I Expect to Grow This Year. Should I Hire Now?

Hello everyone. [music] Welcome to the 21 Hats podcast. I'm your host Lauren Feldman. Suddenly things are moving [music] fast at Sarah Seagull San Francisco PR firm. Several new clients look likely to sign on and for the first time in a while growth feels real. [music] Which leaves Sarah with a familiar nerve-wracking question. Do you hire before the work arrives or wait until the revenue is actually in the door? If she hires now, she may have to cut her own pay until the new [music] business materializes, and there's no guarantee it will. She still remembers the last downturn when she had to lay off people she cared about, and she's determined not to repeat that experience. But [music] if she waits and the clients do sign, she risks something else. [music] Overloading her existing team, burning people out, and falling behind before she can recruit and train new hires. The pressure is even higher because she's already set an aggressive revenue goal for 2026. Plus, Jackie Russo responds to Sarah's dilemma by [music] explaining why she's adopted a different approach to planning and budgeting. Instead of guessing how much she can afford to spend, [music] Jackie is changing the order of the math. After revisiting Mike Mallowitz's profit first, prompted by a story highlighted in the 21 hats morning report, she's begun setting profit targets first and forcing every other decision, including hiring, to fit around them. It's only been a few weeks, but Jackie says the shift is already changing how she thinks about risk, growth, and what she can actually afford. Even in good times, owning and running a business can be a lonely pursuit. Our hope is that these weekly conversations will let owners know they are not alone in facing challenges. In fact, that's the whole idea behind the 21 Hats community, [music] engaging with other owners to get the kinds of insights only another owner can offer. [music] If you're interested in learning more, you can sign up for a free trial of the Morning Report newsletter, which highlights the most important news of the day for [music] business owners and shows how other owners are confronting challenges and seizing opportunities. [music] Just search the 21 Hats Morning Report to subscribe. Joining [music] me this week on the podcast are regulars Shannon Kennedy, CEO of Kiwi Vision, which is based in San Francisco and manufactures the Morgan Square measuring tool. Jackie Russo, CEO of Brand Russo, a marketing agency based in Lafayette, Louisiana, [music] and Sarah Seagull, CEO of Seagull Communications, a public relations firm based in San Francisco. [music] The episode is titled I expect to grow this year. Should I hire now? Welcome Shannon, Jackie, and Sarah. It's great to have all of you here. So Sarah, I gather business is pretty good, but you're feeling some anxiety over what to do next. Uh, in the emails we exchanged before this session, you indicated you think you probably should be hiring, but you're a little hesitant. What are you thinking? >> Well, I love that you call this sessions, first of all, cuz it is like kind of like therapy. Kind [laughter] of talk through everything that's going on. But for your listeners, I mean, most of them have heard about the reset that I had to do in 2023 where we had some clients leave um for various reasons, right? you know, not for our own lack of skill set, you know, it was mostly their funding issues. >> It happens. >> It happens. And I let people go that I really liked and I valued and I thought were great members of the team, but I just couldn't support their payroll anymore. And so, you know, several years later, things are going well. Randomly, one of those people that I had to lay off um actually just came back this fall, which was like amazing to me. and I'm so happy to have her back. But, uh, I'm in this phase where I'm definitely pulling out of the weeds. I'm not managing dayto-day except for on a couple special clients, but I'm also in this place where like I'm I have to hire people and having the burden and the responsibility of so many paychecks, it's a little bit anxiety driving. And uh I think I mentioned this briefly, but you know, our office is, you know, it's a fine little office, but at some point we're going to have to get a bigger office cuz we have too many people. So, I don't know. I'm in this I know I need to hire people and I'm just waiting for that other shoe to drop. >> Which shoe is that? >> I don't know. I'm I'm waiting for like if everything's going well, something's got to go wrong, right? [laughter] >> Not necessarily. Tell me about the pressure. You say it it sounds like it's pretty clear to you that you have to hire. Describe why that's clear. >> Well, I mean, we have too many clients and it's just if I don't hire people, then I'm going to I'm going to risk uh burnout for my team. And I appreciate that. At an agency, we try to know have no one person um on more than six to eight clients because it impacts their ability to focus on um each of their clients if they have too many. And so we do have some people that are managing close to that, if not a couple more than that. And I know it's like, do I wait until I have enough clients to hire the next person or I'm probably going to have to just do an investment hire? >> Wait, what does that mean? What's an investment hire? Well, well, I I don't have enough business to um uh legitimize that hire, but I hire that person knowing that once I get them in place, I can get enough clients to uh offset their salary. One option is to burn my team out um and have them have too many clients and risk impacting the deliverables to our clients, which I don't want to do. or you know what I've done in the past is reduce my own salary, hire somebody and then work towards getting myself um whole again. Um I would be really curious to see how Jackie approaches this. Like do you fill the position before you have the work or you have the work then fill the position and risk burning out the people that are like filling in the gaps? >> I think I've done both and I don't think there's a right or a wrong. My tendency is to stretch, not burn out, but stretch. So, we've got the the gig, we've got the work, and you know, so much of it is in the startup and getting set up and making the plans and doing the the relationship building and making sure everybody's on the same page. The execution is is kind of just making sure people can stay on task and communicate. And so if we can stretch a little, then I know we've got that solid retainer income, then I'm comfortable hiring to keep going. >> Do you hire a straight out? Do you hire people full-time? Like we've hired people temp to perm where we have more flexibility in that where we can say, "Hey, listen, we don't have the full, you know, client list for you to hire justify hiring you on full-time, but we can do temp to perm." And we've done that more for junior level people, but I think that my we're definitely we're hiring two junior level people already. Like that's done. That's in the budget. That's fine. They're they're rel relatively inexpensive. I think I need another um manager level person just to be the overseer of some big clients. So, >> what's the market like for those people? Sarah, >> that's a hard market, Lauren. Um because what happens in my industry and I'm sure Jackie can probably relate to this is that people when they get to a certain level sometimes they will leave agency life or leave being inhouse and go independent and then just do the work as a as a as a so solo person, right? Because they don't want to work for an agency. And so you have less people to choose from in the job market, >> right? But that said, the job market is pretty tough um for [clears throat] people at least in our area. Um and so I feel like I would have luck at finding some people. I don't know. >> I want to come back to some of that. But first, Shannon, you're in a slightly different situation in that you have a a full-time job and the business you're running is still something of a side hustle, although I I gather it's it's doing quite well and you have lots of opportunity ahead of you. How do you think about hiring people? And has this been an issue for you as well? >> Yes. And this is such perfect timing because even though I'm a startup, it's moving now. I've, you know, left the ground. So, and I'm in this thought process of, you know, just even in admin, I don't know if I need one. It's to the point in order for me to get to the next level. There's so many things going on. The the company's definitely in growth. So, it's something that is on my mind. It's kind of like I'm not necessarily bringing in the funds to pay for the needs that my business has. And so I still need to pour into it a little bit, but with the expectation that, you know, it's going to take me to that next level where I can then be a bit more profitable. So both of the insights from Sarah and Jackie are are, you know, definitely helpful. But that's where I am right now. So I need to let go of, you know, day-to-day task to be able to manage and people relationship, you know, be out there and market and do the other things that need to get me there. So >> yeah, it's it's figuring out the things that you shouldn't be doing anymore. >> Yes. I think it's [laughter] funny that you talk about an an admin. I don't have an admin. I've always thought about one. My my biggest challenge is I think that I would be very good at giving them things to do because everything lives in my head. Um Jackie, what do you do? You have you have an admin? I do. Um and it's a stretch position. I'm going to use that word a lot today, I guess. Uh so we set it up as it's an entrylevel position in the sense that it's the best way in the door for somebody who wants to have a very long career here because they work directly with me. They get to be the uh marketing manager for brand stateu and for brand russo. So they learn how to handle two complicated difficult clients. uh they go through our entire system of you know planning calendar execution of all the things that we do for our clients and when they do that well for 3 four five six months then they get promoted to handling real clients and the next one comes in which means I am the turn style of new people coming in all the time but it's how we train them to be really good clients managers >> oh that sounds like a headache [laughter] >> I don't love it but you know what it works >> why does it sound like a headache, Sarah. >> Well, I mean, when I got a team that could like train the new people, like I mean, [laughter] just you're constantly training people. I mean, that you you're you're a natural teacher, I guess. I mean, I just >> Oh, no. I think people learn by osmosis and just proximity. Figure it out. >> Figure it out. You got to have that. You got to have that. >> Jackie, what percentage of your admins actually stick? >> I've got four still here. >> Wow. >> Yeah. I don't have an admin. I have an operations manager and she's one of the people that came back and I feel bad asking her to do anything small. [laughter] So, um I wouldn't mind having somebody uh just on the admin side, but I I feel like that's like a luxury. That's like getting a, you know, a Louis Vuitton bag for [laughter] me. I'm not there yet. Um maybe if I hit some of my financial goals, um I'll [clears throat] do that. >> Jackie, do you think of it as a luxury? I don't I think of it as a necessity and I we've had, you know, years without and years with and no, I'm not able to do twice as much with me and our coordinator, but it's probably one and three/4ers. And Sarah, I know you're like this, too. This is a fast-paced business. There's a lot of pressure. You're got a lot of balls in the air. You got a lot of spinning plates. And so, somebody needs to be really good at managing that level of chaos and not breaking a sweat. and I can't put them on a client desk and handle clients if I don't know they can handle that. So, if they can handle me and these two clients and running the office and the downtown workspace, you know, all those different little things, no one of those is really a full-time job. They're all a 10% job. And so, you've got 12 10% jobs. And so, if you can manage all of that, then you're going to be really good at handling our clients. >> When they come in and they learn through osmosis, like what kind of things are they doing? Um I I'll tell you the things Mary did this week. Okay? And we are three and a half days into this week. This week Mary um was one of the leads at putting on the Brand Break conference which we did on Tuesday. Uh so that was working with our PR team for this massive event that um she set up two new members of the downtown workspace. >> The downtown workspace is your own um >> co-working >> right in your office. >> Yeah, our co-working. I mean, we have, you know, offices and desks and so there's members and they're coming in. She's got to coordinate because we are the virtual mail office for people. So, when we get mail for people, she's got to let them know. It's a bunch of little things, but you got to keep all that straight just like a client. So, planning the February content for Brand Russo and for BSU. Now, Mary's not writing Bran Russo's content. Michael is, but somebody's got to wrangle him. And so if you know how to get him to pay attention to his tasks and stay on deadline because like all creatives, you know, he's got a lot to do and he's gonna push to the last minute until he gets inspired. And so she's got to go push for an answer without being pushy. Uh she coordinated on an email campaign for um a new client we just onboarded that I was kind of setting up. So she got to learn that. It's a lot of things. >> That's kind of cool. I mean remember the old term, you know, my girl Friday. >> Yes. It's kind She's kind of like that. >> It's exactly like that. Oh, and we started our new intern class. So, we have I think six interns from the university or seven. And so, she had to get them all set up and you know, so they've got to have login and computers and where are they sitting and what cl what projects are they working on and who do they answer to? >> Yeah. >> How long is one of these admins typically in that role? >> Three to six months. >> And then they get to work on a client. >> Yep. >> Shannon or Sarah, have either of you ever thought of hiring a a virtual admin? I I've interviewed many organizations that offer virtual um and I've talked to people about virtual admins all the time. I'm not a virtual person. I have to just tell you that I don't think I would be successful with a virtual admin. I think I'd have to have the person in my office. >> How about you, Shannon? >> I've thought about it. I've, you know, you know, like you said, figuring out what I need help with. for me. I mean, I've talked to a couple people, but I'm still, you know, I can still handle it, but I'm okay with virtual, uh, you know, it being in the technological space and plus with with, you know, my business, it's more of a product driven things could be set up online, you know, thinking about like marketplaces and things such as that. Um, so it's not necessarily, you know, that I need someone in front of me, but that's where I'm, you know, thinking about it, but I don't know that I have enough to give them at this point. What's interesting, I've started like a list many times of like all the things I would have an admin do. >> I've been doing that. I've been doing that. [laughter] >> And you're still not impressed enough with your own list. >> No, I just I feel I I I don't know. I might my maybe it's my Bostonness in me, but like it seems indulgent to me. And I like the way that Jackie is doing it where it's not really it's an admin, but it's it's really a launching pad. And I I I think that's cool where it's and it's something that I could see here too where you get somebody who for example has absolutely like they didn't go to school for PR or journalism. Um which is fine for me because like I didn't go to school for undergrad for PR or journalism. I went to school for international relations. So you're looking for that first employer that saw something in you and goes, "Okay, you can do this." My mom was a French history major in undergrad. She ended up being a a tax accountant. So, like your undergrad doesn't necessarily define your career. Um, I feel like you find that as you go through your first and second and third jobs, but yeah, it might be a great way to find somebody who you're like, I like how they they they conduct themselves. They're good communicator. They are somebody I could eventually put in front of a client. They're somebody who could actually lead a client someday. >> Yes. but they don't have any of the the the check boxes that I need in terms of they know how to use this system and that system and they know how to put a campaign together, but I see something in them. So, hey, you know what? I'll give you you can you can be my right-hand person and learn that way and then you'll eventually move on to accounts. I like that. That's really smart, Jackie. Thanks. >> No, definitely. And and you know what I was thinking when when Jackie said that I was like that's in a way it's succession planning and that's something you know that I foresee that I'm going to need. I have you know a few people on my team but having someone that does what I do is a whole different game and that's you know where I'm like okay well how do I do this and they're not going to have the experience since I'm pretty much building this plane while flying it. Um you know but I that was a great point out. So yeah I think it's cool that Jackie you do that and like I said I was like oh succession plan and that's something to consider too down the line as you know I grow. I don't want to do this forever. I'd like to do it for now, but it's if you want to keep it going, that's the part you need to think about. >> Well, my theory is our clients are our most valuable asset. They're our resource. They're everything. And I can't just put somebody on a client project or account without knowing that they're going to handle it the right way. >> Right. >> And so, how do you know unless you work with them and I am their client for six months? >> Yeah. But you don't do that with everybody. You hire senior people right out the gate, don't you? >> I'm racking my brains of 25 years of brand developers and I can think of one that we hired that did not go through this process. >> Really? Wow. >> Yep. And she came from an agency in Dallas and she had an amazing reputation and she was awesome. She was with us for years and years and years and is now at a different agency across town and I still have great respect for and admiration and we like each other which I cannot say about everybody who's left here. But so yeah, that's it. I've got one and I I may be missing a second one, but I don't think I am. >> We do that for the most part, but it's not it's not a perfect science. My agency happens to be mo like majority women. Not by per it's not done on purpose. It just happens. PR and communications tend to be very dominated by women. Um but we hired um a a a young man um uh and literally threw him into the fire like week one. We're like, "You're on client calls. Here you go." So um but his resume and his background was he had six he had six six years at a previous agency basically doing everything that we do. Um so we like to hire people junior people and bring them in but we also find that because we have such a diversity of clients um some of those people stay for a while and then they move on into a specialty. Like last year we had um uh one of our team members, she went um from us to starting to work in biotech um because she was very interested in that space and had a little bit of exposure through one of our clients. And then um this December we had one of our um team members who had come on as an intern as well um leave and go into to a tech agency because she she was exposed to that through some of our clients and really wanted to hone that skill instead. So we also are a little bit of a a learning platform for them to find what their specialty is because what we do is not for everybody and I get that. Did the guy you threw into the fire uh succeed? >> Oh my god, he's so great. We're so happy. >> That's the exact opposite of what Jackie was describing. She's It sounds like she would never throw somebody into the fire like that unless absolutely necessary. I suppose >> we also put our interns on client calls like right away, but we tell our clients like, "Hey, we have interns that are going to be on the call." And that's because we want them to hear what you're saying and like learn the business. And most of them are are fine with that. I don't think I've ever had anybody say, "Oh, that's not something we want." >> Oh, ours will audit, but they're not taking lead. >> No, we give them projects though. What we'll tend to do is like we have a big Monday morning meeting, right, where we go through our clients and everybody talks about kind of the projects they're working on. And usually when it's like an intern or a new person, like the first couple weeks they're quiet, but then um I will tell their their manager like, okay, they have to own something that they're updating and and talking to the team about. And it just gets them used to being having to go through for an audience. And then once they're comfortable doing that, then we'll have them own something small on a client agenda, like say they the back and forth with a reporter, we'll have them give the update. Um, and so they're usually like so nervous though. It's really cute. Mhm. Cuz they want to do well. They care. >> Sarah, you mentioned uh tight quarters. You like your office, but um it's smallish. Would hiring the the manager that you're talking about possibly hiring. Would that throw you over the limit where you would have to get more space? >> No. But like we started on one floor and then the people in the office upstairs from us left and it was empty for a while. So I negotiated with our landlord who owns the building and owns the retail shop in the in the downstairs. It's like a funky old San Francisco building in Chinatown. And so we took over the second floor. Um and our lease runs out uh not this May but next May. And if we continue to build as we are going, we are going to be uh too many people. We just don't have enough private spaces for conference calls and stuff where I don't think people will be happy. And it sucks because I really love this office. I love the location and I love the price. And with all my all these AI companies coming into San Francisco, like I'm getting worried that I will be able to afford something different when our lease runs out, >> which is leading you to think about maybe moving sooner. >> I don't know. I don't even know how you do that. You have to finish your lease, I assume. I've never tried to get out of This is the first commercial space I've ever had, Lauren. Like, I don't know if I can do that. I'm sure that there's a possibility, but I also don't want to pay a year and a half of rent uh just to move. >> Any chance that your landlord has a bigger space you could just switch to? >> No, they don't. >> Okay, then I I my vote would be not to do that. A, you don't know what year and a half from now is going to look like. So, you have a couple of options. One, create some sort of an optional work from home. or two, create a rotating system so the whole team is together for team meetings once a week and then it's shared workspace and not everybody works from the desk all the time. >> I'll think about those. I'm not so into the second option. Um I I don't I just think that the logistics of something like that. >> Are you people coming in most 5 days a week? No, most required to come in Tuesday, Thursday, and then Wednesday we have a bribery thing where if they come in, they get extra stuff [laughter] and they like to because if you think about it, when you're young, your network of people, your community is built on the people that you work with. Like I'm still friends with people that I worked with in a tiny newsroom in Binghamington, New York, you know, like I still know those people well because I was in the trenches with them. And um we've definitely hired people that had previous jobs that they were working from home and then they've been like it's so nice to like come in and talk to people and have those little side conversations and it just you just get so much more out of your day. Sarah, you mentioned that you're at ground zero for the AI revolution. Uh, >> and I know you're interested in adopting AI where possible. You've talked about that here before. >> Yeah. >> Has it changed anything for you? I mean, are you able to do more with less and could that provide something of a solution here? >> We were working a lot on it um in the fall, more so than this year. This year I've been a little bit sidetracked on new business. I swear to God, people are coming out of I don't know about Jackie and her space, but like people are coming out of the like the corners. Like they're like people I haven't talked to for like two years. They're like, "Hey, you know, I know we talked two years ago. I'm like I'm ready to get going now." And I'm like, >> I'm in my 15th day of drowning this year. >> Yeah. Yeah. It's it's been >> Are you both talking about drowning in potential clients? >> Yeah, >> that's a good thing. >> Yes. No, it's great, but it's they're not all going to pan out, but you got to go through the process with every one of them. And then there's all the other things I already had in process. So drowning. >> I I'm right there with you, Jack. I don't know what's in the water, but everybody all of a sudden I think that you know part of with us there's this realization maybe that the value of what we do in terms of visibility specifically like social media like it's where young people they don't read anymore. I'm sorry love love newspapers love magazines but people don't read anymore. They certainly don't watch like local news and and TV and commercials anymore. Their decision making comes through their their digital exploration. So whether or not that's social media uh chat GPT or you know AIdriven recommendations like that's where people go and so people I think are are finding a a reason to invest in that and experiences as well. We have a lot of clients that are like oh well we want to do more things in person so people can come and experience it. But yeah, it's been busy busy. >> So AI hasn't really created the uh the productivity gain that would make a difference for you. >> And I wonder if Jackie and and Shannon have the same experience, but like everything is a AI thing now. You know, it's like you're being saturated with all of these different tools and solutions and ways to do things with the new AI, but what has longlasting value for you? >> I think you've talked about you love doing that. You like trying new things? >> I do. I tried one this week. It was a really cool one where it's a it was a tool that big problem with social media is um is tracking when an influencer posts on behalf of your client, right? Uh stories on Instagram are fleeting. So, they only stay up for a certain period of time. So, your team is having to kind of watch and see when it posts, when it posts, so they can screen grab it and get the metrics, all that kind of stuff. There's this new AI company that figured that all out. does this automatic screen grab of like everything that a potential that an influencer does. So I I certainly go through all of those things, but they are all doing the dog and pony show and and really if I have a budget of x number of dollars, where is going to be the most valuable for me to spend that money? >> Shannon, is AI changing your life at all? >> Um, it's um well, I'm using it a little bit. I I don't know about changing it, but I would say maybe enhancing it. So for me, since I have a physical tool and I am not as experienced in the trades as a regular trades person would be, there are some things that I utilize AI for to either make sure that it makes sense or that, you know, when I'm I'm writing something or need to reply to something that I can utilize AI to do research, you know, about construction, just things that I don't have experience doing, but I'm able to gather the data. I was wondering like um your your website is a uh you know you could obviously purchase the product on your website. Have you ever thought about having like a a chat bot on your site that where you could if people had questions about it could use AI to make that chatbot an expert on construction and framing and all that kind of stuff. So it's able to speak the language of your potential customers. >> Yeah. No, that's a great idea. I have thought about that. It would that's and and that's part of some some changes that I'd like to implement. So yes, I guess and changing the business. >> Shannon, I know you've made a lot of progress getting your product on uh storeshelves and on websites. Uh I think you're hopeful that you're going to wind up in some of those big box stores like Walmart and Home Depot. I guess you are in some Home Depot. What have you learned about getting in uh the door in those kinds of places? So getting in the door literally I think in this age for for me with a product I'd rather be in their online store. So I am on homed depot.com. I'm also on walmart.com. What I've learned is if to put it in the store itself it's going to cost me a lot more money. >> What what's the expense? Is it >> buy that shelf space >> that well the shelf space and the and the profit margin they they they're wanting 50 at least 50% margin to be in the store and then I' I I've heard stories I'm not sure yet but you know some of the bigger box stores that if they buy a a large amount and it doesn't turn over within a certain amount of time that you may be responsible for buying it back. I don't know. I haven't looked at that detail. >> I'm sure that's true. >> So people are shopping from their phones or shopping from their their laptops. Uh people go to trade shows because there is a lot to see in one place versus if you you're looking for uh you know a framing tool, you can just type in framing tool and you'll get a list of them. They want to feel and touch the new things which is why we go to the trade shows. Um and that that's what is getting me to these stores. But staying online, it it seems to work. People don't want to go into places to buy what they need. So, if you can get the orders, you know, in a day and send it out that day instead of someone going to wherever they need to go get it, getting out of their cars, waiting in line, not Some people still love it, but there's not as many people doing it as they used to. >> Jackie, I think this is somewhat relevant to the discussion we've been having about deciding when you hire people. >> Yeah. >> You changed your budgeting process this year. >> We did. >> Well, first tell us what that is and then tell us whether that's had an impact on how you think about spending the money that you do spend. >> It does. And you know, I just think sometimes the universe sends you signals, you know, and everything aligns. So, I bought the book Profit First years ago. Uh, I'd read Pumpkin Plan with same author and, you know, I think he's brilliant. I was excited. I read it and it kind of made sense, but I wasn't obviously at a time to hear it. And then I don't know what was it maybe two weeks ago in 21 Hats, you mentioned it. You you talked about it. You had a recap of somebody who had talked about And I was like, "Oo, I need to pick that back up again." And boy, was it all of a sudden everything was clicking. I was like, "Oh my gosh." And then I remember thinking, "Boy, I wish I'd had this 5 years ago." And I was like, "Well, dummy, you did. You just chose to ignore it 5 [laughter] years ago." And so, yeah, I've sat down and and it's how we live our personal lives. You know, we're quote unquote envelope people. And so, Michael gets an envelope of of money allowance every week and that's his to spend. No bills, no responsibilities, just yours. Wait, you literally hand him his >> I literally do like an allowance. [laughter] Luckily, he is confident enough in his masculinity that he does not feel like I'm treating him like a child. He has requested it, just to be clear. But that way, it's broken up by week and it's easy for him to get his head around it. He has expensive hobbies, so we got to keep him wrangled in. And he will tell you that he absolutely married me because I had more money in my bank account than he did and I knew how much I had and I knew how to keep it. And so, he just thought those were the coolest things. So, >> well, you've told us that he doesn't know how much he gets paid or how much money the business makes. >> No, both of those things are true and no one needs to tell him. That's not information he needs. We are on a need to know basis. And actually, funny enough, he and I were at a a lunchon with a a group of female entrepreneurs and we he was telling them this story. I was sitting at a different table and I joined them like for dessert and they looked at me with I don't know if it was fear, horror, awe. I don't really know [laughter] what the expression was. And they they said to him, "If another woman was telling us this, we would be rescuing her." [laughter] And I was like, "No, he's happy. Leave him alone. The system works." But so I believe in that. You know, I think you're supposed to pay yourself first. I think you've got to prioritize your long-term savings, short-term savings. You got to have your emergency account. I do believe the psychology that um time is going to expand to fit the space you give it and expenses are going to expand to fit the account it's coming from. And so when you mentally see you have X dollars in an account, well then that's money you can go spend. >> Well, the first step is you have to have the discipline to actually do this. >> Heck yeah you do. >> How do you mechanically do it? How do you make it happen and make sure that you don't slip? >> I followed every step of directions. I built out the actually he he recommends five accounts. So, Michael McCowitz is the name of the >> law. I was not even going to pretend to pronounce his last name correctly, you know. So, you have your operating expense account, you have your tax account, you have your profit account, you have your owner compensation accounts, you have all of these set accounts, and two times a month, and I want to say it's the 5th and the 25th, you sweep into these structured accounts. You pay your bills, you do certain things at certain times. It's a very timed structure setup, which works for me. I like it. And then you have another set of accounts that are long-term at a totally different bank. No ATM card, no easy access transfer. Like it is bury it in the backyard in a bucket and forget it's there kind of stuff. And so I set up my separate over there in a very highinterest savings accounts and um I started you know last week. I shockingly in six days have not seen a complete overhaul of our entire system yet. But I am seeing that the process is pretty easy to follow if you just put all the steps in place. And it it makes sense to me which makes it easy for me to follow it. If it didn't make sense, I would struggle. In our 25 years of existence, we've had three different CPA firms, which some people may think that's a lot or some not enough. The first two I was not super thrilled with, but they were each around for about well cumulatively 22 years. the one we have now that we're in our second full year with um I am thrilled with. They explain things to me in a way my little entrepreneur mind can get its head around. I have never understood. Then I could have written the first chapter of the book cuz the first chapter he says he's talking to these entrepreneurs and they say they go to their CPA and their CPA is like look at all this profit and he's like where is the money in my account? And they're like, "Well, no, you have profit on paper." That I've had those exact conversations with all three CPAs. But the third one was like, "No, dummy. Here's where you spent your profit." I'm like, "Oh, okay. Now it makes sense." And so the accounting system of sales minus expenses equals profit doesn't make sense to me. This system of actual operating capital, so you take out things that are not yours, which in our case would be media. That's not my money. That's my client's money and the media outlets money. I'm just the go-between. So, I got to get that out of my mind. That's not mine. And then I take out tax money because that belongs to the government and owner's compensation, which we're fairly compensated. So, I don't have that kind of problem that other entrepreneurs do. I've had a paycheck since day one, but I want to keep it properly accounted for by the percentage that he suggests. I like that. And then profit right there comes off the top. And then what's left is my operating um money. And that is the smartest thing ever. I love it. >> Well, that's leaving you with less money to spend, though. >> Yes. Which is the whole point, Lauren? That's the whole point because you're going to spend as much as you have, so you need to have less in that account that you look at every day. >> Has that forced [clears throat] you to make some difficult decisions? >> Well, I was already making them. I just wasn't sure how deeply to cut. And so, this has given me really good insight on what I need to get to. And so, I have a lot of clarity now on how to get to it. And, yeah, it's going to kind of suck in the short term, but I'm excited about it. >> What's going to be the most painful cut? Oh, that's a good question. The most painful cut actually is going to be the time that I have to invest to go and track down all the stupid things that we don't use anymore or don't need anymore or don't have anymore that no one, and by no one, I mean me, was properly babysitting and keeping track of. And then I'm going to be really mad that I should have canceled it 6 months ago, 24 months ago, I don't want to say 36 months ago. And I'm going to add up that amount that I have wasted. and then I'm gonna be angry and then I'm gonna be glad that I'm finally doing it. >> These are software subscriptions you're talking about, I'm guessing. >> Yes. Well, it's software descriptions. It's client. It's things we do for clients. It's it's a lot of stuff. >> Can I ask a silly question? >> Sure. >> Um, when you do media buys for your clients, I've heard this that some agencies like they do it on a credit card and that way then you get all these benefits and perks back from it and then you're just constantly paying that off. Do is that how you guys operate? >> Oh, let me tell you, the last time I gave Delta US dollars was 2016 and I fly a lot. Um, and I pay I pay off the MX every Friday. >> Okay. So, you do do it with all points. Okay. >> I probably have a balance of about 2 million um Delta miles >> because you pay for it all on your card. I was wondering cuz you you two travel a lot and I was like, I need to do what she does. But that's really smart. Um, in terms of doing your budget, my uh CFO, I have a fractional CFO and my operations person are having they put an hour on my calendar for today to go through um my books and my budget because I put together a pretty, you know, big audacious goal in terms of our what revenue numbers I want to hit by the end of the year. And uh they're like, "All right, if you want to do that, we're going to do math and you got to listen to it." So, like I'm a little anxious, but I'm pretty good about um maintaining profitability in that I I did a session with uh this guy um who's [clears throat] fantastic. I pay for my team like their salary and stuff like that, but their rates are based on what I their cost to me. I add in profitability into their rate. So their hourly rate is encompassing of that plus all the benefits and stuff. So and then when they track hours, their hours are tracked based on that overall expense. Um so we're able to um price out projects um um pretty pretty well um and are able to have that profit. The challenge is is like as we grow, I'm having to hire more people that are not billable and I'm becoming less billable. Right. >> Um, so it's how do I subsidize that? I don't know. >> Yeah. >> Are you comfortable sharing what your audacious uh revenue percentage uh growth is? >> Well, I want to hit 2 million by the end of the year. I'm I'm not and I'm not at 2 million. So like I want to hit 2 million by the end of the year. >> Do you know what percentage growth that would require? >> I will know by the end of the day. [laughter] I'm talking >> and this is why you're thinking about hiring people because you want to hit that goal. Yeah, we're you mean we're already uh you know 20% into it. We're to we're moving quickly and that's that's where I want >> 20% into what? >> The 2 million like making that number and we're not even halfway through January. >> That's awesome. >> 20% of the additional revenue that you would need to hit 2 million, right? >> Yes, sir. >> Got it. >> Um which is why I have anxiety because I'm like, is this sustainable? Um and it is sustainable. I know it is. I just need to make sure that there are systems and people in place. Um cuz I don't ever want uh a client to turn around and be like, "Well, um what have you done for me lately?" >> I remember talking to you when it what it was like when you had to let people go. And I've been in and around situations like that. I know how painful it is, but you did survive it. And here you are a couple years later doing really well. If you hired and something happened, the economy turned, whatever, and you had to back off again. >> Oh, I'd be much easier this time cuz I had never had to do it before. >> So, that you do view that, I suspect, is something that's survivable. >> It is. It's survivable. I The first time you have to do that, I think it's just awful. Um, it's a terrible experience. >> Well, it's always going to be awful. >> I'd never let anybody go before. um for not for I mean I let people forgo for cause but not for because I I felt like a failure. I felt like I failed in running a business and they were the >> collateral damage. >> Yeah. Exactly. And once I did it, I mean the very next day after I did it, there was this mass amount of relief I felt because all of a sudden I'm not like having to like, you know, rub two sticks together to make payroll. And so I'm glad I did it, but I certainly don't want to do a step and repeat. The people that I hire, I like the people like and I want them to flourish and I want them to grow. And also like the vibe that happens when you let people go, it's terrible. It takes a while to like get people feeling good again. >> Although you did hire some of those people back, so clearly they took it the way you wanted them to take it. >> They did. And it was funny though, the woman I hired back, she texted me and she's like, "Hey, you know, I'm leaving my position because of X, Y, and Z. Um, I'm going to be starting looking for stuff. Would you be a reference?" Like, of course. I was like, "Do you want to come back and work for me, you know, just temporarily while you're finding stuff? I mean, I I definitely have work for you to do. Um, because there's a lot of things that you created that I haven't touched since you left." And she was like, "Yeah, absolutely." And um uh she came back and she said that you know she worked at a lot of different places but it was interesting because she really appreciated the value of the workplace that I created by experiencing other ones and I was I felt flattered by it. >> That is very flattering. >> So I'm so delighted that she's back like she was the first person I ever hired Lauren. So, wow. She she knows where all the dead bodies [laughter] are. >> So, what's keeping you from pulling the trigger? What's the main thing? Is it the the fear of having to lay people off again? Is it the real estate? Uh what's the main issue that keeps you from pushing that button? >> Um I just want to make sure I'm doing the right math. You know, like I think there's no guarantee on it, but things happen. you know, there might be a client that we've had for a long time that goes, you know what, we need to go in a different direction or we ran out of money. Like, I can't control things that I can't control. Um, and I think that it's more mental than not mental, but um I think I do need to pull the trigger um and and get that going because I sense my team is going to implode if I don't hire an additional manager or they're going to they're going to come back and they're going to come at me with pitchforks. At least they get it though. I'm very transparent with everything. Like they have visibility to everything that I do. >> Jackie or Shannon, do either of you have any words of encouragement for Sarah? What she should do? >> Because this is a session. My therapy. [laughter] >> That's what you asked for, right? >> It is. It is. >> Go for it. Go for it. I think you should go for it. Go for it. I mean, >> yeah. Go for it. It seems like everything is lined up. You don't necessarily have to move. Now, I understand that, but you're going to need that help. And why not be prepared for it then than be halfway down and go shoot and then try to try to hire people when you need them. Start it now. Get ready. Get you deserve it. You've been working hard for this. So, why not jump? I I will probably reduce my own salary for the first couple months just because I like to have like a little bit of padding in the bank just to make sure that like I can I can do this, but it also motivate me to make sure that like I'm getting them enough business to justify their existence. Um I'll get paid at the end of the year. >> All right, my thanks to Shannon Kennedy, Jackie Russo, and Sarah Seagull. Thanks for sharing everybody. One thing before you go. Everything we do at 21 Hacks is created by entrepreneurs for entrepreneurs to help us all learn together. If you get something out of listening to these podcast episodes, consider joining the conversation. [music] You can do that by joining the 21 Hats sounding board, a Slack channel where you can tap [music] the wisdom of a very smart crowd or by becoming a founding member and joining our monthly Zoom forum where you [music] can be part of conversations much like the ones we have on the podcast. You can sign up for both by subscribing to the Morning Report. If you have any questions, you can email me at lauren21hats.com. And if you get something out of this podcast or out of the morning report, [music] please tell a friend, tell an enemy, tell every business owner you know. Your word of mouth owner to owner will always be the most effective way to build this community for all of us. Thank you. It means a lot. This episode was produced by another entrepreneur, Jess Stubberon, [music] founder of Blank Word Productions. Thanks for listening, everyone.