Episode 27: My Jay Goltz Face

Paul Downs, Jay Goltz, and Dana White talk about how they would know if it was time to close their business, how long it takes to really grow up as a manager, what they’ve learned about managing—and occasionally firing—employees. “I think my staff hears me but eventually does what they want to do,” says Dana. “And that can be very draining because you wonder, ‘Well, why? I pay you. We’ve had training on it and talked about it.’” And Paul tells us that while he’s normally a pretty nice guy, he does have to put on his “Jay Goltz face” occasionally. “So what does that mean exactly?” asks Jay Goltz. “I’d like to understand.”

Episode 27: My Jay Goltz Face

Guests:

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

Paul Downs is founder of Paul Downs Cabinetmakers.

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: “I think my staff hears me but eventually does what they want to do. And that can be very draining because you wonder, ‘Well, why? I pay you. We’ve had training on it and talked about it.’”

Jay Goltz: “When you hold people to standards, it doesn’t mean that you’re not nice. It means that you’re acting like the boss.”

Paul Downs: “I have a whole procedure I’ve worked out about how to discipline and fire people so that I can go on autopilot and just perform that. Being a boss has a big performative element.”

Full Episode Transcript:

Loren Feldman:
I want to pick up on something we talked about last week, when I asked Paul to talk about why, in 2009, he thought his business was heading into bankruptcy and how he was able to avoid it. He talked about how it’s never over ‘til it’s over, and how a key order came in at a really important moment that helped the company keep going.

But what I’d like to pursue a little bit deeper is the question of: Is there a line somewhere? Unfortunately, in the middle of this pandemic, I fear that this is an issue that a number of owners are confronting. How do you know when it really is time to to stop throwing good money after bad?

Dana, I want to pick up with you. When we spoke last week, you’d already closed one of your shops and you were concerned about business being a little bit slow at your remaining location. How’s this week been?

Dana White:
Equally slow, just slow. I’m still in this holding pattern. And then, have I thought about closing? Absolutely. Oh, man. I’ve thought about it because there’s the people part of it. Once you get in the back of your head ideas where you can make money, have a business, and not have to deal with or work with the people part of it, it does make you go, “Hmmm, I wonder.”

Especially because over the pandemic, I’ve thrived. I’ve been in my office. I’ve been working constantly. I’ve had this energy, and I’m wondering, “Why am I so productive, where pre-COVID, I was so burnt out, and I was so drained?” And it was the people side of it. When you don’t have to work with the people aspect of it—employees and customers—it frees you up, your mental space, to do a lot more. Getting back into that causes anxiety. I have thought of closing Paralee Boyd and pursuing other opportunities that have come to me.

Loren Feldman:
Dana, you talked about the people issue. What exactly are you referring to?

Dana White:
I’m not able to afford to pay somebody to come in and have the business acumen and polish that I want portrayed in or executed in my business. And so, at times, it can be very draining. You have to tell somebody how to dress for work. You have to tell somebody how to answer the phone. Things that I think are basic are not for everybody, even when you put people in place.

I think I’m not a great manager. I think my staff hears me, but eventually does what they want to do. And that can be very draining because you wonder, “Well, why? I pay you. We’ve had training on it and talked about it.”

Then I also think a lot of it is industry-related. I’m in the beauty business, and these are creatives. They don’t do well with structure. Some of them do, some of them don’t. It’s just that you’re dealing with an industry that is used to coming to work, wearing whatever they want, getting there when they feel like it, leaving even if there’s a customer in their chair.

Jay Goltz:
I have to jump in here. You’ve answered your own question. It’s not that everyone does what they want. You don’t want to be the manager of them. Period. You’ve outgrown that, you’re older, you’ve made six-figure salaries. You’re used to being in a different world. You don’t want to be the babysitter at that level. Because if you do babysit at that level, people will show up on time, because you start to manage them properly.

This isn’t about them. I’m not criticizing you. You don’t want to be that person. You don’t want to be that $50,000-a-year kind of manager who’s going to say, “I told you yesterday. You can’t dress like that. If I have to tell you again, it’ll be your last day.” You don’t want to do that, and that’s okay. You don’t want to be that manager.

Dana White:
It’s draining that you have to keep telling adults to—

Jay Goltz:
Welcome to management. Yes, it’s management 101.

Dana White:
You have to tell adults what “on time” means. You have to tell adults, “You can’t call off because your two-year-old started talking to you.”

Jay Goltz:
Let’s qualify this, though. It’s not adults, it’s $16-an-hour people. Managing $16-an-hour people is very different from managing a $60,000-a-year person. You’re not comfortable with it. You don’t want to do it. There’s nothing wrong with that. But that is what running a retail business is. I don’t do that anymore because I do have the scale. I can go pay the $60,000 salary, and they can do that stuff.

But it’s a question of, maybe you just don’t want to do that. There’s nothing wrong with that. But my point is, you can get that under control. A manager will hire the right people, weed and feed, tell them what the rules are, “This is how you dress.” If they can’t do it, you find someone else who does do it, and you can fix that. That is a fixable thing if you want to be that manager. I don’t know that you want to be, though.

Dana White:
Right.

Loren Feldman:
Dana, when I asked you about whether you thought about closing, you talked about both the slow business and the management issue. It almost sounds like the management issue is paramount in your mind. Is that right?

Dana White:
No. To me, I think the slow business is what makes me nervous because I don’t know why. I don’t know exactly why. There’s no letter that’s been in my mailbox to say, “Hey, FYI, this is why it’s slow.” I’ve talked to customers, I’ve talked to other business owners. I’ve seen my trends, and it should be slow right now. We’re in a pandemic, and in Michigan, we don’t know if we’re going to close tomorrow or not. We don’t know what the governor is going to do, and people are still scared.

I would feel much better if the numbers were higher. Again, that allows you to pay people more, you know what I mean? It’s a chain effect. I’m going to stay open, but when you have other opportunities of a private hair care label coming up, and when you have opportunities to speak, because people want to hear from you. People hear me from the podcast and other things. “Hey, Dana, you want to come speak?” And you’re like, “Wow, yeah, sure.” It just makes the grass look greener on the other side, but there’s always a hefty water bill for greener grass. You just have to be mindful.

Paul Downs:
I have a question. Are the people who are asking you to speak, are they offering to pay you for that?

Dana White:
Yes and no. There’s free speaking engagements, and then there’s paid.

Paul Downs:
My observation, having been in a business group that hosted a lot of professional speakers, is the ones who make a living at it, basically—at least until the pandemic—travel all the time. When I started writing for The Times before I understood exactly what level of celebrity I was, which is grade Z-minus [laughter], I was thinking I might have more opportunities to do that. And then when I thought about it, I thought, “I don’t even want to do that. I hate being in airports.” I think the lure of wandering around and talking to people should be considered carefully. It’s probably not as nice as you think.

Jay Goltz:
My issue is, first of all, we’re not only in a pandemic. You’re in a very personal business. You’re right in their face. It is going to end eventually, and I’d hate to see you make a decision based upon today’s reality, rather than whatever it is—six months from now. It is going to end eventually. Loren, are you with me that it is going to end eventually? Can you go with that?

Loren Feldman:
You and I might define “eventually” differently, but yes.

Jay Goltz:
Okay, it will end eventually. The question I still have is: Do you want to be the manager of the store and deal with setting standards, holding people accountable and responsible, and then doing that stuff until you get it big enough to where you can afford to have the $60,000-a-year manager, and now you can become the leader instead of the manager? In my mind, that’s the question.

Loren Feldman:
I want to follow up with what Jay just said. I think it’s important to remember that, when we started this podcast, which wasn’t that long ago—it seems like ages ago, lifetimes ago—but it was in the fall of 2019, you had a thriving business and our conversation was about what you were going to do to expand it and how ambitious you were going to be about taking your concept and spreading it around the country. I want to follow up on Jay’s point by asking you, when you talk about possibly closing, did you mean closing until things stabilize, or did you mean closing?

Dana White:
I meant closing and then reassessing, and then opening someplace else.

Loren Feldman:
I see, so you could essentially mothball the business until this sorts itself out.

Dana White:
No, that would be a part of it, but that wouldn’t be it. It would be more of, “Okay, stop. What did you do wrong, or what could you have improved upon? And what could you do differently going forward?”

I still very much believe in the idea and the vision and the service that I provide. I’m not 100 percent confident that I am in the right city. I’ve always said that. I’m not sure that I’m in the right city for my business. When you have a chain like Drybar or Blo, there’s a reason why they open on the coasts first—New York, L.A.—and then move inward. There’s a reason.

To answer Jay’s question, “Am I willing to do the management work?” Yes, I am. Because there’s not only more to do, but I could be better at doing it. And I don’t think it’s fair to my staff, I don’t think it’s fair to the lessons that I owe myself, to just say, “You know what? This is hard. I’m gonna stop. I don’t like doing it. It’s not doing what I want to do. Let me stop.” No, there is still work to be done and growth for Dana as a manager, because in order for me to bring in somebody eventually making $60,000 or $70,000 a year, I have to be able to identify with their position, and I have to be able to manage them or be able to look at their job and understand. I can now, and it’s been draining now, but I think I owe it to myself and to my team to do better.

Jay Goltz:
And my point is, you absolutely could do better. You’re not used to managing at this level. I am, and I can tell you that the Jay of 2020 is lightyears away from the Jay of 1990. I get it now. You set standards, you hire people, you explain it to them. You talk to them two or three times. When they don’t do it, you replace them. And eventually, you end up with a staff that actually shows up on time.

I have none of those problems I used to have. Everybody shows up on time, dresses properly, happy to take care of customers. You just haven’t gone through the learning curve yet of realizing it doesn’t have to be like that. There are enough people in the world who will show up on time and do the right job. You’re on that learning curve. So I am confident you can get this under control.

Paul Downs:
How did you imagine it was going to go? I mean, this sounds so standard to just about every business I’ve ever heard of where you get in, and it turns out to be different than what you thought, and the people turn out to be the big problem, and there is a solution. As Jay said, you have to start weeding through your staff, and then at a certain tipping point, good people attract good people and the bad people start to become the focus of attention because the manager and the owner isn’t spread so thin. And then, as Jay said, your team can stabilize in a way that makes life a lot easier.

Dana White:
We’re lightyears away from where we were this time last year. This time last year, it was a hot mess, what was going on. I had a manager in place that would nod and smile at me and then go do what they wanted to do. That can happen. We have now hired a manager who has done much better, helped turn the place around. But she’s going through some personal things right now, and there was a learning curve for her as well.

My issue with my managers is that I have hired “momagers” who say, “Well, Dana, Janie can’t get a ride. Dana, we close at seven. Janie’s mom wants her to leave at seven.” So that means she’s not doing any of the end-of-the-night-of-work stuff. She’s not doing any of the finishing of the final customers. And so it’s like, “Well, now maybe we should close early so Janie’s mom can have Jamie out at seven o’clock.” Those are the situations that have been brought to me and I’m looking like, “Really?”

Jay Goltz:
This is my typical training of managers. I wait like three weeks before they say something like that, and then I have to remind them, “That’s why you were making a six-figure income and were successful in life. These are not you.” And I tell the manager, “If they thought like you, I wouldn’t need any manager.”

I can count on it. I can wait one week, two weeks, three weeks before they come into my office and go, “Oh my god, can you believe it? So-and-so blah, blah, blah.” I go, “Yes. That’s why they make $16 an hour, and that’s why you’re making $50,000.”

Dana White:
So to answer your question, Paul, “What did I expect?” I expected me at that level. I have never managed at this level. When I managed, I think the lowest person was making $60,000, $70,000 a year—the people under me. I’ve not managed retail and hourly before. And again, I’m not doing it day-to-day. I’m working with two managers right now, and they’re doing well. But I already see room for improvement, and before I put this at their feet, I put it at my feet. I’m wondering, “How can I be a better leader first,” and that’s literally what I’m writing about and thinking about right now.

Loren Feldman:
How many stylists do you need?

Dana White:
Right now, in my salon, we are good with four.

Paul Downs:
That doesn’t sound like an impossible number, but I’ve gotta say, Jay, you just have to be open to the possibility that different businesses are truly different.

Jay Goltz:
No, clearly it’s different. It might be a little harder, but some of the basics that she’s saying are the exact same things that I went through, the exact same things that you went through. It’s not just because it’s a hair salon business. It’s about the hiring process. It’s about the management process.

Paul Downs:
Yeah, and also the training process. I think that one of the things that helped me was to make a very clear set of rules and then enforce them, but then, also always expect to repeat yourself and train people. It’s just how humans work. Think, what’s the most successful form of organization humans have ever invented? It’s a religion. And what do they do? They sit you in the same place every Sunday and tell you the same thing over and over and over again. They don’t expect it to be any different, and that’s just the way people are.

Dana White:
Now please let me be clear. My staff is good. The examples I’m giving you are from the past. The staff I have now is by far one of the best staffs I’ve ever had. But Dana needs to be a better leader and Dana needs to be less friendly, be less nice. Dana has to do less asking and more telling.

Loren Feldman:
But Dana, I have to ask you, if the problems that you’re describing are from the past, why did you bring it up in terms of your thinking about whether—

Dana White:
Great question. Because they percolate every so often. They’re not as frequent, but I’m still tired of it.

Paul Downs:
You’ve got PTSD.

Dana White:
Probably.

Paul Downs:
After 2009, I had the same thing, which is, certain things would trigger me, and it would just be like a wave of exhaustion and depression.

Dana White:
Right, and so many little things percolate again, you’re like, “Oh, here we go.” I have managers and leadership who get it now, but I believe it’s on Dana to be less asking and more telling. Again, I keep saying, “This is a Dana issue.”

Paul Downs:
It can be hard to do that. I have a very difficult time with it, and the way I got around it was by writing down a bunch of rules, so that when somebody breaks the rules, I could say, “It’s the rules.” I have a whole procedure I’ve worked out about how to discipline and fire people so that I can go on autopilot and just perform that. Being a boss has a big performative element. Most days I’m a pretty happy, nice boss. And then every now and then, I’ve got to put on my Jay Goltz face.

Jay Goltz:
Okay, now. I was already gonna object to that nice boss thing. This isn’t about being nice or not being nice. I would also say, let’s change the word “rules” to “standards.” It’s about having standards, making sure everybody on the interview understands what the standards are. “We have to show up to work on time. That’s part of the gig here, blah, blah, blah,” and holding people to standards. When you hold people to standards, it doesn’t mean that you’re not nice. It means that you’re acting like the boss. Like, “I told you when I interviewed you, I needed you here on time. This is your third late. I have to tell you, if you’re late again, you’re gonna force me to fire you, and that’ll make me unhappy.” Is that not being nice?

Dana White:
No. That’s what I’m saying. My managers are really good at that part. “This is what we talked about in the interview. This is what you’re not doing.” We have hiring and termination standards. We have processes for everything. And so for Dana, Dana being nice means, when I say, “Hey, we’re gonna start wearing uniforms,” and my team will say, “Well, Dana, we don’t know about that, well, well, well, well,” instead of considering what they’re saying to me, I’m done considering what they’re saying to me. I want uniforms because the people are not dressing for work that represents the brand. We have to put them in a nice uniform.

Jay Goltz:
I can tell you, that could be a huge mistake. You’re in an artsy business, I’m in an artsy business. To go tell everybody, “We’re gonna start dressing like Burger King.” I’ve gotta tell you—

Dana White:
But if you dress like Burger King, it’s a problem.

Jay Goltz:
No, no, there’s somewhere between uniforms and saying, “Here’s what dressing properly means.”

Dana White:
We’ve done that, and it does not work.

Jay Goltz:
How does it not work? Give me an example. They walk in and they’re wearing—

Dana White:
They walk in and they say, “Well, either I got dressed this way, or I was going to be late for work.” Or “I wasn’t going to be able to come.” We’re going to nip it. My team agrees, we need a uniform, and it doesn’t mean a Burger King uniform. There are stylish uniforms. DryBar has uniforms. They’re a very stylish, very creative brand. It’s not all the same outfit. “Here are the five types you can choose from to wear to work today. Here are the four pants you could choose to wear to work today. Choose from these.”

Paul Downs:
So it’s like when a restaurant server—they’re all wearing a white shirt and black pants or something. There’s a fair amount of latitude.

Dana White:
Exactly.

Paul Downs:
I think it’s a little bit different from—

Dana White:
A uniform. Exactly. It’s not like Burger King. “Here’s a burger on your head, here’s a hat.” No, “We’re going to order four tops and four bottoms from this company. Pick which ones you want. If you want anything else in this line, you pay for it. But we’re going to buy these many for you so you have uniforms for work,” and I want my staff to be able to take their uniform and go out with friends after and [have] people not realize they’re in uniform.

Jay Goltz:
Which you can’t do wearing a Burger King outfit.

Dana White:
Which you cannot do. People would be like, “You just came from work.”

Jay Goltz:
All right, here’s what I’m hearing. You still haven’t accepted you’re in retail. You can argue with that, retail dealing with customers. The difference between you and I: I grew up working in my father’s store. I got it. I started the business, and every single thing you complain about, there are people who own frame shops that go through the same tropes about, “Oh, these people, the customers!” When like, they don’t get it. I get it. That’s why my business is 20 times bigger.

I have nice people who show up every single day on time and do a nice job. I have nice customers, and I don’t let those customers once in a while get to me. But you’re angry, you’re frustrated, and tired, and I’m telling you, if you change… First of all, I would go back to the hiring process and say, “Did she have a job before you? And did you check references?”

Dana White:
Oh, we check references, and let me tell you, the Oscar goes to… When we interviewed, we had some of the best Academy Award-winning people sitting in front of us. It’s not until later and they show who they are. The interview, they come wonderful. Again, maybe it’s because they’re creatives that they interview so well. I don’t know. But they interview marvelously.

Jay Goltz:
What about the references?

Dana White:
Their references are glowing, and guess what? We come to find out references may not even be true. References might be a cousin. References might be a friend.

Paul Downs:
Okay, one thing to look for is: What’s the correlation between people who actually interview well and success? Because in my industry, if someone comes in and wants to work on the shop floor, and they’re articulate, and they’re outgoing, and they’re friendly, that’s not what you want. The real successful woodworkers sit there in front of you and sweat and can’t answer a question because they’re not about communicating. They’re about doing something with their hands.

I really hesitate to offer you wise advice from an utterly ignorant person. I know nothing about this industry, and I know extremely little about Detroit and what it’s like to live there. I feel like it’s possible that your business model would work great in a different place, and you’re just adding an extra burden to yourself by where you’ve decided to be.

Dana White:
You’re the fourth person to tell me that this week.

Jay Goltz:
He’s not telling you that. He’s guessing. That’s my point.

Paul Downs:
One of the things that I confronted right when I started was I said to my mother, “I want to be a woodworker.” And she says, “Oh, are you gonna go to Vermont and live in a barn?” And I said, “No, I’m gonna live in Philadelphia and live where people with money are.” I realized pretty early that it would be a good idea to be where the money is. That helps.

Jay Goltz:
Smart.

Paul Downs:
I think that’s pretty basic in any business. If you have more affluent customers, just like you’re in a better place, then it’s easier to sell things.

Jay Goltz:
Sell things for more money, which allows you to hire better people and it makes your life easier. No question.

Paul Downs:
But you might also have a desire to change your community.

Dana White:
Yes.

Paul Downs:
Aside from my major business, I’m involved in a nonprofit effort where we’re working with adults with developmental disabilities. They’re challenging and it’s a real burden on just the business. We’re trying to have a functioning bakery, and that’s tough enough, and then you add another mission on top of it. It’s almost impossible to get a regular business to go, and now you’re going to add some social mission that changes your parameters of decision-making. That’s super, super tough. I think that you’ve just got to recognize that. You’ve set up a difficult problem for yourself. There are solutions to it, and they may or may not be ones you want to execute.

Loren Feldman:
We’re probably not going to solve this whole situation today. In the time we have left, I would like to get back to the original topic, which is the idea of how you know when it’s time to throw in the towel. Jay, you’re the one person here, I think, who has actually closed a business. Fortunately, it wasn’t your main business. But there was a time a few years ago when the internet was young, and so were we. You put lots of money into an idea you had. You’ve talked about it here before. It was kind of a 1-800-Flowers type idea, but for picture framers instead of flower shops. It didn’t work out. Eventually, you did throw in the towel. How did you know it was time?

Jay Goltz:
The issue was, it was way past the time. It was a great marketing thing, I thought. I figured, everyone’s gonna understand that, for 150 bucks, we could market together, advertise in shelter magazines, blah, blah, blah. I needed about 300-400 framers to do it. I got up to 200-250. And then people started dropping out because, “Well, I didn’t get any new customers this month.” And it blew my mind, because if you get three customers a year out of this for what you’re spending, it was worth it.

I had gone through hundreds of thousands of dollars because I was delusional and figured, “I’m going to fix this, I’m going to fix this.” And I realized in hindsight that I should have pulled the plug faster, because just because it was a good idea, quote-unquote, doesn’t mean that the average picture framer is going to get it. That’s why my business is 20 times the size of theirs. I went on the assumption that they think like I do, and they don’t.

Loren Feldman:
But what did you learn from that experience? If you faced it again, would you know how to decide when it’s time to call it quits?

Jay Goltz:
What I should have done—this is very simple—I should have simply asked the framers, “How many customers per year would you want to get from this, paying $150 a month?” And if they said, “50,” I would have said, “This isn’t gonna work.”

Because the reality is, if you pay $150 a month for a service to bring new customers in, and you get 10 customers a year, that’s a home run. That’s a couple hundred dollars for acquisition costs, which is really good in this business. These people had unrealistic [expectations]. They would say, “I’ll pay you for every customer you send in.” They think if they spend $150 a month, they should have a customer every day coming in. If I would have asked first, I probably would have seen this isn’t gonna work.

Now when I do speeches at the frame show, which I do every year, someone always comes up with this idea who wasn’t around when I did this, and I go, “Hey, that’s a great idea. I already had it. Let me ask you a question. How many of you will write a check right now for $500, blah, blah, blah?” And three hands go up. So it hasn’t changed.

They don’t understand how marketing works. They don’t understand you have to pay money to invest in it. And had I done a little more research first instead of just delusionally thinking, “Oh, well, I’m Jay Goltz, I built this gigantic frame business. They’re clearly going to follow me because I know what I’m doing with this,” that was the part where I should have stopped myself. It went on for way too long. It went on for three or four years. I should have pulled the plug after the first year. I would have saved a lot of money. Oops.

Loren Feldman:
Paul, how about you? When you talked about your experience 10 years ago, you did not want to close your doors. You’ve told us that, until it’s over, it’s not over. But I also know that you learned a lot about managing your cash flow. Did you figure out in that process how much cash you needed to keep going?

Paul Downs:
Well, yes, you can model cash flow fairly simply just using an Excel sheet. It’s hard to describe an Excel sheet, so I won’t, but let’s just say it’s easy to do it. What it tells you is the day you run out of money, and that day is always at some point in the future. Hopefully, it’s not next week. It’s some months away. Because you always run out of money eventually.

Loren Feldman:
What do you mean, “you always run out of money eventually”?

Paul Downs:
If your model is conservative—and you want it to be conservative, you don’t want it to be a fantasy—you’re going to overstate the budget for expenses, and you’re going to understate the income. You’re going to model out the future. It’ll give you a sense of where those lines cross. I think that the big value of modeling is just so you get a sense of what normal looks like.

Getting back to what Dana said, this is her slow time of year normally. And okay, that’s good information to know, so that when the business is not doing as well as you’d like it to, at least you have something to compare it to.

Now, I think that, in general, when I confronted the idea of failing, I didn’t really have any way to analyze it. There wasn’t any model of what to do or what not to do or what to think about or what not to think about. There was literally no information about this available. And even today, I don’t think that anybody has… well Jay’s five-point checklist is not bad, but it doesn’t tell you exactly what to do.

I have to say that my sister, Carol, ran a restaurant in Boston for the last 27 years—a community restaurant—that got to be well-known in her community and beloved. Best year’s revenue was last year, about $2.2 million, I think. She just decided to close the doors in May, because this recession basically killed her. She went through and she thought about, “Okay, we’re going into this problem of being shut down at our lowest cash point every year. And it’s the wedding business and the event business that puts money in our pockets over the course of the summer and fall, and that’s not going to happen. I owe all my vendors a ton of money, and I’ve got rent, and I’ve got people I’ve gotta pay. I can get a PPP loan, but I can’t actually put anybody to work, so what good does that do me?” And she just decided, “That’s it. I’m done.” It’s sad.

Loren Feldman:
That is sad. How is she feeling about it?

Paul Downs:
She feels terrible about it. She was just at my house yesterday, and we were discussing it, and she said there are a lot of other restaurant owners she knows who are trying to make it work. They don’t have the option of shutting the doors because their entire life and all their money is in the business. As soon as they shut it, they’ve lost it all. I think that that’s one of the things, getting back to Dana: If you shut the doors—I have no idea whether this statistic exists, but I have a feeling that businesses that shut the doors, even for one day, have a much higher overall failure rate than businesses that never shut the door—where you just tough it out, and you hope for the best. Can’t prove it. It’s just a suspicion.

Also, the way that a lot of small businesses get financed is through the owners doing it out of their pockets. It’s going to lead to them going too far, to staying open too long, and to putting their last asset into the business in the hope that something will come along and turn it around. It’s a horrible problem to have if you’re desperate and you’re dying, and it’s already sucked the life out of you, and what else can you do? You’ve just got to try to keep open. You know it’s not gonna work. That’s just a tough situation.

Jay Goltz:
There’s no question that there is a point to where it’s good money after bad. When all you have left is hope, instead of an action plan, that’s a problem. And there’s no question there are some people who should have called it quits earlier than they did because they were just hoping things would turn around, and there was no rational reason to think that was going to happen. Your sister might be one of those people, given that she lives off of weddings and stuff. That probably was the right decision for her. There are other people who went to a carry-out model, and they’re doing okay. I mean, there are some restaurants that aren’t as dependent on weddings and such.

Paul Downs:
Well, she thought about that. Just to add, you can go to a carry-out model if you feel like it, but that doesn’t change the setup of your kitchen. Her kitchen was designed to minimize space to fit another table in, and so she didn’t feel she could safely operate and put her people shoulder-to-shoulder in a kitchen, and it simply wasn’t safe to do that.

Jay Goltz:
No, it was probably the right decision. But it’s tricky.

Dana White:
I’m not there yet. I’m not at that point where all I have is hope and no action plan. I have a few action plans, because again, there are things that I didn’t do. For me, I want to do the work, keep busy working, and see what happens. I think, Jay, you’re right. I think it’s a matter of not letting this season, this hour, be indicative of what’s to come. I’ve chosen to see this as an opportunity to fine-tune, to become a better leader with my management staff, and to do the work and put a team together—an administrative team, meaning bookkeeper and lawyer and making sure all of those people are in place, and we’re all on board with the vision, and a digital person to help me grow the business.

Loren Feldman:
What is your plan to try to get more people through the door?

Dana White:
Marketing. When I’m at home working, I’m looking at ways to market, and I’m updating our standards.

Jay Goltz:
Dana, where do you think you are, zero to 10: 10 you’re the experienced, know-what-you’re doing, can do it in your sleep, blah, blah, blah. Zero to 10?

Dana White:
Five.

Jay Goltz:
Okay, I think that’s probably accurate, which means you’ve got lots of opportunity. As you go up the scale quickly, it’ll get easier, because I think that’s probably a realistic number. You’re going to get better at hiring, you’re gonna get better at setting standards, you’re gonna get better at management, and it will get easier.

Loren Feldman:
I’m sure we will come back to these—

Jay Goltz:
Wait. I have to ask Paul a question before you finish. So what does that mean exactly? You’re nice, or you put the Jay Goltz face on? I want to flesh that out a bit. Explain it. I’d like to understand it.

Dana White:
I love that.

Paul Downs:
Jay, if you don’t know the answer to that by now… No, what it means is that, as I said, I believe that being a boss is a performance. You put on different faces for different situations, and calling it the Jay Goltz [face], that’s just a provocation.

Jay Goltz:
It just means you do what you have to do.

Paul Downs:
It means that now I’m concerned with the team, and I’m no longer concerned about you.

Jay Goltz:
Very good. It means you do what you have to do, and you act like the boss. There’s no screaming. There’s no humiliation. They’re sitting down in the office very quietly and saying, “You know, Paul, we’ve talked about this several times. It doesn’t seem like this is the right job for you.”

Paul Downs:
It’s not even a conversation. It’s all written. I have a template.

Jay Goltz:
What, do you throw it at them? How does that work?

Paul Downs:
No, you write down what the problem was. You write down when it happened. You write down what the witnesses said. You write down, “Here’s the policy it violated. Here’s what I want to have happen if you want to stay. Here’s what’s going to happen if you don’t improve. Here’s how we’re going to help you improve.”

Jay Goltz:
Wow. You sound like a manager!

Loren Feldman:
Or a prosecutor.

Dana White:
But that’s what we do! We have performance improvement plans. We have reviews from them to us. We have reviews from us to them. The only thing that has been able to save our butt at Paralee Boyd is document, document, document, because for us and for them, it removes feelings. So if you’re acting out because you’re in your feelings, because you don’t like that we remember that this is your sixth time or third time being late, here’s the documentation. And they still escalate. I think the fear of failure—that’s what the Jay Goltz face means—

Loren Feldman:
We’re gonna make that phrase universal.

Dana White:
Jay is so competent and committed to his vision for his business that just because X employee is upset because they’re getting terminated, he has no question as to the move he makes if he’s doing the right thing. Me, being only seven years old, I question all the time.

Jay Goltz:
No question. And believe me, I’ve said this before, seven years isn’t a long time. I’ve said that before.

Paul Downs:
I agree.

Dana White:
I question all the time because I’m wondering, “Oh, well, this is an upset employee. Maybe they see something I don’t see. Or maybe…” No, I have to grow up and I have to get into the habit of trusting my vision, even when the people around me don’t. So I have to push back and say, “No, respect the check. My name is on the bottom of it. That’s why you listen to me.” I’ve got to finish getting there. I’m not there all the way yet.

Paul Downs:
It takes many years. It took me 30 years to become a decent manager. The first 20, I didn’t have any access to real coaching about it, but it just takes a long time. I think part of it is also that you need to develop a bit of a crust. And you don’t necessarily want to let that harden on you, but you need to know it’s there. You need to have it.

One of the things about disciplining and firing, I make it very clear to my people that if we see that your co-workers are upset, you are a problem. Everything is part of the team. I don’t think I’ve ever had a firing where people weren’t happy when I completed it. If you fired people all the time, and then you saw the other people looking kind of upset that that happened, that would be bad. But I bet you find that every time you fire somebody, everybody else is delighted.

Jay Goltz:
It’s called being committed to your mission, which is to have happy customers and happy employees. There’s nothing wrong with that and we don’t have to apologize for it. The big line I’ve learned to say to people is, “This just might not be the right place for you. I’m not telling you that we’re right, but this is how we operate here. Maybe this isn’t the right place for you, or, this isn’t the right place for you.” We’re not trying to brainwash anybody. It’s not right for everybody.

Loren Feldman:
The only failure of management evident here today is mine, because I’ve completely lost control of this podcast. I think that’s a good sign that you guys won’t let me break in and call it quits. But I’ve got to do that. We have run out of time. We will pick up many of these threads again, I have no doubt. I want to thank Paul Downs, Jay Goltz, and Dana White for being so open and honest as you guys always are.