Dashboard: Welcome to the Pre-Recession!

[Music] welcome to another 21 hats dashboard I'm Lauren Feldman I'm here with genan marks to talk about the stories and issues we think business owners should be following this week welcome Jean Lauren welcome to the pre-recession wait there's a I was going to get to that well there's a great debate about that is it pre or are we there uh yeah listen you know it's funny I just heard that read that term in Bloomberg today the uh the it's a pre-recession Lauren not according to everybody Jean yeah I it's it just I don't know I was in you know I've been studying economics all my life you since college and I was always taught that two quarters in a row of negative GDP is a recession but apparently it's not anymore so things change things change that's the civilian version I think I think that's the informal thing but there there's some I forget what it is but there's some body that gets to declare the official thing the national the National Bureau of economic research what do is and it takes a few months because they go back and they look at a a bunch of different metrics and factors and then determine officially if it was a recession or not but you know that won't happen till like later this year yeah right which is why sometimes you find out it was a recession six months after it's over which is really valuable let's dive in Jean you recently wrote a column suggesting that some business owners may be fooling themselves into thinking their businesses are growing when they're really really not what were you talking about yes Lauren so you know I you you would ask me like what I was working on you know that was coming up and that was definitely a piece that is uh that that I knew was coming um it it listen when I I found this out because I was at a client recently and talking about um going over their financials you know you know year to year at least half year you know through June 30th and they're like hey sales are up through June 30th compared to June 30th of 2021 and and sure enough their their dollars were up but then you know we started talking and it's like dude you raised prices like 10 to 15% during this year so of course your sales is going to be up you know it's like the same numbers if you're shipping the same you're going to be showing more dollars and you know so we we dug into it further and it turned out that like when you looked at the what they were actually shipping out they really were they were flat they were shipping out the same amount of product that they were you know the first six months of this year compared to last year so even though they thought that their sales were up their sales really weren't up I mean it was just that they had rais their price and they only raised their prices to keep up with cost so their margins are the same do you know what I mean you're not saying that was a mistake right I mean they no it was certainly not a mistake it's just it's just misleading it's like you know I'm just giving this warning to people everywhere when they start looking at publicly heeld companies and their financials and when companies are announcing their revenues for the year year uh at the end of the year let's let's not forget because this the first time in like you know 40 years that we're in a you know an inflationary period you know and we have to very we have to be take take pause as to what Revenue increases really mean Lauren you know because it's not you know if if it's just a price increase that really might not be indicative that the company is doing any better it's just they've raised prices you know what's the Practical impact of that are you concerned that uh one of your clients or a business might think they're doing better than they really are and be you know hire somebody or behave in such a way you know assuming that the business is growing when it's not that is exactly it I mean it is you're you're misleading yourself first of all you could be misleading investors and bankers if you're reporting that oh we're having a much better year than last year when any smart investor Banker accountant that starts digging into it asking the right questions might call you out on that you look kind of Dopey and that that that hurts your credibility uh plus you know it's misleading yourself and thinking that way so in an inflationary period you need to be measuring your volume you know based on quantities and depending on you know if you're able to track that in your accounting system and you're able to track the units of things that you're selling the sheets the packages the boxes the you know whatever it is the tons uh the uh you know you know ounces the gallons th those are the numbers that are really relevant in 20122 if you really want to see if your business is growing or not if you're just basing it based on uh uh dollars then you really not be giving yourself the the true picture of of what your business is doing but protecting those margins is still a good idea you you really don't want to fool yourself on that right of course yeah of course I'm not saying not to raise your prices or to do whatever you can to protect your margins for sure but just be aware that if you're a lot of people judge their growth based on their revenues and if it's Revenue dollars you know they it just might be inflated because of inflation all right moving on you also wrote recently that Google is offering a powerful CRM function and bizarrely enough it's offering it for free well Google does a lot for free but this I have such mixed feelings about Google don't you Lauren I mean like there's such they are very awesome in a lot of ways and they are very monopolistic in a lot of ways that's all true and they've also evolved in a lot of ways they're not the same company they were five 5 10 15 years ago definitely not and I you know and I I I I hate them when I try to advertise with them because I feel like I'm being screwed left and right you know and the big business the big guys are getting the keywords and not me um but I love them when they offer free tools and this is one of them I mean it's a CRM tool but they're offering and what I mean by that it's it's what it is is this um if you set up your business profile on Google and I wrote about this in Forbes this week so you can you can Google that and see the article because I've got a few links to how to do that but if you set up your business profile right Lauren so like you know you search for uh that's free too right and there's kind of no reason not to do that yeah everybody should have a business profile on Google you know you search for the March group um you know in B kinwood Pennsylvania and you'll see on the right hand side the profile shows up and you know there's a description you can see all the great reviews I'm getting except for some one jerk who left a really bad review and then you can also see uh you know you I can post stuff there it gives our hours of opening and our our our health and safety what we're doing to make sure our customers are safe and healthy uh we have a our address is a PO Box so you know you we we we clean it out every day it's completely sterilized and safe so you're fine if you're ever going to visit us but now what they're allowing you to do is um you can set up automatic replies to questions so people can ask questions on Google on your business profile and uh you can set up automatic replies which is like a CRM kind of thing a lot of us have these chat functions on our websites uh that you know that where where people can chat and my smarter clients have been using us to set up automation so you know people ask standard questions you know I'm looking you know you know what's the price of this or how do I get this or does this do that uh you can set up I think like 10 of these um you're limited to a number of uh the question can be up to like 200 and something words and the answer can be like 500 Words and you can also include links to drive people to your website so you know people are visiting your profile they see they can just ask a question they ask the question they get an automatic answer so you don't have to spend any money or time orever doing it and they not only get their answer but they could you theoretically be then just driven right to a specific page on your site that's a CRM thing man and that's great because then you're you're driving traffic to your website where you can hopefully grab contact information from that visitor and maybe nurture them into an actual sale and Google is providing that tool completely for free so I strongly recommend check it out if you have a functioning CRM is this still useful it is so um if you have a functioning CRM like a good mainstream CRM you you can set all this stuff up there um but then you you have to like pay somebody like me or exorbitant hourly fees to do it and uh you know some people it's harder than others the the Google process is a lot easier uh what you want to make sure of though is that if you're going to drive somebody to your website there's a call to action on your website you know what I mean so you know if they have a question it it goes to a page on your we website that they can click on and then they can request you know a white paper or instructions or something to download and then that data then goes into your CRM you know that's what you want to get set up but you can grab them on the Google Search right there without having to drive them to your website first and that's a really big deal but not a um a substitute for having a CRM if if you don't have one all no not at all not at all it's just that you know a good customer relationship management application has got a lot of ways to uh grab data to bring into its database so that you can then nurture that data and turn that into sales well Google is now providing one of these ways to get that data into your CRM system and that's you know that's something you should be looking into got it now you also recently wrote I believe for the Philadelphia inquire about whether Philadelphia is a good place to start a business or not and having lived in Philadelphia myself I know this topic has been debated for many years and Philadelphia gets a lot of grief on this where did you come down well for starters actually the the the headline that our editors assigned to us and I love my editors it's a little misleading okay it really wasn't an article about whether Philly is a good place to start up a business I mean you can go to a lot of different sites from us you know news and World Report to wallet yeah they do a lot of this cities for startups Philly is never listed very high in any in any of those lists rightfully so because Philly has a lot of you know red tape to start up a business and it is a I don't want to say it's a business unfriendly government because everybody in the government will say that they they love and support small businesses but it's still you know higher taxes and uh you know regulations so the article which I wrote in the Philly inquire though does apply it it's specific for Philly but if you're listening to this you know conversation um you know it it really does apply to any you know big city in the country every city has got its anomalies for starting up a business so if you're going to start up a business in LA or San Diego or Chicago or uh Omaha or Little Rock I can guarantee you that there are going to be similar Hoops you're going to have to go through that you go through in Philly and in Philly you've got to consider permits you've got to consider licensing you've got to consider zoning there are applications and forms that you've got to fill out for that in Philly you've got to get a Philadelphia tax ID because there's taxes that you pay sales tax soda tax uh you know income tax grocery seats tax as well so you got to get that all set up you know you know and in addition Philly does have some programs to help small businesses um like you know they'll they'll they have like reimbursement programs if you put in security cameras and boy do we need those as well as other things so um you need to know all of that if you're going to start up a business so my my advice to you if you are starting up a business in any City not necessarily Philadelphia is you got to visit your city's website that's number one because you got to find out what the rules are and number two is I I do recommend getting help and I spoke to a few people that work at nonprofits in Philly that that help you know entrepreneurs startup businesses and those people you know they what kind of help are you talking about just dealing with the bureaucracy yes so like okay I'm I'm starting up a food truck I'm starting up a restaurant I'm starting up on a plumber um you know opening up a a manufacturing facility what permit do I need uh what what zoning permission do I have to get you know what is my what tax forms do I have to be filing every year you can go to the city's website but it's not like it's really clear you know what I mean it's confusing so you know you know but if you reach out to a nonprofit that deals with startups that's what they do and they can guide you that way and I'm telling you there are these non in Philly there's like Small Business Development Centers there's the Philadelphia Industrial Development Corporation there's uh you know there's a few others I mentioned in my article you can find those same nonprofits in any city um I strongly recommend that you work with them because they will they will make the process a lot easier is there a place you can go that basically has this all inone template where you can just basically fill out you know one form no of course not I'm sure there are places that do do that do you know of any well it's it if you go to the nonprofits and again if you're starting a business in Chicago and you're like nonprofit you know startups you know what I mean in Chicago you'll find organizations that you go to their place give them your information and they will fill out the forms and get you set up and I'm telling you it's not easy regardless of what city that you're in so that's sort of like the One-Stop shop that you want to go to that makes sense so did you form an opinion as to whether Philadelphia is better or worse than other places H it's a tough it's a tough call Lauren I mean I love Philly you know that um but it is it when I compare it to some other cities that um uh you know have low taxes and less regulations and don't require Tradesmen to you know pay get permits and pay fees and fines and are less unionized than Philadelphia uh and have a more Pro business approach I mean there are a lot of other cities um that are you know that I think are more meatable to starting up a business in Philadelphia having said that though if your customers are there if that's where your Market is and more important importantly if you've Got Talent there I mean Philly does have a really good University system uh with pen and Drexel and Temple and haford and Swarthmore and you know any number of colleges locally um if if you're looking for certain Talent it's certainly a great place you to get that talent but is it the best place in the country probably not the thing people tend to focus on especially in those list of course is taxes uh do you is Philadelphia particularly it is it is I mean there's still a wage tax which is close to 5% yeah people don't understand what that is in a lot of places this is a tax that is assessed based on your payroll and it's regardless of whether you make any money or not right you just pay a percentage no no no hold on there's there there's a business receipts tax which which is based on your uh it's based on your Revenue there's a net profits tax which is based on your profit so they get you either way that's the business if you're an employee you have to pay a wage tax it's like 4 point something percent close to 5% just if you work in Philly so but that's that hurts businesses because it makes it harder for them to uh attract Talent exactly so that is you know a real you know the taxes themselves are really tough and then there are other things like uh you mayor Kenny you know our esteemed mayor who by the way doesn't want to be mayor he said publicly uh you know he had a big soda tax on grocery stores and restaurants was implemented so they have to pay an extra tax whenever they sell soda uh which is going towards you know pre kindergarten care and all that kind of stuff but it's just extra money you've got to pay out which hurts your business regulatory stuff you got to file so it is so if you're starting a soda business maybe not in Philadelphia not or a grocer but you know it's funny because you have that you the tax you paid Philly then you got the sales tax and then you've also got your state tax Pennsylvania has like a 2% you know state tax as well and then of course there's federal taxes so they really do add up all right uh I haven't checked in with you about this recently Jean you we have been talking about the state small business credit initiative the uh$ 10 billion do that allegedly uh will be flowing towards small businesses on a state-by-state basis have you seen any indication that the money's actually flowing you are very dubious about this aren't you um you know I keep hearing from frustrated business owners and that's why I feel compelled to ask and yes you know obviously it It's tricky because it's state byst state it would be much easier if it were just you know go to the SBA and get your answer you're 100% right it is tricky because it's state by state and I I have no updates for you on this other than the money is trickling out but you know what I would like you to do is um let's talk come back to me on a monthly basis not a weekly basis I I I don't think I asked you last week but you might be right I think we did we have talked about whatever but like I got no new updates for you now but I am G to be checking in on it and seeing how the money is is Flowing out um I did this big piece for the inquire and a guardian about this um and I um I do intend to revisit it like in the you know late fall well you know the thing is when we first heard about this the economy was was going Full Steam and there was in a sense that there was a desperate need but each week as we get as we head into the pre-recession as you put it um it becomes you know more intriguing that there might be money out there for businesses it does I'm still waiting to see Lauren like an actual recession going on I mean I I know that GDP is down I get that um I I know that you know a lot of my clients aren't necessarily going gang busters right now um but I don't see anybody like going out of business I don't see anybody defaulting on their loans um I still see my my clients that are still looking for people to hire they're all kind of concerned I mean you know about the next six to n we keep telling them to be concerned yeah we keep telling them to be concern but I'm not quite sure their order books are telling them that you know what I mean and so there every week there seem you be more red flags there are does there's cause for concern but you're right I mean I I don't think there's been a like this where people are still desperate to hire and and I talk to owners who are still desperate to hire yeah yeah and there were less unemployment claims filed this week than last week you know like that's not supposed to happen at every session there's supposed to be more unemployment claims filed you know what I mean so it's we still have a tight labor market out there and so it's just you know inflation is the Big Challenge right now and even that I've been looking at those numbers and I I'm seeing that start to Plateau so um it's going to be like a slow year there's no doubt about it but you know I think I think it's this is ain't going to this is not 2008 that's for sure Jean I have managed to forget to bring along my list of all the places you write for I usually thank you at this point and tell everybody what you do could you do that this week you know what I'll just do is say if you want to see all the places that I write and all the different places that I like appear and whatever just go to my medium account your two podcasts as well yeah yeah I do a podcast with paychecks I do one with the hardford and and uh my medium account is gan gan marks you Gan marks. medium.com and then whenever I write something and I do write in a bunch of different places every week I also repost it on medium so you can get it all there at gen march. medium.com excellent thank you for that anything we should be watching for from you this week I'm working on a piece about WWA Lauren Wawa you know half the country has no idea what you're talking about I know what the hell is Wawa I'm going to explain WWA is you'll read the P hopefully it'll be out this week or next we'll talk about it but I I've I I have such great things to say about WWA I had to share them so that's coming up Wawa is a chain of convenience stores we should just let people know 900 by the way wow I'll look forward to that Jean thank you as always have a great week thank you Lauren see you next week [Music]