Episode 73: Get Rid of the Arsonists

Episode 73: Get Rid of the Arsonists

Introduction:

This week, we have a very special episode. It’s the dog days of August, and the only regular available was Jay Goltz. So we reached out to a bunch of loyal listeners who we happen to know have listened to every episode of this podcast, and we asked them if there was more they wanted to know about Jay—or if they’d heard enough. It turned out, they had some great questions, including: What Jay thought of Dana’s recent “Jay” impression? What exactly he does all day? How he learned to delegate? How he knows when it’s time to fire someone? And which of the other 21 Hats Podcast businesses he’d be inclined to invest in?

— Loren Feldman

Guest:

Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Full Episode Transcript:

Loren Feldman:
Welcome, Jay. How are you?

Jay Goltz:
I’m good so far.

Loren Feldman:
I guess my first question for you is: What are we doing wrong? How come everyone else normally on this podcast is away somewhere, or unavailable for some reason, except for us?

Jay Goltz:
Because they must have more exciting, vibrant businesses. They’ve got places to go and people to see. And I’m just sitting here, minding my own business with nothing to do, so here I am.

Loren Feldman:
Yeah, me too. Number one, what did you think of Dana’s Jay impersonation a few weeks back?

Jay Goltz:
Very good. I have to say I was right there with her. Very good, impressed, and feeling good that she’s got it. She’s got her own little track in her head. Now I don’t have to keep telling her. She can play it on her own. Beautiful. Well done, Dana. Or Jayna, as we call her now.

Loren Feldman:
Right, Jayna.

Loren Feldman:
Jay, as we’ve learned on this podcast, you have people running each of your divisions, kind of removing you from the day-to-day, which means you get to do podcasts like this. And also, you actually do get to work on the business and not in it, which is something everybody talks about. So given that that’s the case, what do you do all day, besides talk to me?

Jay Goltz:
You know what, I can’t really answer that. I don’t know what I do all day long. But I’m here nine hours a day, and the day goes by, and you know, honest to God… I’m not dealing with customers, almost never. I’m not dealing with vendors. I’m talking to you here and there. And I really don’t have an answer to that. Maybe I should keep a log, but… not that much.

Loren Feldman:
That’s so interesting. I mean, do you spend a lot of time alone in your office?

Jay Goltz:
Yeah, absolutely. And I’m telling you, I don’t exaggerate. There are managers, I might not talk to them for a week or two. And I’m not even bragging that that’s a great idea. Maybe I should be following up more. Here’s one thing I do regularly. I help Dave with the Autism Workforce thing. I’m working with him regularly. I’ve probably got two or three hours a week in that and it’s working great.

Loren Feldman:
We’ll get to that later. I want to know about—

Jay Goltz:
All right, so that’s part of it. That’s one of the regular things, but other than that… I was dealing with looking for banks for a while. I took care of that. That’s done.

Loren Feldman:
Do you do a lot of, I guess they call it, “managing by walking around”? Do you just go looking for—

Jay Goltz:
No, I have to tell you, especially with COVID, my warehouse/factory, I used to go there twice a week. I’m barely there. I just don’t want to expose them or be exposed, and it’s all working just fine. So no, not a lot. And I feel bad because some of my newer salespeople, for instance, in framing, I barely know. I don’t know them at all. First of all, they’re wearing masks. And I’ve had very little conversation with all of them, so I feel a little bad about that.

Loren Feldman:
Do you ever get bored?

Jay Goltz:
Not really. I don’t know. I’ve got my to-do list. And I will say, my to-do list is down to a couple of things, so I’m almost there. My new thing is—as you know, because I’ve been talking to you about this for five years—I want to get my second book out there, and that’s my new objective. Get done with my to-do list, and write a new book.

Loren Feldman:
What did you once believe about business that you don’t believe anymore?

Jay Goltz:
Oh, I’ve got 10 of those. In the very beginning, I thought you just hire people. You tell them what to do, and they just go do it. I was really naive. The fact of the matter is, probably only one out of 10 people who are applying for a job are going to be a great fit for your company. So, that’s the biggest one.

The second one is, probably in the beginning, for many years, I thought it was all about money. And as I got older, I realized, no, it’s not all about money. As I always say, “It’s not the income, it’s the outcome.” For me. I want to make money, for sure. That’s high up on the list. But I also want to feel good going to work, and I want to have happy employees, making customers happy. So for me, it’s about happy customers, happy employees, and having a good bottom line. And in the beginning, it was just about making money.

Oh, here’s a couple that I think are important—that you think that your bank is your friend, your partner. That’s laughable. They’ve got their own agenda. They need to make money. They watch their risk. All the lunches and all the going to the sports things, yeah, forget about it. If things go bad, the lunches will stop, and going to the sports games will stop, and you’re gonna have an issue. I don’t want to sound cynical. I’m not cynical. I’m just realistic that the bank has to manage their risk, and you’re it. So don’t ever think, “Oh, my banker is my friend.” That’s just laughable.

Loren Feldman:
You once believed that though. You went to those lunches and those dinners. How did you learn otherwise?

Jay Goltz:
I had my heart broken. I had a banker who I had a great relationship with, and then the big bank took over the bank—this was 15 years ago—and he just lost complete control over the account. And the next thing I know, I couldn’t get a loan, and I said to him, “You going to be hanging around?” “Oh, yeah, I’m not going anywhere.” And literally, the next week, he was at a new bank. He called me a year later, and I said to him, “Can you explain to me what went on last year? I was with you for 10 years. I never missed a bank payment. You told me in the beginning that it’s hard to get a bigger company to change banks, and you need to grow them. And that was me. And next thing you know, you guys wouldn’t give me a loan.”

So he said, “Well, you know how it goes.” I said, “No, I don’t know how it goes! Explain it to me.” He said, quote-unquote, “The new guy didn’t like retail.” That was it. That was it. The big bank took over, and he didn’t like retail, so next thing you know, they wouldn’t give me a loan. And that’s when I lost my innocence with banks. Like, all it takes is some guy in New York somewhere to decide that retail’s not where they want it to be. And even though you’ve never missed a payment, and you’ve never lied, you’ve done everything right, it doesn’t matter. You’re out.

So that was a big one. Find the right-sized bank. And I’m not saying you can’t have a friendly relationship with them, but don’t ever think that they’re going to stick with you through thick and thin. Maybe they will, maybe they won’t.

Loren Feldman:
Is there a commonly accepted piece of business wisdom—something that most other business people believe, that you reject?

Jay Goltz:
Well, here’s a nuance: if you think that training employees, you walk around and say, “The customer’s always right,” that’s not going to be helpful, because the employees know that’s not the case, and that frustrates them. My expression is, “The customer is usually right.” What does that mean? If you heard their perspective, in my experience, the customer usually is right. And then once in a while, they’re not right, and it’s just not worth fighting with them. Take care of it and smile. And when you tell employees that, it makes sense to them.

I’ve been the customer at times for stuff that I stopped doing business with a company for some small little thing that they could have easily taken care of. I had a bag company I bought from. We buy a decent amount of bags. I had a new buyer, she ordered 10,000 each of this series of bags, and the one gigantic bag, we usually order 1,000. And she unfortunately ordered 10,000, which was a huge bill. I called the salesperson. I go, “Can you help me out with this at all? This isn’t what we usually order.” If they would have thrown me a bone, thrown me anything, like, “All right, we’ll give you 20 percent off,” something. They wouldn’t do anything for me. I left the bag company. You know, I was a decent customer. That was 20 years ago. They probably lost $200,000 worth of bag business. All they needed to do is be a little sensitive.

And you know what? I’ve got five other examples like that. Some little thing all they needed to do was accommodate. Or the shipping supply guy who called me. We were a little late. And I said, “I just mailed a check yesterday.” “Well, we’ll have to wait until we get the check.” Really? I had done business with them for years. I messengered—back when there were messengers—I messengered them a check with a note that said, “I don’t want you to have to worry about my accounts. I guess I’ve apparently become a check-in-the-mail account.” And he called me all frantic on Monday. “Oh, the CFO made me do that.” I said, “Well, the CFO shouldn’t be running your company. I don’t know what to tell you.” I’d already found a new supplier. That cost them hundreds of thousands of dollars for the business. So, you kind of have to be careful with pissing customers off, I guess, is the point—even when they’re not completely right. It’s just not worth it.

Loren Feldman:
Do you find that that has an impact on your employees and how they treat customers?

Jay Goltz:
Absolutely. You can see, it makes perfect sense to them when you explain it.

Loren Feldman:
They don’t get mad?

Jay Goltz:
No, no, no, they get it. If you just go, “The customer’s always right,” how can they accept it? “What do you mean the customer’s right?” They’re gonna argue. Listen, first of all, I truly do believe the customer usually is right. But that 5 percent of the time where they’re not right, where they take the picture home and they go, “I don’t know what happened. I brought it home and the glass was broken.” They clearly dropped the picture. We’re not going to go, “Well, I saw it before I went out and the glass was…” You know what? Just fix the glass. “Oh, so sorry. Let me fix it for you.” That’s what separates the great companies. It’s simple math.

Loren Feldman:
What’s the math?

Jay Goltz:
The math is simple: Why is my framing company 20 times the size of the average in the United States? Simple. Ninety-nine percent of the customers who leave here are really, really happy. The 1 percent I don’t know about, because they didn’t say anything. And I’d say, in the average frame shop, 92 percent of the customers leave really happy. So if you do that for 43 years, you end up with a really big business versus not a really big business. And I’ve had conversations with framers over the years. My favorite one was—a guy I knew well—he called me and told me he had scratched somebody’s poster, a French expensive poster, and the customer was mad.

And I said, “Well, I think you’d have to replace it.” And he said, quote-unquote, “Well, I’ve had trouble with this customer before.” Whoa, whoa, whoa, whoa. You just scratched his poster, and now you’ve had trouble with this customer? So he was already digging in, figuring out why he wasn’t gonna make good on it. I don’t fight with customers, period. In 43 years, I believe there’s been two times where I just said, “No,” where they were just absolutely stealing. Just two times in 43 years. I don’t fight with customers. It’s not complicated. So the math is, if you get your customers happier by that 3, 4, or 5 percent, it makes a huge difference over the years.

Loren Feldman:
Have you always known how to delegate?

Jay Goltz:
No, clueless. Never had a job. Started by myself. I had to figure it out. So I’ll just give you this example. I don’t know, I was probably in business five or six years. I had 20-30 employees, and I kept reading books about delegation. Or maybe I scanned the book. Or maybe I just saw the front cover of the book, but I knew: Delegation, delegation, delegation. So I figured, “Okay, Jay, you’ve got to start delegating more.”

It happened to be the end of the year, and I’m in Chicago. You have to put a vehicle sticker on the windshield every December 31st. You have to change the sticker. So I said to myself, “All right, this is a good thing to delegate, because somebody else can do this. It’ll save me time.” So I get one of my guys, and I had a company van at the time, and I said, “Here, will you put the vehicle sticker on?” Sure, no problem. So he puts it on, and I’m feeling good about myself. Like, “I delegated. I saved myself 20 minutes,” or whatever. And I go out to the van that night, and the sticker’s like halfway up the window. Like, it’s supposed to be in the bottom right hand corner thing. For God’s sake, doesn’t he know that?

Loren Feldman:
Halfway up the windshield, right?

Jay Goltz:
Up the windshield, yeah. So for a year, like a dunce cap, I’ve got to look at this stupid sticker. Because once it’s on, you can’t get it off. So for a year, I had to look at this thing and remind myself, “I’m not good at this.” So a year goes by, and then I realized, “No, no, I didn’t understand delegation. You’ve got to give instructions.”

So the second year, at this point, I didn’t just have a company van, I was driving a car now. So had both a company van and a car. And I gave him the two stickers, and I gave him instructions. “Put the sticker on two inches from the bottom, two inches from the side. Here’s a paper towel, put it on the dashboard. Here’s a razor blade.” Laid it all out, because I’m becoming a manager. I’ve got this whole delegation thing.

So he comes back 20-30 minutes later. “You get the stickers on?” He goes, “Yeah…” I go, “That sounds a little tentative. What do you mean, ‘Yeah’?” “Well, I lost the razor blade.” “Whoa, whoa, whoa. What do you mean you lost the razor blade?” “Yeah, I don’t know where the razor blade went.” And so I had to worry for the next year—I had two little kids at the time—that maybe my kid was going to sit on a razor blade, or I was going to find it somewhere. So for the next year, I had to worry about a razor blade.

Okay, that was the second year. Third year: All right, now I’ve got it. I’ve got the whole Murphy’s Law thing. I know whatever can go wrong is gonna go wrong. So now I’m a professional manager. I figured it out. I’m going to give them one sticker at a time. So I get another guy, and this year, it was particularly cold out. It was like zero degrees out, and it was the perfect time to be delegating something like this. I had a nice coat. So I figured, “Okay, here’s sticker one. Put it on the van.” Told him my same instructions. “And when you’re done, come back to me, and then I’ll give you the second sticker,” because I knew that they’d probably mix up the two stickers. So I’ve got it all figured out now, because I’ve become a manager.

Okay. Comes back after 15 minutes with the [old] sticker in one piece. He’s like, “Okay, I’m ready.” I said, “Oh my god. I’ve never gotten this sticker off in one piece.” I’m some kind of delegation genius. I got the right guy on the right job. I trained him. Look at this. So I happily give him the second sticker. And he goes off to put it on my car. So 20 minutes go by, 30 minutes go by, I don’t see him. So I go to find him, and I see him coming out of the bathroom, and he’s white as a ghost, like he’s sick. I said, “Did you get the sticker on?” He goes, “No…” “Why not?” “The windshield exploded.” He used a blowtorch to get the vehicle sticker off. That’s how it came off in one piece. And my right-hand guy was standing there, and he said, “You know, I saw him going through the showroom with a blowtorch. I wondered where he was going with that.” So he just blew up the windshield of the boss’ new Lincoln Continental.

Loren Feldman:
So what did you do?

Jay Goltz:
I got a new windshield. I didn’t go yelling at him. I mean, what are you gonna do at that point? I mean, I can literally remember when I was 7, 8, 9 years old, and my mother told me, “Don’t take a cold plate and put it in the oven.” And obviously his mother didn’t tell him that. So people go, “Oh my God, how stupid!” Well, if someone didn’t tell you that, how would you know that? So I put a new windshield in, and the lesson from that year was: When you delegate, some things get messed up sometimes. So, the next 35 years until today—I now have 10 vehicles between the cars and the trucks—and I put the vehicle stickers on myself. So if you ask me: What do I do? That’s one of the few things I don’t delegate, and I feel good about. And I like doing it.

Loren Feldman:
What is the lesson to be taken from this?

Jay Goltz:
The lesson from this is: I’ve delegated pretty much everything else in this company, except putting vehicle stickers on. I don’t mind doing it, and the city changed their date now. You don’t have to do it on December 31st. The dates float. All of the stickers go on in September, so the weather’s nice. That’s my sideline, and I haven’t blown up anyone’s windshield or anything. So I do a really good job on that. Do what you’re good at.

Loren Feldman:
In other respects with the business, we just talked about how you’ve got people managing your business, and you’re not even sure how you spend your time. How did you learn to delegate?

Jay Goltz:
You know what, I’m kind of the opposite from many entrepreneurs. I get bored. I said to my manager a few months ago, who’s been with me for 25 years, I said, “Dale, you know what? I’m 75 percent entrepreneur and 25 percent manager.” He goes, “No, you’re not. You’re 100 percent entrepreneur.” So I laughed. I don’t take it as an insult. I’m really not into the day-to-day management stuff. And the key is, I’ve always delegated everything, but it blew up in my face. And the reason it blew up in my face is delegation doesn’t work if you have the wrong people you’re delegating to.

I’ve gotten really good at the hiring and firing part, so I now have competent people that, when I delegate, it gets taken care of. And if you don’t get good at the hiring part, you can’t go delegating to the wrong people, because it’s just gonna be a mess. And I will tell you, one of my key guys told me—again, been here for 25 years—the most powerful thing I ever told him, that changed his head, was I said, “You know, you’re starting to condition me that when I ask you to do something, it’s not going to get done.” And that really freaked him out. Ever since then, he gets everything done.

So it’s about hiring the right people, training them, and finally, when you’ve coached, managed, and had six conversations about the same thing, or maybe three conversations, you realize they can’t do the job and you unhire them. That’s what it’s about. And I would say, from my experience of looking at managers or entrepreneurs, they frequently keep people who can’t do the job forever, and that’s why you’re constantly putting fires out. And I always say, “Instead of putting fires out all day long, get rid of the arsonists.” They’re not necessarily bad people. But they just can’t do the job.

Loren Feldman:
How do you know when it’s the right time to let go of a long-time employee, who used to be fine but isn’t any more?

Jay Goltz:
I would say that goes with long-term or short-term. When you can ask yourself: if they walked into my office and quit tomorrow, would I be relieved? That’s the time. Now, with that being said, I wouldn’t criticize somebody if they said, “Look, they’ve got a couple more years to retirement, or three more, and they’re going to carry it.” I certainly have had a little bit of that. That’s not a black-and-white thing. And I went to a business group that I was in when I was probably 30 years old, and I had all these older people sitting at the table, and I said, “I’ve got a guy.” Exactly what you just said: “They can’t do it anymore. It’s frustrating. I don’t know what to do.” And I thought they’d all do a “Jay” to me: “You gotta do what you gotta to do. Just get rid of him!” And every single one of them rolled their eyes and said, “Yeah, I’ve got one of those.”

It’s difficult. I’m not saying you can’t carry someone to a degree. But if they’re in a key position, and they’re really doing damage to the customers or to the other employees, you gotta to do what you gotta to do, and it’s horrible. Give them some severance pay. It’s horrible. It’s one downside to being the boss, but if you don’t do it, it doesn’t mean you’re too nice. It means that you’re a bad manager. I see that all the time.

I did a speech one time, I went through the whole firing thing to a multi-generational group. There were the parents—they were in their late 50’s—and the kid—in his 30’s. And the kid raises his hand during the speech and goes, “Jay, can I ask you a question? How do you balance being nurturing with being cutthroat?” And I said, “Wow, you think firing someone that can’t do the job is being cutthroat? You don’t understand the definition of cutthroat. Cutthroat is doing terrible things, illegal things, unethical things. This is just being the boss. I mean, if some of you in the audience think, ‘Oh, you’re just too nice,’ don’t kid yourself. You’re a bad boss. And you’re not too nice. You’re a wuss.” I mean, there’s no such thing as too nice. You gotta do what you gotta do. That’s what the boss has to do. And the part that really stinks is, they think there’s some nobility in being too nice and not getting rid of a person who can’t do the job. And in fact, you’re cheating your customers, you’re cheating your other employees, and you’re cheating yourself.

So yeah, it’s the hard, cold reality of business. And the people who have been in business for a while, whenever I do this speech, they nod their heads. The one who just got into business has not experienced it yet: “Oh, that’s not right.” You know what, I don’t know what to tell you. People sometimes need to be fired. I’m sorry. That’s just the hard, cold truth. If you figured out how to run a business without firing people—and you’re running a business—then you’re smarter than me. More power to you.

Loren Feldman:
Speaking of hiring, you’re not planning on going public, you’re not selling to private equity. Do you still think you need a CFO?

Jay Goltz:
Yes, I do because—

Loren Feldman:
As opposed to a controller, or senior controller, as you said?

Jay Goltz:
Yes. Well, the recruiter said I should call it a “senior.” It’ll get rid of the people running multinational corporations. I’ve got four different businesses. I’ve got a lot of costing things. I’ve got computer issues. I think the person who I need is gonna want a CFO title, and I believe I’m closing in on the right candidate. She’s coming in for another interview tomorrow. So yeah, I think I do need a CFO, not one that has run a multinational company. There’s a gigantic bandwidth of CFO, just like the captain of a boat. Yes, there are captains of a boat that are 20-foot boats, and then there are yachts that are 200 feet long. There’s a gigantic bandwidth there, and I don’t need a sophisticated, knows how to do mergers and acquisitions, and debt financing and blah, blah, blah. But I do need somebody who is probably a little higher than just a controller.

Loren Feldman:
Did you ever open Jayson Café?

Jay Goltz:
That’s been put on hold, because the permitting process is so intense in Chicago. We put it on hold. I’m not saying I’m gonna do it. I’m not saying I’m not gonna do it. It does fit well with our business model to a degree. But I don’t know if it’s going to be worth the pain.

Loren Feldman:
Tell us about that permitting process.

Jay Goltz:
There are lots of regulations. The amount of sinks you have and refrigeration. It’s a lot of stuff to opening up a food place.

Loren Feldman:
Do you think it’s reasonable or unreasonable?

Jay Goltz:
I don’t know that it’s unreasonable. This was really a combo plate of COVID, and getting the permitting, and I’m not sure this is a great idea. I just needed to get through this year.

Loren Feldman:
That last one seems important. If you were sure it was a great idea, you would fight your way through the permitting.

Jay Goltz:
No, in the old days, I just thought everything was a great idea and did it, and then found out it wasn’t. So I’ve actually gotten a little restraint. I know that’s hard to believe. I actually control it a little bit. I’m not saying I won’t do it. We’re still thinking about it. But it made more sense to just get through this year. And I have to say—knock on wood—this year’s going nicely, and I’m glad I put that on hold.

Loren Feldman:
You’ve referred to yourself in the past as an entrepreneur-aholic, and you’ve talked about how you don’t need to start any more businesses. But you seem to get a lot of pleasure out of it. What’s wrong with starting more businesses?

Jay Goltz:
I said I was a recovering entrepreneur-aholic, and I realized I don’t need more locations, I don’t need more employees. That’s all true, but I also realized I really like starting businesses. So what I’m planning on doing is, I’m not opening any more frame stores. I’m not opening more home stores. We’re good where we’re at. I’ve got enough critical mass, and I’ve got the economies of scale. It’s all good. But I’m working with Dave with Autism Workforce, and I believe over the next few years, we’re going to be able to put together a national model to help companies hire people on the spectrum. It’s going extremely well, autismworkforce.com. It’s extremely rewarding.

We got an email from a brother. He said, “Dear Dave, thank you so much for getting my brother, Gary, a job. He needed someone to believe in him.” I mean, it’s more than money. We’re changing people’s lives. I will put my energies into entrepreneuring and that, because I need to do something. I’m not playing golf—nothing against golf. I’m not going to go play cards. I like it. So with that being said, I want to stay in alignment, meaning I really don’t need any more exposure to any kind of grief. I’ve got it all under control now. So there’s no more stores. I can’t imagine it. My kid said to me a couple weeks ago. He said, “Dad, why don’t we open another frame store?” I go, “Jared, stop. Why do we need another? We’re just not doing it.” So I think I have it under control.

Loren Feldman:
Did he accept that?

Jay Goltz:
Yeah, it made sense to him. I had to walk them through it. Think about it. The business? I’ve got 130 employees. It’s big enough. I never in a million years thought those words would come out of my mouth—that there was such a thing as “big enough.” It’s big enough. It’s fine. I love my employees. It’s a good size. We’ve got economies of scale. There is such a thing as big enough. To some people, that’s having one store and making, whatever, $75,000 a year. More power to you. It kind of goes back to the book that I was in that you know, Small Giants. I just don’t need to keep growing it like I used to.

Loren Feldman:
If someone gave you a million dollars to invest in the businesses of the other people on this podcast, how would you divvy up that million dollars? And how much of it would depend on the market? And how much on the leader of the business?

Jay Goltz:
I think Dana’s got the business model, quote-unquote, that has the most explosive potential. She is truly providing something for the marketplace that isn’t out there a lot. And I would follow her into that hole. She’s got the military contract possibility or the franchising. To me, that’s the one that I would hitch my wagon to. I think that’s more about concept. Whereas my business, Paul’s business, Laura’s business are about execution. She’s got a new concept. It’s got a lot of potential.

Loren Feldman:
How about 21 Hats?

Jay Goltz:
That, too. That goes without saying. I think that what we’re doing on this [podcast] is different than what’s out there, and it has the potential to make a huge difference in people’s lives. I believe that we’re on a roll here, and we’re just still figuring out.

Loren Feldman:
Back to Dana, a number of people who I sought out to ask questions of you were very quick to turn to how much they’ve enjoyed watching your relationship with her evolve. One even pointed out that he’s got the sense that you seem to take as much pleasure from her journey as you do from yours. What’s the biggest thing that the two of you have disagreed on? Is there anything?

Jay Goltz:
Boy, that’s pretty easy. No. You’ve seen her go from, “Oh, I’m all depressed,” to “All right, I’m ready to go.” So I get great satisfaction. She gets it. She embraces it. And she does something with it. So no, I can’t think of any.

You know, I told her with the franchising, on this podcast: “It won’t surprise me if, in two years, you’re making a zillion dollars, or if, in two years, you say, ‘What did I get myself into?’” And I think I was right. And now she’s wondering, should she have done it or not? I don’t know. She’s on that journey. But if you recall, she didn’t tell me about it until she had already signed up with the franchise consultants. I had a little insight into that that I would have given her. That might work out great. I would have asked a few more questions before I would have signed up, just because I’ve been down that road. I still think long-term, the franchising is gonna work well for her. But I can’t think of any disagreements we’ve had.

Loren Feldman:
You mentioned Dave a couple of times and Autism Workforce. Obviously, he brought his understanding of autism and working with employees or potential employees. What did you help him with?

Jay Goltz:
Well, the story is, my cousin who runs my home store has a kid who’s autistic. I’m his only family, and I knew I needed to help him somehow with that. So I read a story about Dave that was in Crain’s Chicago Business about how he’s doing exercise with autistic kids, and it’s very helpful to them. So I called him out of the clear blue and introduced myself, and said, “Look, you probably could use some entrepreneurship help, and I certainly can use some help with autism.” And he came in to see me, and we made a quick bond, and I’ve been helping him with how to run a business. He had no clue, and he wasn’t making money, and he wasn’t charging enough. And we charted a path.

I had to learn as we were going, but I have to tell you, he has tremendous entrepreneurship skills. He figures stuff out. I help him regularly. We work together on writing copy and doing the websites and figuring out the direction. But he’s the one that figured it out. He went ahead and got a certification from ACSM, the gold standard of training certification, to do one just for autism, and it’s going great. So he’s the one who came up with the idea of coming up with an app for teaching for leading kids through exercise. I came up with the name: Exercise Buddy. He’s a tremendous entrepreneur, and then he’s got a couple of people he’s hired—four now—and I helped him with the whole hiring process because he had no idea how to do it. I’ve saved him 30 years. I’m able to tell him in 10 minutes what took me 30 years to figure out. So it’s going extremely well.

Loren Feldman:
Is he charging enough now?

Jay Goltz:
Yeah, we’re getting contracts from big companies all of a sudden, and he’s got universities following him now. This is all evidence-based. We’ve unlocked the code as to how to get this to work, because there are plenty of organizations that’ve been doing this for years. It wasn’t working so well. They will get them in the jobs, but they wouldn’t last. Dave gets them into the jobs, and they flourish. Because this is what we’ve learned—what I’ve learned—if you change your environment, everything from the hiring process, to the onboarding, to the app, to the regular management, if you get that 80 percent right, if you get it 90 percent right with someone who’s on the spectrum, you’re gonna fail. That’s why they’re on the spectrum. They don’t do well with things that don’t work right. All you have to do is change your schedule too much.

You’ve got to get it 100 percent right, and Dave and his team have figured out how to do that. So we’re talking about huge companies calling him down to a company that’s a bakery that’s got 300 employees. It’s working. These kids get the jobs, we train them, and they’re doing jobs better than neurotypical people do it, and they like doing the same thing—many of them—repetitively. And they get into it, and they thrive on it. So it’s about finding the right jobs. It’s about training. It’s about the right environment. And it works marvelously. That’s exciting, because there are a million people in this country who are on the spectrum, and the unemployment rate is probably 90 percent.

Loren Feldman:
Did you invest money in the business?

Jay Goltz:
Yes. During the pandemic, things went to a grinding halt. I just had to do some soul-searching, and I said to myself, “I can’t let this thing go down.” I just couldn’t. So, yes.

Loren Feldman:
You’ve talked about having a mentoring relationship with Laura, with Dana, and with Dave. What have you learned about mentoring? Are there traps to watch out for?

Jay Goltz:
Yeah, I just love business, so I love to give input to people, and I’ve learned most people really don’t want it. And the reason why I enjoy being on the podcast, and for the people who you’ve curated, I’ve told people stuff over the years that I was trying to help them, and they completely blew it off.

Loren Feldman:
I happen to know that drives you crazy.

Jay Goltz:
Well, you know. You’ve been involved with some of it. Most of these people have failed. There was some basic stuff. I had one guy who was involved with an art business that I gave some black-and-white advice to. This wasn’t brain surgery. And he goes, “Well, we can agree to disagree.” And I thought, “Wow, okay.” I stopped giving him advice, and he’s out of it now. I could give you five stories of people who I tried to help where they just blew me off, and they’re out of business. And I’m not saying I know everything, but there’s some basic stuff that’s just pretty clear. I have to control myself from giving advice to people who don’t want it. And in your case, with our people, they ask for it, they enjoy it, they use it, and it works. But that isn’t the case frequently.

Someone once told me at a frame show, he stopped me in the aisle—I’ll never forget this—he says, “You know, Jay, people either love you or they hate you.” And I go, “Whoa, who hates me? What did I do?” He said, “You’re telling people they’re doing something wrong, and a lot of people just don’t want to hear about it.” And you know what? I was so stupid. I didn’t realize that. But he’s right. When I do speeches at a frame show now, I can count on the fact that out of 50 people, 45 are gonna say, “This was the greatest thing ever, thank you.” And three or four are gonna say, “This was really good.” And two of them are just gonna be mad at me. One guy wrote on an online thing, “I went to Jay Goltz’s seminar. I admit he’s successful, but he is so arrogant and condescending. I stormed out of the class.”

Loren Feldman:
You’ve memorized that. I’ve heard you say that before. You know every word of what he wrote.

Jay Goltz:
I know, yes. Exactly. Because my first thing was, “Oh my God, what did I do?” And then I realized, “You know what? What can I tell you?” And I think you were there when I talked to a bigger group when I do the breakfast on Wednesday morning. I had, I don’t know, 100 or 200 people there, and I mentioned this, and I said, “So I thought to myself, I need to tone it down a little bit. I need to be a little more subtle.” And then I said, “But I decided: No, I’m not. I’m ratcheting it up. I want you to all be successful.” And everybody applauded. I’m sorry, if you tell people the way it is, some people are going to really enjoy it and feel good about it and embrace it, as you’ve heard on the podcast. And some people are going to get mad at you, and you know what? Sorry. What can I tell you? I’d rather be significant and make a difference in someone’s life.

Loren Feldman:
Why do you seem to get riled up whenever the subject of open-book management comes up?

Jay Goltz:
Well, since you know all my hot buttons, because I find it disingenuous to say, “We do total open book management,” and then I go, “Oh, do you share how much the owner takes out?” “Well, no.” “Okay. Well, because it’s just not true—”

Loren Feldman:
So that’s one word: “total.”

Jay Goltz:
I got it, I got it. But I’m just saying, just be honest. It’s not total open-book management. It’s almost total, but the owner’s pulling a salary out can have—not can—you could make a company look like it barely makes any money if you pull out a half-a-million-dollars salary. Or you can make a company look extremely profitable if you under-pay yourself by 75 percent. So without knowing how much the owner takes out of a company, to look at the books, it doesn’t mean anything. It just doesn’t mean anything.

Loren Feldman:
Wait a second. You’re evaluating it from the perspective of whether you understand how truly successful the business is. But one of the main purposes of open-book management, as I understand it, is to help employees understand what drives that business.

Jay Goltz:
Yes, absolutely.

Loren Feldman:
What are the most profitable products?

Jay Goltz:
Absolutely. I’m not saying it’s not a valuable, great thing.

Loren Feldman:
And that can still be true, even if you don’t know—

Jay Goltz:
No, absolutely. I’m just saying, tell people upfront that it’s almost all open-book. It’s very valuable. I can’t argue. It’s been extremely successful. I totally buy into it, and I get all that. It’s just that, don’t make it sound like, “We’re totally open-book,” because you’re not. And for some people who own their own business, it’s easy when you don’t own the business to say, “Oh, open up.” For a privately-owned enterprise, there’s a real discussion to be had: Is it really smart to go ahead and tell people how much you pull out? We’ve had Paul on, and Paul, if I recall, used the phrase, “Well, I don’t pull out an outrageous amount.” That’s a silly phrase: “outrageous amount.” What does that mean? That means, if he was extremely successful, if he pulled out 800 grand a year, is that outrageous? No, it’s what he earned. So I just think that you’ve got to be careful with—

Loren Feldman:
Well, there is such a thing as an outrageous amount, isn’t there? I mean…

Jay Goltz:
No, no! If you earned it. I’m not talking about people who work at public corporations that are making $200 million a year that haven’t earned it, perhaps. I’m talking about, if you started a company, and you’re really good at what you do, and you figured it out—

Loren Feldman:
And you’re paying your employees well.

Jay Goltz:
And you’re paying your employees well. What’s outrageous? Why shouldn’t the owner make 800 grand a year if the owner can make 800 grand a year?

Loren Feldman:
Okay, but that might not be the case at all companies.

Jay Goltz:
Absolutely not. I’m just saying, let’s just call it the way it is, because it’s deceiving to business owners. For someone who’s thinking about doing it, I think you need to be upfront and say, “No, no, you don’t need to. Here’s how it works.” Just be upfront so they understand it. That’s all I’m saying. Don’t sell it as this magical bill of goods, because it is magical, but you need to understand the nuances of it.

Loren Feldman:
You’ve had to deal with the rising minimum wage in Chicago. I believe it’s $15 now.

Jay Goltz:
Yes.

Loren Feldman:
Has the issue of wage compression been a problem for you—dealing with what you pay people who had been making more than the entry-level?

Jay Goltz:
I would say it’s an issue. I’m okay with it. People need to make a living. There has been some compression, meaning maybe in the old days, the starting person made $5 an hour less than the person who’s been there for 10 years. And now maybe it’s gone up a little bit, but now there’s only a $3 difference, which is where the compression comes in. Yeah, I am navigating it. I’m not complaining about it.

Loren Feldman:
How about your employees? Are they complaining about it?

Jay Goltz:
No… umm… Well, that’s always… No, that I know of. I don’t know. From what I know, no. But we certainly have raised wages, and we’re trying to keep up with it. And it is an issue, but we’re dealing with.

Loren Feldman:
Do you have any thoughts on the hidden consequences of paying commission-based compensation to salespeople—especially in this period coming off the last 18 months, where I suspect there are a lot of salespeople who have done a lot worse than they would have expected to?

Jay Goltz:
That’s a great question. I don’t think “hidden consequences.” There are some consequences. They’re not hidden. The answer is: We’ve made some adjustments. We’ve raised the base salaries, and we took a little off the commission so that it’s not on them if business is a little off. They can still pay their rent, and I feel good about it. And it worked. And on top of which, in a difficult environment for hiring, it’s easier to give them a higher base salary, because that’s all they hear. You can say, “I’m giving you X percent,” they don’t know what that means. They have no idea what the sales are going to be.

Loren Feldman:
Do you have any advice for somebody, an early-stage entrepreneur, who’s trying to get more sales—especially with a B2B business?

Jay Goltz:
I’m mostly not B2B. We’re mostly going to consumer, or I have the wholesale business.

Loren Feldman:
Yeah, you do sell to other frame shops.

Jay Goltz:
And I’ve got 17 reps around the country, and they do a good job. I’m just not involved with that personally. I will only tell you, as a customer, coincidentally, I just got a call an hour ago, first thing in the morning, “Hi, how are you doing today?” And I’m sorry, but that just triggers me. It’s like, come on. So I said, “What do you want?” And I’m sure it was rude, but I’d just sat down. I was trying to get something done. He goes, “Well, I didn’t want to interrupt. It sounds like you’re in the middle of something.” I go, “What are you trying to sell me?” He goes, “Well, I want to have a high-level conversation about, you know, but it doesn’t sound like this is a good time.”

And I said, “Okay,” and I hung up. And I actually felt bad about it a little bit, but like, this person could have absolutely got my attention. All he had to do is get the idea that I don’t want to chit-chat. And all he needed to do was say, “All right, I respect it—let me get right to the point: I work for ABC Company, and we help companies with their blah, blah, blah.” Okay, just say it, and I would’ve had a conversation with him. But going right to, “Oh, well, it sounds like you’re busy.” He’s just not doing a good job on the cold call thing. And I can tell you that most people who do cold calls have no business doing cold calls. I get calls regularly, and I think to myself, “My God, do they listen to what these people are saying on the phone?” Whereas once in a great while, someone really good calls. And you know, I answered the phone. I’ll listen to somebody’s pitch.

Loren Feldman:
I was gonna say, you’re telling us that if your phone rings, you pick it up?

Jay Goltz:
Yes, yes. And anyone who says, “Cold calling is dead,” is wrong. I don’t buy that for a second. Yeah, I answer the phone. Well, if somebody said, “Hi, Jay. God, I’m glad I got a hold of you. This is Joe Schmo.” Just get to the point! Now, I’ll listen to your pitch. I’ll give you the 60 seconds. But don’t start with a, “Hey, how’s your day going so far?” Maybe that’s just me.

Loren Feldman:
Maybe you just answered the question about how you spend your time.

Jay Goltz:
No, no, that’s a good question. I will tell you, how many of those calls am I getting? Twice a week. Not a lot.

Loren Feldman:
You’re going to get more after this.

Jay Goltz:
Maybe.

Loren Feldman:
What do you tell business owners who’ve been in business for a while, maybe 10 years, and the business hasn’t really connected? They’re probably taking out a modest salary, but they’re working really hard, and there’s no real reason to believe that’s going to change, or that they could ever get to the point where they’d be able to sell their business. What do you say to someone in that kind of situation?

Jay Goltz:
Frequently, the problem is, they’ve got framer’s guilt. You have to understand, you’re standing there with a customer for 20-30 minutes, and then you give them the price, and they go, “Oh my God, that’s more than I paid for the print!” And they pound you and pound you, and you start to believe that the most important thing in framing is the price. Because they don’t say to you, “Your store looks terrible.” Or, “Boy, it’s impossible to park.” Or, “Boy, you’ve got a horrible selection.” Or, “Your salesperson doesn’t know what they’re doing.” No, they complain about the price. So framers have it in their head, “It’s about the price.” And I’ve had numerous people after taking a seminar at the show come back the next year and say, “Oh my God, thank you so much. I was totally in debt. Last year, I paid off everything, and now I’m making a living because you were right: I wasn’t charging the right price.” And so pricing is one.

Two is, if you have the frame shop in the wrong place, you’re not going to be successful. Everyone does not frame pictures. You need to be in the kind of neighborhood where people find pictures, and if you went ahead and found the cheapest rent possible somewhere, that’s probably not the right location. So you might have to bite the bullet and move the store, but the pricing thing is critical.

This is a real story. Remember, I had the pop-up in New York. I went through Chelsea, a very upscale neighborhood. I walked into a frame shop, and I wanted to see if he carried my molding. I went in there, got to the owner, he had heard of the company: “Oh yeah, I buy some of your stuff.” And I said, “Do you ever go to the frame show?” And he takes his finger and does this—like you’re slitting your throat, whatever that action is called—he takes his finger and slits his throat, and he goes, “I don’t do that to the customers,”—implying, or telling me, the reason he can’t afford to go to the frame show is he doesn’t charge his customers that much so he can’t make enough money to go to the frame show. This is a guy with a store in one of the wealthiest areas in the country. And like, I don’t know what to say to that. They feel guilty that they’re charging the customer too much, and they’re providing a great service. I love picture framing. I love helping frame shops out. Doing beautiful custom picture framing is making their lives better, and they’ll pay 10 percent more if that’s what it takes for you to make a living.

A lot of framers just can’t do it. Because they say, “Oh, I want to be fair.” There’s no such thing as fair. All there is is appropriate—the appropriate price. And the appropriate price is the price where you can make money and the customer gets a great value, and that’s a problem. And the phrase “pricing themselves out of business” usually means they’re not charging enough, not the opposite. I’ve seen people online say stuff like, “I’m so busy and exhausted that I’m thinking of closing my store.” Really? I love framers. I love to help them, and I’ve gotten tons of people tell me that I’ve had a profound impact on their business. And then I’ve got half a dozen tell me that—they never told me my face, I would respect that—they go online and talk about me.

Loren Feldman:
You referred earlier to your, “It’s not the income, it’s the outcome.” It’s something that comes up fairly frequently. We’ve talked about it on the podcast. You’ve talked about being surprised by how big you’ve gotten. But you’ve also acknowledged that there were times, maybe in your 30’s, where you thought you were really going to explode. You were going for big growth. You hadn’t had the Small Giants awakening yet. Are you really as comfortable with where you’ve ended up as you tell us?

Jay Goltz:
Ab-so-lutely, absolutely. Because I’m telling you, in my 20’s, I was just shocked. In my 30’s, I thought I was gonna take over the world. And I used to read Forbes and go, “Oh my god, this guy’s my age, and he’s worth $300 million. What did I do wrong?” And I tortured myself all through my 30’s, and then in my 40’s, I was trying to figure it all out. And then when I hit about 50, I realized, I’m just fine. Life is good. And I’ve told this to everybody. I really believe that you don’t grow up until your parents die, because until your parents die, you think you’re just gonna live forever. And then you realize: You’re gonna die one day, and you’re next. And it changes your perspective—at least it did mine. So, I realized that I’m good.

Loren Feldman:
Well, here’s my question, and this one is my question. This one comes from me. As you know, we talk a lot, not just on the podcast. You tell me what you just said fairly often. You tell me that even in private when it’s just the two of us talking—and you say it often enough that the thought has occurred to me—are you telling me that to convince me? Or are you saying that to convince yourself?

Jay Goltz:
Absolutely. I am one happy camper. Somebody said something to me super smart, when I was about 28 and he was about 50. I was in this business group, and he said to me, “Jay, everyone realizes at some point that they have limitations, and it’s usually when you turn 50.” And the 20-year-old Jay said to myself, “Oh my God, that’s pathetic.” And the 50-year-old Jay says, “Yeah, got it. You’re right.”

Loren Feldman:
Thank you, Jay.

Jay Goltz:
That’s it?

Loren Feldman:
That’s it.

Jay Goltz:
Wow.

Loren Feldman:
Did I miss anything? Did we miss anything?

Jay Goltz:
Yeah, I just want to say this to those people who are out there struggling with whatever: at some point, stop torturing yourself. I’m 65 years old. I’ve been doing this for 43 years, and I have made every single mistake you can make. Stop torturing yourself. This is complicated. There are a lot of moving parts, and as long as you keep it moving forward and making positive—you’re better this year than you were last year—just enjoy the ride.

Loren Feldman:
My thanks to Jay Goltz and to everyone who suggested questions. We got some great questions from the people I reached out to. I think we may have to do this again with the rest of the crew. If any of you listening have questions for our regulars, please send them to me. You can email them to me: Loren—l-o-r-e-n—at 21hats.com. Or you can just hit reply to your 21 Hats Morning Report. You do subscribe to the morning report, don’t you? Thanks again, Jay.

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