I Used to Sell to Consumers

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Paul Downs Jackie Russo and Sarah seagull talk about how they wound up pitching their products and services not to Consumers but to other businesses they all agreed that selling to business is more profitable and they all agree that it has other advantages as well in general says Paul it's easier to sell to businesses because the person you're talking to it's rarely there money but some aspects of selling B2B can be harder for example how do you break through and reach the right person at a business especially if you're trying to reach the owner directly and of course there's always a learning curve selling to a big business requires a level of professionalism that can be challenging especially early on plus Sarah explains why even though she had a lay off people last year she's doubling her office space this year Jackie is exploring what policies make High offices most effective and Paul who says he's having his best year ever spells out the way he calculates when it's time to add employees as he had to do earlier this year 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 same thing with our daily newsletter the 21 hats Morning Report which in magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are regulars Paul down CEO of Paul Downs cabinet makers which is based outside of Philadelphia and makes custom conference tables Jackie Russo CEO of brand Russo a marketing agency based in Lafayette Louisiana and Sarah seagull CEO of seagull Communications a public relations firm based in San Francisco the episode is titled I used to sell to Consumers before we get started I want to play part of an interview I did with Steve Baker who was a vice president with our sponsor the great game of business in this segment of our conversation I asked Steve about a presentation I saw last September at the great game conference the presentation came from a consulting firm ITR economics that is predicting we will EXP experience a depression in the 2030s much like the one we experienced in the 1930s I asked Steve what the great games suggest businesses do to prepare for a depression well first of all you got to get over the fear I think fear is the right response well absolutely the fear is the problem right and and think about the last depression the only thing we have to fear is fear itself that's what Roosevelt said what we have to do is we have to say okay look we know it's coming I said earlier the world breaks every 10 years anyway but we have the silver tsunami happening when this Pig goes through the python so to speak we're going to run out of people uh look Japan is already dead as far you know zero population growth uh Germany already dead and when I say that you know what I'm saying it's it's about their Workforce uh China by 2050 will be half the population it is today why on Earth does Steve Baker know this stuff mean the population or half the population growth half the population remember they had a one child mandate for many many years they did it to themselves here's the thing we're going to be in a pickle too the one of the things that will save us believe it or not is that we do have people that want to come to America and make a run at it so the thing is we're still going to have a problem and uh the when you look at something like that as harrowing as a depression sounds you got to look at it through the eyes of the experts that you can trust we we trust ITR economics because they've been doing this for something like close to 80 years they're they're 90 plus% accurate as soon as you get over the nausea and the the terror of there's going to be depression you go well wait is it going to be like the 30s is it going to be different what does that mean our approach to it is this we know it's coming there's still years to go and we learned something in the in the uh uh the last recession was hey let's do this let's set aside a war chest and this war chest is not to be covering payroll it's not to be covering uh you know the bills so to speak it is for opportunities that will present themselves during the next recession we're approaching the depression the same way because guess what if we walk in the depression with 150 million in cash equivalent well if it doesn't happen we're just rich but if it does happen this is how we grow the next 40 years right is to take advantage of all the things that will be on a fire sale the key is you know you want to buy when everyone else is selling you want to buy when there's blood in the streets and it's not that we're heartless cold capitalists it is that someone's going to buy it why can't good people buy it and why can't we create opportunity jobs and wealth for the people who want to be a part of our organization you have one choice you can either be smart or you can be a victim and I choose to be smart you can read a text version of my entire interview with Steve at 21h hats.com and now on to Today's Show welcome Paul Jackie and Sarah it's great to have you here I want to start today by asking about something all three of you do which is you all sell B2B uh to other businesses and we've certainly noted that here previously but we've never had a a conversation in which we specifically addressed the challenges the opportunities the pros and cons of selling to businesses as opposed to Consumers uh this was triggered for me by a question I saw on the small business subreddit the question was headlined B2B is difficult let me read it to you um everyone wants to be able to sell to someone but doesn't want to be sold to myself included we see it here often with the sheer disdain toward marketers cold calls emails really anything that wasn't asked for I realized that selling to us types is harder so why are we the way that we are is it not hypocritical so I I I want to get your answers to that but but first before we talk specifically about those questions and about selling B2B in general I want to talk about the numbers until I saw this question it had never really occurred to me to check and see what percentage of the regulars on this podcast sell B2B and somewhat to my surprise it turns out all of them do including me um of course three have significant consumer businesses as well Liz Laura and Jay um but I was kind of surprised by that so I asked chat GPT what percentage of businesses sell B2B any of you have a guess do you know small I would say 15 the opposite I would say the majority and you would be right Jackie uh Paul I was kind of thinking along your lines well what's the definition of a business well I wait I have a question I'm confused so you said what's the percentage the percentage of businesses that sell specifically to other businesses as opposed to Consumers and according to chat GPT the percentage is 75% yeah but chat GPT makes stuff up all the time so the first thing is I would want to know is what is their definition of a business because as my understanding is the vast majority of businesses just number them by things that are called business are quite small usually single person and so that's a huge number of businesses that probably aren't selling B2B and would be the denominator in the percentage so uh I asked Chad GPT a couple of days ago when did carrots start to be a popular food item and Chad GPT told me to my surprise that it didn't happen till the 14th century and it took about 10 seconds of looking to realize that carrots have been around in European Cuisine for at least 10,000 years before that so just because chat GPT gave you an answer doesn't mean anything to me anymore here here's the real question Paul why on Earth were you asking that CH GPT uh it was my wife and I were just talking about cooking and what I was curious about was whether carrots were one of those things like tomatoes or potatoes that have been introduced to European Cuisine after America was discovered so the answer the 13th century doesn't make any sense in any context because it would be prior to Columbus finding the new world but it would be so much farther after people started cooking in Europe and other places that it just like where did that even come from now this was to be fair this was Google's AI their little summary at the top of these search results saying here's what we think it is and then all the search results immediately below that directly contradicted this AI generated answer and that's the same place that said uh a popular topping for pizza is glue so yes your correct AI can be wrong but but Jackie knew Jackie how did you know well because that's what we do ourselves are B2B but we primarily work with B2B clients and so our clients sell to other businesses and I am even though I know I am still regularly Amazed by how many business are out there that I've never heard of in industries that I've never heard of making things that I've never heard of that are sold in the millions and sometimes billions um the layers of nuances in Industry are fascinating to me every day and there are far more businesses in this country that sell goods and services to other businesses for commercial use than there are uh businesses that are retail or open for everyone to come in and buy but my question also is but where's the money at like you know is the percentage does it make sense like is the money really in one B2B or b2c yeah there's more there are more dollars um moved in the B2B space than there are in the B Toc space in the 23 years that I've been doing this are you typical of all businesses I'm still very suspicious to this question because a we don't know what the definition of a business is I don't know how many of them there are are there any boundaries in terms of size is the size dollars is it employees and then that the amount sold is that in dollars is that as a percentage of revenues like all this is so vague I just uh I have a hard time with it I would Define B2B we'll just start there uh with a business that sells a good or service to other businesses and by contrast B Toc business to Consumer the typical way to kind of differenti iate those uh in just terms of layman terms is in the b2c space you typically have either a website or a brick and mortar store that is um open to anyone just about anyone could buy and use the things you sell and so if you look at a company that manufactures lug nuts that are to be installed in the um use on 18 wheelers that's not a regular thing that every day people need but shampoo and soap are so there's your kind of two differences okay that's a definition I mean if that's if the answer that Lauren kicked out actually reflects that definition sure then I believe it but sorry Lauren what what did you say was the percentage of businesses by this uh 75% 75% 75% of all businesses are primarily B2B yes I find that difficult to believe because again I don't know what the definition of a business is I think you're you're asking some some good questions Paul I think there are answers to them um but I don't have those answers I do think there's still an interesting conversation to be had here though about what it takes to sell B2B and why you guys chose to do it and how you wound up where you are and and the questions that the the person asked on uh on the subreddit well I will say that I've done both and that for the first couple of Decades of my business I was primarily business to cons consumer and then we switch focus and now we're business to other entities besides consumers could be business could be government could be military but it's not consumers it is way easier to make the sales to anybody but consumers at least what we sold because it was a high cost High commitment item and yeah I was going to say it depends on the price yeah um in general yeah it's easier to sell the businesses because the person you're talking to it's rarely their money that makes it whole a lot easier Jackie did you make a deliberate decision to specialize in B2B we started in b2c um my first couple of years of clients were all clients in a b Toc space uh auto dealers and restaurants and furniture and casinos and hospitals you know all kinds of of General retail B Toc I realized about 2008 the shift that was happening in the advertising industry was going to dramatically change media buying and um traditional advertising and my future and we had a real skill set in the strategy and we had started to do some beab work and we' started to be more involved in the creation of strategic planning and we liked that better and quite honestly it was more profitable and so we transitioned did you have the same sense that Paul had that it's easier to sell to businesses than to Consumers I think so not for the same reasons that Paul just mentioned um because a lot of the businesses that we work with we're working with the the people who own the business and so it is their money uh but I find that it's easier because it's specific and I think anytime you can be specific it's going to be a lot easier to um have a plan for what you're going to do to be more successful with that plan to know what is and is not working to implement that plan retail can be so much um wider and therefore vager because it's like who are you selling to you're trying to sell to almost everybody that's going to be very hard success I'll go back to the lug nuts for 18 wheelers there is a finite number of companies who are buying lug nuts for 18 wheelers so it's a lot easier I think to be successful when you have a finite specific spe ific number of people to go sell to you just have to get to know them really well develop a relationship with them and sell Sarah you sell your service to other businesses but some of them are buying your services to try to reach consumers do you think about this much does it make a difference to you B2B B Toc we have both so we have a lot of consumer lifestyle clients but we also have um we always have a handful of B2B um clients I have to say that I agree that um with Jackie that um B2B pays better um I mean it just does don't tell the others yeah it just they have bigger budgets they have you know it they're they're bigger industry um they are harder in terms of what we do in terms of press and media and social media and content they're harder to service those because you're always challenged and trying to some of them just want like trade recognition but most of them come to us because they have the trade already but they want to break through into like General business um uh coverage and so we're we do a lot of kind of content and news creation on their behalf and which is a lot of work so you know while they pay better we're also um having to do a lot more strategic thinking um for them and then in terms of the lifestyle um they're easy they're fun they make the day go by quickly you get satisfied when you're why not that your client is featured in you know Vogue or in you know some lifestyle publication like pop sugar what have you like that's fun so um I like having both um because I think it gives us a balance um and we're able to take learnings from each kind of client we're learning different different um strategies and tactics so the person who wrote this question on the subreddit uh has a slightly different perspective than you guys I think this question suggested you know the headline was B2 be is difficult and it was making the point that other business people that this person is trying to reach don't want to be reached a lot of the time they're not asking for the kind of Outreach this person is is trying to do so bad Outreach I'm going to say because on any sorry to interrupt you Lauren but on any given day on any given day my inbox has at least 10 if not 15 um cold cold emails or follow-ups to previous emails of somebody I don't know why I'm like on some sort of list where people are like trying to guarantee me calls for to grow my business like that is I get those all day every day I actually posted on LinkedIn a complaint the other day about um people you know putting thoughts question mark in the subject line like to try to make me not realize it was and and they all use the same tactics over and over again it's very rare that I get a one that um is valuable there's like I got one the other day and I kept it because it was smart it was a great way to reach out to me I didn't need the particular service but the woman provided me with insights about my company and U free stuff something valuable for me as a business owner so that was that was good it wasn't just like a hey I can guarantee you 25 calls um so you can grow your business like I don't love the the Deluge of of cold emails but I'm open to thoughtful strategic targeted emails those people are selling and they're selling and I'm using air quotes here selling with false promises there's no social proof they don't know you they don't know what they can deliver for you they are lying and they make all of our industry look bad and I'm going to revisit my need for some licensing and rules and regulations around it but that's a topic for another podcast but the one that you saved are the same ones that I save every once in a while the ones that cut through the Clutter because they're not selling they're sharing information serving they're that can help us with ours so the person who started this on uh Reddit sure nobody likes being sold to I I went to dinner with my in-laws last night and my father-in-law was on a rant about tv ads and how horrible all the tv ads are and I was like well if you don't want to be sold reverse mortgages and hearing aids and Medicaid supplements stop watching old people TV I don't know what to tell you but that's what they're doing is they're selling you things that they think the audience of that TV station wants to watch I just want to add to that is that like for example I we pitch media right and a a a reporter can know that if we're just throwing spaghetti at the wall and Blasting them or if we're reaching out them individually and looking at what they're reading and really getting to know them before we reach out like you can tell Oh you mean doing your job yeah yeah it comes through loud and clear when professionals do their job and have research and expertise and put thoughts together then it's not spam it's sharing and serving and that will get you in the door most of the time I think that the the fundamental insight for the person who asked the question on Reddit is that if what you're doing isn't working think about what you can do to make it better are you pitching a good or service that's a common commodity and you're just spamming people and hoping for a 0.1% return or something I've run into some tough moments in my business and always got the advice from people who knew me well it's like you're trying to blame the economy you're trying to blame this you're trying to blame that don't just look in the mirror and whatever you do if you start doing a better job you're going to have a better outcome so we don't really know anything about this person on Reddit what they're trying to sell what their approach is and than them complaining it isn't working so rather than put the onus on the people who are getting whatever crappy message this person is sending out I would suggest that that person figure out why their message is generic poorly timed not relevant to the people that that are receiving it and try to figure out a way to do this differently because business owners have problems just like everybody else I have in the past actually responded to pretty much a cold call that was extremely helpful and has ended up saving me oh probably $100,000 in credit card fees and that was some one who contacted me cold but had a very compelling pitch that hey I am pretty sure that you're not getting a good deal from credit card companies and I'm absolutely willing to explain to you exactly what's wrong if you just send me your current statement I'll analyze it for you and I was like yeah I'm sure I'm getting ripped off by these terrible Banks so why not and it turned out to be a great relationship and has been extremely valuable to me so that person uh sent me some something with a reasonable action I could take and that was likely to be appical to me because we charge half a million bucks or more in credit cards every year and timed it right too so a lot of the our ability to respond to messages is also just like what's happening that particular moment when it comes across and that's just luck Paul I I realized it was a while ago but when you made the shift from selling furniture to Consumers to making conference tables specifically for organizations of various types was there a learning curve for trying to reach that different customer that you had to go through I would say yes there's always a learning curve whenever you do anything new now it's been a while and we at first tried pretty much the play the same Playbook that we had been doing with consumers and we found that it was just easier to close the deal and as I said in my case we're selling an expensive item but people don't it's not something you could just Spam a million people and sell a table they're looking for a table and both in the residential and in the business context those people were contacting me and saying I need what you do now show me what you're going to do and what we found was the same Playbook worked way better for the business and government clients because the person making the decision was rarely spending their own money and if they were a business owner then they had contacted us and they already knew what they were in for and these people are usually fairly prosperous and the the money just wasn't that big an issue for them so it was a much easier business for us to be in transaction costs were lower uh the sales cycle was faster and I didn't have to watch a husband and wife sitting across table from me fighting about what their dining room should be so it had a lot of pluses to it Jackie when you made the shift did you feel like you had a go through a learning curve as well well we had started to do a lot of um transitioning already so where we were all B Toc for the first few years then we were kind of starting to bring in some B2B and appreciating the nuances the differences the larger market that we could work in the profitability and really the fact that industry was changing and if we were going to stay uh rooted in traditional media buying we were going to lose that battle and so it was a very quick learning curve because we'd already started to make inroads into that area and it was probably 18 months of meetings and discussions internally around who are we going to grow into um are we going to go all in on an industry we're going to become Bank agency or Hospital agency or lawyer agency are we going to stay media buying agency or is it going to be this B2B branding thing and it was it was pretty much unanimous that that's where our strengths were that's where the profitability was that's where our future was and so then it was a quick transition because we all bought into it hey I want to add one other thing that we learned after doing the business for a while which is that businesses have a vast range of different ways that they actually purchase things and so probably the biggest learning curve for us was making sure that we knew how to look like a credible vendor to the Department of Defense or locky Martin or some of these big businesses that are expecting a certain level of you know like what does the proposal look like what what is the look and feel of of doing business with you if you come off as a a small person in a garage kind of business that's not going to cut it for a lot of situations because what the people who are buying for businesses fear the most is that they make a mistake and somebody calls them out on it so uh that I mean nobody ever wants to make a mistake with a client but it can happen but if you do that and you you Scuttle somebody's career who chose you over the other options that's a really bad thing so we had to learn to look extremely competent to large organizations with people who were purchasing things all day every day and I think that that is actually a fairly heavy lift for a lot of very small businesses how do you look credible what do you bring to the T that convinces somebody that you can actually do the job yeah clearly all of you sometimes deal with people in businesses who are not the necessarily the owner of the business but sometimes I think you do deal with the owner and I I wonder how you think about approaching that um the the question from the person on uh Reddit I I understand your response is that that person is probably going about it the wrong way but it did raise an interesting issue I think you know what are what's the personality of a business owner like uh when you're trying to sell them something you're all business owners yourselves I suspect that's probably helped you uh figure out how to do this but I'm curious when you're dealing directly with someone like you another owner is there some approach that you think about any of you no I just give them the password and slip them the secret grip handshake and I'm in we have segmented the people who call us into I think 15 different types and one of them is the boss direct which would be dealing with me and yeah those people tend to have a particular personality but the basic way we think about them is that this is somebody who called us because they want what we offer and let's assume that resources aren't the issue most of our boss direct clients are running businesses that grows from 20 to 200 million a year if they want to spend an extra five grand on a feature on a conference table they're just going to do it just like buying a car if they want to buy a Lamborghini they can do it if they want to buy a Toyota they can do it so it's not about uh trying to to trickle information it's just show them what they ask for put a price tag on it say here it is pal when do you want to get started and so it's a different psychology than other kinds of buyers because a lot of other buyers are very very different and require a different Playbook and that is something that you can only you can only learn by having to deal with a pretty wide range of different type of clients I want to acknowledge what Paul just said because I think that is the takeaway for this whole hour so if you learn nothing else he clearly said he uses 15 different segments so the takeaway here is when you know your data when you know your target audience segments you know them well enough to have 15 different variations on that and then he can adapt because he knows that they're coming from a different place they have a different power and authority they have a different want and need they have different pain points they have different rationals so he is not using what I think our Reddit new best friend might be doing which is kind of a one-size fits-all approach or what Sarah and I get inundated with all the time which is I can guarantee you 25 new clients a month which is so what Paul's doing is doing it the right way he knows his target audience so well he knows how to segment them so well that he's serving up the right piece of information with the right um motivators to the right person to get the right answer and on that note I think we should move on to a different topic uh well said thanks I want to hit each of you with a specific question but Sarah let me start with you last summer you had to unfortunately lay off some of some senior people uh I understand you recently just expanded your space in your building in San Francisco I assume that's a good sign yeah it is a good sign um yeah thank you for bringing up you know bad times well and bring it up in a positive context it's a pretty quick turnaround uh to be taking more space after having uh had to lay people off well just for context um we last year just to refresh um we laid people off after losing um several very large clients that basically ran out of money because the economy and VCS and all that kind of good stuff and so I learned a lot from that experience and um rebuilt um based on smaller sized clients so our U monthly retainer minimum um was decreased but also it's uh it's just it's made it so we're not so dependent we don't have an anchor if a client leaves um my p&l doesn't Flinch you know it's a little more um complicated running the business because we have so many clients so we do have a lot more kind of younger um cheaper people coming on board and uh it's been a great way for me to build the business now as far as expanding the upstairs of our building has been empty for a year or so um um and we have a great relationship with our landlord and um uh so we' kind of been just Heming and haing over it we had asked for the first WR of refusal um and didn't take action on it but we pay next to nothing for our our space like you guys would laugh by how little we pay try us for our current space we pay $2,500 a month and we're basically doubling our space and so I negotiated a similar term for the the the second floor so now we have twice the amount of space and we're going to be moving our desks to the upstairs floor and then the downstairs floor is going to be more client facing but it's also going to be offered out to I know a lot of agencies and businesses and media groups that don't have offices anymore and they're always looking for spaces where they can get together and meet with their teams like um for example I know that like there's one publication here in San Francisco that's a a very wellknown publication and they don't they're all remote and I was talking to the senior editor and she was like yeah we try to get together once a month but we're always looking for spaces and I'm like well why don't you use our space so we're going to let it out as well but we have um it's not just you know our full-time staff which we have grown slowly back up um but we also have reignited our internship program so we actually have three interns starting on Tuesday nice that was a long answer to your short question well that it it did sound quite positive it is positive I am nervous I would I'm nervous as F like 100% like there's a lot of anxiety with this because I'm waiting for the the the shoe to drop like I'm because it was a shitty experience last year like 100% And I fearful about that but I can't run a business based on fear I have to run a business based on okay things are going to keep improving and getting better and um our clients are all feeling well serviced and so I'm not worry about our current folks I have a great team on board like things are good and so I can't live I can't run a business based on the wha ifs it's a self-fulfilling prophecy if you believe it's going to be positive than it's going to be right I was watching Oprah on like Tik Tok I wasn't watching her but she was quoted and she was saying that the successful leader or successful business owner decides what they want right and what they want to become and what they want their business to be and then they make sure that everything that they do every decision that they make is in service to that end goal right and if you do that you're not distracted by the little things or the concerns or whatever you're just going toward wards that goal it's like it's like being in a in a in a cross-country race you have a start and a finish you got to establish the Finish because if you say hey people you're going to be in a race but there's no finish then that's just going to be a messy race I suspect though that you were taking that same approach last year when things got difficult yeah no but I'm I'm sure that Paul and Jackie have had experienced the same things where it's like you do everything with optimism that you're going to grow and you're going to you know know continue to meet your goals and and hit them um but you also have to be flexible enough to realize when the has hit the fan and you need to resize I didn't want to do that and I've talked to so many agency owners that are like oh my God it's the worst but it had to be done and it was sucky but I also worked really hard to make sure that most of my people who left ended up in a good place by either offering up recommendations or connecting with people like you know I I learned a lot from it and I wouldn't be afraid to do it again if I needed to but um I'm hoping that because we kind of rejigger the kind of client that we like to work with like on the smaller side I won't be hit with that particular uh reality again Jackie from our emails that we exchanged before the show I gather you're still kind of figuring out the hybrid work environment uh tell us about that well I think we have it figured out to a point I occasionally get sad when I see that you know cuz we stock the kitchen for the team and I see bananas going to waste and I think man whoever asked for those bananas to be added to the list and then they worked from home all week they just killed a bunch of bananas so I I you know I have to find the nuances the little things to tweak it really I was introducing the topic around hybrid for some challenges that I'm seeing with my clients and I think it's because they seem to feel like this work from home thing that they always say with air quotes and a tone uh would be over by now and I don't think it's ever going to go back to the way it was before and I think that you know a lot of our clients who have multiple offices in various time zones and sometimes different countries whether you work from a different office location or work from home or find yourself in a company large enough to really become siloed it's now about how do you build team culture how do you continue to connect how do you collaborate when you're separated by all these miles and are you finding an answer to that question I'm working through answers to that question um I'm starting to do organizational assessments and uh trainings for companies who are struggling with that and so I'm looking for for feedback I always want to know how other companies are doing it who's cracked the code because that's how I think we learn is by observing the ones who've gone before us and have figured it out so are you hybrid or are you completely remote we are hybrid in the craziest way possible and we've been like this since 2001 um we operate under the assumption that people have work to do and they need to get that work done and the time of day you do the work and the location where you do the work doesn't really matter to me you have a desk here in this building and I love it when you come in because I think that's fun and we can all get together and work on stuff together and it's nice to be in the same room but you may also work from your house or this location or that location because that works better for you and that whole thing started for us because I was almost 9 months pregnant when I started the company and I couldn't imagine taking freedoms for myself that people on the team weren't going to also be able to have and that was with the second kid so I went on to be pregnant a third and fourth kid uh so I spent the first three years of this company just being on the Perpetual maternity leave which really was just code for I'm working from home because I'm in my pajamas and I'm nursing a kid and so it wasn't like maternity leave like I was at home resting you're optional hybrid optional hybrid yeah see we're mandatory hybrid oh really yeah Define that Sarah people have to be here two days a week honestly I think it depends on the age of your average employee how so and the experience because think about it when you were young and um you were kind of just getting into the business like you enjoyed going into the office and learning from your peers and getting to know your bosses and having that cocktail after work and having that kind kind of social connection and when you got a little bit older you didn't eat as much because you have a family and you have kids and this and that but like if you have people that are on the younger side you know we're try to be flexible obviously something comes up stay home like do what you need to do but there's a value that younger employees get we have a employee who um she's a full like full-time contractor of ours and she relocated to New York recently and you know I think she missed is coming into the office because there's a vibrancy and a connection that you make with your your folks I should also say that we have bribery program for people um where we have this point system where for every additional day that you come into the office outside of your mandatory two days you get a point and then you can cash in those points for gifts and prizes so oh I'll send you the sheet I can send it to yeah um oh the gifts um I had some of the the the team help me pick out the items last year so they're things like away luggage a round tip ticket in the United States to any destination um if you really save up your points by the end of the year you can get a international flight but and they're small enough they're as small as like a gift card to Starbucks so you can cash them in however you want but so far um I've purchased a away luggage for somebody um a Yeti mug and some Starbucks stuff so um I know that there are some people on my team that are like like collecting them to really cash in by the end of the year that's awesome I love it but it's not it's not for like PT oh and one is like one is an additional like summer Friday not during the summer like that kind of stuff and I'm happy to share it and I can give it to Lauren to share as well but like it's gamification of getting people here and I should note that the hybrid mandatory you have to um if you have a manager or a partner in crime on the team you have to your days in the office have to align with their days that's the only other requirement because it's pointless for somebody to come in by themselves and so most people come in every Tuesday Thursday Jackie do you think the difference between your experience with hybrid and that of your clients who are perhaps struggling with it a little bit more is simply the difference in the attitude of the boss you embraced it because you needed it at one time yourself and they remain skeptical and speak of you know working from home uh in air quotes is it as simple as that I think it is that but I don't I want to give some fairness to the fact that it's not as simple as that so yes I do think that's a lot of it I think it's about trusting your team uh I think that I I hear a lot of and it is predominantly older men who question whether or not work is actually being done from home are they just doing laundry all day I'm like how much laundry do you have like that's crazy who could possibly do eight hours of laundry every day they're working from home that's nuts I can oh really I guess I could when all six of us lived at the house but now it's just the two of us and you know we wear the same thing every day so that would be impossible um so I hear bosses who say if you're working from home then you're more home than work I hear employees say my challenge is when I'm working from home work doesn't stop yeah I don't separate the two and so I'm thinking we have some work life balance problems we have some trust problems and isn't it just that the work gets done the right way on time isn't that what matters so do you really care if they're doing it at 2 o'clock in the morning or 2 o'clock in the afternoon what difference does it make Paul do you ever wish you could try a hybrid Factory I mean no not at all I think that uh a hybrid Factory would be incredibly difficult to manage because at least the the kind of manufacturing that we do which is oneoff manufacturing there's really a requirement for people to talk to each other about what's going on all the time and it's not something you can just plan a meeting and and solve all the problems people need to be approximate so that they can just walk over to the person they have a question to or they need to ga gather some people to solve a problem that physical proximity Is is a huge plus to us now we do let certain positions work from home on occasion and it's an issue because often times people we need to talk to those people and then it's it's just not as convenient to do it if you want to get two people to look at a piece of wood and make a decision about whether it can be used or not it's very difficult to do that if one of them is looking at it on their phone and so uh I don't think that that it's even a possibility for what we do is it also an issue for the employees who don't have that option is there some jealousy and frustration there possibly but probably the biggest break point for my team is that the people on the shop floor are working in an environment that's not air conditioned at all and the people in the office have kind of crappy air conditioning but it's better than nothing and so that when you walk from one to the other you just notice oh now I'm in a different place now much of the year it doesn't really matter in the fall in the winter in the spring that doesn't matter at all uh in the summer it can be pretty bad if it's 92 de on the shop floor and it's 80 in the office and not nearly as humid yeah that's like a class divide but everybody who works here understands that and the part of our rules is like if you're feeling overheated just go in the office and have a cold drink we don't care and so I think that that whatever resentment there is none of my people are the type of of person who's going to let that Fester like we all understand this is just what it is and I also have a number of people who worked for me who've had other employment situations where instead of it just being a hot shop they were on a hot roof or they were in Baghdad getting shot at or something so everybody's got access to to some perspective about how bad it could be to be hot and what we do is try to do everything we can to mitigate it and it's just it's not as bad as a lot of other situations so they have perspective they have perspective yeah and they're good people they just get it you know like this is what it is you can't make everything perfect all the time but if there's an acknowledgement from management that yeah this isn't optimal but this is what it is and I've explained to them what the problem is why we can't air condition the shop and looked into what it would cost and told them hey it's going to be A4 million bucks and then you know another 4,000 bucks a month for for the electricity and there's your bonus what do you think and uh so they they understand that we've looked into it and we're doing the best we can Paul you haven't been on the show in a little while I haven't had a chance to ask you what I've asked just about everybody else which is how's your year going so far uh best year ever so far I mean we're on track for over 6 million at the moment our sales are up about 35% from last year which was actually kind of a Down year so I can't necessarily explain what it is uh it's just more people calling us and we've done a lot more government work this year I think that there has been a effort on the part of the government to spend money and whether they're getting directions from the top to do that or not I have no idea but they're spending money so we're doing okay um I hired a bunch of people in early in the year and they're all working out great they're all young people and uh I would say that that uh this has actually been one of the better years in terms of just being easy to manage because if people are pounding on the door to buy what you sell and actually plac in the orders then all other problems are solvable and if they're not then you got real problems so we're in a easy to solve year were you hiring people uh to replace people or to expand um both we had one who left and I hired a replacement and then seeing the trend starting at uh right from January people were placing orders at a higher rate than they normally would and I've got enough experience now that I know that with the exception of 2020 the year tends to be fairly consistent like if you project out what you sold in the first quarter all the way through the four quarters in our case we sold more than a million and a half and and so okay if we project that to four quarters it's 6 million so I started planning for 6 million and that's been the right move so far because it looks like we're going to be there and I keep track of ratios of revenues to employees just like okay if you divide the revenues by the number of employees you get a number very simple to calculate and uh we we're at about 190,000 bucks per employee for the last two years and then if we're going to do 6 million it implies that we need 30 employees and if you only have 24 it's like okay you better you better do something because you can't in our environment it's difficult to make people magically more productive it's just the nature of the work is just the same you can raise prices which we did do but at a certain point you just know you need more people to do what you need to do Paul we've talked a lot over the last year maybe the last two about your um spending a lot of time energy money on uh rethinking your marketing you wanted to aim at a slightly different type of client you created a new website but when you listed the reasons why your Revenue was up this year you you didn't mention that I I'm curious do you think that's had an impact well we can't draw a direct direct line from the things we did last fall to orders that came in immediately but one of the things that we did uh in order to reach the target audience was to focus and develop marketing materials that talked about our experience at senior levels of government and Military and by coincidence we're getting a lot more of those kinds of inquiries even though I can't say oh it was the person I talked to at this show we did called me it's just somebody else and and and I don't I don't even know what that means it like we saw that there was an opportunity we did something about it and so I think part of it is that our response to the inquiry that wasn't necessarily driven by our Market is now better and Tighter because we did all this work to be ready for the market when it showed up so I'll take that you know that's fine but uh like right now I'm actually working on a project for a senior federal agency and and some some work they need and I we didn't we didn't know the architect who contacted us did they find out about us from somebody who spoke you know like who knows there's a lot of moving around in our target audience but uh I will have an extremely credible response to this inquiry because we can just say to them they're like hey we're already working at the level you're asking for here's projects here's people and so when you focus on developing a market and you get some success it just makes it easier to access and succeed down the road and that I mean getting back to the very first question the person on Reddit if you're just starting a business it's tough to get that first group of experience you know like that first set of clients that are convincing clients for the next set of clients that's probably the hardest part about starting a business and particularly in today's day if you send an email and the person read it and they looked at your website and uh they could just as easily be looking at all of your competitors within the next Second and a half that's not how the world was when I started but I can see that that's a huge issue for people who are trying to establish credibility and confidence and there's nothing like doing a couple of thousand at bats in order to make yourself a more convincing uh Prospect when you go to sell people but it's tough to get over that initial hump and there's no real easy way to solve that I don't think well thank you for bringing the conversation back to our starting point that's a great way to tie it up my thanks to Paul DS Jackie Russo and Sarah seagull 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 r n at21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you 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]