Dana Opens in Dallas

Introduction:

This week, Dana White tells Paul Downs and Jay Goltz how her move to Dallas is going, including hiring a manager, firing a publicist, tweaking her business model, and for the first time, confronting competition. Dana also explains the surprising way she managed to get the financing to open her first salon on a military base, Ft. Bragg, which she now thinks could be up and running by the end of the year. Plus: Paul has to make adjustments to handle a sudden influx of business. And Jay is still looking for a head of HR. Should he post the ad on ZipRecruiter or Indeed? Should he offer a salary range in the ad? And is it reasonable for him to expect a follow-up email after an interview?

— Loren Feldman

Guests:

Dana White is CEO of Paralee Boyd.

Paul Downs is CEO of Paul Downs Cabinetmakers.

Jay Goltz is CEO of The Goltz Group.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Full Episode Transcript:

Loren Feldman:
Welcome Paul, Jay, and Dana. It’s great to have you all here—especially you, Dana White. We haven’t spoken in quite a while. How are you?

Dana White:
I’m well, Loren. How are you? Good to be here.

Loren Feldman:
I’m fine, but I’m more interested in how you’re doing. It’s been months and months. What’s going on?

Dana White:
A lot is going on. I have closed the Midtown Detroit location. I have relocated that location to Arlington, Texas, which is a suburb of Dallas. I have begun seeking contractors to start the build-out at Fort Bragg. And we are moving forward with the German entity salon for Grafenwöhr in Germany. And I have put franchising on hold. Ta-da!

Loren Feldman:
Well, that’s a lot. Let’s start with leaving Detroit. Was that hard?

Dana White:
No. It wasn’t. I mean, it was bittersweet. But it wasn’t a hard business decision. I spoke with my operations manager. I spoke with my manager. Both of them have years and years of experience. And we just were not able to get back to the numbers we saw in our heyday, pre-COVID and before we opened Midtown. We just weren’t able to get back. Staffing was very challenging. We weren’t able to do it. We had to constantly make compromises.

And then I was robbing Peter to pay Paul—pulling money from here to pay that, looking at getting a job. And it just wasn’t worth it. At the end of the day, Detroit just didn’t have the density for my business, for a hair salon. And when you look at other hair salons in the area, they too are struggling—not only hair salons, about five other lifestyle beauty businesses have closed since I’ve closed, and a major coffee shop that was a symbol of Detroit’s resurgence on the same block as me. Although they closed for different reasons, they closed as well. A lot of Detroit businesses are closing.

Loren Feldman:
Sorry to hear that.

Jay Goltz:
I have to say, that doesn’t mean Detroit’s in trouble or anything.

Dana White:
Not at all.

Jay Goltz:
And the fact is, only 10 percent of the ZIP Codes in the United States have a frame shop. And it’s just one of those things, you have to have the right neighborhood. And you have an upscale business that’s dealing with a certain kind of clientele. There’s a little bit of a mismatch. And like I said, there’s plenty of businesses that are like that, that need the right location.

Dana White:
What I’ve learned from having had this business in Detroit, it’s not Detroit. Detroit is still on the meteoric rise. I mean, Gucci just opened there, but Gucci isn’t reliant on Detroit revenue to be Gucci. So what I’ve learned is that for the smaller business, unless you have the volume, you’re one, two, three, four, five, six months away from closing in the event something happens. So you take a combination of COVID. You take the population not being in that area. You have to have a strong following from the suburbs, who are willing to come to your location.

You take something breaking down in your building. You take staff calling off. All of these little things, and it puts you closer and closer and closer to close. And so that’s why, it was just a series of events that said, “You know what? There are other businesses like mine that have sprung up after me that are doing so much better than mine.” Why? Look where they are. Look where they are. So I changed my location, much to the dismay of the powers that be in Detroit. There are those in Detroit who are not happy with me.

Loren Feldman:
Why is that?

Dana White:
Because, you know, at the time. I was a success story. I was a business that they could say, “Look what started here in Detroit. Look what was happening here in Detroit.” And now there’s not. The franchising there still is, but then again, that’s on hold. And that’s on hold because even though we had all these inquiries, these were people who didn’t understand business, number one, let alone small business, let alone franchising.

The questions we got were, “Well, can we change the name? Well, can I add custom colors? Can I change the color scheme? Well, can you give me all of your operations information before I give you the franchise fee?” Not understanding that this is not how a franchise business works. A lot of people just didn’t know. I could have started the franchise process with them, but I had in the back of my head, their not knowing is going to be the foundation for issues in the future. And I said, “No,” and I walked away.

Jay Goltz:
Well, plus, the reality is you have two other better opportunities right now. So that makes sense,

Paul Downs:
Speaking of the other opportunity, are you open in Arlington now?

Dana White:
I am, but it’s very slow. I put money into marketing, I put money into PR. That did not work. I’ve gone ahead and reinvested in PR, because I know more now as far as what to look for. I had a publicist who was more comfortable with the Detroit market. He had done PR for another business in Dallas, but I was told, “Nobody wants your story in Dallas.” I talked to a Dallas PR person, and they vehemently disagreed. And you can already tell the difference. So we’re very slow, because nobody really knows we’re there.

And I also made changes. We are no longer walk-in only in Dallas, because that is foreign to my market. Why force them to adapt to something? Take appointments and just open your books. Why? Be able to set more appointments. Instead of calling it a blow-and-go in marketing, we’re calling it a press-and-curl. My market doesn’t know what a blow-and-go is.

And then we’re handing out flyers, and women walk by. One of the things they’re saying: “I’ve seen this is open. I thought it was a white salon. And you’re the owner? Oh, hey, sis! Hey, girl! I’m going to make an appointment!” And they’ve started. But we don’t have the volume to stay open every day, all day. But that’s about to change because the PR team is on the case. We have an influencer event planned for early November. They start pitching October 10th. It’s gonna start taking off.

Loren Feldman:
Dana, how long have you been open?

Dana White:
A month.

Paul Downs:
Well, that’s not very long,

Jay Goltz:
The lesson she learned is the same one I’ve gone through several times. If you call four plumbers, they’ll all fix your toilet. Whereas PR people, three of them aren’t going to get the job done. I mean, this is the way it is, especially a smaller one. There are some that get it, and there are some that don’t. And it’s one of the few things I know of that you can spend money for and get absolutely nothing.

Dana White:
That’s what happened with the last publicist.

Loren Feldman:
Obviously, you hired that publicist, and you were aware that it wasn’t working, because you weren’t seeing any results. How did you determine that it was the publicist’s fault and make the decision to go with someone else?

Dana White:
That’s a great question. So what happened was, during our last call, I hadn’t heard anything from the fires that were in the oven. So I decided to contact those people. And they reached right back out to me.

Loren Feldman:
You contacted the people in the media that you were trying to reach yourself?

Dana White:
Yeah, so I knew we had a story coming out in Allure magazine. I knew I had done an interview for Dallas Business Journal. So last time I talked to him, it was, “Well I haven’t heard from them.” So I said, “Well, let me try.” So I reached out to Allure magazine, and she contacted me right away with a link to where the story would be posted September 2nd. And then I reached out to the Dallas Business Journal. Well, the reason why we hadn’t heard from her is because she had gone back to college.

So I had a call with him, and I asked, “Hey, where are we with the Allure story?” “Well, you know, I haven’t heard from her for over a week.” “Okay. Where are we with the Dallas Business Journal?” “Well, I haven’t heard from her.” “Well, I have heard from them. And she just contacted me about 20 minutes ago. Here’s the link.” And he got quiet.

So I reached out to the new publicist. And I said, “This is the reason my former publicist said this is not going to work. Do you think that this is something you can take on and why?” They put me in touch with clients that didn’t have an impactful story like me, but were in the news two or three times a month—local, regional news, and not just the block association newsletter but like NBC, CBS, Fox News.

I spoke with references they gave me as well as references they didn’t. And I asked, “Why didn’t you give yourself as a reference?” They said, “Because we didn’t want to be inundated with calls. They did really good for me, and I’ve got to manage this business.” And so I didn’t hear anything bad. I wasn’t afraid to ask the question. I pursued these publicists as if, “you work for me,” versus: “how can I help you work for me?” It’s a very different mindset.

Jay Goltz:
Did you end up paying the first person that didn’t do the job?

Dana White:
I did.

Jay Goltz:
So did I all these years, and I have to tell you, n hindsight, I say to myself, “Maybe I shouldn’t have. Maybe I’m enabling bad behavior. You hired them to do something. They didn’t do it. And then I paid them anyway.” Just food for thought.

Paul Downs:
When you hire these people, do you have any kind of written agreement?

Dana White:
Yep, you have a written agreement. And they say, as with most, “There are no guarantees. However, this is our scope of work. This is what we’re going to do. If that doesn’t work, this is what we’re going to do. Here’s our success rate.” And I’ve literally had a client of theirs tell me, “I sell $250 shirts, blouses to women, and they’re able to get me on the news.” I am not the first African American woman to franchise a hair salon that has moved their salon from Dallas to Detroit that has a multi-base global military contract. Hello? No one in Dallas wants this story? No one? She said, “I find that hard to believe.”

Jay Goltz:
What bothers me is you caught him red-handed. He didn’t follow up like he said he did. Which is why, I’m still pissed about what happened to me 20 years ago, which is paying these fees and just getting nothing. And in my case, I didn’t have them red-handed, though. You did.

Paul Downs:
That’s an interesting question. And I hate to hijack the show, but when do you not pay people when you’re dissatisfied with their performance?

Jay Goltz:
I’ve always paid them, and I wonder whether that was smart. In this case, maybe the appropriate thing is, “Tell you what, I’ll send you half the fee since you obviously didn’t do what you said you were going to do.”

Dana White:
Don’t pay him to continue.

Loren Feldman:
I think Paul was talking about in general, not just with PR people.

Paul Downs:
Yeah, in general.

Jay Goltz:
I can’t think of anyone I refused to pay. No, I take that back: a headhunter. I found out the headhunter told the applicant to lie to me about how much money they were making in their last job. That guy, I didn’t pay. He went to sue me. I went to a deposition, and the deposition lasted about 20 seconds. As soon as the lawyer heard what he did, it was over. So that’s one I’m glad I didn’t pay. That was just fraud.

Paul Downs:
I tend to pay people. But yeah, I’m a strong believer in karma.

Jay Goltz:
Have you ever not? That’s the question? Have you ever not paid someone?

Paul Downs:
I’m just trying to think.

Dana White:
I’ve not paid someone for not finishing the job.

Jay Goltz:
Well, that makes sense.

Loren Feldman:
All right, back to your story, Dana. You said before, if I heard you right, that one of the reasons you left Detroit and shut down there is that you saw other businesses that had opened after you doing better than you. Were you referring to other businesses who do something similar to what you do or just businesses in general?

Dana White:
No, businesses who do almost the exact same thing as I do, opening in New York, Dallas, California.

Loren Feldman:
Really?

Dana White:
Yeah, doing over a million dollars in their first year.

Loren Feldman:
Because I think for a while there, you thought you were way ahead of the game and you were, if not the first, among the first, to do what you do.

Dana White:
I am. They all opened after me, like several years after me. A lot of these salons have only been open in the past—a lot of them just since COVID. And that’s something that my new publicist in our kickoff meeting, they noticed. They said, “We’ve done our homework, and you’re still very far ahead of them, as far as your business mindset, your business model. We’ve even visited some of these businesses, and your professionalism, you can tell that this is somebody who’s been doing this longer than two years.”

Loren Feldman:
One of the reasons you mentioned for going from Detroit to Dallas was the talent pool, the people who you could hire. How did that work out? Were you able to hire people you were looking for in Dallas?

Dana White:
We were able to hire people who I was looking for, but I’ve pushed uphill with managers. I’ve hired managers, and none of them are with me now. And I think—well, I know—it’s because I’m looking for the wrong person. One of the reasons why they’ve left is because they say the work of it—

Loren Feldman:
Wait, people have left your Dallas store?

Dana White:
Yep. Already.

Loren Feldman:
That must have been pretty quick.

Dana White:
Yeah, and it’s, one, because we don’t have the volume. That’s one of the issues. The other issue is because like I literally had someone say, “Well, I’m leaving, because I want to spend more time with my husband. Like Sunday, I can’t work on Sundays. He flies out on Monday, and I want to be with him. Why can’t you just hire three or four assistant managers so I can just come and go as I please?” Well, that’s not going to happen.

One person we hired, everything was fine. And then she said, “My husband told me I need to take a break.” So she said, “I have to resign.” She has since come back to visit the salon to see how we’re doing. But I think some of them were very skeptical about how well we would do, and that’s okay. But I think I’m looking for the wrong person.

Loren Feldman:
What do you mean?

Dana White:
The best people for this job are operations people who have salon experience. I’ve been hiring salon people with some business-slash-operation experience. The last manager I hired, I had to teach how to use the computer. I said, “Well, how do you measure KPIs?” And it wasn’t until after I hired her that she said, “Well, I never really have. Corporate has just kind of given me what to post, and I posted it in the break room.” Well, during your interview…”

Jay Goltz:
I have to tell you, what you’re going through is exactly what I went through 25 years ago: of figuring out who should be working for you, what the job is. I went through 10 production managers over a period of three years, because I had no clue what I was doing. And it took me a long time to figure it out, and it sounds like you’re figuring it out quickly. You’ve got to figure out the nuances of every time you go through one of these, you think, “Oh, next time I’ll have to make sure they understand they’ve got to work Sundays,” or whatever it is. And I’m confident you will find the perfect person. But first, you have to figure out what the unperfect person looks like.

Dana White:
And yeah, I’m working on it. I know more and more. I was so discouraged when the first managers quit, because they quit quickly. And then, I had spoken with Jay about, “Oh, no.” And he said something that just kind of—of course, you know, the four tenets: “It is what it is. Deal with it. You’re operating with a good and noble purpose. And FU if you’re going to stand in my way, which none of them have.”

But the other thing was, I said, “Jay, I think this is a sign maybe coming down here to Dallas was a mistake.” And he said, “You’re gonna cut your arm off because of a mosquito bite? They did you a favor.”

Jay Goltz:
Every time I went through one of these people, I would drive home thinking, “Oh my god, maybe you just can’t find someone to run a picture-framing business. The owner has to do it.” Every time, I would do that. And then I’d wake up in the morning, and I’d say, “No, I’m going to do this.” But every single time I thought, “Wow, maybe this just is impossible.” So you have the benefit of somebody telling you, “Yeah, just keep doing it. You’re gonna find the right person.”

Dana White:
Just keep going. Just keep going.

Loren Feldman:
Dana, in Detroit, you had your operations manager, a woman who had extensive experience working in national salon chains. Is she still your operations manager?

Dana White:
No. We had a great talk, and she is going to stick to her commitment to her family. She’ll always be there if I need her, kind of as my salon braintrust. But she was starting to pull away, pull away, pull away more, because her priority is to be there for her girls. And she can’t use her skill-set and be there as a mother.

Loren Feldman:
So you’re the person who’s handling the searches for the manager and stylists.

Dana White:
Yep, I want to be. I want to be the operations manager, even for the military opportunities. I want to do it. I want to be the one to travel, check in. I want to do it. And I eventually want to replace myself. Eventually.

Paul Downs:
Is there any sense of being an outsider in Dallas? I know a zillion people move to Texas, so maybe it’s just friendly to outsiders.

Dana White:
Not at all. It’s outstanding. It is outstanding. I love Texas.

Loren Feldman:
Really?

Dana White:
Oh, yeah. So I’ll tell you why: Because southern hospitality is true. And they meet you with the energy you bring them. And if you bring them good energy and positivity, they meet you with that, versus what I’ve experienced in some other places. You’re just surprised at the level of customer service, the double-checking, triple-checking.

It’s just a small example: You’re in line at a drive thru picking something up. Normally, I’m used to people closing the window, and then just coming back when they’re ready for you to pay or give you your product. No! Here: “So how are you today? What’s going on with you today? How are you?” And you’re like, “Oh, you really are gonna talk to me? You want to talk to me?” So it’s just a different level of customer service, even with the stylists that I have, their level of customer service: “Hi, how are you?” You don’t have to tell them to come to the front of the salon. They come. They want to engage.

Jay Goltz:
Wow. Did you get a pair of cowboy boots yet? That’s what I want to know.

Dana White:
I had a pair when I lived in New York, but I’m looking for my pair down here. And I probably will buy some.

Loren Feldman:
Dana, you mentioned that you tweaked your business model. You’re not walk-in-only anymore. How big a deal is that? Does that matter?

Dana White:
It’s less I have to deal with, less I have to teach. I upgraded our POS system. It just makes a lot of things just more seamless, and we just open our book to accept more people. And we could focus more on the training and getting our appointment times down. So if we set it at an hour and a half, let’s get it down to an hour and 15.

Loren Feldman:
So is that something that you think you could or maybe should have done years ago?

Dana White:
I do. I brought my salon in Detroit where I’d like to see it in 10, 15, 20, 30 years—instead of meeting my customers where they are. Your customer’s not used to walk-in-only. Get them used to it by getting them in and out at a certain time on their terms. They love walk-in-only. Red flag: They thought walk-in-only meant 24/7. So we would get an appointment request at two o’clock in the morning. Or, “I’m out front of your salon at two o’clock in the morning. Why aren’t you open?” But they heard walk-in only, seven days a week, and assumed 24/7.

Jay Goltz:
Dana, I think you’ve gotten like 15 years smarter in one year. Really very impressive. Very smart. You’re figuring it out.

Dana White:
I put a decal in the window: “$65 press-and-curl.” And then you see people look and go, “Oh!” And then they look in and then you go hand them a flyer. And then they see me, and they go, “Oh my god, this is for us? Oh my goodness! I saw the press and curls and wondered when it was gonna open. I went to your website.” You just meet them where they are. It wouldn’t have been the same if I put “$55 blow-and-go.” That doesn’t communicate to my market.

Loren Feldman:
You said business has been slow for the first month. Are you okay?

Dana White:
I’m okay. I had the privilege of having a former employee drive one hour to come see me. And we sat and talked, and she said, “I’ve worked for you three years. This is exactly what Dallas needs.” And I said, “So you see nobody’s in here right now.” She said, “Because the only reason why I know you’re here is because I’ve been following you on Facebook for years. No one knows you’re here.” She goes, “You need to get in front of the television. You need to be on camera.” And she said, “I’m letting you know, as soon as you get on television, it’s going to go gangbusters.” She goes, “I promise you.” Because that’s what happened with the other salon, my competitor. And I asked my PR people, “That’s my competitor.” And they kept saying, “That is not your competitor. She is catering to a much younger market.”

Loren Feldman:
This is your other competitor in Dallas. Nearby? Same neighborhood?

Dana White:
Yes, she just opened her third location in two years in Arlington.

Loren Feldman:
But you’re not concerned about that as competition, because you think you’re going for a different market?

Dana White:
I’m going for a different market, and I’ve been to her salon. And that’s just not who we’re going to be. That’s not who we are. And there’s room for both of us.

Jay Goltz:
There’s millions of people there. One person, three people: It’s not gonna make a difference.

Dana White:
I’m very proud of her, though. I’m very proud of her. And I’m hoping to see her growth, evolution over the years, because I walked in, and I can say, “Yep, she’s new.” She hasn’t owned it long. Just the plug-and-play things that I’ve learned to evolve from: The tools and the processes and everything. Where I do it in one step, she does it three, because she’s new. And so she’ll learn, and she’ll evolve.

Loren Feldman:
I want to ask you about Fort Bragg and the military opportunity. But first, let’s take a quick break to hear from our sponsor.

[Message from our sponsor, Work Better Now]

And we’re back. Dana, you mentioned Fort Bragg and the military opportunity. Is that proceeding?

Dana White:
It absolutely is proceeding. And with the very valuable help of the 21 Hats community.

Loren Feldman:
What do you mean by that?

Dana White:
It’s proceeding, because you have a listener who has heard me on your podcast for the years that I’ve been on. And this listener believes in what I can do. And he has generously loaned me—with very generous loan terms—$100,000 to go forward with Fort Bragg, which is what we’ll need to open. It was higher, but the military people saw my Dallas location, and they said, “Dana, can you do this without the architect and the build-out, the architectural drawings?” I said, “Absolutely.” They said, “Well, this is what we want.”

And so I’m going to do that there, which cut the budget drastically. I don’t have to hire an expensive GC or contract construction. I’ve got meetings next week with contractors coming in to do the things that I need to do, all within the budget, which still leaves working capital for when we open. And that process has started. But it is because of the community that you have built here, Loren, and that is not to be overlooked. Yep, Fort Bragg is great, and it’ll be fine. And Grafenwöhr is next.

Paul Downs:
When are you gonna be open?

Dana White:
I don’t know. I have to check the timeline for the contractors. I’m hoping by the end of the year. I’ve talked to the trades. Again, that’s southern hospitality. The gentlemen I’ve spoken to who want to do flooring, they asked, “If you don’t mind, what else do you need done?” And I said, “Well, I’m looking for an electrician, I’m looking for a handyman.” They said, “Listen, this job is so small, you’re gonna be calling around for years trying to find somebody. Because most of these boys can’t get on base. You know, they’ve got backgrounds and such.” That’s what they say.

They said, “The boys can’t get on base, because they got records. So we’ll get on base with you, we’ll work it out. Most of our guys, they can do that. They can paint. You don’t need 10,000-square-foot painted. You need a wall painted. Who can’t handle a screwdriver or a power drill? We can help you.” All three separately have said that. And so that’s what I’m looking at. He said, “We’re going to have to bring in somebody for millwork, but that’s just to get you a quote. We can find people who’ve got good cabinets to put your towels in.”

Jay Goltz:
Look at you, you’re speaking the language now. Didn’t take long. [Laughter]

Dana White:
No, they’re the best people. So that’s who I’m meeting with next week at Fort Bragg on Thursday.

Loren Feldman:
And then, when do you start looking to hire employees?

Dana White:
So we’ve sent out a market survey. Once we have a start date for when they’re going to come in and do the electrical and all of that, then we’re going to put out the job. So she has the new signage for the window. She already has a temporary Paralee Boyd—

Loren Feldman:
Wait, who’s she?

Dana White:
The director for AAFES, there at Fort Bragg. She’s already put a temporary one up, but she’s going to take all those down, and she’s gonna put the branded one up. And it’s gonna say, “Now hiring,” and then we’re going to update our website for Fort Bragg: Now hiring.

Loren Feldman:
But are you going to run that hiring yourself, just as you are in Dallas?

Dana White:
Yes, and I’m going to do the online interviews.

Loren Feldman:
You’re going to be going back and forth?

Dana White:
Absolutely. Between Dallas and Fort Bragg.

Paul Downs:
How far is that?

Dana White:
It’s about a two-hour flight, two-hour direct flight to Fayetteville. But a lot of it, I’m going to do online, Zoom, initial interviews. And then, like I did with Dallas, take my final interviews, and go meet them in person. Phone interviews, Zoom interview, in-person interview. And then keep them abreast as to the build-out, and then get them in there for training.

But again, it’s this community. I wouldn’t be able to do this had I not dialed it back as an owner and said, “Okay, what do you need? Do you need a Bentley? Are you all right in a Honda? Are you okay with that? I’m good with a Honda.” And the military is like, “That Honda to us is beautiful.” Really? Because I can get a Honda. And so I’ve got the Honda. And I looked at my budget, and I said, “All I need is $100,000.” And sure enough, connections were made in this community.

And to me, it’s more than the money, Loren. I didn’t just want, “Okay, give me the loan, and here we go with generous terms. Here we go.” No, I want the relationship. So this person told me what they’re good at, told me what they’re not. I picked the things they’re good at and want them to be a part of my braintrust with monthly, or as frequently as they would like, updates. I want that. That’s one of the first things I said. “Can we talk?” And he goes, “Well, I’m gonna send you what I know and what I don’t know. You pick, any way I can help you.” And this is what he said that was key: “You don’t have to sell me. I already know you. I’ve known you for two years. That’s because of 21 Hats.”

Jay Goltz:
All right, that gives me goosebumps. What a beautiful—I mean it. Thank you. Kudos to you, Loren. It’s all working.

Dana White:
Here, here, Loren.

Loren Feldman:
Well, that’s great. That’s awful nice to hear. And I got goosebumps, too.

Dana White:
Let’s not stop there. Do you know what this does for my business—the Fort Bragg contract? Putting a salon on the largest military installation in the country? The exclusive salon serving over 79,000 women? What that does for Grafenwöhr, Ramstein, Japan, Fort Benning, Fort Hood. That’s the spark. Loren, I mean, let’s sit with that for a second. It’s changing my life.

Loren Feldman:
Well, that’s a wonderful thing. I don’t want to get ahead of ourselves. We’re gonna keep up with you, Dana. Hopefully, it won’t take months to get you back on again. And we’ll hear how that goes, and maybe one of these days we’ll be recording a podcast in Germany or something.

Jay Goltz:
And unlike reality TV that’s scripted, this is reality.

Dana White:
It’s the reality. And it’s not going to come without its challenges. It’s not going to be managers who don’t quit, staff who don’t do, flights that are delayed. It’s not going to come without its challenges. But it is what it is. You deal with it.

Loren Feldman:
All right, well, I want to hear a little bit about Paul and Jay’s reality, too, before we have to shut down this episode. Paul, you’ve told us quite a few times about the marketing initiative you’ve been developing this year. But it’s been a while now. Where do you stand?

Paul Downs:
Well, we’ve passed through the kind of message definition phase of things. And we’re about to do content production, where the marketing firm is going to be sending camera crews into our shop and filming in order to produce a series of short films that we’re then going to use to support a final marketing effort. So I would say we’re about two thirds of the way through at this point. And the company I engaged has had a very rigorous process of developing the message that started with some research with our target audience. And that was very useful. And now we’re going through the message development.

Loren Feldman:
Well, in fact, I think the last time we talked about this, you told us that some of the research had led them to talk to a company that said, “Hey, we want to know who these guys are.” Did that lead to business?

Paul Downs:
It’s led to one opportunity that is sort of in the middle of development. It certainly looks promising. But I don’t know the exact status of that, because I handed the job off to one of my design engineers. And while all that was happening, we have just been buried with incoming orders. Our business is up 35 percent over last year, and we’ve already blown past last year’s sales numbers.

Jay Goltz:
And last year wasn’t bad, right?

Paul Downs:
No, last year was the best year we’ve ever had. Last year, we sold 4.15 million, and we’re probably going to go past 5 million this year. So I’ve been more focused on how to get all that work done, and making sure that my team is strong and that we’re continuing to hire into the positions we need to do that much work.

Loren Feldman:
To what do you attribute that increased business, Paul?

Paul Downs:
Well, a lot of our clients are military and defense contractors, and they’re the ones who’ve been feeling spendy lately. And for, I think, what should be obvious reasons, if you’re in the business of producing military hardware, there’s a little event going on across the other side of the world, which is soaking up all that excess inventory. And I think these people are rubbing their hands together. So they’re moving ahead with CapEx projects that, in some cases, we’ve known about for years that have just been sputtering along going nowhere, and then all of a sudden, they pulled the trigger on all of them.

And we’re also doing a fair amount of work through our GSA contract, which is heavily oriented toward military units. And there’s just a fairly healthy rate of people giving us a call anyway. Our inquiries from all sources are up about 25 percent over last year. So rumors of recession, as far as I’m concerned, are greatly exaggerated. And I can’t speak for anybody else, but we have people who are waving money at us and want to get in the queue. So it’s good.

Jay Goltz:
So war is good for business, basically.

Paul Downs:
War is good for my business. But peace is good for my business, too. We see different buyers emerge in different phases of the economy. When a business sector is doing very well, there’s always going to be someone who is expanding their office, or whatever, and gives us a call. So, in any given two-year period, our top clients tend to come from different parts of the economy. And right now, it’s heavily defense and military.

Loren Feldman:
Paul, you said you’re dealing with trying to figure out how to handle this production. Are you hiring additional people?

Paul Downs:
Yeah, hired five people this year. We lost one, and so we’re at 27 at the moment.

Loren Feldman:
Do you have openings? Are you looking for more?

Paul Downs:
I am kind of looking for more. I filled all the immediate openings. And the question is: What happens next? Because we’re so far beyond the normal pattern of growth, which is usually about 10 percent a year, that I don’t know whether it’s the new normal, or whether it’s a blip. And so, I’m somewhat loath to add a lot more people. We’re actually getting it done with the current crew, although it’s going to be a challenge for the next three months. But I kind of want to see what happens after the New Year,

Jay Goltz:
How’s your space holding up? I mean, are you running out of space?

Paul Downs:
We were, and I had started shopping around to see about a possible move with very discouraging results. Because to get the amount of space that I wanted was going to triple my monthly bill and probably incur about a million bucks in moving and refit costs. So a parcel opened up on the ground floor in our complex, and I took it, even though it’s not ideal, because it gives me an extra 25 percent square feet. And it just gives me some breathing room for the next few years. So we’re committed to stay here for the next three years,

Jay Goltz:
One strategic move would be to perhaps look at the jobs that are of the lower margin and just raise prices on them and maybe lose some of them. It’s better to lose customers because you’ve raised your price than because they’ve gotta wait too long. I wish someone would have told me that a long time ago, but rather than go spend a million dollars, that’s one way to throttle down growth.

Paul Downs:
For various reasons, we never really maximized the output from this particular space we’re in. And the new space that I rented allows us to get a lot of stuff that was just sitting around in our current space out of here so that we can devote every square foot to production. And I believe we can do what we need to do with the resources we have for the next few years.

Jay Goltz:
That’s good.

Loren Feldman:
Jay, let’s turn to you. I think one of the last times you were on, you told us about your efforts to hire a head of HR. Did you find one?

Jay Goltz:
No, and it’s been very interesting. First of all, this is my third HR person I’ve had. The last two lasted six or seven years each, and I really didn’t have that much to do with hiring them. And now I’m very much involved. And here’s what I’ve learned. A) we were using ZipRecruiter for years, and I talked to my friend who does recruiting. She said, “You’ve got to do Indeed,” and she was right. I’m getting way more responses from Indeed than I was getting from ZipRecruiter.

Loren Feldman:
Let me stop you there. Paul, Dana, have you had experience with ZipRecruiter and Indeed? Did it make a difference for either of you?

Dana White:
I have. ZipRecruiter just didn’t work for me. I just got a lot of overseas candidates. Indeed is my go-to.

Paul Downs:
Yeah, I’ve been working with Indeed lately, too. I don’t love it. I think that there are aspects of the user interface that are pretty bad, but I do get applicants. I mean, I get a lot of applicants.

Jay Goltz:
You know what, I agree with that. I actually liked the interface with ZipRecruiter better, but if you don’t get people from it, who cares? So that just shows you, for all these years, I’ve been using a screwdriver instead of a hammer, and who knew? I figured, “Who cares? ZipRecruiter? Indeed? Same thing.” Well, not the case. So that’s the first lesson.

The second thing is, I redid the ad. I added in there, “Work for a company that was profiled on the front cover of Inc. Magazine, in Small Giants, and the owner blogged for The New York Times for five years.” And so I finished the ad. I feel real good about it, and I expected to get probably 100 resumes from it. And I’ve gotten about 40, and the trickling has almost stopped.

Loren Feldman:
So did Indeed make a difference or not?

Jay Goltz:
No, it did. Without Indeed, I would have had less. I mean, no, it definitely helped. But it’s certainly not getting the response I thought. One of the questions is: Why are you applying for this job? And I would expect someone at this level would take about 30 seconds to say, “I was really intrigued by your ad. I want to work at a company that has low turnover like you have,” blah, blah, blah, or, “I’d rather work for an entrepreneurial company than a large corporate.” And instead, I get answers like, “It’s an HR job.” Or, “It fits my background.” Or, “It’s close to my house.” And I’m like, “Really? That’s the best you can come up with?” So we go through the resumes, and we find 10 that we think are interesting. We sent emails to 10 of them. Four of them don’t even get back to you, which makes you think, “Why did you bother applying?”

So out of the 10, six get back. And then we do a phone interview. We’ve interviewed three of them, and none of them seem like the right fit. I do have a really good prospect coming in tonight. And what I just figured out is, I just made a list of my 25 key employees here. And I realized that the average age when I hired them was 25 years old. And most of them have been here 20 years, at this point, or so. So I realized I’m really good at taking the diamond in the rough in their 20s and developing and keeping them. So this one that’s coming in is 28, and that’s the other interesting thing. You can’t ask anyone how old they are. But you can Google their name, and it comes right up.

Loren Feldman:
Did you put a salary range in the ad?

Jay Goltz:
No.

Loren Feldman:
Do you think that might make a difference?

Jay Goltz:
You know what, I don’t want to commit. The salary range is pretty big. If I get someone really junior, it’s going to be 40 percent less than if somebody comes in who’s plug and play, who knows what they’re doing. So I don’t want to necessarily put out a range, because I don’t want to have to explain to somebody, “No, you’re not qualified for that thing.” And you know what? They turned the tables now. You can’t ask what they were making. You know what? You tell me then. What do you want to make?

And most of the people do put a salary in there. Some of them say “negotiable,” which, you know, I don’t think that’s a great answer. I don’t want to waste a lot of time talking to someone if they’re looking for twice the price of what I want to pay. That hasn’t been the problem. I’m more disappointed that most of them don’t take the time to actually think about: Why you are applying for this job. And then there’s one last question: Do you hold it against somebody after you interview them for an hour, and then they don’t send you a note? I mean, really?

Paul Downs:
Jay, one of the things is, you’ve got a lot of experience, and you’re thinking back to those people you hired at 28. But that was 1991, and it’s possible that people today come in different than that crew of people.

Jay Goltz:
Yeah, for sure. That’s why I asked the question. The question is: Is it unreasonable to expect someone applying for an HR job at a higher level that they should send you an email after the interview?

Dana White:
If you’re looking for someone young, I think it’s a high expectation.

Jay Goltz:
Wow, we’re talking about an HR job, though. We’re not talking about someone working in production.

Dana White:
No, I don’t think it’s the job.

Jay Goltz:
That’s remarkable.

Paul Downs:
if it was a sales job, probably I would be looking for a follow-up. But for any other position? No.

Jay Goltz:
It’s an HR job.

Paul Downs:
Okay. But what does that mean?

Jay Goltz:
It means that they’re used to hiring. I would have thought that that would be standard procedure, but I’m not ruling anyone out if they don’t. But I have to tell you, I am surprised. Most people do send one. I’m surprised that someone doesn’t think that’s a good idea.

Paul Downs:
At the end of the day, you’re gonna have a checklist of what you like. And maybe you’ll find somebody and maybe you won’t. But whether the checklist is reasonable, who knows? Every owner comes with their own biases, like, “The one thing that that person could do. I like someone who comes, shakes my hand,” right? But it’s not a given that everybody’s gonna do that and give you the firm grip and look you in the eye. I mean, that’s just golf course bullshit in a way. Why should somebody want to do that? When they’re out there on the shop floor, they don’t have to shake anybody’s hand.

Jay Goltz:
Okay, but again, this isn’t a shop floor person. This is a highly-paid human resource person. So I have higher expectations of them.

Loren Feldman:
Jay, you said you’re talking to somebody who’s fairly young. Is this somebody who has real HR experience?

Jay Goltz:
Oh, absolutely. Absolutely. I’m not talking about a theory. I’m talking about people that are probably making $70,000 a year. This is someone who’s been in HR for five years and has hired a lot of people, so I am expecting some minimum level.

What I figured out I need is two things: I need someone who’s not afraid of me. And there are people who are 27 years old who I hired. They come right in, and they’ll tell you right to your face whatever they’re thinking, and it’s a beautiful, wonderful thing. And I’ve got lots of those people. And there are people who are afraid of their own shadow, who are afraid of saying the wrong thing. And I can’t deal with that. That’s the first thing.

And two, I need someone who’s smart. And I just don’t know that it’s smart not to send a follow-up email, and I’m grappling with that. We’ll see what happens. So my expectation is, of tonight, from what I saw so far, I’m expecting—I’m not asking for that much—them to have good answers to the questions and follow up with a nice email. And I do believe I’ll find someone like that.

Loren Feldman:
Jay, you said that you’re willing to wait to find the right person.

Jay Goltz:
Yes.

Loren Feldman:
You have a company with 130 employees or so. How’s HR stuff being handled?

Jay Goltz:
The CFO is dealing with some of it. I’m dealing with some of it. Felice has been with me for 30 years, she’s dealing with some of it. The last thing I will do is the, “Well, I interviewed 10 people. This was the best of them.” No, that’s a recipe for disaster. I’m gonna wait till I find the right person. And if it takes another month, whatever. If I have to hire a headhunter, I’ll do whatever I need to do to find the right person. I am not going to hire somebody who I don’t feel is the right person. Because that’s just a recipe for, if not disaster, a recipe for mediocrity.

Loren Feldman:
Dana and Paul, just curious, do you guys put salary ranges in ads typically?

Paul Downs:
Yeah.

Dana White:
I’ll put, “starting pay X,” and then whatever else benefits are included.

Jay Goltz:
In this case, like I said, it could be anywhere from someone who’s got five years of experience who I can mentor and train and do the rest of it, or someone who’ll come in here that can do this in their sleep and knows what they’re doing. So that person is clearly worth more. So I don’t want to corner myself with telling them upfront.

Loren Feldman:
But if it’s a range, you can explain that to someone, right?

Jay Goltz:
I’d just as soon have them tell me, “Here’s what I’m looking for.” And then I can decide. I mean, it used to be we were the cat and they were the mouse. Now it’s the other way. Now we’re the mouse and they’re the cat.

Loren Feldman:
You still make the decision. They can’t tell you what to pay them.

Paul Downs:
You said you wanted someone smart.

Jay Goltz:
Yeah.

Paul Downs:
And when someone says, “Oh, let’s negotiate the salary,” but doesn’t throw out the first number, that to me is a sign of intelligence, because everybody knows when you’re negotiating, whoever throws out the first number loses.

Jay Goltz:
That’s a philosophy. This is all out of the Jay playbook. I want someone who will work cooperatively with me and give me a good faith number that, “Okay, I’m not going to come in high, so you can come in low.” And it’s worked for me. It’s worked for me for 43 years. I usually get to a number where I say, “Okay, what are you looking for? Tell me the real number.” And I go, “Okay, that’s reasonable.” And that’s it. I am not looking to get into a negotiation thing. And I’ve never done it. And it’s worked extremely well for me. So that’s my philosophy.

Paul Downs:
All right.

Loren Feldman:
As someone who’s spent most of his career as an employee, and who has frequently put “negotiable” on the application—

Jay Goltz:
And most of the places you worked were larger organizations.

Loren Feldman:
Where I knew for sure that what I put in that box could only hurt me and couldn’t possibly help me—and that I was going to get paid what they wanted to pay me anyway, and that I’d rather have that discussion face-to-face and be able to adjust, and not put something down that might preclude my even having that conversation.

Jay Goltz:
Keep in mind, now, that was also back in the old days where you could ask someone what they’re making. The game has changed now.

Loren Feldman:
We’re out of time. Dana, I have one last question for you. You referred to the member of the 21 Hats community who is lending you the money to get you open at Fort Bragg. Do you think this person wants to be named or would prefer not to be named?

Dana White:
I don’t know.

Loren Feldman:
All right. Then let’s not do it. My thanks to Paul Downs, Jay Goltz, and Dana White—and to our sponsor, Work Better Now. Thanks for sharing, everyone.