Dashboard: The Price of Tipping, Virtual Offices, and Men’s Underwear

[Music] welcome to another 21 hats dashboard I'm Lauren Feldman I'm here with Gan marks to talk about the things we think business owners should be following this week welcome Jean hello Lauren great to have you here as usual you've been writing and talking about stuff that matters to business owners in a way only someone who's actually a business owner themselves could uh I want want to start with a piece you wrote making the business case for Banning tipping yeah this is something that comes up from time to time it's it's not a new issue um but you I you introduced some things that I didn't know it it it started with an explanation of how tips are handled differently in the restaurant industry than they are in the beauty industry I didn't know that can you explain yeah this came across well okay let's take a step back and and I hope I can um um you know give this just make this as easy as possible to digest if you're running a restaurant um the rule is is that you've got to report to the government all of the compensation that your employees make that's both what you pay them and the tips that they earn and your requirement is you've got to pay employer taxes on all of that compensation okay so and that employer tax the FICA tax right the six perent 6.2% tax you got to pay for that well there is a special tax credit for the restaurant industry that gives you some relief on that income based on the tips that your employees received I won't go into what the calculation is but basically if you run a restaurant um you get a tax credit on on so you don't have to pay all of the F tax on all of the income that your employees receive okay yep that's an incentive that's a good thing if you're running a restaurant well the beauty salon industry has been growing in Leaps and Bounds there's like a million and a half beauty salons around the country and as we know to become like a beauty salon or a cosmetologist or whatever it's like you have to have a PhD in engineering or something to do it some states their regulations are insane you know for that industry and that industry has been lobbing hard and this isn't just beauty salons right it's it's barber shops as well yeah barber shops you know salons yeah the whole thing the beauty industry all the things that the place that I don't go so those those businesses themselves um they also have a lot of tipped employees and um so they've wanted to be treated the same way as the restaurants are treated and a new bill was just introduced by two senators that will allow them to take advantage of the same tax credit that the restaurant owners get to take advantage of so that they don't have to pay all of the F tax on all of the earnings of their cosmetologist or cosmetologist is that right or um you know all the people that work in their in their beauty salon regardless of whether they're getting tips or not so they this bill was been introduced just recently uh it was in January and it's the kind of bill that you can imagine I mean it it it'll probably make its way and get past at some point it's great I mean good for them you know I do agree it would give some relief to a lot of these business owners if it's fair for the restaurant owners it's fair for the beauty exactly right and you know but but here's my beef with it okay my beef is this enough with the Tipping that that's my beef I mean this whole tipping thing I I spent a month in London you can't even like go into a restaurant I I multiple times I would go into a restaurant pay the bill they would bring the bill with the credit card machine without a I'm like is there any place to leave a tip and they would look at me like tip what what's that like nobody there have been times when I've left a tip for a server and and they they didn't know what to do with it you know it's like in in in in Western Europe and Asia and Australia like tipping is not a thing it's only in the US where tipping is like a thing you know and I just think it creates so much complications for small businesses we've got got to report on these tips we've got to pay taxes on them we have it's also not always great for employees there are a lot of employees not get 100% paid what they should yeah they first of all you you're you're an employee and you rely on these tips and like you get like some some jerk offs that come in that don't tip you so you're getting screwed on top of that there are some jerk off business owners who play around with the tips and don't report them the right way and the employees get screwed out of that as well there's a whole calculation that has to be done for sharing tips within the or you know within the the bartenders get this and the bus people bus boys get this and the servers I mean come on it's very complicated so if we just didn't have t we abolished tips in this country you know I think it would be a lot Not only would it be better for the employees but I think it'd be a lot better for business owners now you might say Hey you know well if you're you know the business I'm gonna say you're gonna have a hard time convincing business owners of that oh man I'm telling you because it's like anything else in this country it's such a giant country that you just can't change anything I think Obama realized that with you know Obamacare you know what I mean it's like it's very hard to like do anything on a massive scale and business owners of course would be screaming and yelling that like oh you're going to increase our cost because now we have to pay our employees more and you know and then pass that down to our customers and I'm like dude I'm already paying 15 to 20% more anyway because I'm leaving a tip for somebody you know so pass it down it's it makes no difference to me I just would rather pay one bill and not even have to go through the the pressure of knowing whether I'm tipping or not it just is what it is and there have been efforts at this I mean most famously I think Danny Meyer in his restaurants in New York tried it he failed he tried to do it and it interestingly it failed in part because the employees didn't like it some employees quit because they knew they could make more money in a place where they got tips especially on you know busy nights like a Saturday night yeah the only way that you can make it work is it just has to be across the board so it's a level playing and it just has to be legislated to do that and you know and again I mean I just you know I I for me I think you would think particularly with you know you know the government the way it is now they're hungry for any tax receipts um you know it's it's an easier way for the government to collect more payroll taxes because they won't have to be chasing down you know tips and figuring out what that is you know what I mean I I guess I can understand the business owner concerned with having to pay more and yes there you know I understand how that you're response to that but they would have to raise prices and there's an emotional aspect to that even if across the board that makes a difference you know it really does and then I think it's like anything else I mean people hate change I mean this is the way the society has always been but man it's just that's what instigated this what prompted me to write about this because I'm I'm you know I got the press release about this new bill for the beauty salon industry and I'm reading it and I'm like okay that's great I'm trying to understand it and and literally I mean okay I'm not the smartest guy on the it but you know I'm not a complain it took me a few times to read through it to figure out this calculation like what it involved and I'm like Jesus this is a pain in the ass like why do we even going through you're you're also a CPA which makes a difference yeah you would think it would like come naturally and I'm like wait a second what was the floor and then oh and by the way I got the calculation wrong because then I wrote the the thing submitted it it gets published and you were the one that emailed me and said wait a second Jean like don't you have like a and I'm like yeah I screwed that up it was a typo I can't you know so even that's an indication of how annoying the calculation is and I think like well if I'm screwing this up I mean how many business owners are also not going to understand it why do we even need to worry about this just forget about tips there chances that this will ever be changed never zero okay zero I have more chance of growing hair than this will ever change in the future all right well in that case next topic you wrote recently about having a uh a virtual office and not really loving it uh we've talked about this before uh what was new in this piece at least to me is you made the argument that you're not even sure you're saving money by not leasing office space that surprised me tell me about that so you know when I went to when I started this up back in 2005 when my dad passed away you know we had offices and then we sh I shut them down because nobody was coming in the office you've heard the story a hundred times already and you know we went like all virtual and you've heard me joke about my company being the world's most dysfunctional company because we're virtual yes and we are the world's most dysfunctional company and so there's all this there is cost to running a virtual company that you know people you know forget about there is this cost to first now I'm subscribing to 67 different online applications and services and hosted phone systems and Google I I looked at my je that you wouldn't need if you had an office yeah I mean it depends I mean you know you're right I mean I would probably have some of those costs as well but I because I have these remote employees I have to get more of these sort of Remote Management tools to do that so there is that cost but you you do raise a good point maybe I'd be incurring the same thing if I had a typical I don't know also I have people that work you know both you employees and contractors and they work around the country I have some in California uh Colorado uh and and Florida and New York State and there's like tax issues like I'm paying my tax account a lot more to and make sure to figure out to make sure that we're withholding and Reporting on you know the tax you know on their compensation also helping them out because they don't really know what the tax rules are because we're like located in Pennsylvania but we're close to Philadelphia and you know there's state tax issues and you know you know that's a real concern I mean some businesses have gotten in trouble because they've had employees working in places they didn't know about it and correct if it's surfaces there there are fines that you can be subject to yeah it is so all of that creates you know a uh you know more more headaches for me as well so I have all of that and then of course there's just the sort of added cost of just unproductivity you know I mean like if you do have people in the office you do keep an eye on them you do see them now again the whole reason why I started up this Virtual Office was because I people weren't coming into my office but I guess if if if you are running so you're definitely doing better than paying leasing an office that nobody's using right that is correct but for I guess the point is that if you're running a business where you do have people in your office and then you're thinking of just going all virtual you are there there are cost for doing that and there are going to be you know elevated Remote Management and monitoring tools that you're going to get from a security standpoint not that you're going to be monitoring your employees every keystroke but that that's a cost you know you're going to have cost of efficiencies and inefficiencies that you're going to lose you're going to have costs of losing out on ideas and Innovation as well um and then of course you have like some compliance cost and accounting cost tax costs because where people are located you've got to make sure that you're doing what you got to be doing and some of the states are getting really tough about that all of that stuff is needs to be taken into consideration if you are thinking of going all virtual and I'm telling you a lot of companies are thinking of doing just that because of you know the way the workplace is nowadays could you imagine ever going back to having an office no it's a great question I no I never would um I'm 58 years old so come on I'm not going to change you know what I mean I have like I eat the same takeout food every Friday nights I have the same routine you know I'm not I'm just not GNA change I'm very regular so um no I don't see myself doing that and the other thing is I wrote about this how what stops you from doing it I mean aside from being a creature of habit there must be something you like about not having the office I think first of all is that I still think financially it makes more sense to do it this way and but the big thing that's driving me is my staff um I have pretty low turnover Believe it or not you would think working for me I would be losing all my employees every other month but like I know I've got like 10 employees actually 11 now and and they are they most of them have been with me for a long time they like it they like being ver they've liked it since 2005 and 2015 and whenever they were hired so if I were say we're GNA open up an office and I want you to come into an office I'd probably lose them that's a that's a good thought a good reason to keep doing what you're doing yep yep yep yep all right next topic you wrote a piece for Forbes uh in which you listed 27 uses for chat GPT that small businesses can do right now is that crazy or is that 27 things you can do right now you can be doing that but can you really wait hold on here we go ready you can be using it for programming you can be using it to write blogs you can be using it to do market research you can be using it to draft legal forms laen I don't care if this is your I'm running off this list right now go ahead what were you going to say keep going okay you can use it you can ask legal questions you can use it for scientific research you can use it to take to to provide a knowledge base for customer service calls you can use it to do Don't Stop Me Now online chat and support you can use it to answer tax questions that you might have you can have a draft HR policies you can have it answer specific HR questions you can use it to draft product descriptions if if you're in the real estate business it can draft real estate descriptions I'm halfway through the list right now you can use it to come up with sales pitches that you can use in emails and campaigns you can use it to draft a newsletter every month you can use it to draft internal memos based on the topic you can use it to draft a quote if you integrate it with your accounting system it can draft a brochure a sales brochure it can do math calculations for you it can translate documents it can generate multilanguage content when you generate that content when you get teams you can actually use it to prep for meetings it can do research for you in advance of a meeting or manage your meeting so that it you know it'll it'll do transcripts from your meeting you will be used it to very soon in Microsoft Office to create spreadsheets and PowerPoints based on information that you just tell it you can use it to provide training materials you can use it to drop job listings job descriptions and finally you can use it for business advice as well now can I read the caveats too or at least can bet there better be a good one for taking business advice from it yeah I mean first of all you just can't rely on any of the information that's why C okay she can do all of that cave there yeah it just it might not be right okay so there you know listen you know we there's there's pros and cons to everything I mean obviously chat GPT is a uh you know it's in its infancy there's bias it's inaccuracies it's incomplete but you can use it to create legal documents I hear yeah right even to using some of these uh like to do quotes I mean it's not out of the box it's an open- source application you would have to hire somebody to integrate it say with your accounting system if you want to actually use it to help you with doing quoting but it is all stuff you can be using for it right now and hopefully you know it will get better and more accurate and more reliable in the future and it's there it's it's open and it's it's doing it I actually do have clients and friends and people that are using it for some of those specific things that I just mentioned G nobody writes more than you do for more different Publications have you tried using it to draft something not yet and I might you know what the first thing is I'm going to try and do is and this is all seriousness so on my website you know I I have a Blog for my products and I have people in my office that write every month they write blogs and um like three blogs for each product because Google likes it when your website is active and it's got you know your current and changing content it helps with SEO and um I've already told them that um I'd like each of them to go and use use chat GPT to generate the blog um for them every month then after it generates they need to you review it and make sure that it makes sense and all of that but my hope is I'll I'll start getting some feedback in the next month or two that they're able to have it and then do the you know do the blog in half the amount of time which is the whole point of chat gbt is to Pro it's a productivity tool so that you can squeeze more work out of your existing people and I'm paying my people if it takes them an hour and a half to write a a good blog on on Salesforce or Zoho um and chat GPT can cut that time in half that's like saving me money that's good stuff so I'm gonna have them start doing that and I'm gonna put that into practice and we will look forward to hearing how it goes yes I will be reporting back to you on that because I like to show that stuff last topic Allan greenspans underwear this is about a piece you did not write but it ran in fortune and it talked about the former Chief of the Federal Reserve board and his well-known belief that men's underwear are a strong economic indicator we we've talked about these kinds of metrics indicators frequently you're a big believer you follow many do you buy this one okay first of all where did you get this from from Fortune because I've been talking about this this metric for years did somebody steal this from me I don't even now Alan Green and I remember when he was uh chairman of the FED yeah he talked about it then um this particular story Rand in Fortune but it's been covered in many times many places yeah so he gets a report from the men's underwear industry um every month I don't know if he still does and to him that was an indication of of of where the economy is going right um and listen do you do I think it's a reliable metric well listen you and I are both guys right Right light learn so you know when things are going good we're buying new underwear when things are not going so good I don't know we turn it inside out we're going to right can we share this right now we're friends here aren't we so Greenspan knows he's a nerdy guy but he's a guy and he knows what guys do when things are rough we cut back on the underwear and just basically reuse that product so there I've now shared a dirty little secret um so you so you do buy it um it's it's funny I mean it could have been shoes sneakers or pants or something then well there are a lot of interesting um metrics and I actually I I love maybe that's another conversation for another day and I haven't written about this for a while because I do talk about it when I when I speak I like to share some sort of um you know lesser known metrics I mean everybody focuses on the GDP and the unemployment rate when there are a lot of other you know core metrics that are more interesting to follow that really give you like a you a taste of what I mean there there're weird ones like the underwear one or the um there's there's one guy is a researcher for um NYU who did a um a metric of stolen pets like literally he he analyzes like I can send you this this story he analyzes like dogs that are stol that are reported stolen because he believes that there's like a black market when when the economy is is going bad um you know more people buy their pets on the black market wow uh right than than through like breeders I don't even know if that's accurate or not but that's what he does there's smaller metrics that are more serious like have you we talked about the Baltic dry index like are you familiar with that metric I've heard it I don't remember how it works tell me it is I've got a few Economist friends that swear by it because it it measures the cost of freight through the Baltic Sea now I mean I don't I couldn't even point out the Baltic Sea for you on a map I don't even know people are paddling canoes through the Baltic Sea but apparently you were just in Malta yeah yeah right it's but it is I I still is the Baltic se's nowhere near Malta no but you were in that close part of the world no but the idea is the Baltic Sea is happens to be one of the more traversed you know Freight Lanes in the world and when freight costs are going up that means there's more activity there's more demand for Freight that means global Shipping is up and that's good that makes sense that's more clearcut and the Baltic dry index if you follow it and there's a few different sites where you can follow it daily weekly monthly you Trend it out you can actually see where the overall the global economy is going just based on the activity of of ships makes a lot of sense to me too so have you bought any underwear recently um yeah I buy I have to think about that no I haven't bought it recently but I then again I haven't turned it inside out no actually I'm actually I'm not being truthful here because when we were in London I did go a few days well that's another thing so we can I won't I won't talk let's leave that out too much information it sounds like you haven't really bought any underwear recently and I haven't either um I guess that's kind of a small sample size of two but yes I guess that suggests we could be in for a tough time yeah who knows I mean we're only we're very just you and me saying so any all right anything in particular you're working on that we should look for this week yeah so next week uh I'm going to write a piece for the inquire about peos professional employer organizations um which are I'm seeing a jump in interest because of all the complications of having employees and um I'm also going to write a piece for the Washington Times tentatively but probably about the producer price index you know because wholesale prices went up more than expected and I actually think the increases were actually higher than what's being reported so I want to dig into that and hopefully write on that this week as well interesting all right Gan marks is a CPA who writes weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times the Chicago Daily Herald Forbes and entrepreneur you can also hear them on ABC radio's eye on the world with John Bachelor Jean hosts two small business podcasts of his own with paychecks Corporation and the Harford thank you Jean thank you Lauren this was fun we'll see you next week always a pleasure [Music]