I Wouldn’t Have Done This Without Covid

Introduction:

This week, five years after Covid arrived and as we find ourselves in another period of dramatic uncertainty, Jennifer Kerhin, Lena McGuire, and Sarah Segal talk about the advances their businesses might never have made had it not been for the pandemic, from the technology they use, to the people they employ, to the systems they’ve created. “It was very scary early on,” says Jennifer, “but it was transformational.” Plus: Do you hire full-time employees in anticipation of more business or when the new business is in hand? And Sarah asks what she should do when a new client signs a contract and her agency goes through all of the preliminary onboarding work only to have the client walk away. Lena’s suggestion? Review your cancellation policy, but she also tells us: “My business is 100 percent up-front. I get paid, and then I do the work.”

— Loren Feldman

Guests:

Lena McGuire is CEO of Spóca Kitchen & Bath.

Jennifer Kerhin is CEO of SB Expos and Events.

Sarah Segal is CEO of Segal Communications.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome, Jennifer, Lena, and Sarah. It’s now been five years since we all first heard of Covid 19. Especially since we seem to once again be going into a period of some uncertainty, I thought it would be interesting to compare where you and your businesses are today with where you and your businesses were when Covid hit. Jennifer, maybe we could start with you. Maybe tell us, first, what was the scariest moment for you and your business in 2020?

Jennifer Kerhin:
I remember early on, we had our first client call to say they were going to cancel their meeting, and it was about a 3,000-person meeting that was being held in the late spring of 2020. I’ve never seen a meeting canceled, except once, and that was due to a hurricane that was coming into New Orleans. And it was canceled five days beforehand or something because of the weather.

But this was months—maybe not months, maybe six to eight weeks—and they canceled it. And a lot of other meeting planners were talking about what they were going to do, too. That was the scariest part: the unknown of, “Wait a minute.” And I remember telling some other people outside of my industry that we were kind of the canaries in the coal mine, and: Watch out. And then we saw events—and I don’t mean 100-person events, I mean 1,000-person conventions—that were canceled pretty quickly throughout the spring and the summer. And then maybe hoping that the fall, like October of 2020, would come back. And then that didn’t.

So that first meeting being canceled was the first like, “Whoa, this is not a weather-related one. This is due to the pandemic.” It was very, very scary. But what’s strange is, that summer, the technology company that we work with for event technology managed somehow to create a product that did virtual conventions. And so we started doing virtual conventions in the fall of 2020, and that has actually transformed my business. So it was very scary early on, but it was transformational.

Loren Feldman:
How is your business different today than it was back then?

Jennifer Kerhin:
Well, it’s about four times the size.

Loren Feldman:
That’s a good thing.

Jennifer Kerhin:
That’s a great thing, yeah. A couple big things. One is we are now fully remote. I had put a contract down on an office building, and we were supposed to settle March 22 of 2020. So when we all went home, what we thought to be the first two weeks in March, I canceled that contract. And since that time, we are remote. Now I have 30 employees in 13 different states, so my labor pool is very different. We’re a fully remote workforce. I don’t think I would have done this without Covid.

Second, we now do a significant amount of work with hybrid conventions. All of us probably went to a lot of sort of virtual conventions that first year, or year and a half. Hybrid conventions are different because it’s not necessarily the same time, what we call live-streaming. So it’s not like watching the Super Bowl, where everybody’s watching at once. What we do with hybrid conventions is kind of like Netflix, where you can go to the meeting. So think of the meeting like an in-person performance: sports or theater or whatever. Or you could sit at home at 2 a.m. on Saturday and click up Netflix and find some content.

We do a lot of that, where associations have done an unbelievable job of reaching a larger audience. Their in-person convention is for people who want their networking experience in addition to getting accredited educational content. But if they can’t, the association has worked with us to figure out how to monetize that content that’s already happening and repackage it for after the meeting.

Let’s say you have 30,000 members, and 3,000 of them come in person. Well, the other 27,000 have an opportunity to buy two sessions or a track of sessions. They don’t have to come to the entire meeting. It’s definitely fantastic when you come, because there’s so much networking that’s just not possible in the virtual environment. But there’s some incredible education that takes place that you can watch and get accredited for after. So we’ve started a whole new department on hybrid conventions and figuring out how to monetize that content for associations to help the revenue.

Loren Feldman:
I think you said you have grown four times. Do you think that would have happened anyway?

Jennifer Kerhin:
I think it was a catalyst for change. I think we would have grown somewhat, maybe double the size. But what Covid did is—and I’m sure someone famous said this, I don’t know when—when opportunity comes knocking, you gotta open the door. So Covid provided an opportunity for us that we took advantage of, doing the hybrid conventions. And then other things fell into place. The other aspect was labor, so then I had access to really talented labor across the country.

But then the next one was we started to add services. They came to us and said, “Well, look, since you’re doing this now, can you also do that?” A year later, we added registration. It wasn’t a service that we had previously offered, but now that we knew the technology, we did registration, both for in-person and virtual events. So that created a whole new department. Maybe I would have done it, but it would have taken a lot longer. Covid was the catalyst to get us to take risks more.

Lena McGuire:
Covid actually worked well for me with going to conventions. I just came back from the Kitchen and Bath Industry Show in Las Vegas last week, and they have a separate ticket. Now, you can buy an expo ticket, but you can also buy what they call Voices from the Industry, which is the learning content. And if you don’t attend, you can still buy that ticket, and it’s wonderful. I wouldn’t go every year. It’s just a great thing to be able to purchase that and watch that content and learn and get your CEUs.

So for me, that has been wonderful. So I can see where your business would grow from that, because that’s, like you said, those 27,000 people who weren’t going to attend could benefit from that. But I did go to the show, and I still prefer to have that time to network on the floor and then use the content after I come back.

Jennifer Kerhin:
Yeah, that’s exactly what I’m talking about. That’s a great example, Lena. Associations have found ways to combine the best of both worlds for people that want to come in-person. They’re really developing experiences so you can network better, and you can do the things you want to do on the trade show floor, through the experience or meeting vendors, but then they’re also figuring out, boy, they have amazing content that they can repackage to use afterwards. So you gave a great example.

Loren Feldman:
Jennifer, every day I read another story about a business that wants to get all of its employees back in the office again. Are you fully comfortable with managing 30 employees in 13 different states?

Jennifer Kerhin:
It has its challenges, absolutely. But we’re not going back in-person. We are in a unique position that convention planning requires us to travel quite a bit, and so our staff meet each other as well as meet clients when they’re on-site for site visits or conventions. You combine that with the travel schedule being remote, and it’s very helpful for us. And I will never go back to an in-person place. I think we’re doing a great job. We use Slack in addition to emails. So Slack is constant for quick questions and thoughts. We try to build culture. And I think working remote is fantastic. I am surprised, actually, some companies are pulling people back in.

Sarah Segal:
How do you manage training more junior people, though, remotely? Has that ever been a challenge, or do you just not have junior people?

Jennifer Kerhin:
We have a lot of junior people. We have a lot of coordinators. It’s definitely a challenge. I would say we’ve gotten better at it. The first week the person just spends with our administrative—she’s a senior manager for HR and finance—first just doing our systems. And the second week is just doing more systems. But in their department, under their supervisor, the training part of that’s been really great. We have a new system.

Where it gets into a harder part is, if you’re a coordinator and you’re sitting next to an experienced manager, you can easily ask them a question if you’re not sure, right? That osmosis learning, that has been harder. And so, we’ve done a lot of—once a month, we do lunch-and-learns. We have a Wednesday morning staff meeting where we do five- to 10-minute tech tips and then Slack. Each department, each client, has its own Slack channel so that they’re constantly saying, “Hey, how do we do this?” Really quickly, right? That’s been unbelievable.

What I have found that I haven’t quite gotten over is younger people also sometimes like the social aspect of being in office. You know, if you’re older and you have a little bit more space in your house, let’s say, and a little bit more obligation, so you prefer being at home. But when you’re younger, there’s a social aspect that I totally forgot about being in the office, meeting other people, maybe going for drinks. I haven’t quite figured that out yet, Sarah. I think it’s okay for us, because, like I said, they’re traveling. They’re going to different cities. They’re spending time with other staff there. But that’s the part that I didn’t quite consider.

Loren Feldman:
Have you figured out how to handle payroll with people in 13 different states? Or is that still challenging?

Jennifer Kerhin:
We have definitely gotten over the hurdle. Two years ago, I would sit at my desk at least once a month and just sob at night because the state taxes were a nightmare. We did two big things. The first is, my fractional CFO, God bless her, on one of our meetings, I probably looked all red- and bleary-eyed, and she’s like, “What’s wrong?” And I was telling her, and she’s like, “Jen, let me take over this.” So she took this more on her plate.

And then we upgraded our payroll system. So we had a basic ADP system, which I have now come to realize—no matter what they say—they were not prepared for all these different states. And so they were creating more of a mess on their side. We upgraded to the next level of ADP—or a different level, I’m not quite sure—that can better handle employees in different states. And then my CFO helped me get up to speed on logging in. So now it’s very easy, very, very easy, and it’s fantastic.

Loren Feldman:
That’s great. Sarah, how about you? What were you doing in March of 2020?

Sarah Segal:
Well, I was two years into my business. So I hadn’t existed for very long. And I was lucky. We had started the company—I say we, because I had a partner at the time. We had started the company remotely, just because it kind of fell into our laps. I had a project that was handed to me, and my then-business partner was like, “Hey, let’s start this thing.” So it was already virtual. But she left, and a client of ours from the home furnishings company Serena and Lily was starting a new company and had office space in the town near me, and said, “Hey, listen, we don’t have a huge budget. Would you want office space in exchange for some of your PR services?”

So we moved into that office, and obviously three months later, or it was a little bit longer than that, Covid happened. The office was shut down, and we were back to being virtual. But since then, we also have tripled in size, and we have an office in San Francisco, which is great. But also, with the triple in size is the triple in burden. It’s the payroll, it’s the HR, it’s the one-on-ones. It’s the, “Okay, do I have enough team to service the clients that we have? But if I get another client, we’re screwed because we don’t have enough people. So do I start looking to hire another person, or do I wait and just fill the gap?” It’s a full-time job. Before I was spending 75 percent of my time doing PR—you know, actually doing the client work. Now it’s probably closer to 25 percent. The rest of the time, the team is doing it, and I’m still struggling with—

Loren Feldman:
That’s what everybody wants, Sarah—to pull themselves out of the day-to-day.

Sarah Segal:
I know. And theoretically, yeah, but it stresses me out to not know everything that’s going on. And I think that’s just the way that I’m built. I want to know everything that’s going on with every single client that we have, and I know that I can’t. So I really rely on that Monday meeting I have with my team to bring me up to speed on anything I missed and flag things that I need to really focus on. So I don’t know. I like to describe to people that my business is in its teenage years, where we’re kind of awkward, but we have a lot of energy. And I’m really looking forward to adulthood.

Loren Feldman:
Do you think your business would be any different today if Covid had not happened?

Sarah Segal:
Would it be any different today? I think my clients would be a little less hesitant to do things. For example, we used to do a lot of media events and pop-ups and things that were a little bit more in-person. I think a lot of clients got to this comfort zone where they’re like, “Hey, I can still run a business and do pretty well without doing anything in-person and interacting with people in real life.” And yes, you absolutely can do that, but it’s really hard on the media side, because media loves that show-and-tell experience.

It’s one thing for me to pitch somebody an Italian handbag. It’s another thing for me to say, “Hey, we’re having a cocktail hour for influencers and media. We’d love to introduce you to the product, show and tell you all about it, and really give you a hands-on experience.” And it’s just hard to get that kind of connection with potential writers and influencers without that in-person. And you know, people do do stuff. I’m not saying that they don’t. But I’m just saying that they’re hesitant about investing in it just because, well, they’ve been doing fine without them.

Loren Feldman:
Lena, how about you? What were you doing in March of 2020?

Lena McGuire:
That was the infancy of my business. I had been about two years of side hustle, still had a part-time job in testing the waters, and then Covid hit and the business started drying up. But the good part was that I learned the new technology: Online video conferencing has been a game-changer. And because of the slowdown in the business, I have been able to learn how to use the product.

So, usually on a day-to-day basis, you can’t just sit down and read the user manual, and learn how to do everything. But because of the slowdown, I was able to take the time to learn the product and fine-tune some of my processes so that now what used to take 18 to 24 months, I can do in about eight weeks—because I was able to focus on what I’m doing and using the tools. And the customers like the experience better.

Loren Feldman:
Can you explain that, Lena? What are you doing now that you’re able to do in just eight weeks?

Lena McGuire:
I meet with my customers, and I have some who are not within the 15- to 20-minute radius that I prefer. So, if I have a customer who’s about an hour and a half away. Rather than taking that drive for an hour and a half and then having a 90-minute meeting and then an hour-and-a-half drive back home, I can conduct a Zoom meeting after our first initial consultation, where we’ve actually met in person.

We can agree to meet via the video chat, and I can share my screen. We can work in real time, sharing the software and actually making progress. So I’m saving a lot of time that way. And because I know that this is what I’m going to do this week, and then next week, our meeting is going to be focused on this, I was able to reduce the time involved in having people make decisions and get the work done. So everything kind of condensed, and it’s to my benefit.

Jennifer Kerhin:
Lena, you bring up a really good part about sort of that sales discovery part can now be done by Zoom. That frees up your time. But also, do you think it makes clients—sometimes, I think it makes clients feel more comfortable not having it in person. What are your thoughts? Because you are so intimately involved with your customers.

Lena McGuire:
My customers either have a strong preference to meet via Zoom because they’re busy professionals, or they prefer to meet in their home because they’re insecure about the decisions they’re going to make. So it really comes down to the personality of the client. And a lot of times, what happens is we do a hybrid where we meet when we can. But then, because they have travel schedules or they’re tight on their deadlines, they request a Zoom meeting this time. So it gives them more flexibility, more choices, and it makes them more comfortable with how we’re progressing, so that we can stay on our eight-week schedule without missing a beat, and they don’t have to worry, “Oh, I have to be somewhere else.” They can still Zoom in if they want to.

Sarah Segal:
Can I point out one thing? We use video conferencing all the time, but I had a new business pitch a couple weeks ago that we’re still crossing our fingers on, and I got on the call with them. They had originally wanted to meet us in person, but I think scheduling was tough, so they asked to do it over a video call, which is fine.

And when we do video calls, I’m so used to, at this point, having one face per square, you know? But this company, they were all sitting in a conference room on one video conference, and it was an awful experience for me, because I couldn’t see the reactions from any of them. Because they were just these little beings in the screen. It was terrible. I’m so used to being able to have everybody have their laptop so I can see their face.

Jennifer Kerhin:
Sarah, I agree. I don’t like it when—I think they call it The Owl.

Sarah Segal:
Something like that, yeah.

Jennifer Kerhin:
I find it disconcerting. If everybody’s gonna be in a conference room, honestly, I want to be there. I much prefer, though, to have these first couple calls by Zoom. At some point, you like doing things in person, I get it. Especially in a conference room where people can brainstorm, it’s much easier to do in person. But many, many times we have saved hours and hours by, like Lena said, you don’t have to spend the time commuting to see a potential client or customer. And it’s low risk on their part to spend a half hour on Zoom to just see if you’re any good. I love this post-Covid, do a lot of this by Zoom.

Sarah Segal:
Yeah, but I think there is something important about, even once you’ve landed the client—you get the client, and you have an ongoing relationship—finding the time to meet in person every once in a while. There’s stuff that they’re going to say when you’re there, one-on-one, or in-person, or having a coffee, or catching up, or whatever, that they’re never going to say over a call. And so for us, we try to find time to make an excuse to go see our clients so we can get a temperature check on how they’re doing. Maybe they have other things that are popping up. We get so used to doing everything virtually that we forget that in-person experience and relationship is so important.

Jennifer Kerhin:
Agreed, Sarah.

Lena McGuire:
It really is. With my business format, the Zoom, the video conferencing, that would come in when we’re doing some layout things, where I’m using the computer. But when we’re selecting products, we have to touch and feel the products. I have to be right next to them. Like Sarah said, you want to see the facial expressions. You want to see the body language. For me, if I’m in a showroom, and we’re looking at a product and you see the pupils dilate, you know that the customer is very excited about that particular product. And you can start focusing on that, stop looking for something else.

Sarah Segal:
Oh, I’ve never thought about looking at people’s eyes to dilate.

Lena McGuire:
Oh yeah, pupils dilate when they’re excited about something, and their lips get very thin when they’re angry about something or they’re concerned about something.

Jennifer Kerhin:
My eyes are not good enough to even notice that. [Laughter]

Sarah Segal:
Well, that’s why you have to have one of your junior level people, you train them on human behavior and expressions, and be like, “Okay, just Slack me during the call if you see any of these things.”

Lena McGuire:
When we’re in construction, I do a weekly call to them. So either they get a text message or a phone call or an email, depending on what their preferences are, but that way, we have that touch-base point—but that’s not always in-person. So I can start out in-person, go to the video conferencing, go back to in-person, and then even go to a phone call. So for me, I have 24 weeks with a client, and we have all different methods of getting in touch with people.

Sarah Segal:
How do you deal if you have a husband and wife and they have different perspectives and different desires for the project?

Lena McGuire:
Well, that’s part of our first meeting. We go over our goals and objectives, and we figure out what’s important to each person. A lot of times it comes down to one of the partners is more interested in how much things cost, and the other is more interested in what things look like. A lot of times, it’s designing for the sexes. There’s always a compromise at some point. As long as we find something that makes somebody else happy, they’re fine. So it’s just a matter of finding a priority for each of them, so that they each get something that’s really important. And then, they’re willing to compromise on things that are less important to them, because they want the other person to be happy. So we’re always focusing on that.

Sarah Segal:
Okay, I asked that because, today, I went and I met with a local restaurateur with a couple different locations and potential locations outside of the Bay Area. And it went really well, great conversation. And now his wife, who founded the company with him, is coming to our office because she has more questions, and we hadn’t met her yet. So it’s just going to be—I know nothing about this person. All I know is that they’re going to show up in my office, and I wonder whether or not they’re gonna have questions about the work or the price or what have you.

Lena McGuire:
There’s a question I ask early on in the meetings when we’re doing what I call the good-fit meeting, the discovery call kind of situation. I ask a question: “Who else is going to be making decisions?” Because when you say that, they’re like, “Oh no, I make the decisions.” So I follow up and say, “Who else is going to be making decisions? Is your sister going to be shopping with you? Is your husband going to have to approve anything?” So you kind of feed them a little bit about who else might be in their periphery that would be coming in and making it a little harder for you, because you don’t know that person. They come in at the last minute, and you have to start over again.

Sarah Segal:
Interesting. Thank you.

Loren Feldman:
We’ve had some conversations on this podcast in recent weeks with owners who’ve talked about sensing some uncertainty in the market, some reluctance to commit to projects, and some softness in their business. Have any of you experienced anything like that?

Sarah Segal:
I have. So, January came in like a lion. There was tons of business, phone ringing off the hook, like it’s crazy town, right? And then—

Loren Feldman:
Your Januarys are usually slow, aren’t they?

Sarah Segal:
Oh, January is usually terrible for me. January is like, I spend basically the latter half of the year before January to try to preserve myself from January. And I kind of set myself up, hopefully, to not have a bad January again. Because I just know that people look at their books at the end of the year, and then they say, “Oh, well, maybe we should buy paid ads instead,” or whatever. So January came in, there’s a lot of new business. Some stuck, some wasn’t a fit. Some were these gigantic RFPs that you have 30 different agencies going after. So we didn’t make it to the cut, but there was a handful that we got, where I’m really excited about it. Like, okay, good to go.

So we have one client where we even had an in-person onboarding. We all went to their location, sat down at the table and went through a good hour and a half of onboarding with them to get going. And the next day they were like—I think we scared them, because we had a lot of questions about, “How are you gonna do this? What is this like?” So they emailed me the next day—and it wasn’t even the owner. The owner didn’t email me. It was, like, their right-hand man or woman, and they were like, “So we’re gonna have to put a pause in this, because we need to get our ducks in a row in-house before we set forth on this. We’re gonna have to push it out two months.” And I was like, “I’m glad I didn’t hire anybody to service this account.”

Last week, I emailed them, saying, “Hey, I appreciate that you want to get your ducks in a row—just making sure that we’re on track to start next month.” And they’re like, “Yeah, so we’d like to void the contract, because we’re just not in the right place to move forward.” And it was such a waste of time. And, you know, I’m pissed. I’m pissed because I spent a lot of time working on the proposal, the onboarding, nurturing this thing—and that was, again, not the owner emailing me. It was her second-in-command emailing me. And I’m like, I want to say this—and you’re going to hold me to it—but I’m not going to work for them. Like, that’s not how you treat partners, and that’s not how you work with partners, and that’s not the kind of client I want.

Jennifer Kerhin:
Sarah, did you have a signed contract?

Sarah Segal:
Yeah.

Jennifer Kerhin:
What’s your cancellation policy?

Sarah Segal:
It’s a 30-day cancellation policy. But I gave them the time, because I was like, “Okay, well, they’ve got to get their ducks in a row.” So we never really started started. And yes, I could go back.

Jennifer Kerhin:
Could you charge them? Charge them the first month, at least, to get something?

Sarah Segal:
I can go back and do that, but honestly, it’s just not the way I operate.

Jennifer Kerhin:
Oh, you should. [Laughter]

Sarah Segal:
I know.

Jennifer Kerhin:
You know what it’s gonna do? It’s gonna make you feel slightly better. Because it sounds like you have a bitter taste in your mouth, rightfully so. I don’t think they led you on, but they got you down a path where you were ready to build this up. And now you’re frustrated, totally understandable, and you’re right.

On the other hand, if you get some money—because you did spend time on this, right? Think about that. It might help a little bit if you got a chunk of money, because I think about cancellation policies all the time. As we get stronger and better in our businesses, it’s when is it time to let it go and when not?

Loren Feldman:
Sarah, you seemed to suggest that they might have been a little uncomfortable with all the questions that your team was asking. How did you come to the conclusion that this was just about them getting their ducks in a row, or whatever internal problems they had, versus them maybe not being fully comfortable with what they saw from you guys?

Sarah Segal:
No, it was more like we would ask about their messaging. We’re like, “Okay, so what is your key demographic? Who’s buying your products currently?” And they didn’t have those details. So they didn’t have answers to a lot of the baseline things that we need to develop a social media influencer and PR campaign.

Like, what are your target publications that you’d really like to be able to be included? What kind of influencers? Just stuff like that they couldn’t answer. They didn’t know, right? And I think that they realized that they needed to do a little bit of inside homework first, which is fine. I get that. I mean, we can help them with it. But they didn’t give us the opportunity to do that. They were just like, “Yeah, we’re not gonna move forward.”

Jennifer Kerhin:
Do you think they thought that you were gonna do that for them?

Sarah Segal:
Well, I mean, we can absolutely help them, but like, I don’t know what their demographics are. I don’t look inside their Amazon, looking at their purchasing. I know that they have people on their team who do that.

Lena McGuire:
That might be how they’re coming in. I know I’ve been new to the marketing purchasing services, and without actually knowing and being guided through it, there were expectations that I had when I came in that I thought, “Oh, they would help me get this information.” But they were in your shoes where they were expecting me to give that to them. So we had to go into an additional contract so that they could help me do that and get that information. And it, of course, adds time and money to what’s going on, but that might just be part of the education process.

Sarah Segal:
No, but here’s the thing: We weren’t their first agency. They’ve worked with other agencies before.

Jennifer Kerhin:
How long? Like three, six months, and then that doesn’t work out, too?

Sarah Segal:
Yeah, I don’t know the length of it. All I know is, in retrospect, I now can see all the red flags. I can see all the red flags. And I’ll think about asking them for money. But like, it’s not how I operate. I really respect small business owners and, you know, shit happens. I get that. And there may be more to the story that I don’t know. Yeah, I probably need my CFO to yell at me a little bit about that. [Laughter]

Jennifer Kerhin:
Sarah, did you talk to the owner before?

Sarah Segal:
Oh my God. They’ve been nurturing this relationship for, like, a year.

Jennifer Kerhin:
Do you think you could call that owner and just say, “Hey, I got the message. Do you think we could chat so I could help figure out for the future of client relations and get maybe a little bit more understanding?”

Sarah Segal:
I could. I just have to be in the right mood. [Laughter]

Jennifer Kerhin:
Sure, have a glass of wine.

Sarah Segal:
I’m a little angry right now. Because that decision impacted my business. I had put it into my plan for the year, and now it’s not in my plan for the year.

Lena McGuire:
That’s why you have a contract.

Sarah Segal:
I know. I know.

Lena McGuire:
You have to kind of respect your contract too, because it’s a tool that’s working for you, and you have a cancellation clause in there. Because what if you had hired people? I mean, you are assuming, based on the signed contract—they’re funding the contract, they signed it, and now you’re doing things because they made a commitment. And then, when they say, “Oh, I want to void the contract,” that’s canceling it. You have to back date it. I would think that you might want to look at your contract and look at your cancellation policy and see if you’re actually comfortable with that. And maybe that needs to be modified.

Sarah Segal:
I should. I mean, honestly, this has never happened to me before. So I’m like, it’s a brand new territory.

Jennifer Kerhin:
Oh, it’s gonna happen again, too. So, Sarah, you might as well start now. [Laughter]

Lena McGuire:
This is how we learn! I can’t tell you how many times I’ve adjusted my contract, because I learned something, and it always costs money. It’s the school of hard knocks, and that’s the tuition you’re paying. But then, you know, you call up your attorney and you say, “Hey, this is what happened. How can I adjust my contract?” And then, after a few years, a few tries, then you get something that’s working better every time.

Sarah Segal:
I know. There are some agencies that actually, with newer and more startup-y businesses, will make those businesses pay three months in advance.

Jennifer Kerhin:
I mean, that makes sense.

Sarah Segal:
I don’t trust that your business is—I don’t know. I can’t rely on you. You need to pay up-front for three months before we even get going. And I’d love to be in that position someday.

Lena McGuire:
My business is 100 percent up-front. I get paid, and then I do the work.

Jennifer Kerhin:
I’m not that. That sounds lovely, Lena, to get 100-percent paid before you do the work. But I think, Sarah, this is just a product of growing pains. We’ve all been there.

Sarah Segal:
I told you I was a teenager.

Lena McGuire:
There are consequences in my contract, because people will find out that the remodel project is going to cost significantly more than they anticipated. I have outs for them at different phases. But when they’re paying me, part of that money, because I’ve done the work for them, that money gets credited within 12 months if they come back. So we have a restart fee. It’s not insignificant, but it’s not crazy. But then any money that they’ve already put into it is applied to the new contract. So they’re not losing anything, unless they go beyond the 12 months of not working.

Because, you know, life happens. You’re doing something, we’re getting together, and all of a sudden, maybe a family member is injured or dies. You just have to put the project on hold. So I have something in my contract that allows for that kind of contingency, but it also protects me, saying that, “Yes, this is a contingency—up to 12 months. And then, after that, the money, I keep it.”

Sarah Segal:
Wow.

Lena McGuire:
You live and learn. I’ve gone through these things.

Sarah Segal:
Well, this is my live-and-learn moment, and I’ll figure it out. I will ponder your recommendations.

Loren Feldman:
Jennifer, how’s your business doing?

Jennifer Kerhin:
Good. It’s not great. It’s moving at a slower pace, but we grew at such a fast pace before. It’s actually kind of lovely.

Loren Feldman:
At times, you’ve talked about actually pulling back a little bit and not wanting to grow. Is that what’s happening? Or do you think there are people, similarly, who are reluctant to commit right now?

Jennifer Kerhin:
Well, the one thing about associations that I love is their membership by-laws often say they have to have a meeting. So it’s rare that they cancel it, except in the case of a pandemic. No, I don’t think it’s pulling back. I’ve put a little bit more emphasis on business development since the fall, and we’re seeing that come in. Is it a flood of input? No, but it’s not a trickle either.

Loren Feldman:
Lena, in our emails before today, you mentioned that you’ve had some issues with hiring vendors. Can you tell us about that?

Lena McGuire:
Service providers, yeah. I’m getting to the point where I need to hire out work, and we have discovery calls to do marketing or accounting or whatever other outside services I need. And the meetings go well. You know, I interview a few different people, and I select one, and then I hire them, and we do the work. And it seems like it’s a really good fit, and everything’s going well. And then I find out that my expectations are not being met.

And I don’t know if it’s because I’m not communicating well, or if I’m a perfectionist, or I have such high expectations. But I’m starting to get frustrated because I’ve had two service-provider issues in the last couple of weeks. And I’m feeling like the common denominator is me. So I want to step back: What am I doing wrong? How can I improve this so that when I hire somebody to do work for me, to take something off my plate, that the expectations I have are actually being met? Or that they can instill their expectations onto me, so that I know what I’m getting into. Because something is going astray, and it’s becoming very frustrating.

Sarah Segal:
Like you hired a marketing agency or something to do work for you? Can you talk about that?

Lena McGuire:
Yeah, I’ve hired a marketing agency. I’ve hired a new bookkeeper. And they’re lovely people. I enjoy working with them. But the deliverables are a little less than what I had anticipated. And then in the other situation, it would be that the cost of services has doubled.

Jennifer Kerhin:
That sounds about right these days.

Lena McGuire:
But it’s the cost after they quoted.

Jennifer Kerhin:
Oh, well, let’s go back to the contract discussion. Did you put the parameters in the contract? Or is it an hourly rate?

Lena McGuire:
We had a flat fee to do something, and I paid that ahead of time. And then they came back afterwards and said it was going to be triple. And I’m like, “No, we had an agreement. We signed it. So this is what we’re going to do.” And it was like, “Well, but I did all this extra work. I didn’t anticipate that.” And, you know, being a decent human being, I understand that they did do all that work. I’m not denying that they did lots of extra work, but we had a quoted fee in a contract. So we negotiated what I was going to pay additional because I didn’t want them to work for free but I also didn’t want to pay triple.

Jennifer Kerhin:
I think, Lena, when you’re dealing with new service providers, understanding the scope of work and your expectations is really hard. It’s hard on their end. It’s hard on your end, right? And I think you may have to go through a couple cycles, if you trust that the work that they’ve done is good, just not up to what you wanted. I think you can work with them, if you like them, and you feel like it’s a fair rate to get to what you want.

I think sometimes, when we start in business, we have an idea, but it’s hard to verbalize it to partners. And it’s sort of trial and error until you get what you want. Now, if this person did a terrible job, or the price was outrageous, then you can drop them. But sometimes that partnership relationship with new service providers, it takes a while.

Lena McGuire:
Yeah, I agree with that. I do agree with that. And I have the two different providers, and one, we are continuing the relationship. It is a partnership, and we have good conversations. So our working is getting better because we are understanding each other more. The other one, we’re just not moving forward because I talked with other people in my situation, and the fees that they want to charge are commensurate with somebody who has a lot more work that needs to be required. So I basically would be paying double what I should be, based on the consensus of about eight or 10 people who I’ve spoken to about the same situation.

Jennifer Kerhin:
So it sounds like you’re working the process. Finding good partners on services is hard. I’m on my fourth tax accountant, and I finally feel like, in the past year, that I found a really great one.

Lena McGuire:
I might need his name, because that’s what I’m looking for.

Jennifer Kerhin:
I didn’t know what I didn’t know, right? And so in taxes, who wants to learn about that? And I took a lot of their advice.

Lena McGuire:
And this isn’t the time of year to learn it.

Jennifer Kerhin:
Yeah, and so now I finally feel like I found a really great company. Also, I maybe couldn’t have afforded this company when I first started, and now I can. So it’s ongoing. Your partner that started with you may not be the partner you still need as your company has grown.

Lena McGuire:
Yeah, I had a Score mentor tell me once that when you’re hiring your lawyer, your accountant, your insurance agent, that what you should look for is the company that is the same size that you are going to be next year. So if you’re a five-person agency, then you should have somebody who is in that four-to-eight-people range, so that they can understand where you are. And I think that’s really good advice. If you’re hiring a solopreneur, and you’ve got 30 employees, they’re probably not going to be able to handle the business that you are going to be wanting them to do.

Loren Feldman:
Speaking of tax accounting, we brought in a tax expert, Julianne Rowe, for a podcast episode that we published a few weeks ago. She talked about tax and accounting issues. It actually started with a question that Sarah asked. And I’m curious, Sarah, did you get something out of that conversation? Was it helpful? Have you made changes?

Sarah Segal:
It was very helpful, absolutely. And I had been asking about how to bonus myself, or how to pay myself, and if I should do it as a withdrawal or in my payroll. And I’ve only had a brief conversation with my current tax accountants about it. They vehemently disagree and say that it doesn’t really matter, because of the way that I’m set up as an LLC, which is a pass-through—that if I pay my taxes through payroll or pay it after the fact, it doesn’t matter, because it’s all registered. That said, I’m trying to get through the next couple of weeks.

Loren Feldman:
That’s very different from what Julianne was saying.

Sarah Segal:
I know it is, and I haven’t broached it again, because she says one thing. They’re saying something else. I did get the name of another tax accountant, so I’m going to make an appointment to talk to them, because my husband and I also had a long conversation about it. And we’ve had various tax accountants over the years, and for one reason or another, we’ve moved on from them. But the thing is, our current tax accountants are very capable people, as far as we can tell, but I don’t feel like they’re working hard for us to find those savings. Because I think that we’re just one of their small clients.

It goes back to what you were saying, Lena, about finding a business that’s a little bit bigger. I think that they have enormous clients. So when they do our taxes, it’s like, we’re nothing, we’re not important. And finding us savings is more work than it’s worth for them. So I did get the name of another tax accountant who is also in my same time zone, which I’m looking forward to having, because being able to get on a call with somebody or communicate with them in real time during my hours is appealing to me. So I’m starting to search around for alternatives. I just want to make sure that we’re getting all our taxes in for the season, because it is the pass-through. So I have to do the April 15, and then maybe switch gears. I just don’t know who to believe. I want to get a couple second opinions, you know?

Loren Feldman:
One last question I want to ask Jennifer. You were on an episode late last year in which you kind of teased us a little bit. You shared that you had a big idea that you were excited about, that you’d been noodling on for a few years. And you thought you might be ready to pull the trigger. You told us you would tell us whether you’re going to do it by the end of the year, but this is the first time we’ve seen you in a while. Can you tell us? Did you make a go or no-go decision?

Jennifer Kerhin:
I made the decision, but unfortunately, it’s a no go. I am so close to having an incredible management team handle all the client work, and I’m not direct client-facing anymore, but I still help do priorities, project management kind of stuff. And I decided that until I’m 100 percent out of that, I don’t want to do the new idea. And I’m very close. I’d say another six or nine months. So I’m holding off again, for a while—ask me again at the end of the summer.

Loren Feldman:
So you still think you might do it?

Jennifer Kerhin:
Oh, I definitely am going to do it. It’s just I need to have the door closed on this so I can be the CEO who’s the visionary, the strategy maker, the hirer of the leadership, and oversee the leadership, and I’m almost there. So once I get out of that, then I can go do this new idea.

Loren Feldman:
Which I’m guessing you’re not quite ready to tell us what it is.

Jennifer Kerhin:
Not quite ready to tell you.

Loren Feldman:
Understood! All right, my thanks to Jennifer Kerhin, Lena McGuire, and Sarah Segal. I really appreciate your taking the time.