Best Of: What It Takes to Build a Business

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman so this week I decided to give the 21 hats podcast crew the week off between the Memorial Day holiday and our first 21 hats inperson event the previous week in Chicago which was attended by five of the podcast regulars by the way it seemed the right thing to do it also seemed like a great opportunity to reprise one of our favorite alltime episodes it's not a used episode it's a certified pre-owned episode or better yet a greatest hits episode we first published it in December of 2021 and it features highlights taken from the podcast we published up until that point that cover many of the risks and rewards of business ownership including what it's like to sell your business to fire an employee to risk your own home in order to get financing and even to deal with serious mental health issues if you're new to the podcast I think you'll find that these conversations bring real context to the journeys of the entrepreneurs you've been following here but even if you've heard some of these discussions before I think you'll find them refreshing reminder that choosing to build a business can be a noble Mission but it generally doesn't come with an owner's manual we're all figuring it out as we go even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations brought to you by our principal sponsor the great game of business will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which in magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews this certified pre-owned episode is titled best of what it takes to build a [Music] business as you'll hear I introduce each Exchange in this episode with a few words to set the context the first highlight actually comes from one of our closing episodes of 2020 in exchange with Laura in episode 42 the great Co churn William predicts that 2021 will be a year of turnover as we now know he kind of nailed it I do think that um this year and the pandemic in particular has accelerated a lot of things um that that might have taken a while to change and it's also decelerated some things that were going to change and didn't and a quick way of saying that is I think you're going to see in fact I know because I'm already seeing it you're going to see 2021 as a year of I'm calling it The Great covid churn in other words it's a year of turnover and what are you what are you seeing they convince you of that you ever remember in elementary school there were the tests you take and then there was the teachers Edition that already had the answers in it we kind of get the teachers Edition on the job market because we're already seeing people tell us I'm ready to make a move and and it's December and who moves in December you move in January right that's when everybody's going to lose 10 pounds and balance their checkbook and but we're already seeing uh instead of January okay I'm ready to look around uh we're seeing in December some pretty major moves and it's it's made me stop and say what's really going on here and couple things I'll I'll try not to ramble but one the pandemic put a put up a dam in the middle of what's a normal flow of turnover like like turnover just happens in the job market I mean there's there's healthy turnover there's unhealthy but there's always turnover except when there's a pandemic uh you know obviously some companies had to lay people off because of the pandemic so there was some churn there but a lot of good people that would have a natural move because of career stage or a geographic need or a promotion or try a new thing a lot of the people that would have made those moves voluntarily hunkered down during the pandemic and what should be a natural flowing river of healthy transition it actually got damned up by the pandemic so that that's one thing and when now that a vaccine's been approved in the UK and should be here in the US pretty soon and you know maybe it'll take till end of Q2 for everybody that wants a vaccine to to receive one by the end of Q2 I think the fear of moving will have gone away and that's just to say we've lived with a really uncertain year and a lot of people that would have made a move have said I don't need any more extra uncertainty in my life right now so I'm going to wait and make a move once this clears can I jump in like so where we live you know in Reno it's a lot of I don't know what the the statistic is but there's not a huge population of people that were actually born in Reno and are from Reno you know it's a lot of people from the east coast and um all around and people are moving home you know they've just decided they're like this is it you know I'm done Laura I Laura I totally agree with you I would say there are a myriad of reasons why this is going to be the year of turnover one of them is people who were waiting to start their own company people who were waiting take a job at a competitor people who were they're like no I'm not doing that right now no more uncertainty now right after that there's a whole lot of other reasons like we're doing several searches right now for repeat clients where we placed an individual and it's only been 3 four five years and the individual has moved and the client has rehired us to refill the spot which You' think why would you rehire us if the guy only lasted that long and they say well no no no no they did a wonderful job but the pandemic has made them realize they want to live near their family of origin they want to go back home that's only going to accelerate and then you add in I've got uh some dear friends in Park City which has been a quiet little mountain town forever and now it is one of these bedroom communities outside of a major city and Salt Lake's growing like crazy well Park City's growing quicker because you you as Lauren can relate Princeton and the Stamford con all the places Don and Betty Draper would have lived that everybody said was a dead real estate market well it's hopping everybody wants out of the so people are moving geographically and that's going to increase in 21 people are moving for family reasons that's going to increase in 21 people are moving because they would have moved in 20 and they put it off and that's going to increase in 21 the other thing that's happened is everyone's job has completely changed and a whole lot I mean I can't tell you the number of people who are like this isn't what I signed up for anymore in episode 44 how do I manage my managers the following exchange between Jay and Laura came in response to a question from a listener hap Cameron who owns happy cones a New Zealand style ice cream company in Denver hap was looking for suggestions on how to manage his managers more effectively and by the way if you ever have questions for the podcast panel you can send them to me simply by replying to your morning report number one and most people don't talk about this the most important part of management is in management it's hiring the right person in the first place so uh first I put a lot more energy or good energy into figuring out what kind of person is going to do the best job doing this put a great ad together interview thoroughly check references and most entrepreneurs are not real good at it including me why because we like people because we like to talk about our companies and we're in a hurry that's not a good thing in hiring slow down the hiring process and do your best to find someone that has had experience doing something with customers ask good questions during the interview like tell me about a customer experience you have Jay is that realistic advice for an ice cream shop yeah okay why why not maybe they didn't work in an ice cream shop no question I'm but they did they have a job before they've never had a job okay maybe they're right up maybe maybe they just graduated high school caught whatever and they've never had a job okay but most people have had a job before so I would ask them tell me about dealing with customers because at the end of the day people are not going to be pissed at you because your chocolate ice cream wasn't quite as good as the chocolate no they're going to be pissed because your person wasn't nice go to Yelp that's all you have to do just look at Yelp and see the reviews usually it's about they've got an attitude in there or they weren't nice to me or I hate that it's usually not about the product it's usually about the people so you want to hire a nice person who's G to give a wonderful feeling to your ice cream shop so you've got to figure out what kind of questions do you ask asked to tease that out and the one I would ask is tell me about a difficult customer situation you've had and how did you handle it and you can tell by just their body language do they sigh do they say oh wow I hid one boy six months and they and then you find out what they learned from it and you find out whether they've got an attitude about it like well people are jerks sometimes versus listen I understand my number one job is to make sure people are happy even if they're not nice to me I suck it up it's not a problem I don't take a person I want to see how they handle that they process that hiring number one okay number two set standards in an ice cream shop I'll give you my top four make sure this door opens on time how many retail stores do you go to that they're not open when they're supposed to be open and you stand out in front waiting I have a simple solution to that my employees know our standards are we open five minutes early and we don't lock the door till five minutes after closing so there's none of that screaming through the door pointing at your wristwatch we're closed like you know if we close a six no one locked the door till 605 easy easy versus you know getting into the fight with the customer so setting standards like that cleanliness got to be critical like you shouldn't walk into your ice cream shop and find dirty napkin plane on the floor customer service if someone's not happy how do you handle it oh no problem let me get you something out you need to train people on that stuff because some people think they're doing cut the the company a favor if they fight with customers they think that's their job is it fair to ask this man manager to write up those standards no not at all well you can ask on the interview to see if they can do it that certainly would be could you make that part of their job could you say look part of the reason I'm I'm hiring you is because I want you to create these standards I want us to agree on them no absolutely not you've just given away you're no longer the owner now it's likey is one is deciding who your store is no I don't mind the asking what do you think if I had to here um Mary what are what do you think the four most important things to being a manager in the store and see if she can come up with it this ain't brain surgery they should come up with customer service cleanliness making sure that you know we got the place staffed properly for the right time they should be able to come up with this if you're wanted to be a manager in episode 46 a fabulous conversation about marketing we welcome Stephanie Stucky to the podcast later in the year Diana Lee who co-founded constellation agency digital marketing business would join as well and by the way in January we will be adding two new members to the 21 hats podcast team Stephanie explained how she had bought back stues the family roadside stop business which had once been everywhere but had fallen into serious decline her plans to reinvigorate the business she told Dana and Laura included aggressive use of social media including LinkedIn LinkedIn was the biggest surprise I get so much engagement on LinkedIn it's the comments and it's not just well done or Kudos I like that it's I really like this because like today for example I can't afford marketing research so I'm deciding between two billboard designs and I was really headset on one billboard design and the owner of the store wants another billboard design and I'm like all right I'm just going to put this up on LinkedIn I'm going to ask people for their feedback and everyone's going to agree with me and then I'm going to go show this to the store owner and say all right see I'm right well I posted it I said I want your feedback I've already gotten a lot of feedback and uh it's been mixed a lot of people like the way he likes the billboard so that's just one example but the feedback I'm getting is not just I like the top one it's I like the top one because the logo stands out more God what a great way to grow this brand by like your community involved in all of these decision Mak getting free Consulting I put up display Concepts oh this is my favorite I put up display Concepts and I'm been working on this display because we're so small and we have limited budget and we don't own our own stores part of my growth strategy is we get Retail Partners and that sell our product but they don't pay as a franchise like an Ace Hardware so I'm working on these displays that look like a mini Stucky store with a ro roof a blue roof and a little Stucky sign and so you get the experience of a road trip from the display even though you may be at your local Ace Hardware store so I got the inspiration for this display shamelessly from a Crispy Cream display that i' taken a photo of and I showed it to this guy who makes displays I was like this is my this is my inspiration can you mock up something and so I had a I had a prototype and I put the Prototype on LinkedIn I said can you'all give me feedback what do you think of this got tons of great comments and this one guy messaged me and said I really like this I have some valuable feedback I'd love to have a phone call with you it looks a lot like the display that I created for Crispy Cream when I was their marketing director and he showed me a photo and I was like busted he's now helping me by the way that's great yeah at a very reasonable rate because he said I love your brand he's no longer working for Crispy Cream he's doing he he just took time off for family reasons and he's like this is a fun project I'm interested in helping you and he's amazing and I found that through Linkedin through a LinkedIn comment I was I didn't even say I was hiring in episode 48 I want to have Clean Hands Paul Jay and Dana talk about the mechanics of firing an employee and how to make the best of a bad situ situation I had an employee that I fired because he wasn't showing up for work and I did all the stuff documenting it writing it down and uh we had the final meeting where his transgressions were to be reviewed and I filmed it and what happened was I sat down handed him a document here's your problem here's the policy violation started reading it to him he threw it in my face and jumped up you know basically screw you I'm out of here but he was smart he said you can fire me if you want but I'm not listening to this garbage and then he just left and so then I did go and fire him and then of course he claimed unemployment and I sent this movie Into The adjudicator and I said check this out you know like how in the world is this not a quit and he said well it's not a quit he he asked you he didn't say he was quitting he said fire me and you did so it it's a fire but and the guy took pity on me he told me exactly how to play it so that so that the claim would be denied and it was and it basically was the guy had demonstrated that he couldn't be managed and that instead of me saying that he had quit uh I should just say he couldn't be managed you know that is a critical piece this it wasn't a question of competence or whether he could do his job or not and it wasn't a question of who who quit or who got fired it was he had demonstrated very clearly that he could not be managed and that was a legitimate reason for me to get rid of him you hit on the key piece which is there's there's maybe half a dozen reasons why someone's not eligible for unemployment one of them is they didn't follow agreed upon rules one is you know attendance there's there's reasons so you have to pick reason Jay before you say that in a blanket way we should be we should emphasize that these rules differ from state to yes my what you say about Illinois and what I say about Pennsylvania may be real different in in Alabama or New York for that there are I'm 100% with you on this you need to know the rules and if you follow the rules and someone you have to fire someone for those rules you will win unemployment but at least in Illinois if someone you can't say oh they weren't doing a good job that's that's that's not a that's not a reason to that's not a reason they don't got unemployment I want to follow up on one aspect of what Paul just said do we all think it's a good idea to videotape a session where you are letting an employee go I think it's a bad idea because there shouldn't be enough discourse to videotape termination should be quick and you should always have somebody there with you um and some of the times we've even had a quick sign off a quick two or three sent paragraph saying you know yes I'm being terminated on this day and done but videotaping it I haven't found it necessary in b i find it to be just too adversarial personally this is just my own personal thing I don't like the idea of returning this into a court case right off here we're going to video I I'm not comfortable with it and I have I have found it by documenting it it's worked fine Paul what do you think have you continued to do that uh I haven't but I find the threat of it to be extremely useful so I have I did that one and it actually was really helpful to me in the situation where I was trying to get the adjudicator to see what happened I mean the one thing about video is there's no argument about what happened but since then what I have done is prepare documentation and have a witness and what I tell the person I'm about to fire discipline when they come in is hey I'm going to do you a favor I'm not going to turn on a camera here and and what it does is it is it lets them know it could be even worse they're about to have probably the worst moment or one of the worst moments of their adult lives and I'm going to tell them that there is a further level of humiliation that I could subject them to and I'm not going to do it and that has worked out well for me since then in that I've discharged six or eight people uh for cause and I haven't had any unemployment claims from that um because I try to always leave them with a sense that it's not working out but I don't bear you any ill will so by telling them hey I'm going to do you a favor by not recording you right now I see like I see the bully and I see the bully and the and the buddy right like let me help you help I mean there's there's no way around it you got to be you got to be hard at some moments as a boss you just have to be and you have to do hard things and they are humiliating and they are dreadful for the person you're you're doing them too and that's just part of the job but there's ways to do it to make it worse or ways to do it to make it better and I'm not a I'm not a hard person but I will do a hard thing if I feel like that employees continued employment is threatening the health of the rest of the team that's what makes me act and uh but I try to always pull back a little bit as the punch lands and try to make it as good as it could be well let me give you my version of that clearly you have to fire some people and clearly they're usually not going to be happy about it and I my Approach has been I want to have Clean Hands which means they've been talked to about it before they were given an opportunity to fix whatever the problem was they've given an opportunity to go look for another job because you said listen I'm getting I'm starting to get concerned you're the wrong person with the Shob they've had all that opportunity when it comes the time that they have to get fired I want Clean Hands and if they go which just happened I can't believe you're doing this and say I can't believe you're surprised we just had a conversation two weeks ago and I told you exactly where we're at and listen Bob if their name's Bob Bob you don't have to agree with me I maybe you're right all I know is this isn't working out for us here today's your last day I wish you well I think that one of the critical things is not the meeting that that involves the firing but the one before that and probably I bring out the full documentation and the full you know it's it's all the same things you would do to fire someone with an escape valve at the end so there is the written part there is the witness there is the policy violation there's the person has to sign an agreement that they've been in the meeting they understood what happened but I always say you know I've laid out what I want to change in this document where're we're both reviewing I want you to stop doing X and I want you to start doing Y and if you do that we'll forget about this it'll be in your record but I'm not going to hold it against you you know it's like a real it's a real warning you have just described no you you just describ ex Direction down the road and then you fire them but they're not surprised in episode 49 how do we get out of this cage Laura takes us back to the founding of Jimmy Bean wool before they started the business Laura and her husband Doug were coders in San Francisco who did very well before the internet Bubble Burst after the bubble they moved to reeno where they opened a neighborhood Hood yarn store but then being coders they turned it into the internet's neighborhood yarn store with Doug engineering their platform himself in many ways they were far ahead of their time but almost 20 years later Laura tells Karen and William they find themselves in a predicament Laura I'd like to start with you I understand you have an important job opening if I'm not mistaken you're looking to replace your husband yeah I am I am God if there's a rich single man out there um that would like an 11y old William in your experience how long does a husband search usually take well if you're willing to go the mail order route we can get done pretty quick perfect perfect H in all seriousness your husband is your co-founder and um and I guess kind of the chief technology officer at Jimmy beans wall is that right yeah he's the everything technology officer um but yes yes so he has built we've been a business 19 years um he started full-time 17 years ago and he has built every piece of so pretty much every piece of software that we use so from scratch Laura from scratch okay huh yeah so it's all zeros and ones it's all like asp.net JavaScript um VB uh so you know we have I just have to ask have there are there no systems out there you could have used you had to make them from not 19 years ago no oh wellow no and that was actually our big huge competitive Advantage is that nobody had I mean I sure we probably could have spent $200,000 at the time I mean there was no Shopify I mean this was you know we started years before Facebook started and also you guys were both coders who uh major living doing this yes yeah so we started it with you know an inventory management system that linked to a website which was the e-commerce plus we had a point of sales system because we had a retail store so we had this platform that Doug built um and then just expanded it and expanded it and you couldn't buy you know we're in the yarn industry and so we have all these interesting little things it's not apparel where you sell one t-shirt in one size you sell two Hanks of yarn if somebody's going to make a scarf you sell three Hanks of the same color if somebody's going to make this you sell blah blah blah and then there are diot so there are some complexities um inherent to the industry that we're in that make it so that you can't just buy offthe shelf software um or you could and then you could customize it you know and and that's something that we need to think about but so now we have this you know 19-year-old Legacy system that Doug has built added on to he um invented some things if you will uh before things were available or readily AA like subscriptions before um I don't I don't know what that subscription platform is but he built a subscription platform for us before you could go buy one somewhere so that we could run subscriptions so all of that said he has built it he maintains it he you know he maintains AWS for us he maintains our phone system um he has two college aged women that help him um and that he is training and teaching we've run through over the last TW 10 years I guess um maybe 12 years we've tried hiring college students we've tried hiring $150,000 a year people from Stanford we've tried everything in between we've probably hired 15 people over the last 10 years wow wow yes so all all to try to replace Doug or to do different things well we would you know in an IDE World he's a bright guy you know and he's he's a creative you know like he designs our house he's an architect he was a technical architect in the Bay Area before we started this so in an ideal world he would have a team underneath him with somebody that managed the team and he could do the New Creations you know and he could create new technologies that's what he's you know um uniquely talented at but um or he could just walk away I mean he if we found somebody to replace him today he would walk he'd get on his mountain bike and ride into the sunset um very happily I think you told us previously that his his dream is to be a house husband you know he wanted to be his dream his whole life was to be a stay-at-home dad with no kids um and then I got pregnant so we had the kid um but so somebody one of our employees at one point put it very um described it very well and that Doug has built a cage around himself you know and we need to figure out how to get him out of that cage because the system can't survive without him in episode 50 so you bet the House Stephanie tells Jay about her decision to double down on her investment in stues by buying a manufacturing facility that will allow her to Shell her own pecans and stop Outsourcing the making of pecan log rolls and other candies Stephanie's hope is that this will allow her to control costs and quality more effectively but even with a 50/50 partner buying the plant was a significant investment and arranging the financing was a torturous process that culminated in her taking a risk that many non-entrepreneurs would find inconceivable Stephanie I wanted to take a step back and take the larger view of this for a second you took a big leap when you bought the company in 2019 this seems like an an an even bigger leap you're uh you're even further invested taking bigger risk absolutely what are you most worried about what concerns you the most you know there's one thing I meant to mention earlier when you were talking about you know the the risk from the initial purchase of stues this is a mult multiple of that amount of money to purchase this manufacturing facility and I did mean to bring up how we financed it and it was through a SBA loan and we we did a 7A loan and I think it is important so many people with the cares act talk about the PPP which of course is a benefit that is has been a huge boost to businesses but these loans for acquisition of facilities are also benefiting from the cares act two round two and the first six months of our payments the SBA is going to pay up to $99,000 of our mortgage payments so that's a boost that's not always mentioned in the news nice what keeps me up uh or what worries me about this I guess obviously it's a it's a financial investment and the SBA loan and it's a great thing if you can get it that's a whole other episode trying to get financing on a big acquisition for a small business because it typically requires you having good credit which my business partner I are fortunate to have but you also have to have collateral and the SBA Loans do require you to put up personal collateral so so you bet the house my house is collateral now y welcome to entrepreneurship I'm glad there's some honesty out there because that's the way it works because I got to tell you especially now with the banks it's about collateral collateral and collateral it's incredible not only did I have to put my house up as collateral but then I had to make sure that the home insurance policy listed the bank I had to take out an additional life insurance policy and list the bank I was just waiting for them to call me and tell them my firstborn son has to be collateral as well in episode 57 Dana White decides to franchise paral Boyd Dana tells Jay and Stephanie what she's decided to do with the $200,000 she won at an entrepreneurship competition in 2020 Dana's decision will Loom larger as 2021 goes on and she lands another big opportunity this one to open company-owned salons on American military bases around the country and even the world so I've made the final decision as to what to do with my winnings from Detroit demo day interesting and it's been a long back and forth journey and I have decided to franchise wow wow that's so funny I'm actually getting trying to get out of franchising I'm the opposite direction that's why I wanted you here today Stephanie franchising gone wrong we're gonna talk about that but first uh tell us Dana why what what brought you to this decision so I had decided that it was time to expand and so I had looked at going to Chicago we talked about that we had an episode absolutely I was going to Chicago um and had a conversation with my operations manager and she said I think Chicago would be an amazing move but I hope you don't mind me saying I'd like to talk to you and I said sure what's going on and she said you know my background I've worked with the sports clips franchise great cliffs franchise in Lady Jane's operations and I said yep those are all hair salons and and she said after having worked here for the time that I have I've never seen anything like your business and if you don't mind me saying I think you are perfect for a franchise model and we really went in depth and had a conversation that inspired me to call up the franchise consultant and just have a basic conversation what is the state of franchising after covid during covid what's going on and we had a very Frank conversation and we talked and he pointed me in the right direction to get the information that I needed um and then after that I you know talked to people read the reports um and called him back and said this is what I'm thinking and this is what I can do he was like okay um I think it'd be a great idea but you have to think it's a great idea so this is let's get you comfortable with it my network has stepped up ernston young has stepped up Golden Sach has stepped up to give me as much information and support that I need to execute this perfectly um I franchise group I've started my process I'm about two weeks in in a femon process and at the end of this process I will be the first African-American woman Beauty franchise or and we're already starting to talk about subsidiaries in in other countries five other countries this is the same group of um the frame same franchise team that franchise dry bar and so they've been able to impart their wisdom on what went right with that process what could have been improved in that process um and what makes per boy different but I am extremely confident using my resources the people that I've talk to away from my if franchise group family as I'd like to call them I told them yeah I mean of course you're going to give me great references I want to talk to people who have nothing to do with you that are franchises and they said understood and that's why I leaned on Goldman Sachs and ernston young to put me in touch with their clients who either started franchises or have been in franchising for years um and that was it we're off and running to the races it's been a great process so far wow Jay any questions for Dana wow uh lot to take in um the franchise consultant I mean I've looked into this a little bit there's I don't know 20 of them this one okay so this one did dry bar okay that's good are you privy to what the numbers are from that whole thing what do you mean the numbers what are they making money is like how many lawsuits are coming from the people that bought the franchises are they first question I asked was about the lawsuit I've asked not only my I franchise group what is the number of their lawsuits but other franchise ores and the numbers are low and I said okay but why do you have numbers at all and they told me why they have numbers at all and so are there some lawsuits yes but a lot of it has to do with the franchise consulting firm that you start with no question there's absolutely no question and it comes down to being careful who you sell the franchise to so there is no question that franch chising is one of the greatest inventions of the 20th century but with that being said there's been lots of failures over the years and I'm glad that it sounds like you did your homework on it so okay um wow Stephanie how about you any questions for Dana I'm not so sure if it's questions as much as some cautionary tales although this all sounds great so I no way I want to dampen this enthusiasm and I love that you would be or will be the first female African-American franchisor of a beauty salon chain so I'm all for it I just have a very different experience and part of it is that I purchased duckies and we had a franchise system that had really gone a after years of neglect so the challenge you have and you know this is ensuring consistency and quality and really capturing what's unique and making sure your franchisees get that and in order to have that you have to have a strong operations program and systems in place and we lacked that at Stuy so we don't have consistency so I'm trying to do a lot of Cleanup in episode 65 this is where we get into therapy Paul Jay and Laura well they get into therapy Laura acknowledges her discomfort with some aspect of being an owner does she work hard enough does she pay herself too much does she deserve her success Laura I'm curious with you given your feelings of guilt are you uncomfortable with the idea that there are certain people at your company that know how much money you're taking um sure yeah I mean my salary is low you know my payroll salary is low I mean not low but I'm not the highest paid person at the business um and neither is Doug so that doesn't bother me wait wait wait what I know you employees making more money than you're making from a salary standpoint yes okay but then we take distributions right right now we're just paying back you know the loan that we made to ourselves certainly there are things that I get uncomfortable with like you know one of our um our office manager our accountant sent our taxes to her the other day and I'm like no you know I don't want her to see like you know the all of it plus your social security number now oh I don't care you say that please you say that until it happens then you're G to find out I'm sure yeah I'm sure uh so yes yeah it does m i mean because I feel guilt and I feel but I'm learning a lot just from listening to you guys I'm surprised after all of the difficult times you've had cuz I certainly used to feel like you did I'm surprised that after all of the difficult stressful times you've had you haven't finally figured out this is why I make money because I did and maybe maybe just because I'm old and you at finally some point I realized this is why I deserve versus guilt replacing guilt with deserve this is why if I happen to do well because of what I did and the business is really profitable I no longer have any guilt I certainly used to um it's the deserved thing even taking this last week off I feel so much guilt because everybody else is working and I'm not don't they get vacations your employees they do they do what's the problem with that I you know I mean this is we're going to get into the therapy I think we're already in it so just finish it out it boils down to the deserve thing I don't deserve it you know because I haven't worked hard enough I've made too many mistakes you haven't worked hard enough I could have worked harder oh man you should go you should go read that book uh what is it the jungle okay uh where the guy's like in in the meat packing industry and every time he gets utterly screwed by yeah he gets screwed by everybody in sight and then his reaction is oh I should work harder it's like no you're getting reamed by the politics the business the government you know like everybody's on him and you're just seeing it I don't know who taught you to do that you should go slap them because you you I'm done Laura is this a surprise to you cuz it was a surprise to me when someone pointed it out to me 20 years ago would it be a surprise to you if I said that you're obsessive do you know that about yourself oh absolutely okay well this is part of being obsessive you don't think you're working hard enough you don't it's all part of being obsessive and I was talking to my friend one day and I I said boy the guy in the article I think it was Bo Burlingham actually he said you know he called me obsessive and I was telling my friend this who's know me since I was 10 years old and he goes Jay you are obsessive you didn't know that you used to time yourself when you cut the lawn at home and I go what do you mean I used to time myself you know but I got to tell you I'm obsessive and now I recognize it and I made some adjustments yeah I think no you're absolutely right of course you mean you don't time yourself to see how fast you can get the mail and see if you get a PR you doesn't everybody do that oh God yeah it's crazy with your which is a problem with myself yes it's with myself and and I think there's probably some maybe it's not narcissism but it's that I you know feel like I'm the center of the world and so you know everybody's sitting there watching what I'm doing and paying attention to whether or not I'm working um and I realized that that's not uh rational and not accurate but anyway so yeah fighting it in episode 72 it's a pile of money Jay talks about how commonplace it's become for job candidates to schedule an interview and then just not show up Paul suggests this may be because some of those candidates are getting snapped up by other employers he then explains how much his own hiring process has changed because of the labor shortage at least for now Paul says the days of higher slow are very much over I've noticed that when we interview people now we really need to be ready to lock them down right that second make a decision take them out of the job search or they're gone like the idea that we could spend time thinking about it and you know dragging our feet you know what I'm sure you're absolutely right that that's part of it for sure so someone else will hire them I mean it's just a different market now we're not in 2009 anymore and employers are going to have to make adjustments and that's one of them you see someone you want like what I do is I hire them and try to get them in here and then we'll take our time to make a decision about it and uh but then we've removed them from the job market and we have the chance to make the decision as opposed to them making the decision and that costs money basically the way you do that is by they're asking for 17 say tell you what I want to hire you right now and I'll give you 18 and you can start you know whenever you can and then if it works out it'll be great and if not I'll fire you and but they're at least they respect the honesty and they understand what's going on and they're in they're in a they got to make a decision if they've been identified as someone who's worth more than they think they are and and then I got a chance to do whatever I want with them and I have had people who we let go fairly quickly after hiring them because they didn't turn out to be a good fit but then there's others that were even better and I was glad that I didn't let them walk out the door at that interview and go get hired somewhere else CU someone else would hire them but do you actually say to them if it doesn't work out I'll fire you yeah a lot of people actually appreciate a company which is clear about it standards now I have a whole list of what we call the new employee guidelines that say okay here's what you're expected to achieve do you show up on time b b you know like here's a whole bunch of things if you can answer yes to all these questions after 3 weeks great and if you can't then don't take this job because the these are the these are the rules of the game you're playing it's not that hard to succeed do a good job and show up and be a good teammate and uh you're in in episode 73 get rid of the aridus we tried something different mostly because no one else was available I talked to Jay one-on-one having had these weekly conversations for 2 years I wasn't entirely sure what we'd talk about but given Jay's wealth of experience we managed to pass the time in fact based on listener feedback Jay's detailed explanation of how he learned to delegate was easily one of our most memorable segments of the year have you always known how to delegate no clueless never had a job started by myself I I had to figure it out so I'll just give you this example so I don't know I was probably in business five six years I had 20 30 employees and I kept reading books about delegation or maybe I scanned the book or maybe I just saw the front cover of the book but I knew delegation delegation delegation so I figured you know what Jay you got to start delegating more so it happened to be the end of the year and um Chicago you have to put a vehicle sticker on the windshield every December 31st you have to change the sticker out so I said to myself all right this is a good thing to delegate because um somebody else can do this it'll save me time so I get one of my guys and I had a company van at the time and I said here will you put the vehicle sticker on sure no problem so he puts it on and feeling good about myself look at that I delegate I Sav myself 20 minutes or whatever and I go out to the van that night and the sticker is like halfway up the window like it's supposed to be in the bottom right hand corner I'm thinking oh for God's sakes doesn't he know that so halfway up the windshield right up the windshield yeah so for a year like a Dun cap I got to look at this stupid sticker because once it's on you can't get it off so for a year I had to look at this thing and remind myself I'm not good at this so a year goes by and then I realized no no no I didn't understand allegation you got to give instructions so the second year at this point didn't just have a company van I had I was driving a car now so I had both a company van and a car and I gave him the two stickers and I gave him instructions put the sticker on two inches in the bottom two inches on the side here's a paper towel put it on the dashboard here's a r laid it all out because I'm becoming a manager I got this whole delegation thing so he comes back 20 30 minutes later you get the stickers on he goes yeah I go sounds a little tentative what do you mean yeah well I lost the razor blade whoa whoa what do you mean you lost a razor yeah I don't know where the razor blade went and so I had to worry for the next year that I had two little kids at the time that maybe my kid was going to sit on a razor blade or I was going to find it somewhere so for the next year I had to worry about a razor blade okay that was the second year third year all right now I got it I've got the whole Murphy's Law thing I know whatever can go wrong gonna go wrong so now I'm I'm a professional manager I figured it out I'm GNA give him one sticker at a time so I get another guy and this year it was particularly cold out it was like zero degrees out and it was the perfect time to be delegating something like this like iy had a nice coat but you know so I figured okay here's sticker one put it on the van told them same instructions and when you're done come back to me and then I'll give you the second sticker because I knew that they'd probably mix up the two stickers so I've got it all figured out now because I become a manager okay comes back after 15 minutes and the sticker in one piece he's okay I'm ready for I I said oh my god I've never gotten a sticker off in one piece I'm some kind of Delegation genius I got the right guy in the right job I train him look at this so I happily give him the second sticker and he goes off to put it on my car so 20 minutes go by 30 minutes go by I don't see him so I go to find him and he I see him coming out of the bath bathroom and he's white as a ghost like sick I said did you get the sticker on he goes no why not the windshield exploded he used the blowtorch to get the vehicle sticker off that's how it came off in one piece and my right-hand guy was standing there and he goes you know I saw him going through the show with the blow chch I wonder where he was going with that so he just blew up the windshield of the boss's new Lincoln Continental what did you do I got a new windshield I didn't go yelling at him I mean what are you going to do at that point I mean I can literally remember when I was seven eight nine years old and my mother told me don't take a cold plate and put it in the oven and and like obviously his mother didn't tell him that so people could go oh my God how stupid well if someone didn't tell you that how would you know that so so I put a new windshield in and uh the lesson from that year was when you delegate some things get messed up sometimes so the next 35 years till today I now have 10 Vehicles between the cars and the trucks and I put the vehicle stickers on myself so if you ask me what do I do that's one of the few things I don't delegate and I feel good about it and I like doing it what is the lesson to be taken from this the lesson from this is i' I've delegated pretty much everything else in this compan except putting vehicle stickers on and I don't mind doing it and the city changed their date now you don't have to do it December 31st the dates float and I got the all of the stickers all go on in September so the weather's nice so that's my my sideline and I haven't blown up anyone sheld direct so I do a really good job on that so do what you're good at in episode 74 every day I have to force myself to get out of bed we ventured even deeper into therapy as Laura talked about her lifelong struggle with depression she spoke with Jay and Dana about the impact it's had on her business and how she copes with it after the episode aired we received several very moving notes from listeners who had had similar experiences and who appreciated Laura's willingness to talk publicly about depression I think what hit me um and you may want to cut this out but you know I realize one of the reasons that I share my lows more than I share my highs is I mean you guys know like I'm depressed and I've always been depressed like it is hard for me to get out of bed every day I mean every day every day I have to force myself to get out of bed and to not just crawl under the sheets and it's been that way my whole life that is a legitimate explanation I might even feel bad now but I don't feel bad cuz it's still good advice but you're right I fully respect and appreciate that so I like I said I'm not beating up on you I'm not criticizing you I'm just telling you it's good and you're totally right and I um I work so hard and maybe I don't get the same results as somebody else who works just as hard right but I work so hard on stoicism and trying to let things go and trying to be productive and not going down this hole but you know the last few years have been hard um and we've had lots of UPS I can tell you all kinds of great stuff that's happened over the last couple weeks you know our the it looks like we're going to get the bank loan um it looks like this building's going to go through you know we're going to get it at a great rate you know our staff is really stoked on it um we talked about this the last time you were on you're you're buying a new building for your buying a new building I've got a new brand that I'm going to be the big thinker on and launch um but I feel like and maybe this is the wrong thing to do but I've always felt like nobody talks about the dark parts and that's not true a lot of people do talk about the dark part but they mention it and so I'm very open with I mean I thought about killing myself last week you know like I was that low and that's indep well I mean that's cuz everybody in my family has killed themselves so that's just training you know that's the first place exaggeration there I doubt that everyone in your family has killed okay no good point but multiple people you know my mom her mom you know my uncle blah blah blah so you know there's some programming there that I recognize intellectually that this is programming um doesn't mean I'm going to do it doesn't mean I'm seriously thinking about it but you know I know that I'm going to a dark spot which is an emotional spot it just is and all I can do is go for a run or and just or sometimes just wait it out um so does your team I'm starting to interrupt you Laura but does your do your does your person that's next to you you in this company do they know that oh totally I'm super open about it and so here's the thing Ashley my operations manager does a very good job of managing how involved I get yes and what she brings to me because she knows how low I can go not low as like a me but how much it'll weigh on me and she's like I need you to focus on this so this company can grow don't worry about what she said when fired her she's gone I'll say 97% of the time that is the case here as well okay great we have just been pushing my number two both of my number twos so my number four um have been pushing so freaking hard for the last six months and I'm so grateful for that like I couldn't ask for them to work harder and they're working on the right things but as a result they haven't had the energy or perhaps they've slipped a little bit and they've let things come to me that have affected me emotionally and I have made the mistake of jumping in to try to help them you know as because we're still building our teams like Jay said you know we're still trying to figure out if this production manager is going to work he may not you know we're on our third one I mean we're not um we lost five people two weeks ago uh so we had five people leave you know all at once so we're hiring and blah blah blah blah blah it's all good stuff it's all fine it's all going to work out but you know you take the co the smoke the overwhelmed you take a couple of emotional people you take me being emotional and blah blah blah and it just hits you sometimes yeah okay just for clarity had you said I really did not real you said well you all know this I really didn't know that it was that bad and if anything gets cut from this it shouldn't be this part it should be me going off on you because I didn't realize that so you have excuse to I get it I get it good for you and good for you for being honest cuz you're certainly not the only person that that that's dealing with they yeah I wanted to say that too thank you for saying this L yeah that's huge no and I think I'm very grateful that at 40 almost 47 years old like 99.8% of the time I know it just is what it is I mean my freaking chemistry is off you know it just I create you know different levels of dopamine and serotonin and all this than other people do like I know that and so and I can see I can look at it from the outside most of the time the you know the gross majority of the time but you know listen I am painfully aware of mental illness I have three sisters and one of them she killed herself and uh I have a picture of me and her in my office to just remind me to be kind to people and just remind me that life isn't fair because um she had that life and I have this life and I I um so I absolutely hear where you're coming from and I will maybe wrap my pep talk in a little more niceness or whatever you want to call it oh sorry you don't need to yeah because I have to tell you I I I've I've certainly had horrible frustration and horrible stress and all that but I've never I I I I've never experiened I've had and I'll tell you I've had the waking up in the middle of the night thing with is this horrible dark feeling which I do think is whatever that's called anxiety I've had that a little bit but yes you you good for you no and my husband doesn't have it you know I mean he he hates his job most of time B the problem you know he but he just leaves I mean that just is what it is like it doesn't like take him some down down some dark hole Laura when you're in a when you're in a dark place do you have some someone that you can talk to yeah I talk to you guys um but yeah sure and again I'm experienced and practiced enough at this that I am able to step outside and be like okay I'm in a dark place don't make any decision you know blah it'll pass I mean that's you know my dad actually told me one of the the few pieces of like great parental wisdom that he passed on was um I think it's I don't remember who the artist was but it's this series of pain paintings um of four paintings of this River um you know and in the first painting it's a little baby on the boat going down the river and um it's all nice and peaceful and beautiful and then the second one is it's kind of exciting and it you know it's it's a teenager on there and then the third is you know you and your kids and all in the boat and it's just Rapids and it's crazy and it's chaotic and then the fourth one is you're older and again it's Serene and beautiful and the Sun is setting and so I just keep thinking where I'm in the Rapids I mean I got a 12-year-old kid you know I've got a husband that I work with we have a lot going on um and I don't I just keep pushing and pushing and pushing and pushing and pushing you know I force myself to get out of bed I force myself to go for a run um and so when I do go to these dark places I have the awareness to know that it's happening um which is something you know I didn't have that 20 years ago or even 10 years ago me 10 years ago I would just drink you know to make it go away now I know you know what if I need to take a nap and just like Escape for an hour I'll take a nap in episode 77 can an entrepreneur raise an entrepreneur Diana and Jay talk about how they were both raised in businesses Jay in his father's Dime Store Diana and her parents convenient store the businesses that Jay and Diana have built are light years away from those of their parents and yet Diana tells how quite unexpectedly she wound up following in her parents Footsteps in one respect so my parents were entrepreneurs but they actually came from a very poor country South Korea um and we moved to the US in 1974 when I was 5 years old so um they had a very hard time you know with all the businesses that they had because they self-funded everything and were working you know 15 18-hour days just to get by and make enough money they came from like pretty desperate times and you know my parents were held up in gunpoint multiple times uh while I was growing up running their you know convenience stores their fish markets or whatever they actually owned at the time uh many of the reasons were because they had to actually open it in pretty bad locations or locations where they could can afford it but uh obviously they weren't in the best places watching them throughout the years they would come home and they would have a bag of cash uh afterwards cuz obviously they'd have to take the money out of the registers and they would count the money you know soon as they got home and then they count the coupons of what they actually had to apply everything to and I watched it my whole life and as many times that I could say Lauren that I said I don't want to turn out like them where I'm working 15-hour days not sleeping much working all the time and completely ignoring me their child I ended up repeating the same identical thing but in a bigger way tell us about that when when did you realize that you were repeating I started the business when I was 47 years old so it was 5 years ago I'm 52 now and my kids were in high school then so my husband had said to me if you're going to actually you know build a business you should do it now because our kids are in high school they don't really want you around as much and they don't want to be controlled Diana so at the end you're going to have a better relationship if you just go to work more so I was like okay fine I'll do it and you know because I'm a control freak I wanted to make sure everybody's okay all the time and I was you know over controlling about what they ate how they dressed all of those those things that I think you know most mothers are with their children and then soon as I start the business I am so overc consumed and now I have employees I have people I have to support that I feel like they're my children as well and I end up putting all this energy knowing that my kids want me to have less control of their lives so that's how it all started it was all for the benefit of them to have a better relationship with them the business starts doubling year over- year and I just get more and more SU and more and more consumed um you know having a 100 employees now it's just every hour of my day has been consumed with work um so they recently all left for college you know I have two freshman year I have one my in his senior year and I just feel like I haven't been around for them at all for the last four or five years because of the business and I feel guilty but I ended up repeating the same thing my parents did for me in episode 78 I'm a freak about the numbers Dana Diana and Jay talk about how they track their financials including how they stay on top of accounts receivable how they avoid overcompensating salespeople and the importance of paying close enough attention to be able to spot mistakes yeah I I have a report for everything and I make the bigger I think that you scale the less time that you have as a CEO so instead of me trying to pull all these reports myself I make it mandatory that my teams all send me a report on Friday and so of course my PR report comes in that shows all the lead generation and what they actually have I have a sales report that shows a 30 6090 in terms of conversion percentage of conversion based on everything that's on a pipeline on a financial perspective I always look at receivables once a week because people always think oh I generate the revenue but if you don't actually collect you're going to go under um I look at the balance sheets on a monthly basis just to see what where my assets and liabilities are I look at an acrel report which basically shows me how much revenue AEL that I'm doing on a daily basis and that report is always coming from the finance department that shows me how much generated acrel there is um I look at p&l that's acrel and cash so that the cash side I always know cash flow where I am cash is always a lag indicator so it's usually 60 days behind the acrel if you collect everything but the acrel is the beginning indicator that says that you sign that contract and that's actually coming um in 60 days you should get payment on it I also look at um margins right CU you always have to look at if margins are going up or down based on all of your product lines um so I you know am a freak about the numbers and it's because the numbers will never lie to you they will always tell you a story it doesn't matter what your sales team says the numbers tell the story period and obviously you want to see an upward trend for every Department that you have so I do really track everything let me ask you a question I get off everything you said makes perfect sense the one piece of the puzzle that I I I'm wondering about is when you said you're margins it's not like you're buying a shirt for $12 and selling it for $19 how do you so accurately figure out what your true incremental cost of something is so that your margin quote unquote is accurate because you're I don't know what it is you're selling I know know what you're selling but like your costs that go along with it do you feel like that's always accurate or is that a moving Target no so Jay that that's such a great question and I could tell you're an entrepreneur true entrepreneur because you're asking that so what I find is that I have a lot of product lines right and I have a package B package SE package all over the place and each package is a different one for every manufacturer that I deal with so we have invented our own billing calculator because it was so damn complicated in terms of what we came up with but what I realized with the sales department and the account teams they just want to make a deal and so you could see that the longer I'm in business many of them have the autonomy to make their deal right and so because at certain times they trying to meet the quota they're going to go down on margin and this is important to me because when I track it on a monthly basis and I see certain product lines I'll take the percentage of margin per product line because I can't do it by line item and I'll just make sure that it's somewhere you know between 40 and 60% and so if it's dropping a lot lower than that I'm going to meet with a my VP of um accounts okay that makes sense so you've got a fixed number but it's really about discounting which is a great answer because you're right the I've seen companies go broke because they gave the sales manager oh we'll give you uh 2% of sales not a good idea because next thing you know they're selling things below cost and what's that person in care they're making a zillion dollars so that's interesting so it's about really keeping a handle on the discount and that makes sense because that is a problem yeah Jay because as you get bigger everybody else is doing the selling right and so you're giving them the autonomy to do it and it's exactly what you said everybody wants it for themselves they're like me generated and so and those are the best Sal sales people right you make it about them and they can make money for you well I I have a problem where all of a sudden they were they had to get this job delivered and hung on the you know for an artwork project it's got to be the 30th and I'm after a while I figured out well what's the emergency that this company needs it on Tuesday the 30th and and then you figure out oh wait they want on their sales and they are unconscionable they'll you could run overtime you could BR they don't they they'll do whatever they want they have to do to get that in for the month and I've learned that we were very careful at the end of the month to watch for what jobs were shoved in there because they wanted it on their sales report for the month versus somebody really needed it so that's like standard procedure for us now cuz it's a common problem yeah and and for me Jay receivables is exactly that so I have salese selling but if I don't collect the money I'm charging them back after 60 days so that's why I checked the receivables to see which people didn't pay and if they didn't pay cuz you know you have over a thousand clients you have to check receivables and you got to charge back these sales people because you'll go broke if you just pay them on the acrel and you never collect the money Diana you described a what sounds to me like a pretty sophisticated uh review system and you you called yourself a you said you're a freak about the numbers were you always comfortable with numbers that way is this something that came naturally to you or did you have to develop it no no I am not an accountant I just I was a startup and so I couldn't even afford a billing Team 5 years ago so so I was the biller you know and this is the beautiful part when you do the job yourself you're going to know everything about what you want to measure and so when I handed off these pieces as we got bigger and ended up getting you know my Ops team was my billing team in the beginning CU I only had two people on the Ops side and so between Ops and me we did all of the QuickBook and voices and sent them out and it kept getting bigger and bigger and now we have five people in Billing but now because I went through that experience myself and did it myself I know what reports to push because I basically did it with my Ops Team and so that was such a valuable lesson because I I speak to entrepreneurs all the time you know I have a a family member that they have their own business and when I talk to them I'm like well don't you check this stuff and they're like no I have a controller and I will tell you in the 5 and 1/2 years that I've been in business I have found hundreds of thousands of dollars of mistakes hundreds of thousands of dollars worth of mistakes invoic is not being sent out you know $30,000 invoices oh miss didn't get sent out nobody cares about the business and the money as much as you do I don't care who you hire and at the end of the day if you don't actually look people make mistakes and and they don't mean to but they just do in episode 81 holy crap this is all my dreams come true Karen completes one of the more surprising narratives of our two years when we started the podcast she had just come off an extremely trying year of attempting to land an investor she kept thinking she had a deal only to see it slip away as we started recording our weekly conversations Karen told us that she would be taking a mental health sabatical to get away from the business for a while but she came back and in October of this year she told Jay and William that she and her co-founder had sold blink where she will remain CEO for $94 million so when you you you closed on a particular day and that day money shows up in your account and all of your liabilities go away I just want to know what goes through somebody's head when they go to bed they wake up the next morning and they realize they've got a zillion dollars sitting in an account somewhere and they're completely set can you just give us that emotional when you open your eyes in the morning what you thought about yeah um God I don't know I mean it's awesome I mean it's and and for me the Jay it wouldn't be awesome like I'm not interested in going and retiring I'm not interested in leaving the company and so for me to have all of what you described and now I get to go fast I mean I love to go fast and I love to go big and I've got big ideas that morning I had to get up really early cuz I had five meetings all all to do with what are we doing now and so I haven't had like honestly I haven't I haven't had a lot of sleep in a long time and it's not coming anytime soon I've been you know cuz now we've got the New York time and we've got some folks in India some folks on the leadership team are in India so our calls are late and they're early and then they're everything between so it's been kind of non-stop but I'm you know like I'm on fire this is what I love I love to be busy I love to be doing big exciting things so I just I just feel um it's less of a kind of relief feeling and it's more like you know like holy crap like this is like all my dreams come true like all of them at once and it's just this most I it's my you know my veins are tingling it's like that that's a good no that's a good answer so did you buy some new shoes I bought a new purse okay there you go it's really nice okay and I also just want to know the day you made the announcement to the employees what was that you think everyone knew no and no there there were a couple of dozen people so so blink has 28 shareholders and had 28 shareholders and so that means that the money that the company received and and there's a big earnout portion so the money that we received up front gets get split pro pro cross those 28 shareholders so it was not all to me um or Kelly so we we're majority shareholders but then we have you know 26 other folks who participated in this sale and so they all had to agree to all this they had to review and sign six different documents times 28 people over the course of three days it was really intense and we were docy signing like fly documents flying back and forth my CFO he was absolute Rockstar cuz we had to Route them one at a time through all these people and so meanwhile I'm communicating with all the shareholders to have everybody on standby these documents are coming and they had to be last minute because we were literally negotiating up until half an hour before we had the closing call like I at at one point before it was going all through the lawyers and then the investment bankers and then to us and then the you know and then the reverse that was sort of the the pattern with a 100 calls in between with various different due diligence folks uh different work streams but then at the end it was just me on the phone like all weekend early in the morning late at night 7 days a week negotiating directly with the emphasis with their their head of uh legal and business and then and then in the end in the sort of Final hours it was you know by text well he was on the call with somebody else something just came up texting me CU he can't call me cuz he's on the phone and it was like that and then we had the closing call um which was a zoom call with all the bankers all the lawyers ERS all the business owners there were 30 of us on the call everyone just sort of went around their boxes saying like check check check just like a flight taking off and after months and months of this and I get I got goosebumps just thinking about that moment and I was and everybody went around and I was just waiting for one more thing cuz it was like that like one more text one more item that we have to clear and everyone went around check check check and then the the main the head lawyer on their side said all right we're good I'm going to initiate the funds transfer and at that moment I just started shaking I could I'm like this is it like we we cuz everything was already signed and I was like oh my God often the highs and lows of Entrepreneurship come at you in waves in episode 84 I can do it I promise you I can do it Dana explains what it's like to experience a high and a low simultaneously that week she returned from a triumphant trip to Germany where she toured potential sites for her hair salons on multiple military bases but when she got back to Detroit she was greeted by resignation letters from two of her key employees welcome Dana White we haven't spoken in a while Dana in part cuz you've been traveling the world how are you I'm okay okay what's going on I have no idea what's going on what do you mean I have I have no I I have I don't I don't know what's going on well let's start you you've just been traveling I have where were you I was in Germany and you were there looking at a military base I was looking at like five or six or seven wow yeah and how long were you there six days wow so is that what you're not sure about or did that go well what can you tell us about that so there are great things happening and there are some not so great things happening and because it's because of both of these things that I don't know what's going on I see right like what is going on right now how is it that you win them over in Germany I mean win them over like when I tell you they are like how many does she want want oh by the way Fort Hood can be ready Fort Brag is a go like oh and by the way don't forget we want all of the I mean they are Beyond impressed with me and they're not bringing me on base to um bid on these contracts as if I'm a contractor they're bringing me in like I'm Starbucks it's not and so that's what I had to learn was the difference right there are there are salons on basis that they put the contract out and you bid on them and you just keep bidding every time your contract is up Starbucks doesn't have a contract and neither will Peril boid that's how interested they are in having me I've surpassed that process and that's huge the people who were working with me that know this company apist the Air Force Army and Air Force exchange they don't do anything with deliberate speed except work with perly boy and they're moving quickly so that's one thing that sounds pretty great right exactly that's amazing you come back and you have a 7 a.m. debrief call about how you did such a great job and left such a great impression on that trip okay great so then you're franchising and yes that process has slowed down not because of the work I'm doing in you know military stuff that stuff is easy it's just looking and talking that's it but at this point but it's close down because your Midtown location is doing decent numbers better numbers than they've ever done because now you're down to one location but your team is falling apart I get back on Thursday I get a resignation letter from Ashley wait that's that's your operations manager your key person yep my operations manager and I get a and and I get a on on Saturday I got a resignation res from my manager and it was emotional it was emotional resignations it wasn't this is a bad company it was Dana we don't think you like us from the manager the team's morale is low because they just want you to law them where's Dana and so get on a conference call with my manager and operations manager and my question was as the owner well if my team does not feel appreciated one why am I hearing this after a resignation letter has been given and two was why wasn't I told before well why should I tell you and then Ashley she did interject and say it's your duty that's your job to let leadership know how your team is doing in our last regular episode of the Year episode 88 the vomit list William told Jay about an interesting strategy he's adoped to try to hang on to his most valuable employees in the very tight labor market that he predicted a year ago I've done a couple retention bonuses early in the pandemic so so Lauren you're a key player here we're about to go through a really tough year and a half right or let's call it a year and you know we don't really do bonuses but uh I'm going to bonus you a year from now I'm going to give you an extra I don't know what give you $110,000 or whatever the number is right if I stay by the way it's it's a bonus you're going to get in a year but actually I'm just I'm going to go ahead and give it to you now okay now I want you to think about this before you say yes because I'm also going to have you sign a piece of paper that says I'm accepting this bonus in advance and if I leave the company for an unfireable offense between now and a year from now I'll pay this back with interest do people sign that I had one not and two did wait did you give this to everybody no how does that work well I probably shouldn't say it on a podcast if my whole office listens to it they wow I wasn't on the list that's what I'm thinking so I had a friend who used to say you need to keep a vomit list so he I what's a vomit list he said it's the it's a very short list it's probably no more than three people that if they walked into your office and said can I have a minute at the end of the day and you know what that talk is that's right you you before you even let Them Sit down you're looking for a trash can cuz you're going to throw up yeah right and if you frame it that way I I'm yet to meet a a team leader who can't immediately name the two or three people and it's not always the two or three best- paid people it's like I got a church that's going through a building campaign and for them their Finance director for the next eight months is a very important role that they don't want to have to train somebody new and and so it's that or for sometimes it's an admin person that we I mean like you can leave in a year but for right now through this tough season I got to have you around and I'll pay you a bonus in advance and of course you get you you need to give him time to you know I give him a week you think about it if you don't want to sign it no harm no foul I get it life changes you might have something else going on but but uh it's yours if you want it all I can say is wow I I just don't know yeah wow well you know if those really are employees who are that crucial to you I would think if other employees found out about it that's a defensible situation oh my God Lauren you think the average person going to feel okay about that well this is what I said I assume that no meeting is actually private you know words going to leak out how are you not going to tell a friend or a coworker or whatever so I just said listen I I like you you're great for the team you do good work I like working with you but this bonus has more to do with protecting the company while we're in a very vulnerable season your role during this next year is super critical to the whole team and for the good of the team and everyone that works here I'm making this offer to you and and I don't even tell them if I do it with anybody else so you really can't be sure whether anyone else heard about it and they're pissed about it no you can't William what happened with the person who refused to sign did you give the bonus anyway no and they had a job offer within 3 months and left and they're in a great situation I it really stunk to lose them and they weren't our highest paid person but did you know that day that they were on their way out I think they probably knew yeah no did you know no know but I did after they didn't sign it all right that's a wrap for the 21 hats podcast in 2021 as always you can find a transcript of this episode at 21h hats.com that transcript has links from each of the excerpts to the entire episode in case you want to go back and listen to any of them in full my thanks once again to Karen Clark Cole Paul DS Jak goz Diana Lee Stephanie Stucky William Vander Bloomin Dana White and Laura Xander and thanks for listening everyone