My Employees Are Not Thrilled to Be Back at Work
Dana White is founder and CEO of Paralee Boyd hair salons.
Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.
Laura Zander is co-founder and CEO of Jimmy Beans Wool.
Producer:
Jess Thoubboron is founder of Blank Word Productions.
Episode Highlights:
Jay Goltz: “I don’t have the luxury of just saying, ‘Oh, I’ll tell you what. Maybe we’ll open in six weeks, eight weeks.’ I mean, there’s some point where I’ll be out of business.”
Dana White: “Okay, you guys go ahead and play with this. I am not. I’m getting ready for fall 2020 when we will most likely have to shut down again.”
Laura Zander: “I live in a city of 250,000 people, and you walk around, and you would almost never even know that this is happening. I mean, we’ve had, I don’t know, 100 cases in the whole county, 200 cases in the whole county.”
Full Episode Transcript:
Loren Feldman:
As usual, let’s start with quick updates. Dana, what’s the status of Paralee Boyd? What’s going on with you?
Dana White:
Paralee Boyd has received the PPP.
Loren Feldman:
Wow!
Dana White:
Yeah, I know. Kind of major. It was not through my bank. It was through Goldman Sachs.
Laura Zander:
Interesting.
Loren Feldman:
You got it through Goldman Sachs because you participated in the Goldman Sachs…
Dana White:
10,000 Small Businesses, yep. They sent an email out to us a couple of weeks ago saying, “Hey listen you guys, we actually have partnered with someone who can move this along quite well.” The difference with the Goldman Sachs money is they looked at all of 2019. Whereas in my bank and another entity, they looked at from April 2019 to April 2020. The Goldman Sachs money is less by $6,000. I also applied through BlueVine, and my application was accepted through BlueV ine as well.
Loren Feldman:
I’m not familiar with BlueVine. What is that?
Dana White:
BlueVine is a lender similar to Lendio. A girlfriend of mine said, “Dana, BlueVine is approving and getting PPP funds out right away,” and their application process was very simple. Their responsiveness was amazing. And so I went ahead and applied through them too. I was torn about applying through multiple places, but I was just looking at the level of contact from my bank.
Loren Feldman:
Why were you torn?
Dana White:
Because people were like, “You know, you should apply once and wait.” My bank kept saying, “We need you to sign the document, we need you to sign the document.” So I would fill out the document, sign it as per their instructions, and then I get another email, “You need to sign the document.” And I said, “I can’t keep signing this document.” And my application just wasn’t moving. I took the reins in my own hands and applied through the Goldman Sachs program. I also applied through BlueVine.
Loren Feldman:
Anybody else?
Dana White:
Nope, just those three. BlueVine has said, “You’ve been approved, we’re just waiting on your loan number.” And Goldman Sachs has a loan number and an amount.
Laura Zander:
What happened with PNC? Have they gotten back to you?
Dana White:
I wish we could put a cricket sound effect right here.
Jay Goltz:
I’ve said this before, I need to say it again. The big banks just don’t need little accounts, period. They don’t.
Dana White:
Well, Chase just sent out an email to tons of small businesses that I know. Today, they all got their money.
Jay Goltz:
Well, three weeks, two weeks later, a week later, I’m just saying.
Dana White:
Yeah, they sent it out 3 a.m. this morning, and then on my Goldman Sachs web feed, on my newsfeed on Facebook, everybody’s like, “Oh, I got awarded, I got awarded, I got awarded.” But the anxiety and the nerves that everybody was going through, not knowing what to do. “Should I apply?”
Loren Feldman:
One thing I would add is, all the advice I’ve heard is that there’s nothing wrong—in fact, there’s a lot good—about applying in multiple places. The only thing you can’t do is, you can’t take more than one loan. That would be a problem. But you definitely did the right thing by applying in multiple places.
Dana White:
I hadn’t heard that. I had heard, “Apply one place and sit tight.” Even the Goldman Sachs loan said, “Do not apply if you’ve applied already.” And I ignored it!
Loren Feldman:
Good for you.
Dana White:
As did several other people in our Goldman Sachs class, and they were approved within 24 hours. It was the Goldman Sachs people who actually picked up the phone and called me and asked questions.
Jay Goltz:
So the entrepreneur’s lesson from this is, you can’t always follow the rules, and that is the reality. You were doing the right thing listening to all the quote-unquote professionals. You were doing what you were supposed to do with your big bank, and they didn’t come through for you. To use the phrase, you took it into your own hands, and you got the job done.
Laura Zander:
I think the other lesson that I’m hearing is, apply and try to become part of these programs. The Ernst & Young program, the Goldman Sachs program, if there’s a local program. Because that becomes your quote-unquote networking, and that’s their goal. That’s what I’m hearing.
Dana White:
Yeah, those organizations are invaluable. Likely, I wouldn’t have had it had I not been an alum. And the other thing is, when it comes to entrepreneurship, don’t ask. When you’re asking, you’re waiting. Because you’re waiting on somebody to decide to help you or not. I chose not to ask PNC and wait for PNC to decide that they were going to get to my application.
Jay Goltz:
You know the phrase, “Better to beg for forgiveness than ask for permission.” That’s another example of it.
Loren Feldman:
Do you know, Dana, is there any reason to think the loans will be different, and that you have a material choice to make here? Or do you think it doesn’t really matter which one you pick?
Dana White:
I think it matters just in the amount of funding. Like I said, with the Goldman Sachs loan, they did January of 19 to January 2020, so that means it’s going to be a $39,000 loan, whereas the BlueVine loan is April to April, which is going to be a bigger loan. I may go with BlueVine. And I don’t know if this is legal or not, but the governor of Michigan just extended the stay-at-home order to May 28. So if I get closing docs next week, Dana may not be signing closing docs next week. I know a lot of small business owners that I’m talking to are rescheduling their closings.
Loren Feldman:
So you’re saying you might not take the loan?
Dana White:
I’ll take it. I just may not schedule my closing.
Jay Goltz:
No, she’s delaying it because she’s gonna be closed, which is smart. Better to add a week at the back end when you’re open then get it now when you’re closed. Again, smart.
Dana White:
You have to spend it within eight weeks. So if I went to get my closing documents, let’s say Monday the fourth, they’re processing and that money hits my account Tuesday the fifth. Well, then the clock starts ticking Tuesday. I have eight weeks from Tuesday the fifth to use it. Well, I’m saying, “No, let’s schedule that closing for as far out as I can go and then go from there.”
Loren Feldman:
Do you have any reason to believe that they’ll accommodate you? Will they let you wait as long as you want to wait?
Dana White:
I mean, scheduling a closing… it’s your schedule. If I’m unavailable…
Loren Feldman:
Nobody’s unavailable.
Dana White:
I could be caring for a sick loved one. I could be walking my dog.
Loren Feldman:
Have you thought about how you’re going to start spending it, and when you’re going to start spending it? You close on the loan, but your shop is still closed. Are you going to pay people before your shop reopens?
Dana White:
Probably two people to get us reopened. I’ve already done the set-up work so that when I do bring them back, I can just give them their marching orders and pay them, not to help me get set up but, “Here are your marching orders and go” and pay them. And then when [the governor] does give the green light to open, I will, based on who we have, put all my staff back on, and if there’s anybody who has any questions, “I’m not feeling comfortable.” Then I have to let you go, because in Michigan, they’re very clear: You will go to jail if you have a job, and you tell somebody, “No, you can stay at home and stay on unemployment.”
No, I’m not doing that. They’ll come back, and then we’ll have training. We’ll have some cultural engagement, some rah rah meetings. I’ll give everybody their face mask, train them on how we’re going to keep ourselves safe, how we’re going to be different. Again, do more training to get their skills honed, and then we will have an opening date. Then we will open on that date. But it may not be the day that she says we can open. I’m not opening up gangbusters. No, I’m not doing that.
Loren Feldman:
Jay, you have told us previously that you got a PPP loan. You’re in a similar position, in that your business has been closed, but your state is handling it differently. You’re in Illinois, you’re able to start opening, I believe, today? Is that correct?
Jay Goltz:
No, no, no, no. It was pushed till the end of the month. But I sell plants in my home store. I have a whole big lot next to my store that, in the summer, we sell plants. Three, four thousand feet. We have a big lot out there. So because I sell plants, I’m called a “plant store,” and I service some landscapers. Therefore, I am allowed to open that store.
Loren Feldman:
The whole store or just the lot with the plants.
Jay Goltz:
You know, you go to Home Depot because they sell some building supplies. There are no stores that are part open. If you sell something that somebody needs, the whole store is open. So I am confident it’s okay for us to carefully open the store and control how many people are in there, masks and the whole thing.
Laura Zander:
Do you have predictions or projections on how busy it’s going to be? I mean, I drove by Lowe’s. The parking lot is completely full.
Jay Goltz:
Well, that’s funny you ask because I’m an hour behind Loren. It’s 11:25 a.m. here. I’ve been open for an hour and 25 minutes, and before we’re done here, I will find out whether anyone showed up or not. But from what I heard, we were getting lots of emails that people were anxious for us to reopen. So there I’m good.
My wholesale business—I sell frames to a thousand frame shops around the country—I believe that falls under the category of distribution and quote-unquote managing my inventory. Now, most of the stores are still closed, so I’m not doing anything there yet. And my retail picture frame store, there’s no way I can open that. There’s no wiggle room there, whatsoever. So my framing business is closed. My home store was open for all of an hour and a half now.
Loren Feldman:
And you opened the whole store today, and not just the plants?
Jay Goltz:
An hour and a half ago. I don’t know, frankly, I didn’t go outside yet. I’ll leave this thing for 60 seconds and tell you whether there’s any business here. We made up signage, we made it very clear, everybody’s wearing masks, customers and employees are wearing masks. We’re putting tables in front of the checkout, so they can’t get too close. We’re cleaning the place. We’re watching how many people are in there.
And then there was one other directive I gave to everybody, which is we’re suspending the cardinal rule of this company for 42 years: “The customer is not always right.” They all know when they start here, “Don’t go fighting with customers.” We won’t fight with a customer. They want to come in and be a jerk and say, “I’m not wearing a mask.” We’re going to tell them they gotta leave, and that’s the way it is. I’m not going to get intimidated by a customer who thinks it’s okay to come in without a mask. That’s a huge change for my employees, and I wanted to make sure they know, “I’ll back you up.” They’re not going to come in here and throw their weight around and go, “I’m not wearing a mask. This is overreacting.” That’s fine. Go somewhere else. I’ve got no use for that.
Loren Feldman:
Are you limiting the number of people who can come in at any one time?
Jay Goltz:
Yes, we’re starting with eight. The store is about seven, eight thousand feet. We think that we’re going to start with eight people.
Laura Zander:
How did you come up with that number?
Jay Goltz:
The size of the store, and we figured out what we could handle. We’re only keeping one door open instead of two. I’ve gotta tell you, my employees are not thrilled to be at work. They would have just soon stayed at home.
Loren Feldman:
Is that because they’re concerned about their safety, or because they were collecting the unemployment with the extra $600 a week?
Jay Goltz:
That falls under the category of, who knows? I do think, though, that they sincerely are worried about it. And all we can do is, everybody’s wearing masks, staying away. But I just don’t have the luxury of saying, “Oh, I’ll tell you what. Maybe we’ll open in six weeks, eight weeks.” I mean, there’s some point where I’ll be out of business. Whatever the day is that any business opens in this country, there is still going to be some risk out there. So it’s a question of: When’s the time to jump in? We’re being extremely careful with how we do it and extremely respectful to the employees—they don’t have to get near the customers.
Laura Zander:
Are you paying them hazard pay?
Jay Goltz:
I’m thinking about it. I haven’t done anything yet. Because unlike Michigan, apparently, that made it crystal clear about the unemployment, I’m still grappling with the people who are home. Should we put everyone back on the payroll and bring them back or leave money on employment? The whole thing is just a big murky mess. I’m trying to do the right thing, quote-unquote, but it’s not clear what the right thing is.
The question is going to become, this is just scene two of a 10 scene play. The next question is, what about the employee who doesn’t want to come back in two weeks, three weeks? Where do you finally say, “Sorry, but I’ve got to replace your job.” And then, are they going to be eligible for unemployment if you’ve offered them the job back and they didn’t come?
Dana White:
They’re not.
Jay Goltz:
Well, no, you’re in Michigan. Maybe in Michigan… Who knows? I’m not sure which way it’s going.
Loren Feldman:
How comfortable are you with the idea of opening your store now? Most medical experts would prefer that we were not opening back up the way we are.
Jay Goltz:
Customers are wearing masks. We’re wearing masks. We’re putting tape, no one’s going to get anywhere near six feet. We’re cleaning everything. I would say this: All of the experts get a paycheck every single Friday, I’ll guarantee you.
Loren Feldman:
But, Jay, it’s not as simple as that.
Jay Goltz:
There’s a point in time where, I’m not gonna do anything that’s perilous to anybody. I think we’re being extremely careful.
Loren Feldman:
Are you worried about potential liability? Suppose one of your employees gets sick.
Jay Goltz:
This is becoming a regular theme with this show. If I was to worry about everything that I could worry about, I would be in a mental institution somewhere. So I’m not going to say worry. We’re taking all the precautions we can take, and I think it’ll be okay. If I didn’t think it would be okay, I wouldn’t be doing it. So is it possible that someone’s going to get sick and then blame it on that they came into work? I’m following the law. I’m doing everything I’m supposed to be doing. It’s a difficult situation.
Laura Zander:
Is anybody doing waivers, like a liability release? Like when you come in the store, you can shop at your own risk?
Jay Goltz:
The government is trying to make it illegal to sue a company. If somebody gets sick, they can sue their employer. There won’t be any companies left.
You didn’t ask this question, which is a fair question: Jay, has anybody been sick? No, I don’t have one sick employee that I know of. I think we’ve been quarantined nicely. I think we’re being prudent. I think we’re being careful. I had plants ordered for six months. These plants are showing up here. I’ve got a lot of money invested in plants. I’ve got customers who are clamoring to come in to get their plants.
Laura Zander:
Gardening is huge. The retail numbers… it’s just going through the roof.
Jay Goltz:
Right. So there’s people who want this stuff. They’re being careful. We’re being careful. At what point do I—
Laura Zander:
I think you’re doing a great job.
Jay Goltz:
Thank you!
Laura Zander:
I’ve been in your shop. It’s reasonable. It’s not overboard. It’s not going to look like Walmart looks. Again, I go by Lowe’s, and I’ve never seen the parking lot so full. It’s more full than it’s ever been. So to have a private store that already has kind of a niche audience be open with eight people at a time… I just don’t see an issue with it. People are running a business. We’re running a business, and we have more than eight people at our location, and they’re humans, and they’re there by choice.
Loren Feldman:
Okay, so let me see if I can annoy all three of you.
Jay Goltz:
You already have, Loren. Done.
Loren Feldman:
I know I got you, Jay. The big picture here, though, is this: By opening back up now, when the experts are saying it’s too soon, they’re saying we are running the risk of triggering a second wave. I think the worst thing for all of us—for the country and for your businesses too—would be for us to have wasted this time that we spent shut down and to have to do it again. That’s what I really worry about. Do you not worry about that, Jay?
Jay Goltz:
You left a piece of the puzzle out. Some of these people—I saw in the paper this morning in the Wall Street Journal—[in] Michigan, a bunch of people showed up at the Capitol with guns, saying, “We want to be open,” and they don’t have masks on.
Loren Feldman:
What is the piece I left out?
Jay Goltz:
I’m talking about, customers all have masks. We have masks. They’re not getting anywhere near each other—more than six feet apart. We’re following all of these things to keep everyone away from each other. It’s not like I’m minimizing the problem and going, “Oh, it’s been overblown. We don’t need to wear masks.” We’re not letting anybody in without a mask. We’re going to send them away.
I think if you take all of these precautions, I believe it will be okay. I’m not one of these people that you see, these people with their protests who are out there in crowds with no masks. I think that’s crazy. That’s not what we’re doing. We’re taking all the precautions.
Laura Zander:
I agree, you’re being responsible. People are far apart. You’re not opening a movie theater.
Dana White:
Well, I don’t know. I’m getting ready for the second wave. I’m here in Michigan. I’m looking at people. I’m getting ready for the second wave. That’s what I’m doing.
Loren Feldman:
And you’re saying that because you see people who are not being responsible?
Dana White:
Absolutely, and we don’t have enough tests. If you’re watching what’s happening in the homeland, in Iowa and Nebraska, people have not been hit hard enough yet. Not enough people—for them—have died for them to take this seriously enough to shut it down. So okay, you guys go ahead and play with this. I am not. I’m getting ready for fall 2020 when we will most likely have to shut down again because Cletus and Bubba and Jeff want to hang out in the backyard. “Because the governor said I can’t hang out with my friends,” they’re mad. So you be mad and be sick, while Dana is getting ready to have a much more distanced online interaction with her customers, getting ready for what’s going to happen in the fall.
Maybe, since I’m not opening till May 28th, that might be something I can do in the time it takes to put products and kits together, but I’m getting ready for the second wave right now. And then, if we can open, that’s great. We’ll open, generate revenue, use PPP, have some cushion. But when and if we have to shut down again, I will be ready. That’s what I’m doing.
Jay Goltz:
I’m not in a vacuum. Home Depot’s open. There’s hundreds of people there. Lowe’s is open. Everybody’s doing business. I should decide, “Oh no, I’m gonna take it to a newer level and I’m gonna let tens of thousands of dollars of plants die, and I’m just going to shut it down because…” And the customers are calling us. They want to come in and buy their stuff. There is a point to where the customers want to come in, we want to sell them things, we’re all wearing all the right stuff. There is a point to where you’ve got to make a value judgment, and I don’t know that I can go another month without doing any business.
Loren Feldman:
Why do you say that, Jay?
Jay Goltz:
Because I have been shut down. It will be 10 weeks of next-to-no business coming in. I don’t have $3 million sitting in a bank account somewhere. I have no business coming in.
Loren Feldman:
You did get a PPP loan. Does that make a difference?
Jay Goltz:
I paid the people with it. I used it for payroll. It doesn’t change the fact that—
Loren Feldman:
Well, 25 percent of it you can use for other things, right?
Dana White:
Utilities and rent.
Jay Goltz:
Yeah, except this isn’t going to be a light switch going back on. I am sure I’m going to lose a ton of money this year. As soon as the lift is over, it’s not like business back to usual. I mean, I’ve still got the same overheads. I’ve still got the employees. It wouldn’t be surprising if my business is off by 30, 40 percent the day we open.
Dana White:
Jay, I have a question. Can you do pick-up framing and delivery framing? Can you do delivery of furniture?
Jay Goltz:
Yes, we already have a website: Jaysonhome.com—with a “Y”—Jaysonhome.com. We absolutely sell stuff on the internet, and people can pick out furniture, and we can deliver it. Framing, we’re hanging plastic shields over the sales counters and people are protected there. If they want to digitally send in photographs, we can certainly frame those.
Loren Feldman:
You told us you haven’t opened the frame store.
Jay Goltz:
I can’t. It isn’t an option at this point.
Loren Feldman:
When you said you’re hanging plastic, you’re talking about that’s your plan. That’s what you’re going to do when you can open.
Jay Goltz:
We’re gonna do it for sure when we open again. And then on top of which, I am putting in some software where you can frame online and come pick it up. I don’t think that my customers mostly are going to decide after all these years that they’re going to want to start framing pictures online.
Laura Zander:
Agreed.
Jay Goltz:
I believe that most people are going to get back to quote-unquote some kind of normal. I don’t think that the world is going to stop doing picture framing. That’s what I’m counting on. And just so you have some perspective, I’m dealing with a very small niche market, people who are into their interiors, people who want to frame their own photographs. Most people have never been into a frame shop and never will. I’m dealing with a very small niche. With that being said, they’re into it because they realize that the secret to a happy life is having beautiful picture framing, and they know that.
Laura Zander:
I thought it was meditation and enlightenment!
Jay Goltz:
It’s a little known fact that it’s picture framing first, and then meditation, and then…
Laura Zander:
God, I’ve been way off track.
Jay Goltz:
Well, that’s why I’m here. I’m here to help.
Loren Feldman:
Jay, could you open the frame shop by-appointment only?
Jay Goltz:
Technically, no. I mean, could I get away with it and lock the door? Probably. But then I’ve got the problem now that I’ve got to bring people into production to go do the framing. And believe me, I thought about it, but I don’t know that it’s worth all the trouble because—unlike a restaurant, if you lose a meal in the restaurant, it’s gone. Here’s a case of, if they have a picture to frame, they’ll wait for me to open. So there’ll be some pent-up demand. I don’t know that it’s gonna be worth all the trouble to try to do that.
Dana White:
But I’m wondering, with the amount of time that people are spending at home, they may need to do things around the house like picture framing.
Jay Goltz:
Yeah.
Dana White:
We’re getting a new roof put on our garage, so there are things that we’re now doing around the house because we’re here all the time. I think that’s a marketing push, if you want to invest the dollars in saying, “Are you tired of looking at that old dah dah dah? Have it framed.”
Jay Goltz:
Here’s the problem, though. The question is: How many of my customers have been financially affected by this, whether psychologically because their stock portfolio’s down, or because they were laid off? I don’t know, I mean that’s the problem.
Dana White:
But I think your niche market… you are a niche market. You’re not a hamburger. You’re a Costco, you’re not a Sam’s—no offense to those two big major businesses. I think your niche market is spending money. Lowe’s is jammed for a reason. People are at home getting paid, and I think if you market it to people who are working from home, still making their salary, because business is still coming in, I think, “Hey, this wall doesn’t have to be drab anymore, and this is how we can help you make your home beautiful while you’re in it.”
Laura Zander:
Why don’t you just market to all of Karen’s employees?
Dana White:
Right, I was going to say, market to all of Karen’s employees! And I’m wondering if you could expand your market. I see you shipping across the country. I know there are women who are cross-stitching right now.
Jay Goltz:
There’s a company that went into doing online framing. They’ve gone through $90 million and still don’t make any money. Custom picture framing is still one of those things that you’re better off doing in person—to see the texture, to see the stuff. And then on top, shipping glass is not a great thing. If you’ve got any artwork that’s of any value, and the art is hinged properly, meaning it’s suspended in the frame, by definition, it can’t be shipped upside down. It’ll break the hinges. It’s the worst possible thing to try to ship. It’s flat, and the UPS charges more because it’s flat, and it’s bigger.
What I’ve learned about business is, I can’t stay six steps ahead. I’m taking one step at a time, and we’ll see what comes, because I see people on the news now with their predictions of, “This is going to be a depression with World War Two,” and it’s like, shut up. You just don’t know anything. You don’t know that.
Loren Feldman:
Jay, you’ve been saying that week after week here, and it’s gotten pretty bad. You know that, right?
Jay Goltz:
Oh, it is bad. It’s horrible. How about CNN saying unemployment numbers. People have lost their jobs where it’s the same jobless as the Depression. Did they remember the fact that people can’t go to work right now, and then as soon as their businesses open up, they’re going back to work? To use the unemployment number, and to say they lost their jobs—they didn’t lose their jobs. They were furloughed for a month or two, but they never make that distinction.
Loren Feldman:
Jay, they don’t have their jobs.
Jay Goltz:
They’ve been furloughed. They didn’t lose those jobs.
Loren Feldman:
There’s no guarantee that those jobs will be there for them two months from now.
Jay Goltz:
For most of them it will.
Loren Feldman:
Maybe, you don’t know that.
Jay Goltz:
To make a parallel between this point in time…
Loren Feldman:
All right, let’s not argue economics. I can find another way to annoy you.
Jay Goltz:
You’re very good at it. You’re actually gifted.
Loren Feldman:
Thank you. I appreciate that. [Laughter] I want to go back to what you said about the concerns among your employees. I think it’s an important point, and let me stress here, you’ve been kind enough to share your journey on this podcast. I do appreciate that, and I’m asking you these questions because you’re representative of—all three of you—people who are trying to make the best of a really awful situation.
I want to stress that when I asked about what the experts are saying and the risks, it’s not because I think that whether or not there’s a second wave hinges upon whether Jayson Home is open or not. But you’re representative of a lot of businesses that have to make really difficult decisions, and I want to try to think those through.
Part of it involves your employees. You mentioned that your employees aren’t terribly happy about this. I think that brings up an important point because you can be incredibly responsible in the store, and I’m sure you are, but your employees have to get there, and some may be taking public transportation, some may be pumping gas. There are things they have to do that increases the risk. And it changes the risk factor for all of us. So, I’m asking, how are you dealing with the concerns among your employees?
Jay Goltz:
If somebody said, “I don’t want to take the L, blah, blah, blah,” I would get someone to pick them up. My HR person’s calling every single employee to make sure they’re okay, and it turns out one guy who didn’t speak great English did not file for unemployment soon enough. He literally put his wife on the phone because his English wasn’t great. He’s been with me for four years. She said, “We have no money. We need medication for our kid.” I went over there and gave him some cash to get him through it. They’ll eventually get unemployment, so we are doing what we can. And for the employees, I wouldn’t tell someone to go take the L at this point if that’s a problem. It’s just not black and white.
Loren Feldman:
What about somebody who has been caring for somebody or has kids at home who can’t go to school?
Jay Goltz:
Yeah, they should stay home. What am I going to do? They should stay home.
Loren Feldman:
But does that create a problem in terms of unemployment if you ask them to come back?
Jay Goltz:
I’m gonna guess not. Not my call. It’s unemployment’s call. I’m gonna guess not, but I’m not going to tell everybody, “Lock your kids in the closet. Come to work. I need you here.” Some of them would be happy to do that at this point, I can assure you. I have one person who comes to work every day. She’s got a nanny at home, and she doesn’t want to be at home, and she hasn’t missed a day, and she’s happy to be at work. There are people who want to go to work every day. Will there be some collateral damage on this at the end? Maybe. There is going to come a point where people need to go back to work, and we’re going to have to say to them—it’s not going to be this month, it’ll probably gonna be after the whole stay is lifted, and things are supposed to be getting back to work—at some point, we would have to tell the person, “Listen, we need someone to take care of the customers when they come in. And if you don’t want to come in, we’re going to have to replace your job.”
What am I gonna do? What if they say, “Oh, I really would like to wait till the end of the year when winter comes in.” There’s some point where you’ve got to take care of business. And believe me, these people who are out there protesting, I’m not supporting that at all. But there is a line somewhere. You will never be risk-free in this situation. Not for a year or two. There is going to be a point that some people are still going to have it, and somebody’s gonna have to say, “Okay, it’s safe enough.”
Laura Zander:
I live in a city of 250,000 people, and you walk around, and you would almost never even know that this is happening. I mean, we’ve had, I don’t know… 100 cases in the whole county, 200 cases in the whole county. I think we’ve all had different experiences based on either geography or what kind of business we’re in, and I just don’t think the rules are going to apply the same to everybody.
Jay Goltz:
No, I can tell you, if you walk out front here—people jogging, walking the dog—most people have masks on. It’s all over the place. I went to Home Depot a week ago, and some of the employees didn’t have masks on. And I had a mask on. I walked up to one of the people and I go, “Is there a store manager?” “Yeah, Al.” “Is he here?” “No, he’s off today.” I go, “Why aren’t you wearing a mask?” “Well, I had it on before.” I go, “You should have it on all the time.” I went in there this morning. There wasn’t a person in the store without a mask, and they did make it a law, as of today.
Laura Zander:
I go to the grocery store. I’m one of three people in the grocery store, never even cross somebody in the aisle. One person the whole time. There’s Plexiglas in between me and the lady who checks us out. All I’m saying is that—and we all know this and we’ve heard this—based on where we live and the population density and probably other factors, we’re having completely different experiences. Very, very different experiences. So, Loren, when it comes to, can you open business? Is that the responsible thing to do? Overall? No, it is not the right thing to do. But I think that in some cases, if we use good judgment, that it’s not necessarily a bad thing.
Loren Feldman:
I want to follow up on that. But Jay, this would be a good time for you to go find out what your traffic has been like…
Jay Goltz:
If you talk about me while I’m gone…
Loren Feldman:
Trust us. We will.
Jay Goltz:
I’ll be gone for 40 seconds. Hold on…
Loren Feldman:
Laura, let me ask you: you shut down your brick and mortar store, I believe. Where do things stand with that? Is there any prospect of it reopening?
Laura Zander:
No, no, we don’t have any plans to reopen it. Not for quite a while.
Loren Feldman:
Is that because the restrictions remain in place or because you don’t feel the need to reopen it.
Laura Zander:
I think a little bit of both. Part of it is our customer base is, not elderly, but some of our customer base is a high-risk base. I don’t feel any urgency, given that we have other sources of income and that’s not the primary part of our business. It’s not the primary driver.
Loren Feldman:
And you’ve been telling us that you’ve been selling well online, and that’s still true?
Laura Zander:
The retail store has always been 5 percent or less of our business. So no, I don’t feel any urgency. Our store manager is an older man in his 60’s, and he’s taken off. He’s on unemployment right now, and he left a long time ago. He’s like, “It’s not worth it. It’s not worth the risk.” So once we hit the 14 days or maybe 21 days of no more cases in town, we’ll consider it, but I’m not in a rush.
Loren Feldman:
The company you bought in Texas is a wholesaler that sells to retail yarn shops around the country, and you’ve told us that that’s struggled for obvious reasons throughout this. Is there any indication that some of those stores are starting to open? How’s that looking?
Laura Zander:
It’s consistent. We’re losing money every day. I told you we’re paying people, even if they’re not coming to work, because we don’t have enough work for them. But at least we’re losing money consistently, so we’re able to kind of predict it, and we don’t see that changing significantly, for probably three months.
Our suppliers—we have a mill in Peru and a mill in South Africa—they’ve been shut down. They’re the primary suppliers of yarn, of wool, in the world. Even the other yarn suppliers in the country, none of us can get our yarn. We’re all going to run out of product here in just a little bit.
Loren Feldman:
How soon?
Laura Zander:
We have about six weeks of supply left at the current demand, given that our demand is about half of what it normally would be.
Loren Feldman:
Is there anything you can do? Do you have a plan?
Laura Zander:
Yes. We have some older inventory that has been sitting around that we inherited, or I guess we purchased. We’ll just get creative with old inventory. We’re going to get creative. We have a lot of mistakes, some second quality or some items that people had canceled, so stuff that’s in the returns pile.
Jay Goltz:
How big an industry is the yarn business in the United States?
Laura Zander:
At one point it was about $1.1 billion.
Jay Goltz:
That’s interesting, because framing’s about two and a half. I would argue, probably only 1 percent of the population is knitting stuff. It couldn’t be much more to only do a billion dollars in the United States. You’re also dealing with a tiny little niche.
Laura Zander:
Oh, it’s tiny. Very, very tiny.
Jay Goltz:
Okay, so I’m back: 10 customers, which, you know, not bad.
Laura Zander:
How much did they spend?
Jay Goltz:
I don’t know, I didn’t stay there long enough to find out.
Loren Feldman:
10 customers just for plants?
Jay Goltz:
There’s not that many plants. I’ve gotta tell you, I got here at eight this morning, there wasn’t a plant in the lot. The truck just came. It’s probably only a quarter filled. We’re waiting for more shipments to come in throughout the day and then through Monday. It’s not that hot out. When the temperature goes up, people get activated to go out to plant their gardens. Right now, it’s probably in the 50’s, so it’s still a little chilly. But I would think by tomorrow, we’ll probably be doing okay out there.
Laura Zander:
I’m curious—and I know this is a tangent—but why would somebody buy a plant from you as opposed to Home Depot or Lowe’s?
Jay Goltz:
I got into the business by accident. I have no idea about that stuff. I’m a picture frame guy, but the building came up for sale, and I was trying to tie up the real estate for something. I wasn’t ready to move framing, so as a placeholder, I opened a garden store, and what we’ve learned over the first couple years, we’re in an upscale urban environment. We’re not Home Depot. They don’t come in with dirty blue jeans and a laundry list of what they want. They want cool, interesting stuff. So just like in my frame business, just like in the home store, it’s a boutique thing.
We carry the fullest, nicest, best plants we can find. We don’t have everything. I can’t even give you the names because I don’t know it. We carry whatever the best in the market is at the moment, and people appreciate that, and they come here because Home Depot’s literally one mile away, if not maybe even less.
Loren Feldman:
Laura how much is Jay paying you to ask questions like that?
Laura Zander:
Oh, no. I think it’s a really good one for us to think about.
Loren Feldman:
I agree.
Laura Zander:
It’s like, why would you go there? It’s the same thing in the yarn industry. Why would you come to Jimmy Beans and buy yarn when you could go to Jo-Ann’s or Michaels? There’s a quality thing, there’s the service…
Jay Goltz:
Laura, he doesn’t understand the higher level stuff like that. [Laughter]
Laura Zander:
Yes he does! He’s really close to Princeton.
Jay Goltz:
No, that’s a smart question. Believe me, I asked myself that. The other thing is, Home Depot, they buy stuff from vendors, they don’t actually pay for it till it gets bought by the customer. The stuff’s not taken care of that well. We have people who are paying more attention to the plants.
Laura Zander:
Do you play them music at night?
Jay Goltz:
Yeah, it’s a whole lifestyle business thing.
Laura Zander:
Okay, great. I just want to make sure those plants are taken care of.
Jay Goltz:
They’re nurtured. Everything we do is nurtured.
Laura Zander:
Aww…
Loren Feldman:
All right, before I offend all three of you…
Jay Goltz:
It’s too late for that, Loren.
Loren Feldman:
We’re going to have to wrap this up. Thank you all for doing this. I appreciate, again, as always, the fact that you’re willing to come here and be so transparent about what you’re going through. I think it means a lot to a lot of people.
Jay Goltz:
I would just say to people who don’t own businesses, it’s really easy to sit back and take shots at business owners. Like, “Oh, I would never open.” Have you ever had to pay the rent on Friday? I don’t think so. I mean, it’s a little frustrating to see the politicians who have never run a lemonade stand deciding the way businesses should be running.
Dana White:
What I’m learning through this whole process is, you do have to do what you have to do. I’ve applied for over 14 grants, two loans. I got my EIDL today, which is wonderful. I’ve got the PPP.
Loren Feldman:
Wait. Whoa, whoa, whoa. We buried the lede. I should have asked you about that at the beginning. I don’t know anybody who’s got an EIDL.
Laura Zander:
Me neither.
Jay Goltz:
I don’t even know what that is.
Dana White:
It’s the emergency disaster loan.
Loren Feldman:
It’s the SBA’s disaster loan, and it’s been all messed up.
Dana White:
That’s why I’m getting ready for the second wave and using grant money to keep the lights on, keep the phones on, keep the internet going, getting ready for when we hit go—ordering new capes, because when we get the new capes, it’s a matter of that cape is done for the day. No more disinfecting it and using it again in this climate. My market has been disproportionately affected. African Americans are being disproportionately affected. Since that’s the majority of my business, I have to do what I have to do as a business owner to keep the guests of Paralee Boyd safe. Towels are always thrown out, but tripling up on towels, tripling up on capes, and just getting ready to go, and using the money that I’ve been fortunate enough to get through grants and EIDL and PPP to hold the ship together.
Jay Goltz:
For those who have listened to this podcast from the beginning, you’ve gotten to watch how Dana has gone from a worrier to a warrior. You have your own Superwoman cape and I couldn’t be prouder and happier to be associated with you because you are Entrepreneur of the Year.
Dana White:
Thank you!
Loren Feldman:
On that note, my thanks to Jay Goltz, Dana White, and Laura Zander. Really appreciate it guys. Be careful out there.
