Are You Playing Offense or Defense?

Introduction:

This week, Paul Downs, Dana White, and Laura Zander talk about the lessons they’ll take from 2021 and what they’re hoping to accomplish in 2022. Paul thinks he’s found an alternative sales channel that will lessen his dependency on Google. Laura, who built Jimmy Beans Wool on ecommerce, is planning a renewed emphasis on brick-and-mortar retail. And Dana White is working on building the team that will help her pursue her remarkable opportunities with franchising and the military. Plus, we talk about how comfortable the owners feel showing up at work in a brand new car.

— Loren Feldman

Guests:

Laura Zander is co-founder and CEO of Jimmy Beans Wool.

Dana White is founder and CEO of Paralee Boyd hair salons.

Paul Downs is founder of Paul Downs Cabinetmakers.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Full Episode Transcript:

Loren Feldman:
Welcome, Paul, Dana, and Laura. It’s great to have you here. We somehow seem to have made it all the way into December. I’m not sure how that happened, but I thought it might be a good time to take a little bit of a look back and kind of ask what we learned this year. Maybe I’ll start with you, Paul. You’ve been running your business the longest, but is there anything you know today that you didn’t know a year ago?

Paul Downs:
Well, business is considerably easier when the government shovels money at you.

Loren Feldman:
You might not want to count on that to happen too many more times.

Paul Downs:
No, I just got a check for the ERTC yesterday: 142,000 bucks. There’s one more on the way.

Loren Feldman:
That’s the employee retention tax credit.

Paul Downs:
Yes, and the gravy train will be over as of January 1st, I guess, and I’ll have to go back to scrambling for money. What else did I learn? Not much.

Loren Feldman:
Well, you have been doing this a while.

Paul Downs:
I have been doing it a while.

Loren Feldman:
Was there anything you tried this year? Did you do anything different?

Paul Downs:
Well, okay, here’s something. We just wrapped up our GSA contract. It’s finally been received, and it’s official. And that was the third time in the last 15 years I’ve tried to do it.

Loren Feldman:
Tell us what that is.

Paul Downs:
The GSA contract is a purchase agreement that one enters into with the federal government in which you offer a set of items at a negotiated price that is better than you’re offering to anybody else. And this allows government buyers to purchase those items with very minimal bureaucracy. The alternative being, if you’re selling to the government, the buyer has to get several bids for the service, and you may lose out at that point. So we’ve tried to do this a number of times, and it’s a complicated application process. And this time, I hired consultants, as opposed to the other two times when I tried to do it myself.

Loren Feldman:
That’s an important lesson.

Paul Downs:
Yes, and I would say that the lesson is: A) hire a consultant who’s familiar with the exact kind of service you’re offering, or product. Because there are a number of strange things about furniture and the way furniture is sold that general consultants aren’t going to understand, but our consultants went through like champs. And I know that, having followed the questions that were asked and the answers they gave, that there’s no chance we would have been able to have a successful interaction with the government examiners. So there you go.

Loren Feldman:
I don’t want to get too deep in the weeds, but can you give us a hint? What’s weird about selling furniture? Why is that tricky?

Paul Downs:
The practice in furniture is for furniture companies to publish what are called “list prices” on everything that they sell, and the actual selling price can be considerably lower because of discounts that are offered in the process. And the discounts are done in a way that it’s hard to figure out why it’s done that way. In other words, instead of just saying, “Hey, here’s an item, it’s 100 bucks. We’re gonna sell it to you for 50 bucks: 50 percent discount.” It’s often expressed as, “We’re gonna sell it at a 50 percent discount, and then another 10 percent on that, and then another 6 percent on that, and then maybe 3 percent back in your pocket as a kickback.”

So the actual selling price can be like 35 percent of what the list price is. And what everybody ends up doing is publishing catalogs with enormously inflated list prices and then negotiating gigantic discounts back with the government. And so it’s like, well, what’s the catalog even for? That’s very counter to our normal practice of just telling people what we expect them to pay without any hidden discounts. And so we had to get familiar with how everybody else does it and make sure that everything we said kind of worked within that system.

Loren Feldman:
So are you playing the same game everybody else plays now?

Paul Downs:
Yep, absolutely. Because that’s the way it goes.

Loren Feldman:
Wow. It’s a beautiful thing.

Paul Downs:
Well, at the end of the day, the government is getting a good deal. It just looks very strange if you’re trying to work your way through their process.

Loren Feldman:
Laura, how about you? Learn anything this year?

Laura Zander:
This has been a big year. A couple things: one, on the business side of things, I’ve learned that I don’t need to be involved in all the details. And things actually run much smoother when I’m not involved in all the details. I’m still learning, but I’m much better at describing what we want done—not how we want it done—and letting the team figure out the how. And being okay with the fact that they may not do it the way that I would have done it, but they’re getting really good results. That’s been very uncomfortable.

And like I said, I’m still working on it. I’m actually reading What Got You Here Won’t Get You There right now. And man, it’s really hitting close to home. So that’s a big one. And the other thing that I’ve learned, you know, Loren, you wrote an article in Bloomberg about a year ago about our industry…

Loren Feldman:
The knitting industry.

Laura Zander:
Yes, and diversity and inclusion, and some of the women of color who have not been treated equally. We took a stand on all of our platforms and have stood with these women, and with the BIPOC community very publicly. And I have learned that if you don’t stand for something, you stand for nothing.

There’s some hubbub that’s been going on this week. Michelle Obama was just in our industry’s leading knitting magazine. It’s just such a huge accomplishment. And you know, just how amazing and incredible to have this woman be the face on this magazine, because she learned to knit during the pandemic. And some people made some disparaging comments about it. And so there’s a huge conversation going on for the last four or five days. And again, we’ve stood up and held our ground, and I’m just really proud. I’ve learned that if you stand up for what you believe in, it doesn’t mean you’re going out of business. There’s so much fear.

Loren Feldman:
How about you, Dana? I suspect you’ve learned a few things this year.

Dana White:
I have. I have. Keep going is the biggest. It’s a hard one to call because it’s a matter of… Everybody says, “Keep going, keep going,” but learning what that actually means as a business owner, what it means to keep going.

Another one is, I’ve learned a lot about myself, especially from the last episode where I was on here with you. Navigating that line between being a bitch, who I’m absolutely not—a lot of your listeners messaged me and said, “That’s just not who you are. I don’t even know you, but that’s not you.” Navigating that line between thinking that’s what I need to do and demanding professionalism, which you helped me out with and helped me begin to see what that meant. And also realizing that as business owners, we don’t just come to the table as business owners. As with people in most positions, we come with baggage, and me really sitting down as my business grows through franchising and potential military opportunities, and seeing, “What am I bringing to the table from childhood that is impeding my ability to demand professionalism, have hard conversations, and do what needs to be done?”

And so my lesson from this year is being in a space that knows not only where I need to go, but exactly where I am and why I’m there. Specifically: This is who you need to be to be the leader of this company with this opportunity, understanding that you’re not there yet. Understanding why, so you can daily navigate that growth so you can get there. Because the woman I am today has some growth to do before she can be the franchisor of five to 10 locations and potentially have salons on military bases.

There’s a voice that she has to find in order to say, “You know, I know I’m paying you, but I need you to do the job that I need you to do, instead of paying people to not do what they say they’re doing,” and I hadn’t found that voice until recently. So it’s about knowing my power, understanding why I’ve fallen short of realizing what my power is, based on all this stuff I brought through my experiences in life, having a vision as to the type of CEO and owner I want to be, and working every day to get to that person and, prayerfully, having people around me. Like Jay had people brought into his life who were on this journey with him who made his company better. And hopefully I keep those people who are on this journey with me who will make this company better and, more importantly, start attracting those people.

And part of the reason why I haven’t is because I wasn’t demanding professionalism. And I haven’t been the CEO I’ve needed to be to attract those stellar people. It’s more than money. It’s also where you are as a person. I think money is part of it. So keep going, know where you are, where you want to be, what you’re going to do, and what you need to do to get there. That has been my biggest lesson. And don’t be afraid of debt. Debt is huge. But before you take it on, have a plan for it to the penny if you can.

Laura Zander:
It sounds like we’re on a similar path, and just kind of trying to figure out where out are we in this leadership journey, if you will, and who are we? Because I feel like, over the last year, I have also really learned I’m not a CEO. I’m an owner. I’m an owner operator.

Loren Feldman:
What’s the difference that you’re drawing our attention to, Laura?

Dana White:
It’s a huge difference. It’s a huge difference.

Laura Zander:
I’m a small business. I own a small business. Right now and for the last nine months, I have been in the office maybe one day a week. I have been reclaiming my fitness, my personal life, all the things that I put on hold for the last five years to rebuild the business and to kind of try to save the business. But I’m not some fancy CEO. I don’t know. It just feels like a huge difference. CEOs don’t go and build racking. They don’t help move boxes during the move. Maybe some of them do, I don’t know, they’re fancier, probably smarter.

Paul Downs:
I mean, I’ve gotta say that I think that if you’re the owner, showing up and helping with the racking is actually probably one of the best things you can do, as long as it doesn’t take over your whole life. Because it demonstrates to your team that you’ve got some sympathy for the whole operation. That’s one of the things that, now that my time is freed up from operational roles, I like having the flexibility to jump back in. Now, different businesses of different sizes make that choice differently, but for where I am, it’s one of the things that I do. And it also gives me a good sense of what’s happening in the business a couple layers down that I wouldn’t otherwise see. So I wouldn’t beat myself up about that.

Laura Zander:
You know, we just moved into this new building a couple weeks ago, and it was interesting. I was trying to figure out: How involved do I get in the move and the layout of this building? So I go for a couple of days, and I’m moving boxes, and I’m putting stuff in the container, and I’m working with the movers. But when it comes to laying out the space, I consciously decided just to back off. My team knows how the space is going to be most efficient. Even the retail space, even the customer facing space, I’m just like, “Here’s the kind of look I like. Here’s what we want to accomplish. Go for it. If I can help, let me know. What do you need?”

Loren Feldman:
Is that working?

Laura Zander:
Yeah, I mean, it’s great. Compared to five years ago—and I’ve probably mentioned this before—we’re shipping out just as many packages as we did five years ago with half the staff, because we just quit screwing around and I quit sticking my nose in. I quit trying to help and just let them do what they do best and letting them fail, if you will.

Loren Feldman:
Do you really think you’re twice as productive because you’re not in the day-to-day as much?

Laura Zander:
I think it’s absolutely one hundred percent a part of it. Absolutely.

Dana White:
I agree with her. I agree with Laura. My business runs differently. I think it is good when I’ve been spending a lot more time in the salon, and they see me. But my business is a little different. Although they’re like, “Oh, wow, that’s Dana!” they freeze, and they don’t perform as well. I conducted an interview this week with a staff member whose job it is to do the interview., and I know she’s capable of doing it, but she could barely get a sentence out.

Laura Zander:
There’s the nervousness and the performative part of it as well.

Dana White:
Yep, and we had a meeting based on, “Okay, why is it when Dana’s here everybody is stuck on dysfunction? They’re dropping combs and flat irons. What is going on?” And they said, “It’s kind of like having a superstar in here. Because in this industry, there’s nobody that looks like us, that’s doing what you’re doing.” And so I have to be mindful of how relatable—”Here I am! Yay, Dana.” And they’re like, “Oh my God, Dana.” So I have to navigate that line, and that’s uncomfortable for me because I too am an owner-operator with CEO traits.

But I want the business to run without me because that, to me, is a successful business. If the owner has to be there for things to get done, then why are you franchising? Because you can’t be in every state. And I’m with you, Laura, that when you step away and let them make mistakes—and I’ve let them make mistakes, but they don’t want to make them in front of me.

Laura Zander:
Yes, exactly.

Dana White:
That was said. “Stop coming to trainings.” They’re like, “Dana, could you please stop coming to trainings?” Because they’re feeling like, “I can’t learn with Dana standing there because I want to show her that I’ve got it.”

Laura Zander:
Exactly, exactly. That’s a great point.

Loren Feldman:
Dana, this is the first time we’ve spoken since you and I had our one-on-one conversation. I caught you at a really interesting moment. You had just come back from a very successful trip to Germany, but you were met with a couple of resignation letters, and you were feeling the pain. Can you give us a quick update on what’s happened since then, how have things been going?

Dana White:
Sure. So the person I have as an operations manager has moved more into administrative capacity. We’re going to talk in the month of December about how that looks, as far as performance and pay. The manager is gone, and that’s okay. Our stylist trainer is involved, but we understand that their vision may not equal our vision. The vision for what they want for themselves may not be aligned with the opportunity, and so we’re looking for people who will get it. I think we’ll find those people, but right now, I am where I am. To me, I’ve gotten the scissors out, and I’m cutting. I’m cutting because I found out some of the crux of my problem was I’m paying people who aren’t doing what they say they’re doing.

Once I got more involved in my business, I’m like, “What do you mean this isn’t done? I’m getting reports that it’s done. I’m here in the salon, and it’s not done.” So it’s like, “Okay, since that’s not what you’re going to do, then we need to find somebody who’s going to do it.” The anxiety is alive and well, and anxiety is a close friend that wakes me up every morning and stays with me throughout the day. I love what Laura just said about reclaiming my time, because my time has been Paralee time. And so tomorrow I turn the big four-five. Forty-five years on this Earth as of tomorrow.

Loren Feldman:
Happy birthday.

Dana White:
Thank you, kind sir. I’m going to reflect, but project. And in my 45th year, I want to get back with my fitness, connect with people who feed me—not feed me because they assuage my anxiety over my business, but just give me the confidence to move forward. I’m definitely gonna reach out to Laura, because I need some more of those hitting close-to-home books on my reading list. But yeah, I had a breakdown, which I needed. But that was quick, and then I got back to work.

Laura Zander:
Okay, books. Loren, can you do a book club? Or like a book recommendation once a week or once a month? Oh, and then I was also going to ask, could you do a gift guide? Maybe you could just have a list or something of places that we could buy gifts? Like if anybody needs a really nice conference table for their house, then we would know to go to Paul.

Paul Downs:
Yeah, just keep in mind that they don’t fit in a stocking.

Laura Zander:
Well, yeah. A big stocking.

Loren Feldman:
Laura, this sounds like an assignment you might want to take on. You have some free time now that you’re not getting so involved in the day-to-day.

Laura Zander:
Yeah, I’d help with that. I’d totally help with that. That’d be fun.

Paul Downs:
Actually, the book that got mentioned, What Got You Here Won’t Get You There, that’s one of the very few business books I’ve ever read, and it is pretty good. Because when you’re small, you get used to doing whatever—your pattern of behavior. And when the company changes, you do have to change.

Laura Zander:
Yep. Dana and I were talking offline before we started the podcast episode about getting new cars. And Dana just got a new car after 15 years. It’s her first new car in 15 years. I’m about to possibly get my first new car in 10 years. And there’s this shame associated with it and embarrassment. And I’m like, “I don’t want to drive up to work in a brand new…”

Loren Feldman:
Wait, just to be clear, your embarrassment is not that you were driving a 15-year-old car. Your embarrassment is that you’re gonna be driving a new car.

Laura Zander:
Yes. Yes.

Loren Feldman:
You don’t want to be seen by employees?

Laura Zander:
Correct.

Dana White:
No. Well, kind of, yes. So I’ve had my new car for a week, and it was a beautiful experience. Thank you for that. But I was excited and sick to my stomach, because it’s a beautiful automobile. And I get in it, and here’s the question: With everything that I talked about last time I was on the podcast, with all that’s going on right now, I deserve to be in a 15-year-old car…

Laura Zander:
Exactly.

Dana White:
…that shakes going 40 miles per hour on the highway. I don’t deserve this car until my business profits so much money, and I’m where I want to be. And my people just laughed at me. They’re like, “Okay, Dana.”

Laura Zander:
Dana, so this will be probably the most profitable year that we’ve ever had. And so I would have thought, following your logic, that now I deserve to have this really nice car. I want to get a Jeep Wrangler. It’s not like it’s some crazy, nice car. But it’s actually the reverse, because now I’m like, “This is the most profitable year that we’ve done and we’re still paying people 15, 20 bucks an hour, 25 bucks an hour, or whatever. If we’ve had such a profitable year, why don’t I double everybody’s salary? Why don’t I give everybody the money that I would have spent on this new car? Like, why would I spend it on myself?”

Dana White:
I don’t feel that way.

Loren Feldman:
Wait, I don’t think you spent enough on that new car to double everyone’s salary.

Laura Zander:
No, that’s a great point. You’re right. It’s not that nice of a car.

Dana White:
Depending on the car, I mean, maybe not double it for a year, but definitely give out bonuses. I don’t feel that way. I think my staff makes a pretty fair wage. I just feel that I expected I’d be further in the nine years that I’m open, and I didn’t think I’d be able to have the type of car I wanted or the type of car that’s in my garage right now until I was at that point. And the fact that I’ve gotten it before that point makes me anxious, and it makes me nauseous.

Loren Feldman:
Paul, do you worry about how you drive up to your business?

Laura Zander:
No, he’s a white man.

Paul Downs:
No, I’m not an auto guy, and everybody knows that. I drive a used Prius and it’s a cheapo car, and I just don’t care.

Loren Feldman:
Would you feel uncomfortable driving in a fancy new car?

Paul Downs:
Probably, and not for the sake of the employees. Because I think that there’s an interesting thing where if you’re too out of the norm as a boss—like if you’re running up against what people expect from a boss, and you’re always more humble and more giving and what have you—I think that there’s the possibility that people will just respect you less. At a certain point, it’s my business. I’m going to spend the money, and that’s that. If you want that experience, start your own business. People are baffled if a boss isn’t what they think a boss should be.

Laura Zander:
That’s a great point, and that book has really kind of started to help me recognize that the way I think people see me—or the way I want people to see me—is probably not the way that people see me.

Dana White:
My staff expects me to drive what I’m driving. And ever since I’ve been driving it, and they see me, it’s almost made the “Dana!” a little bit worse. So how much my staff makes, what my staff thinks of me, those are not my issues. My issue is, I should not be driving this until my business is in a healthier position. Whereas other people are saying to me, “You should be driving this because you worked your butt off for nine years.” And I’m like, “Well, if I worked my butt off, my business would be in a better situation.” So there’s all of this back and forth with myself that I struggle with every time I press unlock.

Loren Feldman:
Dana, I want to go back to something you said early on, which is that one of the things you learned this year is that you can’t be afraid of debt. Are you in the process, or have you just taken on more debt?

Dana White:
Yes, the EIDL. That’s debt.

Loren Feldman:
At a good rate.

Dana White:
It’s debt at a good rate, but it’s debt, and it’s 30 years of debt. So if I pay it off, I’m 75 years old. And so you look at your business, and you go, “What is going to be the opportunity? Or how fast can I grow my business, so I’m not in debt up to my ears at 60-, 70-something years old?” And so that’s the conversation I want to have with Jay at some point. And I’ve been told, “Well, if you’re going to sell your company, don’t worry about that. It shouldn’t be exorbitant, but the sale will absorb it.” Okay, so it’s about growing the company again—growing the company so I feel like I deserve the car I want and growing the company so I feel like this debt won’t hinder my ability to run this business or sell this business if the time comes and I choose to.

Loren Feldman:
Do you feel that you have the capital you need to pursue all the opportunities you have in front of you: the military, the franchising?

Dana White:
No, I don’t. As a small business, in order to pursue with the military, I’ll need anywhere from 200,000 or less per base. And so I don’t have that with all the bases that they have listed. I don’t have that right now. And so I do foresee myself taking on more debt in order to realize this opportunity. However, these are different opportunities than private salons. I’m doing it. It’s just me. I’m a captive audience at Fort Bragg. So that’s huge.

My dear friend who I love—the owner of Good Cakes and Bakes, her name is April—she always reminds me: “Stop thinking that your past with your business here in Detroit is indicative of your future Paralee Boyd in other cities and what you’re going to do. Please don’t, because then, if that’s the case, close tomorrow. If that’s how it’s gonna be forever, no, go get a job. It’s not gonna be worth it. It’s not. It’s going to be different.” And based on the franchise inquiries I’ve gotten, we’ve gotten almost 90 franchise inquiries. Even if three of those turned out to be viable, we’re on our way.

Loren Feldman:
Are you close to being in a position to actually sell a franchise?

Dana White:
No, because my lack of confidence slowed the process down. And talking to people who don’t understand what I’m doing in my industry. I think I’ve said on this podcast before, I talked to a guy who was like, “Yeah, since you don’t have seven locations, you shouldn’t be franchising.” And it jarred me. And he said, “Well, why don’t you have seven locations?” I said, “Where am I gonna get the money to open seven locations?” And he said, “Your friends and family.”

Laura Zander:
But you were confident enough to pay the franchise guy, weren’t you?

Dana White:
I know. I was. But this happened after.

Laura Zander:
I know, but you’ve got to chase that money.

Dana White:
You know mental health stuff. No, I’m serious—you know of anybody here the things that you tell yourself—

Laura Zander:
Absolutely.

Dana White:
—can slow you down. And so I’m back on track. And so in early 2022, we will be ready, but I should be ready in the fall. I should be ready now. And I’m not, because I slowed down out of fear. People are like, “Oh, you slowed down because of military opportunity.” Not at all. I slowed down because I’m like, “Who’s gonna want to purchase this franchise?”

They were like, “Oh, you’re the first, and there aren’t going to be a lot of early adopters. You’re going to struggle. You’re not an Orange Theory.” I kept hearing that. And you’re the first, so nobody’s really going. And it wasn’t until the franchise consultancy, all the leadership, everybody on my team, got on a call and said, “Stop talking to them. We’re the experts. This is what you need to know.” And they showed me documented evidence of trailblazing franchises.

Laura Zander:
But how did you get to the point where you paid the money to the franchise guys and then the doubt comes? Like, it’s usually the reverse.

Dana White:
No, because I was excited, and I was doing my homework. It was the people talking to me: people from large, major companies getting on the phone with me, saying, “Hey, I work at such-and-such bank. And I’m over in the franchise department, and these are the portfolios of the people who franchise and are successful. Your franchise isn’t set up for success. Your story sounds good, but yeah, I’m a franchisee and I have seven locations with this. And I wouldn’t invest in you. I would not be an early adopter, because your salon isn’t a million-plus revenue a year.”

Laura Zander:
I know, but fuck off! Like, fuck off. I put the money down, so I’m doing it. And I know it’s a sunk cost, but yeah.

Loren Feldman:
Well Dana, where did your thinking end up? Could that person be right? Or have you concluded that person is wrong?

Dana White:
Again, I follow the four tenets of Jay’s…

Laura Zander:
Who cares?

Loren Feldman:
Well, I think Jay would tell you that you do have to consider an opinion like that. That’s somebody who is doing it themselves. It could be right.

Dana White:
And I did. And there were questions that I asked him about my business, and he was stumped. And then that’s when the fourth tenet came in: “Fuck you. You don’t know.”

Loren Feldman:
Okay.

Dana White:
You own a wireless company, a wireless repair store. You have no idea how much money these women spend on getting their hair done. You don’t see how many inquiries I had just from two articles being put out.

Loren Feldman:
But Dana, you would agree that your case gets better the more stores you have open and doing well?

Dana White:
I agree, and that’s why I’m saying, the questions of doubt? That’s why they hit me, because they weren’t wrong. They were just misinformed. He wasn’t wrong. I mean, yeah, would I love to have seven locations right now and then just drop down to six figures to franchise? Sure. But my franchise consultant said, “Most of our most successful trailblazing franchises didn’t have the money to have seven locations.” And they said, “Drybar? First location. They franchised after one. Massage Envy? First location. Massage Heights? First location. All these companies,” they said, “now look at them. Stop listening to them. Listen to us. And let’s get to work.”

Laura Zander:
It sounds like there’s a bit of paralysis, in terms of thinking too big, instead of just taking the next step.

Loren Feldman:
What is the next step?

Dana White:
The next step? And you know, praise clap, Laura. Yes, the next step, like literally church clap, sister with a head down, wave her hand.

Laura Zander:
Quit thinking so much.

Dana White:
Right, stop thinking about the CEO you need to be, and understand who you are today, and you are enough for the next step.

Laura Zander:
One hundred percent.

Dana White:
So the next step is getting through the documents of the operations manual, the training manual, which you can do when you’re asleep. I just had that call. And I was answering questions left and right. It was easy.

Paul Downs:
So I’ve got a question: Do the franchise guys know about the military thing? And vice versa?

Dana White:
Yep. They sure do.

Paul Downs:
And they’re not worried by that at all?

Dana White:
They were. The franchise consultants were, but I’m not in a place where that’s taking my time. And the military wants to make sure that none of these locations will be franchises. And I think I’ll ask you a question: What do you mean by worry? What do you mean that they’re worried?

Paul Downs:
Well, just based on what I’ve heard so far, over the course of the year, the military thing seems like an entire birthday cake to eat by yourself, and the franchise thing seems like an entire birthday cake to eat by yourself. And I just think that there’s going to be a capacity problem at some point to really do these two opportunities.

Dana White:
If it’s just me and two or three other people, yes. There’s going to be a capacity problem. But we’re going to bring on the people to help me.

Paul Downs:
You just started by telling us that your team fell to pieces, and you can’t get them to do what you ask them to do.

Dana White:
I’d be worried if I were opening five locations tomorrow or within the next six months. I’d be worried, and I’d have to find or need help finding the person who was better than me. Like they say, “Hire somebody better than yourself.”

Laura Zander:
Look, I’m not like crazy—I’m not a CEO. Okay? And I’m not super successful.

Loren Feldman:
Wait, you are a CEO.

Laura Zander:
I think I’m firing myself. I’m just gonna be the owner-operator, but…

Loren Feldman:
Are you gonna hire someone else to be CEO?

Laura Zander:
Do we need a CEO for a business this size? That’s what I’m coming back to. But anyway, I’ve had a track record of 20 years of a profitable business. And I have operated, Dana, by jumping first and asking questions later throughout our entire career. So I probably would have done what you did and put the money down and jumped, knowing intuitively that this franchise thing is the right thing to do. I’d put the money down, and I’d sign my name on the paper before I had a chance to second-guess myself, and before I had a chance to let all the doubts sit.

And so then, my pattern of behavior is, it forces me to move forward while the doubt is creeping in and recognizing I don’t have the skills. I have not mastered that skill. I don’t have the team. Oh, well. I’d better figure it out.

Dana White:
You will figure it out. You will get it together.

Laura Zander:
Yes! You will figure it out. The only thing that’s ever stopped me is when I don’t take the next step forward. Just take the fucking next step, and it will work out. You’re smart. You know smart people. You don’t have to figure everything out before…

Loren Feldman:
But I think you do need to know what the next step is. You need to have a plan, and it’s more complicated for you, Dana, because you have the two opportunities we’ve talked about, plus the software technology, which we’ve talked about in previous episodes. What is the plan to get both the military thing moving forward and the franchising thing moving forward simultaneously?

Dana White:
Great question. Right now, my priority is making sure that Midtown Detroit is a profitable location, and that it’s running well. The next priority is the franchising, making sure that we’re getting through the franchise process, which is some months away. I’m not in it alone. I have a company I’m working with that is helping me with the military, understanding that world, understanding how the setup is, what would work for a business owner, what wouldn’t? I’m not in it alone when it comes to the franchising piece. Ashley, who has worked with me and who has operations experience with franchising, that is very much a part of her wheelhouse, and that’s enough for today.

When I asked the franchise consultancy, “Where am I with my support team? Do I have enough? Do I need to start looking for more? Because this is what I’m strong at, and this is what I’m not.” They said, “You already have one person on deck. You’re ahead of the game, at this phase.” They will let me know based on the time they spend with me and what I need to do, who I need to bring on and when, what I’m capable of doing, and what I need to bring on. I’m with you, Laura. Yep, there’s a lot I don’t know today, but I’m not going to forsake this opportunity, because I’m not where I need to be. I believe this opportunity will help get me there.

Laura Zander:
And you’ll become a CEO.

Loren Feldman:
We’re almost out of time. Dana has just given us her priorities going forward into next year. I’m curious, maybe Paul and Laura, you can do the same. I guess the question I would ask, starting with you, Paul, is: Are you playing offense or defense?

Paul Downs:
No, we’re playing offense. In my mind, getting this GSA contract is a pretty big event for us, because we’ve been doing significant business with the government for years. But we also turned down about two thirds of the inquiries we got because we didn’t have a GSA contract. So this is the next level for us, and it presents opportunities just to expand the operation, in terms of production, but also to expand our marketing and think about it in a different way.

Because we’ve been dependent on Google leads for almost all of our business for many, many years, and this is the first alternate channel where business would come outside of that. I’m in this kind of long-term battle with my industry, in that we do business just a different way than everybody else does. And I think that we’re going to be able to bring that same approach to the GSA sales. And it should be very successful.

Loren Feldman:
What are you referring to when you say you do business in a different way than everybody else?

Paul Downs:
Well, as I explained at the beginning of the podcast episode, the whole pricing, quoting discounts, all the nonsense…

Loren Feldman:
But you said you changed that to adjust to the way the others do it.

Paul Downs:
Well, that was just to get the contract. That’s just what had to happen to get through that little hurdle. Now we’ve got the contract, and we can go back to dealing with our clients the way we like to deal with them. And I think that the pandemic has probably been a huge favor for us, because I have a feeling that it’s knocked a lot of our competitors into a bad place. People who were doing 100 million in business are probably doing 40 million, and they won’t be able to manage that, whereas we are going to be around to pick up the pieces of those markets.

Loren Feldman:
Laura, how about you? Are you playing offense or defense?

Laura Zander:
We are definitely playing offense and have been playing offense, actually for a couple of years, with the acquisitions and now with the new building and the expansion and retail. It’s so funny, I saw in the Morning Report the other day the section about how ecommerce companies are now thinking that they should really have brick-and-mortar, and I’m like, “Damn it, I’ve been saying that for so long.” You know, we’ve had all these business experts say, “Why do you still have a brick-and-mortar? Why do you have a brick-and-mortar? Like, if it’s not the most profitable, why do you do it?” Because one, it’s the heart and the soul of the business. And two, you get to leverage inventory that way by having two channels. Anyway, we’re doubling down on retail over the next year.

Loren Feldman:
In the store that exists in the new building that you just bought? Or are you thinking of opening other locations as well?

Laura Zander:
Well, we’ve always been thinking of opening other locations. We’ll see. We’re going to open a location in Texas, a factory store., so we’ll see how that goes. Kind of like Dana, I’d like to fine-tune this location here in Reno and see what we can learn and put some processes in place, kind of in preparation for perhaps opening another location someday, maybe in a city that doesn’t have a yarn shop. But for the next year, the priority really is just going to be to get these two locations open and running.

Loren Feldman:
I could talk to you guys all day, but we are…

Paul Downs:
Well, wait a minute, Loren. What are you going to be doing next year?

Laura Zander:
Yeah, good question, Paul.

Loren Feldman:
Wow, I wasn’t expecting that, Paul.

Paul Downs:
Why not?

Loren Feldman:
Well, because I ask the questions here. That’s why. But it’s a fair question. I’m figuring that out. I would like to think I’ll be playing offense. But you know, it’s kind of a question of how many resources I have. And I’m working on that. Does that answer your question?

Paul Downs:
Not really. It sounds a little weaselly.

Loren Feldman:
Unfortunately, we’re out of time, and we’re gonna have to hold that for a future discussion, but I promise to give you a better answer next time, Paul. My thanks to Paul Downs, Dana White, and Laura Zander. As always, thanks for sharing guys.