What it takes to run a business

Podcast

This episode is dedicated to Ivy Garfield. Back in 1996, Jay Goltz had no real hiring process and the results to prove it. “My hiring success rate,” Jay tells us, “was probably, I don't know, 30 or 40 percent, which isn't much better than whoever walks in you hire.” And then he asked Ivy Garfield to take over his hiring. As Jay explains, Ivy brought an instinct, an understanding of how to assess people. “She profoundly changed my business,” he tells us. “She was here six years. Most of my key people she hired. They’re with me 25 years later.” Jay talks about the secret to Ivy’s success and why entrepreneurs like him tend to be terrible at hiring. Plus: Dana White talks about being disappointed by a mentor. And Jay and Loren offer an apology.

This week, starting with a conversation about crucial hires Dana White and Laura Zander have made recently—an operations manager for Dana, a salesperson for Laura—we found ourselves exploring some of the great unresolved debates of entrepreneurship. Which comes first when hiring: filling specific needs or finding places for good people? With sales people, do you motivate by paying commission or build a team by paying salary? And in finance, do you bootstrap to maintain control or raise capital to grow faster? Obviously, there’s no right answer for these questions, but Dana and Laura tell us what’s been working for them.

This week, Paul Downs, Jay Goltz, and William Vanderbloemen assess the damage of a stressful year. We started with the impact the year has had on the value of their businesses. Then we discussed whether they would be ready to sell their businesses if a generous offer were to come along. That prospect, Jay tells us, would likely cause him to do some soul-searching, but he would consider it skeptically. It seems to be a well accepted fact, he says, that most people who sell their business end up regretting it. Plus: as we head into budget season, we find out whether the three owners are planning to give raises. And in this week’s Morning Report News Quiz, we learn what happened to Inspiration, Imagination, and Fantasy.

For Jay Goltz, William Vanderbloemen, and Laura Zander, concerns about the pandemic loomed large this week as one of them had to self-isolate in his basement after being exposed to the virus. That fact helped surface a number of interesting questions: Are the three owners being careful enough? What should they tell employees who choose to travel over the holidays? Should employees who travel get paid if local rules require them to quarantine after they return? And if traveling employees do have to quarantine, will these businesses have enough staffers available in December and January to function? And then there was the question Laura demanded of Jay after Jay explained how exactly he was exposed to the virus: “Wait, no,” she said, “You didn't answer my question. Were you wearing a mask?”

And so, yes, Dana White was in fact the big winner at last week’s Detroit Demo Day, taking home the top prize of $200,000 for her hair salon business, Paralee Boyd, which specializes in serving women with thick and curly hair and which has an unusual walk-in-only business model. Of course, Dana now has some decisions to make: Does she want to take the money in the form of a zero-interest loan? Or does she want to take it in the form of a convertible note, which can convert to an equity stake in her company? And perhaps, more importantly, how exactly is she going to spend the money? As she tells Paul Downs and Jay Goltz in this conversation, she’s thinking about spending it on marketing, on opening another location, or on creating retail products for sale online or in her salons. What do you think Dana should do? Please email your thoughts to lfeldman@21hats.com, and we’ll share them on the podcast and in the Morning Report.