Episode 25: Would You Start Your Business Today?

Jay Goltz, Dana White, and Laura Zander talk about confronting what’s changing in their businesses, possibly forever. Dana is considering a new business model. Laura is considering moving her wholesale business from Texas to Reno. “Ask yourself," says Dana, quoting an adviser, "'What kind of business would you start today?' Because that's the only one that has a chance to survive.” Plus: We get into some interesting strategies for raising prices, for managing lower paid employees, and for balancing entrepreneurship and parenting.

Episode 25: Would You Start Your Business Today?

Guests:

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

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

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

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Dana White: “Ask yourself, ‘What kind of business would you start today?’ Because that’s the only one that has a chance to survive.”

Laura Zander: “So we’re wrestling with the question of, ‘Do we stay in Texas? Do we move this to Nevada? Do we keep leasing this building? Do we buy a building?’”

Laura Zander: “It’s really nice for me personally to have a two-week stretch where I can work 14 hours a day uninterrupted, and I don’t have to cook dinner for anybody.”

Full Episode Transcript:

Loren Feldman:
Welcome, everyone. Dana, let’s start with you. We haven’t talked to you in a couple of weeks. If I’m not mistaken, you were planning on reopening your salons this week. Did that happen?

Dana White:
It did, but differently.

Loren Feldman:
Do tell.

Dana White:
I have opened up Paralee Boyd, and I have opened up one location. I have decided not to work out of my first location, the Southfield location. We kind of just moved everybody over to Midtown, and things are looking good so far.

Loren Feldman:
Is this a permanent decision? Or just for now, you only want to have one location open?

Dana White:
Just for now. I’m looking to potentially move my first location, and so that’s kind of in the works right now. A friend of mine named James Feagin, he’s getting ready to write an article and he posted something to Facebook. He’s the owner of Projects and People here in Detroit. He has been really really outstanding in getting in touch with business owners, giving them resources and access to capital.

He said, “The future is gone, and all the business models that depended on it, you need to take your plan and run it through a set of facts rooted in the new reality we are coming to understand. Then ask yourself, ‘What kind of business would you start today?’ Because that’s the only one that has a chance to survive.”

Loren Feldman:
Did you do that?

Dana White:
I did it. And that was the information I needed to say, “Okay, Dana, who is Paralee? And you’re already starting to see that things are changing. People are scared. People are nervous. We cannot operate the way we did pre-COVID. So who will Paralee Boyd be going forward?”

I’m really starting to focus on retail and selling online, getting together a subscription service for hair care because of the conversations I’ve had with guests over the past couple months and their hair care needs. Then just making haircare easy and accessible beyond the salon.

I think to operate post-COVID, especially with a potential second wave coming, you have to reach people in their homes for my business. So for my business, I’m looking at hair care kits, a subscription service, and really drumming up the retail products that will help them take care of their hair.

Loren Feldman:
Has anything changed in opening the stores and talking to customers? Are you seeing evidence of things that you didn’t expect to see?

Dana White:
You know, one of the reasons why Paralee Boyd works is because a lot of my market, they do not want to do their own hair. They want to pay you to do it. But when we are not available, or when you’re afraid because of what’s going on, or when you can’t get to us, they’re finding that their hair quality diminishes because of protective styles, because of wigs, because of whatever they choose to do or not to do with their hair.

For me, and speaking with my guests, how do I equip my guests outside of the salon to do their hair or to have better hair care? When I had these conversations in the salon, there are a lot of things that women just don’t know. They didn’t know you have to rotate your shampoos. They don’t know the type of ingredients you have to look for to keep your hair healthy and why you can tell a difference between Paralee Boyd when you’re coming frequently and when you’re not coming frequently. So a lot of education has been going on in the salon.

Loren Feldman:
Jay, Laura? Any reactions? Thoughts?

Jay Goltz:
Yeah, I don’t know if he got into detail, but it’s not just the pandemic that has changed business. I hope he didn’t make it sound like that, because I don’t believe that.

Dana White:
Not at all.

Jay Goltz:
Okay, good.

Dana White:
There’s another paragraph that just kind of shakes you. This is what he said. He said, “A list of things we need right now: a smack in the face,” was one of them. He goes, “Yes, I know, we feel like we’ve had one already: friends and families lost, businesses shuttered, balance sheets ruined, but that’s not what I’m talking about.” He goes on to say, “We are all anchored psychologically to a future that doesn’t exist anymore. Our past experiences are historical thinking, instincts, and sometimes even our trusted information sources are telling us that ‘This will be over soon, just hold on, just keep trying, in 90 days, a vaccine, when the order is lifted, when people come back to work, the government is going to pass this or that.’ The future is gone and all the business models that depended on it.

Jay Goltz:
I think he’s getting overly dramatic with, “The future doesn’t exist.” Okay. I don’t know…

Loren Feldman:
Well, the point there to me was the question, “Is your business the business you would start today?” And that’s an interesting exercise. Laura, how about you? Is your business the business you would start today?

Laura Zander:
Yeah, it probably is. I’m looking for the opportunities, as opposed to kind of rebuilding, and maybe that’s the wrong way to look at it. But I keep looking at people going out of business and things shifting and I’m trying to find the gaps. I’m trying to find out what’s not being filled. Does that make sense?

Jay Goltz:
Sure, and there are opportunities out there.

Loren Feldman:
Dana, tell us about your business model. Is the primary change the one you mentioned about taking care of your customers when they’re not coming to you? Is that the shift?

Dana White:
Yes, and not being walk-in only.

Loren Feldman:
Oh, interesting.

Dana White:
Yeah, we’re not walk-in only. According to the state of Michigan, we can’t be. On busy days, we’ll see 10 to 15 women standing outside in a line to come in and get their hair done. That can’t happen anymore. We’re scheduling our appointments, and it’s an adjustment for us, and it’s an adjustment for our guests.

Loren Feldman:
That was kind of your claim to fame.

Dana White:
Yeah, and we do hope to get back to that. We do have people who are just walking up, because they’re fighting making an appointment. If they walk in and we have time, then we’ll put them on the book. If we don’t, then we’ll schedule them for a time that we do, as opposed to letting them sit there and we work them in. And that made me nervous. I was like, “Gosh, Will people come to me if I’m not offering walk-in only?” I’m glad to report, yes.

Loren Feldman:
You mentioned that you are thinking about moving the location that you have just closed. How big a priority is that? Is that something that you want to get done soon? Or are you going to wait to see how things stabilize? What’s the thought there?

Dana White:
That’s a great question. When I opened my second location, I wish I could go back in time and do things differently. One of those things is take my time. That’s what I have the opportunity to do now. Thank you, COVID. I have the opportunity to go back in time and take my time in opening my second location.

My priority is getting butts in seats. I have been vigilant on marketing, understanding our brand, making sure that we’re getting in front of people. I’ve talked to customers. A lady said, “I live around the corner, I work down the street. I’ve never heard of you.” Said that to me the other day. She goes, “Dana, I work with hundreds of women who are me, who’ve never heard of you.” So that’s the priority, is getting the word out about Paralee Boyd. I’m also happy to report prices were up day one.

Laura Zander:
Yay!

Jay Goltz:
Good for you.

Loren Feldman:
You did in fact raise your prices? How’d that go?

Dana White:
Uneventful, except for one customer who called.

Jay Goltz:
There’s always one customer.

Dana White:
Always one. But it wasn’t bad. She said, “So why did she do that?” And my manager, she did a great job. She said, “Because it was time. We kept our prices the same way for as long as we could. But as you know, everything goes up and it was time.” And that was it. And she said, “Okay.” And so people have not—

Loren Feldman:
And she made an appointment?

Dana White:
Yeah, she came in later that day.

Jay Goltz:
And most importantly, when you raise prices, it’s okay if she wouldn’t come in, because you can factor into your pricing: “Okay, we’re gonna raise prices. Somebody’s not going to come in. It’s okay.” Like maybe you’ll lose 2 percent, 3 percent. It’s okay.

Dana White:
Most of my guests have been, “Girl, it’s about time. Girl, it’s about time.”

Jay Goltz:
Wow.

Loren Feldman:
That means it’s time.

Jay Goltz:
No, that means it was time five years ago.

Dana White:
I have a call with the CBD people because I’m starting my CBD line in the salon. There are no CBD lines that cater to women with thick and curly hair, black women’s hair, and there will be now. I’m adapting, and I think that’s what James’ post was saying: “Think about where you are now and think about the future.”

Laura Zander:
What do you guys think about doing annual price increases, and then you have like July 1st is the price increase day, so all of June you really push it, and you train your customers to know that, every year, I’m going to increase prices a tiny amount: 25 cents, $1, $2 whatever it is. Something that’s not going to hurt the pocket, but then all of a sudden five years down the road, you have increased prices 10 or 20 percent.

Dana White:
I’m having that conversation at three o’clock with my bookkeeper so I never have to do this again. But at what rate do we need to increase our prices?

Laura Zander:
Right, and then you make a marketing event out of it.

Jay Goltz:
I’m going to tell you what the problem is for people like Dana who are in that kind of business. In my business, the molding goes up, the glass goes up, people automatically go, “Oh, the price of materials went up? You go ahead and adjust your prices.” The problem with the hair salon business is they don’t have a bill from a supplier, so there’s not a direct—

Laura Zander:
Cost of labor. Don’t you want to increase the pay of the people who work for you?

Dana White:
My people are hourly, so there’s a cost-of-living increase, and that’s what she and I are going to talk about today. The reason why we will be increasing my prices consistently is to keep my people paid.

Laura Zander:
Exactly.

Dana White:
I had a good conversation with someone I consider a mentor. We sat down, and we did the math on, if you increase your prices, how much business would you lose? We also talked about, as I open, how much more should I give my people? And he said to me—wink wink—”If you want good people, you’ve gotta pay the money.” And I want good people with the vision I have for my business, so I have to pay the money, and in order for me to pay the money, I can’t keep my prices at $40, and I probably won’t be able to keep them at $50 for long.

Laura Zander:
Perfect.

Dana White:
So that’s why it will go up.

Laura Zander:
You increase it 5 percent. You give everybody a five percent annual raise, whatever it is. I wish I had a mentor like that.

Dana White:
Well, you know what? Jay! That’s who I had the conversation with.

Jay Goltz:
Oh, I’m blushing. I wish this was on TV. I’ve lived through it myself. One of the most difficult things emotionally in doing business is to raise your prices. But the problem is, in my case, as in yours, I always want to give the best quality, the best service, and you cannot simultaneously give the greatest price, the greatest service, and the greatest quality and think you’re going to be the cheapest place in town. Those three things don’t go together.

Laura Zander:
I feel like there’s a lot of storytelling that has to go along with it, and you can really turn it into something that has a great story behind it. “Yeah, absolutely, we’re raising our prices because we want our employees to continue to have a great standard of living,” or whatever it is. But if you answer the why, people tend to understand.

Loren Feldman:
Laura, what’s going on with your building in Texas?

Laura Zander:
Ah, my building? Interesting question. We’re vacating one space that we have across the parking lot next week, so we’re going to reduce our rent and we don’t need the space. We’re getting out of that. We have about 20,000 square feet here and our lease is up in December, so we’re wrestling with the question of, “Do we stay in Texas? Do we move this to Nevada? Do we keep leasing this building? Do we buy a building?”

Loren Feldman:
Let’s step back for one second. Remind people, this is a company, a supplier of yours, that you bought in December.

Laura Zander:
Correct. We bought this October 30th.

Loren Feldman:
And you manufacture yarn there. That’s what you need the space for.

Laura Zander:
Exactly. We have a kitchen, we have a commercial kitchen, a large commercial kitchen where we dye yarn. It’s kind of like cooking spaghetti. You’ve got big pots of boiling water, and you put dye in it. So we need a little bit of space.

Where we’re at is, to make the space, there’s been a lot of improvements that have needed to be made here to make this space a good space for the people who work here. One of my primary goals is to make work not necessarily the best part of everybody’s day, but I certainly don’t want it to be the worst part of everybody’s day, and so to create really, really great working conditions.

Loren Feldman:
How serious are you about picking up and moving to Reno?

Laura Zander:
Not very serious. I don’t want to for a thousand reasons, but I am struggling with: how much of my reasoning is emotional and how much of it is a good business choice? I don’t want to, one, because I really like the people who work here and I know that they are not going to move. When we were sold this, we were told that they thought a lot of people would move to Reno, so originally, that was the plan. But coming down here and being here, this team is so smart. So many of them have been here for five to 10 years. There’s so much institutional knowledge and so much commitment that I don’t want to displace anybody. But I know that could be an emotional decision.

Jay Goltz:
Oh, those are completely emotional decisions, but with that being said—correct me if I’m wrong —isn’t the labor much cheaper in Texas than it is in Nevada?

Laura Zander:
Yes, it is, and cost of living is about 20 percent less here in Texas.

Jay Goltz:
Okay, so forgetting about the emotional things, my guess is your labor is probably running at least 25 percent. 20 percent of that is the 5 percent bottom line right there, plus the occupancy cost of the building. The reality is, the reason you probably should keep it in Texas is because there’s 8 percent that’s falling right to your bottom line that you would lose if you went to Nevada.

Laura Zander:
Yeah, because we make the product, labor’s like 36 percent.

Jay Goltz:
Right. That’s 7 percent. How are you gonna make that up? That would be hard to make up if you moved.

Loren Feldman:
Have you thought about what you would do in Reno if you did move there? Do you by any chance have excess space that you could use?

Laura Zander:
We do not. We started looking for buildings in Reno, and buildings in Reno right now are $140 per square foot to buy. Buildings in Texas are $70 per square foot.

Jay Goltz:
Just to be clear, it’s not the real estate that makes a difference. Because at the end of the day on her income statement, her labor is running 36 percent. The occupancy costs are probably 3, 4, or 5 percent. The real money is in the labor and that’s why you can’t move it, because you’re going to pay people a lot more there and it’s going to eat up the bottom line.

Laura Zander:
Yeah, but I mean, if my rent or my lease is half the price, and rent is 10 percent, that’s a couple percentage points as well.

Jay Goltz:
No, for sure. But it’s mostly the labor, is my point. I doubt your occupancy costs are costing you 10 percent of sales, are they? That’s a retail number.

Laura Zander:
No, you’re right, as usual.

Jay Goltz:
So you can pick up a couple of points on the rent, which is fine, but the labor is the big number, on top of the payroll taxes and everything else. We’re talking about, if you moved it to Nevada, you might eat up the entire bottom line by just having higher costs, and it’s not like it will give you any benefit to sell for more. In retail, yeah, I can pay a lot more rent because I’ll get a lot more customers there and it pays for itself. But when you’re manufacturing something, there’s no upside to paying more rent or for labor, for that matter.

Laura Zander:
Got it. That makes a lot of sense.

Loren Feldman:
We’re talking about this wholesale business that makes and sells yarn to yarn shops around the country that you bought in Texas. I’m curious, what percentage of what they make is actually going to Jimmy Beans Wool, your original company?

Laura Zander:
That’s a good question. About between 10 and 20 percent will go to Jimmy Beans, and that’s a consistent number. That’s the way it’s been for the last five or six years. That’s independent of the fact that we’re selling it. In fact, that percentage is going to go down some because we are selling so much more to other yarn shops and prioritizing other customers above the parent company. We’re kind of taking the dregs.

Loren Feldman:
I was just wondering if there might be any synergies in having the operation all in one place.

Laura Zander:
Just from a management standpoint. Sure, we would save some on freight, and that’s a great point from a bottom line standpoint, and I should probably do the math on that. Like, how much would we save on freight annually by not having to ship things between Texas and Nevada?

Jay Goltz:
Probably not a significant… there certainly are some synergies to being there, but I don’t think it’s gonna make up for the 20 percent labor savings.

Laura Zander:
Yeah, that’s a big, big chunk. I guess I put a spreadsheet together and kind of throw it together. But again, then there comes the insecurity and the emotional side of it. Do I have the energy to move this? There’s so much work to be done down here from an infrastructure and a system standpoint. Both Doug and I feel like, let’s tackle one issue at a time. Right now, our issue is we’re building a computer system to support the business. We’ve got all these other processes that we need to put in place. We already have a fully-trained staff of people who have been here five to 10 years, so at least that’s one thing we don’t have to struggle with right now.

Loren Feldman:
Of course, you are putting energy into spending a lot of personal time in Texas. You’re there for two-week stretches away from Doug and from your son. How does that factor in for you?

Laura Zander:
Do you want the politically correct answer or you want the honest?

Loren Feldman:
I’d opt for the honest answer.

Laura Zander:
It’s really nice for me personally to have a two-week stretch where I can work 14 hours a day uninterrupted, and I don’t have to cook dinner for anybody.

Jay Goltz:
You are speaking like a true workaholic. My friends and I used to go, “Oh, wasn’t that great? My wife’s out of town.” “Oh, yeah, I got to work the whole weekend.” And we laughed about it.

Laura Zander:
Oh, that’s so funny you say that. Doug gets so mad because I’m like, “Why don’t you go up to the cabin and take a couple days off, and that way you can work non-stop?”

Jay Goltz:
Doug doesn’t know you’re on a podcast, right?

Laura Zander:
He’s never gonna listen to this.

Jay Goltz:
My wife’s not either.

Laura Zander:
And he knows. We just know, that’s the end goal. The end goal is for us to figure out how to get him out of the business so that he can retire. He wants to be a stay-at-home dad. His life goal originally was to be a stay-at-home dad with no kids, but then, you know, that happened… [Laughter]

Loren Feldman:
A stay-at-home dad with no kids?

Laura Zander:
Yeah, that was his goal. His goal is to be able to stay at home and do the fun stuff and take care of things so that I can do my hobby, which is to work non-stop. It just is what it is.

Loren Feldman:
I suspect there are a lot of people listening to this with whom that resonates.

Jay Goltz:
I read an Inc Magazine article one time where a guy says he was going to a business meeting and his wife went into labor and he had to decide, “Should I go to the business meeting or go to the hospital?” And he’s telling this to his business group, and he said, “I decided to go to the meeting.” And he said, “You could hear a pin drop…”

Laura Zander:
Yeah, I’ve gotta say, this time coming out here, Huck cried when I left, and it was one of only probably three times that he has ever cried when I left. That hurt for an hour. That really bothered me for a little while, but now I’m okay.

Jay Goltz:
Ahhhh.

Loren Feldman:
It sounds like you have something to say.

Jay Goltz:
No, whatever doesn’t kill him will make him stronger.

Laura Zander:
It is what it is.

Jay Goltz:
Seriously, you’re home a lot. It’s not like you’re an absentee mother or something. You’re home a lot. I always say, the fact of the matter is, if you want to be the perfect parent, you’ll never leave the house and be home with your kids all day long. If you want to be the perfect business person, you’ll spend all your time at work. There are compromises to make. My kids with Little League? I went from, “Oh my God, I’ve got to go to every game,” and then I realized, “No, I’ll go to half the games.”

Laura Zander:
We just came off a stretch where I was at home for three months straight, every single day.

Jay Goltz:
My guess is he cried every day. You were here every single day. [Laughter]

Laura Zander:
But when I’m home, I’m home and I’m with him. We get up at five in the morning and we’re together until eight or nine hanging out. I love it, but it’s exhausting. So it’s actually quite a break for me to be able to come here and just really hammer and focus on work. Then I get a lot done. And then when I go home next week, when I go home, we’ll take a couple days off, and we’ll go camping, and we’ll sleep on the trampoline.

Jay Goltz:
I think you’re okay.

Dana White:
Yeah, you’re fine.

Loren Feldman:
So the bottom line is you’re going to keep this business in Texas so that you can continue to have your two-week trips to Texas.

Laura Zander:
Yeah, and they have lakes here, and I could buy a lake house.

Jay Goltz:
Maybe have another family there. [Laughter]

Dana White:
Wow, that’s crazy.

Laura Zander:
I’m not close to Waco.

Dana White:
I’ve always been raised and taught, “Start and have a family when you can afford to be present.” So I don’t have a family. I’m not married. I don’t have any kids. But what I’m finding is that there are young mothers—and you all can speak to this, if you’ve witnessed this—who I don’t want to say haven’t done the work, but they’re new in their careers.

And yet they need a lot of time off to be present. “Well, Dana, we can’t work because…” Or, “Such and such can’t work because…” “I can only work one day this week because…” And that was an adjustment for me, because I had always worked in a climate in my career in corporate where it was, I have to work so I can get to this point. I’ve noticed lately it’s like, “No, I work, but your business adjusts to my life, versus my life adjusts to work.” Have any of you seen that?

Jay Goltz:
Absolutely, and the answer is that sometimes there’s a mismatch. There’s nothing to criticize anyone over. Someone once said to me, I was hiring a production manager, he goes, “In the summer I need to leave at two o’clock.” I didn’t hire him because I needed a production manager there at two o’clock. I’m not criticizing him. Go find a job where you can do that, because this isn’t the one. I need to get production out, and I can’t just have the guy walk out.

Dana White:
I agree, and in my world, it’s been a matter of adapt. And now that I’m not, I’m finding that new team members are [like], “Oh, Dana’s not going to adapt.” No, it’s just putting Paralee first is something that I haven’t done in quite a long time.

Jay Goltz:
That’s your job.

Dana White:
Right, and I haven’t been doing it, and so that is where Dana’s no longer asking, Dana’s telling. When I bounced off several new ideas to a manager recently, there were all these things, the reasons why those ideas won’t work. And I said, “Mental note.” I don’t want to have a team where when we start having uniforms, it’s the manager telling, “Well guys, now we have to do this.” I want a manager or a leadership team that is on board with me, as opposed to being on board with the staff. Is that realistic?

Jay Goltz:
Yes. Absolutely. All of my people here know, don’t even use my name. None of my key people are gonna go, “Oh, well, Jay wants us to—.” No, no, no, no, we agreed as a group, here’s what we’re doing, and they’re gonna wear uniforms or whatever the case is. That is an extremely weak manager that, instead of just saying the way it is, they say, “Oh, well, the boss wants it this way.”

Dana White:
Exactly, and I’ve always felt that way. Even in my background, I didn’t agree with things that my boss said, but when it went to the employees, we were a unified front. And then the other thing is, I find that, in the past, I’ve been handled. So I’ll say, “Hey, this is what I want done,” but because they have key insight into what’s going on with the staff, they adjust what I want done to fit what the staff can do, as opposed to adjusting the staff, and that’s where I’m at right now.

Jay Goltz:
Or I would add one other part. Or adjusting you. Do you have people who will go, “Dana, this isn’t gonna work”? That happens all the time here. We sit down in the room, and we flesh out the answer, and lots of times I’m wrong, and they convince me. At the end, we all agree, “Okay, that makes sense.”

Dana White:
Exactly. I agree. But what I’m no longer taking into consideration is, we’re hashing out an answer based on the fact that somebody can get a ride from their mom or not. If you’re going to pow wow and brainstorm with me, make it about the business and operations, not about somebody’s mom and whether they can pick them up for work at a certain time. Or, “They’re not going to like that because they don’t like the color blue.” Well then we need to get somebody in place who will wear the color blue.

Jay Goltz:
Not to say that you can’t make accommodations. You try to be reasonable with people, but there’s a point where it’s either you have someone there who’s going to take care of your customer and pay the bills, or they’re not going to be there. It does get down to that sometimes.

Dana White:
COVID took a lot of things, and COVID took the Asking Dana with it. The Asking Dana, when I had this time to sit back and look at my business and look at all that I wasn’t doing, when I was able to reflect on what I want versus what I have, and why I don’t have those things, a lot of it is I have not been a strong CEO. I have been an accommodating CEO, and I think it’s been from my issues with my market. My issues with black women—being one, I have issues with some.

I have to put all of that aside and put Paralee first. Stop asking. I’m smart. I know what I want for my business, and I should be allowed the opportunity to make the mistakes I’m going to make in running this business. And if they’re mistakes, they’re mine, and I’ll learn from them. But I’m smart enough to make some decisions that will help me navigate whatever I’m trying to do.

So that’s something I was thinking about when I’m hearing, with Laura saying, “Hey, my son and the two weeks.” But I’m finding in my business, people are like, “No, I’m 21. I have a son. I can’t stay from 10 to three. I have to leave at one because I’ve got…” This is not the job for you.

Jay Goltz:
The other issue is you’re paying more now, so you’re gonna have a little more selection as to who to hire.

Dana White:
Jay, no. This is what we decided to do. This is a really good thing with my manager. I told her, and she said, “We’re gonna wait. We’re not offering them more out of the gate because I don’t know who’s coming back. I need to see their performance.” And she was absolutely right. Some people, the day before their shift: “Well, I don’t know if I can make it.” Just kind of flaked, some people did. And so she said, “See? This is why I didn’t want to do it.”

Jay Goltz:
No, no, but wait a second. Think this out. So what does that mean? Just pay her less money to be a bad employee? That doesn’t make any sense.

Dana White:
What do you mean, pay her less money?

Jay Goltz:
Let’s say you’re paying… What were you paying, $10? And you’re gonna raise it to $12? Okay, so she’s saying, “No, let’s keep paying them $10 in case they flake out,” and my argument is, you shouldn’t have that person working there, so it doesn’t matter.

Dana White:
And that’s what we’re finding out. We’re finding out that we shouldn’t have had that person working there.

Jay Goltz:
Right, so it doesn’t matter what you would have paid them.

Laura Zander:
Yeah, it does. If you give them $12 to start, if you give them $12 right out the gate, you’re gonna see shiny eyes and everybody’s gonna be on time for the first two months.

Dana White:
Exactly, exactly. My manager’s like, “Why waste the time? We can clean these people out immediately and then just hire new people ready to go with a standard that’s put in place, as opposed to bad habits.”

Loren Feldman:
And hire them at what rate?

Dana White:
At the new rate. Then she said, “Well, let’s wait. Let’s do a 90-day.” Because, again, Jay, my industry is very, very, very, very, very, very fickle. And they should all be actresses, because who they are in the interview, they should get an Academy Award, versus who the person is two weeks after they’re employed. Very different people.

Jay Goltz:
But my point is, if they’re not worth $12, they’re not worth $10.

Laura Zander:
I know, but you may not find out that they’re not worth $12. You’ll find out a lot faster.

Jay Goltz:
So your theory is you’ll be saving $2 an hour until you find out if they’re no good, basically?

Laura Zander:
No. I think what she’s doing is she’s strategically weeding them out by keeping the rate. Because if she tells everybody she’s going to increase the rate right away, of course everybody is on their best behavior.

Loren Feldman:
And that’s a topic that I am sure we will come back to. Unfortunately, we’re out of time. I’ve got to stop here. But thank you all for giving the honest answer, as Laura put it, not the PC answer. I do appreciate that, and I look forward to our next conversation. Thank you all.