Dashboard: Is There Really a Credit Crunch?

[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 hey Lauren you know I was just thinking about this hell life is like a game you know it really is and running a business is like a game which is why the great game of business seems to dovetail into both life and running our businesses don't you think I think you know it's funny I'm not sure people understand what that refers to all the time when they first hear about the great game of business and it it started because they use gamification they use they play games to um did you just say gamification it's a gamification I think it's gamification yeah well thank you I think so yeah I've never heard it I've never heard gamification I don't think I've used the word a lot all right obviously I'm going to assume you're right gamification the idea owners use it to uh encourage their employees to pay attention to specific metrics or issues uh they turn it into a game and try to improve the performance of the business and they've had a lot of success with it yeah I mean that sounds about right and uh listen the last time I heard of people referring with such um you know uh I don't know you know interest in in the game was that Seinfeld episode where George was was picked up in the wrong chauffeur remember that and he had to impersonate this like this supremist organization the author vote the game do you remember that I don't it's been too long wow anyway I'm getting off track and I do not want to imply in any way that the great game of business is that it was just a funny sign F episode so anyway understood last is the game is what they wrote all right back to business let's go you're always writing uh and talking about stuff that matters to business owners last week uh there were a number of stories that suggested that the out from the collapse of Silicon Valley Bank has led to people moving deposits from smaller Banks to bigger Banks which has led to smaller Banks being more conservative about their lending which has a lot of people speculating about a possible credit crunch uh I'm curious you talked to your clients all the time have you seen any evidence of a credit crunch no I haven't seen any evidence of a credit crunch per se what I'm you know so so a couple comments on that um you it is uh I I I totally get why businesses and individuals would feel that way it's sort of a knee-jerk reaction but it's feel meaning the inclination to move their deposits to larger Banks yeah yeah I mean I I I kind of get that you know what I mean like and I'm sure you feel the same way right I mean like it's you know it's just you feel safer with a bigger you know you know bigger organization behind you and all that kind of stuff do you know what I mean sort of I also have a lot of skepticism about those bigger Banks yeah exactly right and that's EX exactly what I was going to say I mean like it's I I don't know how much more safer we've seen some of the largest banks in the country go bust you know during the Great Recession and you know I don't know if the people there are that much more smarter you know what I mean the to to to bear in mind is that um the FDIC um they publish every quarter an official problem Bank list like they do stress testing of like all the banks in the country and you know they just published their unofficial list I don't know why they don't make it official but they do uh you know they they you know it's it's off you know it's it's what they publish um for the for the first quarter of 20123 it just you know came out you know recently we're you here on the second week of April um there are 46 institutions on their list that are considered to be problem you know institutions 46 you know it's not a huge number you know particularly when we consider we have like 4,300 banks in this country you know what I mean right so I just want to say like people shouldn't I don't think there people should be panicking and running away from their Banks I'm not seeing it among my clients either um and and certainly I don't think you're going to be that much safer at a larger institution either I mean Silicon Valley Bank was like the 16th largest bank in the country and they still you know [ __ ] up their cash management so you know who's to say that somebody else is going to do the same thing you know what I mean yep and then those depositors all got bailed out in the end too they did and that's a whole other confusing scenario right let's not go there I want to stick with the credit crunch aspect of this a little bit more because I think that's kind of the story of the moment there's this this is this discussion is spreading and I'm wondering uh how you look at that I mean it's it's such a tricky thing to figure out whether banks are reigning in credit or not because I mean clearly it's more expensive interest rates have gone up people have to pay more is it just that or are they actually being more conservative about who they will loan money to and we may not know that for a while how do you think about that I mean first of all I I hate to say I told you so but I told you so I I mean I I wrote about this at the end of December in the guardian and I said 2023 the biggest biggest thing impacting small businesses are going to be interest rates and and I said in that piece you know it's going to come with you know two ugly heads one is just a cost of borrowing and then there's going to be less credit availability period um because it it's more expensive for banks to borrow money from the Fed so for them to do that now that their cost of operations have gone out they got to be a little bit more careful with the money that they're lending out to people regardless of you know what interest there they're charging them so it just it's just a makes sense that they're looking more carefully and scrutinizing smaller startups early stage emergency growth you know emerging growth companies particularly in those industries that like Tech which have really been challenged so it just it's common sense that that that the Banks themselves are going to be pulling back on the availability of credit it it just is so you know you've got the one group of business owners that are are paying like I think the prime rate is like eight% now I mean it's pretty high or you know like people are paying and they're paying one two three points above that to refinance their equipment loans property loans working Capital Loans or get you know new loans for their B those established business owners are going to be paying more but it's the ones that are starting up businesses or ones that are like emerging growth or looking for Bank financing no question they're going to find it more difficult and I think if you talk to any Banker they would agree with that that there's just more scrutiny I think the Silicon Valley Bank thing is um added salt to the wounds you know that's what I think it was happening anyway because of a higher interest rate environment got it and and by the way I I like it when you say you told us so because that's why you're here yeah yeah exactly right so you know I mean you know it's I I don't know I I I I did write about that back then and I just want people to know that like Dam it I did say this give me some credit here credit where credit is due yeah where's my wife let me get her in here and tell her how smart I am anytime bring her she's always welcome next topic you wrote recently for Forbes about the best password managers for businesses first of all should every business be using a password manager yeah so all right I got a whole speech on password managers first of all this whole this whole conversation is going to be obsolete in a couple years because passwords are going away um it's it's I mean Lauren it's all going to be by Biometrics I mean that's where all the big you know software vendors are going Microsoft is making a big push that way to be passwordless so you're going to use fingerprints or eye scans or facial scans it's not good news for me because I bite my fingers really bad so like I don't know if my fingerprints will even show up and I'm completely bald and pale so I don't know how that does with you know um you with facial skin you know I I can't get the fingerprint thing to work on my um MacBook it it it always works for a while and then it stops and I just go back to typing in my password as a problem you know I mean it's got that that biometric technology has got to get a little bit better and more reliable for it to become mainstream but it it's heading that way because it's going to get better and more reliable um but in the meantime in the meantime we're here in a password environment so um people need to be using you know they're using passwords there are a number of good password managers out there um some of the leaders last pass keeper I use keeper um keeper security last pass although they're they're the biggest but they they've also suffered a couple of hacks in the past couple of you past couple years which is like you know kind of against the point I know I that's my point I'm like I can't believe that they haven't just been put out of business I mean you're putting these passwords with them and and they call it the Vault they literally call it that and clearly not a very Secure Vault if they be and they'll come back and say like no nothing was significant was compromised and like who believes that so but having putting those concerns aside the password managers um they really serve a really good purpose and I use it um I don't have one for my entire company though and I should I just get a company one and tell people to use it but what it does Lauren is you I don't do you have one by the way do you use it I do not so here's what it is like you know instead of um you know having typical passwords that people use and we all know that people use you know stupid and short and bad passwords you know y um yours being you know I love the Phillies I hate the Mets you know and that's silly so but anyway so you know if you use the password manager the right you know the right way it gives you a complex password to use for each site that you go to and then it will either prompt you to fill in that password when you're on that site or if you turn that off which I do because I don't know if ever my device gets stallen um you can go back to the password manager and it'll easily copy and paste the password in so in other words it enables you to use those passwords there's you know 30 character you know asterisk you know Stars you know exclamation points like really strong passwords instead of just you know password one two three um and then it's you know it's available cloud and you know and then you can you can share it do all your kind of thing now with keeper security I authenticate that so I cannot get access to my passwords without first putting in a password but then it ask me for authentication I use Google Authenticator it's like a third party authentication app Microsoft has on Google there's other ones you can even set it up with like a flash drive like a key that you put into your device that way even if like keeper gets hacked theoretically I mean if they get my password to get into keeper they can't get into keeper without having my you know you know my authentication so it gives me a little bit of comfort you know what I mean yep and they store all the passwords in these highly encrypted ways so again even if those password managers get hacked it is really tough to um get access to that but I am warning everybody besides Biometrics coming along the supercomputers of the world that are being developed are able to process through even the most complex encryption keys where at some point even those those encryption encryption is not going to be you know as safe as it is right now do you know what I mean y so it's all temporary but I do recommend using one of those password managers what percentage of businesses do you think are in fact using password managers like 1% I really don't think people do it and and even you know what I also find with clients they say you know use a password manager and then they um uh they they you know you can't require employees to use it the best way to go you can't require employees to use it no I mean like you can't you know you make it available to the employees that's where they're storing their passwords can't you make it mandatory to the employees not really no I mean like they can you know the password managers aren't needed to get access to applications and networks or whatever there's just a vault to store that information um which you know you can still create your own passwords if you want to do that and not use it you know so it's like a tricky thing to get people to actually use it I mean you have to you have to say to them I'm paying for it and this will protect you and you can use it not only for your business but use it personally you know have complex passwords for your bank accounts and investment accounts do you know what I mean so you can you can entice them to use it saying it's a great benefit and we'll secure your stuff but you really can't if it's customer data you're talking about and somebody's you know using a password to get into a CRM I would think you could make that mandatory yeah and again I mean that's just you know as like anything else I mean you know it's not like you're big brother like snooping over their shoulder whether you're using this stuff or not you know what I mean yeah um but yeah I mean you can you can make it mandatory and tell your employees you need to use it and I'm paying for it and this is important and whatever but just saying it's like it's not like a you know required thing what what is a required thing though with this is that if you if you're smart and you get rid of your stuff in your office um and you have like a managed service provider host all of your files and your applications and whatnot then they set up the the good ones have their own password Management Systems so that that forces the employees to use complex passwords and then they can store it with the managed service providers do you know what I mean y so that's a better way to go about forcing your employees to do it I I'm still struggling with that one 1% figure were you being flipped when you said that or do you really it's not quite that badp yeah what what do you think I have like all the Time in the World to to do surveys of my clients La you know I well I mean what my Survey Monkey like I'm running like a data Farm here like can find out how many people are using it Jesus I count on you to be in the ballpark I you think it's less than half oh yeah I do think it's less than half I do think it's less than half but it's that makes you feel a little better 1% seemed low yeah it's probably not as low as 1% but I don't know it's not it's not that high not what it should be yeah that's for sure all right uh next topic you recently wrote about the kind of the business case for addressing the mental health of your employees that it's it's not just an ethical issue but also a financial issue what were you referring to with that well first of all the average age of the US small business owner was like 55 you know half of us are over 50 we don't we don't do could care less about mental health like we we weren't brought up to talk about it was always a stick it was all some of us are coming around though did I ever tell you the story like I was at I was at a client this like a couple years ago and I was like in a small conference room and I was talking to one of the owners she's like my age you know he's in his mid-50s and some young woman distraught she was like an employee was like crying she her car broke down and then she she didn't have enough money to pay for it and she's under a lot of stress if feel lot of that and she came to him and she was crying to him while I'm sitting there in the conference room and he's listening to her uhhuh uhhuh uhhuh and then like you know as soon as she walks away he's like rolling his eyes at me oh gosh oh jeez you know like that kind of thing you know that was this before the pandemic yeah this was before the pandemic and it's also just you know like you just can't do that anymore when you're running a business I mean there are a lot of younger employees that are under a lot of a lot of stress you know and anxiety and and they're they're willing to talk about it now because it's a thing and which is a good thing and that awareness has spread since the pandemic hit it really has and you it's like it kind of makes sense it's like you know we don't have a problem talking if we have like a medical issue I mean a heart problem or we break our arm or something I mean like you know a mental health issue is is is a brain issue there's something wrong that needs to be worked on fixed maybe it's therapy maybe it's Pharmaceuticals maybe it's whatever but it's it's no different you know so we should be able to talk about this stuff and the the Millennials and Jers you know it I mean we've talked they're a nicer generation than us okay they really are I mean they're annoying and they don't work as hard but they are a nicer generation low bar they really are it's true but they uh you know they they've made you know more awareness and then you've got like Simone biles and Naomi oaka and unfortunately Ben Simmons when he was with the Sixers and you know it's drawn a lot of awareness so there's all these studies out that say that like you know people that have mental health you know challenges tend to lose a lot more time working you know they have way they take way more days off than people that don't um so now it's a financial issue you know and then on top of all of that it's a recruiting issue because we're all you know you know falling over each other trying to attract good people half the people in this country are younger employees um and they're asking they're asking my clients like they're sitting there in interviews and you know what kind of benefits do you provide and I suffer from this type of you know you know anxiety or depression you know what kind of mental health benefits do you provide and man you better be ready to respond you know I mean it's it's thing now do you have any suggestions I do you first of all talk to your health insurance company and find out what benefits they offer because they've expanded them all um number two is you you give some training to your employees because your existing employees some who may have these challenges don't even know about it uh they should be aware of that things like you know uh fees for psychiatrists or psychologists or you know things like you know Xanax or you know uh zolof I mean those things are covered under most plans now and it's possible employee don't know about that you might want to bring in an outside uh you know firm and and I mentioned a few in the article that I wrote for the inquire uh that that could do like special sessions that talk about stress and managing those challenges and there are some really good platforms out there Lauren there's um better up is they're really good you pay like a I don't know a couple Grand a year and it's an online platform it's been very popular I have a few dozen clients that use it where uh you make it available to your employees the employees go to better up and they can connect to and talk to psychiatrists and psychologists confidentially and privately about their issue of their own systems and it's just a platform that you're providing a benefit for those employees better up some one of the primary investors is H Prince Harry believe it or not but the good news is for you and all your listeners Megan Markle apparently has nothing to do with it so I give it the seal of approval you can use it and feel fine not sure what to make of that Jean she was involved I wouldn't be talking about it so hm uh but is a good platform I'm going to let that go uh last topic um in yet another surprisingly employee friendly piece you wrot Jean there's a way for business owners to make unlimited paid time off work uh tell us what you were referring to with that so really is it is it employee friendly because now all this information this data that's coming out is showing that you know unlimited PTO plans actually favor the employer more than the employe well you know Jean that's you all my thunder that's where I was going to go right after you talked about how great they are um cuz you you in the piece you wrote you talked about how it's a a recruiting tool for businesses yes it is yeah because these employees are like they I mean listen you know there's a lot of people out there that you know they they're attracted to companies where the less they have to work the more attractive the company is you know that's where we are in 2023 so like well they hear unlimited they hear 4 day work week yes right I got the real Jean here now there go then they hear unlimited paytime off are you kidding me unlimited sign me up um but but here are the facts with unlimited pay time all plans first of all Studies have shown that employees tend to take less time off like you know 14 to 16% less something like that and they um which presents a mental health challenge by the way but that's a whole other thing so it actually costs employers less um I forget if I included this in the article or not but there's there's um a handful of court cases that found in favor of the employer uh when they uh if they terminate somebody they don't have to pay unused vacation when you offer an unlimited PTO plan they don't have to pay unlimited paid time off for the rest of your life just bankrupt themselves so so they don't have to do that so a lot of employers have to really cough up some money for employees that have AC cred vacation if you have an unlimited PTO plan you don't have to do that so there's that and and let me just let give you some advice because again I have I have clients and readers that have been doing this it's been growing in popularity because you can control it Lauren I mean you can you can have more than one PTO plan at your company I mean you can have a plan for hourly workers you can have a plan for management and then you can have that unlimited PTO plan which is like the carrot you know out there you know you can make it like you you you're only eligible if you're with us for a few years five years it you know that might help with retaining people um and then the unlimited PTO plan here's the catch for my clients that have implemented it the right way it's like yes we have unlimited PTO but your supervisor has to approve any time that you take off so if you're thinking you're going to take the next six months and go surfing in New Zealand probably not going to happen I think most employees understand that don't you think I would think so but you know the supervisor it it is in writing and that way you you keep control of it yourself and and it's an internal control from stopping you know some you know any individual employee from taking advantage um but just think about that if you're an employer alar right so people take less time off putting inside the mental health issues you don't have to pay any unused vacation uh it's a huge recruiting tool people you know love to hear this stuff and you can you can you can make it you to be eligible to you know it'll it'll increase retainage in your company hopefully if they know employees can can be eligible for this plan after a few years and you can keep control of the hours they take time off it doesn't have to kill you um because you just say you know it's it's up to the supervisor to approve so I don't know it just to me it seems like a really good idea we have it in my company I mean I I don't it's Unwritten it's just whenever people ask for time off are people taking time off yeah oh yeah yeah I mean people in my company take time off all the time and I don't I don't track it or anything so it's an unofficial unlimited paid time off plan it's just if people are good I mean employees don't don't I you know listen it's always the exception rather than the rule but at least for the people that work for me they're like hey Gan I'm going to I am going to have a family trip to Australia and it's going to be three weeks and it's going to be next October and I'm like yeah so as long as we can plan it out and make sure that you know your your work is covered go for it you know knock yourself out you know um I don't know and employees who want to get ahead and do a good job and there are you know some of them still out there um you know they don't want to take advantage of their employers they get it so I don't know I just think it's like a good thing to offer it used to be kind of a dirty little secret that this that unlimited PTO wasn't quite the you know Wonderful benefit for employees that it sounds like I think that word it's gotten out and people understand that now yeah and so that leads to my next question which is do you think it's going to remain a recruiting tool or are employees catching on that this isn't necessarily the greatest thing ever I actually think and you you you hit right on it I think as it becomes more and more common it'll be one of those things that it will hurt you if you don't have it and or at least an option for it and therefore yeah it will be a recruiting tool because if if you don't have it then you're gonna you're gonna and your competitor does you're going to miss out on you know finding those employees all right uh the last time you were here you told us how outraged you were that Illinois is mandating five days of PTO for some employees this week you're advocating unlimited PTO C can you square that Circle for me no doubt about it because it's my decision okay I want to offer unlimited pay to you that's up to me I'm not having the state tell me what to do jeez okay okay what are you working on for uh this coming week Jean so I am going to be writing about um Point of Sales Systems I've interviewed a few um Philadelphia area retailers and restaurant tours and what's changed how they're using them and all that you know all that good stuff so that's that that's my main thing that I'll be writing uh this week and then I have a CRM piece uh or Tech piece out in Forbes uh that you'll see also that um talks about why business owners aren't really paying much attention to that Chat gbt thing that we've talked about before Oh interesting and I find that I've been asking a lot of my clients and then when I've been speaking I've been out speaking to you know groups and asking people to raise their hand if they' even I spoke to this group uh last week in Vegas there was like 1100 people was a the national portable storage Association I know it doesn't sound very sexy but um I asked them you know show hands how many people played with chat GPT and like I don't know what smattering of hands went up you know um be and I explain why in that article so uh that's what I'm working on interesting we will look forward to those Gene Marx is a CPA who writes weekly on small business for the guardian the hill the Philadelphia in choir the Washington Times the Chicago Daily heral Forbes an entrepreneur you can also hear him on ABC radio's eye on the world with John Bachelor Jean hosts two small business podcasts with paychecks Corporation and the Hartford this episode was brought to you by the great game of business which helps businesses use an open book management system to help build healthier companies you can learn more at Great game.com thank you Jean thank you Lord we'll see you next week have a great week everyone [Music]