Episode 19: How Do You Handle the Fact That a Lot of People Don’t Like You?

This week we focused on Laura’s struggle to get control of a Texas-based yarn supplier that she acquired late last year. She’s had issues with inventory, personnel, quality control, and then the general manager walked out, which has Laura feeling deflated knowing that some employees are talking about her and some just don’t like her: “I really struggle with that. Am I the only one who struggles with stuff like that?” Plus: Laura and Jay talk about seizing the opportunity when a competitor goes out of business.

Guests:

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

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

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Laura Zander: “Every time somebody doesn’t work out, I go in this kind of a deep depression of, ‘I suck. And if I was a better manager, this would have worked out.’”

Laura Zander: “I don’t think I’m running that business. I think that the business is running me.”

Jay Goltz: “We had the strongest economy we’ve ever had. Unemployment was at a record low. Why in the world will we not get back to normal in six months?”

Full Episode Transcript:

Loren Feldman:
Let’s do a quick update. Laura, the last time we talked to you, you told us you were about to get on an airplane and fly to Texas. Did that happen?

Laura Zander:
No, it did not. I am actually going to go this Monday, so I delayed it.

Loren Feldman:
Why?

Laura Zander:
Well, I was going to go because we were going to be hiring a new person and onboarding her and there was some drama around that. I wanted to be there for that. But then we ended up not hiring that person and we decided that, without any super significant urgent reason for me to be there, it wasn’t worth the risk, and that we’d let things play out for a couple more weeks.

What I have decided is I’m going to go on Monday and then I’m just going to stay for two weeks there. Instead of going there Monday, coming back Friday, going there Monday, coming back Friday, I’m going to go there Monday, come back the following Friday, and then I’ll stay here in Reno for a couple weeks and quarantine in Reno, and then I’ll go back to Texas for two weeks. Maybe I’ll just keep doing it that way for a little while.

Loren Feldman:
Are you comfortable about the travel? Was that part of the reason you put it off?

Laura Zander:
I feel comfortable. I don’t have a problem. But Doug was a little nervous about it. It was more for him. He thought it would be better if I didn’t go, and that’s what you do.

Jay Goltz:
Oh, isn’t that sweet?

Laura Zander:
Yeah, we’ll have a whole other discussion about being married to your business partner.

Jay Goltz:
That’s a different show altogether.

Laura Zander:
Yeah, it is. It wasn’t necessary quite yet, and it actually worked out really well. The woman whom we hired in January to be our GM, she ended up walking out last week. It worked out better that I was gone, because that kind of forced the issue, and it forced us to have conversations over Zoom and phone and Slack, and that forced our communication issues to a head. It meant that the separation happened much faster than it would have if I had been there in person. It made things a little cleaner.

Jay Goltz:
Could you put some color on the “walked out”? Does that mean she called you in the morning and said, “Listen, I appreciate the opportunity, but this is not for me, I’m quitting”?

Laura Zander:
No.

Jay Goltz:
Did she not call you at all and you found out through the grapevine?

Laura Zander:
Yes.

Jay Goltz:
Did she go ahead and scream at some people, “You’re a bunch of losers and I’m out of here”? Did she just not show up one day?

Loren Feldman:
I think you already got a yes, Jay?

Jay Goltz:
No, no, I didn’t get the whole picture.

Laura Zander:
I got a Slack message from our HR manager there that, when the HR manager got there that day, the general manager had already been in there that morning, cleaned her desk out, came over, and just said, “Will you please terminate me? I would like to just go on unemployment and leave.” I have not heard from her. We had a conversation on Slack the day before she left, and I don’t think she was happy with that conversation. Again, our communication styles collided. Anyway…

Loren Feldman:
Laura, let’s back up for a second. Let’s just make clear, this is the company in Texas that you bought, I think around December. They supply yarn. They were one of your biggest—if not your biggest supplier, and now you’re running that business. They’ve been struggling, as you’ve told us, because they supply yarn to brick-and-mortar yarn shops around the country, most of which were shut down, obviously.

Laura Zander:
Yeah, I mean, I would disagree. I don’t think I’m running that business. I think that the business is running me. But, yes.

Jay Goltz:
Did you accommodate her in terminating her?

Laura Zander:
Yeah.

Jay Goltz:
And did you have any qualms about that?

Laura Zander:
No.

Jay Goltz:
Because you felt like you owed it to her to let her go on unemployment?

Laura Zander:
It just seemed easier, yeah.

Jay Goltz:
Okay.

Laura Zander:
I don’t know that I necessarily owed it to her. But yeah, I’ve been in a funk for the last week because I feel like I’ve failed. There are a thousand things that I could have done better.

Jay Goltz:
Wait, let me help you with that. The fact that she quit that way tells you it was okay because if she was the grown-up who you wanted to run that business [while] you’re not there, she would have called you like a grown-up and said, “Listen, I’ve been thinking about our conversation. This doesn’t seem like the right fit for me, and I appreciate the opportunity. I don’t think this is going to work for either of us. I’m gonna, by the end of the day…” That’s what grownup professionals do. And the fact that she didn’t do that tells you she really wasn’t up to the task. For the amount of money you were paying her, that’s what grown-ups do.

Laura Zander:
I know, and the bottom line is the job was too big for her. It just was. She had run or managed the business years ago, but it was a much different business. It was a reactive business, as opposed to a proactive business. It sounds like she had done a fantastic job before. But we’re running things differently. I’d had that conversation with her multiple times. I’d given her the opportunity to go out with grace and just say, “Look, if this doesn’t work, it’s okay. We can totally talk about this. I’ll help you find something else.”

Jay Goltz:
Okay, good for you. Then you were professional and you did try to do it in the most civilized, nice manner. Good for you. You’ll be more deliberate the next time you hire for that position—

Loren Feldman:
You didn’t hire this person, did you Laura? You inherited her, right?

Laura Zander:
No, I hired her.

Jay Goltz:
Back. She hired her back. She used to work there.

Laura Zander:
She had worked there and then was gone for a couple of years and then I brought her back.

Jay Goltz:
When I was your age or a couple years younger perhaps, I literally—not exaggerating—went through 10 production managers in my production facility framing pictures. And every time I hired a person, I would dig in. “The last one was wrong, but this guy, he’s the guy!” And then would I dig in for a month or two or three, and then it would crap out, whether I fired them or they quit. And then I brought a consultant guy in who sent me the most poignant letter, and all that matters is one sentence. He said, “Jay, I figured out the problem.” Maybe two sentences… “You keep hiring production managers, and you think you’re hiring CEOs.” I got it.

What that meant was, I was 30 some years old, and I thought that when you hired somebody who was older than you and put them in a production thing that you’ve never done, that they’ll just be able to run the business. What I realized was, he was saying to me, “You needed to manage them more.” Now in hindsight, I realized something he didn’t even know, which is I was hiring burnouts. I was hiring people who, for the kind of money I was paying, made no sense. So the next guy I hired 24 years ago, was 27 years old, and the amount of money I was paying was a great opportunity for him. That guy is still working for me. It was all about the hiring. I didn’t know what I was doing with the hiring.

Laura Zander:
Tell me, as you’re letting these people go, you’re going through the 10, what’s the ripple effect on your other employees? Are they scared all the time?

Jay Goltz:
No, not at all. This is the way it worked. I had, I don’t know, 20 people working in production, and it was just like with the substitute teacher in school. This is exactly what would happen every time. I’d hire this new person, introduce them, and I almost walked away. I’m telling you, I had enough going on. I figured, “Oh, this guy knows more than I do. I’ll just leave him alone.”

Laura Zander:
Right.

Jay Goltz:
“Okay, Bob, you need to get 87 pictures framed every day.” Okay, so the first day he’d get 87. “Oh my God, I got the right guy.” The next day, 88. The third day, 84. The fourth or fifth day, 51. “Hey, what happened?” “Well, it was just a bad day… there were some problems with the…” It was just like at school. They would get a feel for the guy, and then as soon as they figured it out, boom! They slammed him like kids in high school. “Oh, he’s really nice. Okay.”

It kept happening, time and time again. And what I realized in hindsight, like I said, I was hiring burnouts who were never good at what they did. I’m embarrassed to say this at this point, but looking back, I had a framing factory on a third-floor walk-up loft with no air conditioning. What kind of winner who’s 53 years old is going to take that job? I had a guy who was working at Coca Cola, honest to God. What kind of manager who worked at Coca Cola is going to leave Coca Cola to work for Jay Goltz framing pictures? So, what happened with him? He just went to lunch and didn’t come back.

Loren Feldman:
Laura, tell us about your situation. Do you know who you want to hire? Do you know what you want to do?

Laura Zander:
No. Here’s the sad part. So, she left, and as it turns out, nothing has slipped through the cracks yet. It’s not been a tremendous increase in work for anybody else. I went to everybody, and I’m like, “Okay, how is this gonna affect you?” And they’re like, “Well, it’s not really.” Where I thought it would affect us most is that now I don’t have a point person, but I actually do have a point person, because I was actually talking to a couple of the other people there, a couple of the other managers, more than her anyway because it was just easier to have conversations and get straight answers. That’s part of me going there next week and spending the next two weeks is I would like to learn the production side of it. I’d like to learn what’s happening.

Loren Feldman:
Are you thinking you might not have to replace her?

Laura Zander:
I don’t know if I’m going to.

Jay Goltz:
You need to replace her. You need a manager there. You’re not there, which means either you need to bring someone in, or maybe one of your existing managers can be promoted to that. But this is like Animal Farm. This is not just going to run itself and everyone’s going to be happy. You’re going to have issues. You’re going to have people who need to be managed. You’re going to have people not coming in on time. There needs to be a manager.

Loren Feldman:
Jay, I want to go back to something. You asked Laura about terminating this person versus having her quit, in which case she wouldn’t have been able to collect unemployment. What were you thinking?

Jay Goltz:
I would want to know more. I’d want to know more things like: did you take her out of another job? Was she working hard the whole time? Was it your fault that this didn’t work out? Now, at this point, are you even going to get charged for the unemployment? Because now I’m not even sure it’s going to cost you anything because some of the states aren’t charging back. I’m not being vindictive against somebody.

Loren Feldman:
Explain how that works, Jay. In normal times, how does a business get charged?

Jay Goltz:
The quick version is: this is in Illinois, my guess is it’s the same everywhere. Whatever they end up getting for unemployment, you end up paying for plus about 30 percent, except you don’t get a bill from the state of Illinois going: “Hey, that guy who you fired? Here’s your $14,000 bill.” No, what happens is it goes into your rate and your rate goes from 4.2 to 4.4.

Loren Feldman:
That rate meaning you pay that percentage of payroll to cover unemployment?

Jay Goltz:
Yes, on every employee up to like $13,000. You are paying for it. It’s just split up, and then it’s over three years, so instead of getting a bill for 14 grand, you end up paying another thousand dollars a quarter for the next three years. You are paying for it, though, so you do want to control your unemployment expense.

Loren Feldman:
Laura, does this change your thinking about what you should do in this situation?

Laura Zander:
No, not at all, because I’m aware of this and knew that’s exactly what was happening. But I’m also kind of hoping that with Covid and everything else that the unemployment laws are a little more lax right now.

Jay Goltz:
It sounds like it was the right decision. It sounds like she shouldn’t have been put in that job, and that’s fine. She didn’t just not show up one day. She at least showed up and asked. I had someone who—this just happened—the receptionist, she just stopped showing up.

Loren Feldman:
That is what just happened here.

Jay Goltz:
No, no, no, this woman came into the HR person and said, “Will, you terminate me?” My receptionist just didn’t show up to work. So my HR person sends her an email saying, “Are you resigning?” Doesn’t respond to her. She goes for unemployment. Unemployment sends a thing to us and says she’s looking for unemployment, and the woman said in the letter that she wanted to torture us, so she wasn’t going to just quit. So I said back to her to the receptionist who came to me, “Maybe this isn’t the right job for you if you can’t come to work on time, which I know has been a problem. I’d be happy to work with you. Just tell the manager that you’re going to be looking for a job, and we’ll work with you.” As soon as I told unemployment that, she goes, “Thank you. Perfect.” She denied the unemployment.

Laura Zander:
How do you handle the fact, Jay, that a lot of people don’t like you? That this woman probably goes home at night and is like, “Jay this,” “Jay that,” and “He’s so unfair,” and “Blah, blah, blah,” and, “If he was smarter, they would be doing this, and they would be doing that”? I really struggle with that. Am I the only one who struggles with stuff like that?

Jay Goltz:
I would say that everyone struggles with it until they finally realize, “Hey, you’re the boss. It goes with the territory.” And I’ve got to tell you, whatever…

Loren Feldman:
Laura, tell us a little bit more about that. What are you hearing? What are you feeling?

Laura Zander:
Well, every time somebody doesn’t work out, especially if it’s somebody who I’ve worked directly with—and I’m exaggerating a little bit, and I am much better at it than I was five years ago, and maybe that’s the growth of my outer shell—but I go into this kind of a deep depression of, “I suck. And if I was a better manager, this would have worked out. And if I had been more clear, and if I had done a better job at this,” and I can visualize all the things that they’re saying when they go home at night about how I failed at this and…

Loren Feldman:
Wait, are you imagining these conversations? Or are you actually hearing them?

Jay Goltz:
It doesn’t really matter. Either way.

Laura Zander:
I’m imagining, but I know they’re happening as well. They’re absolutely happening. When they’re not true, they’re fine, but I know that I’m not perfect, and I know that I make mistakes, and I know that there are areas that I need to be better in. So those are the things that haunt me.

In this example, with this manager, we had a conversation last week or the week before where I was just like, “I’m sorry. I know I need to do better in this, and I really appreciate you giving me the feedback that you’re having a hard time talking to me about X, Y, and Z. I’m going to work on that, I really am.” I’m usually really open about my weaknesses, but then to know that your weaknesses are being used against you, and that you’re not getting that back… I don’t know. When somebody leaves, and I recognize that I’m complicit in that… If I was Jay, it may not have turned out this way.

Jay Goltz:
Except Jay’s 20 years older than you, and when I was your age, I was having the exact same issue. What I’m telling you is, you’ve got a God complex—

Laura Zander:
I know.

Jay Goltz:
—and you think that you’re supposed to be perfect and do everything right. And the fact of the matter is, you didn’t kill her. You didn’t have her sent to prison. You know what? You gave her an opportunity, it didn’t work out, she’ll go find another job. You’re just going to have to learn you’re on a good and noble cause. You think about all those wonderful employees who are with you on this mission to do nothing more than take care of customers and provide for their families and provide for a return on your investment. And you’ve got to give the rest of this up because it doesn’t matter. You’ve got 30 other people, 40 other people who you are a wonderful boss with, they thank you, and they feel good. And you’ve got hundreds or thousands of customers, and you need to live in that world and give up this other stuff. Because that’s like a baseball player going home thinking, “Oh my God, I struck out today right when they needed me. What am I? Oh my God.” Leave it on the field.

Laura Zander:
All right, okay.

Jay Goltz:
You don’t sound enthusiastic. [Laughter]

Loren Feldman:
Laura, are you feeling some battle fatigue? This has been a lot lately.

Laura Zander:
Yeah, for sure. I was okay like two days ago, but then yesterday there was an issue down in Texas. I’m trying to figure out how to hold people accountable from three states away during a pandemic where we just found out somebody might have been exposed, and the quality’s not there.

Loren Feldman:
The quality of the yarn that they’re producing?

Laura Zander:
Yes, we’re having some quality issues.

Jay Goltz:
You just answered my thing, which is, you need a manager there. That’s a problem.

Laura Zander:
Yeah, you’re totally right. Way to bring it back.

Jay Goltz:
Yeah, that’s the point. It’s not a matter of holding accountable. It’s just called Management 101. When you say, “hold them accountable,” did they do it on purpose?

Laura Zander:
No.

Jay Goltz:
They need some management. It is what it is.

Laura Zander:
Exactly. Okay, great. I need a manager, but I can’t get a manager today.

Jay Goltz:
Why?

Laura Zander:
I have to deal with these problems today.

Jay Goltz:
Why?

Laura Zander:
Well, logistically because it is 9:27am. I’m on the West Coast, so it’s 11:27am there. Even if I were to go through LinkedIn or whatever, I don’t know if I’ll even be able to schedule an interview until this afternoon. I don’t know if I can get them to show up by five.

Jay Goltz:
I’ll ask you the question I know the answer to: Did you write a really good ad and put it out?

Laura Zander:
No.

Jay Goltz:
Of course not. That’s what I’m talking about. As soon as we’re done here, go write a really good, compelling ad talking about… it’s going to be like, “Running your own business. Report directly to the boss who’s three states away. I need someone to build a corporate culture, to get the job done.” And write something that, someone who’s working somewhere else is going to go, “Oh my God. This is that dream job I’ve been looking for my whole life!” And then they send you this golden resume, and you look at it and you weep, and while you’re weeping, you’re dialing the phone, and you hire them and you hug and life is grand.

Loren Feldman:
Jay, it sounds like you’re trying to get that person from Coca Cola to apply for the job.

Laura Zander:
Yeah, exactly.

Jay Goltz:
No, I’m talking about the 27-year-old guy I hired who was working at a crappy company that didn’t care about quality, that didn’t care about their employees, who saw this as a great opportunity. I love this guy. I’m telling you, he’s my corporate soul to the company. He understands our whole thing. He treats the employees right. He knows when he’s got to take the hard line, he knows when they need a hug. I have that guy. There are people like that out there in the world. They are one out of a hundred.

Laura Zander:
Does he want to move to Texas?

Jay Goltz:
No. One out of a hundred.

Loren Feldman:
Do you need somebody who’s in the industry?

Laura Zander:
No, I don’t think so.

Jay Goltz:
Absolutely not.

Laura Zander:
No, I just need Dana. That’s all I need.

Jay Goltz:
The answer is, when you put the ZipRecruiter ad out, you’re gonna get 150 resumes, and you’re going to look through them and think, “Oh my God, this guy is a truck driver. Why is he applying? And this woman is a manicurist.” Yes, you’re gonna get 150 resumes, and in there, there are going to be three really interesting ones. And then there’s gonna be one of them who’s your person, but you’ve gotta buy a ticket to win the lottery.

Laura Zander:
Okay, all right. I was just kind of on the fence, because if the team there feels like they can do it themselves, do we need a manager?

Jay Goltz:
You answered your question.

Jay Goltz:
You need to put someone in charge. Maybe there’s someone there who’s your person. I’m not saying that’s not possible. Maybe there’s someone who works there who has the competency, the ambition, the nerves, and the ability to all of a sudden go from being their coworker to being their manager. You can find that out in a conversation.

Laura Zander:
Yeah, I think I might. So maybe offline, we’ll chat about that. Because I may have somebody who I think that could be a good fit for.

Jay Goltz:
I can think of half a dozen people who we’ve taken from working on the line, who had no self confidence, who we turned into managers, and there is no greater satisfaction, reward to life. Dale—one of my managers—one of them left, she moved down south for some reason. She goes, “Dale, I have to thank you. When I came here, I was just doing stuff, and you made me a manager.” When she moved down south, she got a job as a manager. Nothing is a greater success than taking someone who doesn’t have confidence but has ability and giving them confidence and training and turning them into the manager that they have latent in there. There’s a good chance that person works at the company.

Laura Zander:
Well, it’s funny that you say that, because that’s what the issue is. I feel like there’s so much talent in this organization, and there’s so much potential, but it’s never been developed. It’s never been a culture of trying to develop and pull out talent from the people who are there.

Jay Goltz:
And do you know why? I know why. You told me enough about it. I’ll tell you why. Wasn’t a husband and wife running it?

Laura Zander:
Yeah.

Jay Goltz:
Well, when a husband and wife run it—nothing against you—they can kind of run the whole place and never have to really delegate, because one of them will cover everything. The organization never gets developed properly, because one of the two of them is going to run the place. Whereas in my case, I was by myself. I had no choice.

Loren Feldman:
Wait a second, we’ve got to let Laura respond to that. Laura, your main operation, you built your business with your husband. Is Jay right about that?

Laura Zander:
Yeah. It’s very observant. Absolutely. And it wasn’t until—

Loren Feldman:
Have you figured it out?

Laura Zander:
Yeah, I mean, yes, I think so.

Jay Goltz:
Well, here’s the key. She got it bigger. That’s how I know she figured it out. And I’m not saying husbands and wives are bad. I’m saying, some of them never grow past a certain point because they can just run the thing by themselves and keep it down to that. There’s a number, it actually works. Yeah, you can do a few million bucks, but you can’t get to $10, $15, $20 million running it like that, and they didn’t. Whereas Laura has been successful at it.

Laura Zander:
No, they went big and then ended up dropping in half kind of thing. But it’s because they didn’t develop anybody. There were a few people who moved up in the ranks, but for the most part, no. They didn’t figure out how to scale it. We didn’t for quite a while. I mean, it took me a long time to figure out how to let things go and how to have other people do things and me not having to know every single zero and one and every single sentence that was written.

Jay Goltz:
You and 80 percent of entrepreneurs. That’s why most companies don’t get past a certain point. They just can’t let it go.

Loren Feldman:
Jay, let’s talk a little bit about your business. You keep talking about trying to find opportunities in this crisis. Have you seen any of late?

Jay Goltz:
I’ve just been sitting back waiting, and boom! There it blossomed. I got a call from my sales manager that goes, “Did you hear so and so is closing?” Really? A large frame shop that’s been around for many years.

Laura Zander:
Oh my God, our biggest competitor just closed too, last week.

Jay Goltz:
Yeah, so I go online. I see there’s a whole page he wrote on his website talking about it. And then, first thing this morning—this is all part of the story—It’s 7:30. I got a text from a rep who I’m tight with, she was servicing him, and she knew this was coming. And she said, “Did you see it?” She goes, “I said you should call Jay.” “Well, I don’t know if I want to.” So I said, “Have him call me.” So he immediately called me. We had a lovely conversation. And I think I’m going to be able to put together something to take the thing over, buy the building from him, and everybody wins. But he needed the push to do it. I think this is gonna work out for all parties.

Loren Feldman:
Laura, you said you had a competitor that just closed too. Do you see an opportunity in that?

Laura Zander:
Oh, it’s huge. Yes, I actually have an interview with the right-hand man of the CEO this afternoon. So not only does this open up a bunch of staffing opportunities for people who are now out of a job—

Loren Feldman:
A manager maybe?

Laura Zander:
No, not a manager, but the volume that they’re doing is going to trickle down. A big part of it will trickle down to us, I’m sure. It’s interesting, this company was one that was founded by a guy who had worked for eBay and it was VC-funded. They had raised, I don’t know, $100 million or something ridiculous. They were operating at a loss for years and years and really took a chunk out of our business—a big chunk. Then they got bought out by NBC Universal. Of course, this is the trajectory that you watch, then NBC just shut it down last week.

It’s just coming full circle, so now we’ll get back some of the market share that we lost to them. I’m assuming we will, I mean, we’re firing much better than we were five years ago, and eight years ago when they started. We’re in much better shape and much more solid. It gives us a huge opportunity, like on a couple different levels.

Loren Feldman:
Jay, let me ask you: you’re talking about possibly buying a building. I don’t know if that means buying the business as well.

Jay Goltz:
Yeah, that comes with it.

Loren Feldman:
Obviously it’s an investment. Are you at all concerned about making that kind of investment at an uncertain time like this? We still have a pandemic underway. Nothing’s back up to normal, the economy is obviously going through some difficulties. How are you processing that?

Jay Goltz:
I pull out my old playbook. I did this eight years ago. I bought a big building…

Loren Feldman:
You’ve told us about that.

Jay Goltz:
Same story now. I’ll simply tell the guy—he’s got no mortgage on it—I’ll go, “Look, we’ll put together a sales contract. I’ll buy it in two years.” It’s a solid real estate buy. If I can’t get the mortgage now, he’ll get rent for the next two years. Everybody wins. No, I’m not worried about it. I can’t say this enough. Listening to all the news reports, this is not the Great Depression. I’m so tired of hearing that. We had a pandemic. It shut things down. Yeah, it’s been brutal for a lot of people. Got it. The world will get back on its axis. Really, we will be okay. Will it be next month? Maybe not. But I’m so tired of these reports, “Unemployment is higher than during the Great Depression.” Did anyone mention that we’ve been shut down, so we laid some people off?

Loren Feldman:
Where do you draw the line between trying to maintain optimism and burying your head in the sand?

Jay Goltz:
Easy. This isn’t being optimistic and this isn’t burying my head in the sand. It’s looking at reality. We had the strongest economy we’ve ever had. Unemployment was at a record low. Why in the world will we not get back to normal in six months? That’s not being optimistic.

Loren Feldman:
You were just talking about businesses that are closing and not opening back up. There are a lot of those.

Laura Zander:
It’s not going to get back to normal, but it doesn’t mean that the new normal won’t be healthy. How about that? No, I don’t think it’s gonna be back to normal.

Jay Goltz:
Right, exact same page. There will be some businesses that won’t open. So my question to you is: Will those be the best businesses? Or will they be the ones that—like my friend’s daughter who works in a pet shop—they’re not wearing masks. She put herself out of business. Done! Over and out. Do I think there will be some businesses closing? Absolutely?

Loren Feldman:
They already have.

Jay Goltz:
Yeah. Will it be me? No. So now the market reopens and there’s less competition out there. How is that going to be bad for me? Why should I not be—forget the word optimistic—why shouldn’t I presume that these customers who were going to these other businesses that no longer exist, why shouldn’t some of them come to me? This isn’t about optimism. This is about simple math.

Loren Feldman:
Despite my challenge, you guys have just shown why you’re both successful entrepreneurs.

Jay Goltz:
And will continue to be.

Laura Zander:
It’ll be fine. It’s gonna be fine.

Jay Goltz:
Let me give you a practical answer to that though, because it’s a fair question if you phrase it a little bit differently: “Jay, are you concerned that this is gonna last longer?” So here’s the key. I’m gonna cut a deal with this guy probably. Let’s assume that I forge ahead. This isn’t gonna be in a week, it’s going to be over months. If things are going down the toilet in three months, I’ll probably get out of it, and he’ll have to go sell his building to someone else.

Loren Feldman:
That’s the answer I was looking for. You are assessing the risks, you’re aware that there are a range of possibilities, and you’re protecting yourself.

Jay Goltz:
No, I’m not betting the ranch on it. I’m buying some real estate, and I’ll put it in a contract. But by the time that deal goes through, it’s going to be two, three months from now. I’ll have a better feel for things.

Loren Feldman:
Okay, so we’re gonna try something different this week. I have a surprise quiz for the two of you. I’ve got four questions, all taken from this week’s 21 Hats Morning Report. And we’re gonna see how you guys do.

Laura Zander:
Is there a prize? Is there a prize?

Loren Feldman:
Yeah, you get to come back next week.

Laura Zander:
Oh God, I want something tangible.

Loren Feldman:
Hey, what’s more tangible than hanging out with us, Laura?

Laura Zander:
Awww, that’s a good point.

Jay Goltz:
Yeah, he’s got you there.

Loren Feldman:
Okay. Question number one. An employee-owned company in Vermont first realized something was up in early March when it saw its grocery store orders increase 600 percent. What does this company sell?

Laura Zander:
Flour. King Arthur Flour.

Loren Feldman:
Wait, wait. Let me give you the options, Laura. A) recycled toilet paper. Remember, this is a Vermont company. B) A new flavor of ice cream called stay-at-home strawberry. C) Baking flour. Or D) Hydroxychloroquine made from hemp. And your answer is…

Laura Zander:
Baking flour.

Loren Feldman:
Jay?

Jay Goltz:
That’s a good answer, yeah.

Loren Feldman:
And you’re right, that is the right company.

Laura Zander:
And the CEO said, “Are those numbers a mistake? Can you run those again?” And then she was in shock when she saw that they had increased 600 percent, because they had really been struggling with getting the millennials who were pro-gluten-free, and now they’re all baking.

Loren Feldman:
You’re warming my heart, Laura. All right, question number two. And this relates to you, Laura, as well. During the first two months of the year, the average domestic flight in the U.S. was carrying between 85 and 100 passengers. How many are flights carrying today?

Laura Zander:
I thought it was 34.

Loren Feldman:
Jay?

Jay Goltz:
I’m gonna go with whatever Laura thinks. She’s obviously paying more attention.

Loren Feldman:
It’s 39. There have been a lot of pictures on social media of full flights. Those are the exceptions still.

All right, this week, small business lending expert—this is your third question—Ami Kassar noted that the application for PPP loan forgiveness is quite complicated. And if you can manage to complete it—you’ll probably need some help completing it—your lender then has two months to review it before submitting it to the SBA. And then the SBA has three months to review it before approving or disapproving forgiveness. So that’s a total of five months in review, after you’ve managed to get the thing submitted. When is your first payment due? After how many months?

Laura Zander:
Four months?

Loren Feldman:
Jay?

Jay Goltz:
Whatever Laura says.

Loren Feldman:
That would be less than the time it takes to get it approved, so you would have to start paying before you know whether the loan’s been forgiven or not.

Laura Zander:
Exactly.

Loren Feldman:
Fortunately, that’s not the case, Laura. It’s actually seven months. But if you don’t get your act together and get that application filed, you could wind up in a situation where, even if you qualify for forgiveness, you’ve got to start paying back the loan.

Laura Zander:
Got it.

Loren Feldman:
You don’t want that to happen. Last question. You may remember an entrepreneur named Parker Conrad who started an automated HR business called Zenefits. Its customers were small businesses, and it quickly became a Silicon Valley tech darling valued at billions of dollars. Then it all fell apart and Conrad had to resign in disgrace, in part because they were breaking compliance rules about selling health insurance.

So what did Conrad do? He almost immediately started another HR startup called Rippling that does exactly the same stuff Zenefits did. In fact, he hired the engineer who built Zenefits for him to build Rippling. Forbes recently predicted that Rippling will be valued at billions of dollars as well.

My question for you guys is: When Conrad, who got lots of venture capital to build Zenefits, went back to the venture capitalists in Silicon Valley to raise money for his new startup after Zenefits had fallen apart, how much money was he able to raise? A) Are you kidding me? Zero, nothing, nada. B) $10 million. C) $100 million. Or D) $1 billion. Laura?

Laura Zander:
Oh, I didn’t read this one but I would guess $100 million.

Jay Goltz:
I would have guessed that, too, but it’s probably a billion because you want to finish the show making us both want to vomit.

Laura Zander:
Exactly.

Loren Feldman:
One hundred million doesn’t make you want to vomit?

Jay Goltz:
That does, too. It makes me kind of sick. The other one I want to vomit while I’m jumping out the window.

Loren Feldman:
Okay, you can just feel sick. It was $100 million to do the same thing over again.

Jay Goltz:
Okay, I’ve accepted the fact that none of that stuff makes any sense to the Laura world, to the Jay world. I’ve accepted that, and I don’t pay much attention to it, because it is what it is.

Loren Feldman:
Guys, we are out of time. My thanks to Jay Goltz and Laura Zander, as always. Thank you for sharing here in such a transparent way. Thank you for putting up with my questions where I try to get under your skin—especially you, Jay.

Jay Goltz:
Did you think it worked?

Loren Feldman:
Occasionally it works. On that note, thank you both.

Episode 18: Everything I Learn, I Have to Learn the Hard Way

Before the crisis hit, Jay, Dana, and William talked about what they thought the next recession might mean for their business and the benefits of starting a business during a recession: “What I've learned is, when things go bad and I lose $300,000 and I take out a second mortgage on my house, no one comes into my office and says, ‘Hey, boss, can I give you some money?’” Plus: Some making tough decisions on employee compensation.

Guests:

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

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

William Vanderbloemen is founder and CEO of Vanderbloemen Search Group.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

William Vanderbloemen: “I think if we were not in that recession when we started, we would have oversold what we could deliver and would have just imploded.”

Jay Goltz: “Taking on debt could be the safest thing you could do because when things go bad, you can’t borrow money.”

Dana White: “If the economy isn’t doing good, we have a lot of factors that bode well for us. That’s why the experience is very important. That’s why the price point is very important. Your higher-end salons, they do see a downturn, because women aren’t paying $200 to go get their hair done.”

Full Episode Transcript:

Loren Feldman:
Heading into 2020, I want to talk about how you guys are thinking about the new year, what you’re expecting out of it. Are you concerned about the economy? Are you planning to grow? Are you expecting to hire? What has to happen in the coming year for it to be a successful year for you?

William Vanderbloemen:
We started our firm in the fall of 2008. I quit a secure job to start a business, which is a brilliant move, right?

Loren Feldman:
Well, it seems to have worked out for you.

William Vanderbloemen:
We started in the greatest recession and had good growth. I was hopeful we would be able to do well. Somebody told me one time—I don’t know if it’s true or not—they’re like, “Man, I like your business.” “Why is that?” “Well, if the economy’s doing well, people are hiring. And if the economy’s doing badly, everybody needs religion. So how do you lose?”

Loren Feldman:
I’ve actually spoken to a lot of people who think starting in a recession is a great thing.

William Vanderbloemen:
It was great for us.

Loren Feldman:
It’s harder. But if you survive, it gets easier when the economy gets better.

William Vanderbloemen:
Oh, that’s a good lesson. I’d add one that I think is true. We tapped into a felt need, but very few people had the money to try this new thing in 2008. I think if we were not in that recession when we started, we would have oversold what we could deliver and would have just imploded, because everybody would have said, “Sign me up, sign me up,” and, being the sales sort of guy, I would have said, “Yes, yes, yes, yes, yes” and then would not have been able to deliver. It’s almost like, I don’t know if you guys have watched the old Karate Kid movie, but 2008, 2009, and 2010 were wax on, wax off, learn the craft.

Loren Feldman:
Are you expecting a recession going into 2020?

William Vanderbloemen:
I’m just a preacher, Loren, who’s trying to learn how to run a business. I really don’t know. I think that whatever the economy does, for us, we’ve said the future in our business—and I think it probably translates to other sectors—belongs to the agile. So if opportunities for growth pop up, we need to have cash in reserve and systems ready to go, ready to move. If the bottom falls out, we don’t need to be tethered to long-term overhead costs that we can’t shed quickly. We’ve been focusing over the last year on increasing our agility, rather than worrying about what the economy is going to do, so that if we surge forward, we’re ready. If it shrinks back, then we can make those contractions and not be caught in some long-term mess.

Loren Feldman:
What does that mean to you? How do you increase your agility?

William Vanderbloemen:
For us, agility means that we’re trying to be financially agile. For us, and this isn’t true for everybody, that means we just don’t take on debt. That way, we don’t have a note we have to pay. And we also don’t take on investors so we don’t have to answer to the “Why?” and the return here, here, and here. If we choose to take a down year because we want to try and expand while the economy is contracting, that’s our call.

Now, smart friends of mine have very different approaches on this, but for us, agility is cash agility, and then it’s also space agility. We’ve done this recently. We made a move over the last year. We’ve tried for a number of different reasons to have our systems and our process to be much more of a thing that’s taught than caught. I’m a horrible manager. I’m terrible. “How do you learn search?” Well, the answer used to be, “Hang out with William for a few months.” That was the onboarding process. That that doesn’t scale. Now, we have systems that can be taught well enough that we can say, “Well, you don’t have to be in Houston.” We could have regional offices where we’re closer to our customers, not all virtual, but regional. That means we have less central office space, which means we have a lower lease that we’re responsible for. If for some reason we need to expand, we could open more regional offices, and if we need to contract, we can just close them down. I’d use the word “WeWork,” but I think “WeWork” has become a four letter word.

Jay Goltz:
That would be six, but who’s counting?

William Vanderbloemen:
Something like we can start small with our model, with the no debt, no investors. We can get a shared office space in Atlanta and start with two or three people and build it up, and then when it’s shown enough legs that we’re ready to buy a building that we own, rather than leasing, we can do that, and we have agility. We’ve done a few things. We’ve tightened up our systems so we can make them more portable. We’ve tightened our office space here to lower our commitment to a lease, which I don’t think I’ll ever do again. And then we have made sure that we’re cash positive so that we have the agility to expand or contract as as circumstances dictate. I think the future belongs to the agile.

Loren Feldman:
Dana, how about you? What are your expectations heading into 2020?

Dana White:
I have this pie in the sky, “Oh my goodness, this will be a great year if we do this.” But over the past couple weeks, after spending time with my mentor, talking to business owners whom I really truly value their feedback, the pie in the sky may come, but this year for me and for Paralee Boyd, it’s just about buckling down and getting even more into the weeds of the business. I am a very process-driven person.

Paralee Boyd runs on process. We have an onboarding process that we track. We have so many processes that we track. I think processes aside, I really want to focus on the culture. I’ve done that a little bit, but I want to start kicking it up to the point where the processes and the culture run hand-in-hand, because it’s the culture that makes the processes applicable, if that makes any sense, because of the people. It’s really about getting my hands deeper into every aspect of Paralee Boyd. William said, “Hey, I’m a horrible manager.” I am not a great manager because I’m a former labor organizer, so for me, “Does this feel good? Even if it might hurt the business, as long as it feels good…” That can’t be my managing style anymore. I have help with that, but I’ve also grown as a manager in the past year.

My goal for 2020, as far as management, is just being able to put my hands deeper into every aspect of my business and managing the finances. I think when we talk about getting your hands dirty in the business, I have a very good sense of my numbers, but having a better handle, touching my numbers every day, three or four times a week, just to manage that better. And then lastly, just growing the business.

My challenge has always been getting the word out: marketing, marketing, marketing, marketing. I’ve already begun putting the team together, giving me low-cost options to do the social media and digital marketing that I can do before I pay to hand it off, and by the time I’m ready to pay to hand it off, I will hopefully yield results with butts in seats from what I’ve done already.

William Vanderbloemen:
I love your self-awareness that if it felt good, that was good management. I think for me at a younger age—and maybe some other entrepreneurs can relate—it was: if it’s shiny, it must be good. It was like a garden hose nobody was holding with water spewing everywhere.

Dana White:
Yeah, our analogy wasn’t shiny. For us, we use food. So oh my gosh, it’s this beautiful ganache, chocolate layered cake, but we can’t live off of that. We need protein, right? We need carbs and vegetables and fruit. And so even though green beans aren’t sexy, it’s what you need to live.

Loren Feldman:
You’re in the hair salon business, right?

Dana White:
Yes.

Loren Feldman:
Yeah, you’re not opening your restaurant on the side, are you?

Dana White:
No, I’m a diner. I love to dine. That’s like my hobby. But that’s how we say, “Marshmallows are great, but you can’t sustain off of marshmallows.” For 2020, it’s really about getting those meat, potatoes, vegetables, and fruits and setting up our buffet. And then, towards the end of the buffet, oh my goodness, we have this artisanal cheese. Woo! The pie in the sky for me is potentially franchising or opening up another location. I’m still kind of back and forth on the franchise bit because it’s a huge commitment. But yeah, that’s my 2020. What about you, Jay?

Jay Goltz:
I’ve been through… I don’t know, I’ve lost count. I’ve probably lived through seven recessions and I’ve learned that you just can’t predict anything, and we’re living in such volatile times that you need to stay flexible. My main thing is, given that my business is fairly mature, I have to continually keep my eye on evolution and keep changing it, because the market’s changing dramatically. I’m working on that and I’m working on making sure I have cash.

I just want to defend something that’s got a terrible reputation: debt. Most people who are rich anywhere have used debt to get rich and most people who go broke have used debt to go broke. Debt is not good or bad. William, in your case, you don’t have inventory, right? I don’t think you have inventory.

William Vanderbloemen:
Not that I’m aware of.

Jay Goltz:
You don’t have equipment. You’re not buying hundred thousand dollar printing presses or something. For someone like you, it probably makes sense not to take on debt because it begs the question: why would you need to? You don’t have to.

William Vanderbloemen:
Spot on.

Jay Goltz:
Someone like me? I have to tell you, taking on debt could be the safest thing you could do because when things go bad, you can’t borrow money. For someone like me, it might make great sense to go take out a mortgage on a property that there’s no mortgage on, get a pile of cash, stick it into an account, and have it there if you need it, because if the economy goes bad, the banks go hide under the table. Having debt actually gives you cash, in some cases.

Loren Feldman:
What are you thinking heading into 2020, Jay? Are you concerned about the economy? How dependent on the economy do you think your businesses are?

Jay Goltz:
I’m concerned about the country. I can’t turn on the TV. For the first time ever, I work out every morning on the elliptical and I always put on one of the news stations, I’ve had to stop doing it because I can’t deal with it anymore.

Dana White:
Yeah, it’s a lot.

Jay Goltz:
On the car drive in, I thank God for Sirius radio, because I can listen to the Frank Sinatra station and pretend like everything’s okay. Because if I turn the news on, by the time I get to work, I’m already anxious and depressed. So yeah, I am concerned about where things are going. Yes, I’m watching cash, for sure. I’m absolutely watching long-term commitments. I’m staying flexible. I do agree with William, and this is a general comment, the no-partner thing, I think that’s a good plan.

Loren Feldman:
No partner, no investor?

Jay Goltz:
I think that’s always a good plan. Now I recognize that some people need to do that, and I’m not criticizing it, but I think it’s a true statement to say: If you can avoid having investors or partners, that’s a good idea.

William Vanderbloemen:
I just remember when we first started out and it was just me, staff meetings were awesome. Everybody got along and all the votes flew through and everything got done right on time and nobody felt like it went too long. Now it’s like my investor meetings are awesome.

Jay Goltz:
Someone gave me some good advice. The guy was in his 60’s or 70’s by the time he told me this. He said something very poignant. He said, “Long-term, you have three potential enemies in business: your landlord (true, I own most of my properties, it makes my life much easier), two: partners (don’t have any), three: the bank (I’m not painting the banks as bad guys, but they’re your partners on some degree). They look at your books and they can control you. I am very close to getting rid of the bank because I just had the revelation of: there’s two sides of the bank: there’s the real estate side and there’s the business side. When you do business loans, credit lines, they crawl into your…

Loren Feldman:
They crawl into your what?

Jay Goltz:
They’re in your business, they’re looking at everything, and you basically have to answer to the bank. You know what, I don’t want to answer to anybody. I just figured out lately, I’ve had this revelation. All I need to do is go take a mortgage on a property that I have no mortgage on, take that cash, and use that as my credit line, quote, unquote.

The bank, the real estate side, all they care about is, “What’s your debt to equity on the building?” They’re not coming in and asking about your sales projections. I encourage people to think about, if you can buy the property that you’re in, not a bad thing, because most of the risk to real estate is having a tenant who pays rent every month. If you’re your own tenant, it’s a no-brainer.

If you talk to attorneys and accountants, they’ll tell you there are plenty of people who end up retiring off of their building they sold when they were done because the business was worth so little. One of the greatest things that the government does are the SBA loans. You can buy a building for 10% down, which is what I did. Those are all long-term strategies that can be extremely powerful. As far as the moment, what am I looking to for next year?

Loren Feldman:
Yeah, that’s the question I asked!

Jay Goltz:
Possible volatility, election coming, making sure that I have enough cash to withstand whatever comes along, and at the same time, keeping an eye open for new opportunities, because the internet is still wreaking havoc with the business world, and there are opportunities to be had from it. The world’s changing very quickly, and you need to keep your eye on it. 40 years ago, I watched my father’s dime store—if anyone still knows what that is—slowly die over 20 years. My father-in-law had a clothes store slowly die. I’m very aware of the fact that you can’t just put your head in the sand and say, “Ahhh, computers, schmooters. They’re gonna be gone in a few years.”

Loren Feldman:
Dana, how about you? Do you think your business is sensitive to the ups and downs of the economy?

Dana White:
Yes and no. It depends on where you are financially. I think my business is priced at a point that I’ve been told is somewhat recession-proof. I do believe we will see a downturn if the economy tanks. However, I’m providing a service that is needed. We provide a basic service.

We might start losing people because they do it at home, but also it helps in a recession, similar to alcohol, you can pour a drink at home, but it just feels better when you’re at a bar for some people with other people. It’s the same thing with a hair salon, like it’s just done better. You might save some money, but it’s a whole experience. I think for Paralee Boyd, if the economy were to tank, we would see a little back beat, if you will. But I do think that we’re one of those businesses that wouldn’t tank completely because of the economy.

Jay Goltz:
I think your business is recession-resistant to a degree, clearly, but I read an article years ago that was really insightful. It talked about guys who go to country clubs to play golf and looking for the ball. They found out that when the economy got bad, people would spend more time looking for their ball than when the economy’s good, because they can’t do anything about their car lease, they can’t do anything about their mortgage payment, they can’t do anything with their health insurance, but they can spend five more minutes looking for their ball.

I think that haircuts are similar. I think there are some people who will think, “You know what, instead of getting my hair cut every four weeks, I think I’ll stretch to 6.” There will be some of that for sure, sure.

Dana White:
Absolutely.

William Vanderbloemen:
I’d have to look on the interwebs to find it, but I read a study not too long ago, Dana, that Revlon’s biggest boost was in an economic downturn. Women wanted something to make them look good when everything else was bad.

Dana White:
They wanted to feel good. That’s exactly it. If the economy isn’t doing good, we have a lot of factors that bode well for us. That’s why the experience is very important. That’s why the price point is very important. Your higher-end salons, they do see a downturn, because women aren’t paying $200 to go get their hair done. I’ve only been open for seven years—there were some “Eh, jobs aren’t as great right now”—but we saw women who had appointments based at higher-end salons, they started coming and we gained new customers because, “Hey, you do my hair just as well. Why am I spending $100 more?” A lot of it was a social status thing. Sometimes women go because they want to be known to go to that salon. I’m not really seeing where the economy is affecting this too badly.

Loren Feldman:
Okay, next topic. Also, relevant for this end of one year, beginning of a new year time period. I’m curious how all of you handle performance reviews and also bonuses and compensation. Do you tie them together? Is it a once-a-year thing? William, why don’t we start with you?

William Vanderbloemen:
This is a new thing for us. As a startup, I was and still am to some extent, highly allergic to overhead. It causes rashes and things. We would pay people a fair wage as a base salary, but hey, trust in us and when we grow, we’ll share the growth. We had to learn to not call it “profit sharing” because then you’ve got to issue K1s and all kinds of things. Okay, so bad preacher joke, but we named it “prophet sharing.”

Dana White:
That’s funny!

William Vanderbloemen:
It was basically, if we grow, we all grow together. We didn’t know until the end of the year. We’re an S Corp. The books close on December 31st. There’s all this, “Get all the cash in that you can by December 31st so we can share all we can.” We had big fun and the most fun meetings of the year were at the end of December. Go have a beer with William and get your bonus check. It was awesome.

Now, we’re paying better base salaries, we have benefits. We’re like a real business. We still want to share the growth, and we do, but we’re moving toward a different model where it’s not so much of the compensation tied to bonuses. You don’t have people running around at year end wondering what’s going to happen. We’re actually moving toward intermittent bonuses and rewards tied to particular performances throughout the year. If there is an annual bonus, it will no longer happen in December. It’s like, who wants to be the Grinch at Christmas?

When we first started out, we were on meteoric growth. It’s like, “Well, that’s fun.” But when you have a year of 8%, 9%, 10% growth, and it’s not 50%, and the check’s not as fat as it was, then you’re talking to Clark Griswold in Christmas Vacation and he’s like, “Where’s my bonus? I need to build the pool,” or whatever it was that he wanted. We’ve tried to remove it from the holiday season, just so we don’t run the risk of messing up holidays or mixing the message.

Then we’ve also moved to lower percentage bonuses to a healthier, more predictable workplace. Then we’ve also said, “Let’s not make it all one annual bonus, but let’s do some that are intermittent.” I jokingly said, “We probably ought to study how slot machines get people coming back. How often do you pay out so that people come back?” And I don’t mean that crudely because I love our people and I want to reward them, but we think that a combination of an annual reward that’s not tied to Christmas, and some seemingly random but tied to performance rewards throughout the year, will actually create a happier, more fulfilling experience for the employees.

Loren Feldman:
What do you see as the real goal with these bonuses? Are you trying to motivate people?

Jay Goltz:
Is it an incentive, or is it a thank you?

William Vanderbloemen:
For me, we’re still small enough. We’re a micro niche business, and we have 45 full-time employees. I would love to have the upside of people feeling some ownership stake in the company. Now, we’ve not done an ESOP kind of program, and I don’t know that we’ll ever do that. But I think the value proposition in an ESOP is everyone feels like an owner and they pick up a piece of trash in the hall when they see it. Or they take care of something that’s not in the job description. There’s more of an all-in mentality. The best days for us are when we’re all working together, irrespective of whether it’s not what my team does or what my job description says. I may be living some utopian dream thinking that can keep happening. Maybe as you grow as a business, that gets harder, but we’re going to try and maintain it. One of the ways we’re trying to maintain it is through basically saying, “If the company grows, we all grow.”

Loren Feldman:
How about you, Dana?

Dana White:
In our last podcast, I shared about me hiring a new operations manager, and that’s working out very well. Now that we have more structure in regards to performance reviews with this new operations coordinator, we gave everybody a raise, and we’ve been very deliberate about incentivizing people financially through performance. For us, no bonuses. We have a younger group, and this is not a salary-based position, so definitely not profit sharing. But what we do do is, based on your performance, here is $100 gift card, or based on your review—we don’t really incentivize for their review—we are starting to say thank you.

Next Friday is the gift exchange. We do these little things that go a long way with the staff. We’re going to start doing PB bucks—Paralee Boyd bucks—and the managers will start giving those out to staff members during shifts, as well as reading the kudos. We have a kudos box and they leave notes to each other. We read those out loud and give them to them. Then when somebody performs well, we give you a Paralee Boyd buck, and then you add those up. If you get up to $100, or whatever denomination you want to get to, you can redeem those for a gift card of your choice for that amount.

We don’t really base it on performance, as far as incentives. We don’t say, “Hey, good review. Here’s, 500 bucks.” But through our key performance indicators, you’ve been performing well, so we incentivize you with a reward of some sort.”

Loren Feldman:
Do you do annual performance reviews?

Dana White:
We do quarterly.

Loren Feldman:
Is that working for you?

Dana White:
Yeah, it is because we measure your consistency and speed. We understand that there’s a person behind that flat iron. We want to check in when we notice, “Hey, the timing is going down” or any variants. We bring it up at that next quarterly review, and then they’re not punitive at all. That’s just not our culture. It’s a check in with you so you can let us know how we’re doing. We check in with you to praise you, and recommend any areas of improvement.

If we see areas of improvement, it’s based on the connection we have with you as your employer. “How are you doing? Because we’re noticing in your work that…” It’s talking about what’s going on with them, and how we can help, not so much in your personal life, but how can we refocus you to come back and perform? A lot of times, that conversation is all that’s needed. No added training needed.

Because we’re watching that, we connect with them and say, “Hey, what’s going on? How are you doing?” And then they turn it around because they know they’re being watched. Because you work for an employer that cares, and we want to help get you to perform at your best. We’ve also had reviews where they’ve outgrown the position, so now we’re looking to transition you out. But it’s all above board. It’s never nasty. Some people would like to make it nasty, but I have a really strong management team that keeps it even-keeled.

Loren Feldman:
Do you tie compensation discussions to the performance reviews?

Dana White:
Annually we do. When we get to that fourth performance review, we for the most part give you a raise for your time in—a raise or a promotion, or both.

Loren Feldman:
People have an expectation that, at the end of the year, they’re likely to get a raise?

Dana White:
Based on their performance, and they’ve known over the year, this is how you’ve been doing. We also give them time to correct whatever’s going on. For the most part, they do. We have not not given somebody a raise. With training, it’s about communicating clearly to your staff what they need to do in order to perform well at this position. Either they want to do it or they don’t. For those who don’t want to do it, we have a way of transitioning them out. For those who do want to do it, we have a way of working with them to get them to where they need to be.

They’re not hard tasks, they’re not, “Hey, we need you to stand on your feet for 18 hours a day.” No, they’re just, “Hey, it’s taking you 40 minutes to curl one head. We need that done between 15 and 25. Why don’t we set you up to go to these following trainings to get you there?” And there’s all the encouragement that we give them along the way. We really clap for them along the way. Then when their review comes up, you’re not surprised because you’ve been performing like a rockstar.

Loren Feldman:
Do you worry about creating an expectation for an annual raise that you may not be able to meet in coming years?

Dana White:
I would if we didn’t communicate clearly. Our raises aren’t huge. They’re incremental. They’re like 25 cents, 50 cents. A lot of times, the raises come when we promote them. If we take you from stylist to lead stylist, your commission goes up. They’re still based on the amount of heads that you do, and your hourly salary. Your hourly salary may go up 25 cents, but you’re actually up for a promotion for the lead stylist where more money comes in. That’s where you want to make your money. But we are very clear that if you’re not performing, I don’t care if you’ve been here for five years, you’re not going to get a raise. But we’re going to do everything that we can to help get you there.

Loren Feldman:
How about you, Jay?

Jay Goltz:
I’ve been all over on this thing. I used to give everyone bonuses, and then what I’ve learned the hard way is—because everything I learn, I have to learn the hard way—when things are great, everybody’s happy. But as I said, I’ve been through several recessions. The last one in ‘08 was brutal, and you can explain it all you want. At the end of the day, people are really unhappy that they didn’t get their bonus, and I’ve come to the conclusion: they’re not my partners. What I’ve learned is, when things go bad and I lose $300,000 and I take out a second mortgage on my house, no one comes into my office and says, “Hey, boss, can I give you some money? You gave it to me on the upside, so I want to be there for you on the downside.” I’ve recognized they’re not my partners, A. B, a lot of them are making $30,000, $40,000, $50,000—they really need the money. This is just my opinion at this point, but it’s a well-educated opinion, because I’ve got everyone from salespeople to production workers to guys working on the dock—I would not want a big percentage of their income to be based upon this, because they just can’t afford that.

This is what happened to me. I was giving out bonuses every year. ‘08 happened. I’m lucky to be in business still. I’m in the home furnishing sector between the home starts. Picture framing is absolutely a luxury item unlike haircuts. You could stop picture framing for a year and nothing’s going to happen to you. Your life will be a little less happy, but you can just stop. My business literally took a 30% hit overnight, and I was in no position to be giving out bonuses. Every year, I thought, “Okay, this is going to be the year. I’m going to start again.” And then every holiday season, I have to stand there in front of everybody with this albatross and say, “Listen, guys, sorry, but we’re still not where we need to be. I can’t give it.”

Every year, I would dread this thing. I finally figured out—I went back to my old thing. For production people in particular, I’ve got like 50 people, and we give out like 25 bucks a year. It’s just something to say, “Thanks for hanging around.” The new employee gets lunch, but the person who’s been with me for 20 years gets $500. Now, I did that right before I came here to get on this podcast. I just had the handout. My top guy’s been there 33 years. He got a nice big check. I’ve got lots of people who have been with me for 20 years.

And you know what? The five or ten grand that I ended up giving out is never going to make that big a difference in the scale or the size of my company. I got rid of this huge albatross around me now, and I can’t tell you how much happier I am.

Loren Feldman:
What’s the difference? Jay, why is the albatross gone? You’re still giving out—

Jay Goltz:
The albatross is gone because I don’t have to worry about, “How much money did I make? How much am I going to split it up?” No matter how much money I make, there are years where I make a good amount of money, and there are years that I lose money, and there are years that I make $50,000. The albatross is off because the five or ten grand that I’m giving out of bonuses is just not going to make a big difference.

Loren Feldman:
You’re always going to give that amount.

Jay Goltz:
Yeah, unless it’s really bad. And if it’s really bad, everybody’s going to be happy to have a job. I would never say, “I’ll always give it out.” But if the economy really goes bad, everyone will understand that we can’t do it. I can’t tell you how much better I feel that I don’t have to worry about it every year.

I know this sounds preposterous to people who aren’t in businesses like mine—I have such a huge inventory and so many costs, I really don’t know how much money I make until I take inventory. I’m not selling televisions where they’re all in a SKU, we can barcode them. I’m using framing material. I’m selling things at different prices. There are sales. There could be a huge swing, depending on what the inventory is. I don’t even know how much money I made in December.

I just feel so much more relieved now that it’s just clean and simple. People are happy. The first time I went to it, I had a woman working for me who had only been there for a year, and I gave her the check. I go, “Sorry, it’s not much.” She goes, “Oh no, that’s okay.” She appreciated the fact that they’ve been there for that long, and they were getting their $200, $300, $400, or $500. There was no resentment whatsoever. It’s just clean, simple, one hundred percent fair. Everyone knows what the formula is. Versus you start giving it out based on, “Oh, he really worked hard this year,” and all of a sudden, the raise review and the bonus are mushed together. I think that’s a huge mistake.

It also helps when I give the raise reviews now. How long you’ve been here is out of the formula, because I will tell you what I’ve seen companies do. They give their 3%, 4%, 5% raises every year, because you can’t give the guy a quarter. And the next thing you know, 20 years later, one person is making $20 an hour standing next to someone who’s doing the exact same job making $15 an hour. That’s how you go broke slowly. It’s really helped me to keep that out of the formula. We do once a year raise reviews, but we do reviews every day. If somebody is doing something, well, hopefully we notice and say something if there’s a problem so that we don’t store it up and have one dumping on them once a year, once a quarter.

I feel very comfortable. It took me 41 years to get to this place. Dana, I’m glad you said, “I’ve only been in business for seven years.” You’re right. Seven years isn’t a long time. It really isn’t. People need to understand, in business, this takes years to figure out. I’m very comfortable with what we’re doing now. I know this open book management thing, a lot of people swear by it. I’m not criticizing it.

I just know that you’ve got three choices: no bonuses (I wouldn’t argue, in some places that works), a badly done bonus program (where people feel like they didn’t get their fair share, which is worse than no bonus), and then there’s my approach, which is just a yearly thing—no harm, no foul, clean, simple. I’m sure not as good as a well-tuned performance bonus thing, but better than nothing. I’m comfortable with where I’ve landed. I continually try to figure out, “Is there some way I can do more of this whole participative thing?” But it’s very, very tricky. I’ve got all different kinds of positions and jobs, and it’s just not worth the brain damage to me at this point.

Loren Feldman:
William, I’m curious, do you think your employees compare notes on how much they make or what they get in a bonus? And do you worry about that?

William Vanderbloemen:
Is there a company where people don’t compare notes on what they make?

Jay Goltz:
They do it in the bathroom, by the way. I used to have parties. They go in the bathroom and open up the envelopes. They don’t do it in front of you. But they’re doing it.

William Vanderbloemen:
There’s this word that’s used throughout the New Testament, “and there was murmuring,” and I think in describing most businesses, there’s murmuring.

Loren Feldman:
Do you try to manage the murmuring?

William Vanderbloemen:
No, there’s nothing punitive. I don’t even know if we have anything prescriptive: “Do not talk to each other about what you make.” I think it’s going to happen. We certainly don’t post it. I don’t think that’s helpful. But I just don’t know how you govern that, and maybe I’ll be back on this podcast in a year or two talking about, “Oh man, did I learn the hard way.” But for now, it’s just not something that we publish, nor try and protect.

What happens with the bonuses, that used to be a bigger conversation than it is now. We did finally put our salespeople on a form of commission mainly because they came to me and said, “Even if you paid us all the very same amount of money, we are all going to perform better if we have a number on our head,” which was really interesting. So we did finally say, “Okay, we all are no longer part of bonus. Let’s just put you on straight. Here’s what happens if you sell this, and if you sell that.” I guess people know sales numbers.

Jay Goltz:
There’s just nothing to argue with. They know how much they sold. They know the percentage. That’s clean.

William Vanderbloemen:
It’s your annual review. I think we all have a mutual acquaintance in Cliff Oxford. Cliff wrote an article, I think for you, Loren, years ago: “What Do You Do With the Brilliant Jerk?” I guess the idea, or at least what I took away from it, was: what do you do with the sales guy who’s hitting all the numbers but is a total rear-end around the office and ruins your culture?

In our annual review, for years, we’ve codified what our nine cultural values are, what it means to live those out, and the employee gives their version of how they review themselves. The manager or direct report says, “Here’s how I view you,” and your compensation is directly tied to how well you’re living out the cultural values. It’s not all of your merit pay, but it’s certainly part of it. The sales guy could make all the sales, but if he’s a rear-end, he’s not going to get all of his commission.

Jay Goltz:
That’s an ongoing problem with outside salespeople. It’s common that the person who brings in all the big business comes in and dumps stuff on the desk and says, “Here, I need this by Thursday,” and the rest of the people are aggravated at him, and they know they make way more money. It is an ongoing regular problem for many businesses.

Loren Feldman:
Which is why some people don’t pay sales commissions and even put salespeople on straight salary. But that’s a conversation for a different day—in the time we have left, the biggest story in entrepreneurial compensation I think over the last five or six years, is this guy Dan Price, from a company in Seattle called Gravity Payments, who got a ton of publicity when he decided a few years ago to give all of his employees raises so that everybody was making a minimum of $70,000 a year. It was in the news again recently. We had it in the Morning Report because he has bought a subsidiary and he did the same thing there. All along, this has created all kinds of publicity for him. I think there’s been a Harvard Business School case study about him. He’s become kind of a brand name. I’m really curious what other business owners think of him.

There was another side to this story. He had some employees who had made more than $70,000 who quit when this happened. He had some vendors, business owners, who felt that this sent a very bad message and stopped doing business with him. There was a story in Bloomberg that he had some litigation with his brother, who was a partner, and they raised the question of whether he cut his own salary because he didn’t want to be liable for a larger payment to his brother if he lost the litigation. I’m curious what you guys think. How about you, William?

William Vanderbloemen:
Well, I’m all for innovative ideas, and I love giving away things. I love being generous. Then with all those things I love, let me just put a caveat in, I don’t have an MBA. I don’t know all the cool business rules, whether this is right or not, but something in me feels like this is a little bit of an idealistic chasing of a windmill, and it’ll come back to Earth.

Loren Feldman:
Bloomberg called it a “capitalist fairy tale.”

William Vanderbloemen:
That’s kind of what I’d call it. I just don’t see this as a universally applicable rule. Maybe it’s cost of living, and Seattle’s going through the roof. I mean, real estate values are up 15% year-over-year, ever since Amazon and a lot of tech have moved in. Maybe to keep good people up there, you have to do unusual things. Maybe there’s a contextualization, and maybe there are all these other things, the fight with the brother. But for universal application, I can’t see it. I’m just a struggling preacher trying to build a business.

Loren Feldman:
Dana, any thoughts?

Dana White:
I think it served his purpose. In part, I think he got the publicity he needed. I think it was a very… not a PR stunt, but I think that was more to it than just making sure that his employees were all compensated at $70,000. It’s just not a model that would work for my business. I want to caution business owners who want to pay a salary. You want to make sure that the output, the work that they’re doing—I’ve had conversations with people about salary raises, and they’re like, “Well, this is what’s going on in my life, so this company should compensate me for that.” My thing has been, “The company had no choice, no hand in the decisions that you made in your life. If I’m in a certain situation or if I have a gambling issue or whatever… “I owe $500,000. I have a job. I’m working here. You should help me with that.”

Loren Feldman:
Have you actually had somebody come in and say that to you?

Dana White:
I’ve had people in my company who have felt that, “I have made these choices and I’m here at this point in my life. I need a job that will help me compensate for that.” And then I said, “This is not this job. This is what you do, and this is what I believe is a fair compensation.” Based on my research in this industry, and based on how I feel comfortable putting my head down at night when I see your check. I’m like, “Okay, that’s fair.”

I just think we’re getting into this period, Loren, where the business owner is the bad guy, where back in the day, when you look at old movies, like It’s A Wonderful Life, the business owner had the opportunity to be the hero. It wasn’t, “Oh, you’re making money. Oh, you’re awful.” When I read that article, I said, “Hmm.” He got me to read the article, but it’s just not something that I would do at Paralee Boyd, is pay everybody $20 an hour to make the statement of equitable wages. At Paralee Boyd, everybody knows what everybody makes.

Loren Feldman:
Interesting.

Dana White:
Yeah. Everybody knows where they fall in the commission. They know what the lead starting commission is.

Loren Feldman:
They know what they have to do if they want to make more.

Dana White:
Absolutely, yeah, everybody knows. It’s already the beauty business, it already can be very competitive.

William Vanderbloemen:
Maybe a little drama. Is there drama in the beauty business?

Dana White:
Yeah, so let’s just remove all that. You know, she just started, and this is where she’s starting at. Yes, she has 20 years of experience, but she doesn’t have 20 years of experience at Paralee Boyd, and Paralee Boyd is different. I just thought it was, I don’t want to say a “PR stunt,” but I just…

Jay Goltz:
It could be though. You could call it a PR stunt. That wouldn’t be unfair.

Dana White:
Thank you, Jay.

Jay Goltz:
Now Dana, you said something that I think you’re right about with paying market wages. But you said, “They made choices.” They might not have made choices. Maybe they’ve got a sick kid at home. It might be no choice, just bad luck. Does that mean if someone has horrible bad luck in life, that the business owner, it’s now their responsibility? I mean, that’s a slippery slope.

Dana White:
Very slippery.

Jay Goltz:
The problem with this guy’s story, and Loren, I believe you left the most important part out of the original story. He cashed in all of his money. He funded this business as though it was a not-for-profit. He decided that it wasn’t important that he made money. He’s giving it all away. The problem with that—

Loren Feldman:
Wait, wait, wait.

Jay Goltz:
Yeah, read the original story. He went ahead and he was cashing out all this stuff so he could fund this. That’s what the story was.

Loren Feldman:
I don’t think that’s right. His original salary was more than a million dollars. He cut his own salary to $70,000. But I think the company remained a for-profit business.

Jay Goltz:
For sure. But I’m saying, cutting your salary from a million dollars to $70,000 is basically saying, “I don’t have any rights or expectations or needs as a business owner to make money. I’m just going to give it all away.”

Loren Feldman:
Wait, he still owns a company.

Jay Goltz:
He kind of does, but to what benefit? He just gave away the profits of the company to the employees.

Loren Feldman:
Sure. He retained equity in the business.

Jay Goltz:
What good is equity if you don’t have profits? He’s giving the profits away.

Loren Feldman:
I don’t think we know that.

Jay Goltz:
Aha! There’s the point. We don’t know anything. We have no idea how much money he’s making. We have no idea whether he’s actually paying all these people. The newest article I read about that ratio people use with how much does the CEO make compared to the average employee—that is preposterous in a privately-owned subchapter company, because what that means is, if you own a $50 million company and you’re making 2%—which would not be anything to brag about—and you made a million dollars, and you say, “Oh, that’s terrible. This guy’s making a million dollars and his average employee’s only making $40,000.”

They are dangerously close to going out of business, because all that would have to happen is a hiccup and now the company doesn’t make money at all. That whole ratio should not apply to people who own the business. There’s supposed to be a return on investment and you need a return on investment for the longevity of the company to stay healthy in business.

Loren Feldman:
You know what’s interesting, Jay? What you were just talking about now is one of the strongest arguments, I think, for doing open-book management, which you raised before. The people who do it tend to make the argument that they decided to open their books because they knew that their employees just assumed that the owners were making even more money than they really were, or way more money than they really were.

Jay Goltz:
Or losing money.

Loren Feldman:
By opening the books, they changed that. They allowed employees to see how the business really does.

William Vanderbloemen:
Loren, I’m going to push back on you here. We’re in an industry where we have a very clear margin—I don’t want to go into those margins—we need to clear a certain EBITDA to be a healthy business. If we ever wanted to take on investors, they’d look at our books and say, “You’re healthy, you’re clearing the right amounts.” So if I had 100 stock owners, and I were distributing our profits among 100 stock owners, nobody would have a problem with that, but because there’s one stock owner, they’ll look at the number and say, “Oh, that’s too much” I don’t know how to get around that. And I think it’s a Pandora’s box to open that. You want to talk about water cooler talk and murmuring?

Dana White:
Oh my goodness.

William Vanderbloemen:
I don’t see the value and I’ll push way hard against you, Loren, as a guy who’s the sole owner of his business.

Loren Feldman:
For the record, I don’t mean to be selling open-book management. I just think it’s a really interesting debate.

Jay Goltz:
No, it shouldn’t be a debate. Some people it works for, and they’re happy, and other people aren’t. The most misused word lately is the word “transparency.” That’s good for government. It doesn’t apply to a privately-owned business. Since when is it, “Oh, William, you need to tell everybody how much money you’re making. We need to be transparent.” Where did that come from? Who says it’s our responsibility to show transparency to everybody? It’s really not right. It’s not capitalism. It’s not even healthy for the business.

Loren Feldman:
I don’t know about it’s not capitalism. I don’t want to be in the position of selling open-book management, but one of the things that does happen at companies where this works, is if employees know that the company’s not doing well, they often come up with ideas that wouldn’t even occur to the owners.

Jay Goltz:
No argument. Capitalism does not mean that you have to be transparent with everything you do in your internal business. That’s all I’m saying. We don’t owe it to the population or to our employees.

Loren Feldman:
I’m just objecting to it’s not capitalism. I think there are different ways to be a capitalist.

William Vanderbloemen:
I do think it’s a one-way street. I don’t know how you open the books and then ever close them again.

Loren Feldman:
Okay.

Dana White:
Yeah.

Jay Goltz:
Just to be clear, I’m saying government should include transparency. That’s what government is supposed to be. It’s our government. Included in capitalism should not be the notion that as business owners, we have a responsibility to be transparent. That’s a crock. It’s just not true. It’s nobody’s business if we’re losing money, except the bank.

Loren Feldman:
Well it’s an employee’s business, isn’t it?

Jay Goltz:
Did they sign the lease? Are they the one who’s going to lose their house if things go bad? How is that the employee’s business? Explain that to me. They have a job.

Loren Feldman:
But people change jobs too. That’s certainly something that they might consider, if they have a job offer somewhere else.

Jay Goltz:
Is that our responsibility to tell every applicant, “Oh, by the way, before you take the job, I just want you to know I could be out of business in two years”?

Dana White:
It was brought up during the Small Giants Forum, and I looked around like, “Okay, am I the only one here who thinks this is a little much?” I would not do open-book management at Paralee Boyd. Oh, no!

Loren Feldman:
We are out of time! My thanks to Jay Goltz, William Vanderbloemen, and Dana White for another lively conversation on the 21 Hats Podcast. Thank you all.

Dana White:
Thanks for having us!

Episode 17: You’re Not Human Anymore. You’re the Boss. Deal With It

In this week’s report from the front lines of the crisis, we talked about overcoming the fear of raising prices (during a pandemic!), deciding when is the time to tell employees they have to come back if they want their jobs, and finding opportunities amid the crisis disruption. But the focal point of the conversation was Dana White discussing her realization that she’s been more productive during the crisis, even with her hair salons shut down, than at any other time since she started her business seven years ago. “I have been emotionally drained for years,” she told us. “And because I've been emotionally drained, I have not grown my business.”

Guests:

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: “I have a confession. I am afraid to raise my prices because I’m focusing on the naysayer customers.”

Jay Goltz: “What would be the point of having happy customers when you’re going broke?”

Full Episode Transcript:

Loren Feldman:
Let’s get started. Dana, we haven’t spoken with you in a couple of weeks. What’s going on with Paralee Boyd?

Dana White:
I’ve gotten the plans together for when we reopen. I had a conversation with my manager and my operations manager about what that will look like and what that means for the staff. I will keep both our staff and guests safe. I’ve been working on growing Paralee Boyd, which is updating the website, doing marketing as far as meeting my customers where they are, developing a product line of CBD hair growth products, because there aren’t really that many that are geared toward—

Loren Feldman:
I’m sorry, using what?

Dana White:
CBD, which is cannabis.

Loren Feldman:
Oh, it just didn’t make sense to me in the context of hair. What’s the purpose of using it in a hair product?

Dana White:
Cannabis has a lot of great uses, and so I have been doing my online research and understanding what my market needs. They want their hair to be thick and they want it to grow and there are things out there—castor oils and such for growth and thickening—but I wanted to kick it up a notch. So I started doing my research and talking to people who know about the hemp plant and they said, “Dana, cannabis is the way to go.” Or CBD, which has no THC, so you can’t get lifted from CBD.

What I’ve been doing [is] I’ve been spending time on the phone with CBD suppliers, as well as sources of where I can get the other ingredients in bulk for my haircare products that I’m going to use and then developing a treatment in the salon for hair growth and thickening based on some of the things we already do. I’ve also been putting together kits for branding, so that’s speaking with vendors overseas to determine what their prices are for paddle brushes, bobby pins, hair clips, everything to make the Paralee Boyd brand so you can get a nighttime hair-care kit that includes a satin pillowcase or hair bonnet shipped to you at home.

We have not gone into the product/retail space. My brand is trusted. Women trust Paralee Boyd to come in and get their hair done, and I’m hoping that when we launch these products, that they will still put their trust in that brand knowing that we can take care of them at home.

Loren Feldman:
Dana, would these kits that you’re talking about be a one-time purchase or a subscription?

Dana White:
A little bit of both. You can buy a satin pillowcase or a headscarf, but you may need another one. And of course, the products will run out, so the hair growth oil, if you still want to keep using it, and the shampoo and conditioners are going to run out, so you can purchase those again. You may buy a blow dryer one time until the blow dryer dies and you can buy another one.

This subscription idea was brought to me, and I’m thinking about it. But I’m really just focused on what our retail is going to do. If I’m seeing guests are repeatedly buying products, I will probably turn it into a subscription for those that are interested.

Loren Feldman:
Have you thought about the pricing for these kits?

Dana White:
I have, and it was funny, I was on the phone with another small business owner last week, and she told me that I was pricing way too low. So right now—

Loren Feldman:
That sounds familiar, Dana.

Dana White:
Yeah, sounds familiar. Yeah, it’s a symptom. What I’m putting together is the cost of the CBD—the cost of everything—the cost to bottle, and then once I have that price, just kind of running it past some other business owners who have retail and deciding what my markup should be—which is a hefty balance between what my people will pay and the cost to produce it. I want to not do it too low, which is something I do, and just do it at the right price.

Loren Feldman:
Well, since you’re referring to it, let’s talk about that. We have spoken in the past about your pricing of your basic service at your hair salons. As you start to think about reopening, have you given any more thought to how and when you might raise your prices for your salon service?

Dana White:
Yes, I have, and the balance right now is not to do it too soon, but don’t leave money on the table when it comes to opening. So I think that’s a matter of communication with my guests. First, it’s a matter, as an owner, of picking a date. And if I’ve learned anything during Covid-19, it’s picking a date by putting Paralee Boyd first, but not putting Paralee Boyd first to the point where your guests think that you only care about Paralee Boyd and you don’t care about them.

It’s a matter of picking a date and communicating with my customers—not that we’re raising our prices as a reaction to COVID-19, but we’re raising our prices because it’s not something we’ve done in the past seven years and it’s time. Giving them enough headway. It’s not a matter of months. It may not even be a matter of weeks, but communicating to them that these are our plans, and we’re going to go forward with these plans on this date.

Loren Feldman:
Jay, what do you think of that? I can certainly understand why this could seem like an awkward time to raise prices in the middle of a pandemic and an economic crisis. On the other hand, this might be the time when people would understand it best. What do you think?

Jay Goltz:
I don’t think they need to understand it. They just need to pay it. And the fact of the matter is, telling them, “We haven’t raised our prices in seven years” kind of says it all. At 2 percent inflation for seven years compounded, that’s about 15 percent or so. That means that $40 seven years ago is now $46. So to raise your price, I think I would take it to $46, and then in a year from now, raise it to $50 or $48 or something.

But I’m telling you this: If you said to me, Jay, I’m gonna give you 10 seconds to blurt out something to the Jay from 30 years ago, what would you blurt out? The first thing I would blurt out is, “Raise your prices.” Because it’s emotionally difficult. I have been underpriced my whole career, and I was growing like crazy. We’re not talking about 20 percent. We’re talking about 3, 4, or 5 percent. It’s the value proposition. I give a tremendous value, and you’re giving a tremendous value. And frankly, it was a mistake not to raise prices $1 every year for the last seven years. You’re making up for it.

This is a common entrepreneur mistake: “Oh my God, if I raise my prices, I’ll lose all my customers,” and that’s just not how it works. I don’t think there’s any apology needed. “I haven’t raised them in seven years. We need to raise our prices.” Period. End of story.

And, important: train your staff. Somebody is going to complain. Count on it. “Oh my god, Dana! See, Mrs. Smith yesterday, she really laid me out.” Yeah, we figured that into the formula. Someone’s gonna complain. Deal with it. They’re gonna complain, sorry. Everything else has gone up, our costs are going up, it’s the way it is. They don’t have to all be happy. Here’s the point: if 3 percent of the people leave and never come back, you’re still way better off. Count on it. Figure it in. Tell your employees, “We’re going to lose 3 percent of our customers.”

Loren Feldman:
Okay, it’s easy for Jay and me to tell you to raise your prices, but it’s your business and you know your customers better than anyone. Was that convincing, Dana?

Dana White:
It was. But again, it’s still a matter of timing. The other component to raising our prices is we have been functioning, but we haven’t been operating. I just believe that we need to communicate the growth and the changes that we’ve made before telling the guests that we’re going to raise the prices, even though it’s just to raise the prices. What I don’t want my guests to feel is, “I’m getting the same old thing.” No, there have been a lot of changes. Again, it’s communication. It could go out in an email, and then the prices could go up a week later. I just don’t want to open, and now prices are $50. I also don’t want to open, and then one month later, prices are $50.

Either way, I think it’s important that I communicate with my guests, because I’ve kept my prices the same for seven years, and give them time, not a lot of time, but enough time to let it sink in. It may not take a lot of time. They may get the email and go, “Great, there it is. Done.”

Jay Goltz:
Why would you go from seven years of not having the stomach to raise prices to all of a sudden flicking the switch, and you’re raising them 25 percent? If I were you, I would take it to $46. I don’t know that I’d take a 25 percent increase. That’s more than inflation. You’ve just lost your inflation argument. On top of which, you still have this guilt thing. You’ve got to give them more. No, it’s called inflation. You don’t have to give them any more. Everything else went up 2 percent a year for the last seven years. They’re making 7 percent more, everybody. How many people in this world would say, “I haven’t had a raise in seven years”? I don’t think many.

Loren Feldman:
What does someone in your market have to pay to get a comparable service? I’m not sure there is a comparable service.

Dana White:
There is, and it’s a lot more expensive than what I’m offering, even if I inflated prices. Like I talk to people all the time—

Loren Feldman:
What are people paying elsewhere then?

Dana White:
Sixty, seventy dollars. So that’s why I was gonna take it to $50, and I was about to ask Jay, “Do you think I should not take the price to 50?”

Jay Goltz:
Well if you’re that under market… I don’t know, maybe. That is part of the formula. I didn’t know that when I said that. If you’re that under market, maybe that’s appropriate. Frankly, most people aren’t going to do the math. They don’t know what inflation is, and they can’t do the math. So they’re not going to go, “Wait a second, 2 percent inflation for the last seven years…” Maybe it does make sense then.

Loren Feldman:
The assumption we’ve made throughout this entire crisis is that Dana is the one business in this group of business owners who can expect lines out the door. People are going to be desperate. Isn’t this the right time to raise prices?

Dana White:
I think it’s the right time, but I don’t think it’s the right time immediately. Again, I want to be transparent with my guests, and I want them to know that this was something that we had planned on before. I don’t want my guests to walk in and feel that they’re being expected to pay more because we need to make up for COVID-19. I want them to know that we are raising our prices because it’s time. Oh, and by the way, it just so happened to be at the tail end of a pandemic. That’s the difference.

I feel if I opened tomorrow, “Oh, and by the way, you guys, it’s now $50.” Now, they still may pay it, but the branding is important and the message to my guests is very important.

Jay Goltz:
I wouldn’t argue with you that waiting a month, just so that’s behind you, and say, “Okay, we haven’t raised our prices in seven years.” I wouldn’t argue, “Why do it the day you open? Why not wait a month to do it?” But I’ll tell you something else, which is critical to this. I know the picture-framing business. I don’t know the hair salon business. Your margin, like in framing, I’ve had to explain to people, “If you raised your prices 10 percent, you’d have to lose 30 percent of your customers to lose any money.” And their eyes open up wide, and I show it on a whiteboard, and they finally get it. “Oh my God, that’s crazy!” So my question to you is, what’s your breakeven analysis on that? If you raise your price to $50, you know how much you pay your people. How much business would you have to lose before you’d lose a dime on that?

Dana White:
A lot.

Jay Goltz:
A lot, because right off the bat, that’s 25 percent more money coming in. So if you lost 20 percent of your customers, you’d be back at even. You’d have to lose well more than 20 percent of your customers. I mean, if that doesn’t say it, I don’t know what does.

Dana White:
Yeah, in our slow season, we only see about 400 to 600 guests a month. We’d have to lose a significant amount of guests in order for that to happen. But here’s the thing, I don’t think the pricing is what’s going to turn people away. I think if we’re not doing our service standard, if we’re not taking care of our guests, and then asking them to pay, then it’s an issue. For me, I want to let guests know that, because of this pandemic, we’re operating differently. Now that you know how we’re operating—you have to have a face mask, we’re only letting so many people in the salon at a time—now that we’re operating differently, this is what is next, shortly thereafter.

Again, the picture was painted for me, because initially I was like, “Oh, we’re not going to raise our prices till the fall.” But then the picture was painted to me by Loren: “Dana, you know, you’re leaving a lot of money on the table if you don’t, in some way, take advantage of the volume that you’re going to see.”

Jay Goltz:
I’m not even sure that the phrase “leaving money on the table” is appropriate. You’re losing money. That’s different. This isn’t like, “Oh, you could make more.” No, you’re gonna lose money is the reality. It’s a matter of, you’re going to dig yourself a deeper hole so you can have happy customers. Well, what would be the point of having happy customers when you’re going broke? And let me ask you this question, because I hear this all the time: How did the customer turn into a guest? That’s what I want to know. I want to ask Target, who I think started that nonsense. Guess what? When I’m a guest somewhere, I get everything for free. When I’m a guest in someone’s house, I don’t pay for anything. What is wrong with calling someone a “customer”? Is that a dirty word now? That’s what I want to ask you.

Dana White:
No.

Jay Goltz:
Clients?

Dana White:
No, I use the word “guest” because Paralee Boyd is the cultural icon in the salon. It was the way she treated people. The guest comes from how you will be treated when you come in here. It’s a business, but in this business, we will treat you as a guest. Sometimes when it’s like, “You’re a client,” I think it makes it very individualized, meaning for the stylist, “Oh, this is my client.” But when you are a guest of Paralee Boyd, you are a part of this club, and there’s a way you will be treated. Your coat will be put on for you when you leave. There’s a call you will expect. So I say “guest” because we treat them like we would in our home.

Jay Goltz:
Okay, do you think that the person who goes into Target and buys the tube of toothpaste, do you think they’re a guest or do you think they’re a customer?

Dana White:
I think they’re a customer.

Jay Goltz:
Thank you. That’s all I wanted to hear.

Dana White:
Right, you will go into Target and not be seen.

Loren Feldman:
All of that suggests to me that you should send out an email tomorrow saying you’re going to raise your prices to $50, and then you should do it from day one. Because your customers are used to being treated like guests. They obviously trust you. This is a time of a health crisis, and they’re going to be willing to come into your store and trust that you’re doing everything right. They’re going to be so happy to have your service back after not being able to come for several months that that $10… I think they’re going to be very happy to pay it.

Dana White:
I have a confession. I am afraid to raise my prices because I’m focusing on the naysayer customers. I’m focusing on a very integral conversation I had with the head of an organization that is slated to help business owners, and it was a very tough conversation. It included gossip, it hurt me, and it took the wind out of my sail. I’ve been reluctant to raise my prices because of that conversation with her and the conversations with other—not a lot of guests. But I haven’t focused enough on the guests who love us, especially the ones who have told me, “Girl, yeah, raise your prices! I used to get my hair done for $40 when I was back in college.”

Jay Goltz:
Wait, the person who’s complaining, do they work at a not-for-profit? Are they business people?

Dana White:
They work at the federal government.

Jay Goltz:
Okay, same thing. How nice for people who either work for not-for-profits or the federal government to start telling business people how they should operate. How nice! Like, they’ve ever had to make payroll on Friday. I would say, this is your Achilles’ heel.

Dana White:
Yeah, my Achilles’ heel, totally.

Jay Goltz:
And I’m telling you, after 20 years of speaking to frame shop owners, I see people who have no money, who are broke, who have let the customer—that one out of 10 customer who just rips on them about the price—I have watched them ruin their entire life’s savings, putting kids through college, retirement. I’ve seen people be slaves to that for 20 years, because they’ve got in their head Mrs. Smith who said, “Oh my God, that’s too much money.” When I show them the math of it, it’s like, they get released. I swear to God, they come back to me a year later and say, “Oh my god, I want to thank you. A year ago, I owed $10,000 in debt. Now I paid everything off, and I doubled my income. Thank you.” It happens all the time because someone needs to tell them, “Stop listening to that one out of 10.

Dana White:
This is it. We’ve been speaking about COVI-19 on the podcast, and the growth of business owners, and the growth of me for weeks. But my one hurdle to get over is, I have been emotionally drained for years. Because I’ve been emotionally drained, I have not grown my business. I’ve done more during this time to grow Paralee Boyd than I have in the years that I’ve been working, that I was officially “open” open.

Loren Feldman:
Dana, when you say that you’ve done more, you’re talking about during the crisis, while your shop’s been shut down, you’ve done more? And you’re referring to your thinking about how the salon’s going to operate when you reopen, and the kits and the products? Is that what you’re—

Dana White:
Absolutely, and I’m like, “Dana, what happened? Why have you done more work now than before?”

Loren Feldman:
You’ve got a chance to breathe.

Dana White:
I’ve had a chance to breathe, and I’m no longer tied to the call or the text message you get saying, “I know my job is to help minority businesses grow, but I stopped coming to your salon for months, and there are people around me who asked me, ‘You don’t still go there, do you?’” That’s a text and a phone call. From her, that really hurt, because they had no problem showcasing me in front of government officials. They had no problem showcasing me at the Congressional Black Caucus. But to hear that… We’ve done so much work to be better after all we’ve been through. And then when I said, “Hey, we’ve made changes since… you haven’t seen us since September. We made changes in August that you started to see in the business in October.” “Well, what efforts are you making to communicate that to your guests?” And then you’re getting it from your staff: “Well, Dana’s a business owner. She should be able to pay me through this crisis. Well, Dana doesn’t care.” My flaw has been I have not communicated with my customers. I have not communicated with my staff as well as I could, because I have been emotionally protecting myself.

Jay Goltz:
I feel your pain. I would imagine that that text, that email, that conversation was extremely upsetting. I’m sure you are accepting responsibility for at least part of it, the communication piece. When you get to the end, and you’ve done everything right with a noble cause, it’s like, you know what? There are gonna be some people who want to rag on you.

But here’s the best thing that happened to me in all the years of me doing speeches at the picture frame show. I went on an online thing, one of the chat rooms, and this guy says, “I went to Jay Goltz’s seminar, and I’ll admit, he’s a successful guy, and he’s built a successful business. But he is so arrogant and condescending, I stormed out of the class!” And my first reaction was, “Wow, I didn’t think I was coming off like that.” And I thought more about it. I had that one comment and another 40 comments, because I get the things afterward of the responses: “This was the best thing I ever went to. Thank you so much, blah, blah, blah.” And I realized I probably reminded him of his father or something, and like, sorry. I said to myself, “What could I have said that was so offensive?” and I figured it out eventually. This is equivalent to saying you have an ugly baby. When you tell a frame store owner that “You don’t need 2,000 corner samples in your store, it’s a waste of space,” that’s like saying you’ve got an ugly baby. Now what’s the surprise ending to the story? He’s out of business.

Loren Feldman:
Sum it up. What’s the message in that for Dana?

Jay Goltz:
The message in that is you can’t let the one or two or three people get in your headspace. Listen, it certainly made me think about it, and I did. And I am a little more careful now of don’t sound arrogant, like, “You must not know what you’re doing.” And it helped a little bit, but in general? What the hell was that, he stormed out mad? But in your case, the person who complained—is that a fellow business owner? No, she works for the federal government. Oh, what a surprise.

Dana White:
But that’s the thing. I’ve had several fellow business owners, and that makes it worse when they’ll say, “I’m not impressed with your receptionist,” as if impressing you is a KPI.

Jay Goltz:
There, I’ve gotta take a line though. There’s probably something wrong with your receptionist. They’re trying to be kind to you. The receptionist probably has an attitude or something. Why would someone say that to you?

Dana White:
But that’s what I’m saying. Come to me with a specific instance. Don’t come to me like, “I’m not impressed.” Well, tell me what happened.

Jay Goltz:
Did you ask them what happened?

Dana White:
Yes, and then it was also the end of the text message: “Oh, and by the way, how’s that expansion going.” And it wasn’t a question, she ended it with a period. And I was just like, you know what?

Jay Goltz:
Wow.

Dana White:
In short, I’m saying negativity can be very negative. I’m focusing on the people who have been negative, which I know to have been hurtful and not productive.

Jay Goltz:
I would get rid of the word “negativity” and put it into two buckets. Are they being critical, giving you something you’re doing wrong that you could do better? Or are they attacking you? Those are two different things. But in some cases, it sounds like they’re attacking you. I get that.

Dana White:
I don’t think it’s attacking. It’s nasty. It’s, “I want to help you, but I want to express my anger.” When I’m trying to help someone, it’s not about how it made me feel. It’s about speaking with that business owner about things that may need to be improved, and here is how I can help you. Can I help? I’ve been focusing on the people who are, maybe not even angry with me, but just angry in some way. They’ve laid it at my feet, and Dana has said, “Okay, I’ll take it on.”

During this time of COVID-19, I haven’t been in a space where I’ve had to take it on. I’ve been so productive. My Achilles’ heel and my flaw and my confession is, I have not communicated with my staff because the messages I’ve been getting back are, “Why aren’t you doing more to help me in my situation? Why aren’t you paying for me through this time?” That’s the one thing. And the second thing is, I have not communicated with my guests because it was, “Well, I didn’t get the email.” “Well, why aren’t you doing this?” And here’s the thing: No, I haven’t been sick, thank God, but when you’re a business owner, COVID-19, nothing affects you. So to the people who have been critical: Did it ever occur to you that something might have happened? Did it ever occur to you that she might have been dealing with things?

Jay Goltz:
Wait, wait, I have to give you the greatest advice ever. I put this in the top five. She’s retired. She was my controller—not a kid, not a $5, $10, $15-dollar-an-hour person, like my first professional person. She’s working here for six months or a year. I’m younger than you are at this point. I’m probably 32 or something. And something happened, I don’t remember specifically. And I said to her, “Boy, did anyone ever think about how I feel about that? Bah, blah, blah.” And she turned to me, and she said the most poignant thing ever. She goes, “Jay, everybody knows that the boss isn’t a human.” And that was the most poignant… I’ve never forgotten that. I’m telling you, get over it. They’re not going to treat you better. You’re not human anymore. You’re the boss. Deal with it.

Dana White:
Yeah, I’m the owner.

Jay Goltz:
You’re the owner. It’s okay.

Dana White:
You are not human.

Jay Goltz:
Yes, and it’s okay. I’m not mad about it or bitter whatsoever. I’ve accepted it. Okay, I get it now. You’re the boss. That’s part of figuring out you’re the boss. It’s okay.

Dana White:
But knowing that I am human, I have to find a better way. I can’t do what I’ve been doing. I cannot not communicate and I have to find a way to the middle ground between taking too much on myself and not communicating. But then also listening to the positive critiques or the critiques that are helpful versus the critiques that are just meant to dump on you. I’m trying to find that middle ground. I have great ideas to communicate with everybody, and we’ll be doing so because I have to.

Jay Goltz:
Instead of looking for the middle ground, this is simply a case of, you need to stop taking things personally. You just need to. Whatever they say, there’s probably something to it. I believe the customer’s usually right. If the customer made a comment about your receptionist, there’s probably a problem with your receptionist. And the other thing that has saved my head, and I’ve helped lots of employees, you know the employees in the back crying because somebody just dumped on them? I’ve had it, certainly. I always tell them, “Why don’t we take this approach? Whoever just dumped on you? Why don’t you just assume they just found out their mother’s dying. Let’s give them all the benefit of the doubt. They’re having a really bad day, and they took it out on you, so let’s not take it personally.” Let’s not get mad. Let’s listen to the criticism and say, “Really? Can you tell me specifically what my receptionist did so I can understand and do something about it?” Because there’s probably something to it.

And then to your other point, there are some people who are having a bad day, and they just read about you, and they’re jealous or they’re pissed or whatever. Yeah, whatever. I have the benefit of doing this for many years, and I finally have come to terms with all this stuff. And it’s okay. It doesn’t have to make you crazy.

Dana White:
Okay.

Loren Feldman:
Jay, let’s give Dana a little bit of a break here. What’s going on with Jayson Home these days?

Jay Goltz:
Well, I opened because the state of Illinois says if you sell plants, and landscapers buy the plants, you can open. I have a legitimate 5,000-6,000 feet of plants outside in my outdoor lot. We sell to landscapers, so we opened. Customers are extremely happy that we’re open, and they’re all wearing masks. I’ve had two episodes since I opened.

Loren Feldman:
You told us about one, I think. The Yelp review.

Jay Goltz:
I have a new one. This one’s better. My manager is sitting there on the phone. I happen to walk in. “Yeah, we’re open.” I can see the tone of the conversation, someone’s complaining. “You know what? The owner’s standing right here. Let me give him to you.” So, no problem. He hands me the phone. She tells me her name. I give her credit. The woman says, “This is so and so. I have to tell you, I just can’t believe you opened up your furniture store.” “Well, I sell plants.” “I know. But it’s a loophole. That’s just not right. I’m not the only one who feels that way.” Dana, does this sound familiar? “I’m not the only one who feels this way. And I can’t believe you’re opening up. You’re the only furniture store in the city of Chicago that’s open.” And then finally, she revealed, which I also respect, she owns a small gift shop two blocks away, and she’s closed. “And it’s not fair!” And I said, “Wait, how long have you been open? How long have you been in business?” She said, “Nine years.” I said, “Okay, let me give you the 42-year perspective of things. Do you still think the world is fair, really? I know someone who died of cancer last year, the nicest person I knew. You think the world is fair?” And then you could hear, “Well, yeah.” I go, “I should worry about the multibillion dollar competitor I have that’s owned by a German company. I’m trying to keep in business, take care of my employees. I’ve gotta tell you, I’m following the law.” And so meanwhile, this is the really important entrepreneur part. I go, “Let me ask you a question. Did you get PPP money?” “Well, my husband applied for it. I’m waiting, but it’s just a loan.” I said, “No, no, it’s not just a loan. If you use it properly, it will turn into a grant. You don’t have to pay it back. Did you go for unemployment?” “Well, no. They said…” “Well, you’ve been paying unemployment for years. Why wouldn’t you go for unemployment?”

So by the end of the conversation, I was her adviser, and she wants to come by and have lunch. But this shows you how people go broke. Instead of taking care of business, instead of going for the PPP thing and going for unemployment, she’s using her time to call me up and whine that I’m open and she isn’t. I’m not making any apologies. Yeah, I’m open, and we’re wearing masks, and we’re cleaning everything.

Loren Feldman:
How’s business?

Jay Goltz:
It’s been okay. We’re bringing in decent business. The customers are thrilled to be here.

Loren Feldman:
Have you brought back all your employees who normally work in the home store?

Jay Goltz:
Yes. They’re all working. Some were hesitant. Everybody came back, but I had to make a line to say, “Look, if they don’t want to come back, it’s a free country. They don’t need to come back to work. They can go work somewhere else. They can not work.” I certainly am not suggesting everybody should be having parties and not wearing masks and taking guns and going down to the city hall. I’m not saying that. There’s a point where, if somebody is petrified to leave their house, I’m really sorry. That’s a personal choice of theirs. I can’t keep this job open forever for them. I can’t. That hasn’t turned into a case. But I was prepared if it did. At some point, people need to come back to work.

Loren Feldman:
Are you at that point?

Jay Goltz:
I think we decided [is] we’ll give it till the end of the month when the whole state is officially open. But if somebody on June 1st says they’re not coming back to work, I’d have to say, “Thank you for your years of service, but we’re going to have to replace you.” I actually have an obligation to customers to have a human being working here to take care of them. I can’t accommodate them.

Loren Feldman:
Would you do that with an employee that you had for 10 years and really liked?

Jay Goltz:
Well, what are my choices? Not have anyone work here? Let me make it a better question for you: “Jay, if they were over 60…” Okay, I do have a guy who’s my oldest employee after me. If he wants another couple weeks, I’ll absolutely work with him on it. He’s been with me since 1986. It’s not a black and white thing. If he has a legitimate thing, or if they’ve got a heart condition, I certainly will… It’s not black and white. But if I got someone who’s 32 years old, who’s afraid to leave the house, who doesn’t have a medical condition, who doesn’t live with an old person… What am I going to do? “Okay, everybody, you just stay home. I’ll take care of customers all by myself.” I mean, there’s a point where you’ve got to take care of business. So luckily I haven’t had to deal with that.

Dana White:
Does that mean taking them off unemployment?

Jay Goltz:
I took everybody off unemployment. I got the PPP money. Everybody’s off unemployment now, and I will tell you, I have lots of employees [where] this was the lottery for them. If you make 40 grand a year, and if you got your unemployment insurance, and then you have the extra hit from the government, this little thing has just made them about 4,000 bucks. They got another 600 bucks. They come out just fine. I don’t begrudge them. Like, whatever.

Loren Feldman:
That’s all true. But it can put an employee in a difficult position—the employee you just described who’s deciding whether to come back or not. There might be extenuating circumstances: kids at home, older parents, people to care for, having to travel on public transportation—whatever it might be, that person is going to lose that unemployment if you offer the job and they turn it down.

Jay Goltz:
Well, that doesn’t mean that I would go ahead and contest the unemployment. If that was the case, I wouldn’t contest the unemployment. It hasn’t happened, but if I had somebody working here for 10 years, and said, “Listen, I just can’t.” I would say, “Stay on unemployment.” But that doesn’t mean I don’t have to replace them. I need employees. I can’t run the place on good wishes.

Just so you know, I’ve had the opposite experience. I’ve had lovely notes and people extremely happy that—I didn’t have to, but It’s the least I can do for them—we’ve paid people who, for whatever reason, didn’t get unemployment, filed too late. We’ve tried to make everybody whole, and we’ve succeeded. At some point, I told my key management staff, “Look, here’s the reality. If everybody got unemployment plus some extra money, I don’t need to give them more money.” I’m going to lose hundreds of thousands of dollars. At the end of the day, I’m the only one losing in this whole deal. I’m not complaining about it, but it just is what it is.

My employees have come out just fine, thanks to the PPP and thank you government. It was a lifesaver. I’ve got 110 people. I haven’t had one bad experience, one disappointing conversation with an employee—not one. I’m here to tell you, part of that is, I have good employees. I’ve worked really hard at it for 40 years. I’m more careful who I hire now. If they’re the wrong people, if they don’t fit here, they’re not here anymore. I’ve gotten nothing but positive things from all of them. I haven’t had one ugly anything with anybody who works for me. And the only thing from the customers is the jerk doctor who needed to go to Yelp about how we asked him to wear a mask. Even the lady that called me, she’s my best friend now.

Loren Feldman:
Are you gonna have lunch with her?

Jay Goltz:
Sure. Not until lunch is okay. But I felt bad for her. I understood where she was coming from. I think I convinced her by the end, “Look, it is what it is.” To go ahead and throw on me that I’m a bad person, I’m working the system, and I should stay closed because everyone else is? That’s just preposterous.

Loren Feldman:
Well, it is a loophole, but I agree with you…

Jay Goltz:
It’s a pretty big loophole. If you sell plants, how about Home Depot? How about Costco? They’re all selling furniture all because Home Depot sells stuff, what, to fix your heater? Any of these big businesses, they’re selling other stuff than the stuff that is essential.

Loren Feldman:
I’m just saying, if you didn’t sell plants, you wouldn’t be able to open the home store.

Jay Goltz:
But I do sell plants. That’s the point.

Loren Feldman:
You’re kind of arguing, if she sold plants, she’d open her store too, and I think that’s a pretty good argument.

Jay Goltz:
That’s what I said to her. And I go, “You know what, you want me to send over some plants? You can open.” And she goes, “Oh, well, that would be hypocritical,” but she was thinking about it. And then I thought, “Wait, that won’t work because you need to sell to landscapers, I forgot.” But oh, she was thinking about it. I actually said it to her, “I can assure you, if you were selling plants, my guess is you’d be open.” It wasn’t an adversarial conversation. It was a business owner to business owner conversation, and I totally respected and appreciated she admitted who she was and gave me her name. I’m used to dealing with customers. It was a very pleasant conversation.

Dana White:
It’s a lot of judgment. That’s what I have to do better at shielding myself from. I see it on Facebook: business owners judging PetSmart because they’re grooming dogs, because their business is considered essential. And that service is not, but because they’re open, they can do it. There’s just a lot of judgment going around, and it’s tough.

Loren Feldman:
We’re gonna have to wrap up. But Jay, let me ask you this, I was really intrigued by what Dana said about how this crisis has finally given her a chance to breathe a little bit and to think about her business and to work on it in a way that she hasn’t been able to previously. I think there’s such an important lesson in that. I’m just curious, for you, you’ve had downtime as well. Obviously, you’re in a very different position. You’ve been in business much longer. Your businesses are much more mature. But have you gotten anything out of this period?

Jay Goltz:
Absolutely. This has disrupted the market, and now’s the time to try to make something positive out of it. Three things. Number one, competitors are going to go out of business. There are going to be competitors that stop giving service because they’re on defense and they didn’t bring people back or they don’t want to put enough inventory in. Their service is going to deteriorate. I’m suggesting, take this time, fix up your website some more, put some more energy into your website. People are going to be looking for a new vendor. That’s one.

Number two, there are going to be some key employees out there who got laid off or who aren’t happy with the way their boss treated them. This might be an opportunity to pick up an employee you might not have even thought of working for you before, and maybe it’s time to put an ad out there and look for them, or call someone who you’ve had conversations with. There’s absolutely an opportunity to pick up some people.

And three, what a great opportunity to buy real estate right now. The interest rates are mind-bogglingly cheap, and there are building owners who want to go hide under the table and get rid of their property. That’s what I did in 2008. I bought a huge building for a cheap price. I’ve gotta tell you, I did the guy a favor. I got him off the hook. It worked for everybody. If you’re thinking about buying real estate, I know this is counterintuitive, now might be the time to do it because it’s on sale, and the interest rates are dirt cheap. SBA loans are the greatest thing the government has ever done.

Loren Feldman:
SBA real estate loans, in particular, you’re referring to?

Jay Goltz:
Yeah, 504 loans, where the bank takes part of it, the SBA takes part of it. It’s a tremendous thing. Now’s the time. I’m suggesting there’s a point to where you’ve got to get off defense and get on offense, if you can.

Loren Feldman:
The “if you can” is important. There are a lot of people who are just trying to make it to tomorrow.

Jay Goltz:
I understand that. I’m just saying, if you can. But in some cases, you could go fix your website up. I mean, just change the copy, change what’s on there, that doesn’t cost any money. I think everybody can at least work on their website. Most people don’t think they have a “ten” website. They’d say, “Well, it’s not bad, but I’m working on it.” Well, now’s the time to really work on it, put some real energy into it.

Dana White:
That’s what I’m doing right now. I’m working on my website. But I will say that I have to push back on you a little bit, Jay, because working on a website is free if you know what you’re doing. For me, working on my website isn’t going to be free.

Jay Goltz:
Part of it is free, though. Writing the copy is free.

Dana White:
Yeah, the content is free.

Jay Goltz:
Are you suggesting that I’m coming off arrogant and condescending?

Dana White:
No, not at all.

Jay Goltz:
Certainly, you’re right. If you want to redo your whole website, that’s a whole other animal. But I’m talking about just changing some of the copy on it and doing the light stuff. But you’re right, if you want to really redo it, that’s gonna cost some money.

I go on some websites and I see their blog post is from 2017. It doesn’t look good. If nothing else, take the date off. Seriously, if nothing else, just take the date off. I read websites all the time. I think to myself, “Wow, you put that on your website?” I mean, stuff that just doesn’t have any relevance about why I’d want to do business with you.

Loren Feldman:
Dana, last question. Did this conversation make you feel better or worse?

Dana White:
Much better. I just have been focusing on the wrong thing. I had the opportunity to speak with a business consultant here in Detroit, and he said the same thing. “You’re focusing on the wrong thing.” I think even though I know I’m focusing on it, I’ve been hurt. I don’t mean to sound like a wuss, but I’ve been hurt, and I’ve been productive by not being as exposed to that hurt. I need to put my big girl [pants] on and be probably pleasantly surprised that people will respond to me better once I put myself out there. But I’ve been [taking] baby steps to putting myself out there because I’ve been hurt, and this conversation has again reiterated to me, “Hey, you’ve got to do what you’ve got to do. You’re a business owner.”

Jay Goltz:
And since I’m not arrogant and condescending, I absolutely can appreciate how painful that must have been to have women who you respected who had been helpful rip into you. Because I’ve never had that. I can’t ever think of a situation where I’ve been in that situation, and you’re getting a lot more PR than I got when I was at that stage. So yeah, you have absolutely been vulnerable. But I’m telling you, it’s about just saying to yourself, “I’m just trying to do a good job and take care of my clients—or your guests, excuse me—and just say, “It’s part of the program and I’m dealing with it.” I know you’re coming to that, so good for you.

Dana White:
Yeah, and the pricing will go up, and the pricing will go up…

Loren Feldman:
All right, that’s what we wanted to hear. My thanks to Dana White and Jay Goltz. Once again, you guys have kept it real and shared things that you very rarely hear business owners share. I really appreciate it. Thank you for taking the time.

Episode 16: Dude, You’re Gonna Get on an Airplane?

Karen, Jay, and Laura talk about dealing with questions they’ve never faced before: Is it safe to fly again? What do you do if you run out of inventory and can’t get more? How do you entice employees back into the office who’ve either been happy working from home or happy collecting enhanced unemployment? Do you offer hazard pay? And if so, how and when will you stop? “We're trying to stay in business, for God's sake,” says Jay Goltz. “We will have been shut down for two and a half months. And there's a point where I'm the only one who's gonna be losing money in this deal. At the end of the day, [my employees] are getting extra money from the government for unemployment. They're getting hazard pay. Everybody at the end of the year is going to have a banner year for income. And I'm going to lose hundreds and hundreds of thousands of dollars.”

Guests:

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

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

Karen Clark Cole is co-founder and CEO of Blink.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Laura Zander: “We had a huge bump in business those couple days that the stimulus checks all hit. Huge, record-breaking days.”

Karen Clark Cole: “There are some people, they’ve got a lot of distractions at home, they don’t have a good office setup. It is more difficult for them to work. And other people are just lonely. They’re in an apartment by themselves, and they can’t take it anymore.”

Jay Goltz: “At the end of the day, [my employees] are getting extra money from the government for unemployment. They’re getting hazard pay. Everybody at the end of the year is going to have a banner year for income. And I’m going to lose hundreds and hundreds of thousands of dollars.”

Full Episode Transcript:

Loren Feldman:
Let’s start with a quick update. Karen, we haven’t spoken with you in a couple of weeks. Is Blink still doing reasonably well?

Karen Clark Cole:
Yeah, things are going well. We’re starting to work on a back-to-work plan, a phased approach over the summer.

Loren Feldman:
Let me clarify. You’ve been working all through this. By back to work, I assume you mean back into the office?

Karen Clark Cole:
Correct. Back-into-the-office plan. Everyone has been very busy, and in fact, we are slightly above 20 percent growth for the year, consistently, even over the COVID times.

Loren Feldman:
Wow.

Laura Zander:
Hey, so I want to interrupt, sorry. Your back-to-the-office plan… how are you gonna do this? I’ve got quite a few people who are really getting comfortable working from home. I’m not so sure that they’re gonna want to come back, and you know, part of me doesn’t blame them. So I’ve been thinking maybe we let them work from home two days a week for a while.

Karen Clark Cole:
Laura, I’m one of those people. I’m quite comfortable sitting here at home with my cat and my birds and my dog.

Laura Zander:
Oh my God, you’re like the old cat lady?

Karen Clark Cole:
Oh, yeah, totally.

Loren Feldman:
Hope you keep the cat away from the birds.

Karen Clark Cole:
The cat’s watching the birds out the window. It’s great. It’s a little show. Anyway, you’re right. Most importantly, though, we’re asking people to continue working at home if they can, throughout the summer, at least—until further notice is what we’re saying. So we’re saying, if you can, the best advice is still to continue working from home as long as you can. That’s the safest for our employees and for their families. Also, we’re trying to allow space in the community and in our offices for those who need to go back. So if you don’t need to go back, we’re asking people, please don’t. And things that that inquiring sort of in the need world are,

There are some people, they’ve got a lot of distractions at home, they don’t have a good office setup. It is more difficult for them to work. And other people are just lonely. They’re in an apartment by themselves, and they can’t take it anymore. Whatever the reason is, we’re letting everyone decide. You may have a space reason, all kinds of different reasons. We’re not going to judge any of that. So if anybody wants or needs to come back to work, we have a few people who, once we open up—like hosts—will actually need to be in the office.

Then we’re doing a poll. Actually, I just sent the notice out today. On Monday, we’re going to call people and find out who actually wants to come back. Then we’ll create an office plan for the number of people who will be in the office, in terms of spacing desks apart. This is all starting in June. Phase Two is slated to be starting early June. And of course, that could change. But right now, we’re saying we’re going to open our offices beginning of June and we’ll create the proper safety structures in the offices for people to come back safely. That’s meetings of no more than five people. We’ll keep the desks apart. We’ll still use all the sanitizing and those kinds of protocols will be in place.

Laura Zander:
And are you picking up any resentment from the people who have to be in the office and who don’t have a choice?

Karen Clark Cole:
There are very few of them. There’s like two people who actually need to be there. So, no.

Laura Zander:
What about you, Jay?

Jay Goltz:
I’ve got a big problem with it. I’ve got half of my businesses shut down completely because it’s the framing business and there’s no accommodation out there for being open, and my home store—I have about a 7,000-foot lot outside—selling plants now. I’ve got a full load of plants so I can be open. The city already came in last night to audit us because someone complained and they admitted it was probably a competitor.

Loren Feldman:
Jay, let’s clarify there. Chicago has not allowed all retail to open. You’re kind of using a little bit of a loophole—

Jay Goltz:
No, no. It’s not a loophole. Black and white, it says if you sell live nursery products, and you’re selling to landscapers, you can be open. So I’m open.

Loren Feldman:
But you’re not only selling the plants. You’re opening your whole home store, which if you didn’t sell plants, you wouldn’t be able to open.

Jay Goltz:
Yes, exactly. But Home Depot is open, and it’s selling all kinds of stuff that’s not allowed. So it’s not a loophole, it’s just…

Loren Feldman:
But that explains [how] you have competitors who probably are not open, and that’s why…

Jay Goltz:
Not probably. None of them are open because they don’t sell plants. They’re trying to poke me in the eye, and it’s like, tough luck. And they said, “You’re doing everything right. Everyone’s wearing a mask. Everyone’s six feet away.” We’re cleaning everything.

Of course, there’s someone who comes in who was just waiting for an opportunity, and my guy says to him, “You need to wear a mask.” So what does this guy do? He’s got to go back home, get on Yelp, and roast us: “I’m a doctor. I’m a surgeon. And this is baloney. No one’s gonna tell me to wear a mask!” He goes [on] a whole tirade about, “This whole thing is overblown, and Northwestern hospital is half empty, and blah, blah, blah, blah, blah.” And it’s like, really? Are you really a doctor? And what an embarrassing thing for doctors everywhere. We’re just following the law. Then he went and did it also to Whole Foods. He’s going around because he’s got nothing to do but go after people who are trying to follow the law and stay safe.

Loren Feldman:
Jay, when you started this, you said that you have a big problem. Is that the problem that you were referring to?

Jay Goltz:
No, no, the problem is, people are coming into work in the home store, dealing with customers, not thrilled. And I’ve got people sitting at home getting paid, doing nothing. So, of course, they think “Well, wait a second, I like that program better. I’d like to be home doing nothing and getting paid.”

Laura Zander:
What do you do about it?

Jay Goltz:
What we’re going to do is, we’re going to pay hazard pay to the people who are coming into work. And then of course—and I’m very, very appreciative of the PPP—but the SBA—and I’ve read a lot about this—has refused up till now to give any guidance on this. So when you say, “You can pay hazard pay.” What does that mean? Can I pay 30 percent more? 50 percent more? 10 percent more? You’ve got a bunch of law firms and accountants out there trying to read the tea leaves, all admitting they don’t know, but going, “Well, our impression is, our opinion is, our guidance is…”

Karen Clark Cole:
Isn’t that an optional thing that you can just pay what you want?

Jay Goltz:
No. Yes. Yes and no. I can. But the question is, is the PPP police going to come in and say, “Oh, no, you can’t pay hazard pay at 50 percent.”

Loren Feldman:
Well, you can do it. The question is whether the loan will be forgivable, right?

Jay Goltz:
Right.

Laura Zander:
But they don’t care. They’re not looking at each individual. It’s the sum total, isn’t it?

Jay Goltz:
You don’t know. Who knows?

Karen Clark Cole:
That’s my impression, Laura. That’s my understanding.

Jay Goltz:
But you’re using the same words. It’s your understanding, it’s your impression. Me, too. I agree with all of you, but who knows?

Loren Feldman:
This doesn’t answer the question, but they have said that they will automatically audit any loan in the amount of more than $2 million, and they will spot check loans of less than $2 million.

Jay Goltz:
I’m less than $2 million. There is some good stuff. This is what I’ve been doing for a week. I’ll give you the black and white, and I’ll give you the gray. The black and white is, you can absolutely hire people to replace people who left, no problem. That’s about the only black and white one I have. The gray ones are: can you wait a week or two? I’m gonna guess, probably not. So I already started it. I immediately put everyone on it. The gray ones: how much hazard pay can you pay? No clue, no guidance whatsoever. And can you pay vacation pay? I’m not going to do that anyway, but some people are asking that. Again, no guidance.

I’m gonna pay some hazard pay, and then if the employee is still not happy about it, there’s a point at which, you know what? We’re trying to stay in business so you all have jobs. I’m sorry. I don’t let anyone use the word “fair,” because I don’t believe that word fits in business. Is it the right thing to do? Yeah, we’re gonna give a little more money to people who are working. But if they want to go, “Well, that’s not fair. [The other employees] aren’t working.” Okay, life isn’t fair. I don’t know what to tell you.

Loren Feldman:
Karen, has anything come up for you? Do you have any concerns about meeting the requirements for forgivability with your PPP loan?

Karen Clark Cole:
No, we’re being pretty careful. But again, it’s like Jay said, it’s a little bit hard to understand.

Loren Feldman:
Oh, it’s very murky. There’s no question about that.

Karen Clark Cole:
Yeah, it seems the rules are changing. But, in any event, it will still be the cheapest loan we could ever get. We’re looking at it like that.

Loren Feldman:
Laura, what’s going on with Jimmy Beans Wool?

Laura Zander:
Kind of a hybrid of what Karen’s talking about and what Jay is talking about with the different businesses. We just got notice yesterday that all retail can be open, restaurants can be open starting Friday, I believe…

Jay Goltz:
Wow.

Laura Zander:
…in the state of Nevada.

Loren Feldman:
Friday, meaning a week from today when we’re taping this? Or meaning today?

Laura Zander:
Oh wait, today is Friday. Ah, what’s the date?

Loren Feldman:
It’s easy to forget what day it is. Today is Friday, May 8th.

Jay Goltz:
God, she’s gotta go now.

Laura Zander:
Okay, yeah, tomorrow. I guess tomorrow, I think, is the day.

Jay Goltz:
Tomorrow is Saturday.

Laura Zander:
Yeah, okay. Well, then I meant Saturday. Jesus, it ends in “day.”

Karen Clark Cole:
So technical!

Jay Goltz:
I’m in the Midwest. It’s still Friday here. I don’t know what it is out there.

Laura Zander:
I guess, as of tomorrow. Retail stores are only supposed to have 50 percent capacity and blah, blah, blah. From the Jimmy Beans standpoint, what we’re starting to talk about is, “What does reopening look like for us?” We’re not going to open tomorrow. We don’t really have any plans, for multiple reasons. Our retail store manager is an older guy. He’s in his 60’s…

Jay Goltz:
Ouch!

Laura Zander:
He’s very uncomfortable working with the public. He self-furloughed a long time ago. We don’t really have the staff to man the retail store right now. What we’re talking about doing is, do we do two hours a day or two hours three days a week? Our clientele typically skews on the older side as well.

Loren Feldman:
But it’s not a big issue for you, right Laura? You don’t really need to open your retail store.

Laura Zander:
And that’s the other part of it. Yes, we don’t really need to. We may just start with curbside pickup. It becomes more of a community service, because the knitters are gonna go crazy. They’re going crazy at home. They need their yarn.

Jay Goltz:
Can I tell you about my curbside pickup? They’re ripping up the street in front of my business right now to put in some new cable things. So my curbside pickup now has a 50-foot-long truck out in front. The entire street has now got construction guys ripping up the sidewalk.

Loren Feldman:
It is a good time to be doing street work, Jay.

Jay Goltz:
I said that, really. Better now than in a month.

Karen Clark Cole:
I have a question about that, though. The curbside pickup is a totally different set of logistics, and so are you guys just suddenly learning how to do curbside pickup? How are you dealing with that?

Jay Goltz:
We walk it out, they drive up, and they open their trunk. In our case, we left the product out in the yard—I have a parking lot adjacent to the building—and they put it in their car, and they leave. And I’ve gotta tell you, other than this doctor guy, if he is a doctor, everybody’s extremely appreciative and happy to be out and happy to support us, and it’s really been… it’s one extreme or the other. It’s a love-fest on one side, where they’re thrilled to be able to come in, or they’ve got a problem, but I’ve only had one guy who’s given us any issues.

Loren Feldman:
Jay, you basically opened that store last week during our taping of this podcast. How’s the past week been? Has business come back at all?

Jay Goltz:
Yeah, absolutely. People are coming in, and I will tell you, my friend in Arizona—Hall of Frames, he’s got eight stores—they just opened up for appointments. He said he’s crazy busy. I keep telling everybody—

Loren Feldman:
He’s requiring people to make an appointment before coming in?

Jay Goltz:
Yes. But I keep telling everyone, anyone who thinks they can predict what’s going to happen, they’re guessing. Because it depends what business you’re in. There’s plenty of people who have been sitting at home, not spending money. They’re going crazy. They can’t wait to go out and spend money. And then there’s other people who have used up their money. There’s no one-size-fits-all to this thing. Some people are going to be just great and some people are going to be devastated and there’ll be some people in between.

Laura Zander:
We had a huge bump in business those couple days that the stimulus checks all hit.

Jay Goltz:
Wow.

Laura Zander:
Huge, record-breaking days. Which is almost a little disturbing to me, as a saver. I’m like, “Oh my god, all these people got their stimulus checks and they went out—”

Loren Feldman:
And they’re blowing it on yarn!

Laura Zander:
They’re blowing it on yarn!

Jay Goltz:
Better than drugs. Probably, I guess. [Laughter]

Laura Zander:
We may go the appointment route as well. We’re just kind of trying to figure it out. The Texas side of things, again, we’re a wholesale business, and it’s just dead. Our sales have dropped so much. We’re taking this time right now—that’s why I was a little late on this call—to talk through QC procedures, really cleaning up all the things that have been neglected in this business for the last few years, retraining everybody. We’re bringing in somebody who was a master dyer years ago, and she’s gonna start retraining. I just bought a ticket to head down to Texas next week.

Karen Clark Cole:
Dude, you’re gonna get on an airplane?

Laura Zander:
I am.

Loren Feldman:
Wow.

Jay Goltz:
You are such a brave soldier. Wow, fearless.

Laura Zander:
No, it is what it is.

Loren Feldman:
I did just see a report—actually, we had it in the 21 Hats Morning Report—that for some people, they’re saying it’s actually a relatively nice time to fly. You kind of get the plane to yourself. There are no lines anywhere. There are some advantages to it.

Laura Zander:
You probably don’t have to smell anybody’s bad breath because they’ve all got masks on.

Loren Feldman:
The food choices at the airports are somewhat lacking at the moment, I think.

Karen Clark Cole:
Keep in mind, in Washington State anyway, we’re still under shelter-at-home orders, so we’re not allowed to unless it’s really necessary.

Jay Goltz:
Well, if you get on the plane, and there’s other people near you, all you have to do is give out one little [cough], and that’ll be it. You can clear the whole half of the plane for yourself.

Laura Zander:
I also just had a conversation yesterday with the owner of a trade show that I had gone to in January in New York. I had had dinner with him, and we had gone to a Broadway show, and we hugged. We hugged, we sat at the same table together right across from each other, blah, blah, blah. And he confirmed yesterday that he has not gotten the antibody test, but he’s like, “After we had dinner, a couple days later, I had 103 temperature.” He had every one of the symptoms. He’s like, “I am 99 positive.” And I think I’ve told you guys that my people got sick. really sick. Thousands of people from the show got sick.

Loren Feldman:
That’s how it spreads.

Laura Zander:
Yeah, I’m pretty confident that I’ve already been exposed.

Karen Clark Cole:
They haven’t proven yet that if you have had it, you won’t get it again.

Laura Zander:
Yeah, but I mean, I don’t know. I, maybe naively, feel like all of my travels through Asia and India for the last four years, and then going multiple times a year—and I have gotten wicked sick, like wicked sick, over the last few years—there’s part of me that kind of hopefully, naively thinks that perhaps I’ve built up a bit of an immunity.

Jay Goltz:
I think that’s quite possible.

Laura Zander:
And I’m not a hand washer.

Jay Goltz:
Well, that’s good to know. Next time I see you, I’ll keep that in mind. [Laughter]

Loren Feldman:
Laura, last week you expressed concern about the supply of yarn. You were a little nervous that you would run out of product, I think you said maybe in six weeks. Anything changed with that?

Laura Zander:
Um, no, we just might run out a little faster. So one of our mills opened this week, and they’re at 25 percent capacity. So I …

Loren Feldman:
When you say one of your “mills,” that’s one of the mills that’s a supplier? I think that you said they were overseas. Maybe Peru, Brazil?

Laura Zander:
Yeah, there’s a mill that we buy from in South Africa, and then there’s one that we buy from in Peru. So the South African one opened at 25 percent capacity this week, and the Peruvian one has not quite opened yet. We’ve put our orders in, and I actually prepaid. I sent them a note last week and said, “Can I pre-pay you a big, huge chunk?” Because we haven’t bought inventory in a while. We’ve had a little bit of sales, so I’ve been able to take that and hope that maybe we’ll get to the front of the queue.

Jay Goltz:
I’ve gotta tell you, I’d be careful with that, because I prepaid a supplier in Italy for some frame molding and he went bust and I never got paid. I lost like 100 grand.

Laura Zander:
Yeah, well…

Jay Goltz:
I’m just saying, I’m not arguing with you. You gave him 10, 20 grand, but I would just be careful because some people will just go broke and take the money.

Laura Zander:
Fair point. I mean, this business has been around for like 200 years, and it’s family-owned. And we’ve been—

Loren Feldman:
Also, there are only a couple of suppliers in the whole world, right?

Laura Zander:
Yeah, fair point.

Jay Goltz:
Calculated risk. I’m not saying you were wrong. I’m just saying, calculated risk.

Laura Zander:
Can you just say that I was right? Can we just get that on tape?

Jay Goltz:
Yeah, I did. I said you’re right. I’m not saying you’re wrong. I’m just saying, I’d limit it. That’s all. Just in case, because you never know.

Loren Feldman:
Any other contingency plans? Are there other ways to get yarn?

Laura Zander:
We still have some older inventory on-site that’s not current inventory, so not current types of yarn. We can do something with that. We have what we call “replacement yarns.” We have a hodgepodge of inventory that is just kind of random shit. Jay, you’ve probably got some random stuff at your place.

Jay Goltz:
I have hundreds of thousands of dollars of that that I’m working on getting rid of because I should have gotten rid of it before now. But for sure now, I’m going to get rid of it. Let me ask you a question. There are going to be some knitting shops [closing], I assume?

Laura Zander:
I’m sure there are.

Jay Goltz:
Have you considered sending out an email to everyone, saying, “Listen, if you’re thinking of closing and you need to get rid of inventory, please call me. I’m in a position to buy inventory.” And then you’d be throwing them a life preserver, because it’s not like they can go sell it out at cost.

Laura Zander:
Mmmmm. Yeah, we maybe could.

Karen Clark Cole:
I think it’s funny that what’s gonna happen is, a year from now, we’ll see everyone walking around with hodgepodge sweaters that they had to knit based on the available yarn.

Laura Zander:
It’s not that desperate quite yet. But yeah, that’s an interesting thought.

Jay Goltz:
Could you just say, “Yeah, that’s a great idea, Jay.” Can I play that back to you since you seem a little testy about being right?

Laura Zander:
Mmmm.

Loren Feldman:
Jay, let me ask you. When we first started taping these episodes, you were kind of bemoaning the fact that you had excess inventory. It sounds like now, it turns out that might actually be a good thing.

Jay Goltz:
Let me tell you what’s interesting, and I won’t mention names. There’s some suppliers in this industry, and I’m talking about big suppliers, that the word on the street is they might be going down because one of them in particular is owned by a big company, and they might be done with them. And if that happens, it is going to create a huge hole in the marketplace, and then connect these dots. I buy from Italy and Spain. They’ve been shut down now. I might end up being the only guy in the United States with a lot of inventory. So I went from, “Oh, my God, I’ve got too much inventory, and I’ve sent too many corner samples out for free to these frame shops,” to, “Oh my God, I’ve got a lot of inventory. What a great thing.” So it’s a possibility that in a month or two, this thing could be an opportunity for me. I don’t mind having a warehouse full of inventory right now.

Laura Zander:
Same page, same page. Depending on the two different businesses that we have, but, the Jimmy Beans side of it, we had way too much inventory six weeks ago. And now it’s just going down and down and down to a really healthy spot.

On the wholesale side, on our manufacturing side, we didn’t have enough inventory to begin with, because we bought the business with zero inventory. That’s where we’re really suffering. But it’s the same thing—our inventory is healthier than it’s ever been as a result of this and of so many of our suppliers being closed and we couldn’t get stuff.

Loren Feldman:
Laura, I keep thinking, I’m intrigued by the thought of you getting on a plane. I’m wondering, have you started to do any other things that you hadn’t been doing? Have you been out and about in a way that you hadn’t been?

Laura Zander:
No, not a ton, and I don’t really want to go down there [to Texas]. I mean, I do, because I love the people down there, but I’m going down there because I really kind of have to. It’s falling apart a little bit.

Jay Goltz:
I don’t think you’re taking any huge risk getting on an airplane at all. I do think there’s an element of this—and I get it, I’m not downplaying it at all. It’s extremely serious and tons of people are dying and it’s horrible, but I do think that something like getting on a plane where there’s not a lot of people, wearing a mask, I’m no doctor, but I can’t imagine that’s a major risky thing at this point.

I’m going to stores as little as I have to, but I will tell you, my head’s changed. A month ago, six weeks ago, when I went in a store and someone’s wearing a mask, I’m thinking, “You idiot.” And now I go in there, and they’re not wearing a mask, I’m going, “You idiot.” I don’t think anybody should be going into stores without masks on at this point. And like I said, with the customer thing, they’re getting it. We’re trying to be respectful to the situation.

I will tell you though, this is not black and white. I’m absolutely not subscribing to the, “Oh, everyone should open up, and if people die, they die.” But we can’t wait until this thing’s completely gone either. I mean, trying to find a reasonable middle to that… I don’t have an easy answer. I don’t think there is one. We can’t wait until there’s a vaccine made. We’ll be all out of business.

Laura Zander:
Yeah, what I was gonna ask you guys about and ask for your advice on, was you had talked about hazard pay. We’re doing the same thing with the people who are coming into the warehouse here in Reno and paying them a percentage. I’m really considering, I’m really worried that once everything opens back up, at what point do you stop giving them hazard pay? And then, what about all those people who came to work even though they didn’t have to? They probably could have quit, filed for unemployment—

Jay Goltz:
No, they wouldn’t have gotten unemployment if they quit.

Karen Clark Cole:
Why did you decide to give hazard pay?

Laura Zander:
Because they were scared. A fair number of them were scared in the beginning.

Karen Clark Cole:
And if they get paid more, they’re less scared?

Laura Zander:
Yeah.

Jay Goltz:
No, they’re getting compensated for taking risk, and we need to use up the PPP money. That’s a legitimate way. For me, it is.

Laura Zander:
For me, it was more an acknowledgment of, “I acknowledge that you could stay home, or that you could call in sick, or that you could use your PTO, but we need you right now. I appreciate the fact that you’re coming to work and getting in your car and that there is a risk.” Especially in the beginning, when everything was just so terrifying. The media made it so terrifying.

But what I’m a little bit worried about is, at what point do you stop this hazard pay, and then where does motivation go? All of a sudden, they’ve been getting paid an extra amount, and then things go back to normal, and I’m wondering if I keep it for some of them—the ones who have been really reliable and really dependable and have shown up every day.

Jay Goltz:
I can tell you, I’m not grappling with that at all. I’m gonna pay the hazard pay for eight weeks until the PPP thing is done. And then if people aren’t happy about it… Whenever I do business speeches, people say, “Jay, how do you motivate people?” I believe the secret—in my world, I’ll just say for me—it’s not about motivating people, it’s about not demotivating them. I have people who come to work—my average person has been here 10 years. No problem. If they need to be motivated by getting paid an extra 30 percent, and they know the company can’t afford it? Sorry, that’s the way it is.

And if they’re not happy with that, they should go work somewhere else then, because there’s a certain point where enough’s enough already. We’re trying to stay in business, for God’s sake. We will have been shut down for two and a half months. And there’s a point where I’m the only one who’s gonna be losing money in this deal. At the end of the day, they’re getting extra money from the government for unemployment, they’re getting hazard pay. Everybody at the end of the year is going to have a banner year for income. And I’m going to lose hundreds and hundreds of thousands of dollars.

There’s a point where I have no guilt. I’ve treated everyone well, I’ve compensated them, I’ve done the best I can. But if, after two months of getting extra pay, they come and say, “Gee, I really would like…” You know, that’s unfortunate you feel that way, but you know what? I don’t know what to tell you. There’s a point where enough is enough already.

Laura Zander:
No, that’s a great point. Remember, I’m coming from the last two or three years losing hundreds of thousands and not being able to give raises and not being able to give bonuses.

Jay Goltz:
Okay.

Laura Zander:
And so for two or three years, I asked them all to give me everything that they have and not get paid for it.

Jay Goltz:
Okay, so that’s different.

Laura Zander:
They’re getting paid under-market right now.

Jay Goltz:
Wait, so then the answer is you go from hazard pay to just giving them raises of whatever, 10 percent, and like, that’s reasonable. That’s fair. That’s the right thing to do.

Laura Zander:
Yeah, I mean, I’m just so impressed that, after years and years of us all pushing so hard and pushing so hard and losing money and forgoing raises and not having Christmas parties and not doing this, not doing that, and not having any money in the bank, and being frickin’ terrified constantly, that they’re all still showing up every day.

Jay Goltz:
Here’s the problem I’m having. I’ve got one person in particular. This is the exact situation I’m in. What do you do when you explain to them, “Look, we have to do business. We need to stay in business. We’re going to give you extra money, happy to do it.” And then there’s one person who goes, “Hey, I don’t want to come back to work yet.” I don’t have an easy solution. Tell them everyone else came back? I’ve gotta tell you, I need you back here. I won’t even do it this month. I’ll wait until June 1st when the whole state’s opened up. On June 1st, if you don’t want to come back to work, then I’m gonna have to replace your job. I mean, I don’t know what choice I have. At some point…

Laura Zander:
Yeah, we’re in the same spot. We have a couple people like that, and I don’t know what we’re gonna do.

Loren Feldman:
Karen, I’d like to ask you about what Jay was saying before about trying to find the happy medium, opening back up at the right speed. Not too fast, not too slow. Are you at all concerned that people are jumping the gun around the country?

Karen Clark Cole:
Yeah, the governors in California, Washington, Oregon, and maybe a few more are all working together with a reentry plan. I’m super impressed with not only our governor, but California and a bunch of other states. They’re really taking charge and taking it seriously and making sure that everybody’s safety and well-being is paramount over the economy. Obviously, they’re closely related, and it’s very difficult to make a call to affect someone’s livelihood by not allowing them to open their business versus looking at overall public health, but I think a lot of what they’re encouraging, there’s a lot of curbside pickup going on. There’s a lot of deliveries. And it’s really fun for me to watch how businesses in the Seattle area are pivoting and being creative.

Even for us, we have really state-of-the-art research labs in our Seattle and San Diego offices. How are we going to run research studies in there? Because that’s one of our researchers who’s acting as the interviewer, essentially, in close quarters with the participant, who’s somebody off the street. So now we’re doing everything remote, and there are some studies that we just can’t do because it requires physical VR equipment in some cases. We’re busy trying to figure out, “Okay, so what would allow us to do that?”

We’re looking at ozone treatments to sanitize the hardware. You put it in a little case, you shut the door, it gets sanitized, and then the new participant can take it out and put it on. And then our moderator is in another room using a robot to communicate with a participant. We’re doing all kinds of crazy things like that to try to pivot and be creative so that we can get back to serving our clients. They’re trying to run their businesses, and they need to study to get their business going.

Jay Goltz:
I’m going to tell you what I find extremely disturbing when you watch TV. You see some of these states where these people are going down to city hall or wherever with guns and signs without masks on, with the constitutional thing. I get it that, sometimes, you’ve got to open the business, but to suggest this isn’t a real problem and they should all go down there congregating without masks on? It’s really just unfortunate. And there’s no question people are going to die from this unnecessarily. With that being said, they’re gonna have to open up the businesses at some point. But they can be more respectful to each other is my point.

Loren Feldman:
Let me ask you this, Jay. The government can say, it’s okay to open up, but consumers actually have to come back. Whether you can just flip a switch and turn the economy back on is an open question. Is there something that you guys, as business owners, should be thinking about in case this reopening doesn’t go well and you have to go through the process again?

Jay Goltz:
Your fear mongering isn’t working again. And no, I can’t predict three months from now.

Loren Feldman:
I’m not asking you to predict. I’m asking you if you’re prepared—

Jay Goltz:
No, I don’t have an answer. No, there’s nothing to prepare. All I can do is try to get rid of some inventory, try to keep some cash around, and here’s where it gets interesting. There is going to come a moment in time where you do have to say, at some point, these are grown people. If a business owner chooses that they want to open their business, and another human being who lives in the United States wants to come in and do business with them, where’s the line where we say, “Okay, it’s their call,” versus a person in the statehouse who’s never run a business in their life and is getting a check every Friday.

Loren Feldman:
That’s a great question, but it would be different if it only affected the two people who are doing business with each other.

Jay Goltz:
I got it. But what about if you’re gonna lose your livelihood and everything you’ve worked for your entire life? I’m saying it’s not black and white. I’m saying there is a point where there’s risk out there. And like I said, there will never come a day where everyone’s gonna go, “Okay, completely done.” Like World War II, done, done. It was over. There’s not going to come a day where anybody’s gonna be able to say, “This thing is completely done. Open for business, no one’s gonna die.”

Loren Feldman:
We shut down so that we could put ourselves in a position to use that time wisely and ramp up testing, our ability to trace, and we’re not doing those things.

Jay Goltz:
No, no. I’m not arguing with that. I don’t think it’s time yet. I think we’ve got to get the testing thing done, but no, there’s no question. But like I said, there could come a point where we could say, “Okay, all that stuff’s done.” I mean, I can’t stay closed for a year.

Laura Zander:
Well, it seems to me, after what I’ve been hearing, that we can’t decide as a community if we’re China or if we’re Sweden. Do we want to be completely locked down and squash it out? Or do we want to just open it up and let natural selection take its course?

Loren Feldman:
That’s a good way to put it, Laura.

Jay Goltz:
I want to know, do you think I’m gonna survive natural selection? Give me your best guess.

Laura Zander:
No. Are you kidding?

Jay Goltz:
‘Cause I’m elderly?

Laura Zander:
No, cause you’re assholey.

Jay Goltz:
No, those are the people who survive. Haven’t you figured that out yet? You’re so young and naive. You think the nice people survive?!

Laura Zander:
You’re too stubborn. Of course you’re gonna survive.

Loren Feldman:
On that note, we are out of time. My thanks to Karen Clark Cole, Jay Goltz, and Laura Zander. Really appreciate it guys. Thank you for taking the time and for sharing what you’re going through with this. Be careful out there.

Episode 15: My Employees Are Not Thrilled to Be Back at Work

Jay, Dana, and Laura talk about the process of reopening—the precautions, the risks, the consumers who might not show up, the dilemma of asking employees to accept less in pay than they were getting in unemployment, and the possibility of a second coronavirus wave that could bring a second shutdown: “I don't have the luxury of just saying, ‘Oh, I'll tell you what. Maybe we'll open in six weeks, eight weeks.’ I mean, there's some point where I'll be out of business.” Plus: Dana got her PPP and an EIDL.

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

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

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

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Jay Goltz: “I don’t have the luxury of just saying, ‘Oh, I’ll tell you what. Maybe we’ll open in six weeks, eight weeks.’ I mean, there’s some point where I’ll be out of business.”

Dana White: “Okay, you guys go ahead and play with this. I am not. I’m getting ready for fall 2020 when we will most likely have to shut down again.”

Laura Zander: “I live in a city of 250,000 people, and you walk around, and you would almost never even know that this is happening. I mean, we’ve had, I don’t know, 100 cases in the whole county, 200 cases in the whole county.”

Full Episode Transcript:

Loren Feldman:
As usual, let’s start with quick updates. Dana, what’s the status of Paralee Boyd? What’s going on with you?

Dana White:
Paralee Boyd has received the PPP.

Loren Feldman:
Wow!

Dana White:
Yeah, I know. Kind of major. It was not through my bank. It was through Goldman Sachs.

Laura Zander:
Interesting.

Loren Feldman:
You got it through Goldman Sachs because you participated in the Goldman Sachs…

Dana White:
10,000 Small Businesses, yep. They sent an email out to us a couple of weeks ago saying, “Hey listen you guys, we actually have partnered with someone who can move this along quite well.” The difference with the Goldman Sachs money is they looked at all of 2019. Whereas in my bank and another entity, they looked at from April 2019 to April 2020. The Goldman Sachs money is less by $6,000. I also applied through BlueVine, and my application was accepted through BlueV ine as well.

Loren Feldman:
I’m not familiar with BlueVine. What is that?

Dana White:
BlueVine is a lender similar to Lendio. A girlfriend of mine said, “Dana, BlueVine is approving and getting PPP funds out right away,” and their application process was very simple. Their responsiveness was amazing. And so I went ahead and applied through them too. I was torn about applying through multiple places, but I was just looking at the level of contact from my bank.

Loren Feldman:
Why were you torn?

Dana White:
Because people were like, “You know, you should apply once and wait.” My bank kept saying, “We need you to sign the document, we need you to sign the document.” So I would fill out the document, sign it as per their instructions, and then I get another email, “You need to sign the document.” And I said, “I can’t keep signing this document.” And my application just wasn’t moving. I took the reins in my own hands and applied through the Goldman Sachs program. I also applied through BlueVine.

Loren Feldman:
Anybody else?

Dana White:
Nope, just those three. BlueVine has said, “You’ve been approved, we’re just waiting on your loan number.” And Goldman Sachs has a loan number and an amount.

Laura Zander:
What happened with PNC? Have they gotten back to you?

Dana White:
I wish we could put a cricket sound effect right here.

Jay Goltz:
I’ve said this before, I need to say it again. The big banks just don’t need little accounts, period. They don’t.

Dana White:
Well, Chase just sent out an email to tons of small businesses that I know. Today, they all got their money.

Jay Goltz:
Well, three weeks, two weeks later, a week later, I’m just saying.

Dana White:
Yeah, they sent it out 3 a.m. this morning, and then on my Goldman Sachs web feed, on my newsfeed on Facebook, everybody’s like, “Oh, I got awarded, I got awarded, I got awarded.” But the anxiety and the nerves that everybody was going through, not knowing what to do. “Should I apply?”

Loren Feldman:
One thing I would add is, all the advice I’ve heard is that there’s nothing wrong—in fact, there’s a lot good—about applying in multiple places. The only thing you can’t do is, you can’t take more than one loan. That would be a problem. But you definitely did the right thing by applying in multiple places.

Dana White:
I hadn’t heard that. I had heard, “Apply one place and sit tight.” Even the Goldman Sachs loan said, “Do not apply if you’ve applied already.” And I ignored it!

Loren Feldman:
Good for you.

Dana White:
As did several other people in our Goldman Sachs class, and they were approved within 24 hours. It was the Goldman Sachs people who actually picked up the phone and called me and asked questions.

Jay Goltz:
So the entrepreneur’s lesson from this is, you can’t always follow the rules, and that is the reality. You were doing the right thing listening to all the quote-unquote professionals. You were doing what you were supposed to do with your big bank, and they didn’t come through for you. To use the phrase, you took it into your own hands, and you got the job done.

Laura Zander:
I think the other lesson that I’m hearing is, apply and try to become part of these programs. The Ernst & Young program, the Goldman Sachs program, if there’s a local program. Because that becomes your quote-unquote networking, and that’s their goal. That’s what I’m hearing.

Dana White:
Yeah, those organizations are invaluable. Likely, I wouldn’t have had it had I not been an alum. And the other thing is, when it comes to entrepreneurship, don’t ask. When you’re asking, you’re waiting. Because you’re waiting on somebody to decide to help you or not. I chose not to ask PNC and wait for PNC to decide that they were going to get to my application.

Jay Goltz:
You know the phrase, “Better to beg for forgiveness than ask for permission.” That’s another example of it.

Loren Feldman:
Do you know, Dana, is there any reason to think the loans will be different, and that you have a material choice to make here? Or do you think it doesn’t really matter which one you pick?

Dana White:
I think it matters just in the amount of funding. Like I said, with the Goldman Sachs loan, they did January of 19 to January 2020, so that means it’s going to be a $39,000 loan, whereas the BlueVine loan is April to April, which is going to be a bigger loan. I may go with BlueVine. And I don’t know if this is legal or not, but the governor of Michigan just extended the stay-at-home order to May 28. So if I get closing docs next week, Dana may not be signing closing docs next week. I know a lot of small business owners that I’m talking to are rescheduling their closings.

Loren Feldman:
So you’re saying you might not take the loan?

Dana White:
I’ll take it. I just may not schedule my closing.

Jay Goltz:
No, she’s delaying it because she’s gonna be closed, which is smart. Better to add a week at the back end when you’re open then get it now when you’re closed. Again, smart.

Dana White:
You have to spend it within eight weeks. So if I went to get my closing documents, let’s say Monday the fourth, they’re processing and that money hits my account Tuesday the fifth. Well, then the clock starts ticking Tuesday. I have eight weeks from Tuesday the fifth to use it. Well, I’m saying, “No, let’s schedule that closing for as far out as I can go and then go from there.”

Loren Feldman:
Do you have any reason to believe that they’ll accommodate you? Will they let you wait as long as you want to wait?

Dana White:
I mean, scheduling a closing… it’s your schedule. If I’m unavailable…

Loren Feldman:
Nobody’s unavailable.

Dana White:
I could be caring for a sick loved one. I could be walking my dog.

Loren Feldman:
Have you thought about how you’re going to start spending it, and when you’re going to start spending it? You close on the loan, but your shop is still closed. Are you going to pay people before your shop reopens?

Dana White:
Probably two people to get us reopened. I’ve already done the set-up work so that when I do bring them back, I can just give them their marching orders and pay them, not to help me get set up but, “Here are your marching orders and go” and pay them. And then when [the governor] does give the green light to open, I will, based on who we have, put all my staff back on, and if there’s anybody who has any questions, “I’m not feeling comfortable.” Then I have to let you go, because in Michigan, they’re very clear: You will go to jail if you have a job, and you tell somebody, “No, you can stay at home and stay on unemployment.”

No, I’m not doing that. They’ll come back, and then we’ll have training. We’ll have some cultural engagement, some rah rah meetings. I’ll give everybody their face mask, train them on how we’re going to keep ourselves safe, how we’re going to be different. Again, do more training to get their skills honed, and then we will have an opening date. Then we will open on that date. But it may not be the day that she says we can open. I’m not opening up gangbusters. No, I’m not doing that.

Loren Feldman:
Jay, you have told us previously that you got a PPP loan. You’re in a similar position, in that your business has been closed, but your state is handling it differently. You’re in Illinois, you’re able to start opening, I believe, today? Is that correct?

Jay Goltz:
No, no, no, no. It was pushed till the end of the month. But I sell plants in my home store. I have a whole big lot next to my store that, in the summer, we sell plants. Three, four thousand feet. We have a big lot out there. So because I sell plants, I’m called a “plant store,” and I service some landscapers. Therefore, I am allowed to open that store.

Loren Feldman:
The whole store or just the lot with the plants.

Jay Goltz:
You know, you go to Home Depot because they sell some building supplies. There are no stores that are part open. If you sell something that somebody needs, the whole store is open. So I am confident it’s okay for us to carefully open the store and control how many people are in there, masks and the whole thing.

Laura Zander:
Do you have predictions or projections on how busy it’s going to be? I mean, I drove by Lowe’s. The parking lot is completely full.

Jay Goltz:
Well, that’s funny you ask because I’m an hour behind Loren. It’s 11:25 a.m. here. I’ve been open for an hour and 25 minutes, and before we’re done here, I will find out whether anyone showed up or not. But from what I heard, we were getting lots of emails that people were anxious for us to reopen. So there I’m good.

My wholesale business—I sell frames to a thousand frame shops around the country—I believe that falls under the category of distribution and quote-unquote managing my inventory. Now, most of the stores are still closed, so I’m not doing anything there yet. And my retail picture frame store, there’s no way I can open that. There’s no wiggle room there, whatsoever. So my framing business is closed. My home store was open for all of an hour and a half now.

Loren Feldman:
And you opened the whole store today, and not just the plants?

Jay Goltz:
An hour and a half ago. I don’t know, frankly, I didn’t go outside yet. I’ll leave this thing for 60 seconds and tell you whether there’s any business here. We made up signage, we made it very clear, everybody’s wearing masks, customers and employees are wearing masks. We’re putting tables in front of the checkout, so they can’t get too close. We’re cleaning the place. We’re watching how many people are in there.

And then there was one other directive I gave to everybody, which is we’re suspending the cardinal rule of this company for 42 years: “The customer is not always right.” They all know when they start here, “Don’t go fighting with customers.” We won’t fight with a customer. They want to come in and be a jerk and say, “I’m not wearing a mask.” We’re going to tell them they gotta leave, and that’s the way it is. I’m not going to get intimidated by a customer who thinks it’s okay to come in without a mask. That’s a huge change for my employees, and I wanted to make sure they know, “I’ll back you up.” They’re not going to come in here and throw their weight around and go, “I’m not wearing a mask. This is overreacting.” That’s fine. Go somewhere else. I’ve got no use for that.

Loren Feldman:
Are you limiting the number of people who can come in at any one time?

Jay Goltz:
Yes, we’re starting with eight. The store is about seven, eight thousand feet. We think that we’re going to start with eight people.

Laura Zander:
How did you come up with that number?

Jay Goltz:
The size of the store, and we figured out what we could handle. We’re only keeping one door open instead of two. I’ve gotta tell you, my employees are not thrilled to be at work. They would have just soon stayed at home.

Loren Feldman:
Is that because they’re concerned about their safety, or because they were collecting the unemployment with the extra $600 a week?

Jay Goltz:
That falls under the category of, who knows? I do think, though, that they sincerely are worried about it. And all we can do is, everybody’s wearing masks, staying away. But I just don’t have the luxury of saying, “Oh, I’ll tell you what. Maybe we’ll open in six weeks, eight weeks.” I mean, there’s some point where I’ll be out of business. Whatever the day is that any business opens in this country, there is still going to be some risk out there. So it’s a question of: When’s the time to jump in? We’re being extremely careful with how we do it and extremely respectful to the employees—they don’t have to get near the customers.

Laura Zander:
Are you paying them hazard pay?

Jay Goltz:
I’m thinking about it. I haven’t done anything yet. Because unlike Michigan, apparently, that made it crystal clear about the unemployment, I’m still grappling with the people who are home. Should we put everyone back on the payroll and bring them back or leave money on employment? The whole thing is just a big murky mess. I’m trying to do the right thing, quote-unquote, but it’s not clear what the right thing is.

The question is going to become, this is just scene two of a 10 scene play. The next question is, what about the employee who doesn’t want to come back in two weeks, three weeks? Where do you finally say, “Sorry, but I’ve got to replace your job.” And then, are they going to be eligible for unemployment if you’ve offered them the job back and they didn’t come?

Dana White:
They’re not.

Jay Goltz:
Well, no, you’re in Michigan. Maybe in Michigan… Who knows? I’m not sure which way it’s going.

Loren Feldman:
How comfortable are you with the idea of opening your store now? Most medical experts would prefer that we were not opening back up the way we are.

Jay Goltz:
Customers are wearing masks. We’re wearing masks. We’re putting tape, no one’s going to get anywhere near six feet. We’re cleaning everything. I would say this: All of the experts get a paycheck every single Friday, I’ll guarantee you.

Loren Feldman:
But, Jay, it’s not as simple as that.

Jay Goltz:
There’s a point in time where, I’m not gonna do anything that’s perilous to anybody. I think we’re being extremely careful.

Loren Feldman:
Are you worried about potential liability? Suppose one of your employees gets sick.

Jay Goltz:
This is becoming a regular theme with this show. If I was to worry about everything that I could worry about, I would be in a mental institution somewhere. So I’m not going to say worry. We’re taking all the precautions we can take, and I think it’ll be okay. If I didn’t think it would be okay, I wouldn’t be doing it. So is it possible that someone’s going to get sick and then blame it on that they came into work? I’m following the law. I’m doing everything I’m supposed to be doing. It’s a difficult situation.

Laura Zander:
Is anybody doing waivers, like a liability release? Like when you come in the store, you can shop at your own risk?

Jay Goltz:
The government is trying to make it illegal to sue a company. If somebody gets sick, they can sue their employer. There won’t be any companies left.

You didn’t ask this question, which is a fair question: Jay, has anybody been sick? No, I don’t have one sick employee that I know of. I think we’ve been quarantined nicely. I think we’re being prudent. I think we’re being careful. I had plants ordered for six months. These plants are showing up here. I’ve got a lot of money invested in plants. I’ve got customers who are clamoring to come in to get their plants.

Laura Zander:
Gardening is huge. The retail numbers… it’s just going through the roof.

Jay Goltz:
Right. So there’s people who want this stuff. They’re being careful. We’re being careful. At what point do I—

Laura Zander:
I think you’re doing a great job.

Jay Goltz:
Thank you!

Laura Zander:
I’ve been in your shop. It’s reasonable. It’s not overboard. It’s not going to look like Walmart looks. Again, I go by Lowe’s, and I’ve never seen the parking lot so full. It’s more full than it’s ever been. So to have a private store that already has kind of a niche audience be open with eight people at a time… I just don’t see an issue with it. People are running a business. We’re running a business, and we have more than eight people at our location, and they’re humans, and they’re there by choice.

Loren Feldman:
Okay, so let me see if I can annoy all three of you.

Jay Goltz:
You already have, Loren. Done.

Loren Feldman:
I know I got you, Jay. The big picture here, though, is this: By opening back up now, when the experts are saying it’s too soon, they’re saying we are running the risk of triggering a second wave. I think the worst thing for all of us—for the country and for your businesses too—would be for us to have wasted this time that we spent shut down and to have to do it again. That’s what I really worry about. Do you not worry about that, Jay?

Jay Goltz:
You left a piece of the puzzle out. Some of these people—I saw in the paper this morning in the Wall Street Journal—[in] Michigan, a bunch of people showed up at the Capitol with guns, saying, “We want to be open,” and they don’t have masks on.

Loren Feldman:
What is the piece I left out?

Jay Goltz:
I’m talking about, customers all have masks. We have masks. They’re not getting anywhere near each other—more than six feet apart. We’re following all of these things to keep everyone away from each other. It’s not like I’m minimizing the problem and going, “Oh, it’s been overblown. We don’t need to wear masks.” We’re not letting anybody in without a mask. We’re going to send them away.

I think if you take all of these precautions, I believe it will be okay. I’m not one of these people that you see, these people with their protests who are out there in crowds with no masks. I think that’s crazy. That’s not what we’re doing. We’re taking all the precautions.

Laura Zander:
I agree, you’re being responsible. People are far apart. You’re not opening a movie theater.

Dana White:
Well, I don’t know. I’m getting ready for the second wave. I’m here in Michigan. I’m looking at people. I’m getting ready for the second wave. That’s what I’m doing.

Loren Feldman:
And you’re saying that because you see people who are not being responsible?

Dana White:
Absolutely, and we don’t have enough tests. If you’re watching what’s happening in the homeland, in Iowa and Nebraska, people have not been hit hard enough yet. Not enough people—for them—have died for them to take this seriously enough to shut it down. So okay, you guys go ahead and play with this. I am not. I’m getting ready for fall 2020 when we will most likely have to shut down again because Cletus and Bubba and Jeff want to hang out in the backyard. “Because the governor said I can’t hang out with my friends,” they’re mad. So you be mad and be sick, while Dana is getting ready to have a much more distanced online interaction with her customers, getting ready for what’s going to happen in the fall.

Maybe, since I’m not opening till May 28th, that might be something I can do in the time it takes to put products and kits together, but I’m getting ready for the second wave right now. And then, if we can open, that’s great. We’ll open, generate revenue, use PPP, have some cushion. But when and if we have to shut down again, I will be ready. That’s what I’m doing.

Jay Goltz:
I’m not in a vacuum. Home Depot’s open. There’s hundreds of people there. Lowe’s is open. Everybody’s doing business. I should decide, “Oh no, I’m gonna take it to a newer level and I’m gonna let tens of thousands of dollars of plants die, and I’m just going to shut it down because…” And the customers are calling us. They want to come in and buy their stuff. There is a point to where the customers want to come in, we want to sell them things, we’re all wearing all the right stuff. There is a point to where you’ve got to make a value judgment, and I don’t know that I can go another month without doing any business.

Loren Feldman:
Why do you say that, Jay?

Jay Goltz:
Because I have been shut down. It will be 10 weeks of next-to-no business coming in. I don’t have $3 million sitting in a bank account somewhere. I have no business coming in.

Loren Feldman:
You did get a PPP loan. Does that make a difference?

Jay Goltz:
I paid the people with it. I used it for payroll. It doesn’t change the fact that—

Loren Feldman:
Well, 25 percent of it you can use for other things, right?

Dana White:
Utilities and rent.

Jay Goltz:
Yeah, except this isn’t going to be a light switch going back on. I am sure I’m going to lose a ton of money this year. As soon as the lift is over, it’s not like business back to usual. I mean, I’ve still got the same overheads. I’ve still got the employees. It wouldn’t be surprising if my business is off by 30, 40 percent the day we open.

Dana White:
Jay, I have a question. Can you do pick-up framing and delivery framing? Can you do delivery of furniture?

Jay Goltz:
Yes, we already have a website: Jaysonhome.com—with a “Y”—Jaysonhome.com. We absolutely sell stuff on the internet, and people can pick out furniture, and we can deliver it. Framing, we’re hanging plastic shields over the sales counters and people are protected there. If they want to digitally send in photographs, we can certainly frame those.

Loren Feldman:
You told us you haven’t opened the frame store.

Jay Goltz:
I can’t. It isn’t an option at this point.

Loren Feldman:
When you said you’re hanging plastic, you’re talking about that’s your plan. That’s what you’re going to do when you can open.

Jay Goltz:
We’re gonna do it for sure when we open again. And then on top of which, I am putting in some software where you can frame online and come pick it up. I don’t think that my customers mostly are going to decide after all these years that they’re going to want to start framing pictures online.

Laura Zander:
Agreed.

Jay Goltz:
I believe that most people are going to get back to quote-unquote some kind of normal. I don’t think that the world is going to stop doing picture framing. That’s what I’m counting on. And just so you have some perspective, I’m dealing with a very small niche market, people who are into their interiors, people who want to frame their own photographs. Most people have never been into a frame shop and never will. I’m dealing with a very small niche. With that being said, they’re into it because they realize that the secret to a happy life is having beautiful picture framing, and they know that.

Laura Zander:
I thought it was meditation and enlightenment!

Jay Goltz:
It’s a little known fact that it’s picture framing first, and then meditation, and then…

Laura Zander:
God, I’ve been way off track.

Jay Goltz:
Well, that’s why I’m here. I’m here to help.

Loren Feldman:
Jay, could you open the frame shop by-appointment only?

Jay Goltz:
Technically, no. I mean, could I get away with it and lock the door? Probably. But then I’ve got the problem now that I’ve got to bring people into production to go do the framing. And believe me, I thought about it, but I don’t know that it’s worth all the trouble because—unlike a restaurant, if you lose a meal in the restaurant, it’s gone. Here’s a case of, if they have a picture to frame, they’ll wait for me to open. So there’ll be some pent-up demand. I don’t know that it’s gonna be worth all the trouble to try to do that.

Dana White:
But I’m wondering, with the amount of time that people are spending at home, they may need to do things around the house like picture framing.

Jay Goltz:
Yeah.

Dana White:
We’re getting a new roof put on our garage, so there are things that we’re now doing around the house because we’re here all the time. I think that’s a marketing push, if you want to invest the dollars in saying, “Are you tired of looking at that old dah dah dah? Have it framed.”

Jay Goltz:
Here’s the problem, though. The question is: How many of my customers have been financially affected by this, whether psychologically because their stock portfolio’s down, or because they were laid off? I don’t know, I mean that’s the problem.

Dana White:
But I think your niche market… you are a niche market. You’re not a hamburger. You’re a Costco, you’re not a Sam’s—no offense to those two big major businesses. I think your niche market is spending money. Lowe’s is jammed for a reason. People are at home getting paid, and I think if you market it to people who are working from home, still making their salary, because business is still coming in, I think, “Hey, this wall doesn’t have to be drab anymore, and this is how we can help you make your home beautiful while you’re in it.”

Laura Zander:
Why don’t you just market to all of Karen’s employees?

Dana White:
Right, I was going to say, market to all of Karen’s employees! And I’m wondering if you could expand your market. I see you shipping across the country. I know there are women who are cross-stitching right now.

Jay Goltz:
There’s a company that went into doing online framing. They’ve gone through $90 million and still don’t make any money. Custom picture framing is still one of those things that you’re better off doing in person—to see the texture, to see the stuff. And then on top, shipping glass is not a great thing. If you’ve got any artwork that’s of any value, and the art is hinged properly, meaning it’s suspended in the frame, by definition, it can’t be shipped upside down. It’ll break the hinges. It’s the worst possible thing to try to ship. It’s flat, and the UPS charges more because it’s flat, and it’s bigger.

What I’ve learned about business is, I can’t stay six steps ahead. I’m taking one step at a time, and we’ll see what comes, because I see people on the news now with their predictions of, “This is going to be a depression with World War Two,” and it’s like, shut up. You just don’t know anything. You don’t know that.

Loren Feldman:
Jay, you’ve been saying that week after week here, and it’s gotten pretty bad. You know that, right?

Jay Goltz:
Oh, it is bad. It’s horrible. How about CNN saying unemployment numbers. People have lost their jobs where it’s the same jobless as the Depression. Did they remember the fact that people can’t go to work right now, and then as soon as their businesses open up, they’re going back to work? To use the unemployment number, and to say they lost their jobs—they didn’t lose their jobs. They were furloughed for a month or two, but they never make that distinction.

Loren Feldman:
Jay, they don’t have their jobs.

Jay Goltz:
They’ve been furloughed. They didn’t lose those jobs.

Loren Feldman:
There’s no guarantee that those jobs will be there for them two months from now.

Jay Goltz:
For most of them it will.

Loren Feldman:
Maybe, you don’t know that.

Jay Goltz:
To make a parallel between this point in time…

Loren Feldman:
All right, let’s not argue economics. I can find another way to annoy you.

Jay Goltz:
You’re very good at it. You’re actually gifted.

Loren Feldman:
Thank you. I appreciate that. [Laughter] I want to go back to what you said about the concerns among your employees. I think it’s an important point, and let me stress here, you’ve been kind enough to share your journey on this podcast. I do appreciate that, and I’m asking you these questions because you’re representative of—all three of you—people who are trying to make the best of a really awful situation.

I want to stress that when I asked about what the experts are saying and the risks, it’s not because I think that whether or not there’s a second wave hinges upon whether Jayson Home is open or not. But you’re representative of a lot of businesses that have to make really difficult decisions, and I want to try to think those through.

Part of it involves your employees. You mentioned that your employees aren’t terribly happy about this. I think that brings up an important point because you can be incredibly responsible in the store, and I’m sure you are, but your employees have to get there, and some may be taking public transportation, some may be pumping gas. There are things they have to do that increases the risk. And it changes the risk factor for all of us. So, I’m asking, how are you dealing with the concerns among your employees?

Jay Goltz:
If somebody said, “I don’t want to take the L, blah, blah, blah,” I would get someone to pick them up. My HR person’s calling every single employee to make sure they’re okay, and it turns out one guy who didn’t speak great English did not file for unemployment soon enough. He literally put his wife on the phone because his English wasn’t great. He’s been with me for four years. She said, “We have no money. We need medication for our kid.” I went over there and gave him some cash to get him through it. They’ll eventually get unemployment, so we are doing what we can. And for the employees, I wouldn’t tell someone to go take the L at this point if that’s a problem. It’s just not black and white.

Loren Feldman:
What about somebody who has been caring for somebody or has kids at home who can’t go to school?

Jay Goltz:
Yeah, they should stay home. What am I going to do? They should stay home.

Loren Feldman:
But does that create a problem in terms of unemployment if you ask them to come back?

Jay Goltz:
I’m gonna guess not. Not my call. It’s unemployment’s call. I’m gonna guess not, but I’m not going to tell everybody, “Lock your kids in the closet. Come to work. I need you here.” Some of them would be happy to do that at this point, I can assure you. I have one person who comes to work every day. She’s got a nanny at home, and she doesn’t want to be at home, and she hasn’t missed a day, and she’s happy to be at work. There are people who want to go to work every day. Will there be some collateral damage on this at the end? Maybe. There is going to come a point where people need to go back to work, and we’re going to have to say to them—it’s not going to be this month, it’ll probably gonna be after the whole stay is lifted, and things are supposed to be getting back to work—at some point, we would have to tell the person, “Listen, we need someone to take care of the customers when they come in. And if you don’t want to come in, we’re going to have to replace your job.”

What am I gonna do? What if they say, “Oh, I really would like to wait till the end of the year when winter comes in.” There’s some point where you’ve got to take care of business. And believe me, these people who are out there protesting, I’m not supporting that at all. But there is a line somewhere. You will never be risk-free in this situation. Not for a year or two. There is going to be a point that some people are still going to have it, and somebody’s gonna have to say, “Okay, it’s safe enough.”

Laura Zander:
I live in a city of 250,000 people, and you walk around, and you would almost never even know that this is happening. I mean, we’ve had, I don’t know… 100 cases in the whole county, 200 cases in the whole county. I think we’ve all had different experiences based on either geography or what kind of business we’re in, and I just don’t think the rules are going to apply the same to everybody.

Jay Goltz:
No, I can tell you, if you walk out front here—people jogging, walking the dog—most people have masks on. It’s all over the place. I went to Home Depot a week ago, and some of the employees didn’t have masks on. And I had a mask on. I walked up to one of the people and I go, “Is there a store manager?” “Yeah, Al.” “Is he here?” “No, he’s off today.” I go, “Why aren’t you wearing a mask?” “Well, I had it on before.” I go, “You should have it on all the time.” I went in there this morning. There wasn’t a person in the store without a mask, and they did make it a law, as of today.

Laura Zander:
I go to the grocery store. I’m one of three people in the grocery store, never even cross somebody in the aisle. One person the whole time. There’s Plexiglas in between me and the lady who checks us out. All I’m saying is that—and we all know this and we’ve heard this—based on where we live and the population density and probably other factors, we’re having completely different experiences. Very, very different experiences. So, Loren, when it comes to, can you open business? Is that the responsible thing to do? Overall? No, it is not the right thing to do. But I think that in some cases, if we use good judgment, that it’s not necessarily a bad thing.

Loren Feldman:
I want to follow up on that. But Jay, this would be a good time for you to go find out what your traffic has been like…

Jay Goltz:
If you talk about me while I’m gone…

Loren Feldman:
Trust us. We will.

Jay Goltz:
I’ll be gone for 40 seconds. Hold on…

Loren Feldman:
Laura, let me ask you: you shut down your brick and mortar store, I believe. Where do things stand with that? Is there any prospect of it reopening?

Laura Zander:
No, no, we don’t have any plans to reopen it. Not for quite a while.

Loren Feldman:
Is that because the restrictions remain in place or because you don’t feel the need to reopen it.

Laura Zander:
I think a little bit of both. Part of it is our customer base is, not elderly, but some of our customer base is a high-risk base. I don’t feel any urgency, given that we have other sources of income and that’s not the primary part of our business. It’s not the primary driver.

Loren Feldman:
And you’ve been telling us that you’ve been selling well online, and that’s still true?

Laura Zander:
The retail store has always been 5 percent or less of our business. So no, I don’t feel any urgency. Our store manager is an older man in his 60’s, and he’s taken off. He’s on unemployment right now, and he left a long time ago. He’s like, “It’s not worth it. It’s not worth the risk.” So once we hit the 14 days or maybe 21 days of no more cases in town, we’ll consider it, but I’m not in a rush.

Loren Feldman:
The company you bought in Texas is a wholesaler that sells to retail yarn shops around the country, and you’ve told us that that’s struggled for obvious reasons throughout this. Is there any indication that some of those stores are starting to open? How’s that looking?

Laura Zander:
It’s consistent. We’re losing money every day. I told you we’re paying people, even if they’re not coming to work, because we don’t have enough work for them. But at least we’re losing money consistently, so we’re able to kind of predict it, and we don’t see that changing significantly, for probably three months.

Our suppliers—we have a mill in Peru and a mill in South Africa—they’ve been shut down. They’re the primary suppliers of yarn, of wool, in the world. Even the other yarn suppliers in the country, none of us can get our yarn. We’re all going to run out of product here in just a little bit.

Loren Feldman:
How soon?

Laura Zander:
We have about six weeks of supply left at the current demand, given that our demand is about half of what it normally would be.

Loren Feldman:
Is there anything you can do? Do you have a plan?

Laura Zander:
Yes. We have some older inventory that has been sitting around that we inherited, or I guess we purchased. We’ll just get creative with old inventory. We’re going to get creative. We have a lot of mistakes, some second quality or some items that people had canceled, so stuff that’s in the returns pile.

Jay Goltz:
How big an industry is the yarn business in the United States?

Laura Zander:
At one point it was about $1.1 billion.

Jay Goltz:
That’s interesting, because framing’s about two and a half. I would argue, probably only 1 percent of the population is knitting stuff. It couldn’t be much more to only do a billion dollars in the United States. You’re also dealing with a tiny little niche.

Laura Zander:
Oh, it’s tiny. Very, very tiny.

Jay Goltz:
Okay, so I’m back: 10 customers, which, you know, not bad.

Laura Zander:
How much did they spend?

Jay Goltz:
I don’t know, I didn’t stay there long enough to find out.

Loren Feldman:
10 customers just for plants?

Jay Goltz:
There’s not that many plants. I’ve gotta tell you, I got here at eight this morning, there wasn’t a plant in the lot. The truck just came. It’s probably only a quarter filled. We’re waiting for more shipments to come in throughout the day and then through Monday. It’s not that hot out. When the temperature goes up, people get activated to go out to plant their gardens. Right now, it’s probably in the 50’s, so it’s still a little chilly. But I would think by tomorrow, we’ll probably be doing okay out there.

Laura Zander:
I’m curious—and I know this is a tangent—but why would somebody buy a plant from you as opposed to Home Depot or Lowe’s?

Jay Goltz:
I got into the business by accident. I have no idea about that stuff. I’m a picture frame guy, but the building came up for sale, and I was trying to tie up the real estate for something. I wasn’t ready to move framing, so as a placeholder, I opened a garden store, and what we’ve learned over the first couple years, we’re in an upscale urban environment. We’re not Home Depot. They don’t come in with dirty blue jeans and a laundry list of what they want. They want cool, interesting stuff. So just like in my frame business, just like in the home store, it’s a boutique thing.

We carry the fullest, nicest, best plants we can find. We don’t have everything. I can’t even give you the names because I don’t know it. We carry whatever the best in the market is at the moment, and people appreciate that, and they come here because Home Depot’s literally one mile away, if not maybe even less.

Loren Feldman:
Laura how much is Jay paying you to ask questions like that?

Laura Zander:
Oh, no. I think it’s a really good one for us to think about.

Loren Feldman:
I agree.

Laura Zander:
It’s like, why would you go there? It’s the same thing in the yarn industry. Why would you come to Jimmy Beans and buy yarn when you could go to Jo-Ann’s or Michaels? There’s a quality thing, there’s the service…

Jay Goltz:
Laura, he doesn’t understand the higher level stuff like that. [Laughter]

Laura Zander:
Yes he does! He’s really close to Princeton.

Jay Goltz:
No, that’s a smart question. Believe me, I asked myself that. The other thing is, Home Depot, they buy stuff from vendors, they don’t actually pay for it till it gets bought by the customer. The stuff’s not taken care of that well. We have people who are paying more attention to the plants.

Laura Zander:
Do you play them music at night?

Jay Goltz:
Yeah, it’s a whole lifestyle business thing.

Laura Zander:
Okay, great. I just want to make sure those plants are taken care of.

Jay Goltz:
They’re nurtured. Everything we do is nurtured.

Laura Zander:
Aww…

Loren Feldman:
All right, before I offend all three of you…

Jay Goltz:
It’s too late for that, Loren.

Loren Feldman:
We’re going to have to wrap this up. Thank you all for doing this. I appreciate, again, as always, the fact that you’re willing to come here and be so transparent about what you’re going through. I think it means a lot to a lot of people.

Jay Goltz:
I would just say to people who don’t own businesses, it’s really easy to sit back and take shots at business owners. Like, “Oh, I would never open.” Have you ever had to pay the rent on Friday? I don’t think so. I mean, it’s a little frustrating to see the politicians who have never run a lemonade stand deciding the way businesses should be running.

Dana White:
What I’m learning through this whole process is, you do have to do what you have to do. I’ve applied for over 14 grants, two loans. I got my EIDL today, which is wonderful. I’ve got the PPP.

Loren Feldman:
Wait. Whoa, whoa, whoa. We buried the lede. I should have asked you about that at the beginning. I don’t know anybody who’s got an EIDL.

Laura Zander:
Me neither.

Jay Goltz:
I don’t even know what that is.

Dana White:
It’s the emergency disaster loan.

Loren Feldman:
It’s the SBA’s disaster loan, and it’s been all messed up.

Dana White:
That’s why I’m getting ready for the second wave and using grant money to keep the lights on, keep the phones on, keep the internet going, getting ready for when we hit go—ordering new capes, because when we get the new capes, it’s a matter of that cape is done for the day. No more disinfecting it and using it again in this climate. My market has been disproportionately affected. African Americans are being disproportionately affected. Since that’s the majority of my business, I have to do what I have to do as a business owner to keep the guests of Paralee Boyd safe. Towels are always thrown out, but tripling up on towels, tripling up on capes, and just getting ready to go, and using the money that I’ve been fortunate enough to get through grants and EIDL and PPP to hold the ship together.

Jay Goltz:
For those who have listened to this podcast from the beginning, you’ve gotten to watch how Dana has gone from a worrier to a warrior. You have your own Superwoman cape and I couldn’t be prouder and happier to be associated with you because you are Entrepreneur of the Year.

Dana White:
Thank you!

Loren Feldman:
On that note, my thanks to Jay Goltz, Dana White, and Laura Zander. Really appreciate it guys. Be careful out there.

Episode 14: Why Not Us?

Karen, Dana, and Laura share their experiences building businesses as women entrepreneurs: “It's like, ‘Well, you can tell me I can't do this, but it looks like I did.’” Plus: Has the legalization of recreational cannabis had an impact on your business?

Guests:

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

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

Karen Clark Cole is co-founder and CEO of Blink.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Dana White: “There are always these stereotypes with women. When she gets upset, it has nothing to do with what just happened. It’s all the baggage that she’s bringing with her.”

Karen Clark Cole: “I feel bad because for many, many years, I was full-on living in a bubble and I had no idea that there were problems. And once I started cluing in, I felt really guilty, like, ‘Wow, was I really living in a bubble?’”

Laura Zander: “My experience now is I have a lot more confidence because I can just tell people to ‘F— off.’ We have a decent sized business. We’ve done pretty well. My business is my confidence…”

Full Episode Transcript:

Loren Feldman:
Let’s meet this week’s 21 Hats Podcast lineup. Back with us today are Karen Clark Cole, who is CEO of Blink UX, a digital research and design firm based in Seattle; Dana White, who is founder of Paralee Boyd, a chain of hair salons based in Detroit; and Laura Zander, who is CEO of Jimmy Beans Wool, a digital version of a neighborhood yarn shop that’s based in Reno, Nevada.

This was bound to happen eventually. This week happens to be the first time we’ve done a 21 Hats where our three panelists happen to be the three women among our five regulars. My first thought was that this would be a great opportunity to talk about the issues that are particular to being a woman entrepreneur. My next thought was, well, maybe we’re past that. Maybe I should treat this just like any other 21 Hats episode.

Karen Clark Cole:
Amen, Loren!

Loren Feldman:
I went back and forth on it and eventually I decided to just throw it all to you and let you guys decide. Are we past this issue? Or is entrepreneurship still a very different experience for women than it is for men? Who wants to go first?

Dana White:
I’ll take a stab at it. I don’t think we’re past this issue at all. I think the only way we will get past it is if women keep making the same strides, as far as what Karen just did and said, “Hey, amen, Loren.” We have to move the group past it. There’s a part of me that’s like, “Oh gosh, as women we have to do more work.” Like, why is it on us? But I think because we have the vision, we’ll be able to do it.

But as it was recently brought up to me about mansplaining, I was wondering, “Why do I always have to wait for whoever I’m talking to to understand that I’m of equal intelligence and that I have to wait for them to get me and get it.” Especially being a minority woman, whoa. So no, we’re not past it, Loren. Not at all.

Loren Feldman:
Can you give us an example? When this issue gets discussed publicly, it tends to focus primarily on what happens when women entrepreneurs try to raise money. But I’m sure that’s not the only time.

Dana White:
Not at all.

Loren Feldman:
I’m wondering, when you talk about being mansplained to, is there a recent experience of that that you might share with us?

Dana White:
That happens probably seven times out of 10. It’s easy to kind of box Paralee Boyd and say, “Okay, hair salon, done,” but as you all know, it’s actually rather different, as far as the Lean Manufacturing component and the data collection, what have you. I found that I have to wait—and I hate to generalize, but I find that most men, when we’re doing an introduction and speaking about my business and what I do, I have to wait for them to get it and get past the box.

It’s only been a couple of occasions where the man didn’t come to the conversation with, “I’m meeting with a black woman, and let me hear what it is.” It happened when I talked to you, Loren. You didn’t come to the table with that. You came and you immediately got it, as well as a few others. But for the majority of the time, oh my goodness. The light goes off and then the conversation goes back and forth, because they realize, “Hey, she’s capable.”

Karen Clark Cole:
You know, when you say the light goes on and they get it, what do you mean by “get it,” specifically?

Dana White:
They take me out of the box.

Karen Clark Cole:
Meaning, they don’t think that you’re the CEO or they’re not sure if you’re the leader, or what do you mean?

Dana White:
You tell them, “I’m the leader, I’m the CEO,” whatever, but they have this perception of a woman-owned hair salon, who she is and—I don’t want to say what her intelligence is—how much does she know about business?

Karen Clark Cole:
I see, so it’s just limited generally, you’re saying.

Dana White:
Yeah, generally, and then I have to go through the motions with them to get them to understand, “Oh, not only is the business different, but because the business is different, she can speak to A,B,C, and D.” Then they start to speak to those things with me. Once they realize that, it can be done, but upon the initial five to 10 minutes, it’s this me waiting for you to catch up. And also me showing you—which I hate that I have to do—that this is a conversation you can have with me about Lean Manufacturing, data, that I’m not just the black female salon owner. I kind of wish that was enough. I kind of wish I didn’t have to show more.

Loren Feldman:
Let me ask you, Dana, is it possible that some of this is just people’s expectations about what a hair salon is?

Dana White:
Exactly.

Laura Zander:
It’s interesting that we’re talking about this right this second because I literally was just sitting downstairs with a guy—I’m at a big knitting show in New York City right now—I’m sitting with a guy who comes from a finance background. He comes from the Arthur Andersen world, a young guy about 30 years old, and he recently bought a knitting subscription business. But before that, he spent a few years working with a beauty subscription business and getting that off the ground. It’s not Ipsy and it’s not Birchbox, but it’s a third tier to that. He said that when he was raising money and trying to get investors for this beauty subscription box, that the men that he would go to—because most of the investors were older men—would just look at him, and they would give their opinion. They’d just be like, “This is ridiculous. This is so dumb, nobody’s gonna want to do this. Blah, blah, blah.” This is this young guy from Miami, and he had to get to a point where he’s like, “Honestly, your opinion doesn’t matter. Go give this box to your wife. Go give it to your daughter. You are not our target market, and you’re not our customer. The economics are here. The business model is here. Quit using your personal experience to make business decisions.”

I mention that because he is just a guy, and he’s talking to guys. I think sometimes, to Loren’s point, and me being in a knitting world, in a creative world, I think sometimes it’s less about who the messenger is. The fact that [for] these people, if these businesses are not within their world and their world of experience, they just don’t get it.

Loren Feldman:
We started this with my asking where we stand on this issue. Are we past it or not? Obviously Dana’s response was a very strong, “No, we are not past it.” How would you answer that, Laura?

Laura Zander:
That’s a good question. It’s not popular to say, but I’ve just never felt it. I’ve never felt discriminated against as a woman. I’ve never felt any barriers as a woman in business. Every once in a while, I’ll have a woman or a man look at me and not understand what I’m saying or be dismissive or be a jerk. But I don’t know, I have not experienced it.

Dana and I have talked about playing rugby and playing basketball. I think part of it is that I just kind of refuse to be intimidated, you know? Even when somebody is a little dismissive or a jerk, I basically either mentally or verbally say, “Okay, let’s take it out on the court and let’s see.” If you can beat me in basketball, then great. I’ll cede your point.

Loren Feldman:
You get to a good point. It’s tricky to tell sometimes where somebody’s coming from. A jerk is a jerk. How do you know why they’re being a jerk?

Laura Zander:
Absolutely, great point.

Dana White:
I agree, but I disagree. I think she’s right. There’s this resolve that you have from your experiences that certain things, you’re just not gonna let happen. Quite frankly, I don’t think any of us would be open if we let the jerks determine the viability of our business. I think for myself, I’m keenly aware when there’s the “I don’t understand,” which is different than the “Okay, I don’t understand and I’m dismissing you because it can only be so much because of who I think you are.” I think it’s there for me.

Laura Zander:
Totally, and that’s why I’m nervous to even answer this, because I’m not dismissing the fact that it’s happening. I have been fortunate and privileged enough to live in a bubble where it hasn’t affected my life and my business, where I’ve been able to say, “Bullshit,” or I’ve been able to say, “You know what, I don’t want to do business with you anymore then.” I have had to do that. But a lot of times, I feel like the people who have not treated me well, sometimes I think it’s less about my gender and it’s more about the fact that they’re just assholes. They’re assholes to everybody. But I think if I look back intellectually and academically, it probably is because I’m a woman and because this is a woman-run industry and so there are these old white males who have these archaic views of how business is done. I’m just naive enough, I guess, or live in this bubble and pretend it doesn’t exist.

Karen Clark Cole:
I have said the exact same thing as Laura. I feel bad because for many, many years, I was full-on living in a bubble and I had no idea that there were problems. And once I started cluing in, I felt really guilty, like, “Wow, was I really living in a bubble?” But it was to my advantage.

Loren Feldman:
What burst your bubble?

Karen Clark Cole:
We started in 2000, so we’ve been around 20 years, and in the early years, I had thought, “Oh yeah, this is awesome. All women start companies and run them and grow them, isn’t it great?” Particularly in the high tech world. But once we started getting more known, probably 10 years ago, I started getting calls gradually and more frequently of, “Wow you guys are doing great. What’s it like to be a woman CEO in a high-tech world when you’re the only one?” First off, they would say, “What’s it like to be a woman CEO in a high-tech world?” And I would say, “Oh, it’s really great. Why are you asking?” And they would say, “Well, you’re the only one,” and I’d be like, “I am not the only one because I just had lunch with several others,” and I would reel off their names. And I said, “When you’re done talking to me, you should call them up because they’re really great.”

I think part of it is awareness. I really believe that you look for evidence to support your beliefs, and if people believe that women aren’t running companies, that’s all they’re going to see. They’re going to see all the cases where men are running companies and they won’t even notice if a woman walks right on by running a company. So my goal in talking to these people, then—and I actually created a whole non-profit events series around it because I became so obsessed with my years of wearing covers on my eyes and not understanding what was really happening—is I became obsessed with pointing out where it’s happening.

It’s like if you say, “Look at all the red cars today.” All of a sudden, all you’re going to see are red cars. It’s the same idea. What I wanted to do is start saying, “Hey, there are actually a lot of women running businesses successfully. Here are some examples. Now start looking for your own.” Then all of a sudden, everybody will start seeing them. We’re already doing it. That’s been my approach.

I, like Laura, had been very fortunate, in that before I started realizing what was going on, it was way too late, like nothing’s going to knock me down. I actually see it as a challenge. My favorite thing to do is sit on an airplane, and if I get—pardon, my father is an old white guy who I love, and they are my biggest supporters, so you should know that I have many, many men who support me personally and lots of other women—but it’s my favorite thing when you get a white guy and we sit down in an airplane, and I look fairly young as well, so by the end of the flight, if I convince him that women can do everything, then my job is done. [Laughter]

Loren Feldman:
Karen, I think all three of you have had the experience of talking to potential investors, but I think you probably have been more aggressive and ambitious about reaching out and considering that a possible option.

Karen Clark Cole:
Only recently. It’s not in my blood.

Loren Feldman:
Well, in the last year or two. What was that experience like for you? Because that is where this issue tends to come up the most.

Karen Clark Cole:
I’ll tell you, it was there a little bit. Like I said, because it’s way too late to get under my skin. I just see that as a challenge. There was one guy who I read the riot act to. I said to him, “I will not do business with you if you’re going to talk to me in that kind of way.” And I hung up the phone and that was it.

Loren Feldman:
What kind of way was he talking to you?

Karen Clark Cole:
Patronizing. I don’t look for this, so I don’t I don’t see it very often. But it was my belief that he was talking to me like that because I was a woman, based on past experiences with him. Like I said, I don’t see this very often because I’m generally not looking for it. But in this case, I was just not going to tolerate it. That kind of thing doesn’t happen very often to me.

Laura Zander:
I think, Karen, you hit on something and said it really well, in terms of you and I are too far along, almost being 20 years into the business. As I’m thinking back through this, when I was only at the three-year mark, or the five-year mark and at less than a million dollars, I didn’t spend a lot of time interfacing with the old white men of the world, if you will, and I’m married to an old white man. I mean, he’s almost 50, so I’ll call him “old.” My experience now [is] I have a lot more confidence because I can just tell people to “F off.” We have a decent sized business. We’ve done pretty well. My business is my confidence, and I can ignore the other part.

Karen Clark Cole:
It’s like, “Well, you can tell me I can’t do this, but it looks like I did.”

Loren Feldman:
Laura, you started this business with your husband. Did you ever have the experience where people assumed that he was the one who was in charge?

Laura Zander:
No, but that’s because he’s never been the public face. Other than his mom. She thinks I do nothing. [Laughter] We’re in the knitting industry, so of course people are going to assume that it’s me.

Dana White:
I’m in the beauty business and people think my boyfriend is the owner all the time, even when we’re doing press. People defer to him all the time.

Karen Clark Cole:
Like when you’re out for dinner, or when?

Dana White:
If we’re anywhere, but it’s the majority of the time if he is standing next to me and we’re talking or the business comes up—especially if he’s in the salon with me—they defer to him. When I was doing the build-out of Paralee Boyd, I literally walked in, and I was at this point where I was like, “I’m done trying to prove and explain to people that I’m the owner.” The subcontractor came in, and I said, “Hi, I’m here for the one o’clock appointment.” And the guy said, “Okay, could you let us know when the owner gets here?”

Karen Clark Cole:
No!

Dana White:
Oh, absolutely. I’m falling back on that conversation because my experience is very different. And so he—

Karen Clark Cole:
Did you fire him on the spot?

Dana White:
He was a sub, so I just said, “Okay, I’ll let you know.” When it got to 1:10 and 1:15, he came up to me. “Who are you?” I said, “I’m Dana.” And he said, “Do you have any idea what time the owner—I’m assuming that’s your boss?” I’m staring at him, and I said, “Well, how can I help you?” He goes, “Well, I’m not sure you can. These are things for the owner to look over.” I said again, “How can I help you?” The fact that I’d already given him my name and I was done trying to convince or prove or show him. You know you have a one o’clock with Dana, who is the owner, but for some reason, in quotes, when I walked in, he assumed I was “the other Dana.”

Laura Zander:
That’s what I was going to say. I never got that people thought my husband was the owner, but everybody has always assumed my employees are the owners, and that I just work there. That’s still the case.

Loren Feldman:
How does that happen?

Laura Zander:
When I started, I was 27. I guess I looked probably more like I was 19 because people thought I was the high school help. My employee was 65. They always just assumed that she owned it and I was a high school help. Even now…

Loren Feldman:
That’s somewhat understandable.

Laura Zander:
It is. You’ve seen how I dress. I wear a t-shirt and shorts and I try to pretend that I’m still in high school. It’s Dazed and Confused and I’m Matthew McConaughey. I don’t dress professionally, and I don’t have business cards. I walk out very casually and people are usually, typically, very surprised. So that doesn’t really faze me, because a little part of that—to Dana, using her example—I do a little bit of that on purpose, because I want to see how people will treat me.

Dana White:
Yes.

Laura Zander:
If they don’t know who I am. And if they treat me like crap, then I don’t want to work with them.

Dana White:
Exactly.

Laura Zander:
I go to events like this. I don’t wear a name tag.

Karen Clark Cole:
Loren, there’s the underdog side of it that works in our favor.

Dana White:
I love it. I do it all the time.

Loren Feldman:
Tell me more.

Dana White:
Even in my salon, I had another woman who, at the time, was my operations manager. She was white, and they’d defer to her. One lady got up when she came in. She overheard another person defer to her. She said, “Oh, this is white-owned?” She was getting ready to walk out. We said, “No, no, no, no, no, she’s the owner.” So when I’m in my salon, I’ll answer the phone. I know I’m the owner every time I pay a bill. [Laughter] I don’t need everybody to know that I’m the owner.

Another little anecdote is that I’m in Michigan. I’ve lived here for years. I was here young and I had a bully who came into the salon. I was behind the desk. A girl from college, she was awful, she came into the salon and she said, “Oh, hi.” And I said, “Hi, how are you?” She said, “Oh, you work here now?” And I said, “I do. How can I help you?” I checked her in and then I left. She said, “Oh is it the end of your shift?” I said, “It is.” I said, “Enjoy your visit.”

Karen Clark Cole:
Oh my god, I love it.

Dana White:
So I left, and she sauntered up to the front desk and she asked the girl at the front desk, “What is it like working with her?” and then asked all these questions. My staff is, under their breath, laughing. And she said, “You mean working for her?” And she said, “What do you mean?” And she said, “Dana, she’s the owner.” The lady was actually upset, like, “Why didn’t she tell me?”

My staff called and told me what it was like after I left, so the next time I saw her, she was nothing but roses and friendly. Then I’m like, “Laura, you showed me who you are the first time. I believe you.” You just like flying beneath the radar because it gives you an idea as to who these people are when they think you’re the receptionist versus the owner.

Laura Zander:
Absolutely, 100%. You nailed it Karen, with the underdog. This is such a great therapy session because I’m realizing it’s not that I haven’t experienced this. It’s that I am narcissistic and arrogant enough to try to spin it so that I’m in control.

Karen Clark Cole:
Yeah, there you go.

Dana White:
Wow, that’s huge.

Karen Clark Cole:
I take secret pleasure in it too.

Dana White:
Oh, absolutely.

Karen Clark Cole:
They see this company kicking butt and then if they find out it’s me later on, I think that’s sort of fun.

Laura Zander:
100%. There’s nothing more fun to me. Really.

Dana White:
Especially the ones who treated you like you are the help.

Laura Zander:
Dana, we talked about this. It’s always rugby and basketball for me. The bottom line is, at the end of the day, let’s go out to the basketball court and let’s see what it looks like. Don’t pretend like you’re smarter than I am. Don’t pretend like you’ve got more power than me, because when it comes right down to it… yeah, anyway.

Karen Clark Cole:
Good to know! I’m not gonna mess with Laura or Dana!

Dana White:
That’s hilarious.

Loren Feldman:
The other issue that people talk about a lot is whether or not there’s something of a confidence gap between men entrepreneurs and women entrepreneurs—

Karen Clark Cole:
Loren, you can’t actually ask that question after the conversation we just had, can you?

Loren Feldman:
Sure I can! The context that it comes up in is explaining why there aren’t more women-owned businesses that crack a million dollars in revenue. It leads to a discussion about, “Well, women just aren’t as ambitious as men, maybe they don’t have the confidence. They don’t fake it until they make it. They don’t push as hard for growth.” I’m interested in this because there’s an aspect of this that rarely gets discussed, which I think is kind of important. Some of those men who are pushing harder and more aggressively are making huge mistakes.

To some extent, it’s the finance issue, the venture capital issue. I’m not a big fan of venture capital. We always see those statistics about the percentage of venture capital that goes to women entrepreneurs, and it’s a tiny percentage. It’s ridiculous. But I also think venture capital, in my opinion, destroys as many businesses as it helps. Maybe more. So I’m sitting here thinking, “Yeah, women have the same right to destroy their businesses that men do, and they should have access to venture capital.” But on the other hand, that isn’t necessarily the smartest way to build a business. Pushing crazily for growth isn’t necessarily the smartest way to run the business. With all of that in mind, I’m curious how you guys think about that.

Dana White:
I think it’s a societal thing. I’ll expand by saying I had a fellow business owner. She was very excited about expansion, opening up a second and third location. She got her funding, everything was intact. Then at the last minute, she changed her mind. When I asked her, I said, “Hey, what happened?” And I expected it to be, “You know what, I looked at the workload and it was just going to be too much. It was happening too fast.” No. Her response was, “My husband, basically, is not handling this growth well, and if I do this, I will lose my marriage.” That was her quote to me.

Loren Feldman:
Wait, explain that.

Karen Clark Cole:
Did you say to her, “I’m sorry to see your marriage go”?

Dana White:
No, no, not at all, because she was really upset about it and—

Loren Feldman:
I want to make sure I’m clear. Her husband was resentful of her success. Is that what you’re saying?

Dana White:
To an extent. What I’m saying is—and I had this conversation again a couple days ago with another business owner—some of the women married to men who married them when they were the restaurant chef, not the restaurant owner. The nail tech versus the nail tech business owner. You know what I mean?

So they’re okay when you’re going to work every day putting on people’s makeup, doing people’s nails. But when you become the CEO or the leader or the owner and founder of something, there’s a growth that these women have experienced. I know I’ve experienced it. In these instances, these husbands were not ready to stay married to that woman.

This is the young lady I talked to earlier this week—she just opened a location, her husband—his needs are tertiary. They have kids and it’s the business. Now he’s tertiary because she has this booming business that requires her to be there more and she hasn’t gotten to that point in her business where she has structured it to hand certain things off, which is fine. That’s part of your growth. But when you’re asking about women and the confidence thing, I think that can be an individually based thing, based on your history and your baggage, or whatever. Your growth in business can be lonely, and some women may choose to not be lonely and keep the people around them who are more comfortable with them being the nail tech versus the CEO.

Loren Feldman:
Well, that’s depressing.

Dana White:
I’m so sorry! [Laughter]

Laura Zander:
I think that’s very astute. Doug and I, we started the business together. He still had a different job for a few years. We’ve had this conversation many, many times. It’s so funny on the tertiary, because Doug says that he’s fifth. He comes after my iPhone. [Laughter] There’s Huck first, then the iPhone, then the business, then the two dogs, and then comes Doug.

In our lives together, knowing or guessing that we have another 50 years, at this period in time, we have to focus on those things and dedicate our time to those things. He said, “One of the smartest things that’s really stuck with me, [is] our relationship between the two of us has never changed. In 20 years, what has changed is the outside world and what we’re working on, but the unit between us is still there. It’s just that we’re having to spend time on other things.”

I feel for us, we’re very, very lucky in that we’re able to have a conversation and say, “Okay, we’re not having date night this year.. This is just not the year to do it. For us to build the life together that we want to build, this is what needs our attention. Are you good with that?”

We had to have this conversation with my son as well before this new acquisition. We’re like, “This is a family decision. It means I’m going to be gone five days a week for months. Are we all good with that?” And Huck said, “Yes, I want new Legos.” We’ve all got a vested interest, and we all opted in.

Loren Feldman:
Karen, I took your point before when you said I’m clearly talking to three women who have confidence, and I also know that you are not someone who has shied away from trying to build your business ambitiously. But you’ve also talked to a lot of other women business owners. Do you think women in general tend to shy away from that kind of ambitious growth?

Karen Clark Cole:
We used to have a problem where women weren’t starting businesses. The council for women in business produces a lot of data each year about research about women entrepreneurs. Now the research is showing that there are more women starting businesses, but few of them are growing them.

I’ve changed my messaging and a lot of my outreach when I’m speaking, talking, mentoring, to encourage women to grow their businesses. I really try to highlight what I’ve done and how I did it and really encourage women, “This is what it looks like.” It’s no harder than starting a business. In fact, I think it’s easier. Starting the business is the hard part.

Again, for me, I didn’t really have a lot of women business owners who I talked to, honestly. I have a lot of friends who are leaders in companies or own businesses, just throughout my years of being in business. To me, I try not to differentiate: man, woman, black, white, old, young, I don’t care. I just get inspiration from wherever I need it. If there’s somebody who’s doing something that I think is inspiring, I don’t care who or what it is. I try to find mentors in anybody. They may or may not even know me, and most of the time they don’t.

I know it’s really important, particularly for girls, to see their role models looking like them, and I’m not undervaluing that at all. I think it’s really important and we need more of that. But at the same time, it doesn’t mean you can’t have mentors who don’t look like you. I have looked at other business owners who have grown their businesses and said, “Hey, why not me?” I take a lot of inspiration from Russell Wilson, actually, the Seahawks quarterback. He’s my hero. I’m like, “Yeah, why not? Let’s go.”

Loren Feldman:
Why is he your hero?

Karen Clark Cole:
Because he has a whole foundation. The name of it is Why Not Me? The idea is, somebody’s got to do it. Why not me? Why not? I think that about our company all the time. Look, somebody’s got to be the world’s greatest UX firm. Why not us? I just can’t find a good reason why not.

Loren Feldman:
That’s a great answer. Do any of you ever get tired of being the boss making decisions?

Karen Clark Cole:
Yes!

Dana White:
Absolutely!

Karen Clark Cole:
I don’t think that’s a woman or man thing, is it? Or maybe it is.

Laura Zander:
I just had coffee this morning with a brand manager of a brand we carry and he said, “Okay, well where do you want to sit?” And I’m like, “David, can you please just be my boss for like an hour? Just an hour? Like, can you just tell me where to sit and you tell me what to eat? I would be so stoked.”

Dana White:
Yeah, that’s it.

Loren Feldman:
I bet there is a male/female thing a little bit there.

Karen Clark Cole:
Interesting research project.

Laura Zander:
Well, to be fair, I love the fact that I have the choice to sometimes not want to be the boss. I think if we’re really going to dig deep, do I ever not want to be the boss? Probably not. I just happen to have the privilege and the choice to be able to say, “Hey David, boss me around!” [Laughter]

Loren Feldman:
You’re allowed to be tired one day. You’re allowed to feel like you’ve had enough.

Karen Clark Cole:
But you were the boss to decide that you wanted to get bossed around. That’s the important thing. It’s your decision.

Laura Zander:
Yes, it’s the choice. I probably don’t ever get tired of being the boss. I probably, really desperately love it.

Dana White:
I don’t get tired enough to not do it, but there are days where, “Honey, where do you want for dinner?” Not another choice. You decide. Where are we going? You decide.

They found that people who make a lot of decisions have a uniform in their clothing because it’s one less decision they have to make today.

Karen Clark Cole:
Isn’t that what Obama said?

Dana White:
Obama said it, Steve Jobs said it, Mark Zuckerberg said it, Dr. Dre. We wear the same thing because it’s just one less decision I have to make today. I think that’s a version of just not wanting to be the boss. I think being the boss is making decisions.

Karen Clark Cole:
One of the things I’ll tell you is in terms of being within the company, I have often said that I think because I’m a woman leader, that I get less leeway to be mad.

Dana White:
Oh, yeah.

Loren Feldman:
That’s so interesting.

Karen Clark Cole:
If I’m having a rough day and I’m not my best self, and I’m short or I get upset or mad about something, or mad at somebody, I think the impact that has on others around me is far greater than if I were a man. That is something that I really believe.

Dana White:
I think it might be because people want to give you permission to be upset, and if they haven’t given you permission to be upset, it’s jarring to them.

Karen Clark Cole:
I’m not sure about that because these are people who have known me for a while, but I’m a “bitch” if I freak out. I don’t think you hear that about too many men leaders if they are rightly upset about something. These are things that are legitimate. It’s not crazy business. This is: the numbers aren’t right, or somebody screwed up, and there’s really a problem. I take that stuff seriously.

Part of it is, for me, part of my persona is warm and caring. I think people expect that more from a woman. That’s why they like to have women in the room, because they listen better, it’s known that they can be more warm and more caring. This is why you need diversity, right? We need an equal, balanced room. It’s not all women and not all men. You need balance so that we get all kinds of types of personalities, moods, temperaments, these kinds of things.

But I think people expect that more from me because they see it, and then when they see the other side, they’re like, “Oh, that’s not what we expect.”

Dana White:
I don’t have permission to be upset. Even as a leader, I don’t have permission.

Loren Feldman:
What do you mean by that?

Dana White:
There are always these stereotypes with women. When she gets upset, it has nothing to do with what just happened. It’s all the baggage that she’s bringing with her. It’s probably a boyfriend argument or something. That’s why I really do get upset, because I don’t want to do the work of being validated, and I haven’t gotten to a point where I don’t care. Because if I’m upset, it’s because something’s not happening that I need to happen. I need you to care so we can get it done.

I have found that it’s easier to get upset when I have the permission of people who know that I’m upset when they agree that I should be upset. When they don’t agree, it can be dismissed, and not so much with the people who work with me. I don’t really get upset like that, but when you’re talking to a lender, or if you’re talking to somebody in your administrative or contract work, when you’re upset, I feel like I need their permission. Once they agree with me, then we make the changes that we do. But if they don’t agree with me, even though I’m rightly upset, it just changes for me.

Loren Feldman:
How do you deal with it? How does that feel?

Dana White:
Like I said, I don’t get upset, and if I do, I deal with it on my own. I don’t express it to them. When I do express it, it comes in the form of questions, again, trying to get you to see where this is a problem. Then they acknowledge it and they move on. There is no ownership of it outside of acknowledging it, where it’s just different on my end. I’ve seen with women, when men are upset with women, they’re not only supposed to acknowledge it, they’re supposed to own it and make it better.

I don’t get upset outwardly. Not a lot makes me upset. There are a couple times where I’m like, “You know what? I totally would have said this differently. I totally would have expressed myself differently if I felt I was in a space where being upset was okay.” Not okay because I was blowing up for no reason. It was obvious I should have been upset, but because we just don’t want to deal with that, we don’t want to look at that right now—

Karen Clark Cole:
I think it’s impressive that you can maintain your cool like that.

Dana White:
Honestly Karen, look at me. I have no choice. I have to maintain my cool. Can you imagine? The complex of the angry black woman, it’s always illegitimized, it’s never validated, people don’t really want to hear you. I have no choice but to find something to do with it so we can get something done.

Karen Clark Cole:
I don’t think anybody wants to have anybody walking around being angry all the time. I think you’re far more effective if you can keep your cool. I think it’s excellent that you’re able to do that. I wish that I could do it better.

Loren Feldman:
All right, I want to move on to another topic. As I started last week, every week, I want to ask you a question that Laura actually suggested, which is, what’s the worst thing that happened in your business this week? Laura, let me start with you, since you suggested the question.

Laura Zander:
Thanks a lot! What’s the worst thing that happened in our business this week? I would say that I am trying to figure out how to bring two teams together that work in different states that have a lot of overlapping responsibilities and skills. That’s kind of a nebulous answer, but team dynamics and trying to figure out who does what, and trying to introduce everybody and get everybody on the same page. There’s a lot of friction as we figure this out. I personally think that it’s just going to take time.

Loren Feldman:
Was there a particular problem that you can share with us, not pointing fingers, but giving us a sense of where this is an issue?

Laura Zander:
Yeah, we have a couple of different websites, and with one of the websites, we are asking that any updates to the site be run through the other team for second eyes, for a variety of reasons. Some updates were made to the site without running it through anybody. The updates were not updates that we would have—and I hate to use the word approve—but they’re updates that we would have liked to have discussed before they went up. And so once we found out they were up, then we had a whole conversation about it. Then of course, feelings get hurt, blah, blah, blah.

Loren Feldman:
I hope the answer to this question is never doing this podcast. Dana, how about you? What’s the worst thing that happened to your business this week?

Dana White:
No, not at all. This is by far the slowest week of the year when you’re looking year over year. This has been a tough week and we’re counting down the hours to this impending snowstorm here in Michigan that’s going to start tonight and go through Sunday morning, which is always our busiest time—the weekend. The hardest thing this week was watching those numbers. Man, it’s tough.

Loren Feldman:
What do you do during a slow week? Do you try to make use of it in some way?

Dana White:
We scale down our staff. We focus on training. We get a lot of admin stuff caught up on, but we’re also just getting ready for when it gets busier, and some of the changes we want to make and stuff. It’s productive, but it’s not revenue generating directly.

Loren Feldman:
Of course. Karen, how about you?

Karen Clark Cole:
Well, Loren, I’m sad for you, but I’m happy for me to report that nothing bad happened. It was a great week.

Loren Feldman:
I don’t believe it.

Karen Clark Cole:
Nothing, not even one thing. I can’t even make anything up.

Loren Feldman:
Really?

Karen Clark Cole:
It doesn’t hurt that I’m actually not at work. [Laughter]

Loren Feldman:
Let’s remind our listeners you’re on sabbatical, out of the office through the end of the month, right?

Karen Clark Cole:
I am in touch! This week I actually worked more than I have the entire sabbatical because I’m getting ready to go back. We’re working on my reentry plan. I had a nice all-day meeting with my chief culture officer on Monday walking through my plan of attack. And then I had a great half-day meeting with my COO yesterday and the same thing. They couldn’t even tell me anything bad that’s going on at the office.

So, I’m happy. I’m super excited. I go back the week after next, and I think I’m actually ready. I gotta have a little weekend in Mexico first, though.

Laura Zander:
Who invited her? Did you invite her, Loren? [Laughter]

Loren Feldman:
Good question.

Karen Clark Cole:
You two know a little bit of what happened to me last year, that I deserve it. Come on!

Laura Zander:
Yeah, I know. But you’re still making me look bad.

Loren Feldman:
All right, last question. I want to ask you about an item that we covered recently in the 21 Hats Morning Report that I found kind of intriguing. In Illinois, they just legalized recreational use of cannabis, and it seems to have thrown a lot of employers there. It’s interesting. There seems to be some confusion in the sense that recreational cannabis is now legal, but it’s also legal to fire an employee who is using cannabis during work hours. There seems to be some confusion about that.

I’m curious about all of you. Has the change in laws had any impact on your businesses? Have you ever done drug testing? Would you ever do drug testing? How do each of you look at this? Laura, why don’t you go first?

Laura Zander:
It’s funny that you say that because my general manager just told me that in Nevada, it is now illegal to fire an employee for having marijuana in their system. I would assume that it’s not legal for people to smoke pot or use cannabis during work hours in the same way that you’re not supposed to drink alcohol or anything that’s mind altering during work hours.

I’ll tell you one thing. From a recruiting standpoint, we got a lot of people who would love to move to Nevada and come work for us because it is legal. When you’re working with a bunch of creatives, I’m not sure that that’s a bad thing. But from a productivity standpoint, and from a warehouse standpoint, and from the other employees, it doesn’t affect us. I mean, if it makes people’s lives better on the weekend, and that’s what they choose to do instead of drinking, sounds great to me.

Loren Feldman:
So I assume you don’t do any drug testing of employees or potential employees?

Laura Zander:
No, we have great people, though.

Loren Feldman:
Dana, how about you?

Dana White:
No drug testing at Paralee Boyd. Michigan just legalized recreational marijuana, and even before then, I’m with Laura. What you do in your spare time is up to you. If it’s impairing your ability to work, that’ll come out just by keeping up quality standards in the salon. We’ve had a couple of employees who’ve come in smelling of marijuana and they’ve been sent home, because in the beauty business, nobody wants to smell that while you’re doing their hair, so we’ve asked them to go change and come back. We’ve not done drug testing.

Loren Feldman:
You need to tell them about edibles, Dana.

Dana White:
Well vaping is huge here, but the policy at Paralee Boyd is no consumption at all. I don’t want anybody to get hurt. We’re using scissors sometimes, hot irons, and such.

Loren Feldman:
Karen?

Karen Clark Cole:
In Washington, it’s been legal for a long time. We’ve had no problems, and we only ever drug test when a client requires it. It wouldn’t be a requirement of a specific person per se, but it would be requiring that the team working on their project has to have been drug tested. There’s probably some mechanical reason, something that we’re doing that would be dangerous, I guess. I’m not sure why they would require it.

Loren Feldman:
Yeah, that’s kind of hard to imagine. Would this be employees who would be working on the client’s premises?

Karen Clark Cole:
Yes.

Loren Feldman:
I see.

Karen Clark Cole:
It could just be that they have a strict policy and that has to trickle down to us. It’s very rare, though.

Loren Feldman:
Has that ever caused a problem for you?

Karen Clark Cole:
No, no problems.

Laura Zander:
You know, Loren, can you ask the same question when William is on the phone?

Loren Feldman:
Sure.

Laura Zander:
I’d be really interested to hear his answer, as a pastor recruiting guy from Texas.

Loren Feldman:
That’s a great thought. I will do that.

As for today, we are out of time. My thanks to Karen Clark Cole, my thanks to Dana White, and my thanks to Laura Zander. Appreciate your taking the time.

Dana White:
Thank you!

Laura Zander:
Thank you!

Karen Clark Cole:
Have a great day.

Episode 13: Three Owners. Two Loans. One Emotional Conversation

Karen, William, and Dana talk about why some businesses got the Paycheck Protection Program loans and why some didn’t: “The independent grocers. The hair salons. The small restaurants. They didn't get the money,” says Dana. “I have a staff who are single mothers, single black mothers, who are hard-working and who didn't have the foundation to go to college and are doing what they can. I'm up every night trying to help them, and I need help helping them. And I'm not getting it.”

Guests:

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

Karen Clark Cole is co-founder and CEO of Blink.

William Vanderbloemen is founder and CEO of Vanderbloemen Search Group.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Dana White: “What’s frustrating is that I’m the minority businesswoman that [PNC] calls when they want to talk about how they’re helping minority businesses. I’ve done publicity for them. And… crickets.”

William Vanderbloemen: “Frankly, at the end of the day, Adrienne and I are taking the hit as an S corp. If we go under, it’s us that goes under, not the folks working for us.”

Karen Clark Cole: “Some of the Zoom meetings that we’ve had with groups of people—you would think they wouldn’t work but it almost works better because everybody is so focused on the screen in front of them that you really get a different level of interaction.”

Full Episode Transcript:

Loren Feldman:
Let’s start with our usual crisis update. Karen, we haven’t spoken with you in a couple of weeks. I’d love to hear what’s going on at Blink. How have you guys been doing?

Karen Clark Cole:
We’re actually doing pretty well. Most people are still working from home and we’ve had to lay off a few people—workers who needed to be in the office, or in a couple of cases, workers who were doing a form of recruiting, which we’re not doing right now for our research sessions, because they were for live sessions. For the most part, though, everyone’s able to do their jobs from home. Certainly, there’s an efficiency difference, that’s for sure.

Loren Feldman:
How so? What do you mean by that?

Karen Clark Cole:
For me in particular, what used to be a hallway conversation while on my way to get coffee, sort of multi-tasking, decision made or question answered, now it has to be set up as an actual meeting, blocked on my calendar. You’ve got to log in, you’ve got to be on video. My days are literally by-the-minute, back-to-back, all day long, all week long. And so then, when I actually have to produce work, some outcomes, that’s happening in the evening, so I’ve been working till 10 at night most nights, even on the weekends. So it’s been a lot, but I’m grateful that I have stuff to do. That’s for sure.

Loren Feldman:
So the business has held up?

Karen Clark Cole:
Yeah, we’re doing just fine, and our clients seem to have adjusted as well, which is obviously the biggest, most important piece, that they’re still willing to engage and do work and start projects and continue on with projects that they have going.

We’ve just switched to Zoom. We’re even doing some sales training right now with a third of the company all on Zoom, where it would be normally a big in-person gathering. But it’s all happening on Zoom, and everyone’s really adapting.

Loren Feldman:
Can you give us a sense of who your clients are and what kind of work they’re hiring you for? With the economy all but shutting down, what’s keeping you busy?

Karen Clark Cole:
Digital products. Companies where their business is online. We do a ton of work for Amazon. They’re our largest client, so they’re busy.

Loren Feldman:
So I’ve heard.

Karen Clark Cole:
Yeah, a lot of it is working on their systems, new digital products, things like that. Another example is online project management, for example. Projects are still going, companies are still running, and so they still need the tools to run their businesses. That’s largely what we’re working on: enterprise-level systems, or consumer products that are largely digital.

Loren Feldman:
Dana, you obviously are not in as fortunate a situation with your business. Your hair salons [are] completely shut down. What’s going on with you?

Dana White:
It’s been one of the busiest times for me as an owner because, similarly to Karen, I’m working from the time I get up to 8, 9,10 o’clock at night. The updates on loans and grants change hourly, and the stipulations and everything change. So for me, between the webinars and the Facebook Lives, and we’re still just getting a ton of information.

I’ve been applying everywhere. I think I’m at my running total of 11 grants and two loans that I’ve applied for. Again, I’m still working on what the next iteration of Paralee Boyd is. Who will Paralee Boyd be as we go forward? People are like, “How are you dealing with the boredom?” I am not bored. I’ve been working. I have not had time to sit down and read. I have not had time to sit down and cross stitch and do some of the other things I like to do because I’ve been in my email. Strangely enough, people are applying for jobs. It’s so interesting.

Loren Feldman:
Are you finding people that you’re interested in?

Dana White:
Yes. We get about one or two applicants a day for various positions. That’s somewhat comforting.

Karen Clark Cole:
Yeah, that’s hopeful. I love that.

Dana White:
Yeah, it’s somewhat comforting. I don’t want to lose any of my staff to this. Like I said, I have a great team right now. But I understand we might. Now it’s just thinking about, how do we open when we open? Because I know if the hold got lifted tomorrow, not everybody’s running out to the movie theater or a baseball game, right? I know people are gonna come and get their hair done, but I still want to do it responsibly, considering the fact that they haven’t tested a lot of people, and then just making sure I have enough staff to help with the demand of people coming in.

We might be doing some Zoom interviews. I think when we do open, we may not open the day everything is lifted. We may take those couple days to get the staff together, have staff meetings, and then decide the day that we’re going to officially open.

Loren Feldman:
Where do you stand with your Paycheck Protection Program loan application?

Dana White:
[Laughter]

Loren Feldman:
Not the response I was hoping for.

Dana White:
The PPP. Okay, so I applied the night it came out, got booted off the system twice, couldn’t sleep, so about 3:30 that morning, I did it and got through. My bank has contacted me twice saying, “Hey, we need information on this. We need you to re-sign this.” And that’s been it.

Several small business owners here in the Metro Detroit area are in the same boat. We’re a little disheartened. When we see that Ruth’s Chris got $20 million, we’re just really wondering, where is help for small business and how does the government define small business? I’m probably in that next round of funding. But again, if they want to open in May, that’s a month from now. That stimulus package is going to take more than a month to get to us. So how do we get people paid prior to it getting funded? I don’t know, I’m just like Miss Celie in The Color Purple. I’m just sitting here waiting to see what color the wall is gonna change next.

Loren Feldman:
William, you stunned us last week when you told us that you were in fact one of the first businesses in the country, I think, not only to have your application accepted, but to have the money in the bank. What’s going on with you now?

William Vanderbloemen:
Well, yeah, I think we got lucky. My COO wrote an op-ed that was picked up by Religion News Service about how churches need to hurry because even if you get first in line, you might not get there. And even if only 80 percent of just the small businesses applied, they’re underfunded by a third—$350 billion or whatever it was.

So we just feel really fortunate, and our clients are very grateful, because the more common story is the one that Dana just shared. It’s really unfortunate that it’s been that much of a snafu for people. We’ve been blessed to hear that some of our churches, even really small ones, have gotten loans that have carried them through.

I don’t think though, Loren, when we looked at the PPP, it’s not the lifeline, because it is gonna be a month. We bill things out over time, and if you don’t sell anything in March or April, then we don’t have income in July, August, September. So for us, it was a very important—and we’re grateful for it—bridge, but it was not the total solution. That’s what led us to do some restructuring that some might deem severe, but we felt like it was tempered with a lot of thought and careful projection.

Loren Feldman:
Have you decided how you’re going to use the money?

William Vanderbloemen:
Yeah, I’m going to pay people.

Loren Feldman:
Right away? Or are you going to wait until the business fully reopens? What’s your thinking on that?

William Vanderbloemen:
No, our salaries continue. We did a weird thing. We’ve decided if our business were to die, we’re gonna die with our boots on. Right now is just not the time to sell at all. You appear completely tone deaf, particularly if you’re working primarily with nonprofits and churches and faith-based businesses, which is what we do. It just seems like, “Are you kidding me? We’re out here trying to help the world, and you’re asking for money?” I told our sales and marketing team and company-wide, this is the sentence I want you to memorize for March and April: “Serve, don’t sell.” I will pay you your salary to serve, don’t sell, and that’s why we poured—I don’t even know how many hours—into PPP webinars. Now we’re shifting.

I have an addiction—I should probably confess to the group—I am addicted to buying web domains. [Laughter] I might be single-handedly supporting GoDaddy right now. And so we bought, and we’ll have open reopeningthechurch.com and reopeningschools.com. I felt like after Easter—maybe it’s because it’s getting warmer here and flowers are blooming in Houston—but the feeling I have is that attention is shifting away from, “How do I wash my hands? And how do I get this done? And how do I quarantine?” to, “All right, when are we going to reopen and what does a responsible reopening look like?”

I am literally paying my staff to do no billable work with the exception of finishing searches that we’re doing right now to serve churches, and say “Let’s help foster the conversation about reopening.” And we’re betting big that that will happen before we’re completely exhausted of options. We lowered sales projections, we lowered payroll so that we could make this work, but I firmly believe that if we can ride this out on the far side of it, people will remember the service a lot longer than they’ll remember any sales pitch we do right now.

Karen Clark Cole:
William, what do you mean by lowering payroll? Is that reducing salaries or how do you mean?

William Vanderbloemen:
Yeah, we went over a little bit on a call that maybe you weren’t on. We looked at our projections, what that’s going to mean if those are the sales projections. And the quick answer was, “We’ve got to reduce payroll by 40 percent.” So I said, “No more salary for me, done for the year.” My lead team said, “Okay, we’ll take a 25 percent cut.” And then the higher paid people in the company all took a 25 percent cut.

Karen Clark Cole:
Did you give them a choice? That’s what they could manage, or…?

William Vanderbloemen:
No, that was just what it’s gonna be. And if you need to leave, we totally understand. In fact, we had one-on-one conversations with all of them, so that if one of them said, “I really can’t make that work,” then that’s fine. Go where you need to, and then we can readjust the budget and maybe lower that number, but it didn’t happen. Nobody turned us down yet. It’s been, what, two weeks since we did this? So we were pretty early.

The people lower on our pay structure, we just figured the money that we would have cut out of their salaries actually would make a bigger difference in their livelihood than it would in our bottom line. Like the proportions just didn’t work. So we said, “No cuts for you guys.” By the way, we’re cutting everything by 40 percent. We furloughed some people, and we laid some people off, and so everybody who stayed actually agreed to take on more work for either less money or their salary, which is not what I would call highly compensated. Everybody took a hit. And I tried to frame it as, “I’m gonna be the lead here, and I’m taking the hit.” And frankly, at the end of the day, Adrienne and I are taking the hit as an S corp. If we go under, it’s us that goes under, not the folks working for us.

Loren Feldman:
Karen, your business is doing well. But did you consider applying for a PPP loan?

Karen Clark Cole:
Yeah, we did. And we got one.

Loren Feldman:
Wow.

Karen Clark Cole:
Yeah. I say we’re doing well and that we’re still working, but there are lots of financial impacts for us for sure, in terms of we have 30,000 square feet of office space in Seattle alone, plus all of our other four locations. That rent is largely offset by what we call “lab rentals.” It’s renting our research labs. We have six of them in Seattle, and they’re really big state-of-the-art facilities. We try to keep those busy every day, and those really pay the rent.

Believe it or not, we’re in a pretty low-margin business as consultants at the end of the day, so we have savings, but not a pile, so we have to be super careful. So then, with that being gone, it just starts eating right away into our revenue. While the project work continues on for the most part—we’ve had only a couple that are canceled and a lot that are delayed—we’re going to have a lot of deferred revenue.

But there are other things. Most people can’t take their vacation. And so, rather than lose it or accumulate it and then not really be able to—people can’t take months and months off at a time due to the project work—what we’re able to do now is buy it from people. That gives them a little bit more cash and it gives us the opportunity to acknowledge that they have vacation that they can’t take. My theory there too is it’s not life or death changes, but it’s allowing them to get takeout from the restaurants more. We’re trying to use that to encourage people to support the local businesses who are having a hard time. There’s things like that, and then we’ve got a lot of interest payments at the bank and matching our 401k. We’re just making sure that all of those things are continuing to happen, whereas we would have had to put a pause on most of that.

Loren Feldman:
Was there any question in your mind as to whether it was appropriate for you to apply or not?

Karen Clark Cole:
Yeah, I mean, it’s designed for us to keep everyone employed and keep the company running so that we [do] not have to lay anybody off. That’s what we’re doing. Because if we continue to not have the income from our actual physical office spaces, we might have to shut them down. That’s going to cause major problems in our business and have a ripple effect. My CFO spent a lot of time preparing all the financials. You have to make a case for it with real numbers. It’s not really us deciding, honestly, it’s them.

Loren Feldman:
Do you expect to adhere to the guidelines so that the loan will be forgivable?

Karen Clark Cole:
Yeah, I mean, that’s why we got it—to adhere to the guidelines.

William Vanderbloemen:
We’re not.

Loren Feldman:
You’re adhering to some of them but not 100 percent. Right, William?

William Vanderbloemen:
Well, we ran the numbers. This is rough math. It’s more complicated and granular than this. But basically, if your payroll at the end of the program has matched what the payroll was that they used to calculate your monthly payroll from last year—not headcount, just payroll—then it’s forgivable. But if you reduced payroll by a percentage, then you’re going to owe that percentage back to the government. We looked at the numbers of what we would save through payroll costs, through layoffs, and furloughs and what we would owe, and it was a no-brainer. A good bit of it’ll be a grant, some of it we’re going to owe, and by the way, we won’t owe it for a year, and at a very low percentage rate, and saving the money now, cash is king. It seemed to be a better splitting of Solomon’s baby for us.

Loren Feldman:
Dana, what are you thinking right now?

Dana White:
I… I have a feeling. I’m listening to the difference between William and Karen’s story and Dana’s story. You hear, “Well, we prepared.” There was no we prepared. Like, what is the definition of a small business? I prepared. I applied. My business is shut down and I don’t know what the government standard was.

I think everybody who got the PPP needed it in some form. I’m fortunate. I’ve gotten, in about a couple weeks, I’ve gotten about $10,000 in grants. So it’s not like nothing’s happened, and then I’m with William. The PPP wasn’t my lifeline. I wasn’t like, “Oh, I’m going to get it, and it’s going to save my business.” No, it was definitely a bridge.

But I guess you listen and you see companies that profited, and then, the people in my circle are small businesses under a million in revenue, and they didn’t. The companies that I’m speaking with, most of them don’t have benefits packages for their staff. You just go, “What is the plan? What is the genuine plan for working people?” And I’m not talking to people who can now work remotely. I’m talking about people who make this country run, period. I’m talking about the people that if they don’t go to work, the country stops. I’m seeing that these aren’t the people, the companies, the small businesses that got the money. The independent grocers. The hair salons. The small restaurants. They didn’t get the money, and it’s not that, “Oh, I’m mad that you guys got the money.” No, no, no. Your people help. They do. But I have a staff that are single mothers, single black mothers, who are hard working and who didn’t have the foundation to go to college and are doing what they can. I’m up every night trying to help them, and I need help helping them. And I’m not getting it. I’m getting it from my community, like the TechTown Stabilization grant. The DEGC, which is a Wayne County grant fund. They’re helping, they’re stepping up, and they’re turning that money around quick.

But when it comes to national leadership, I think I’m seeing, “We’ll get to you. We’ll get to you, small business.” And that’s it. I don’t want to sound like, “Well, why not my business?” But a part of me is saying, “Well, when are they going to help the companies that didn’t have a $100,000 profit or a $5 million profit or who didn’t have a profit at all last year, who can’t offer benefits for their staff, and whose staff, some of them, are the working poor?” To me, there’s a difference. If you can work from home right now, that’s different than those of us—not us, because I’m working—who can’t. There’s a huge disparity in what the definition of a small business is.

In my circle, there’s a lot more of me’s than there are of them’s. So that’s it. Please don’t make it sound like, please don’t hear that I’m, “Oh, you got it?” No. But I’m just wondering, the people who I’m seeing who are closed right now, and nobody’s working at all, the only people who are working are the owners, I didn’t see many of them getting the PPP. So I’m really hoping that they’re going to make another stimulus package that’s going to filter down to me.

Loren Feldman:
William, I don’t think anybody has spent more time trying to figure this out than you and your team did, and trying to spread that knowledge to help others. Across the board, do you have a sense of who was getting funded and who wasn’t?

William Vanderbloemen:
Well, all I can speak for is the people we’ve worked with. The stories I’m hearing, churches are notorious for looking for the cheapest way out because they’re nonprofits and they take offerings from widows and people who can’t afford it. So let’s be careful with the offerings. The stories I heard, all the people who were getting turned down, down, down were the people who had switched banks every other year to get a quarter point off here or an eighth of a point better there or whatever the terms were. And then there’s just good fortune. I mean, there were a lot of people lined up. I was lucky.

Karen Clark Cole:
That’s certainly the case for us, is having a great relationship with our bank. They helped us a lot.

Dana White:
I had a great relationship. My banker called me three days before the application came out. Chase didn’t even contact a lot of small businesses. They contacted them, but then dodged them.

Loren Feldman:
Is that your bank, Dana?

Dana White:
No, PNC is my bank, and my banker called me three days before. And she said, “This is everything you need to get ready.” Huntington Bank has been phenomenal with the smaller businesses. I think Huntington Bank was very committed to getting Main Street businesses through the program. There are some that did get funded. There are some there that got loan numbers but no money. I think a lot of it is good fortune. I have an excellent relationship with several layers at PNC, all the way from senior vice presidents down to my local bank branch manager, and I heard from all of them.

Loren Feldman:
Do you have an existing loan with them?

Dana White:
I do not. I literally walked my seed money into their bank eight years ago and started my business and they’ve known me ever since. It’s also kind of personal with Maria, with her husband and her daughter. She’s a new grandmother. So I have a relationship.

Then what’s frustrating is that I’m the minority businesswoman that they call when they want to talk about how they’re helping minority businesses. I’ve done publicity for them. They’ve done pictures with me and invited me to things, and that’s how I’ve met some of the people in the corporate office at PNC is because, “Hey, here’s Dana.” And… crickets.

I have thought about switching to Huntington because my bank just wasn’t working for me, but I had a great relationship with the people there. And so now that this has happened, it’s made me kind of rethink it. At least Huntington communicated with their people. They could pick up the phone. I emailed my bank people, and she’s like, “Dana, everybody’s just out of the loop.” Even in the email, “Could you re-sign the document? And whatever you do, just reply and don’t ask any questions.” That’s like literally what the email said. It was like, “Okay…” So I think you’re right, guys, it’s relationship. But I don’t think the people who didn’t get it was because of lack of relationship…

William Vanderbloemen:
No, I don’t think so at all, and that’s horrible to hear. Unfortunately, there are just way too many of those stories. There were way too many people and not enough, and maybe more funding will come through. But I will say, if more funding comes through, the credit—like everything in my life—the credit for getting it done goes to my wife. Mainly because her father, who’s been in politics for a number of years, as soon as Congress passed it, he texted us and said, “Get in line now,” because they are notorious for not getting it done right. If you’re first in line, and you knock on the door every day, that’s your single best chance to control your destiny, and even then you might not.

Loren Feldman:
In the time we have left, I’d like to talk a little about what you see changing here and whether you’ve begun to think about how life might be different once we do emerge from this. Karen, I’m curious, you referred to the fact that your offices are not being used right now. Your life is less efficient doing everything on Zoom, but are you also learning a different way to operate? Do you think maybe going forward, you’ll think you don’t need all that commercial space?

Karen Clark Cole:
I hope not. I hope we don’t get to that where people don’t want to be together. Having everyone in the office and a beautiful space for us to work in and clients to come to has been really important so far. So, I hope not.

Loren Feldman:
Have you learned from anything else? Have you seen other things that you want to take with you on the other side of this?

Karen Clark Cole:
Well, I can tell you, some of the Zoom meetings that we’ve had with groups of people, you would think they wouldn’t work, but it almost works better because everybody is so focused on the screen in front of them that you really get a different level of interaction. I think, maybe there’s more to that. But we’ve got five offices and clients all over the world, and so we’re used to being remote. But I think this is giving us more tools and more skills at doing that well and not jumping on the plane so often. Maybe we’ll create a better carbon footprint by flying less and save a lot of money in doing that as well.

But we’re checking in with our employees regularly. There’s a lot of them who are not enjoying this. They’re in an apartment with a roommate, and they’re trying to work all day long, and it’s noisy, and it’s really stressful. Then there are people who have kids at home and they can’t get any childcare. They’re trying to work and juggle all that. It’s really stressful for a lot of people and not any fun. I think a large majority of our employees are excited to get back to work and to get their usual support. Certainly they want to get their hair cut. I can tell you, I think Dana is going to be busy the minute this is over. And you better stay open. [Laughter]

Loren Feldman:
Dana, I wanted to ask you about that. I think most of us assume that when we do come back, it’s not going to be like flipping a switch. It’s going to be a gradual thing. There are going to be some changes, and initially we may all be wearing masks and social distancing may remain in effect. What are you thinking in terms of the early days? You obviously can’t cut somebody’s hair from six feet away. Do you see changes you’re going to have to make?

Dana White:
Absolutely. I was on a call recently with someone who I didn’t know had been a customer at Paralee Boyd. “When it’s finally time for us to reopen, I’m going to go to Paralee Boyd” She goes, “The reason why I’m telling you this is because you are going to be jammed with people. You’re the only walk-in-only hair salon anywhere and everybody’s stylist is going to be booked. There’s going to be no place they can go but you.”

I have to keep my staff safe. We will probably—definitely—have masks. Gotta be careful using gloves on doing hair, because depending on the condition of somebody’s hair, that could break their hair—the rubber. We’re probably going to take appointments or do what we call “check-ins,” where people can do maybe two to four check-ins every 30 minutes. That’s where the Lean manufacturing of my business has to really kick it up a notch: where will these people be in the process that allows them to keep them at a distance from where the other people are going to be, and then moving them throughout this process to get them in and out in under a certain time. That’s what I’m working on right now.

Loren Feldman:
Do you think you’ll have to reconfigure your shops at all?

Dana White:
No, because it’s already designed to be Lean. It’s just managing the stagnation to say, “Okay, these two are here, they’ve moved here. It’s gonna take them 30 minutes to get to this point. This is the point in the salon where we can get two more people in at this station,” and moving people so they are not in close proximity all the time. In order to do that, we can’t let everybody come at once. We have to have people check in and do check-ins every 30 to 45 minutes is what I’m thinking. But if I just did walk-ins, we’d have a line around the block at both locations day one, and I’m not going to do that.

Loren Feldman:
Right. William, you had an interesting back and forth with Laura a week or two ago where she was suggesting that she imagined that churches may go a little bit more digital after this. And you said you didn’t really see that happening because people have a need to be together. Is that still how you’re thinking?

William Vanderbloemen:
Yes, but I think first of all, our work will become more necessary than ever. What I’m noticing—and this is part of why we’re building out reopeningchurch.com and reopeningschool.com—is, how do we foster conversation and realize what’s really out there? What churches are doing right now—and I think this is true of nonprofits and schools as well—is making as much connection with people as possible. The soft skills, relational intelligence, emotional intelligence: all of that is going to jump really high in the profile of the successful leader of a faith-based group in the next decade. That’s not something you can see on LinkedIn. You can’t just do a resume search to see if that works.

I think that there will be a combination. I don’t think it’ll be an either-or: Do we go back to the old way or do we do it all online? I think the interminable committee meetings that are during the nighttime where people have to leave their families and go up to the church, those might become Zoom things. I think some of the ministries that can happen digitally can happen. I think giving will be more digital. I do think the need to be together will still be there. I think what that looks like is going to be very, very different.

For the last 50 years, it’s been, “Come to the church and learn something.” Well, the idea of learning something at a location is over. It was over a long time ago. But now everybody knows. I mean, you can Netflix the best preachers in the world right now, so to speak. So we will come together, it will require a different kind of leader, and on the school side, oh my goodness a different kind of leader. I think what we’re trying to figure out is, “What is our value to clients?” And right now, it’s helping identify: What’s the profile of the new kind of leader in the new norm? And then how do you become the group that can help identify that talent quicker and better than anybody else?

Loren Feldman:
We’ve talked a little bit about Zoom. I’m curious if any of you had any security problems with Zoom? Anybody been Zoombombed?

Dana White:
Yes. I have.

Loren Feldman:
What happened?

Karen Clark Cole:
Yeah, we have as well.

Dana White:
Yeah, it was bad. The way they were getting all the people together to announce the grant, they did it with Zoom. It was a minority call, and so we got hacked full of Nazi propaganda, racist Confederate stuff, a lot of racial slurs being spit out, a lot of pornography. People just wouldn’t get off the call, and I kept posting, “You guys, we’ve been hacked, get off. The moderator needs to shut this call down.” And so then I just got off, and then they moved it to a call.

Loren Feldman:
What happened to you, Karen?

Karen Clark Cole:
It wasn’t me personally, but I know that some Russians showed up in one of our meetings, and it was quite a while ago.

William Vanderbloemen:
Did they tell you who to vote for? [Laughter]

Karen Clark Cole:
I’m not sure what happened. It was quite a while ago. We just switched to having a password and that solved the problem.

William Vanderbloemen:
We had a lot of clients, Loren, that are on free Zoom accounts—again, churches look for the cheapest option—that unfortunately had really, really bad bombings of their Easter services, like illegal graphic photographs that were thrown up in front of kids who were trying to do Easter. I’m yet to hear—and I’m sure it happens—but I’m yet to hear of anybody who’s using a paid account and using passwords who’s had the issues.

Loren Feldman:
All right, so here’s a question that’s of particular personal importance to me. Have any of you figured out how to get your haircut?

William Vanderbloemen:
Yes.

Loren Feldman:
What did you do, William?

William Vanderbloemen:
I get my hair cut every couple of weeks. I’m a little OCD about it. I called Caroline, who cuts my hair, and she works for a little salon that’s three blocks from the house. Of course they’re closed, and she said, “Find some clippers.” I went to Walgreens to pick up a prescription, and they were putting out a set of clippers. So I FaceTimed her, and I said, “How are these?” And she said, “They’re great. They’ll work. They’ll get you through however long this is. Buy them, take them home, and then FaceTime me with your daughters.” So my two teenage daughters—one of them was the camera person, and the other one was running the clippers—it took an hour to cut my hair.

Loren Feldman:
You let a teenage daughter cut your hair?

William Vanderbloemen:
Well, it can all grow back, right? What can go wrong? I am doing quite a bit of video, whether it’s media interviews, or Zoom stuff, or webinars, so it was getting pretty bad. Haircut Caroline we call her, because we know lots of Carolines, walked them through every step. And in exchange, we let her put it on her Instagram, so there are all these pictures of my head on Instagram with lines drawn about—

Loren Feldman:
So we can all go find that if we want to?

William Vanderbloemen:
Yeah, you sure can. But I think it turned out to be a win-win, and then we sent Caroline and her husband a nice gift certificate for dinner. We actually have another follow-up FaceTime tomorrow afternoon to learn how to do the very top of my head, which is a little trickier apparently. So we’ll see how I look next week.

Loren Feldman:
Dana, what do you think? Is there something in this for you?

Dana White:
Not at all ‘cause Paralee Boyd doesn’t cut hair.

Loren Feldman:
Right.

Dana White:
For me, I’ve just sent away for the samples that I want to use for some of the products I want to start selling. I’ve used them here in the house on myself. I’ve done the best I can do with my hair, because I’m not a hairstylist. I just own a couple of hair salons. So I just do my hair at the house—I did it actually right before I got on this call—and try out new things.

Karen Clark Cole:
Is there an option, though, for you to be sending and selling products to your customers?

Dana White:
Yes, but I have to find the right products. I did send away for some products, and I like some of them, and I don’t like other ones. So it’s a matter of which ones to go to. I wish we had an end date. I wish they said, “Okay, June 12th is when everything is going to go.” At first, it was April 13th, so now we know that’s not it. Now in Michigan, it’s April 30th, so now we don’t know. So with everybody pushing two weeks out, I keep moving the line forward. I’m hoping that I’m just going to get started. Well, I’ve gotten started, and once I get my product in, I will start doing how-to videos. I also want to send an email to my guests when it’s time to reopen about how to prepare to come to Paralee Boyd, because we just don’t want people walking in and saying, “I haven’t touched my hair in a month,” and you go, “Okay…”

But I do want to say this, to circle back if you don’t mind, Loren, to what we were talking about before with PPP. I have to say that I just think that there are a lot of people out there who are not on the cutting edge of anything. They don’t have a family member who can call them and say, “Get in line.” They haven’t built a multi-million dollar business. And although they’re smart, their access is limited. I.e. me, right? I think we’re all just trying to do a good job and just stay in business. I just really hope that there is somebody on a national level who recognizes that and is willing to help. I want to challenge either one of you or both of you to say, “Okay, listen, how do I send the elevator back down?” For example, William, what small business do you know—I’m not saying you didn’t do it, but just my challenge is—when you got that call, what small business owner do you know who you could have called and said, “Hey, this might be a good time to get in line”?

William Vanderbloemen:
Yeah, that’s good.

Dana White:
We have to start acting like our governors. Our governors are not waiting to be told what to do. Small business owners can’t wait to be told what to do. I’m challenging the people who do have the access, the people who can get the PPP, the people who do have a CFO on staff to go to people and say, “Hey, listen, I just got this call, this, that and the other. Hey, make sure you include this.” Send the elevator back down. That’s what I’m doing. I have businesses that are smaller than mine that don’t know what a profit and loss is. If you go, “Okay, let me talk to you about this,” I think that’s how it’s going to get through. So that’s all I’m saying. Try to send the elevator back down, and whether they get on it or not, that’s not your issue. But at least you hit the button, and it closed the doors, and it went down.

Loren Feldman:
That is something for us to all think about. We are out of time unfortunately. I do have a very special programming note. I just want to mention that on Thursday, this coming week, April 23rd at 3 ET, we’re going to have a special edition of the 21 Hats War Room webinar that will feature all five of the regular guests on this podcast.

This will be our listeners’ chance to see which of us is in most desperate need of a haircut. We now know it’s not William. I feel like I may be the winner on that one. We all will also get to see Jay Goltz with his new quarantine beard, which I think you’ll find interesting, and everybody gets a chance to ask their own questions directly of Karen, Jay, William, Dana, and Laura.

But for now, my thanks to Karen Clark Cole, William Vanderbloemen, and Dana White. As always, I appreciate your transparency, your thoughtful approach to all of this in this really difficult time. Thank you. Be careful out there, everybody.

Episode 12: The Money’s in the Bank

Jay, William, and Laura talk about the status of their CARES Act loans, and to everyone’s surprise (including his own), William reveals not only that his Paycheck Protection Program loan has been approved, but he’s already got the cash. Was it divine intervention? Plus: Jay offers up a stress test for businesses in crisis—five ways to assess whether your company is positioned to survive.

Guests:

William Vanderbloemen is founder and CEO of Vanderbloemen Search Group.

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

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

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

William Vanderbloemen: “I am amazed at how much routine actually liberates you rather than enslaves you. It’s made sense out of the days. We’ve got good friends that own solid businesses who are streaming Netflix and wondering what to do next.”

Jay Goltz: “In 2008, the real estate market was completely decimated. Nobody was doing anything. I looked at an 85,000-foot building to move my warehouse and factory to, and the price kept dropping. Deal of the century. Would have never happened without the crash of 2008.”

Laura Zander: “It’s been four years of doubling my Prozac, trying to just figure it all out. So, you know, I’m comfortable right now. I mean, we will figure it out. We’re in a good spot right now.”

Full Episode Transcript:

Loren Feldman:
All right, let’s get started. I’m curious if all of you have gone ahead and applied for CARES Act loans. Let’s start with you, William. I don’t know of any business owner who’s done more to investigate and figure out how this whole thing works than you and your team have. You’ve shared that information with a lot of people. But how’s it working out for you? Did you get your application in?

William Vanderbloemen:
Well, we put our application in, Loren. And you know, austerity’s in place in our house. There is no wine or beer during the week. Otherwise, I’ll gain the COVID 19, and I don’t want that. So when Friday rolls around, it’s like, “Yes, okay, made it to Friday.” So I get to five o’clock, and I make Adrienne a cocktail, and I make mine, and then I get a voicemail from my banker saying, “Please call me as soon as possible.” I’m like, “Oh my gosh, really? Really?” And so I called her, and she said, “I just want you to know, you guys are the first organization in all of our banks nationwide to be approved for PPP.” So I’m like, “Okay, that was worth it. That’s fine.” Within 48 hours, we were funded. So the money’s in the bank.

Jay Goltz:
What?!

Laura Zander:
Oh, you really are close to God. Oh my God. I’m gonna start going to church. Okay, you’ve convinced me.

Loren Feldman:
William, how do you explain this? Why do you think you were successful?

William Vanderbloemen:
I don’t know.

Jay Goltz:
They don’t want to mess with the guy with God. It’s obvious.

William Vanderbloemen:
Dumb luck. There’s a story in the New Testament that Jesus tells where he says there was this widow who kept coming to court and she just kept bugging the judge over and over and over, and finally wore the judge out by coming to him over and over and over, and he said, “Just give her what she wants.” And that might have been a little bit of it.

Our COO is so good and just kind of bull-dogged it and called over and over and over. And we were providing this resource to a whole lot of people. Our bank knew about it. So I don’t know. The lines fell in pleasant places for us and it worked out. I’ve actually heard of a church with about 25 members yesterday that got funded. So, it’s happening.

Loren Feldman:
Did you get as much money as you were anticipating?

William Vanderbloemen:
Yeah, every dollar.

Laura Zander:
Wow.

William Vanderbloemen:
We created a little calculator on that. I think we’ve overplayed it, but churchcovid19.com.

Laura Zander:
I’ve used it.

William Vanderbloemen:
You enter payroll, and that’s what we used. So maybe we could have squeezed some more money out, but we didn’t. Adrienne’s dad, my father-in-law, was in politics for a long time, and he told me as soon as this CARES Act went through, he said, “Be sure you’re first in line. Because once it starts, it’s a feeding frenzy.” And he said, “I know this is different than anything else.” So we got a little rabid about it, and I don’t want to take credit. Our bank gets a lot of credit.

Laura Zander:
What bank do you use?

William Vanderbloemen:
BBVA.

Loren Feldman:
A lot of people, even if they’ve gotten it through their bank, they’ve then run into a wall at the SBA. Did you have to do anything with the SBA?

William Vanderbloemen:
No, no, no. I forget the name of the other act… the interruption of business stuff that you can do straight through the SBA, which I think is …

Loren Feldman:
E.I.D.L. I think.

William Vanderbloemen:
Yes, that’s it, where they credit the first $10,000 to you. We have applied for that. We have not heard anything about that, but I’m not über concerned about that. I understood that would take a while.

Loren Feldman:
How about you, Jay? When we spoke last Friday, you felt you had all your ducks in a row, and the application was ready to go. Where do you stand?

Jay Goltz:
Well, there might be some irony here. I was with this smallish business bank in Chicago that got swallowed up by the bigger bank from Ohio—not a Chase size, but but much bigger—and I thought, “Great, here we go again, because I’ve already seen this movie.” Maybe I’m better off with them because [my banker] claims that I’m number three on the list. He’s trying to hold on to my account, because he knows I’m not happy with the whole merger, and maybe being in a bigger bank now will help. I don’t know, but he claims we’re number three.

Loren Feldman:
Number three on the list to be approved by the bank?

Jay Goltz:
Literally like half the bankers left the bank after the merger, and he stayed around, and I’m number three on his list.

Loren Feldman:
Supposedly, they’ve been approving these loans for a week. Why would you still be number three? What’s keeping you from approval? Do you know?

Jay Goltz:
I don’t know. I mean, that’s like asking me why the sky is blue. I have no idea and frankly, my CFO is dealing with it. I’m dealing with other stuff, but I wish we had video for this because while William was talking, my mouth was hanging down the whole time that you actually have money in the bank.

Laura Zander:
Oh my God. Me too, yeah.

Jay Goltz:
Did the Easter Bunny come by too today? Is he outside? I’m flabbergasted, but I’m hopeful that it’s going to go through. I’m hopeful, but I’m not counting on it. So, we’ll see.

Loren Feldman:
How about you, Laura? A lot of the people applying for these loans are truly desperate. From what you’ve told us, you’re not as desperate. Your sales of yarn online, I gather, have continued to hold up. But you’ve gone ahead and applied for the loan?

Laura Zander:
Yeah, absolutely. I use US Bank, and they didn’t have the application process ready until Sunday morning. I put everything in Sunday morning, and then every day they send an email saying, “It hasn’t changed, it hasn’t changed, you’re still in step two of seven.” They’ve done a good job of communicating regularly and have really laid it out.

I was bugging our banker every, probably four times a day. I used William’s calculator. I’ve been following everything that William has been doing, studying it. In fact, I’ve been putting together a selection of resources per William to share with the knitting community and all the different yarn shops.

But yeah, we’re still just waiting. I’m with Jay. I mean, I’m hopeful, but I don’t know that it’s gonna make a difference. And yeah, yarn sales are good. The two businesses that we have, one of them is doing well, and the other one is losing lots of money every week. The one is covering the other one for right now.

Loren Feldman:
And Is that why you decided to apply for the loan, I assume?

Laura Zander:
Oh, absolutely. Because I don’t know when this is gonna fall out. I mean, right now, things are going well. People are knitting a ton, people are buying a lot of toilet paper. It’s the same kind of thing. But at what point does the bottom fall out? I’m a little worried that we’re going to have a delayed reaction. We are trying to just do what we can, push as hard as we can, save as much as we can to be prepared for when the bottom falls out for us.

Jay Goltz:
The interesting question is, did you steal from future sales now? Or are they just going to knit more stuff? It is possible that people will just knit more. Or it’s possible they just loaded up on the supplies, and you’re gonna see a drop later. Who knows?

Laura Zander:
That’s the thing. W e just want to be smart about it, and be prepared for whichever way it goes.

Loren Feldman:
William, do you have any advice for Jay or Laura?

William Vanderbloemen:
Loren, I’m just a recovering preacher. I’m still learning how to do business. And I’m sure you guys have used the same bank for a while, but like, I’m loyal to a fault. It was Compass Bank, which then became BBVA. There was some pain in that, but we stayed with them. We do our personal with them. We’ve done every penny of every business we’ve ever done with them. And as a result, we have a person who works with us. I think that the relational equity that we built over a long time kind of got us a little farther in the front of the queue.

Where I’ve heard trouble for some churches is, if you dig a little deeper and say, “Why are you not getting anywhere?” They’ve bounced from bank to bank every year to get an eighth of a point here or whatever the thing is. It’s like frequent flyer programs. I’m embarrassed how well United treats me, but it’s because I only use them. I don’t know if that’s a transferable principle, but it’s part of the equation for us.

Jay Goltz:
I need to step in on that because I’ve been to 10 banks over 42 years. Some I was with eight years, 10 years. Some I was with for a year or two years. I’m sure in your case that was helpful, but I don’t want anyone listening to believe that if they stick with the same bank for years, they’re going to take care of them, because that is absolutely not always the case. If you’re at the wrong bank, meaning they’re really not a small business bank, you’re naive to think that, “Oh, I’ve had my car loan there for years. I’ve had my checking account there since I was 20 years old.” If they’re the wrong bank, and they’re not a business bank, it doesn’t matter.

You happened to be at the right bank, and you stuck with it. It worked. But there’s lots of people who are at banks that really are not small business banks. And at the end of the day, I don’t care how many years you’ve been there, they’re not giving you a business loan because they just don’t do that stuff.

Loren Feldman:
In your case, Jay, I think your situation was, you thought you were at the right bank, but then it got taken over and it became the wrong bank.

Jay Goltz:
Yes, I was at the small business bank. So here’s my advice about banking. Banks need two out of three things. They either need big business, they need retail business, or they need small business, but you’ll be hard-pressed to find a bank that does all three. The gigantic banks of the world have banks on every corner, they’re doing tons of business with mortgages, with car loans, blah, blah, blah. They don’t really need the small business community, which is why all these other banks exist. And the small business banks usually don’t have banks on every corner and don’t do business with the big [ones], so it’s two out of three.

I was at a smaller bank that was designed to take care of small business, and they got bought out by a much bigger bank. But it’s still a business bank. It might be okay. And like I said, the guy’s paying attention. And he’s calling us. There’s a tip. The guy called me. I’m not calling him. He’s following up with us. I feel like we’re in the queue. I will be disappointed if I don’t have the money in a couple of weeks, but I certainly am not expecting it this week. I haven’t signed any documents, so I know the process isn’t done because I have to DocuSign something, and he hasn’t sent it over to me yet, so I know it’s still not officially in.

Laura Zander:
We’ve had US Bank for probably 15 years now. We went there from Wells Fargo. And I think the fact that we’re in a small town helps, even though it’s a large national bank. The guy who I work with, he comes in and visits. I can email him anytime. It’s so personal.

Jay Goltz:
Do you borrow money from them?

Laura Zander:
No. Oh, we just did. We just did for the very first time.

Jay Goltz:
My point is, if you never borrow money from a bank, that’s like saying, “I’ve got a great insurance company, but I’ve never been in an accident.” If you’ve never borrowed money from the bank, you have no idea. That’s why I say people are naive. They think because they’ve been to the bank for years, it’s going to take care of them. And when it comes to the business loan, some of these banks just don’t do it. They really don’t.

Laura Zander:
Okay, I mean, we had a line of credit for quite a while but I see what you’re saying.

Loren Feldman:
Okay, next topic. We’ve heard your stories the last few weeks. We know that each of your businesses has, to say the least, taken a hit. I’m wondering, have you thought about what it would take to actually put you out of business? I’m asking this in part because I’m curious about what makes a company well-positioned to make it through a crisis like this, and I’m wondering what we can learn from this. Jay, let me start with you. Have you thought about what it would take to actually end your business?

Jay Goltz:
Yeah, and remember, I’ve lived through four recessions, September 11, the whole thing. This is worse, to some degree, in the short term, and after I got over the… I’d say two days of shock, I started saying to myself, “Okay, let’s go through this.” Number one, I’ve got a strong customer base that loves my businesses. My framing business in Chicago is literally 20 times the size of the national average. I probably have 30% of the market here in Chicago. And then my retail furniture store, same story in my wholesale. I’ve got a strong thing.

Number two, it’s about legal exposure. I don’t have partners. I don’t have investors. I don’t really have a landlord. So it’s not like I get a call like this, “That’s it. We want you out. I want you to sell the inventory.” That’s a huge deal, and that was by design. I never want to be in a position that some partner I’ve got who’s living in Boca Raton now, who’s 73, calls up screaming, “I want my money back, close the business down.”

Loren Feldman:
Let me stop you there. We’ll come back to you, but you just made a couple of interesting points. William, how about you? Have you thought about what it would take for you to actually go out of business in this situation?

William Vanderbloemen:
Oh sure, I mean, not more than 365 times a year. You’ve probably seen the entrepreneur’s journey, and daily journey, is like, “I’m awesome. I suck. We’re doing great. We’re gonna close.” I don’t know how as a small business owner you don’t go through that.

I do think, for me, I have found where my checks and balances are to see when I’m out of touch with reality and in touch. Adrienne and I balance really, really well. She’s usually the realist, and I’m an idealist. When I start to go through the paranoid tailspin of, “Here it is. This is it. We’re closing up shop. We’re done,” I’ll gut check with her. In this instance, she’s been very clear to say, “No way. The business will come back.” Now, how we lead through this could end the business.

Loren Feldman:
William, what do you mean by that?

William Vanderbloemen:
I mean, so I read a really interesting article. It was in Harvard Business Review and it was a large quantitative study of businesses that bounced back after the ‘08 recession and whether they were aggressive in cutting costs or aggressive in investing in more…

Laura Zander:
Marketing.

William Vanderbloemen:
Exactly.

Loren Feldman:
We linked to that story in the 21 Hats Morning Report.

William Vanderbloemen:
What I took away was, if you cut too aggressively, you’re more likely to fail than anybody. However, if you’re too aggressive and bullish about just pushing forward at all costs, you’re second likely to fail. It’s in the middle there of walking this tightrope that really determined who made it and who didn’t. I think that’s what we’re trying to do.

Last week’s podcast [episode] was the day after we reduced payroll by 40 percent. We could have reduced it more. We didn’t, and that reduction was a combination of layoffs, furloughs, and payroll reductions, beginning with my salary going away. That was pretty severe, but we could have been more severe.

The market, unless churches can’t gather anymore, and unless schools can’t have school anymore, unless non-profits go off the market, they will need top leadership. Some people might say, “In a recession, when everybody’s looking for a job, why do I need to search for one?” Actually, it’s trickier then to figure out who really needs a job and who wants this job.

I’m not concerned about the necessity for my type of work. The market, I don’t think will go away. How I lead through this crisis will determine our viability in the long term. I’m looking for checks and balances where I’m not being irrationally panicked or irrationally aggressive. I’ve tried to surround myself with a leadership team, and it’s a very small team, but I’m incessant with them about saying you have to tell me the truth. I’m trying, Loren, to not be the reason that our business ends. It won’t be because of my team members. They’re amazing. It won’t be because the market collapses. That’ll still be there.

Loren Feldman:
Do other people who do what you do?

William Vanderbloemen:
Well, before COVID we had a few people that were trying. After COVID, I’ll be interested to see how many are still standing.

Laura Zander:
I’m curious, William. You keep saying your leadership. Are you not treating your team well? What are you worried that you’re gonna do wrong?

William Vanderbloemen:
Cut too deep too fast or fail to jump on opportunity.

Laura Zander:
So you’re worried that you’re going to either be too impulsive or not impulsive enough.

William Vanderbloemen:
Exactly. It’s the tightrope of when do I expand and when do I be cautious?

Laura Zander:
It’s the BOSU Ball. This is why I’m so glad I’ve been doing yoga because it is literally just surfing.

William Vanderbloemen:
Yeah.

Laura Zander:
If you lean too far on one side, you fall. If you lean too far on the other, you fall.

William Vanderbloemen:
The other external circumstance, is somebody gonna write an algorithm that suddenly causes companies to find staff without having to look? Is there a Pandora for staffing? I’m not real concerned about that yet. Am I concerned that churches won’t be able to meet for a year and a half and all of a sudden the economics change? Yeah, that would change things severely. But would that end the business? Or would it put it into sort of an Ice Age hibernation that we would come out of later? I think probably the latter, not the former.

Loren Feldman:
Laura, how about you? Have you thought about the possibility that the business might not survive this?

Laura Zander:
No, I haven’t a ton, but here’s why. I finally realized why I’m not freaking out. We have been struggling for three years ever since the flood that hit us and made us move in 2017. It’s been three years of struggle and being scared that the business was going to go away, thinking that we might close. I’ve been in battle for a really, really long time. So there’s part of me that I think emotionally is either just beat down or numb or callous, or I’m just used to it.

Jay Goltz:
No, I have the answer. You’ve become a warrior. This is what happens. You’ve become a warrior.

Loren Feldman:
But let me just point out, Laura, for people who’ve been listening to the podcast, they’ll recall that a couple of months ago, you were telling us that you and your husband Doug, were on the edge…

Laura Zander:
Oh my God. I’ve been on the edge forever.

Loren Feldman:
…with the acquisition of the company in Texas. That was before any of this happened.

Laura Zander:
Yeah, exactly. And it’s been years, really since the spring of 2016 when we let our general manager at the time go, and everything has just fallen apart. It’s been four years of doubling my Prozac, trying to just figure it all out. So, you know, I’m comfortable right now. I mean, we will figure it out. We’re in a good spot right now. We’ve made the changes that we’ve needed to make. I’m not really worried about going away. We’ve been dealing with it for a long time.

Loren Feldman:
Is there any particular thing that does concern you most?

Laura Zander:
It’s what William was just talking about. It is the emotional stress that is being put on our team. It’s whether I’m going to be able to help lead, I guess, and have the empathy that I need to have. Just because I’m not freaking out doesn’t mean other people aren’t freaking out. I’m trying to be very aware of that and conscious of that. That’s the biggest struggle for us right now is that everybody’s on edge, which I’m sure is very normal. But that’s my biggest concern: can we lead this team? Can we do it in a way that doesn’t end up with people being horribly upset or bitter, or miserable, or whatever it is.

Loren Feldman:
Jay, I interrupted you before. You were kind of giving us what sounded a little bit like the beginnings of a stress test for a business entering a crisis. What else is on your list?

Jay Goltz:
Like I said, I’ve lived through two slowdowns, but I’ve never been to where the business was literally shut off for six weeks or even more. I went through this in my head, and here’s what I came up with. Number three is, do you have the will to go on? I have enough real estate, frankly. I could probably retire and be fine. I have absolutely no interest in going down to Florida. No offense to Florida and playing Pinochle and talking about my prostate with my friends. I have absolutely no desire to go do that.

Laura Zander:
Good. Because we have no desire to do that with you.

Jay Goltz:
I’m as enthused today as I was 20 years ago. I plan on working for a long time. The fourth one, which I don’t think I have exposure to, and I don’t think either of you do either: are your people going to be there when the dust settles? I believe that my people are 100 percent with me and are committed and will see us through this whole thing.

Then lastly, this is the trickier one: what kind of resources do you have? Do you have cash? I don’t have a whole lot of cash because I’ve always reinvested, but I do have buildings… I have a building that doesn’t have a mortgage on it, which gives me some credit. I think that that is going to be a defining thing for some businesses. Do you have any cash? Do you have any credit? Do you have any inventory? I’m sitting on enough inventory that I could bleed off inventory for six months and be okay. I’m not going anywhere.

Everything you need to know about business, you can learn from watching the Rocky movies. Rocky II, having his head beat in, he’s sitting in the corner, he looks up at Mickey after a bad round and he says, “I ain’t going down no more.” That’s where I’m at.

Loren Feldman:
How’s your prostate? [Laughter]

Jay Goltz:
It’s good! I swear I went out to lunch with someone I was telling this, and as we were leaving, the guys next to me—I swear to God—one guy said, “Oh, I gotta get an MRI on my prostate.” See what I’m talking about? I mean, that’s what guys do when they sit around these big tables and you wonder what they’re talking about. That’s what they’re talking about.

Laura Zander:
Mystery solved.

Loren Feldman:
In one way or another, each of you brought up the question of how long this lasts and how long you have to make it through. None of us knows, obviously, but are you thinking about that at all? William, are you planning for something? Are you thinking in terms of June? July? August? Next year?

William Vanderbloemen:
Well, I spend my day trying to connect with our clients. We’re creating a lot of content, but connection trumps content right now. I think that’s a customer care lesson that I’m learning and maybe it helps somebody out there today. There’s an innate desire among people to be with other people. It’s just not good that we’re alone.

CS Lewis had a definition of Hell. He said, “Hell is God’s granting of our final wish to be left alone.” I’m trying to connect with clients. As I connect with them, invariably the question comes up: so when do you guys think you’re going to be able to get together? It varies by region, obviously, but it also varies by church size. I’ve got guys with a 5,000-seat auditorium. That’s an entirely different situation than 200 on a Sunday.

Loren Feldman:
I read something on the internet, William, that indicated you actually did help a church hire a pastor without meeting them in person. Is that correct?

William Vanderbloemen:
It’s not quite 100 percent. They’d done some interviewing before this, but the congregation had not met, just the search committee. It was actually the oldest megachurch in the country, Moody Bible Church, which has been around a long time, very historic, lots of process. It’s not a nimble startup. It’s got some good calcification. It moves slowly. They got down to their final guy, and COVID set in, and the search committee said, “Well, rather than wait, let’s get this done.” So he met the deacons and deaconesses via Zoom. He did a virtual Town Hall. He preached virtually live on a Sunday to an empty room, but to the whole congregation so they could decide and vote whether he’s the guy or not. Did that on a Zoom meeting, I attended, and then did a Q&A, and then they used SurveyMonkey to vote. It was pretty awesome. The oldest megachurch in the country hired their newest pastor over Zoom. That’s a pretty good headline.

But to answer your question, Loren, a friend of mine wrote an article—Andy Crouch, it’s a great article—that talks about, “Is this a blizzard? Is this a long winter? Or is this a mini-Ice Age?” And you’ve got to figure that out and then adjust your business accordingly. So like, cash reserves? We’re built for a blizzard, no problem. We actually can withstand a long winter with cutting some costs and get through it. If it’s a long Ice Age, it’s a different proposition. And so polling people, what I’m hearing—and it changes every day—but the most recent things that I’ve heard is, there are parts of the country where this may not be true, but church-wise, most everybody’s hoping Father’s Day can happen. It may happen sooner in some parts, later in others. We’re planning to have a really rough Q2 for sales. We’re planning for about a half load in Q3, and hopefully three-quarter load in Q4, year-over-year. If it’s worse than that, and for some reason we decide to stay at home for a year and a half, then I think everybody’s got to redesign their plans.

Loren Feldman:
Laura, how are you thinking about how long this might last?

Laura Zander:
Kind of around the same. You know, we actually had some in-person events scheduled, some retreats [in] late June. We just decided to move that to late August. These are smaller, you know, 50, 60 people kind of thing. The customers are moving. They’re switching the dates, and they seem to be okay with it. Our biggest trade show is in early June, and that just got canceled. I think we’re thinking August-ish and that things will pick up and be relatively back to normal in the fall.

Loren Feldman:
Jay?

Jay Goltz:
I have a different answer. I feel like we’re in the cockpit. We’re going through a horrendous storm, and I’m paying attention to the gauges and what’s in front of me. I’m not thinking about two months from now, because there’s just nothing I can do about it. If I watch the news, they’ve got all these pontificators who are making up stuff, and whoever says the most outrageous thing gets on. “This is going to be worse than World War II.” It doesn’t mean anything.

I’m focused on, “What do I do today? What should I be doing for cash reserves?” I’m just seeing the way it goes, because I don’t know if this is going on for another three weeks, another three months. I don’t know. It doesn’t help any to be trying to guess, because there’s nothing I can do about it.

Laura Zander:
Well, same page, but I’m looking every day at our cash flow and I’m looking at our forecasts and adjusting. Right now, today, trying to predict how much cash we’re going to need over the next six to eight months, that’s where I’m at. Ask me again next week…

Jay Goltz:
What are you going to do with that information, though? That’s my question. What are you going to do with that information?

Laura Zander:
It’s changing how we’re spending things. I’m giving budgets out to the different teams. I’m watching it in case I need to cut budgets even more, in case we’re going to need to cut payroll, in case we need to cut down our ordering.

Loren Feldman:
Jay, it’s different because Laura’s—

Jay Goltz:
She’s got a business that’s working.

Laura Zander:
Yeah.

Jay Goltz:
Thanks for reminding me of that, Loren.

Loren Feldman:
You’re welcome. That’s what I’m here for.

Laura Zander:
Thanks for reminding me that you own your building, jerk.

Jay Goltz:
Build-ings. [Laughter]

Laura Zander:
Oh, yes. Sorry.

Jay Goltz:
Yeah, so it just shows you that everyone has assets and liabilities when this stuff happens. I’m down, literally 95% of my people are furloughed, and I’m not spending any money. I have to tell you, in some weird way, I’m like on a manic high. I’m in battle mode here. I’ve got good plans. My people are coming up with stuff we’re going to do as soon as we open, and I’m planning on sending a letter to a woman that I talked to nine years ago who wanted to work for me, but she couldn’t because she had an employment contract. Now I’m thinking, I wonder if she’s on furlough now. Talk about a game changer. I just sent her a note because I couldn’t find her phone number. I might be able to snag a million-dollar-a-year salesperson who I could have never hired before. So I’m just looking for opportunities to make lemonade out of lemons.

Laura Zander:
That’s a good point: opportunities. Jay and I have actually been talking offline about us looking into buying a building.

Jay Goltz:
And you’re going to get a really good deal and an incredibly cheap interest rate.

Laura Zander:
Yep. I’ve been researching, finding some buildings, looking at when do we think the commercial real estate market is going to hit bottom? Kind of studying 2008, 2009, saying…

Loren Feldman:
Laura, do you even know how difficult it is to buy a building right now? Are commercial realtors operating?

Jay Goltz:
Absolutely.

Laura Zander:
Oh, yeah. The guy who lives across the street from us, actually, he runs an escrow company, and he just said, “Everything has dropped out.” Nothing’s going through because of all the uncertainty. And I’m not looking to buy something… we don’t want to buy something today. But again, this goes back to, I’m trying to think about six months from now. Starting to put my feet in the water, starting to kind of look around, starting to track rates, starting to track prices.

Jay Goltz:
I can give you a real story. In 2008, the real estate market was completely decimated. Nobody was doing anything. I looked at an 85,000-foot building to move my warehouse and factory to, and the price kept dropping. Deal of the century. Would have never happened without the crash of 2008. I ended up with an 85,000-foot building with 27-foot-high ceilings and three loading dock doors. It was a game-changer, and I wouldn’t have bought that building if I didn’t live through the crash in 2008.

Loren Feldman:
What’s your situation, William? I assume you have a landlord?

William Vanderbloemen:
We do have a landlord. We were actually, at the beginning of the year, starting to talk about downsizing our space here in Houston so that we could have regional offices—probably in a WeWork or that sort of thing in about five other markets. And that’s still gonna happen. It’s just been put on pause. But it’s been really cool because we’ve been working [on] remote policies for the last year to say, “How would we work if we didn’t have an office?”

So in the middle of shrinking that, back in January, we found a subtenant for half our space. We have about 15,000 feet, not a lot. We don’t have manufacturing or anything. And we shrunk it down, where we have five, they have five, and we share five. We had put in there buyout clauses—they’re growing very fast, an oil-and-gas company that actually will grow through this—and we had hoped that they would actually buy us out, so we could go buy a building, kind of take a note from Jay, and just own my property rather than pay for someone else’s mortgage. That’s still in play. In fact, I just told our lead team, if we get out of our lease now—which may happen since we have a cash-strong subtenant that may want to make their own move—that’d be fine. And we can just stay virtual till everybody goes back to work and then figure out what to buy. We’re kind of in this weird no man’s land, and we’re figuring it out one day at a time.

Jay Goltz:
You have to realize my percentage of occupancy costs are five times what William’s would be. I have a factory. I’ve got showrooms. Rent is a major expense of mine, and it isn’t in his case. For me, it’s a game-changer. For him, it would be nice and worth doing, but it wouldn’t be the thing that, in 20 years he says, “Oh, thank God I bought the building.”

Loren Feldman:
I just love the fact that William’s recruiting service for churches is sharing office space with an oil-and-gas company. If anybody was wondering, yes, you are based in Houston.

William Vanderbloemen:
Oh, Loren, it’s even better than that. It’s an oil-and-gas company. They do a software for midstream, the shipping of the product after it’s out of the ground, and they’re based out of Israel. They’re all strong-practicing Jewish people.

Jay Goltz:
I knew that was coming!

William Vanderbloemen:
It’s just an amazing coexistence that people would think, “That can’t happen.” Well, guys…

Loren Feldman:
You guys need to merge.

William Vanderbloemen:
There you go.

Laura Zander:
Go do recruiting for him.

Loren Feldman:
All right, we’re almost out of time. Real quickly, you all sound like you’re doing pretty well, but I’d like to go around to each of you. Maybe you have a tip, just dealing with the isolation, with the sheltering-at-home aspect of this. William, how about you? How are you coping?

William Vanderbloemen:
So we have seven children, two of whom are out of the house, five here. One’s in college. My wife is now a university professor and a high school instructor and a middle school instructor and an elementary instructor and running a house. She could run the military. She can build a routine that works and scales, and she has built a routine and a schedule for us, and I am amazed at how much routine actually liberates you rather than enslaves you. It’s made sense out of the days. We’ve got good friends that own solid businesses who are streaming Netflix and wondering what to do next and waiting on what’s to happen.

The one thing that I’ve had all the children do every night before bed: make your list of six—I stretch it to seven—accomplishments you want to finish tomorrow for your work. For me, it’s seven items that have to get done. Even if we don’t get a contract in, or nothing good happens, I go to bed at night knowing I followed the routine, and I got seven things done.

Laura Zander:
Let me piggyback on that real quick. What I have done, and what has changed for me and has helped a lot, is a twist on what William is talking about. And that is, all of us working from home are writing up a daily status report, and it’s 20 items of everything that we did. You know, today, I’ll have my punch list of the stuff I want to get done. But then on the opposite page of my journal, I’m keeping notes of everything, every conversation that I have, everything that I do, so that at the end of the day, even if I feel like I got nothing done, I can look back and have a record of everything that I did get done.

Loren Feldman:
Jay, even through Skype, I can hear you climbing the walls. How are you dealing with that manic energy?

Jay Goltz:
I woke up in the middle of the night—not worrying—because my brain’s going. I’ve got some ideas I want to work out. And I can only tell you, my older sister sent me a text the other day, and she goes, “I’m really losing it. I’m depressed. I went out to the grocery store. It’s depressing.” And I texted her back and I said, “Our father at 19 years old went off to go through 20 bombing missions over Germany for three years. And every time he went up, he wasn’t sure he was gonna live through it. We can handle this.” And she goes, “You’re right.” Everybody needs some perspective here. You know, everyone’s going back to their homes. They’re in the house. They’re not in a foxhole, they’re not getting shot at. Really, let’s get some perspective here. This isn’t the worst thing in the world. It’s stressful.

The thing you were just talking about, William? I do it at night. That’s exactly what I did. I happened to have seven things last night, and it feels good to go to sleep. I wrote them all down, cleared my brain, until I woke up with my new idea. But yeah, it’s a good thing.

William Vanderbloemen:
I learned it years ago, Jay, from a banker who was in my church, and his bank used to hand out—if you can go as far back in time—the little day planners. You remember?

Jay Goltz:
I use one!

Loren Feldman:
You forgot who you’re talking to, William.

Jay Goltz:
I’ve got a Day-Timer.

William Vanderbloemen:
He said, “I make my list of seven things every day,” and he had like 25 years archived so he could go back and look and see, “What was my list back in…” This was before the cloud or whatever. I was like, “Now that’s impressive. I want to try and mimic that.”

Laura Zander:
Seven instead of three. I just always hear three. Seven sounds like so many.

William Vanderbloemen:
I don’t know, maybe it’s a biblical thing, Laura.

Jay Goltz:
Or an obsessive thing.

Loren Feldman:
If I started listing things I have to do tomorrow, right before I went to bed, I would never fall asleep.

Laura Zander:
Yeah.

Loren Feldman:
We’re gonna have to stop it here. My thanks to Jay Goltz, William Vanderbloemen, and Laura Zander. Be careful out there, everybody.

Episode 11: Warrior Mode

Jay, William, and Dana talk about their prospects for landing a Paycheck Protection Program loan, what they think business will be like when shelter-at-home ends, and why they decided to lay off people even though they expect to get forgivable loans: “The bottom line: we cut 40 percent of our payroll yesterday. My decision was, I would rather cut deeper, fewer times. So I'm going to do this once.” Plus: the daily routines of business owners stuck at home.

Guests:

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

William Vanderbloemen is founder and CEO of Vanderbloemen Search Group.

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

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

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Jay Goltz: “When you’re an entrepreneur, it is this moment, this situation, that truly makes the difference between you and everyone else. It gets down to this whole team thing. There’s no team in losing money.”

William Vanderbloemen: “The bottom line: we cut 40 percent of our payroll yesterday. My decision was, I would rather cut deeper, fewer times. So I’m going to do this once.”

Dana White: “My business is going to be a bounce back. Women are coming to get their hair done. They are emailing me: ‘Could you please take me privately? I won’t tell anybody.’”

Full Episode Transcript:

Loren Feldman:
Let’s start with a quick update. How are each of you doing? Where do things stand with your businesses? Dana, your hair salons, obviously, are still shut down. How have you been spending your time?

Dana White:
I’ve been spending my time getting ready for who and what Paralee Boyd will be when we reopen. I’ve been spending my time trying to understand small business loans and grants and county grants and loans and just trying to wait for applications to be ready online. Things are changing by the hour, so I spend my time staying in the know and trying to keep up with everything so I can get as much help moving forward as I can.

Loren Feldman:
When we spoke last week, we talked about the possibility of your creating haircare kits to keep your customers healthy and engaged during this period, but you weren’t sure about the timing of it. Have you gotten any further along in your thinking with that?

Dana White:
I have, but the timing is still not something that I’m going to be ready to bottle and label. You hear different things about how long this is going to go, and so I’m just gonna keep moving forward. And if we find that we do have the time for it, then I’ll do it, but for right now, it’s just a matter of just taking it day by day.

Loren Feldman:
William, I know you’ve invested a tremendous amount of time in analyzing the CARES Act and figuring out what it means for businesses like yours, as well as for faith-based organizations that you serve, and I want to talk about that. But first, what’s going on with your business?

William Vanderbloemen:
Well, I think, Loren, we’re all learning as we go. I’ve led from my gut for a long time, and now I’ve learned some things where I check my gut against stats and data. And I have a fantastic CEO who makes his decisions through thinking so our gut and our thinking lined up a while back, saying, “This is just not the time to sell,” particularly when you’re selling to people who are trying to provide hope, whether that’s through a school or a nonprofit or a church. So we made the decision, knowing it would cost us sales. Our sales bill out later, so we won’t see the revenue dip from that until summertime.

Loren Feldman:
Your revenue is still good now? And you expect it to hold up for a couple of months?

William Vanderbloemen:
Through April, and it’ll trickle down. But the gist of it is, we sell something, and then it bills out over either three or six months. So we’re still riding the tail of sales. We had a very, very strong January and February—our best ever—and that was really good. But we knew this would this would hurt.

I’ve told our staff three things. First of all, connection trumps content right now. Connection is key. I have a list of 15 pastors who I personally call every single day. I’m amazed how long people want to talk. Because loneliness is the signature of hell in any faith. We’ve said, when you connect, care for them. I saw on Forbes yesterday, one of the trending articles was, “Five alternatives to, ‘How are you doing?’” Because nobody’s doing well. Care for people in their moment. And then finally, produce content.

In the last week with this CARES Act we’ve been able to do all three things at once. And it’s been a swamp of business for us at geometrically higher web traffic than we’ve ever, ever, ever had. Hasn’t produced one sale. But you guys all work with sales funnels, and you know, there’s the top, and the middle, and the bottom. I think we’ve actually created a new part of our funnel called the tippy top. That’s not why we decided to serve, but people are like, “I trust you more than my bank right now. We’re not doing a search, but whenever we come out of this, we’re calling you.” That was not the intent behind the service. The service was really just like, this is the right thing to do right now. But I think on the long side of this gap that we’re in, it will prove very fruitful.

Loren Feldman:
Are your employees all still working?

William Vanderbloemen:
No, no, we did furloughs and layoffs yesterday.

Loren Feldman:
How did that go?

William Vanderbloemen:
Well, how does it always go?

Loren Feldman:
Sometimes better than others.

William Vanderbloemen:
I mean, if my pastor friends are listening, they’re gonna get mad at me right now. But did you guys see “Good Morning Vietnam”?

Loren Feldman:
A long time ago.

William Vanderbloemen:
Yeah, yeah. And Robin Williams did the weather forecast for Vietnam that day, and he said, “Today the weather will be hot and shitty, and another front of hot coming through.” So it never goes well. It’s awful. But I think that, unlike some businesses, we actually take time to pray with our employees before and after, and that’s a long separate episode, but it is a painful time. But in order to see the other side of this gap, we just had to make some changes. And hopefully we’ll be able to bring everybody back. But it is what it is.

Jay Goltz:
How many people are we talking about, William?

William Vanderbloemen:
We did a combination of things. First of all, I threw my salary away for the rest of the year as a first move, and made sure everybody heard that. I’m not taking a salary and my lead team all very willingly agreed to take a 25 percent pay cut for the remainder of the year. That was where we led from. And then it was a combination of layoffs, where we’re probably not gonna bring you back, you need to go look around; furloughs, where this is probably going to lead to a surge of business later and we want to let you know we’d like to bring you back; and then pay cuts. And we chose not to cut people’s pay at the bottom of the pay scale because they’re already living—I don’t want to say hand to mouth—but a pay cut would hurt them more.

Jay Goltz:
It’s so funny you say that because I sat down with my CFO. We haven’t done any pay cuts yet, but I came up with the exact same formula you did. We’re gonna go to the top people, meaning over 100 grand, and say 25 percent. And our line in the sand was 60 grand, that if you make less than 60 grand a year, we’re not touching them.

William Vanderbloemen:
Yeah, that’s almost identical to what we did, Jay. And the bottom line—you asked what it was—we cut 40 percent of our payroll yesterday.

Jay Goltz:
Yeah. I’ve got 115 employees. We immediately let go of 10 of them, and the rest of them, we’re waiting to see. I haven’t done the pay cut thing yet, but most of them are on furlough now.

I will also tell you that, if you talk to the law firms—my daughter-in-law is a labor attorney. She’s with a big law firm, and even the head person there, he says something about “our understanding.” They’re not even sure. It is not crystal clear. What’s the difference between a furlough and a layoff? It would be really helpful if somebody in the government would simply give us some guidance.

Loren Feldman:
The rules are changing every day, literally. They’ve changed every day this week.

William Vanderbloemen:
Jay, I would just encourage you next week—this week we’re not focusing on layoffs, we’re focusing on the CARES Act—next week, go to churchcovid19.com or schoolcovid19.com. I should probably have synagoguecovid19.com. There [will] be resources on exactly that. I think I understand it, but there is a serious gap between the need for knowledge on that and actual knowledge. And it is changing everyday, so we change the site in real time.

Loren Feldman:
William, I’m curious. Especially given the nature of your business, how exactly did you do the layoffs? Did you do them over Zoom?

William Vanderbloemen:
Well, so that’s the hard part, right? I mean, it’s hard enough anyway, but you’ve got to do it over Zoom. So, a couple mechanics: right or wrong, my decision was, I would rather cut deeper, fewer times. So I’m going to do this once, and if we get through Q3, and if we’re still in a mess, and it’s an ice age and not a winter, then we’ll have another round. But what I didn’t want to do was have two people get laid off this week and then two people next week, and then everyone’s wondering, “Is it my week this week?” And my best people start looking around. I didn’t want that. So we decided we’re going to cut deep.

Wednesday evening, I sent out an email saying, “Hey, guys, I appreciate all the hard work. Who could have seen this coming? We’ve analyzed our second quarter and what happened,” and this is how severe it was for us, Loren. January, year over year, we were 18 percent ahead, this year over last year. February, 18 percent ahead, this year over last year. Q1, so you add March in, we’re 18% below, year over year. It eradicated all our sales growth and then took us down below. It was bad.

Dana White:
I have a question: so your best people are looking, they’re gonna go elsewhere. Where are they going to go?

William Vanderbloemen:
I think there’s always room for really talented people.

Dana White:
Everything is shut down right now. Some of my staff threatened to quit. I discouraged it because I laid them off and provided temporary leave early, like March 15th. And they’re like, “Okay, I’m going to quit.” And I said, “Well, before you do that, I know you don’t like being laid off and it’s emotional right now. But if you quit, I can’t pay you unemployment. I have to report that you’re no longer an employee. So they’re like, “Well, I’m just going to go get another job.” And we said, “Okay, but know that this is coming down the pike, and we’re going to be a state disaster area. Nobody’s hiring right now except for grocery stores and some convenience stores and people who need help with stocking and stuff. And even then, they’re going to hire an influx of people, and then when this abates, they’re going to lay off more people again or they are going to let people go. So with your industry, where are good people going to go and get money faster than already being on staff with you?”

William Vanderbloemen:
Well, it’s a great question, and I don’t know the answer. We’re making it up as we go. If there’s any way I can provide certainty in the middle of this incredibly uncertain time, I’m trying to provide it.

Jay Goltz:
Well, here’s the word I’d use, and I’m 100 percent with you on this. This is about avoiding “collateral damage.” That’s what this is about. And it’s about confidence, and if you do your first cut, and you stick, “Okay, he knows what he’s doing, and we’re in this together.”

To your point, the dripping of every two weeks, it’s not a good thing. It’s bad leadership. So the answer is, if we can provide a sense of stability, “Okay guys, we made some adjustments that should get us through this whole thing,” then everybody’s a little calmer. We don’t need to make people start thinking, “Boy, he sounded really nervous. I wonder if he’s gonna be out of business in six months.”

William Vanderbloemen:
That’s exactly right.

Dana White:
That’s why I did it, yeah.

William Vanderbloemen:
Jay, to your point, I sent out this email the night before, saying, “We’ve looked at Q1 and Q2, and possibly Q3. The fiscal outlook is not good. And in order to be able to serve our clients on the far side of this, we’re going to have to make some changes. So join me tomorrow morning.” All staff on Zoom, unfortunately. We met for an hour and honestly, I approached it like a funeral. No laughing, no jokes. As much as you want to lighten the moment, it’s just not light. I told people what was up and then everyone received a personal Zoom meeting throughout the day. That was probably a long day for the people who had the 4:30 and 5:00 meetings.

Firing over Zoom is a really interesting thing. I don’t know that there’s a playbook, but we decided—even though it cost time and money—it’s worth it to care for our people, and probably worth it from an HR standpoint, that every call involved at least three people. There were no one-on-ones.

Jay Goltz:
Smart.

Loren Feldman:
People didn’t find out at the big group meeting who specifically was staying and who was going.

William Vanderbloemen:
No, in fact, I was late for our recording today because we have our weekly all-staff right before this. This was the weekly all-staff right after yesterday, where we have the Zoom call, and everybody’s looking to see what panels aren’t there. We had to go through, “Okay, here’s why. Here’s the why behind what we did.” We didn’t share that during the adjustment meeting. Nobody wants to hear that. Not then. But afterward, today, we spent a long time saying, “Guys, here’s the why. Here’s what the sales funnel looks like. Here’s how long it’s going to take to refill it. Here’s what that means for the sales cycle. Here’s what that means for revenue.”

Even with the CARES Act, what we don’t want to do is burn resources so hard through the summer that we wake up in the fall, and we have to fire people right when our surge is coming back.

Loren Feldman:
Well, that’s what I want to ask you, William. Everybody on your staff, I’m sure, is well aware how much energy you’ve put into figuring out how the CARES Act works. And I suspect that they understand that that act was designed to try to keep businesses like yours from having to furlough or lay off people.

Did that sow confusion? Were they understanding that you had to make this move? Or did they wonder why the CARES Act wasn’t saving their positions?

William Vanderbloemen:
Well, Loren, I’m the wrong person to ask because I doubt any of them are going to tell me the truth. You know, the first day you’re the CEO is the last night you hear the truth.

Jay Goltz:
I’ve gotta tell you, I think you’re both exactly right. Loren, you’re correct. People are a little confused, like, “Oh, well I thought they were going to come and save the day.” But William, you’re also right. No one wants to come right out and ask you, “Hey, by the way, am I gonna get paid when you get all that money from the government?”

I had my six key people on the phone with me yesterday on a conference call. They all have been with me literally 20 years-plus, and nobody wanted to ask me. At the end I go, “Anybody have any questions? Do you think we’re doing anything wrong or right?” Don’t think that I don’t have in the back of my mind—I called my cousin, who’s one of my people. I go, “Neil, do you think there was any passive-aggressive whatsoever? Is anybody wondering, ‘Should Jay be paying all this?’” And we both agreed, “No.” But I don’t know if anybody…

William Vanderbloemen:
No, you can’t know.

Jay Goltz:
I can’t know. When you’re an entrepreneur, it is this moment, this situation, that truly makes the difference between you and everyone else. It gets down to this whole team thing. There’s no team in losing money. There’s no team in this situation. It’s the boss and what we’re going to do.

I just want to make the public statement that there’s a range. On the left side of it is, they’re just employees, business is business, cut them off. In plenty of big companies, that’s how they operate. And that is what it is. I’m not in that camp. On the far right is, they’re my family. I’m going to do everything possible to save them. And then there’s a little bit to the left of that: they’re like family. I’m in that category. They’re like family, which means I’m going to do everything possible to make their lives easier, lower anxiety, and try to get through this whole thing. But they’re not my children and I’m not going to go broke taking all of my last money that I have very little left in cash.

I read an article about a company that’s paying their 10 employees because it’s not fair they should have to suffer through this. Really, it’s not fair? Where does that come from? How is that not fair to employees? I mean, this has nothing to do with fair. This has to do with, if somebody’s got a ton of money, and they can pay their employees through this whole thing, hats off to them. Really. But the fact is, most businesses just don’t have that kind of money sitting around. I certainly don’t. And I’m going to do everything possible, including helping them get unemployment. If anybody’s gonna starve, I’ll give them money. If someone’s been thrown out of their apartment, I’ll give them a thousand bucks, two thousand bucks. But this mentality that the boss somehow should be responsible for everybody, 100 percent, is just not…

Loren Feldman:
William, I’m curious, I assume you’re planning on applying for a Paycheck Protection Program loan.

William Vanderbloemen:
Yes.

Loren Feldman:
What do the layoffs mean for that? Don’t you have to keep a percentage of your employees in order for those loans to be forgiven?

William Vanderbloemen:
Well, Loren, there’s a page full of resources about this at churchcovid19.com.

Loren Feldman:
But I’m talking to the guy who knows.

William Vanderbloemen:
So, the answer is, my current understanding of the current interpretations, is that what is forgiven hinges on a comparison of your current payroll, January through March, against your last year average monthly payroll. We’re a little leaner than we were last year, intentionally. We actually grew but got leaner, and so we stood to have 91% of the loan converted to a grant. We were gonna have to pay 9% back. By making the cuts we made, it drops based on what is your payroll on June 30. We’re going to have to pay about 76% of the money back, but the money we’re going to save in payroll from today through June 30 is far greater than that. And frankly, it’s also cash on hand versus a loan owed to the government.

Jay Goltz:
With a little maybe thrown in there because, who knows? There’s always a maybe. The other issue to this whole thing is, if your employee said to you, “Jay, I’ve gotta ask you a question. If you get all this money, are we going to get paid back?” My answer is, just like William is saying, I don’t know that we’re going to have this great bounce back that people are in their houses and they want to get more framing done, they want to buy more furniture, things are roaring. Or my customers are going to be devastated themselves. I have no idea if this is going to be a bounce back, a little bit down. So I tell everyone, “I have no clue.”

Dana White:
Mine is going to be a bounce back.

Jay Goltz:
Sure.

Dana White:
Women are coming to get their hair done. They are emailing me. “Could you please take me privately? I won’t tell anybody.”

William Vanderbloemen:
Totally, totally.

Loren Feldman:
Are you gonna apply for a loan?

Dana White:
Absolutely.

Loren Feldman:
Do you have that in the works?

Dana White:
I do. I’ve been in touch with my banker, and we’re just waiting for the loan to be active. I also have a girlfriend who has the paperwork ready to submit through a certain lender. And I went to treasury.gov yesterday after [Treasury Secretary Steven] Mnuchin promised that it would be ready today through all banking institutions. I went to treasury.gov and looked at the sample, and it’s going to be a fairly easy application.

Everybody’s staff is different. And so with my staff, they assume that I’m a millionaire—except for my leadership team. My leadership team understands, but my team that’s on the ground, some of them believe that, “Dana, she’s a business owner, she’s a millionaire. So why can’t she pay us through this pandemic?” They’re not connecting that revenue equals payment. I had to learn that less is more for me and swift, decisive action is what they need. Gradually laying people off would have been the worst for me and waiting to do it would have been even worse. And now it’s a matter of keeping in touch with my operations person, letting her know what I’m doing every day, and understanding that these programs and the stipulations and qualifications around these programs are changing hourly. And now it’s just about getting the loan process.

Loren Feldman:
Dana, if you get the Paycheck Protection loan, will you bring back those employees so that the loan will be forgivable?

Dana White:
Absolutely.

Loren Feldman:
And do your employees know that?

Dana White:
Yes. I’m going to need to bring everybody back.

William Vanderbloemen:
So Dana, I sent the same text to the woman that cuts my hair. “Come on, Caroline. I’m not going to tell anybody. You could just sneak over cause it’s getting bad over here. I’ve got enough working against me. I don’t need a bad haircut too.”

I think that every smart business owner is going to have to look in the mirror and say, “Let’s assume there’s a bounce back. How fast does my business bounce in a bounce back?” Dana’s going to bounce back immediately. I tried to buy clippers on Amazon last night. It’ll be like a year till they show up. You know, it’s ridiculous.

Restaurants should bounce back pretty quickly. We will not. We will start conversations once churches start meeting and then we enter the sales cycle. Fortunately, we’ve been pretty anal about keeping our data. We know exactly how long a sales cycle is, so back to the original, “What about PPP, and why does that create confusion?” We actually created a slide deck this morning that was pretty simple, that just showed our income versus expenses and what that means for net income if we don’t do anything, and of course, it’s way down below the waterline, and what happens if we don’t do anything. But we take the PPP, it takes us a little less down below the waterline, but it stays below the waterline through the year. And what happens if we reduce expenses and keep our powder dry and take the PPP, and it puts us in a healthy but certainly not greedy position. We just put it out there very transparently in front of our people. Right now, I’m getting slack messages from all of them. “Thanks so much for the graphs. Thanks so much for the graphs.”

Jay Goltz:
I’m in between both of you. There’s no question people need to get their hair cut, so you’re in a good place. And there’s no question you know how long your sales cycle is. I literally could either have a great bounce back because people have been pent up in their houses and they want to fix their house up, or they can wait until three months from now. I don’t know which way it’s going. But I’m certainly letting everyone know I’m planning on bringing them back. I’m telling you, my average person has been here 10 and a half years. I am fully committed to digging in and doing everything I can to make sure we bounce back.

What I’m doing now is, I’m working on a new marketing thing. The second the green light is on that this is over, quote-unquote: “Hey, you’ve probably got stuff to frame. We have a lot of inventory and blah, blah, blah.” We’re working on it, because there is some stuff I can do to prepare for that. And then the other problem with this is, it’s not going to be a light switch going on. It’s going to be, “Okay, the government stopped the stay-at-home order, but still stay six feet away from people.” And there are still going to be people, including me, who are going to think twice. I don’t know that I do want to go in a big group of people.

I’m already getting pressure. I have a lot next to my home store, a big lot. It’s filled with plants in the summer. And people are asking us, “When are the plants coming in? Because I saw my landscapers working, and you should be able to open. You’re like a landscaper.” And I have to explain to everybody, “We’re not like landscapers. They’re outside by themselves. You’re inside looking at them through a glass window.” It’s not the same as going into a lot with a bunch of people mingling around to buy plants. And there’ll be some vigilantes that will see us doing this. Literally, in Chicago, they have a bounty now—you call 311, and you can get a reward if someone’s operating their business. Someone’s going to call up and say, “Those greedy people over at Jayson Home are out there subjecting their employees to…” and I’m not doing it. I’m just not.

Dana White:
For Paralee Boyd, it’s a matter of managing the influx. So right now with the unemployment going up, I think they’re going to add $600 either a week or per pay period to the unemployment. That will be more than what some are making at Paralee Boyd. And so I’m expecting some of my staff to not come back. I have to scramble, hire, and then manage the prospective volume because this is where Paralee Boyd comes in. Everybody’s going to be running to their stylists to get their hair done. Stylists are going to be booked weeks out. Paralee Boyd is going to be one of the only places where you can come, walk-in only, seven days a week. We’ve got to manage the volume.

Our message now to our staff is, “I understand that you want to leave. However, look at your hiring cycle. You have to one, find a job; two, get hired; three, work for two weeks or a week and a half before you get paid. When we reopen, you can come and make money that day, because we’re going to be slammed.

Jay Goltz:
Well, I think there’s two parts to it. First, one of them is, can they make money sooner? And part of it is, they just want to give you a hard time. They’re just angry. Part of this is they’re just mad, which is unfortunate, but I get it. They don’t get it.

Loren Feldman:
Do you have any of that with your employees, Jay? Do you think your employees understand what’s going on?

Jay Goltz:
I believe so, but I have to tell you, I have people—I get choked up when I say this—I have people [who say], “Jay, we’re going to be okay. We’re getting through.” They are on the mission with me. They’ve always been on the mission with me. And the people that weren’t on the mission with me are long gone. I couldn’t be prouder. I’m going to do everything in my power to make sure that every single one of them comes back.

I was on a business group with a guy one time and he’s got like 10 employees, and he says, “Oh yeah, my guys are trying to unionize.” And I go, “What? You’ve got this little company.” “Well, I don’t know why. Blah, blah, blah.” And I said to myself, “Something’s wrong with this picture.” And previously at another meeting, he said he didn’t have a bonus plan one year, so he put a note up on the bulletin board: “There’ll be no bonuses this year.” So I got an idea of what his management style was. I just said to him, “Let me ask you a question. Do you ever loan your employees money?” “Oh, no, never. I would never do that.” And I’ve gotta tell you, it was that moment that I figured out, at the end of the day, it’s about one thing. Do they think you care? Period. I’ve given out literally 200, 300 loans over the years. At any given time. I’ve got five people that owe us money. They’re paying it back. I’ve gotten stuck once—once in 42 years. If someone’s going to have their gas shut off, and you can’t lend someone 200 bucks who works for you, they don’t think you care because you don’t. And taking it today, my employees know we care. That’s what my bottom line is. They know we care.

Dana White:
No, not at all. I disagree. The good thing is that, in previous podcast [episodes], we’ve all talked about the different dynamics there are with staff, and there were things that I’ve shared with you, like, “You’ve had to call the police on your staff?” Yes. I’ve had staff ask me for loans. We’ve helped one person. We helped one girl whose mother kicked her out of her house. She was living out of her car, and we gave her spending money for food, clothes, and we temporarily put her up in a place. We never saw her again.

Jay Goltz:
Wait, how old was she?

Dana White:
She was in her early 20s.

Jay Goltz:
And how long had she worked for you?

Dana White:
Exactly.

Jay Goltz:
No, how long had she worked for you?

Dana White:
Under a year.

Jay Goltz:
Okay, so I’m just saying, in that case, I get it. I’m not saying this always works. I’ve got people who worked for me for—my average person has been here 10 and a half years. It’s not the same thing. And they’re also not 20. I’m not telling anybody, “Go loan your employees money.” I’m just telling you, in my case, it’s been a tremendous benefit for them. I’m happy to do it. And certainly you have to be careful doing it.

Loren Feldman:
We’re running short of time here, but before we end this, I’d like to go around and hear a little bit about what your daily routines are like. William, I’m curious, forgive me, I’ve lost track of how many kids you have, but I know you have a number. How many of them are with you right now?

William Vanderbloemen:
Well, I’ve lost track of that, Loren. [Laughter] We have seven children. Two of them are out of the nest and employed and for now their jobs are safe. It’s amazing what you pray for in these times. We have four in the house in secondary school or lower and then one in college who’s now home. We have five at home. And thankfully, we have enough space that we’re not—my poor brother’s in this tiny little house in the D.C. area. He’s got three kids, and the oldest one’s five, and they’re crawling all over him. I don’t know how both of them try and work during the day—but we’re fortunate to have a little bit more space and be in a neighborhood where you can take a walk.

We have decided that I think remote work takes twice the focus and discipline of working in an office. I have dedicated spaces. My laptop really doesn’t leave this little bunk room that I’m in today. It’s like I walk in the office, I walk out of the office, and we have a very… almost like running a military base routine. I mean, it is down to the minute so that the kitchen isn’t open all day, and there’s not noise when I’m on something like this. It’s posted every day. And there’s a spreadsheet of which kid’s doing which chore. So for me, I am staying up a little bit later. I’m working probably a little too much. I’m finding that the work-life balance is harder to keep in sync.

I worry about some of my highest achievers. I worry that they’re not able to turn it off when the office is right next door to their bedroom or in their bedroom or whatever. We’re trying to keep a schedule, both to not overdo and to not underdo, and I don’t understand… I don’t even know what “Tiger King” is. [Laughter]

Loren Feldman:
I was going to ask, is anybody watching?

William Vanderbloemen:
No, I’ll download that later. But right now it is, burn the midnight oil. We are taking time, like all the kids stop what they’re doing at 3, and we all go downstairs and have an afternoon coffee. We always have dinner together, and we’re actually a little more disciplined about family devotions now than we were before. Every night at 8:30, we stop and we’d have a little evening tea and talk, and so it’s pretty regimented. Adrienne gets the credit for that.

Loren Feldman:
Jay, how about you? Did you get out of your bathrobe today?

Jay Goltz:
Well, today I came to work, because I was doing the podcast, and I needed to hook up here, but I’ve been home more in the last two weeks… I’ve never been home the entire day doing nothing, ever. I feel like I’m on a month of Sundays. Every day feels like Sunday.

I don’t have kids in the house anymore, but I was working all day yesterday. I spent more time on my phone for sure than I’ve spent in the 15 years I’ve lived in this house. I ordered a headset because of that, because it’s hard to sit there on a phone all day long. I’m dealing with employees, I’m dealing with the bank, I’m dealing with my CFO. I am in full-out warrior mode and I would suggest to anybody who is listening to this who’s in business, who wants to stay in business, I would suggest move from worrier to warrior. Big difference. Focus, figure out what to do, and do it, and that’s what I’m doing. I’m kind of on adrenaline at this point. I am fired up ready to go. I’m going to do whatever I have to do to save my employees’ jobs, to save the company, and to take care of the customers.

Loren Feldman:
Is your wife enjoying living with a warrior?

Jay Goltz:
Mmm. Hmm. She’s kind of used to the drill. You know what she said to me a couple of weeks ago? She goes, “You know, you were talking in your sleep. You were really angry.” I go, “Yeah.” “Is it at me?” “No.” She goes, “Okay,” and that was the end of the conversation. She didn’t bother asking me who I was angry at. But no, she’s used to it.

Loren Feldman:
Dana, how about you? What’s your daily routine like?

Dana White:
I’m up later than I normally am. I wake up, I have a light breakfast, and then I’m on text messages, emails, and Facebook groups that are addressing the latest with these issues. I’m applying for grants and loans and seeking advice from my accountant in planning what the next iteration of Paralee Boyd is like. I don’t eat dinner until late—later than I’d like—now. And then I go to bed around 10-ish, but I don’t go to sleep until the wee early hours in the morning and that’s also because I’m up binge-watching “Tiger King.”

Loren Feldman:
You are.

Dana White:
Oh, I am. I’ve been so plugged in all day. I think that’s exactly how long it takes for me to take it down. And so, I’m with Jay. I’m in warrior mode. Let’s go. Let’s get to work.

Loren Feldman:
Jay Goltz, Dana White, William Vanderbloemen, thank you so much for taking the time. I really appreciate it. Stay safe out there.

Dana White:
Thank you. You too, Loren.

Episode 10: My Employees Are Freaking Out

William, Dana, and Laura and their businesses are having very different coronavirus experiences. While Dana and William are expecting little in the way of revenue, Laura’s online yarn business is thriving. But they’re all facing challenges in managing their employees: “It's been amazing to see just how hard folks are working. Are they concerned about a layoff? I'm sure they are. I would be too.” Plus: finding ways to stay connected to customers even while the business is closed.

Guests:

William Vanderbloemen is founder and CEO of Vanderbloemen Search Group.

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

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

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

William Vanderbloemen: “I mean, obviously, if [churches] aren’t meeting, they’re not hiring. If they’re not hiring, they’re not hiring me.”

Dana White: “They’re not understanding why they’re not getting paid throughout the pandemic. Some of the comments have judged me as a business owner. ‘If you were a real business owner, you’d be able to support us through this time.’”

Laura Zander: “Our Reno business and the online business, I mean, I hate to say it, but our numbers are really high. They’re really good right now.”

Full Episode Transcript:

Loren Feldman:
Welcome, everyone to another coronavirus, special edition of the 21 Hats Podcast. If you hear a little buzzing in the background, I’m not in my usual podcast studio and that background buzz is being donated generously by the leaf blowers in my neighbor’s yard.

Laura Zander:
They’re at least six feet or six feet away from you though, right?

Loren Feldman:
From me, but not from each other which is a little concerning…

Laura Zander:
With a blower.

Loren Feldman:
Yes, exactly.

William Vanderbloemen:
Loren, I feel your pain. We’ve gone remote at our work and I have lost track of how many people’s children I’ve seen run across the background in diapers and the dogs bark or all the things.

Loren Feldman:
I’m so glad this is audio.

Loren Feldman:
Let’s get a quick update from each of you. I want to hear how you’re doing, where you stand with your businesses. Dana, we last spoke with you two weeks ago when you were still focused on what you needed to do to keep your hair salons open in Detroit. I gather that’s no longer possible.

Dana White:
So the governor did issue an executive order for pretty much all non-essential businesses to close. So we are closed. I closed about two or three days before she required us to close.

Loren Feldman:
Why did you do that? What prompted it?

Dana White:
I was concerned that there might be somebody who comes into the salon and might infect my staff. No matter how clean we were in the salon, we couldn’t control that. The other thing was the volume. On our busy days, wee were seeing about half the volume that we normally would on a busy day. So when I looked at the numbers, and I thought about my staff, I went ahead and decided to lay off everybody. My network told me that this is coming, and I wanted my staff to be able to file for unemployment before the mad rush.

Loren Feldman:
Laura, when we spoke last week, you had just gone through a tough layoff at the company you bought in Texas but your online yarn sales were holding up pretty well.

Laura Zander:
Kind of same thing. We did a layoff. We’re in much better shape. I think that we’re going to be able to afford—especially with the paid leave acts—we’ll be able to afford to keep everybody and pay them full-time, even if they aren’t able to work full-time down in Texas. Our Reno business and the online business, I mean, I hate to say it, but our numbers are really high. They’re really good right now. Both of our states, both Nevada and Texas, are in counties that are in lockdowns as well. But both of our businesses are excluded from those lockdowns…

Loren Feldman:
Because you’re distribution businesses?

Laura Zander:
Yes, in Nevada, manufacturing, distribution, and storage is excluded. Those are essential businesses. And then in Texas, if you are supplying online sales, then it’s excluded. So as long as you’re closed to the public and you’re employing the health health regulations…

We’re still operating. I mean, we have a half staff in Texas so that we can keep people as far away from each other as possible. They’re way more than six feet apart from each other. But yeah, we’re actually doing okay. If you go look at Google Trends, you’ll see that up there with toilet paper is how to knit. We’re getting more and more new customers. In fact, we’re launching on April 1st—typically they call it a knit-along when a whole bunch of people get together and they knit on the same project at the same time—we’ve been planning for about two years to do a shit-along where we have custom toilet paper made—

Loren Feldman:
You love telling us about that, Laura. You bring this up every opportunity you get.

Laura Zander:
You know what, I had this idea forever ago. I’m not jumping on the toilet paper bandwagon. But anyway, so we’re launching our shit-along next week. There’s a yarn called Comfort that we’re going to be using, so we’re really excited.

Loren Feldman:
That’s great. William, this is your first time with us in a while. How have things been going for you and your business? Is it operating?

William Vanderbloemen:
Well, that’s always the question, isn’t it?

Loren Feldman:
No, it’s not. You have a great business.

William Vanderbloemen:
You know, it’s interesting. It has been a while. We were very harried in January, in February, absolutely the best start to the year we’ve ever had, which was a real blessing.

Loren Feldman:
And why was that? What was going on?

William Vanderbloemen:
I think some of the things we’ve talked about in previous episodes where we set up to scale, we have a new CEO in place, our systems are taught rather than caught. That flywheel finally hit a point where it was turning, if that makes sense.

Laura Zander:
It’s not that January 1st, everybody decides for their New Year’s resolution to go to church?

William Vanderbloemen:
That happens every year. Everyone’s gonna lose 10 pounds and balance their checkbook and hire that new staff person. That’s a very normal surge for us. I’m talking January, February over previous January and Februarys—much, much higher. We were bemoaning the fact that we might not have a March that was 20 or 25 percent better than last March. And boy, I’d like to eat my words.

Loren Feldman:
So what happened?

William Vanderbloemen:
We’re in very uncharted territory, Loren, for a couple reasons. And I want to learn from you all on this one. One, we’ve never been through a downturn in charitable giving. So we started in the Great Recession.I’m the idiot who quit a stable job and started a new small business that was a new idea for churches in the middle of the worst recession we had ever seen. We came through that, and in a lot of ways, it was helpful, because we started small when there was little business and we could learn our trade. But I don’t know the corollary if giving drops by 10 percent, then our business drops by 10 percent. I don’t know that corollary at all.

Then compounding that ignorance, the way I think you tell the future is by looking at the past. It’s pretty repetitive. You look to the past and say, “When has this happened before?” Everybody says, “We’re in uncharted ground.” There has never in human history been a time when people of faith—all faiths, everywhere—have been restricted from gathering for a number of weeks. That’s never ever ever happened. There’s no real way to know. I mean, obviously, if they’re not meeting, they’re not hiring. If they’re not hiring, they’re not hiring me.

So we know that, and we can withstand a blizzard easy. We’re built to withstand a winter. I don’t quite know what happens if it’s really an Ice Age. If you follow the former preacher with metaphors—those are kind of the three phases we’re looking at. And I think it looks more like winter to us.

Loren Feldman:
So now you have no revenue coming in at all, essentially?

William Vanderbloemen:
That’s right. Well, we’ve got revenue coming in, because we built things, but we have no sales coming in. In May and in June, we’ll feel that. But what that means is—we’ve decided because we have been careful with our cash—we’ve said, “Okay, serve your clients as best you can.” But even the searches we’re doing right now, most people are like, “Let’s wait till we can interview the guy face to face.” So everything has sort of hit pause and now we’ve taken time to say, “All right, here’s where we’re going to plant seed, and the fruit will come later.” And so we’ve spent…

Laura Zander:
I was just going to say, how interesting that they want to interview face to face when—and I know that’s an isolated case—but there’s the potential that the new church is more online and more digital than ever.

William Vanderbloemen:
That’s the trendy thing to say, but I think you’re dead wrong.

Laura Zander:
Interesting.

William Vanderbloemen:
Not to get all scriptural on you, but whether you’re Jewish or Christian, the creation narrative in Genesis starts with, “God creates the heavens and the Earth. He creates light, and he says, ‘That’s really good.’ It’s a benediction. ‘This is good.’ And then he creates the Earth and he says, ‘It’s good.’ And he goes through several things. He gets to creating us, humans, and looks at us and says, ‘That’s very good.’”

So there are all these benedictions: good, good, good, good, good. The first malediction, the first curse in the Jewish and Christian scriptures, the first thing God says, “This is not good.” He says, “It is not good for you all to be alone.

There’s a thing in the people who we work with [where] you can’t replicate physical human connection. And I don’t know if you guys have noticed it, but there are more people walking up and down our sidewalks at the beginning and end of the day right now. People are just dying to see each other, even from six feet away, whether it’s writing the messages on the sidewalk in chalk for people or…

Virtual has been awesome, and in a lot of ways, I’m so thankful that this didn’t hit until the church was ready to go online and giving could happen digitally and all those things, but it’s really a Bandaid. It’s just a bridge. I predict that when this is over, there will be a storm surge of attendance at religious gatherings.

Laura Zander:
See, that is so interesting. I don’t mean to sound sacrilegious, but our industry, the knitting industry, is a religion in its own right, if you will. We all worship together, we kind of get together. It’s meditative, blah, blah, blah. But what we’re seeing, because our industry is very community and in-person focused as well—it’s just knitting clubs, knitting groups, knitting guilds, all these events, all that kind of stuff—we’re seeing this new model of the hybrid really taking hold, where we’re using digital, Instagram Live and all of these digital technologies. We don’t think they’re going to go away.

We think that it’s going to end up—because so many of the small businesses and the small gathering places we think are going to go away—that it’s going to have to end up being a mix of you have to have a good digital presence and a good digital personality. Plus, you have to be somebody who is warm and welcoming in person. So, in our industry, I do see the resurgence of people flocking to the shops, you know, to our churches, if you will. But we think that there are some really innovative, interesting things that are going to be happening digital-wise, because, as we all know, this isn’t going to go away. I mean, the virus stuff is here to stay.

William Vanderbloemen:
So, first of all, I totally agree with you. There will be some things in our clients’ work that will go digital. I think a lot of committee meetings, I think of a lot of small group stuff, I think of the cost-effectiveness of doing a children’s ministry online rather than having 1,000 volunteers, and letting people do it in their homes, which connects families. So there are a lot of cool events that’ll come, but the baseline of gathering together, like the oldest word for church is the “gathering.” That’s just not going to stop.

So for us, it bifurcates. There are the really big churches, and it’s thousands of people gathering. Well, they’re gonna have a whole different mindset than the normal church. The normal church in America is 100 people who get together, and they just don’t have the data. This is not a massive business. This is eight or nine families that all have cousins related to one another, and it’d be like telling them to do family dinner online, which we tried doing last week. Better than nothing, but it’s still just a bridge.

Loren Feldman:
So Wiliam, where do you stand? Is your business still operating? Did you have to lay people off? What’s going on?

William Vanderbloemen:
Not clear yet. The CARES act, I guess is the right word for it, that they’re still debating in the house, that the Senate passed, has a big effect on us. I know, reading the update this morning, there’s a lot of consensus that maybe it’s not enough, but it’s certainly a help. We built cash reserves for crises. Frankly, I don’t know. I’ve sat and beat myself up, Loren, over and over and over. “William, why didn’t you build five years of cash reserves or ten years or some ridiculous pile of money?” And it’s because…

Laura Zander:
Because you’re not Richard Branson. [Laughter]

Dana White:
I totally beat myself up over this.

William Vanderbloemen:
But I sit and beat myself up and say, why didn’t I see this coming? Well, we have all of these, “If William’s plane went down, this is how it works, and it’s going to work fine. If we lost three consultants, this is how it would work. If there were a PR nightmare, this is how it would work.” We never foresaw, “What if churches couldn’t meet for six, eight weeks?” So we’re flying blind, Loren. I don’t know.

I do know that on the other side of this, there’s gonna be a massive need for a different kind of leader. At the large church, it’s going to have to be somebody who can preach from their iPhone with their kids hanging off their neck like Jimmy Fallon is doing right now and command a room. That’s going to be different. And there are going to have to be online kids’ pastors, and nobody knows how to hire for that.

And in our school practice, schools move slightly faster than glaciers. Barely, right? So they have been the last to the party on online education unless you go to University of Phoenix or one of the newer kids, and all these old established schools that hire us are having to find a new kind of headmaster who can think through a digital lens. So I think our business is very bullish once we get through this chasm. I just don’t know how long the chasm is. So we’re trying to figure that out, and does that mean layoffs or furloughs or all kinds of creative things? Fortunately, the help that the government is providing is offering some help. Like everybody, I wish it were more, but it is some help.

Loren Feldman:
Dana, I think I heard you start to say you’ve been beating yourself up over not planning for something like this. What were you thinking?

Dana White:
Why didn’t I have three months of cash reserve ready to go? Why didn’t I work harder? Why didn’t I make more money? Why was I tired? If I woulda, coulda, shoulda. For like three or four days after the executive order was passed, it was: to open or not to open? To stay open or not stay open? And after speaking with my mentor—the business community here in Metro Detroit has been amazing—speaking with other Goldman Sachs alum, they said, “You’re asking the wrong question. The question isn’t to open or not be open. You’re gonna stay open. The question is, who is Paralee Boyd once you reopen. And how do you keep and engage your customers while they’re away?” So that’s what I’ve been working on.

It’s, you know, doing the work. We, similarly to William, we don’t have any revenue. We can’t operate and not be within six feet of our customers. So if we can’t be within six feet of our customers, we have to close. It’s a matter of, how long does this go and how do you keep your customers engaged? A lot of people said, “Well, Dana, why don’t you do gift cards online?” My guests don’t want to pay two, three weeks in advance for their service. They want to get their service, pay and go. What I’m working on now is, who is Paralee Boyd when we reopen? I’m focused more on looking forward. Because I know we’re going to be jammed. We’ve had customers email us and say, “I hope you guys are going to be ready.”

Loren Feldman:
Have you thought about things you might be able to do to help during this period? Everybody I know is a little bit concerned about how quickly their hair is growing and what they’re going to do about that before their next Zoom call.

William Vanderbloemen:
My favorite tweet so far is, “I guess we’re two weeks from finding out what everybody’s hair color really is.”

Dana White:
My guests’ hair color is not the biggest thing. For us, it’s a matter of just doing it, because my guests come to me to do their hair. Whereas other people do their hair everyday at home, sometimes my guests come to me to get their hair done. What I’m thinking about doing, and maybe the time will allow for this, is doing hair care kits at home, which they can pick up or we can ship. But again, that takes time. I’ve got the trial kits coming to me right now from Texas and seeing what that looks like. Does it work? Because I’ve got to try it on myself first. And then if it works out, great. Then we can start doing that, depending on how long this goes. If it goes until April 13th, we don’t have enough time. I don’t have enough time to do that. But if it goes as long as as people say it’s going to go, I will have time for that.

Again, the focus for me is looking forward, saying who is Paralee Boyd? Are we a company that ships and does videos on hair care at home? Are we a company that modifies their processes and adds new treatments and services for when we reopen? Time will tell.

Loren Feldman:
Can you do both?

Dana White:
So we can, but again, I’m the type of business [where] I don’t want you to do your hair at home, because we can do it better in the salon. I might change the narrative from doing your hair at home to, “Hey, you’re traveling, this is what you can do when you’re away. But when you come back, come to us.” I don’t want to do, “Hey everybody, don’t come to us anymore. Here’s what you could do at home.” I’d rather say, “Hey, if you’re going on a trip and can’t get to us, here’s what you can do.” So that might be the avenue once we reopen.

William Vanderbloemen:
Dana, that’s exactly what we’re faced with. So, like for us—I don’t want to over spiritualize things, but—the worship service is the echo of heaven for people who believe, whether that’s a Muslim, Christian, Jewish person. And it’s discombobulated, and it’s human, so it’s not perfect, but it’s the echo. Well now with online, we’re having to do the echo of the echo. That’s kind of how we’re finding it. This is the best thing possible for now, but it in no way replaces the fundamental need for the service itself.

Dana White:
Exactly. Yep, that’s my thing. And I’ve had guests say to me, “I would do my hair at home, but you guys do it better.” And that’s it.

William Vanderbloemen:
That’s it.

Dana White:
I mean, you can do it, but having a stylist stand behind you and do your hair is very different than you raising your arms up and having to do your hair, in the back.

Loren Feldman:
And that will always be the case, but maybe there’s an opportunity to just help people get through this period. You know, here are some tricks, just for now.

Dana White:
Agreed. But time may not allow for it, right? So if I had known in January that on March 15th, the governor was going to shut it down, I would have had kits and bags and brushes and everything, videos posted, and everything ready. But if it goes to where the executive order said till April 13th, I don’t have time.

Loren Feldman:
I wouldn’t bet the house on April 13th being the time.

Dana White:
Exactly. So what I’m doing is saying, “Okay, it’s gonna be longer. How can we get these hair care kits out?” And then say, “Okay, if it is going to be longer, how do we take the hair care kits and say, ‘Hair on the go when you can’t get to us?’”

Laura Zander:
Dana, is anybody doing how to make your own hair care kit at home? You know everybody right now is making their own antibacterial soap or their own sprays. Has anybody done a whole how-to using the stuff that you have in your house?

Dana White:
No, no, no, no. You’re talking about black women and their hair. They’re going to go to the store and get shampoo before they try to make something in the home. Hand sanitizer’s different. Two ingredients: aloe vera and alcohol and it evaporates and you’re done. When you’re talking about putting something in your hair, they want to go to a trusted brand that they know.

Laura Zander:
Even during a pandemic?

Dana White:
Absolutely. Some women are going to wear protective styles until it’s time to come out and then come to Paralee Boyd and get their hair done. Again, it’s an understanding that the hair culture for my market is very different. We can’t wash our hair every day. It would break off, be dry and brittle. It would be a mess. The natural oils in our hair help preserve our hair, but you’re not supposed to keep the natural oils in your hair for weeks and weeks and weeks at a time.

If I could get a hair kit together in the next two weeks, I’m okay. It’s not as soon as it would to have been helpful. But even for me, I’m going to the store and buying shampoo. I would never mix anything in my house—and I’m pretty stocked—to put on my hair and risk damaging it for when this is over.

Loren Feldman:
I’d like to talk a little bit about your employees, and how you’re dealing with this, how stressed out they are. Laura, I gather some of your employees may actually have been sick with the coronavirus. What’s it been like with your employees?

Laura Zander:
You know, it’s funny that you asked that because I wanted to ask the same question. That’s one of the things that I’m really struggling with, is that I am not panicking about this, and it’s actually causing me a lot of anxiety that I don’t have anxiety, and I don’t know what’s wrong with me. Some of my employees who are healthy, who are coming in and working, are just freaking out, and I don’t understand what people are freaking out about. Especially for us. They still have their jobs. We are doing really well right now. Nobody’s sick.

Back in January, we went to a big trade show with probably about 15,000 people in one hotel in New York. I’m venturing that about a third of the people got really ill for a week or two with some sort of flu. We didn’t know what it was at the time. And then we brought it back to the office and then everybody at the office was sick. We kind of collectively think that this has already run through our office a few months ago. We don’t really have anybody who’s ill right now.

I was going to ask Dana and William what their experiences are. One of the things I’m trying to work on is developing some empathy because I kind of thrive in chaos and in crisis. It’s what I grew up in, and it’s my comfort zone. I’m having a little trouble not getting frustrated with people for freaking out.

Dana White:
I have a question, Laura. Would you be less comfortable if your sales were 90% down?

Laura Zander:
I definitely would. In Texas, that business is losing money every single day. Absolutely.

Dana White:
But overall, if it’s not just Texas, if just looking at the numbers, you saw, “Whoa, 90 percent.” I think that’s my point. I think you have a comfort of funding. You’re making money. There’s some revenue coming in. And I think that’s part of the reason why you’re not panicking. I think you’re spot on, you’re not panicking because you know yourself, and I think you thrive not in chaos, but I think you thrive in productive chaos.

Laura Zander:
Totally. Yes. But that’s my question: we are doing okay. Nobody’s going to lose their job. In fact, we’re actually understaffed right now. I’m having trouble identifying with the panic that some of my employees are having when things are comfortable for them.

Loren Feldman:
William, what’s your situation? How stressed are your employees?

William Vanderbloemen:
Well, it’s hard to tell virtually, isn’t it? That’s the trick, right? Right now, most of our team members either are very active in their church, or have been on a church staff. They’ve all gone into crisis mode and have probably given me the most productive week we’ve had in years. It’s been amazing to see just how hard folks are working. Are they concerned about a layoff? I’m sure they are. I would be too.

I think what I’m having to do as a leader is, on the one hand—and I think we’re going to see this in our clients’ needs. They’re going to need a senior leader who is better at the soft skills than ever because the need for empathy, the need for a pastoral sense is going to be needed from every CEO in the world—not just people who are pastors for a living. On the one hand, I need to be pastoral and compassionate. On the other hand, I’m eternally optimistic. Every glass is half full. I have to be careful not to be Pollyannaish with them so that if something sudden were to happen, or if we were to cross a line where we’ve got to make some really sudden changes, they’re not caught off guard saying, “Wait, we never saw this coming.”

Laura Zander:
Same page. I’m on exactly the same page, William.

Dana White:
I’m not. My staff is freaking out, and several of them have threatened to quit.

Loren Feldman:
They’re furloughed, but they’re threatening to quit, you’re saying, for good?

Dana White:
Yes.

Loren Feldman:
And why?

Dana White:
Because they’re not understanding why they’re not getting paid throughout the pandemic. They don’t understand. My managers do, and that’s really hard. Some of the comments have judged me as a business owner. “If you were a real business owner, you’d be able to support us through this time. If you knew how to manage money better, you’d be able to support us through this time.”

Loren Feldman:
There are good answers to those questions, Dana. Are you struggling with that? Or do you feel comfortable with the answers you’ve given?

Dana White:
I feel comfortable with the answers I’ve given because they’re honest answers. There’s nothing I’m hiding, and there’s nothing… that’s our culture, right? There’s nothing that I’m hiding, and there’s nothing that I’m not willing to share. I’m not taking it personally. I understand that they’re uncomfortable—extremely uncomfortable. I have my managers who support me because I’ve explained to them and shared with them step by step what I’m doing and why I’m doing it. But my concern is that, when we open, we will be short-staffed. My guests have said, “I hope you’re ready when it’s time to open because you’re going to be swamped.” My managers have told me they don’t really…

Loren Feldman:
…understand how the business works.

Dana White:
Well, it’s that. And they don’t want to leave Paralee Boyd. Like they literally were saying to me the day before I made the decision, “We support you. We love working here.” We did a check-in three days before, and everybody chimed in, “Love working here, love working with Dana. Love it, love it, love it, love it, love it.” And then this hit, and now, “I want to quit, I want to quit, I want to quit.” It’s panic.

Loren Feldman:
Dana, are you up on the stimulus package that William was referring to? It hasn’t completely passed yet. It hasn’t been signed. But there may be help in that package for your business and for your employees. Do you know what you need to know?

Dana White:
Yes, but the concern with that is the timeline. My staff wants money today, and they want guarantees today. So a loan, disaster relief, takes longer than today. My managers are doing a great job managing their demand. I’m doing all I can to get paperwork and everything I need to submit. So I don’t want to respond to a knee-jerk reaction and get a loan, and all of a sudden, “Oh no!” Because I was panicking too, I signed up for something that probably didn’t work out for me in the back-end. So it’s about having these conversations with your accountants to make sure you know to extrapolate what this looks like over the next year.

Loren Feldman:
Wiliam, do you have any thoughts on that? I know you did a Facebook Live. You’ve studied the package, and you’re trying to help other businesses and other organizations understand what’s in it. Do you have any advice for someone who’s asking the question: What do I do until I can apply for those loans and actually get them, which could take who knows how long?

William Vanderbloemen:
Yeah, well, all the guidance that we’ve gotten—and I’m not the expert on this. Our COO combed through all 880 pages, and he’s a Harvard MBA, and all the things that I’m not, so he’s the one that should answer the questions. But everything we’re seeing is that despite the bureaucracy that is undoubtedly coming, the message from the SBA to local lenders is very clear: Get money in people’s hands quickly. In fact, I went ahead and reached out to our banker before the thing passed, and they already had things to us. I think it’s gonna be quicker than the ordinary bureaucratic sit-on-hold forever kind of thing. The reason we took great interest in it [is] it started with a personal interest of, if I’m going to have to pay the backend tax of this $2 trillion thing later, I might as well enjoy the front-end now. So how can this help our business? But on about Saturday or Sunday of last week, nonprofits and 501(c)(3)s and churches were all added into the bill—they were previously not included.

Well, this is a lifeline to the normal-sized church of 100 where payroll’s 65 percent of their overhead. We did a Facebook Live. And if you go to Facebook and just type in Vanderbloemen—and you can spell it however you want—then you’ll find a link there. We set up a separate website to pool resources on Covid, and it’s everything from how to do remote meetings to this SBA bill. It’s churchcovid19.com, and there you’ll find an hour-long, detailed presentation on, how do you calculate what you’re actually going to get from the government? How do you go about applying for it? It’s very granular. If you’re the semi-ADD CEO, find someone else on your staff to watch it. But Loren, this week, we’ve had five times the traffic on our website of any other week ever. And it all goes back to that Facebook Live event, because you can search all over for, “What does this bill mean?” And you’ll find a 600-word blog post here or there with a sentence or two for small businesses, but nobody’s really dug into it yet. I’m sure there’ll be others, but as we did our Facebook Live, nobody else had done it, and it really caught on. That’s where I’d point people.

Laura Zander:
I’m going to go watch that today.

Loren Feldman:
You can also find the link in today’s 21 Hats Morning report. If you haven’t subscribed to that you can do so at batvmorningreport.com.

William Vanderbloemen:
And Loren, sorry, you told us to talk over each other, so I will.

Loren Feldman:
Go!

Laura Zander:
I’ve been trying!

William Vanderbloemen:
I was talking to my COO today, and he said he’s shocked how many accountants, lawyers, and CFOs are calling him asking him for more guidance, because apparently he got it right. And the stuff that’s coming out now from Inc. and from E&Y all is very congruent with what we put out there. So we’re not lawyers, we’re not accountants, but I think it would be helpful.

Laura Zander:
Well, you have a direct line to God. So…

Dana White:
Hey, hey, right. That does it, that does it. Laura, did you have a question for me? We were talking earlier. I thought you might have.

Laura Zander:
You know, I was just gonna ask if you’ve done a GoFundMe or anything? You know, we’ve seen that with some of the smaller shops—the retail stores that have had to close in our industry. They’re just putting up a, “Hey, give me some money.”

Dana White:
Yeah, I’ve seen them, and their numbers are dismal. I’ve seen a couple of them here. They’re asking for $1,000, they’ve got $25, $100.

Loren Feldman:
But Dana, you feel confident that you’re on top of the stimulus package and know what you need to do there.

Dana White:
Yes, you know, this has not been a downtime.

Loren Feldman:
Are you doing it all yourself? Are you getting help?

Dana White:
I’m doing it all myself. So it’s webinar after Facebook Live after conference call after… And I have to say, the Detroit community has been amazing about getting the information out, getting the answers to your question as quickly as possible. I applied for the Detroit stabilization grant on a Friday. Was awarded $2,500 on Wednesday. So they’re not wasting any time. Landlords are really stepping up. Some of them are, some of them aren’t.

Loren Feldman:
I saw Dan Gilbert and Bedrock are putting off rent payments. Are you in a Bedrock property?

Dana White:
I am not, but my landlord in Midtown is amazing. I’m not too concerned about their compassion or what they’ll be willing to work out with me during this time. The response time here for people has been really good.

I literally just got an email saying, “Hey, the state of Michigan now has a small business grant and loan program organized by county. The application just went live about five minutes ago. So, Dana, apply for that.” There’s just been so much information about how you can get through this.

My biggest things are my loans and my people and my rent. I don’t want to take out another loan in addition to the loan I have. I want to consolidate and move forward, and I don’t know if that’s an option for me now. It’s just about doing the homework and finding out: What is the best situation that works for Paralee Boyd going forward? I’m really worried about making a decision that will hurt me in the long run—even though the loan, I don’t think it will. It’s just one more thing, and I would rather weigh my options carefully and then pull the trigger.

Loren Feldman:
I don’t think anybody would argue with that. And obviously, we will continue to track the decisions that all of you make in the weeks to come. We’re out of time. Needless to say, we will be discussing all of this lots more. Thank you for your time today. My thanks to Dana White, William Vanderbloemen, and Laura Zander. Be careful out there, everybody.

Laura Zander:
Thank you.