.

Even with “shelter in place” rules in effect in many states, most industry facilities remained open under the “essential” business designations. Two-thirds of industry businesses had not closed any of their sites during this time.

While most businesses remain open, overall sales in April were affected by the situation. Compared to the same month last year, companies were reporting current sales ranging from somewhat higher to down 20%, (34% of responses), down 30% to 40% (21% of responses), to down more than 40% (33% of
responses).

More than half of the industry’s employees continued to work from the company site, as the large number of production, technical, logistical and retail positions can only be done at the jobsite. The strength of the industry is shown in the finding that 82% of employees were still on the job at their worksite or from home.

SEMA News—June 2020

BUSINESS

By Mike Imlay

The New Media Landscape

Could Tapping Social-Media Influencers Promote Business Recovery?

Cinematographer/editor Christopher Petruccio produces the popular Krispy Media YouTube channel, which boasts 426,000 subscribers. As an influencer, he often promotes car events and hopes to help push their recovery in the wake of the COVID-19 outbreak.

There was a day when the foundations of the automotive aftermarket rested entirely on print publications, but now communications channels have evolved to take advantage of the faster, two-way interactions that the internet has enabled. Social-media marketing has become a necessity, and “media influencers” have become part of the picture. And given the challenging economic currents the industry is now navigating, social media and the potential of influencer collaboration presents a growing opportunity. In fact, those influencers could well play a critical role as aftermarket businesses look to recover from the coronavirus-induced slump that began last March.

Derek Drake is CEO of DriveShop, a marketing agency based in Redmond, Washington. The agency specializes in connecting automotive brands with social-media influencers and journalists.

“The content creator/influencer marketing space is one that is very much in real time,” he said. “It’s often one where the campaign gets launched and happens within the next few weeks. It’s not something that usually takes months to find its way into the market. Because of that, it’s a great opportunity right now.”

As America was beginning to shelter in place to fight the COVID-19 virus in late March, DriveShop quickly launched research into the lockdown’s effect on content creators, their engagement with followers, and their collaborations with sponsors and advertisers. The results of the DriveShop survey underscored the tremendous opportunities for brands as consumers’ online and social-media consumption surged.

Roughly half of influencers reported increased follower accounts, and a third of the influencers were posting more frequently to meet the increasing demand for content. More importantly, however, 52% saw increased follower engagement and interaction with what they posted, while only 22% said that they were posting content related to the coronavirus pandemic.

“It said that audiences were engaging in their normal course of content, not just about the coronavirus, and that was really telling,” Drake noted. “From a geographic standpoint, it didn’t really matter whether or not they were in a market that was under a shelter-in-place order at the time.”

The irony, Drake said, was that content creators reported a noticeable drop in their brand collaborations, meaning that sponsors and advertisers were cutting back on their social-media campaigns at the precise time the potential benefits were spiking. Adding to the irony, collaborating with content creators is not all that difficult, and the costs of such campaigns can be highly scalable for aftermarket brands of all types and sizes.

By now, virtually everyone is familiar with the concept of “social-media influencers.” While the term has become a catchall for social-media personalities with large followings, many of them in the automotive realm wince at the title. Some prefer to be called “brand ambassadors,” but the safest description is probably “content producers.” Whether on Instagram, YouTube or other social-media platforms, they create regular photos, posts or videos (typically around a single theme) intended to inform and entertain fellow enthusiasts or followers. Most create that content in a freewheeling, freelance environment, often first as a hobby that they later learn to monetize.

Claudia Moreno has built a 213,000-strong following on Instagram as RSTgirl. Her static posts and stories chronicle the work she does on her truck. Brand endorsements have helped her monetize her content, but she’ll only take on products she can authentically vouch for.

Keeping It Real

Claudia Moreno, who goes by the name RSTgirl on Instagram, is a case in point. She first started her Instagram account about four years ago to chronicle her work on her Chevrolet Regency sport truck, only to realize two years later that she could monetize her posts as a brand ambassador.

“My sister said, ‘You work on your truck every other weekend and evening. You should post about it and share it with the rest of the world,’” Moreno recalled. Still, she couldn’t believe anyone would care about her posts as she worked on the truck and did “day-to-day things, like brakes and changing the oil.”

But as Moreno put it: “People love being entertained, and people love to pay to be entertained. My first picture was a picture of me next to my truck, and I got a few likes. And then the next picture was of me changing the oil—and it just went on and on and on, and it grew and it grew. So the moral of the story is just being different and unique really attracts the public. And after so long, brands wanted to be represented by somebody who is unique.”

Moreno noted that authenticity was a major factor in building her audience of 213,000 followers, and that sense of authenticity carries over to deciding which brands she will partner with or represent.

“I’m so real with my followers, and they’re so real,” she said. “You don’t want to get to a point where it turns out like it’s a marketing page, because people don’t like that, especially car people,” adding that she often turns down pitches from lifestyle brands having nothing to do with her automotive passion. “I really look for something that’s connected to me, which is automotive. So anything like a big car company brand or a manufacturer that I can use in my project is more than welcome.”

Like other social-media content creators, Moreno represents paying advertisers by utilizing their products in her images or Instagram stories, but she includes hashtags to let followers know that the content is sponsored. Payment often varies and can take the form of actual dollars, comp tickets to an automotive event, or free product for her build projects.

Meanwhile, Rob Dahm has built a following of close to 800,000 subscribers on YouTube chronicling the transformation of a Mazda RX-7 into a car he could love while saving up for his Lamborghini Diablo dream car. He agreed that authenticity is a key commodity, and there must be a synergy between a brand and a content creator for a business arrangement to work.

“I won’t take on an automotive relationship if I’m not using the part,” he said. “Probably one of the most successful things about my relationships with Garrett or Valvoline is that they’re really interesting parts of my build and products that I actually use. So it becomes very organic.”

As the COVID-19 pandemic began to unfold, Dahm also saw a definite shift in interactions with his channel’s subscribers.

“I’ve had so many messages,” he said. “I’m talking thousands, but you can see a trend to them. Recently it’s been, ‘We’re stuck at home. Please make videos. Please make content. We want to see what’s going on with other people in the car world.’ They’re doing a lot of DIY stuff in the garage. There’s a lot of people just changing their oil, the simple stuff. And then there’s other people actually begrudgingly dusting off the old project car and finishing what they started.”

Research by DriveShop, along with anecdotal reports from automotive social-media influencers, reveals that there was a surge in social-media consumption starting in late March as sheltering-in-place enthusiasts sought information and encouragement to tackle car repairs and build projects.

Digital Spokespeople

Rich Waitis, senior manager and spokesperson for MagnaFlow, said that this form of social-media marketing has been a successful part of his company’s marketing mix for years now. From his perspective, partnering with influencers isn’t all that different from traditional marketing’s use of industry icons such as Mario Andretti or Chip Foose to endorse or promote brands.

“We’ve been really big [on] understanding that the consumer audience is always looking for some means of validation of what they’re doing with regards to what products they’re purchasing or some type of critical review,” Waitis explained. “Is the product good? Is the brand good? They’re looking for those sorts
of testimonials.

“So in that, we have a mix of the traditional kind of the ambassadors that have done what they do through the years of either racing or design or whatnot. We also mix in the people who are in front of the camera, whether this be on the social side, the digital side or the television side. These are simply the people who are putting out the information. This could be an educational format. This could be something that’s in more of an entertainment format. But they’re people who are providing insight as to what automotive people are doing around them.”

Waitis added that a key advantage of social-media endorsers is in the granularity they provide. A brand can target smaller niche audiences or specific enthusiast communities with uniquely tailored messaging.

“There’s a ton of people out there who may never be in the market for buying,” he said. “We’re hoping that if they ever are, we’ve created enough content material out there to give them some insight as to what we provide as a benefit. It’s about creating really meaningful relationships inside of these communities and creating people who have not only brand affinity but a desire to be a part of the brand and the things that we participate in.”

Another advantage of marketing through social-media content creators/influencers is the wide latitude of platforms, costs and terms for agreement. While most will make simultaneous use of several social-media platforms, it’s usually to drive follower traffic to their preferred channel.

The big three currently are YouTube, Instagram and Facebook. The number of followers will typically help dictate the cost of a sponsorship, “commercial spot” or promotion. Prices can range from simply supplying product samples all the way up to $3,000–$10,000 or more for large campaigns returning high levels of follower engagement—but that means there’s room for brands of all sizes and types to play in the arena.

A company can either turn to a marketing agency to craft an expert campaign or reach out directly to chosen influencers with a simple email to negotiate a deal. The crucial factor is finding a content creator who resonates with your brand and trusting them to deliver your message to their audience in their own,
authentic terms.

Underscoring the findings of the recent DriveShop research, Drake believes that now is the time to focus on the role influencers can play in helping aftermarket businesses resurge in the wake of the COVID-19 pandemic.

“For the savvy brand marketer out there, it definitely creates a significant opportunity because you’ve got influencers now posting more content, their audiences are more engaged, their follower accounts are rising,” he said. “They’re not really talking as much about the virus. They’re focused on more routine activities, and they’re open to brand collaborations.”

He added that influencers are a really smart place to spend the few dollars that brand marketers have in this period.

“First, influencer content is evergreen,” he said. “So if you get influencers posting on Instagram, YouTube and Facebook, those posts live on. They don’t go away. Unlike an ad that’s up for a period of time and then it’s out of market, [social-media posts] done now will still be there this summer. And if it grows in follower count and in likes and in engagement, it might grow in search-engine results and get indexed. So you’re going to spend dollars in marketing and put them in a place where that content is still going to be there two, three, four months down the line. That is a smart investment.

“The other key reason why I think it’s a really interesting place to put dollars in advertising now is that in a traditional ad—as the marketer or advertiser—the messaging, the creative, the production all rests on you, and then you have to add in a publisher and an outlet. With an influencer campaign, all of that rests on the influencer. They’re producing the content. So you get to save on that, plus that content is customized for the audience.”

Christopher Petruccio echoed those sentiments. A cinematographer/editor based in New York state, Petruccio produces the Krispy Media YouTube channel boasting 426,000 subscribers and aimed at other automotive photographers and filmmakers. Part of his work includes the promotion of car events across the country—many of which have suffered cancellations or postponements due to the pandemic. Consequently, he sees many small automotive-related businesses hurting, spurring him to do his part to help their recovery.

“You know, we’re going to have to come out on top of this somehow,” he said. “A lot of these companies and a lot of [workplaces] have got shut down.”

He pointed out that influencers offer an ideal way for those businesses to say, “Hey, we’re still here. We have all got through this together. Look at this new product we had all this time to think about and to design, to draw up files for. Here’s this new product that we’re coming out of this with. Maybe that’s going to be something that can come out of this for some cool companies.”

SEMA News—June 2020

REQUIRED READING

By Juan Torres

SEMA News—June 2020

RETAIL BEST PRACTICES

Business Survival Tips

Advice for Retailers on Preparing for and Responding to Disaster

By Chad Simon

Titan Speed burned to the ground during the Thomas Fire in December 2017. What was left of the 3,000-sq.-ft. shop was molten aluminum.

Businesses seem to increasingly find themselves at the mercy of some sort of natural disaster, whether it’s a hurricane, an earthquake, a flood or a wild fire. As a result, it’s crucial for business owners to be prepared and have a response plan in place in the event the unthinkable happens.

The Small Business Administration’s (SBA) disaster loan assistance program is designed to respond to a variety of emergencies—particularly natural disasters and especially flooding. A large number of businesses don’t carry enough insurance, so they have losses that are either uninsured or underinsured, according to Alex Contreras, director of preparedness, communication and coordination for the SBA’s Office of Disaster Assistance. He is tasked with helping to coordinate outreach to external and internal partners focusing on three main areas: preparedness, recovery and mitigation.

Don’t Break the Supply Chain

The SBA offers economic injury disaster loan assistance or working capital that businesses can utilize even if they don’t have physical damages. This benefit enables businesses with a solid supply chain to avoid disruptions.

Contreras recommended that businesses compile an updated list of their customers, employees and vendors in preparation. Establish a solid supply chain so that even if some of your vendors are affected, you are still able to resume operations
immediately.

“Your vendors may be fortunate to have not been affected, but they might have a vendor who has been, and that could cause supply-chain disruptions, so you want to have backups for them,” Contreras said.

Open Lines of Communication

Contreras advised business owners to start with a communications plan before disaster strikes that identifies each employee’s role and responsibilities. Designate a spokesperson to reach out to customers and inform them of your status, whether you’re still in operation or if you’ve moved to an alternative site that offers limited products and services. Utilize social media to communicate the status of your business to avoid the spread
of rumors.

Assess your insurance policy and vulnerabilities and make necessary adjustments to ensure that you are fully covered. Create a response plan and practice it on an annual basis so it’s not new to your employees.

“We deal with large and small businesses,” Contreras said. “Large businesses are more likely to have a plan and even a person dedicated to working on disaster response, because they have the resources. Small businesses might think they don’t have the time and resources to address it.”

Location, Location, Location

Look into temporary sites that are accessible, and relocate your equipment, inventory and supplies. In some areas, access may be limited for a long time. For instance, if you are close to a river or are in an area where waters can intrude, infrastructure, water, power and utilities may be disrupted, which can limit a business’ recovery.

In determining which type of disaster to prepare for, take a close look at where you’re located and the hazards that are most likely to affect you, then customize your preparation plans to the specific disaster for which you are most prone. For instance, businesses located in the Midwest shouldn’t be concerned about earthquakes; instead, they should focus on flooding, tornados and winter storms, while states on the East Coast should prepare
for hurricanes.

“It’s good practice for businesses to stay tuned to alerts from local emergency managers,” Contreras said. “Going beyond whether you have to evacuate or shelter in place, local alerts can provide good information for businesses about which areas will have flooding, if there’s a tornado warning or an active shooter, and the impact on supply chains, customers
and employees.”

The Aftermath

First ensure that your employees are safe, then communicate your plans to customers and vendors. Once in recovery mode, business owners must provide documentation, whether they’re filing an insurance claim or applying for disaster assistance. Financial records should be accessible; electronic versions are ideal. When documenting your damages, take photos or video during a walkthrough of your facility and narrate over the video describing the damages. This information will be helpful later on when you have to apply for programs and explain your losses.

“To get back to business as usual as quickly as possible, apply to or inquire about as many programs as possible,” Contreras recommended. “Every disaster is different, and sometimes no local programs are available. Federal programs such as the SBA Disaster Loan Program have partnerships with small-business development centers, SCORE business counselors, women’s business centers and veteran’s business outreach centers, all of which provide free business counseling and technical assistance to small businesses.”

While the SBA’s program provides assistance to help with repairs, rebuilding of physical losses and working capital, the above-mentioned resource partners help companies establish a plan moving forward.

Business interruption insurance is another form of insurance that companies either don’t have or are underinsured for, according to Contreras. In addition to physical losses, there may be an indirect impact where businesses are now experiencing a loss of revenue due to an
interruption.

“The disaster loan program is the only direct-loan program the SBA offers,” Contreras said. “So, the SBA is actually the lender, and we provide low-interest disaster loans to not just businesses of all sizes but also private nonprofit organizations as well as homeowners and renters. We find that the majority of our assistance ends up going toward homeowners and renters, just because they’re disproportionately affected.”

The SBA is currently providing disaster loans for working capital to small businesses affected by COVID-19 (coronavirus). The organization is authorized to provide companies up to $2 million for any combination of physical damage or economic injury. For home loans, the SBA can offer up to $200,000 for repair or replacement of the primary residence and up to $40,000 for replacement of a business’s personal property. In some cases, the SBA can go above $2 million if the company is considered a major source of local employment.

SBA disaster loans can also be used for mitigation or protective measures. For example, if a business is in a high-risk flood area and there’s a flood, a structure can be elevated during rebuilding mode so that it doesn’t flood again.

Since 1976, Titan Speed had survived numerous wild fires; however, it became one of more than 1,000 structures that burned in the 2017 Thomas Fire.

Titan Speed’s Bob Sanders was able to save some equipment from his shop, but most of the big machines, such as this CNC machine, were also lost to the Thomas Fire.

The Case of Titan Speed

Bob Sanders, president of Titan Speed, lives in the mountains between the towns of Ojai and Santa Paula, California. In December 2017, his home and
3,000-sq.-ft. shop were two of the more than 1,000 structures that were lost during the Thomas Fire.

“It was just a firestorm,” Sanders said. “Let’s just say what was left of the shop was molten aluminum running out of all four sides of the building. We had never evacuated before, but it was just plain scary that night. We’ve been up here since 1976, and we’ve seen numerous other fires go by, but we’ve never seen anything quite like this.”

According to Sanders, faulty electrical wires caused the fire, and when telephone poles fell, a transformer blew up, causing the fire to rage out of control and burn 550 houses in Ventura County the first night alone.

“You could see the flames,” Sanders said. “This end of the fire started less than a mile from where we live, and it was supercharged by the wind. We loaded up and took off with burning balls of fire following our motorhome as we drove away.”

Sanders said that he frequently cleared brush away from his home and shop; however, the wind would always blow anything that was combustible his way because he was located so close to the Los Padres National Forest. He also said that he had an evacuation plan in place, but there was no water or electricity on the night of the fire.

“We were just devastated,” he said. “There was nothing left. Both our employees were up here working, trying to help us. We did save a lot of stuff from the house and the shop, but most of the big machines were gone, and there was nothing we could do.”

Because Titan Speed was not located in a commercial zone, Sanders had no commercial business insurance. “Thankfully, we had a really good policy on our house, but I’m here to tell you that nobody has enough insurance on their house.”

The race car and trailer of Titan Speed’s Bob Sanders were also lost to the Thomas Fire.

According to Sanders, the company was shut down for about three or four months before he decided to give what was left of the business to a friend of his in Atascadero, California, and Sanders continues to serve as a technical consultant.

“The business is just minuscule compared to what we were,” Sanders said. “[The new owner’s] sales are probably 20% of what we were doing, but even after two and a half years, we’re doing our best to pick up the pieces.”

It took Sanders a year to get a building permit through the county of Ventura for his house, which has since been rebuilt, and six months to get a building permit for his garage.

“These metal buildings are all engineered up the wazoo, and to get that through the county is difficult and very expensive,” Sanders said. “For example, when we built our first facility back in 1976, it was 960 sq. ft., and it only cost about $5,000. It had 14 cubic yards of cement in the floor. This new building is 1,600 sq. ft., but it has 57 cubic yards of concrete. I mean, it’s like freeway construction.”

After the fire, Sanders’ neighbors created an online GoFundMe page on his behalf, and he also received a donation from the Automotive Aftermarket Charitable Foundation. But Sanders has some regrets looking back.

“I might have stayed and tried to fight the fire, but that’s water under the bridge,” he said.

SEMA News—June 2020

RETAIL BEST PRACTICES

Business Survival Tips

Advice for Retailers on Preparing for and Responding to Disaster

By Chad Simon

Titan Speed burned to the ground during the Thomas Fire in December 2017. What was left of the 3,000-sq.-ft. shop was molten aluminum.

Businesses seem to increasingly find themselves at the mercy of some sort of natural disaster, whether it’s a hurricane, an earthquake, a flood or a wild fire. As a result, it’s crucial for business owners to be prepared and have a response plan in place in the event the unthinkable happens.

The Small Business Administration’s (SBA) disaster loan assistance program is designed to respond to a variety of emergencies—particularly natural disasters and especially flooding. A large number of businesses don’t carry enough insurance, so they have losses that are either uninsured or underinsured, according to Alex Contreras, director of preparedness, communication and coordination for the SBA’s Office of Disaster Assistance. He is tasked with helping to coordinate outreach to external and internal partners focusing on three main areas: preparedness, recovery and mitigation.

Don’t Break the Supply Chain

The SBA offers economic injury disaster loan assistance or working capital that businesses can utilize even if they don’t have physical damages. This benefit enables businesses with a solid supply chain to avoid disruptions.

Contreras recommended that businesses compile an updated list of their customers, employees and vendors in preparation. Establish a solid supply chain so that even if some of your vendors are affected, you are still able to resume operations
immediately.

“Your vendors may be fortunate to have not been affected, but they might have a vendor who has been, and that could cause supply-chain disruptions, so you want to have backups for them,” Contreras said.

Open Lines of Communication

Contreras advised business owners to start with a communications plan before disaster strikes that identifies each employee’s role and responsibilities. Designate a spokesperson to reach out to customers and inform them of your status, whether you’re still in operation or if you’ve moved to an alternative site that offers limited products and services. Utilize social media to communicate the status of your business to avoid the spread
of rumors.

Assess your insurance policy and vulnerabilities and make necessary adjustments to ensure that you are fully covered. Create a response plan and practice it on an annual basis so it’s not new to your employees.

“We deal with large and small businesses,” Contreras said. “Large businesses are more likely to have a plan and even a person dedicated to working on disaster response, because they have the resources. Small businesses might think they don’t have the time and resources to address it.”

Location, Location, Location

Look into temporary sites that are accessible, and relocate your equipment, inventory and supplies. In some areas, access may be limited for a long time. For instance, if you are close to a river or are in an area where waters can intrude, infrastructure, water, power and utilities may be disrupted, which can limit a business’ recovery.

In determining which type of disaster to prepare for, take a close look at where you’re located and the hazards that are most likely to affect you, then customize your preparation plans to the specific disaster for which you are most prone. For instance, businesses located in the Midwest shouldn’t be concerned about earthquakes; instead, they should focus on flooding, tornados and winter storms, while states on the East Coast should prepare
for hurricanes.

“It’s good practice for businesses to stay tuned to alerts from local emergency managers,” Contreras said. “Going beyond whether you have to evacuate or shelter in place, local alerts can provide good information for businesses about which areas will have flooding, if there’s a tornado warning or an active shooter, and the impact on supply chains, customers
and employees.”

The Aftermath

First ensure that your employees are safe, then communicate your plans to customers and vendors. Once in recovery mode, business owners must provide documentation, whether they’re filing an insurance claim or applying for disaster assistance. Financial records should be accessible; electronic versions are ideal. When documenting your damages, take photos or video during a walkthrough of your facility and narrate over the video describing the damages. This information will be helpful later on when you have to apply for programs and explain your losses.

“To get back to business as usual as quickly as possible, apply to or inquire about as many programs as possible,” Contreras recommended. “Every disaster is different, and sometimes no local programs are available. Federal programs such as the SBA Disaster Loan Program have partnerships with small-business development centers, SCORE business counselors, women’s business centers and veteran’s business outreach centers, all of which provide free business counseling and technical assistance to small businesses.”

While the SBA’s program provides assistance to help with repairs, rebuilding of physical losses and working capital, the above-mentioned resource partners help companies establish a plan moving forward.

Business interruption insurance is another form of insurance that companies either don’t have or are underinsured for, according to Contreras. In addition to physical losses, there may be an indirect impact where businesses are now experiencing a loss of revenue due to an
interruption.

“The disaster loan program is the only direct-loan program the SBA offers,” Contreras said. “So, the SBA is actually the lender, and we provide low-interest disaster loans to not just businesses of all sizes but also private nonprofit organizations as well as homeowners and renters. We find that the majority of our assistance ends up going toward homeowners and renters, just because they’re disproportionately affected.”

The SBA is currently providing disaster loans for working capital to small businesses affected by COVID-19 (coronavirus). The organization is authorized to provide companies up to $2 million for any combination of physical damage or economic injury. For home loans, the SBA can offer up to $200,000 for repair or replacement of the primary residence and up to $40,000 for replacement of a business’s personal property. In some cases, the SBA can go above $2 million if the company is considered a major source of local employment.

SBA disaster loans can also be used for mitigation or protective measures. For example, if a business is in a high-risk flood area and there’s a flood, a structure can be elevated during rebuilding mode so that it doesn’t flood again.

Since 1976, Titan Speed had survived numerous wild fires; however, it became one of more than 1,000 structures that burned in the 2017 Thomas Fire.

Titan Speed’s Bob Sanders was able to save some equipment from his shop, but most of the big machines, such as this CNC machine, were also lost to the Thomas Fire.

The Case of Titan Speed

Bob Sanders, president of Titan Speed, lives in the mountains between the towns of Ojai and Santa Paula, California. In December 2017, his home and
3,000-sq.-ft. shop were two of the more than 1,000 structures that were lost during the Thomas Fire.

“It was just a firestorm,” Sanders said. “Let’s just say what was left of the shop was molten aluminum running out of all four sides of the building. We had never evacuated before, but it was just plain scary that night. We’ve been up here since 1976, and we’ve seen numerous other fires go by, but we’ve never seen anything quite like this.”

According to Sanders, faulty electrical wires caused the fire, and when telephone poles fell, a transformer blew up, causing the fire to rage out of control and burn 550 houses in Ventura County the first night alone.

“You could see the flames,” Sanders said. “This end of the fire started less than a mile from where we live, and it was supercharged by the wind. We loaded up and took off with burning balls of fire following our motorhome as we drove away.”

Sanders said that he frequently cleared brush away from his home and shop; however, the wind would always blow anything that was combustible his way because he was located so close to the Los Padres National Forest. He also said that he had an evacuation plan in place, but there was no water or electricity on the night of the fire.

“We were just devastated,” he said. “There was nothing left. Both our employees were up here working, trying to help us. We did save a lot of stuff from the house and the shop, but most of the big machines were gone, and there was nothing we could do.”

Because Titan Speed was not located in a commercial zone, Sanders had no commercial business insurance. “Thankfully, we had a really good policy on our house, but I’m here to tell you that nobody has enough insurance on their house.”

The race car and trailer of Titan Speed’s Bob Sanders were also lost to the Thomas Fire.

According to Sanders, the company was shut down for about three or four months before he decided to give what was left of the business to a friend of his in Atascadero, California, and Sanders continues to serve as a technical consultant.

“The business is just minuscule compared to what we were,” Sanders said. “[The new owner’s] sales are probably 20% of what we were doing, but even after two and a half years, we’re doing our best to pick up the pieces.”

It took Sanders a year to get a building permit through the county of Ventura for his house, which has since been rebuilt, and six months to get a building permit for his garage.

“These metal buildings are all engineered up the wazoo, and to get that through the county is difficult and very expensive,” Sanders said. “For example, when we built our first facility back in 1976, it was 960 sq. ft., and it only cost about $5,000. It had 14 cubic yards of cement in the floor. This new building is 1,600 sq. ft., but it has 57 cubic yards of concrete. I mean, it’s like freeway construction.”

After the fire, Sanders’ neighbors created an online GoFundMe page on his behalf, and he also received a donation from the Automotive Aftermarket Charitable Foundation. But Sanders has some regrets looking back.

“I might have stayed and tried to fight the fire, but that’s water under the bridge,” he said.

SEMA News—June 2020

BUSINESS

Spanning the Gap

Tips for Businesses to Weather Short-Term Disruptions and Come Out Ahead

By Douglas McColloch

Retailers are adjusting to variation in consumer foot traffic, developing new ways to maintain their customer relationships, and marketing to take advantage of growing consumer interest in online purchasing.

The sudden outbreak of the COVID-19 novel coronavirus has forced many companies to alter and adjust their existing business models. Brick-and-mortar retailers are adjusting to a reduction in consumer foot traffic, companies are developing new ways to maintain their customer relationships, and marketing and advertising strategies are being refocused to take advantage of a growing consumer interest in online purchasing.

We spoke about these subjects with Dr. Kim Saxton and Dr. Todd Saxton, professors at the Kelly School of Business at Indiana University, who offer practical advice for businesses to best anticipate and adapt to shifts and uncertainties in the marketplace. The following are excerpts from our interview, edited for clarity and length.

SEMA News: Among our member companies, point-of-sale retail transactions account for about two-thirds of total sales. For companies that are going to be impacted by reduced foot traffic, what are some policies and procedures they can put in place right now to help get them through the next six months?

Kim Saxton: Essentially, as business becomes more online, the key is to test more customer data. Now is a great time to go through your sales records, particularly if you have downtime, and identify who this group of really loyal customers are. Try and look at their shopping history and ask, what kinds of things do they buy? How can I reach out to them if they can’t come to the store? We don’t know how long this [COVID-19 outbreak] is going to go on, but people are starting to want entertainment. Is there a way that you could help them pursue their passion while they’re stuck at home?

Todd Saxton: We’re seeing a lot of businesses going through what we call “crossing the chasm” as it applies to their business model. Now is a time that, by necessity, these kinds of traditional patterns and shopping habits are changing and moving from being just a minority of the market to being the mainstream way that business gets done. And unfortunately, this is not likely to be a scenario where the light switch goes on one day and everybody starts walking into retail stores again.

SN: Many of our member companies rely heavily on a customer base with a healthy amount of disposable income. So when consumers begin to pare back spending on their hobbies and focus instead on necessities like food and medicine, what steps can a company take to keep their customers engaged?

KS: There are likely two consumer markets here: Do-it-yourselfers (DIY) and hobbyists. The DIYers are probably more price-driven, and there’s probably not much more you can do for them right now. But at the higher-income end of the hobbyist group, though, now is a great time to reach out because people can’t do anything on the weekends, for example. During the work week, they might be pretty busy, but on the weekends they can’t do anything.

Then you get that middle-income group of hobbyists who don’t have a tremendous amount of disposable income. So what’s the $50, $100, $200 product package that you can offer them instead of a $1,000 package? How can you repackage your product line so it will appeal to them?

Another thing to think of is, car dealers aren’t selling because they’re “non-essential” businesses, but car servicing businesses are still open. So if it’s possible, now would be a great time to reach out to those businesses.

SN: How valuable is advertising in this economic climate? Given the likelihood of short-term economic contraction, should some businesses just pull back on marketing and advertising and try to ride out the storm until conditions improve?

KS: If you know who your customers are and you have their home addresses, direct mail in times like this can be successful because it’s inexpensive and you can even print it yourself. Also, for some people, mail used to be a bother, but now it might be one of the few inputs of the day that you have if you’re quarantined.

TS: Advertising-as-usual is not going to be effective. It has to be targeted. People are hungry for feel-good stories about how companies are making changes to better serve their customers during the current crisis. Companies are leveraging that into advertising and reaching out to local media. When you’re doing something to help people, it’s something that we see getting a lot of traction.

SN: A lot of our member companies—particularly the smaller ones—rely heavily on Facebook and other social media pages. How effective is social media as an advertising and marketing tool given the situation we’re in now?

KS: Extremely, they should definitely be active in social media, Facebook and Instagram in particular.

SN: Some of our members are retooling on the fly to help produce various medical supplies like ventilators, masks and face shields to help fight the pandemic. Could this sort of “product diversification” be something that we should think about integrating into our business model going forward?

TS: Again, this could be a “crossing the chasm” moment, but it’s a major pivot in terms of resources and capability as a longer-term strategy. On the other hand, if there’s a compatibility with your manufacturing capacity and human capacity and you realize it’s a good fit, then that’s something that could be a sustainable part of your business.

KS: It seems that we’re going to want to have more manufacturing of these products in the United States going forward. So having that capability, if it can be managed by the organization, is not a bad idea. And you should tell people about it right now through social media, on your website, with emails to your customers.

SN: Fast forward until we see that business is returning to normal. I’m working on recovering my business, or the local shop in my neighborhood went out of business, and I want to start up a new shop in place of it. What lessons from today should I take to be best prepared for unexpected events in the future?

TS: We would encourage particularly small businesses, with limited resources, to think of “concentric circles.” Who are your closest stakeholders, who are the people that are going to be supporting you? Maybe buy them gift cards or reward them by making them part of your “first wave” of reopening. If you’ve done things like setting up a really good customer-relationship management program during the leaner times, in times when you have more capacity you can broaden that messaging to your next wave of prior customers.

KS: You cannot move forward today without sophisticated online marketing. I think sometimes smaller companies think that it’s too hard or it’s not necessary. But only a Facebook page is no longer good enough for business. You have to have a website. There are types of website building software that are pretty easy to use. If you have a store, Shopify is an e-commerce site that lets you do it all yourself.

People now are going to buy in a multi-modal way, and some people will want to walk into a store. Some people will want delivery. Some people are going to want to do the whole thing online and never talk to anybody. So you’ve got to be ready for all of that.

Sources: Based in Indianapolis, Dr. Kim Saxton and Dr. Todd Saxton are professors at the Kelly School of Business at Indiana University and co-authors of The Titanic Effect: Successfully Navigating the Uncertainties That Sink Most Startups. They can be reached through their website, www.titaniceffect.com.

SEMA News—June 2020

PEOPLE

Ted Wentz III, CEO of Quadratec Inc., has been elected to the 2020–2021 SEMA Board of Directors in the Distributor/Retailer category.

The 2020 SEMA Board of Directors

Get to Know Ted Wentz III

By Mike Imlay

Ted Wentz III, CEO of Quadratec Inc., has been elected to the 2020–2021 SEMA Board of Directors in the Distributor/Retailer category. He will replace outgoing Board member Greg Adler of Greg Adler Motorsports, effective in July.

SEMA Board members are industry representatives who volunteer their time to lead and guide the association. They are elected by SEMA-member companies and represent the key membership categories: manufacturers, distributors/retailers, manufacturers’ rep and services.

Board Officers

• Chairman – Tim Martin, CEO, Aftermarket Advisors
• Chairman-elect – James Lawrence, CEO Power Automedia
• Immediate Past-Chair/Secretary – Wade Kawasaki, President, Coker Group
• Treasurer -– Kyle Fickler, Owner, Fickler Enterprises LLC

Board Members

• Chris Douglas – COO, COMP Performance Group
• Donnie Eatherly - President, P&E Distributors Inc.
• Dan Kahn - President, Kahn Media Inc.
• Brian Lounsberry - CEO, Motovicity Distribution
• Kim Pendergast – CEO, Magnuson Superchargers
• Kathryn Reinhardt – Senior Marketing Manager, 4WP/ Pro Comp
• Bunyan L. (Les) Rudd, CPMR - President, Bob Cook Sales
• Ted Wentz III – CEO, Quadratec Inc.
• Steve Whipple – Vice President of Sales and Marketing, Edelbrock LLC
• Melanie White – President, Hellwig Products

Outgoing Board Member

• Greg Adler – CEO, Greg Adler Motorsports

SEMA News—June 2020

PEOPLE

Ted Wentz III, CEO of Quadratec Inc., has been elected to the 2020–2021 SEMA Board of Directors in the Distributor/Retailer category.

The 2020 SEMA Board of Directors

Get to Know Ted Wentz III

By Mike Imlay

Ted Wentz III, CEO of Quadratec Inc., has been elected to the 2020–2021 SEMA Board of Directors in the Distributor/Retailer category. He will replace outgoing Board member Greg Adler of Greg Adler Motorsports, effective in July.

SEMA Board members are industry representatives who volunteer their time to lead and guide the association. They are elected by SEMA-member companies and represent the key membership categories: manufacturers, distributors/retailers, manufacturers’ rep and services.

Board Officers

• Chairman – Tim Martin, CEO, Aftermarket Advisors
• Chairman-elect – James Lawrence, CEO Power Automedia
• Immediate Past-Chair/Secretary – Wade Kawasaki, President, Coker Group
• Treasurer -– Kyle Fickler, Owner, Fickler Enterprises LLC

Board Members

• Chris Douglas – COO, COMP Performance Group
• Donnie Eatherly - President, P&E Distributors Inc.
• Dan Kahn - President, Kahn Media Inc.
• Brian Lounsberry - CEO, Motovicity Distribution
• Kim Pendergast – CEO, Magnuson Superchargers
• Kathryn Reinhardt – Senior Marketing Manager, 4WP/ Pro Comp
• Bunyan L. (Les) Rudd, CPMR - President, Bob Cook Sales
• Ted Wentz III – CEO, Quadratec Inc.
• Steve Whipple – Vice President of Sales and Marketing, Edelbrock LLC
• Melanie White – President, Hellwig Products

Outgoing Board Member

• Greg Adler – CEO, Greg Adler Motorsports

SEMA News—June 2020

INDUSTRY NEWS

Photos courtesy SpiedBilde, Brian Williams. Reuse or reproduction without the copyright holder’s consent is prohibited.

Mustang Mach 1 Prototype The Ford Mustang Bullitt is set to be sunsetted after the ’20 model year, and its replacement, the Mustang Mach 1, is supposedly set to arrive for 2021. This prototype appears to be wearing the dark highland green exterior paint that is a signature of the current Bullitt. Given the presence of the camouflage, it would appear that the vehicle will wear some unique front and rear fasciae. The front end, in particular, looks to be slightly different from what’s currently available on the Mustang line. Meanwhile, the bright multi-spoke wheels appear more in line with what we’d see on the Mustang Pony package. It will also allegedly have some performance enhancements over the traditional Mustang GT on which it will be based.
’20 Charger SRT Hellcat This is the ’20 Dodge Charger SRT Hellcat Redeye Widebody (caught for the first time), and it’s packing 797 hp. The latest iteration of the Charger receives wider body panels similar to those found on the Challenger SRT Hellcat Widebody, with more pronounced fenders. The Charger SRT Hellcat also gets a new hood and a blackout panel on top. Other changes are expected to be more moderate, but expect it to closely follow changes made to other Widebody models, which included revised steering, brakes and tire fittings. The Charger SRT Hellcat Redeye Widebody should make its public debut any day now, with an on-sale date to follow closely.
’21 BMW 4-Series Spies in Munich have been lucky to snap new, revealing shots of the ’21 BMW 4-Series, including the controversial front end. The model features a massive twin-kidney grille, which echoes the one used on the Concept 4. However, there are some subtle differences, as the grille on this car features a black or body-color central divider and a different mesh pattern, which in these pictures makes it look like a giant version of Kia’s so-called Tiger grille. At launch, a 430i with a turbocharged 2.L four-cylinder developing 255 hp and 300 lb.-ft. is expected. It should be joined by an M440i featuring a turbocharged 3.0L six-cylinder with 382 hp and 370 lb.-ft. of torque.