Dashboard: Bank As I Say, Not As I Do

[Music] welcome to another 21 hats dashboard brought to you by our sponsor the great game of business I'm Lauren Feldman I'm here with Gene marks to talk about the things we think business owners should be following this week welcome Jean the great game of business Lauren I love those guys welcome are you going to do that every week from now on I think they'll appreciate it you're awesome what can I say yeah thank you for sponsoring us Jean you're always writing and talking about stuff that matters to business owners uh the big story of late there's really just one uh is the bank failures that started with Silicon Valley Bank I thought you were going to talk about the finale of uh the last of us but okay you want to talk about that that's fine that's that's our other podcast Jean yeah that's a great show the question I'm hearing a lot of owners talk about is whether they need to do anything differently now you're kind of a conservative guy as I recall with your uh your cash management and your banking uh have you gone to the mattresses yet so I'm I'm talking to you now from a bunker underneath my home I was afraid of that I've got gold bars lined up along the walls and I'm eating out of cans so it's it's really you know a few comments on on the cigan bank first of all in the past week I spoke to an association of uh diecasters for manufacturing I spoke to an association of pool distribution suppliers you know products and I spoke to an association of companies that make wall in sealing materials you know so different Industries different whatever so imagine lauring a room of a few hundred people for each each meeting and they're all basically business they're all business owners you know sitting out there they're all from all over the country and this whole Silicon Valley Bank thing is like zero impact on these guys you know what I mean and this is like the core of the country you know I'm not saying it doesn't have any impact on some small businesses I mean obviously some in the tech you know industry um have reason to be worry and some people that might be uh banking with um you know less well-managed Banks like signature or Republic Financial might might also have issues as well but this is not a systemic problem there's no reason to like Panic um my my you know my advice though is is kind of a few fold and I'm writing about this on Monday for the inqu sorry this week for the inquire um you know you know talk you know if you're nervous talk to your Banker uh I talked to a few Bankers already about their for this article and they'll all give you the line while your money's completely safe with them but it'll make you feel a little bit better for all I know they're bullshitting but it should make you feel a little bit better well they're just they're just saying that but you you don't think they're you think your money is safe with them right yeah I mean I to an extent yes but I I think that you should be we should all be diversifying our money right I mean I don't think we should have all of our money with One bank I thought the the $250,000 FDIC insurance is it's not that much really you know for a lot of businesses you know because remember that's for all accounts at a bank not just for each account um so you know you should be diversifying your your cash within different banks my advice see you know I sweep my money out that I don't need from my bank I use I use Wells Fargo um that's a whole other story um but I I sweep it out to like two money managers and they have it invested like in mutual funds and and treasury bonds treasury funds which is exactly what you know Silicon Valley Bank was putting it into treasuries but the money that I'm putting into treasuries I know I'm not going to need do do you know what I mean whereas Silicon Valley Bank needed the money right and you know then they some one or two of their Executives made statements in public about them like oh no you know we're having a liquidity issue because our money's tied up in treasuries and then boom there was a classic run on the bank you know what I mean that's really what caused this whole thing so diversify your cash is is what I'm telling you to do well you know you've already violated this uh suggestion but a lot of people say that smaller businesses should bank at smaller Banks so okay that's I agree with that I'm wrong I'm like I'm I'm not kidding I in the wrong place like because for the inquire article that I'm that that's coming out this week um I interviewed like three CEOs of Community Banks you know in Pennsylvania and Jersey Y and um I got off the phone with each of them saying like why the hell do I have my money at Wells Fargo I mean no offense but they each one of them have this line and it's a good question they they say like Lauren who do you bank with let me ask you who do you bank with you're asking me yeah I'm asking you who do you bank with PNC okay I didn't ask you who your bank is I asked who do you bank with PNC no see what I mean that's the question I understand where you're going get what I'm saying like I do not have a relationship with anybody at PNC other other than the other than the ATM right and that's what the community bankers and independent Bankers say like you know you have a relationship with those people and it makes complete sense um having said that I do imagine that a lot of small businesses will be flocking to the big boys because they really are super capitalized and you feel a little bit safer well that's the thing that that's the question right now there there is a lot of money moving to the big Banks and there's some concern you know about contagion and whether smaller businesses should be thinking about doing the same even though it runs against the advice they've been getting for for years and years yeah I don't you know like I said I I'm not saying that there might not be a couple of you know badly run banks that that also fall victim to this you know wave this little wave that's going on now but it's not a systemic issue um diversify your cash make sure you're not too exposed I I I really think that 99% of small business in the country will not be um significantly impacted by something like this so I I just that that's what I'm telling my clients that's what I believe and um if I'm wrong you can find me down in that bunker under my house I'm gonna have that pad locked and with an M16 behind it one result of this thing is that I heard of I've heard of some services that I did not know existed previously one of them is called the iny network have you heard of that the intf network is like um tell me if I'm if I'm incorrect here but it's an additional layer of insurance on your savings kind of like FDIC on steroids am I right there you're exactly right what it does is if I understand it correctly it sweeps any money you have in your account Beyond $250,000 every night into other Banks so that you're fully protected fully insured so it's funny that you bring that up because that was mentioned by a couple of the bankers that I spoke to and you know I was you know juggling whether or not I was going to mention it in the piece I'm I'm you know I'm writing um but yeah it's it's an extra level of security and what they told me that the bankers that I spoke to is the banks offer this and they they charge you a little extra for the service but it's like an extra layer of security that you have um that's above what the FDIC ensures the other thing also is um I'm I'm a treasurer for you know for a nonprofit and we have money in CDs that you know is not that we don't need it to be liquid and you know we have our our main bank is the trustee they don't hold the money and they've got it spread out in like CDs of like 10 other Banks and each of these CDs are less than $250,000 you know what I mean yeah so um so I'm kind of keeping my credit risk that way um like I said diversify your money that's that's what you do you you'll be fine let me ask you if you've heard of any of these other services Forbes had a good story about some of the fexs that are benefiting from this whole thing uh you know a big inflow one is a a San Francisco Credit Card startup called brecks and apparently there were a bunch of uh Tech startups that got caught because their their credit cards sto working they were with uh Silicon Valley Bank and that meant that you know they were going to lose their website they were going to lose all their software services that were tied to that credit card so you know the quickest thing they could do was throw it into this other credit card called brecks you ever hear of it no I haven't really worked with brex so I'm not really that familiar with I know it's like a digital it's like a digital bank and there there are quite a few digital banks that have popped up as well um that provide equal number of uh services that compete against traditional Banks um I would say you I am not um averse at all to people looking at digital Banks like brex um and some of the others in that Ford article because I saw that too um because the for you know it is a um um a digital bank I mean like so many Capital One is for all int of purposes a digital bank now you know I mean unless you want to go and see a banker in one of their coffee shops uh everything is is digital so it doesn't it doesn't concern me but it's the same issues that you have with any Bank you know how well run and how well man aged are they isn't it unbelievable Lauren that these guys they're so they're supposed to be so smart you know they went to the ivy league College got the NBA they're at Silicon Valley they're like smarter than everybody else and like they put their money in treasuries which anybody that took economics 101 knows that the value of treasuries goes down when interest rates go up and they're putting all this money in treasuries and you and I were talking 18 months ago that interest rates were going to be going up this is not a secret you know what I mean it just blows my mind that um how our experts are are dumb asses um which again is why you have to diversify how do you explain that do you think it's because they were confident that if they got in trouble there'd be the government there to back them up and they just decided to go for every bit of interest rate return they could while they could you would have to ask them you would have to ask them I I don't know because it it it's inconceivable to me um they what I think they didn't see is what I wrote about back in December in the guardian which is that these interest rate increases um you'll have an impact across all Industries the interest rate sensitive Industries get impacted first that's the tech companies and uh so their their financing dried up so duh it kind of seems like okay all this money they put on account they're going to start accessing because they're going to really need it without financing and I don't think that um the banks did not foresee that coming and they should have they should have it's supposed to be smarter than us and they're not the other issue and I'm curious if this has affected your thinking is this is one of the banks that fought the regulation um that was put in place by Dodd Frank and you know gota gotta get out of jail free card uh a couple years ago that appears to have made a difference does this make you think that maybe uh there are some regulations that should be in place uh I mean the regulations GNA have to get looked at again you do know that Barney Frank sits on the board of yeah that was interesting wasn't it signature that's kind of it's kind of an embarrassment um yeah I mean I I do think that you know you know and the Wall Street Journal had a good editorial about that last week um where they talked about how the banks that failed it wasn't a regulation issue um some of Dodd Frank's regulations got rolled back in 2018 and it made it lessen the regulations for regional Banks like a Silicon Valley Bank and a signature but those Banks made you know sort of bad decisions that they argued would have probably Fallen under the radar screen of any regulator anyway well I think the issue is that they might have been stress tests they might have been yeah I don't want to go too deep into this but yeah I don't know if the stress test takes into consideration though a run on a bank like that to that extent I don't know well they might have spotted the the interest rate problem that you're talking about yeah maybe I mean they that's what's crazy about is that they're completely capitalized I mean they had the money they were just in illiquid assets and super safe assets it's not like the money was invested in all in crypto you know and so it was just a uh it was just a bad investment decision and and they weren't expecting there to be a run all right there's one one other topic I want to hit with you today and that is you took another pass at the 4-day work week and I'm curious about that you've written about it before uh I think you've said to me that you think there's there's zero chance that this is going anywhere uh in this country and yet you wrote a a colge last week kind of imploring business owners to to give it another look yeah okay so if you're listening to us talking right now I'm gonna I'm gonna pitch you right now on the four- day work week remember my eyes are rolling already Jean I know I know and besides it remember who this is coming from right you know it's not like I'm like the four day work week guy but uh but you're not pitching this because you you want your employees to get more sleep no oh no no it's nothing like that um what it what it is is I'm pitching it as advantage to the employer and to the business owner okay exactly so what is what is the big putting banking issues aside what is the biggest issue that we're all facing right now finding people right inflation and finding people that those are the two biggest things and it's going to continue to be a big thing so what are we trying to do we're trying to recruit more employees to our business what excites younger employees you know uh younger Millennials and gen Z not working and getting paid for it that really excites them they like that a lot so the more benefits you can provide to them business owners tend to get less excited about that yeah right so so you know how can you how can you have an employee that that you hire that doesn't do any work but you still pay them for it you know that's what you want to get to however we can be smarter than that because the younger generation they get all Romance by this four day work week oh my God four days we we only work four days and we take off three isn't that great this is so super and a lot of business owners you know my clients they they they roll their eyes you know add it you have to roll their eyes there there's there's two things you can do to implement a four-day Work Week first of all if you have hourly workers and by the way I'm only telling you this because this is what I'm seeing with some of my clients and when I've been out and about speaking to people I've been asking what they're doing some smart people are doing this already they're for their hourly workers they're changing the shifts so they're going they're they're giving the option to employees you want to work a 10 hour shift for four days a week still 40 hours that's great we'll accommodate you and let's do that but boom you've got a 4-day work week so now when you are trying to attract people to your company and you know the guy down the street doesn't offer a 4day work week we offer a 4day work week yeah they 10 hour shifts you know okay fine but it's a four day work week and then you take three days off I mean Lauren my my my daughter's a vet um she works for a national chain you know vet centers she works three 12 hours shift she doesn't even work 40 hours you know and she loves it she's so happy she has like 4 days off those are long days but I I I understand the appeal it's an option I'm not saying you force it on people you give it as an option so you can say to a prospective employee you have this you can do that and by the way you don't have to give it immediately say you know what you come and work for us and if things are working out say in six months or a year you can be eligible for a 4day work week program how does that sound that's an enticing thing so for hourly workers and all that you're trying to grab them it's a marketing thing man and in some Industries it's already you know healthcare workers have been doing this for years some you know a lot of shift workers have been have been on this it's not a crazy thought it's a great way to attract employees because that's what they want to hear now the salaried employees is a little trickier but you know what it all gets B down to flexibility so depending on their job description and what they do you know you can have a quote unquote four-day work week program as long as they're getting their done you know so if they're if they're assigned with certain tasks and certain deliverables and things they need to they responsible for doing you can say to them listen I don't know call it what you want but I don't care if you work four days or or 80 hours this week just get this is your job description make sure that this is getting done every week and it's up to you and we're going to call that the our 4day work week program it's just words it's just words and people want to hear it especially these younger workers so I say take a step back and figure out if you can you know your schedules a little bit to to accommodate this trend and I think you can recruit more employees by doing that and you said you have some clients who are doing it and they're happy yeah they are I mean I have I can name three clients off the top of my head that are manufacturers and job sh shops that have switched their um you know hourly workers to 10hour workdays and they're complet you know these guys get in there at like 7 in the morning anyway or 8 in the morning I mean it's it's not that big a deal um but it it's been very enticing for workers to do those 10 hours and then turn around and uh and then have three days off and yes you you can whether safety issues and you know you know you got to be careful mental health all that kind of stuff fair enough but it it it's certainly a doable thing and I think if you can before just rolling your eyes and saying this is another piece of woke um don't do that you know take a step back and think maybe I can make this work and then I can attract more people to my business it's my biggest issue so think about that because I think it could help wow coming from genan marks I know amazing isn't that crazy I know there's the law there a whole other topic Lauren about that Illinois just passed a law that's mandating employers to give PTO for any reason we should talk about that next week because that's like now I'm gonna turn all Republican once we get into that but that's another another topic for another day I'm not familiar with that are you going to write about that yeah Google it it's yeah it's uh you know they just it's it's a law that now employers have to give uh um mandated vacation and and you don't have to give a reason why so it's not like a sick time like in Philly you got to give time off for sick time and then show proof that you were sick in Illinois you can just take the time off I think it's one hour for every 40 hours worked with a maximum per year it's crazy it's nuts it's nuts why is it nuts oh you know what enough is enough let's we'll talk about that next week shall we okay anything else you're working on that we should look for this week well yeah I mean you can look later on this week I'll have the piece out in the inquire on the uh you know on on the Silicon Valley Bank and what some bankers are thinking about you know about doing it um that's my big yo thing so far I'll probably be writing about the same in the guardian as well so that's what I'm working on all right Gan marks the CPA who writes weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times the Chicago Daily Herald Forbes an entrepreneur you can also hear on ABC radio's eye on the world with John Bachelor Jean hosts two small business podcasts with Corporation and the Hartford this episode was brought to you by the great game of business which helps businesses with open book management and employee ownership you can find them at Great game.com thank you again Jean Lauren we got it done always a pleasure I'll see you next week take care [Music]