Somebody’s Hiring All of These People

Introduction:

This week, Jay Goltz tells Liz Picarazzi and Laura Zander that he’s had a revelation about The Great Resignation. Yes, he’s lost some people, but not necessarily his best people. “It shook the tree out,” he says, which is why he thinks businesses should be careful right now about hiring too quickly. Meanwhile, Liz talks about her latest product, a bear-proof trash enclosure, and why introducing it has been challenging. And Laura tells us what happened with the salesman she tried to send around the country in a souped-up van. Plus: Is this a great time or a terrible time to be in business?

— Loren Feldman

Guests:

Jay Goltz is founder and CEO of Artists Frame Service.

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

Liz Picarazzi is founder and CEO of Citibin.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Full Episode Transcript:

Loren Feldman:
Welcome, Jay, Liz and Laura. Thanks for being here. Liz, let’s start with you. You’ve been doing some traveling of late. Tell us what you’ve been up to.

Liz Picarazzi:
So last week, I had one of the best weeks, I think, in my whole time in business. And that was, I had an opportunity to travel with my team out to Aspen and to install our very first bear-proof trash enclosure. So for several years, we’ve been getting requests from folks out west to bear-proof our units, and we haven’t done it up until now. We didn’t know if the demand was enough. In addition, of course, it’s a big R&D expense for us.

So this bear-proof enclosure has been in the works for two years. It started actually just before the start of the pandemic, and it was really exciting to install it and to meet the client in person and to hear their stories. But also just launching a new product into the world that meets the needs of a whole new market. It’s kind of like a westward expansion for Citibin.

Loren Feldman:
What did you have to do to bear-proof your existing enclosure product?

Liz Picarazzi:
There were two major changes that we needed to make. Our enclosures, our cabinets, are normally made out of sheet aluminum, and we switched it to steel. It’s a lot heavier, a lot more durable. It’s really standard for bear-proof enclosures. And then the second one is bear-proof latches, and all the hardware that opens the door.

So if you’ve ever been to a national park, and you’ve seen a bear-proof trash enclosure, you know that there’s a special latch that you need to use to open it that a bear’s claws can’t open. So those were the main two changes. There were some other small things with other hardware pieces, but those are the main two changes we need to make.

Laura Zander:
Well, as somebody who has had a bear enclosure for the last 20 years, how is yours different than the ones we have in our driveway?

Liz Picarazzi:
Do you have a bear-proof trash can? Or an enclosure that holds cans?

Laura Zander:
It’s an enclosure that holds cans.

Liz Picarazzi:
Okay, so that’s what we’re doing as well.

Laura Zander:
So it’s like a box?

Liz Picarazzi:
Mhmm. The biggest difference is how it looks. It’s designed like all of our other enclosures to really have curb appeal, and to blend in with your house, and to be used as really a piece of outdoor furniture that you’re going to have forever—not unlike outdoor furniture for your patio or whatnot. So it’s very durable, and they’re also modular. So if someone has four or five cans, we can easily accommodate that. Whereas the other bins on the market are usually just for two cans. I imagine yours might be that.

Laura Zander:
Yes.

Liz Picarazzi:
So the modularity really accommodates a lot of different properties, especially bigger properties, multi-family, that need more than the two-piece unit.

Laura Zander:
Ah, very interesting. I can’t wait to look them up.

Loren Feldman:
Liz, how did you test it?

Liz Picarazzi:
Okay, so here’s the deal on this. We’ve been trying to test it on the East Coast—Pennsylvania, Connecticut, New York—on Facebook for several years. I’ve put out inquiries to friends and family to allow us to test in their homes, near their homes. And understandably, we didn’t have any takers. I almost had one taker, but then his wife was furious that he had agreed to it. They live in New Jersey, And he understands we would be baiting a bin for bears to come near their house.

I don’t know what I was really thinking by asking, but I needed to anyway. So they haven’t been tested, actually. They’re going to be tested in Colorado. We followed all of the guidelines of the—I think it’s called the Interagency Grizzly Bear Committee. They’re in Montana. So last August, you may remember, Loren, we were supposed to be testing the enclosures in August in Montana, but were delayed due to all the supply-chain issues. So we’re going to be doing the testing in the spring.

Loren Feldman:
How significant a market is this for you?

Liz Picarazzi:
So I should have the number. I should market size it like a proper business owner does. But really, it’s just all Western states where bears are an issue. We all know what’s going on with Hank the Tank in the Lake Tahoe area, making headlines.

Loren Feldman:
Laura, do you know Hank the Tank?

Laura Zander:
No, I don’t know Hank the Tank. I mean, we have bears. We’ve always had bears. We’ve had bears in our driveway. We’ve had bears in our backyard. We come across bears when we run. Like she said, market size. So I mean, you have to have a bear enclosure for your trash. I think you literally have to.

Jay Goltz:
Can I assume that you can outrun a bear since you’re here today?

Laura Zander:
They don’t want to chase you—not the ones here. I mean, they don’t want anything to do with you. They just want to scare you

Liz Picarazzi:
Well, and the thing is, they usually give up. So if they try to get into a can or an enclosure, and they can’t, they’re really smart. They remember that. They don’t go back. They’re kind of like rats, as we’ve learned in New York City. So once they try to get into a Citibin and they’re unsuccessful, I’m hoping that they’re not going to come back, but we will see.

And to Laura’s point, too, cities’ municipalities are requiring bear-proof enclosures. So where we installed, which was basically just at the base of the mountain in Aspen, they have a requirement, a city ordinance, that everybody uses bear-proof trash enclosures. So that sort of legal mandate works in my favor.

Laura Zander:
Yeah, there’s huge demand. And where we are in the mountains, recognizing that most of these areas you’re targeting are resort areas, people really care about curb appeal. In the Homeowners Associations even, you have to get your bear-proof enclosure approved by the neighborhood.

Loren Feldman:
Liz, is your market in New York City, where you’re located, close to being saturated? Is that why reaching out?

Liz Picarazzi:
No.

Loren Feldman:
Well, what’s the thinking there, in terms of selling in your backyard versus selling around the country?

Liz Picarazzi:
So it’s a good question, because selling to Aspen and out west has been sort of difficult, from an implementation perspective. The deployment of this product is very intensive. The shipping involved, the costs involved, taking my team out there to install it—all of that is very expensive. So it really got me thinking of the overall costs of doing this product. I am very, very excited for it, but there’s a lot more involved.

And in the New York City market, we just have such a strong presence. I don’t know what the percentage is, but I would say, among property managers—which is our biggest customer in New York City—we probably only have like 5 percent of the market, and we’re growing and growing. So that’s my bread and butter—that segment in New York City with property managers. But I do think that the market size for the bear-proof is huge. And I also think it fits in well with the branding and allowing me to have a portfolio of different versions for different situations.

Loren Feldman:
If I recall, Liz, you offer your customers the alternative of either taking your product and installing it themselves, or you have a team that will come out and do it for them. Are you planning on offering that around the country?

Liz Picarazzi:
So we would have to for bear-proof, at least to start, because it’s so much heavier. Each module is 365 pounds, so a two-module is over 700 pounds.

Loren Feldman:
Wow.

Liz Picarazzi:
That’s not something that the average person can put together, even if it’s a couple of people. So I think in the near future, we would have to do the installation service with it, until it could truly be a DIY, ready-to-assemble kit like our other products are. Those are very IKEA-esque, where there’s an installation manual, and there’s a video that they can watch. But we don’t yet have that for bear-proof.

One of the things that I’m doing that I hope to do in other cities is I’m making contact with local handy people, so that if anything goes wrong with, let’s say, a hinge or a hydraulic arm, that I have someone locally to help out. Because with Aspen, at least to fly to Denver, and then to drive four and a half hours into the mountains to fix something, it’s a big risk. And to kind of mitigate that, I feel like I need to have some local people.

The local people also could actually be resellers, and they could be installers. So a couple of handymen I made contact with there were really excited about the product, and they also were incredibly connected. If they’re working in all these resort areas as handymen, and they see people who need trash enclosures, that’s an opportunity for them not only to get a commission on selling it, but to also get fees from the installation.

Jay Goltz:
So how do you ship these? Even if they’re broken down, I assume they are over UPS’ weight limit, or not?

Liz Picarazzi:
Yeah, they are. We use a private trucker, and I should know more about it. As I’ve talked about on this program, I hate anything having to do with logistics. So if you ask me questions, I’m probably not going to be able to answer them.

Loren Feldman:
Well, you probably know something about what it costs, I’m guessing, because you probably had to factor that into what you charge for this. How much more expensive is this than your standard enclosure?

Liz Picarazzi:
So it was probably about 40 percent more than our standard enclosure, and then the shipping costs are a lot higher—they’re double—and the installation also includes all of the travel. So on this one, we charged a lot less, because the feedback that we get is so important. We needed to have some in the field. So this was more of a breakeven or even at a loss. After I get the credit card bill from all the fancy meals we had out there, it may not have been worth it. [Laughter]

Jay Goltz:
I’m in the furniture business, so I know where the line is between easy and extremely difficult. And the problem is, once it gets past UPS, now you’ve got to ship it and then the question is: Do you have to put it on the pallet? And then all of a sudden, you can’t deliver in a big truck to a house. You’ve got to get white glove service. And now I’m writing huge checks every month for this white glove service—huge, tens of thousands of dollars a month.

Loren Feldman:
What’s a white glove service, Jay?

Jay Goltz:
White glove service means that they take your sofa or whatever, and they deliver it in a truck with a hydraulic lift on it. And they walk it into your house, versus UPS drops a box at your front door.

Liz Picarazzi:
Well, ours were all on pallets. They all are on pallets, and they’re delivered outside, which is a difference. My product doesn’t go inside of a home.

Jay Goltz:
Right, but they still have to have a truck that is not going to a dock. It’s got to have a liftgate. A typical semi truck doesn’t have a liftgate. It’s supposed to be going up against a dock, so it definitely changes the cost and changes who you can have deliver that. So then they’ve got to get there with a hydraulic lift, and then they’ve got to literally plop it down in—where? The street? I mean, it’s an issue.

Laura Zander:
So are these selling for like 10 grand? This sounds like a $5,000-$10,000 thing.

Liz Picarazzi:
Well, so the one that we installed was about $6,600 retail price, and that was for two modules. But again, I mean, we were looking at this as a piece of long-term outdoor furniture, something that’s going to add curb appeal. So the pricing reflects that, as well as really the materials: Something that’s made out of all steel, bamboo, all stainless steel hardware. Laura, I don’t know what your bear-proof enclosure is made out of, but typically the materials on those that are more mainstream are not very attractive, and they’re also not very expensive.

Laura Zander:
Yeah, I think ours was a couple thousand bucks. They’re very, very plain, but it’s the colors. They have to be like chocolate brown, or these kind of desert dirt colors. The homeowners association says it can only be one of two colors. Sometimes it can be green, like a cedar green. But no, they’re not beautiful at all.

Liz Picarazzi:
I would make my enclosure whatever color the HOA wants, and we can do that.

Jay Goltz:
There’s an economy of scale if you have a community that was buying them to ship an entire truckload of these there, and then unloaded them into a warehouse. I think that’s worth pursuing, because this one-off thing—I just can’t imagine how that’s not going to be thousands of dollars just to get it their door.

Liz Picarazzi:
Well, it’s also the opportunity cost, because when I pull two people out of my team to go out to Colorado for a week, it also means they’re taken away from all the installations in New York, which are already backed up quite a bit. So there’s an impact all over.

Laura Zander:
Liz, you mentioned R&D. Are you working with your accountants to get an R&D credit, a tax credit, every year? Do you file for that?

Liz Picarazzi:
We do, yes.

Laura Zander:
Okay, great. That’s been huge for us. That’s how we ended up with our accountants. They did a presentation on R&D tax credits. And you can take salary, a percentage of your salary. If Liz is spending a bunch of time developing new products, I mean, I bet 80 percent of her time is R&D. So obviously, you can’t take travel, is my understanding.

Loren Feldman:
Or skiing.

Laura Zander:
Yeah. Unless you’re doing ski stuff. I would highly suggest that people look into it. I can’t remember exactly what the litmus tests are. Maybe Liz has better information. But if you’re creating something that doesn’t already exist in the world, basically, or doesn’t already exist in the market—so for us, we’re developing new colors, we’re developing new techniques, we’re developing new products.

Loren Feldman:
All right, Laura, I want to ask you what you’ve been up to. But first, let’s take a quick break to hear from our sponsor.

[Message from our sponsor, Work Better Now]

Loren Feldman:
And we’re back. Laura, we haven’t had you on in a little while. How’s it been going?

Laura Zander:
It’s been going really well. I’ve been traveling a ton. I went to Vegas for a day.

Loren Feldman:
Was that for business or pleasure?

Laura Zander:
No, I went to Vegas for a gift show. So we went to go look and see if they had any yarn-related gift items that would be good in our retail store. Just went there for one night. I pulled into the parking lot. My flight leaves at 6 a.m, so I pull into the parking lot at about 5:45 because it’s the Reno airport and it takes like six minutes to get on the plane. And I was fumbling with my keys, and I closed the door, and I hear the door lock. And all I had in my hand was a banana and my phone and my wallet. And I had dropped the keys in the front seat of the car, and it had locked the car. So I couldn’t get my laptop out, I couldn’t get my bag out, I couldn’t get anything. So I’m standing there at 5:15 in the morning, freezing cold. Don’t have a coat, because it’s in the backseat with my car completely locked.

And I’m like, “So… do I just get on the plane? And Doug will come, and he’ll bring the extra key and unlock the car later?” No suitcase. No nothing. I had just gotten this new phone/wallet combo thing, so I had everything I needed. It was just overnight. I’m like, “I can use a washcloth to brush my teeth, I guess.” And my coworker is already on the plane, because she gets in early. So I’m like, “Well, I guess I’ll just roll with it. I’ll just wear the same clothes. I can just turn those underwear inside out. You know, one night.” So I go and I get on the plane, and she’s like, “That’s all you’ve got?” I’m like, “Yep, that’s all I’ve got. We’re gonna do this.” So I slept in the bath robe that they had in the hotel and wore the same clothes two days in a row. It was very exciting.

Jay Goltz:
You know, my car will not allow me to do that.

Laura Zander:
That’s because your car wasn’t from the last century.

Jay Goltz:
Yeah, if I leave my keys in the car, it won’t lock.

Laura Zander:
Yeah, I guess they figured out that that is a great safety mechanism for people like me. This never happened to me before. I was just like, “Wow.”

Jay Goltz:
But you had a banana with you, right?

Laura Zander:
I had a banana.

Jay Goltz:
Okay, so you’re good to go. [Laughter]

Laura Zander:
Yep, had my banana. So I went there, and then two days later got on a flight to Peru. So we went down to Peru for about eight days to visit the mills and develop some new products, do some R&D. We visited some leather factories to investigate moving some of our production from China to Peru. The prices are unbelievably different, like five times the cost to do business with leather with a small leather manufacturer in Peru versus in China. So it’s just not doable.

And then, a couple days later headed down to Texas, took Huck, and we went down there, went to Austin, and visited with a customer, went to San Antonio, went to Fort Worth and visited the factory, and then just got back a couple days ago.

Jay Goltz:
The most important and most interesting part of the story is: I just want to know your mentality. So you locked the car. Were you able to just shut it off and go, “All right, it is what it is,” and just not let it bother you?

Laura Zander:
Yeah.

Jay Goltz:
So that’s a sign of maturity. That takes discipline to do that. Because 20 years ago, maybe you would have been torturing yourself and aggravated. At some point, I made the turn to where whatever happens, whatever.

Laura Zander:
Well, it makes it a good story. I’m like, “Okay, all right. This is going to be an adventure.” What’s this going to be like? This is an experience I’ve never had before—to just get on a plane with just my phone and to go to a professional event for two days and wear the same clothes. I was like, “All right, this will be fun.”

Jay Goltz:
You are an entrepreneur.

Liz Picarazzi:
As an entrepreneur would do. I was thinking the same thing.

Jay Goltz:
You roll with the punches.

Laura Zander:
But you know what it really did is it enforced, as I was about to go to Peru, that I don’t need a bunch of stuff. Like I had this whole set of luggage with all of this crap, and I was fine with nothing. And so when I went to Peru for 10 days—

Jay Goltz:
You don’t change your clothes anymore. Like, what’s the point?

Laura Zander:
No, I went to Peru, and I managed to just take a carry-on to Peru for eight days or nine days, however long we were gone. Because I realized, “Wow, I really don’t need as much stuff as I’m taking.” I can wear the same underwear for four days, and it’s fine.

Jay Goltz:
You are a warrior.

Laura Zander:
I’m just kidding. On the underwear. Those don’t take up much space.

Jay Goltz:
We all know you’re not, though. But okay.

Loren Feldman:
Laura, there’s been something I’ve been wanting to follow up with you on for a long time. You told us many months ago about how you’d hired a friend and somehow outfitted a van to let this friend drive around the country doing sales for you. It was a good friend. You were really excited about it. You spent a lot of money on the van. How did that work out?

Laura Zander:
Oh God, why do you have to ask this? You know how it worked out.

Loren Feldman:
No I don’t.

Laura Zander:
You don’t?

Loren Feldman:
I don’t.

Laura Zander:
Oh… Yeah, so we spent $100,000 on this van. Bless his heart. I mean, great salesman. We’ve been friends forever. He had this van on his vision board for the last five years. What he’s really wanted to do was van life and go around the country. So we had it upfitted. It’s all super perfect, exactly the way he wanted it. I had pretty much no involvement, other than writing the check.

Loren Feldman:
That’s an important involvement.

Laura Zander:
Yeah, we even spent $5,000 to have somebody do the artwork to wrap the van to make the van look beautiful.

Loren Feldman:
Was it yarn-related, the artwork?

Laura Zander:
Yes, so it says “We dye hand-dyed yarn, y’all,” on the side. So it’s this great van, and he takes off in April. It took a while to get the wrap done, so it took almost like six months. He was driving around just with some magnets on it. So we get the wrap done, and it was another five grand just to get the wrap done, so 10 grand to get it all wrapped and everything so it looks very yarn-specific. I swear to God, it was like the day after the wrap was installed, he quit. So six months in—exactly six months in—and he’s just like, “You know, this just isn’t working out. It’s not what I thought it would be.”

As part of us agreeing to do this, we’re like, “Okay, give me a proposal. If you want us to spend $100,000 on this, put it down on paper. How much money is this gonna save in hotels? How much is it gonna save in food? What kind of sales do we need to do to support this?” We’re looking at like a two- or three-year plan. I put together this whole P&L about how in year two, in the middle of year two, it would pay off.

I mean, he put together the budget. He’s like, “Here’s how much I’m going to spend on food. Here’s how much I’m going to spend on hotels.” Well, once he got on the road, he realized he didn’t like to cook as much, and so he wanted to eat out more. And he realized he didn’t like staying in the van, and he wanted to stay in more hotels. And so he used up his food and hotel budget halfway through the year, and then was just like, “Yeah, I’m done.”

Jay Goltz:
What was his history before you started? What did he do his whole life?

Laura Zander:
He’d been a sales rep—a traveling sales rep. And he’s an excellent rep. I mean, really gifted, really great at going and opening new accounts. Not so great at follow-up. He wanted to do business development, but that is just not his strength. Doing the “work” work is not his strength. His strength is going and talking to people and getting them to buy stuff. So now we have a van that is broken in a couple different spots, so it’s just sitting in our front parking lot. And as soon as the parts come in to be able to fix it, which it’s been four months now, then we will fix it, and we’ll sell it.

Jay Goltz:
Well, listen. Nothing ventured, nothing gained.

Laura Zander:
Totally. I mean, it served a purpose. It is what it is. The market is such that these vans are in high demand, so we’ll probably get pretty close to our money back. And at the time, there was no travel. We weren’t taking on new accounts, because our capacity was just not there. So it was really just a marketing effort for him to get out and visit these shops and spend time with people. So I don’t regret it. It just was a little frustrating. I mean, it was very frustrating.

Jay Goltz:
So what’s he doing now?

Laura Zander:
He was taking classes to be a business coach, or a life coach. And I think he is moving to Alaska to work with kids who have had substance abuse and teach them life skills. Bless his heart. Love him. I mean, really do as a person. Really, really like him. Just as an employee and as a co-worker, just not so much.

Loren Feldman:
Laura, what’s your sales plan instead of this? How do you reach the people you thought he was going to reach?

Laura Zander:
We’re just going to go to trade shows. And then we’re, between me and a couple of other employees, we just go and visit some of the shops. We can fly there instead of driving there. The impact that it had was, over the last year or so, not actually opening new accounts. And what we’ve done is we have transitioned one of our employees to being an in-house salesperson. So she’s going to be reaching out and really working on connecting with these different shops and these different customers.

Loren Feldman:
Did what he was doing show any promise while he was still doing it?

Laura Zander:
You know, it did. And I think that we could have absolutely figured out how to make it work really, really well. But it was still kind of in the R&D phase, like figuring out: Is it worth it to drive around to all these different stores and to visit with them, to have a traveling sales rep who does this full-time? So yeah, it was super interesting.

Loren Feldman:
Jay, what’s going on with you?

Jay Goltz:
I had a revelation that, after two years of the pandemic, this whole resignation thing, I’m calling it a “realignment.” Because I’ve done the math, and I realized that nine people have left, out of 130, which isn’t a lot. And half probably quit, and half we fired. And I’m just in a great position. I don’t know why or how.

It’s definitely harder to hire now, no question. We’re trying to hire a delivery guy to drive a truck, very difficult. But I’ve hired people for internal things like doing the web support for the home store, and salespeople for the framing business. We have found some lovely, happy, wonderful people who are thrilled to be here and we’re thrilled to have them. And I think this whole dynamic has shifted. I think if you try to run a nice company and treat people well, I think you can attract good people. I don’t know, at the end of the day, I’m in way better shape today than I was two years ago. It shook the tree out, basically.

Loren Feldman:
Shook the tree out, in terms of the people you lost?

Jay Goltz:
It shook out the people who were on the edge. Listen, you always have the 10 players, and you’ve got the nines, you’ve got the eights. And then you’ve got some people who maybe are teetering, or maybe just holding on or just barely holding on. And some of them were stressed out. They already had anxiety, and frankly, the pandemic pushed them over the edge. And they didn’t want to work in retail anymore. It was okay. And they quit and they left.

Loren Feldman:
Did they find other jobs? What did they quit to do?

Jay Goltz:
They did a good job. The problem was they called in sick a lot, because they had some issues. And now they’ve moved on to something. I don’t know where they went. I would also say—a warning to business owners—out of the nine people, how many references do you think I’ve given out, me or any of my staff? Zero. So somebody is hiring all these people who are leaving their jobs, and frankly, some of them are not your A players. My good people are all happy and here. And it’s just it’s worked out okay. And then I made a couple of difficult decisions with some people… Yeah, it’s okay. It’s kind of an opportunity to reassess your staffing and realign.

Loren Feldman:
You’re issuing a warning to people in the midst of The Great Resignation, this labor shortage, that the people they’re hiring may not be the best?

Jay Goltz:
Yeah.

Loren Feldman:
Based on…?

Jay Goltz:
The most dangerous thing in hiring is adding some desperation into it. And I’m telling you, I had one guy just quit. It was because of the situation. We’re short of people. We didn’t want to fire him. But this is not a good employee. This is someone who would have ultimately been fired. He just quits. He’s going to work somewhere. They think they hired this great guy, and they’re going to find out they didn’t hire this great guy at all.

And that would have been a good case of calling a reference, because nobody would have said too much if they called here, but nobody would have given… I’m telling you, they almost never call. Somebody should ask themselves, “Why are they leaving the company after 12 years?” They should ask themselves that, and then they should call the reference and go, “Hi, we’re offering a job to so and so, and we’re just curious: Why were they leaving?” And like, I’m not going to make up an elaborate story. And so yeah, he quit. And then I wouldn’t tell them anything. I mean, they should have checked. And I’m sure that people are so desperate for employees now that they’ve thrown out the rulebook, and they’re just hiring somebody that’s got a pulse. That is just disastrous long-term.

Liz Picarazzi:
Back when I had the handyman company, it was always very difficult to hire. And I did find that when I was rushed, I made a lot of bad decisions, including not calling references. So I know, as they always say, “The best time to look to hire someone is when you don’t need to. The best time to look for a job is when you don’t need it.” I think that applies here. We’re going to be hiring a lot in the next couple of months, but we’re going to have the ads out probably for a couple of months before we start doing a lot of the interviewing because want to kind of see the flow of candidates coming in. Because it’s not that urgent that we hire right away. And the reason I’m doing that is that I’ve hired in the past out of desperation, and that can be a very expensive mistake.

Laura Zander:
We’ve had really great success at hiring when we’re not looking, and just kind of keeping an open mind again. And we’re kind of doing that right now. Like, if somebody shows up, if somebody who works for us now is like, “You know, I’ve got this friend who’s looking for something. Are you hiring?” No? I mean, kind of always. If we can. Obviously, that’s a luxury to have.

But our social media and marketing manager, she’s been with us for four years. We weren’t looking for her. She just showed up. She had worked with one of our employees, and she’s turned out amazing.

Jay Goltz:
My hiring rate success 30-40 years ago used to be 20 percent. And now, as a company, I’d say 80 percent of the people we hire work out really well. Maybe 85 percent work out really well, and it’s all because of a disciplined hiring approach. Stop hiring whoever shows up. Stop hiring your neighbor’s brother-in-law’s cousin.

Loren Feldman:
But Jay, there are a lot of companies that are struggling with that right now. They feel like some of those rules have to go out the window because they just need people. What do you say to that?

Jay Goltz:
I say there is so much exposure to owning a business that if you hire somebody… You’re hiring a driver. They could kill somebody with the truck. I mean, there’s so much horrible exposure to hiring somebody who’s reckless or is disruptive, that maybe you’re better off being short of help and maybe your service has to slow down a little bit. Maybe you’d have to just tell people, as in my case, we did one-week framing for all these years. Now, it’s a week to two weeks. I would rather slow my service down a little bit and do a good job than just go hire a warm body and then have a problem. Because I’ve lived through those days, and I’m not going back to it.

Loren Feldman:
All right, we’re running short of time. I want to hit one more thing, which is I read a story in The Wall Street Journal recently, and it quoted a bunch of business owners who were kind of making the case that they’re having as tough a time right now as they’ve ever had, which I found interesting, because in many ways, the economy is booming. This article ran before Russia invaded Ukraine and added another issue to worry about. I’m curious how all of you guys are processing this right now.

Laura Zander:
Well, I’ve got an example of supply chain, if you want to hear it. So we moved into a new building in Texas in January of last year, and as you might guess, Texas can get pretty hot in the summertime, and our business is over stoves. We’ve got 16 women who are working in this kitchen. And part of the deal with moving into this building was to provide an air conditioned environment. You know, it’s very humid in there. So we moved into this building, it was supposed to be air conditioned, HVAC, all that kind of stuff. Well, the air conditioning didn’t work very well. They didn’t do a good job—it’s not they didn’t do a good job, but it’s not what we needed.

So we’ve had to go through phase two of cooling this kitchen, so last March, we sat down with the HVAC company and sketched out plans for how to get the air moving and to get the temperature to where it needs to be. So the quote was about $41,000 to get these units put on top to get all the stuff to put together. So, $41,000, okay, great. Well, not great. That sucks. But we know what it is, budgeting for it, all that kind of stuff. So we thought it was going to be installed last June. Then it turned into July. Then it turned into August. Then continue, continue, continue, because these parts have not come in yet.

So it is now February. It’s now 11 months later. The parts have still not come in, or a couple of the parts have still not come in. And because it gets so hot in there in the summer, we’re losing employees. And we have this new great manager down there. We have retention for the first time, probably in the company’s history, of like four months. Nobody’s left, nobody’s quit. We’re fully staffed for the first time in forever. And if we can’t get this air conditioning working this summer, we might lose some people, because it’s just going to get too hot and uncomfortable. So I was down in Texas last week working with the HVAC guys, and we’re like, “Look, we’ve got to do something.” So he reconfigured the whole thing, and now it’s going to be $66,000.

Jay Goltz:
Did you call another company?

Laura Zander:
Possibly.

Jay Goltz:
Because I went through this. I had a company telling me, oh, they couldn’t get parts from Carrier, and I thought that was odd. I called Carrier myself and found out the company was on credit hold with them, and that’s why they couldn’t get parts.

Laura Zander:
That’s not the case here. I mean, the guy who is doing the work is a guy who does work for one of the largest warehouse guys in Fort Worth, and blah, blah, blah. So I feel really good about who we’re working with, and the honesty there. But yeah, and it’s just these couple of parts.

Jay Goltz:
No, no, I think I’d call another vendor just to see whether it’s the same story. Who knows, maybe he’s just got more business than he knows what to do with? I don’t know.

Laura Zander:
No, he doesn’t. Because he can’t get parts.

Loren Feldman:
Is he going to be able to get the parts for the configured version?

Laura Zander:
Yes. They’re going to start next week. And they’re doing it at cost, so they’re not making anything because the original configuration didn’t work.

Loren Feldman:
Liz, back to my question about how all these crosscurrents in the economy are sitting with all of you: How are you thinking about this?

Liz Picarazzi:
Well, so first of all, what’s going on in Ukraine right now is a humanitarian crisis. It’s just at the beginning of it. I used to work in Ukraine in the 90’s. I majored in Russian in college, and so I went over to Ukraine in 1997. And I worked on democracy-assistance programs that the U.S. government did, and we trained Ukrainian politicians on how to run campaigns.
In terms of how it affects my business, unfortunately, it does. And the reason is that 6 percent of the world’s aluminum comes from Russia. And I don’t think mine necessarily comes from there, but in the last couple of weeks, the price of aluminum has gone up 15 percent. And that was before Russia invaded Ukraine.

I expect in the next week or so to be very impacted by that. And it’s the worst time ever for us, because we are placing the biggest order ever we’ve made with our factory. So I expect there to be a lot of volatility in pricing with that. But just back to just what’s going on there, I mean, I’m very cynical about Russia and about Putin, but I’m still very surprised that this is happening—seeing people in bomb shelters, fleeing the city. It’s really devastating.

Loren Feldman:
Jay, let me ask you sort of the same thing. I guess the question, in some ways, is: Is this a great time to be running a business or a terrible time to be running a business? That Wall Street Journal story seemed to suggest it’s a terrible time.

Jay Goltz:
As usual, I think that’s exaggerated. I’m in a business group with six other business owners. I can’t tell you that any one of us is going through a horrible time right now. I’ve certainly got some shipments that have been tied up, and we’re having trouble getting sofas out of North Carolina, and they’re behind, and people are waiting for them. We have had some supply chain things. But I wouldn’t call it a terrible time to be in business. So I’m just afraid that sometimes the newspapers, whatever, just want to create some story like, “Oh, look, how terrible.”

Loren Feldman:
Well, they quoted people who are having tough times, no question about it.

Jay Goltz:
Yes, okay, that’s my point. I could go find some people who would say that red lipstick ruined their life. Let me go find some people. I mean, you could do that with anything. So the fact that they found, whatever, three or four business owners to complain, no big surprise. It’s not hard to find. But is that really representing the small business community? From my experience? No. Laura, from your experience, are you seeing a lot of struggling?

Laura Zander:
Sure, we’re seeing shops close. And I was thinking about it this morning. I mean, we see shops close all the time, so I don’t know that it’s really any different than it’s been for the last 20 years. But people are having a terrible time.

Jay Goltz:
I mean, without the PPP money, I think it’s a whole ‘nother story.

Liz Picarazzi:
Right.

Laura Zander:
Totally.

Jay Goltz:
I recognize and appreciate and accept that. But we did get the PPP money, and a lot of other companies… I feel bad about restaurants. I think they’ve had an unusually difficult time.

Laura Zander:
I don’t know. It’s always tough. It’s always a bad time to run a business, isn’t it?

Jay Goltz:
Yeah, absolutely. Here, let’s do a story right now. Let’s go write a story about banks aren’t lending. I could tell you 365 days a year for the next 20 years, you’ll find five business owners are gonna say, “The banks are not lending any money.” Won’t be a problem to find those people. Does that mean that the banks aren’t lending money? No, it means that there’s some people who are not getting money from banks. It’s the way it is.

Loren Feldman:
All right. Thank you all. My thanks to Jay Goltz, Liz Picarazzi, and Laura Zander. As always, I really appreciate you guys sharing.