Escaping the Valley of Death

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Shan busy tells Jay goz and Jennifer Karen that he's realized that his business too like Jennifer's is stuck in the Valley of Death that we first discussed a couple of episodes back Sean's realization prompts a discussion of what it takes to cross the desert and get out of that Valley we also have a surprisingly entertaining and enlightening conversation about insurance that makes clear why you should occasionally review What policies you have and why you have them I have something called director's Insurance says Jennifer and I don't really even know what that is Sean notes that he found a company that helped him reassess several of his insurance lines what I like about that he told us is that while Insurance Brokers are incentivized to oversell you because they make commissions this company sells its expertise and not policies plus we start the episode with Jay explaining why binge watching HBO's succession brought back all of his worst nightmares about owning a family business even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations brought to you by our principal sponsor the great game of business will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report when Jake magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hat.com where you can also Al find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast our regulars Shan busy CEO of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy Jay goz who's CEO of the gos group whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home and Jennifer Karen who is CEO of SB Expos and events an events management business based near Baltimore Maryland the episode is titled escaping the Valley of Death welcome sha J and Jennifer it's great to have you here Jay over the last year or two we spent a good bit of time talking about your attempts to come up with a succession plan what I didn't know through all that was that while we were talking about your succession you were deliberately avoiding watching the extremely popular HBO show succession um why was that well I ended up watching it as you know so why did you delay it wasn't that deliberate I'm thinking it was a little subconscious I deal with stuff all day long at work and I didn't need to spend another hour or two before going to sleep on it but I did break down and watch it once it was all over in the final episode it aired you started binge watching it uh as we've discussed you were been through two episodes a night I don't want to talk about the plot twist especially since Shawn and Jennifer haven't watched it yet and I don't want to give away any spoilers and obviously the gos group is not wayar Royo apparently found the show pretty relatable what did you relate to well I don't know that I'd say cring let's say here's here's the four pieces which won't be giv away anything number one just watching your kids go at each other I got three kids it's just painful to watch because that's one of my I I have a document printed that I gave everyone in case I drop dead or whatever my biggest nightmare is my kids go after each other which I don't believe is happening they all get along nice watching the kids go after each other was extremely painful number two watching their relationship with the employees of the company was extremely painful just every one of them between Jerry Carl and Frank I mean they just had to put up with all the nonsense and it was just painful to watch how they just were so disrespectful to them and then you got the father who there's two aspects to that his relationship with his kids and it it's just messed up and on top of which then you get the the the biggest one which is oh when does Dad get to the point you start whispering in the back dad's losing it we got to take control of the company so that might be happening now as we speak I'm not sure but um all four of those three are cringe were worthy I and then I'm really embarrassed by the fact that I not only don't have two I don't have a helicopter like what kind of loser am I I don't have a helicopter so Jay you have a forklift actually I have two so I do feel better about that not to brag not to brag yeah so no it was it was I was looking forward to getting through it and and I would say as the father I don't if this was a film study group I don't think he deliberately played the kids against each other I think he was just flailing of who's going to be in charge and I think he really didn't know what to do and the whole thing was just a mess I don't relate to that my kids are all good kids they're not doing any of the stuff those people are doing on there and and and I haven't gone crazy yet you can argue that but it was um painful to to some degree and I was absolutely looking forward to finishing it because problem was I was watching it at night we always did two a night CU I had to get through it and then I would go to sleep and this stuff was in my subconscious and I didn't sleep well sometimes like I needed to get done with it and I'm done with it so it really wasn't about succession it was really about family business I mean all businesses have succession ISS but this was really about family business and the kids were such brats and there was a couple of scenes that were just noteworthy one of them was when be careful okay well I don't think he gives away he what Ken says to his father dad you gave us everything and now you resent us for it I mean that's that's a family business thing and um and then when the father was at the end of his rope and he just looked at all three of them and he just goes you're not serious people I mean I think that really was the summary of they were all screwed up in bad you know you know I I kept going from who's the worst one of the day and like it shifted over time did you learn anything from it absolutely not I really didn't I I I just I knew all those issues I can't say I looked at it and thought oh wow that could be me no I no I really didn't I mean it was extremely well- written show extremely well written um but just as a business owner who's got three adult children one of them isn't in the business but it it's just it's just I I was screaming at the TV sometimes they were so rotten to the to the employees it was just painful I thought you said you weren't crazy yet yeah well is that make me crazy I don't know I just there was a couple of scenes where just like the way they treated Jerry was just unbelievably horrible it was painful to watch so yeah Sean Jennifer is there any particular reason you haven't watched it you just I know you're busy people um are you avoiding it or you just haven't watched it I think I just haven't watched it but then also so there's a part of me that when a lot of people are doing something I tend culturally run the other way and I'm not sure why I think that's a character issue of mine that's a good Instinct I would say how about you Sean I watched I think like maybe an episode when it first came out and it was so painful that I just had to stop you know we're coming off of the pandemic and it was just a really shitty time in general and like I just didn't need more crappy human beings in my life so I just turned it off and then because I knew we were going to talk about it I watched like three episodes you know and and I still don't regret turning it off no you can't leave out the part that it's clearly about rert Murdoch and his family I mean it isn't even like it and and we're living it so yeah that added to the pain of it I mean I think what's interesting about it and you you touched on this Jay about you know we work with a lot of family-owned businesses over the years and and some of the dysfunction in that space I I really feel badly I mostly feel badly for the children because the common Behavior I see is the parent wants to pass on the business to them but then they actually can never really let go and that's a tough place to put a kid in and yeah so so that that related but the but then the kids in that show are just deplorable so I don't know that's what's interesting they're deplorable but all of them had something good in there there was some good parts of each one of them I I I they weren't all evil all three of the kids I wouldn't call them evil I'd call them screwed up but each one of them had something going for him and it was just painful to watch that get smooshed by the the negative side of it and um and I have to tell you I feel good that I don't have a dysfunctional my my kids bring up stuff to me all the time that I wasn't thinking of that maybe no one else would say to me and it keeps me thinking about stuff that I should be thinking about so it's been a healthy productive situation so no I don't relate to it but watching that stuff it was just like everything you don't want to do to run a company I mean I I think I had to turn it off there was that scene in the beginning where they're playing the baseball game and they they off they offer they offer to pay the kid you know a million dollars if he hits a home run and then they like tear the kid the guy tears the check up in front of the kid and it's just like that was probably one of the times I screamed at the TV yeah so bad yeah Jennifer I I I I support your decision I think it's just like uh you're right Jay good writing incredibly you know it's Shakespearean in a lot of ways um but also man that energy is pretty negative all right let's talk about something we can all relate to and that's the insurance business not necessarily quite as exciting a topic but as you all know there's been a lot of bad climate news lately um including Wildfire smoke in the hottest days ever recorded and I believe a tornado in Chicago Jay and it follows um news that some insurance companies are simply refusing to write home and Business policies in specific States especially California and Florida and in Florida 10 insurers have gone Belly Up in the last two years are you guys at all concerned about this anybody not me I can tell you why you just answered it 10 insurance companies have G broke how many insurance companies are there probably a thousand 10 in Florida I know I'm just saying this is typical Sensational news my guess is there's a thousand insurance companies so it's not like they're all running out of state and I believe in capitalism that when they pull out another insurer will step in and get more money for sure and yes the people I the article I just read said that their insurance rates have gone up a couple thousand okay their insurance rat about a couple thousand dolls uh you know they're living in Florida they don't have any you know the taxes are lower there it's like they'll end up pay more insurance but it's not like half the insurance companies have gone away I think that the market will they some some insurance company's going to make a lot of money on this because they're going to step in there and charge 20% more and it'll all be okay capitalism Works Sean you're not in California but you're close have you seen any impact on your insurance not yet um I mean are the risks in Oregon are earthquakes and wildfires so a number of providers have eliminated the earthquake Rider like it's really hard to get earthquake insurance for your home and if we were to have the kind of earthquake that we've had historically here before it would be I mean on a scale you can't even imagine uh you know because very few folks actually have any kind of protection from that so that's I think our number one risk in this region and and you know folks are just sort of turning a blind eye to it and then wildfires is pretty real we're in an urban center we're we get a lot of water here so it's a little bit less of a risk than California but I think it's a I think it's a I think it's a thing you know I mean it's like it's I think Jay said it's just going to increase cost of doing business and businesses will adjust to it and move on I can think of 10 other things that are far more serious dangering small business than your insurance rates are going up that's just kind of my point like okay you're going to spend a couple thousand dollars more okay the technology problems I just I deal with stuff on a daily basis that is far more expensive than $22,000 yeah or five or whatever I think it's more relevant for homeowners which then becomes relevant for employees which then becomes relevant you know for you know your Workforce and so forth and cost it's just I think it's another compounding factor to the extreme cost of housing I think that that's my that's where I think the the problem is going to be is that it's going to be more expensive for housing which puts pressure on employees and makes it more difficult for to have stability I think that's that's what I would worry about if I were a business own more more than the $2,000 and Sean I really do believe for all the difficulties remote Workforce is only going to grow right because housing prices are so expensive and they go try to find where they fit and it can afford and have the quality of life they want they don't have to leave the job behind necessarily anymore you know what I I I agree with you're saying kind of meaning you're right this is going to support the the remote work work forcing but I don't think it's going to necessarily grow I think it's going to shrink first and then shrink less because of this but I don't think it's going to necessarily grow from where it's at I fully agree with you it's not going away and this is going to reinforce it for sure oh I disagree definitely think go off from where it is right now absolutely absolutely and you know what I see and I'm sure we've all heard a lot of commercial buildings are now going to be Office Buildings retrofitted for apartments and condos right the the housing Market's a much higher need and the supply is very low no question so that's going to escalate that when there's less Office Buildings right and if if I had a zillion dollars to invest I would be buying Office Buildings at some tremendous discount because my guess is they're overreacting to this that's my point I think they're over I think it's absolutely not going away it will be a substantial part but my guess is they're overreacting to this because I don't think half the world's going to go remote I I don't think they can for what they do so I would buy it to convert to an apartment man this there's a lot of stuff here but I think we this will be an interesting episode to return to Lauren I think we need to return to it in about a year to 24 months I think the commercial Market is going to become absolutely devastated in the in the near term the the cell phone records which are showing you know are people actually going into the the office it's really bad um especially in places like incore you know San Francisco even Portland is really it's decimated and what's happening is these commercial markets they're just sort of pretending it's not going to happen but it's going to collapse it's a it's it is in for a rough ride but if you look at history with real estate it always overreacts yeah so my yeah you're absolutely it's going to go down but I'm suggesting there's going to be some banks running for the hills just selling buildings for like Dirt Cheap you know I bought my factory building in 2008 and I got a super good deal on it because in 2008 nobody was buying anything and I bought so I I think there's going to be some opportunities just because like I said I believe some banks are going to overreact and just want to get it off their books and uh the conversion from office to residential is very very very expensive you know just putting bathrooms in kitchens and every I mean it's that's that's easier said than done back to uh insurance for a moment there are people people who were referring to the the price hikes as kind of a canary in the coal mine with regard to Big climate events I'm wondering how how many of you have uh business Interruption insurance I do because I was told 30 years ago that if you don't have it the insurance company's not in a real big hurry to settle your claim whereas if they're paying for your business Interruption they they get in gear and get it fixed quicker and uh that makes sense to me Jennifer or Sean I do I have it could I tell you what it says and how much money I have absolutely not that is yet another thing I have to put my eyesight on I have a lot of insurance somebody once told me I'm over insured and I really don't know what my insurance does I have something called like director's insurance and I don't really even know what that is well that means that anyone who works is is a director which you don't have I don't even know why you would have that if they get sued they get covered or if you're on a board like if somebody sues 21 hats maybe you're covered for giving that advice yeah I I need to I'm going to put that later next year but I I have to re-evaluate what I have and why I have it yeah I found a service that I'm really bullish on um last year where you you actually pay them for their expertise and they help you evaluate your options in this Arena wow and what I like about that is that insurance Brokers are incentivized to oversell you because they make commissions and so this basically you're paying them for their professional advice they're not actually selling you the policy so that I found that to be really valuable because you're exactly right Jennifer like it's hard to keep track of what you actually need and I was underinsured in some areas very very badly and overinsurance I don't think I have enough liability coverage goes well you've you've got what's average and that kind of says it all I go I'm not the average client I own a successful business and if I get into an accident they're going to go after me and he and I changed Insurance because of that because like he really didn't get it that was a bad answer I shouldn't have the average insurance when you own a successful business you need more insurance and State Farm is not for someone that owns a business usually it's it's you know yeah it's commodity yeah right it's it's yeah well add that to the hats that we have to wear is understanding no that is one of the insurance is one of the hats for sure yeah I do you have an umbrella policy Jay absolutely and I tell everybody this I was I just did a speech yesterday to a bunch of designers and they were talking about insurance they laughed when I said this but it wasn't meant as a joke it's legitimate if you've got kids and the day that they get a driver's license you ought to get an umbrella policy because your risk has gone up dramatically when you've got teenage drug drivers driving your cars it just makes sense and people laugh like it was a joke it's not a joke if you got more than one kid that much more I mean before your kids are driving you have a moderate amount of risk in your life the second you stick to 16-year-old in your car your risk goes up dramatically so I've had an umbrella ever since then and I can tell you what it cost because I know it it was like I think it's $350 a year for a two or three million it's not expensive Jay what's the name of the insurance you can get for when an employee sues you do you do you know the name of that um yeah there is a name for that um here's how you can get sued you give health insurance to your employees and whoever's in charge of it forgets to sign somebody up or something happened the person has a heart attack goes in the hospital Rings up a $300,000 Bill and oops we didn't have you signed up oh yeah you did tell me to sign you up oh I was on vacation that week and I forgot to do it I mean that's omissions I think it's called omissions uh that's one of oh I have that one too there you go I just pulled up my list hey Jay so you mentioned that you have people traveling the world as buyers right yes do you have special um health insurance for like Health disasters no so I bought some recently there you go it sounds like you've got everything yeah well it was super cheap um honestly it wasn't that expensive Jennifer is this insurance specifically for people who have a health problem overseas yes if it doesn't mean you have a health problem it just means if something happens overseas that I covered I covered Health expenses and then emergency evacuation oh wow there's only one thing I know for sure Jennifer you have the greatest Insurance salesperson ever that's the only thing I know for sure or I'm incredibly gullible no no I think that that's remarkable you've got stuff I never even heard of so honestly that was a concern of mine if if I have an employee that's in um a foreign country and something happens right it's not very expensive to cover emergency evacuation and um and the expenses because you may or may not be in a country that has socialized medicine yeah right uh I found it Employment Practices liability everybody listening to this show needs to get that if they have employees it it's like I I went for years without having it Jennifer do you have it yep he's got everything I I I have a bit of insurance I've got this picture of her insurance salesperson with a jacket when you open up the jacket there's just a files in there on both sides which one would you like and you might be right to be to be fair she's working with larger organizations on complex situations all over the place her exposure is massive okay let's tone it down Sean we don't want her to get more anxiety about her exposure I'll be buying more Insurance tonight and Sean I I'm not familiar with the service that you described um H how did you find the the company that evaluated your policies yeah it's called Zuna um they're Portland based company um and essentially they realized that all these providers for small businesses were being either Consolidated purchased by private Equity or going out of business and so the reliability of our thirdparty vendors think you know Health Care insurance even outsourced it book keeping was declining rapidly in in some cases and so so what they realized is that the the incentives are all wrong that that like in an insurance case the insurance broker is incentivized to sell you more than you need because their commission you know goes up and you need a basically kind of a consumer reports for all these different service providers um that you know are helping you and and it and it was very true for me I had great service providers the Pand totally upended that you know I had some that went out of business I had some that just totally flailed you know and I needed to get new ones I have to tell you everything you're saying I fully agree with my insurance guy he's my age he's sold out to the big the big place another guy I knew for years he's sold out they're all getting sold out and I think to your point they have an incentive that doesn't mean we're all getting screwed but no probably 25% of us are getting screwed and and we don't know which one that is and I can tell you from 30 years ago I went to change insurance companies and my father-in-law made you rest in peace said oh here's my guy and I called him it was twice the price it should have been and you know my father-in-law was a loyal guy who liked the guy but like who knows what what these guys are doing and and I had to tell my father-in-law Dad sorry to tell you the guy's twice what he should be and you just don't know and they all smile and they all take you to lunch and maybe they take you to a Bulls game or a hockey game or something once in a while but who knows it's just keeping it in check and I don't think that's a bad idea yeah it was the best you know I don't know $4,000 or whatever I spent I mean they oh is that what it cost did they charge you by the hour or no it's a it's a fixed fee and it was across lots of different areas of my business you know it was it which was a major win we found a fantastic provider with them it was health care it was Insurance lines so you made back the money you're confident you you know you made back the money oh many times over not to mention half of it's Price Right half of it's like I don't want to overpay but the other half is service and we were getting such garbage service from our art it provider which ended up costing me a bunch of money in other ways that I could talk about later in the show but yeah getting a better service provider who Delights the team who ends up actually saving me money in lots of ways it was I would do I would spend twice as much in a heartbeat was crazy so I'm sorry Sean not only did they recommend and consult with you they then provided the insurance right they a broker no they no they're not a broker that's the idea they they would say hey you should go work with fornier group to do this this insurance and these are the types of insurance you should get Sean which was great you know because they then they then I get the Jennifer problem of like everything under the sun then they refer you to the person who would help you yes okay let's be clear we don't know that Jennifer has a problem let's be clear on that that's we're not sure we might suspect but okay I have more insurance I just pulled up my list I have even more forgive me Jennifer I I I gotta ask do you have cyber insurance I do do you know how expensive that is do you know how no I don't how expensive is it it's about $7,000 a year wow wait Jay do you have cyber Insurance sure do you really I don't know what that mean no I have it but I don't know what the details of it are I think there's really two issues here one is to to Sean's point they're in sensiz some more Insurance okay I I'd hate to think people are Crooks but some are okay but the bigger one is you don't know how competent your insurance person is you don't know how much time they're putting into it you know this is always goes down to the bell curve it's like the old joke what do you call someone in medical school that graduates last in their class doctor I mean the fact of the matter is half of everything in the world are below average maybe your insurance person's below average half of them are that was my problem it wasn't that they were taking advantage of it was actually they just didn't give a and that's to your point of like your allate guy I had the equivalent of that in business insurance like we we just had terrible coverage and it took this Employment Practices situation for me to realize oh my God I'm so exposed here and how can my broker have not told me about this and the way the insurance world I'm I assume you've got the same thing where you're at every day on TV Liberty Mutual Progressive like constant ads that doesn't make them the best insurance company it means they spend a ton of money in advertising I love my insurance company I've used them for claims you wouldn't even know the name they're in Wisconsin you wouldn't know what their name is but they're a huge Mutual company but like people just go to where oh they drove by the Allstate office or the State Farm office or they called prog they just go to the name that's familiar and that's not the best way to buy insurance because some of I believe correct me if I'm wrong some of the best companies out there for businesses you wouldn't know the name they don't spend money in advertising like that often I mean we claimed this term a long time ago best kept secret often some of the best companies suck at marketing or just don't spend the money on it because they don't need they don't spend the money on it yeah because the Brokers bring them the business because they know they're the best company for that yeah did you hear the thing about Geico I find this fascinating Geico's sales are way off why everybody raised their rates and Geico figured out they have no relationship with the customers they don't have Bob your insurance guy for the last 20 years you just called up and signed up for insurance so when it goes up you think nothing right there's no loyalty Sean clearly more people should do what you did and have uh somebody assess uh the insurance that you hold I'm curious what prompted you to do that did you know you had a problem or did you just discover that company and decide to give it a shot a little bit of both you know kind of a Confluence so I had met and known the company for a while I like them they seem like really great people but I you know before the pandemic my systems worked really well like I had this well-oiled machine and honestly the pandemic broke so many systems I I just can't even tell you and then you know the added piece I thought about it the other day and I thought about our show the valley of death and I was like oh yeah I'm kind of in the Valley of Death too you know I'm I'm here you know I cross the $2 million threshold and things that used to work aren't working anymore so I got the combination of Jennifer and I are in the valley of death and also the pandemic really screwed screwed up a lot of vendors in my case the IT company I had before was wonderful they were great and then in the pandemic the owner got sick and he sold to private equity and guess what happens we all know what happens when you sell to private Equity that the service provider becomes garbage and they did they became total garbage overnight oh I've got a new phrase I just coined with Lauren last week I can use it now I call that private inequity they come in and it becomes inequitable for the employees for the customers for everybody I've seen more wrecks with that and I will tell you to your point I've been using the same insurance company for 40 years all of a sudden the woman working there only works four days a week oh you gotta call me between 11 and 4 and I call up my guy who's still working I go what's going on oh I can't find anybody this is what he just told me well we're not hiring anyone now because oh we're going public we're going public and we got to watch expenses now and this is what I'm talking about it's no longer about the customer it's all about their Equity it's and this is what happens all the time these private Equity companies generally from what I've seen they got two tricks in their bag just two raise prices and squeeze the employees for everything they got in them and that's how they make money and then they go to The Hamptons and spend the summer there and make a gazillion dollars I've seen that movie half a dozen times and I'm sure it doesn't always go that way but it frequently does so you and I end up with trust great vendors who all of a sudden are a shadow of what they used to be amen I've been thinking about as you guys talking what is with my insurance and I realized something so um but but in a good way it's sort of H I'm like oh okay that's what happened my um husband has had a business since we were married and I've been married a really really long time and when I started my company I used his service providers and slowly surely I have outgrown his providers right they were Legacy providers that he sort of handed over that relationship and this insurance broker is the last remaining service provider and I was like Ah that's it what worked for his type of company which is much smaller and now mine hasn't been broken so I haven't looked at it but it hasn't been broken because I'm paying a lot of money right but that's it's a Legacy Legacy Provider from my husband it walk us through because I'm curious when you say Legacy does he go to lunch with them regularly do they golf together no so is there any personal relationship there for years uh there's a personal relationship yes but it's not it hasn't been Super Active I would say in the no sports games no because that's what when I when I used to and I don't do anymore when I used to go to the Bulls game or whatever you look around and you see all the bankers are there and all the econ I mean this is what they did and this is how people bought insurance they bought it from their golf buddy or from their brother-in-law's neighbor or something and like and we all did that probably it's not it's not like we went out and interviewed for insurance companies and it's just we knew somebody I think it was that way Jay I think 25 I mean it hasn't been that way I would say in the last eight years and that's um but now I realize yep my it different provider my CPA different provider right the insurance one's the one left over Sean you said that you realized that you two are in the Valley of Death have you had a chance to think about how you're going to get out of it I mean I'm going to keep listening to 21 half I mean clearly well that goes without saying so I realized when I was talking to I listened to the podcast and I was talking to my friend that listened to it and Sean you said something about when you go through the desert you have to fill your backpack before you start walking because the worst thing that could happen is that you get halfway through the desert and you run out of supplies right because then you're suck because you right you're by going back doesn't help you you only can go forward right but you don't have any supplies what I'm trying to make sure and and maybe you've thought about this too is I need to load up that backpack and it's been pushing me it's like you know when you you see people that have gone into the army and they have to carry that 150 pound pack right we're carrying I don't know 500 lb and hopefully each step forward we're lightening the load either pulling it ever people holding or something lightening the load so we get to the cross the desert I don't think that you can do that that me I don't think that's an app metaphor and that you can't put possibly load up that's going to avoid these problems my my thing to this is simply you just keep forging on and dealing with it and and you get your way through it and you do what you got to do and you navigate and you make adjustments and you figure this out and you just keep forging on until you get through it but I don't know that you could quote unquote prepare yourself so that oh that was easy I had it all figured out before I went on my trip I I think we just adapt isn't there something that you're like man if I had just looked at that six months earlier I would have been in a better position yeah for sure but you figured that out I I think I think you're both kind of right but but Jay I've heard your story enough to know that you would tell your younger self for example raise your prices absolutely to me that's loading up your backpack good point good point okay check all your systems check all okay so let me while we're on the subject here it is then you okay that's an excellent point I would be checking your pricing to make sure are you really charging the appropriate price forget about these words that you hear all the time I don't want to rip anyone off I don't want to be greedy I want to be fair I want to be those words don't mean anything appropriate price what is the appropriate price the price that you can charart that you'll be making money taking care of customers paying your people enough yeah know absolutely so the appropriate price is huge that might be half of it two continue to try to get Bank lines try to have enough credit available if you need it three this one sneaks up on you continue to be honest with yourself with your staff have you outgrown anybody because that will kill you and I've been through that half a dozen times and it took me too long to figure it out and it was very expensive but continue to say to yourself okay this employee was great when I had six employees now that there's 15 it's not working anymore so that would be three four the marketing world has changed dramatically just CU what you did you know I used to advertise in the radio and you just say what's the radio I mean it just because it used to work for me 10 15 years ago I mean the world changes so you got to continue to to look at the marketing piece I I'd say if you did those four things that covers marketing management you know what I think that would be loading your backpack so okay let me add a few more so one Jay you've talked about how earlier in your career you had massive turnover you you know you you cycled through people like crazy so I think the flip side of the coin of do you outgrow people the flip side of that coin is are you churning through people in my case it wasn't the churning it was bad hiring that that caused the churning yeah what however you want to look at that the hiring process the onboarding the cultivation that is huge because if you're cycling through employees like crazy you're in trouble well there's something wrong no there's something wrong yeah absolutely and then I would also say customer turn you know if you're about to cross that desert you want customers who really love you and are delighted by you not const cycling through customer and then the third one I'd add is a Clarity of vision where are we going because if people don't know where you're headed you're going to wander around the desert and eventually burn through people customers your your own well-being yeah excellent point so those are seven gauges that we just came up with and I I think the point is at least the way I think of this metaphor is I'm loading up this backpack I'm setting the systems to go so when I cross that desert for example we've all talked about my my um investment I'm doing in marketing and so when I cross it I'm going to have a marketing team I'm going to have a leader who has a system and process in place to do our marketing I'm not going to be doing it day-to-day I'm going to make strategic decisions but right now I'm doing it I'm the one who's working with the Ad Agency to develop the website I get through this we have the systems in place from Business Development to marketing that someone else is doing this and I'm coaching and training them instead of me yes I love that attitude those are eight gauges we just came up with dial we'll get and what the one you just described is delegation delegation yeah so it's about the hiring do you have the right people do you have the wrong people have you delegated properly yeah I would say those are eight dials gauges that when you're growing through it you're not thinking about enough and I violate in every single one of those cases I I can look back and realize yeah screwed that up hence the phrase 21 hits and Jay you say this all the time at least I remember from the conference is now you have really strong competent professionals who handle a lot of these details that's where I want to get to right that is to the this concept of 21 hats I'm wearing every single one of them and I want to get to the part where I cross the desert that some people are wearing some other hats that I can help direct and that's a function of money to some degree which means you have to get big enough you want a manager of the marketing I'm arguing the difference between a leader and a manager is about 50 Grand and you don't need $150,000 marketing person right totally fair point but that's the desert the desert is maybe the desert before a professional management class yeah and and keep in mind the key people I have they've been with me for literally 20 25 30 years I'm not suggesting you have to groom for 20 years but it doesn't happen overnight I mean every in my case and I'm not suggesting this is a way to do it I've got people making well six solid six figureure incomes that started here at 15 bucks an hour I mean that's a one out of 20 but I grew them myself now if I was smarter maybe I would have brought somebody in from somewhere that was already doing it but I'm just saying this takes some time to figure out and there are plenty of smart people out there they're absolutely Diamonds in the Rough yeah and that's why I'm also investing heavily in development of my managers I have some incredible people incredible people who operationally are really strong and so I have a consultant working with all of us as a team and then individually to develop their manage aial skills great to get to the next level because I I can invest in people process and systems I can do the systems I can do the process I need someone to help to to if I assuming I've hired the right people to develop their skills and can tell you there is nothing greater maybe money's up there for sure but there's just nothing greater than knowing that you took people from here and got him to there and you're all working together it's just a beautiful thing which is another reason why watching succession is so painful because they didn't have that I mean it was just pain all right we've come full circle my thanks to Shan busy Jay gos and Jennifer Karen and to our sponsor the great game of business which helps businesses use an open book management system to build healthier companies you can learn more at Great game.com thanks everybody wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's L ren21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think he can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess Theron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]