Most People Don’t Have the Stomach for This

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Paul DS tells sha busy and Jay goz why he isn't sleeping and why he has stopped paying himself after having his best year ever in 2024 Paul has seen his inquiries fall precipitously his backlog of work is dwindling and he's concluded he needs to take some painful steps I'm coming to the realization he tells us that I need to do something that involves reducing staff Paul's not sure why his business is off but he suspects it may have something to do with the chaos in Washington he also tells us that the Big Marketing initiative he undertook a couple of years ago when he decided to try to reach a slightly different Target Market has yet to pay off the way he'd hoped but he hasn't given up on it plus we also address an increasingly common issue for business owners what do you do when employees come to work High 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 engaging with other owners to get the kinds of insights only another owner can offer if you're interested in learning more step one is to sign up for a free trial of the Morning Report which highlights the most important news of the day for business owners so you don't have to go looking for it step two is to get on our slack Channel where you can ask questions get vendor recommendations and tap the wisdom of a very impressive crowd just search for the 21 hats Morning Report to sign up for a free trial joining me this week on the podcast are regulars Sean busy CEO of kis which is based in Portland Oregon and works with small businesses on marketing culture and strategy Paul DS CEO of Paul Downs cabinet makers which is based outside of Philadelphia and makes custom conference tables and Jay goz CEO of the gos group whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home the episode is titled most people don't have the stomach for this welcome Sean Paul and Jay it's great to have you here I want to start with you Paul last year at the beginning of the year I asked you if you'd made any New Year's resolutions and you had a quick answer you said your resolution was to make more money and you did you had a great year did you make any resolutions this year yeah wind the clock back to January 1st 2024 because uh it's a startling startling change in what's happening in my business the air started to come out of the balloon coincidentally in early November last fall but we had already exceeded all of our sales targets and had a healthy backlog so I wasn't really focusing on the complete collapse and sales in November and December because there's always a Slowdown in those months but the magnitude of it was different and then when January rolled around and nobody was calling us and we had a fast disappearing backlog I'm like hm and now at the end of January we've just racked up our worst sales totals since 2015 and the number of calls is down uh 22.4% so far last year we ended up selling 5.7 million and our projected sales this year based on one month are 2.6 million that is a 53% decline so I made some money last year I have not paid myself yet this year and I don't think I'm going to be and we're contemplating a trimming of our capacity or production capacity to match something more like a $4 million a year which is I think we' be kind of lucky to get to at this point and of course when you say trim production capacity what you're talking about is you don't just take the machines and put them in the parking lot you got to get rid of the people and so it's a very very distressing place to be I I feel like I've been in this business so long I'm old coming off the best year we ever had and the most money I ever made it's just brutal so why you're asking well first Paul I think it's worth pointing out you you've told us numerous times that one thing you've learned is that the way you start a year tends to be the way the whole year goes yep that continues to be your assumption I assume well you can make a better a better guess by the end of March I would say the first two months give you an indication now there have been many years when January did not attain the average we ended up with over the year but this is this is way worse so there those are facts now we can start pulling out the opinions does anybody want to want to Hazard guess as to what it is is there something that could be wrong with the website with the links or nothing everything seems to be working everything else everything else believe me that's the first thing I look is I know I hate to ask I figured You' check that but it's just it makes no sense to me uh well you know like yeah I checked the website we're getting pretty much as much traffic as we ever do and the number of calls in the first two weeks was down by about 60% but this last week and this week so far been okay in terms of the number of calls but what we're missing is are the quality of calls so good and it's hard to know until you've either closed or not closed a deal but I'll give you another an data point here which is I just got off the phone with a client who we've been working for since last May who is contemplating a complete new boardroom for a Historic Hotel and then called me and said you know we've been thinking about it and all we're going to do is change out one feature on the existing tables we have so if you can send a quote for that so that turns a $50,000 job into a $5,000 job and I will jump in and say that my feeling is that in all the other recessions I've I've been through and I've been through guess the first one was 1987 there was always a precipitating event like some bad thing happened in 1987 it was a a flash stock market crash and then there have been others since then you know 208 Layman goes broke and it's not so much the thing that happens it's the reaction of everybody to what happens so if people are confident that they can write out whatever blip it is then things tend to go okay and if people are rattled and everybody's like clutch I got to pull back I'm not going to do this thing that I was thinking of then it becomes a disaster so that's what it's looking like to me but it's possible that there's some large group of people who are absolutely delighted with all of the craziness coming out of Washington who are just you know like damn Trump's finally kicking ass and taking names and I'm going to go out and buy a conference table so we'll see uh but I'm not happy with how it started let's say that listen half the population Ved for half didn't it's possible the half the didn't between tariffs and the immigration stuff people are freaking out about what's going to happen with business because the ter of thing anyone that understands business and all knows that if these tearist went through all it's going to do is drive trem mendous inflation and just all kinds of issues maybe people are just freaking out and waiting to see if the dust settles I'm pretty sure that half the country is freaking out yeah now we do business with everybody and the thing that that made me Clutch my heart most last week was that idea of stopping all the federal money until you can figure out whether you want to do the Dei or whatever they're planning to do with it like the idea of Simply stopping the flow of federal dollars like that got everybody attention I hope CU it's so outlandishly stupid that even no matter which side of the Divide you were on you were probably like hold it uh we do a lot of business with small municipalities school boards police stations military units people all over the country and behind a lot of those projects we know for a fact there's federal dollars that someone says oh yeah we got a grant to upgrade our Emergency Center or whatever and now we we need a new table for it so when he did that I was like oh my God are you kidding me and because it's not just you know like okay conference tables do you really need them no but that's just like stopping the flow of money for millions and millions of people and in a way that seemed to be calculated to cause the maximum amount of disruption and fear in other words saying we'll stop it and then we'll sort it out as opposed to we're going to take a look at this and we may stop some of it so I'm pretty unhappy with the way things are going but I'm hoping that we can we can just ride it out you know I've been through some bad years before and I'm in a much better position going into this than I have been in in previous years so we'll see I don't know what else do you guys think I mean what you just described as kind of an indirect impact of the cut off of federal dollars but you've done federal government contract work as well haven't you yeah absolutely do you have anything going right now did was something was a project stopped uh of yours uh um no because that's not sort of how well it's possible we're always dealing with various Federal entities that will be like hey we want a quote and then at the last minute they say oh we're not going to be able to do this we'll push it into next budget year or it just disappears so it's possible that my salespeople have projects that they've heard of that got pulled back once we get a contract like it's a contract they're they're not going to cancel it once we start doing work so I'm hopeful that we get paid for all that stuff that they don't stop actually paying their bills but the projects we have on the shop floor are continuing I mean it is possible that things will calm down and unlike you said January usually predicts the year maybe not this year maybe things will calm down in a few months and you'll it's not like you're a restaurant where you lose the meal and it's gone I mean people still need or want their conference table so it was put off but it might get better in a few months well I hope so that that's that's that would be wonderful I'm kind of preventing myself from being too crazed about it because it is just the end of January and the number of calls is actually starting to pick up so we'll see whether people are actually willing to follow through and place orders and as far as navigating a downturn which I certainly have done numerous times you do have to deal with the reality of okay you could lay a couple people off well by the time you pay unemployment you end up paying the unemployment ultimately so it's not like you're saving money there and then it's hard to find and keep good people so I totally understand and respect your reluctance to go and lay people off right away cuz you might have an immediate cash thing from it you're going to pay for it in unemployment rates for the next three years so it's not like you can turn the spigot on and off that easily where do you stand with that Paul um I think that paying for the unemployment over or three years beats the hell out of running out of cash and for sure when I think about that I'm not so focused on uh the amount of money we save what we're doing is yes you're saving some money in in the salaries but the main thing is you're slowing down the rate at which the machine eats through all your your resources and if you're selling at a 4 million a year Pace ideally you have a factory that's set up to produce 4 million profitably and last year we got up to for much of the year we were running at a $7 million pace and so that I had to add people I had to add capacity so now we got all this capacity and now that the sales are not there we're eating our our Seed corn super fast in other words we're eating through the backlog so what I would prefer to do would be to dial back on the number of people and it'll be the same number of people we had four years ago so it's not like it's the end of the world but what happens then is we slow down our production rate and we have a little more Runway to ride through a couple of weeks of lower slower sales and the tough thing is you have to do it as soon as you can see it because otherwise if you get to the point where you've run out of work then that's a really really bad thing and you run through all your cash almost immediately then have you started that process Paul I'm starting it now yeah I mean by the time this gets out and is broadcast I will have made some trimming already because we have a process too where the jobs go through several different steps and so think of it as like the the hopper at the top and then it feeds down and feeds down the hopper is emptying out at the top but the shop floor can still be busy because we have work to do but I need to trim down the capacity at the earlier steps because that just doesn't help anybody to have excess Capac it there do you think your employees see it coming um no because we finished last year on a high note you know was best year ever best sales ever profits big bonuses and cool projects and everybody was great and I was kind of lulled into how bad you know like what could go wrong and then the change after the new year is so startling that I'm like it started with just many many fewer people calling us in the first weeks than they normally would and we keep track of every week of every year for the past 10 years like how many calls did we get that week and if we're back down as I said to below 2015 levels and for the first two weeks it was the lowest number of calls we ever got now we had a Resurgence in calls to being sort of a normal number last week and it looks like we're on our way to a decent number this week but the whole process of of Designing and selling from phone call to whenever takes months so I need more than two good weeks of calls in order to refill our production Hopper it's going to take several months to do it you've just described what being in business is you got one foot on the gas and you got one foot on the break and you're trying to balance out it's it's I feel your pain cuz I've been there I'm a little bit it's it's difficult to navigate that and I do think this isn't unusual year so I won't be surprised if in a month you say things are much better so that could certainly happen but it's not so much me you know like I'm old I've been through it I just feel bad for the for the people I'm going to have to lay off honestly that's just a terrible terrible thing to do to somebody and they will be blindsided by it I'm really interested in um a question in the past could you correlate your traffic to revenue yeah yeah and so those two things have diverged well I can correlate my traffic to revenue to a certain extent the problem is that the top three large jobs in my year like we we're getting we did something like 170 contracts last year and the three biggest ones account for 15% of the business so if you lose smaller ones it's it's kind of a drag but it's not the end of the world but if you don't have a couple of big ones then that's really bad the last three years we've gotten somewhere between 1 12200 and 1300 calls and 2022 it was 5.1 million in sales 2023 it was 4.1 million in sales in 2024 it was 5.7 million in sales same number of calls so it's not just the amount of traffic it's like well what were some of those calls and if somebody's feeling spendy at lockie Martin or at Southern command that can really move our needle and that's the difference between a $4 million year and a 5.7 given the same number of incoming traffic so what about the B2B efforts that you've been engaged in have you seen any sort of impact of that or is that influencing um the situation at all uh the short answer is no and the medium answer is that the target market we were going after the Architects and interior designers was never going to be something that produced immediate results because we're selling a product that basically you need to uh be delivered three days before the building opens and The Architects and designers are doing their work two and a half to four years before that so that was always a long-term play and I got to say I'm not blown away by the results so far Paul can I stop you there I I I really want to dig into that but I want to uh set it up for people who don't remember the conversations we had when you were going through that but before you do that I just want to check on one thing which is I'm curious uh what kind of year uh it's starting out as for both Shawn and Jay could you guys just are you having uh a tough time as well what are you guys seeing um mine is not great not not off 50% but a little slower I looked at my numbers from last year the election clearly was disruptive to business November was way down and um I'm still waiting to get the end of the month but it not great all I can say it's not great it's not it's not horrendous but it's not great Sean yeah um you know kind of like Jay I think that the election year was really disruptive for us just a lot of people hesitating until the election happened and then after the election happened we had actually a pretty decent uptick in inquiries and people taking action and then I would say it's off to an okay start not not not super strong but but but okay I think the the jury still out there would I've been through seven recessions this is not a recession it's like you know you listen to the news everything's great all these computer companies making gazillions of dollars and like you talk to small business people I don't think it's party time so I'm I'm not sure that any of us fully understand the Dynamics of what's going on with stuff well and it's also the thing I noticed the other day is that even though the unemployment rate is low the hiring velocity has slowed down dramatically um and that's a that has some real consequences I think the market has really shifted from being an employee Market to more of an employer market and you're seeing that really in the tech sector I mean they're just crushing their employee base and that's that has Downstream consequences for sure let's go back to what Paul was talking about before a couple years ago Paul you spent a good bit of time telling us about a a big marketing initiative you had that was designed specifically to reach out to Architects and designers you hadn't really targeted before in part it was the hope that you would develop some repeat customers which you traditionally haven't had uh a lot of and you spent a lot of money you built a whole second website for it and I think that's what Sean was asking about you were about to tell us your thoughts on that yeah I I think that just for for context in case anybody doesn't remember we get most of our business from Google searches so my first thing was did Google somehow change their algorithm and isolate us and we just don't see that so if you get business from Google searches it's it's a blessing and a curse the good thing is you get a chance to interact with everybody who does a Google search for a conference table in our case and so we're able to access clients in places that the normal distribution channels for furniture would be very difficult for us to reach them the downside is that you're really at the mercy of that traffic and so knowing that many of the people we could be selling to use an architect or an interior designer to help choose their Furniture we made a conscious effort to try to reach into that community and develop relationships that would hopefully bring us ongoing series of projects whatever that architect was working on so that was the plan the cost of it has been I would say moderate in terms of compared to other marketing things I've done I mean I've spent up to $112,000 a month on AdWords and this cost nothing like that so spent maybe a 100 grand total on the whole thing so far including the new website including the new website and I'm not at all sorry I mean that's probably the best thing we did in that effort was put up a a really nice looking website that we do use to uh communicate to that segment of the market because they have a different aesthetic sense a different set of problems than the people who are Google searching us so we have two websites and I'm not sorry about that at all we reached out to get repeat business from Architects and designers and meanwhile we started getting repeat business from a different segment of the market which is private contractors who maintain relationships with military units and that's turned into our best repeat clientele and they're just harder to figure out how to Market to to because there's not an easy way to to to find them even but there's a million ex uh military people who go out and set up a little consultany business and then basically start selling things to their buddies who are still in the service and that's been very lucrative for us we've gotten a lot of good projects from having relationships with we got four firms right now that we just do over and over you know when you came up with this plan and I'm in a similar business I sell to both most of my businesses retail but I certainly sold to a lot of designers that whole thing made perfect sense to me I think one thing that has changed is the office markets just in the toilet I mean there's buildings in Chicago it's unbelievable they're selling buildings in Chicago for like 20 cents in the dollar they they don't have enough tenants in there so I'm sure that is affected and then I keep getting from a surplus place it sells office furniture nice office furniture every week I get another email from them so I think there's a glut of office furniture out there on the market and there's less people going to offices and I'm sure that has hurt that whole segment I we wouldn't surprise me if if if such a thing could be proven if that was it it's really hard to know again five projects mov the needle for me by 25% of my yearly Revenue so it's really about what are the big ones coming and uh usually we start off a year and it's like well we don't know what the big ones are going to be but there's going to be four or five we just know that I would say this though I'm pretty confident that this year in particular whatever you've done in the past I don't believe you can take January and extrapolate I I do I'm not saying it'll be great this year I'm guessing it's going to get better his problems started back in November right Paul but that's when the election happened it's all election related is my point I mean what are you going to do I'm going to be in business next year that's my intention so I guess that's just loop back all the way to the beginning that's my resolution this year I'm going to be open next year and uh I'm I'm going to do what I need to to get across a difficult patch that's coming up for us Reed Hoffman put his finger on this before the election he said you know business owners ought to really think hard before they get behind Trump because he's an agent of chaos and this is what we're seeing I mean that that removing the federal payments thing even for like a one news cycle was just Madness and I think it's just going to be really tough to navigate um the next couple years because of the desire to be in the news cycle well that's what I'm saying is that if people lose confidence that the future is going to be okay I mean you add in all the other stuff like hey AI is going to take your job and and your kids don't learn to read anymore because they're on Tik Tok and you know it's like I'm old man shouting at the clouds here but there's actually a pretty large group of alarming things on the horizon that it's hard to think oh we'll just you know everything will be fine none of this stuff's going to matter all right can we stop now cuz I'm starting to get depressed yeah sorry hate to be that guy no have we ever lived in a time where people you know say yeah I'm not watching the news anymore I've never that's never happened ever so we're in an unusual time right now Paul I I want to tie up the the whole marketing initiative thing a little but looking back on that it's not entirely clear to me do you think it was a mistake would you do it again did you learn anything from it was it a mistake no because you have to Market you have to try things and they're not all going to work and uh so no it made sense Jay told me that it made sense to him when I rolled it out made sense to me when it rolled out I still think it makes sense I think it's great I think it's great absolutely I would call a mistake something that you should have known something different like oh that there was that that whole thing made perfect sense so I can't yeah I don't but are you saying it it sounds like you're saying you've concluded it was a failure and that it was worth trying are you saying that um I would say that there's a difference between it's not producing the results I hoped for and a failure and I think that it's way too early to call it a failure because got it as I said the sales cycle in these kinds of projects is literally years and so if you're going to take a run at this Market you just got to grit your teeth one day with the understanding it may be years yours or never one or the other and I haven't really come to the conclusion that it's going to be never I mean I've got to put a maybe 35 or 40,000 bucks into this this year which is not a huge amount in the context of all the everything I spent so I'm going to keep going and we'll see what happens what do it meant for you that you've had to keep up two websites I mean the first one had the advantage of being early in the internet game and you know you developed uh SEO you you know you've told us how you were discovered by Google U many years ago it's a lot harder now to establish a website and develop that how have you approached that well I'm not interested in trying to win the Google War at the second site so that makes it much simpler all I want to do is have basically a catalog online that's that's more aimed at that particular target audience we're not doing e-commerce on either site so it's a pretty good experiment in a way of of what happens when you just roll out a site that's got all the content and you know demonstrates a company that has a lot of experience and but we just did put it up there without any expectation that there was going to be much traffic on it I didn't do it to try to win the web Wars and my other site has continued to be a steady producer and it it's something that I tell people when they ask me about hey I'm starting a business and I want to put up a web website and should I use AdWords or should I do this or should I do that and my answer is always most of the people who own those top positions for whatever search or or business you're in were two things one they were incredibly lucky or two they were there a long time ago and they were incredibly lucky then because the secret of the web as far as I understand is that once you're in those top positions it's very hard to disl you unless you actively screw it up and so like Google now considers me to be the place to go for custom conference tables and there's other people who make a run at it but why would they dislodge me if I'm actually delivering a good user experience and people soon to be on site like why would you just shut it down for some newbie and who's 20 Pages back and you know like that doesn't make any sense so incumbency I think has a huge effect on success on the web now we we've never really put ourselves into any of the other platforms like at an Instagram or a Tic Tac or whatever the new thing will be Tik Tock Tik Tock so people go on to these new platforms and some of them are the early winners there and then so they've got a position to defend but I think that those highly algorithmic things that are based on trying to entertain people are more open to new entrance and sort of wildcard successes than just straight out Google searches and I mean Sean it'd be interesting to hear your opinion on that they've been disrupted by Tik Tok meaning that for a while there it was a it was a legit strategy to build a platform on these social channels and you you became kind of a follower model and you were rewarded for that and then Tik Tok came along and said uh actually we're going to feed you constant Interruption to keep you hooked into the system and so now all those social platforms are being disrupted so it's a real challenge for folks who relied on the social channels versus Google which has been a little bit more stable for sure Paul here's why you should sleep at night two reasons one companies still want beautifully made conference tables that's the fact no that's going to continue to be that way and two as you know better than anyone what you do is not easy so I do believe you've got a solid footing and a great Niche and I'm in a similar situation we just got to get through this year well thank you for saying that Jay I mean I I I believe that too and I think that part of the thing is this is like one of those Western wildfires that works the way they should where it burns out all the underbrush and then the the solid trees keep growing and I'm hoping that if we are heading for a bad year in our industry it kills all my competitors for good first Bruno socialist on this show that's their problem and so if we're the last gu standing a year from now that will be fantastic I just came back from the national picture framing show once a year and I got to tell you I did two speeches there and I tell everyone there's less people framing pictures but at the end of the day a beautifully framed custom framed picture is fabulous and there's still people that want to buy that and I'm confident our industry might have shrunk for various reasons but it's stabilized because there are people that want nice things so whether it's a conference table or a beautifully framed picture they want it and they'll pay the price whatever it costs because it's worth it Jay I think you also told them that some of them probably shouldn't be in the business I I had two classes and maybe 75 people in there and that one of them was called unleashing the entrepreneur within now remember these are people that own picture frame shops so they didn't necessarily come from a business thing so I listed out all the things you need to do to be successful in business location hiring un hiring standards training all the good stuff so I did that for an hour and a quarter and then at the end I said I have to tell you I happen to have taken a a test it's called a dis test it's a personality test of how you relate to others and especially in business so here's here's here's what it this stands for D is dominance I is influence s is steadiness and C is compliance and it tells you your personality type so for those of you listening that feel like they have a little idea of what I'm about the dominance one is driving and ambitious pioneering determined competitive decisive okay what did I get in that got a 92 okay all right influence in influence inspiring magnetic persuasive enthusiastic convincing Poise optimistic what I get in that 68 okay steadiness relaxed passive patient possessive predictable possessive what do you think I got in that two zero zero yeah I figured that no I got a 22 I got a 22 okay and then last compliance cautious careful yeah exacting systematic accurate open no I got an 18 not bad so the point of story is as we all know it's not easy running a business and some people you have to have the head for it okay I gave them that part I gave him the 15 things you need to do that was pretty simple but you have to have the heart for it you have to really want to do this and I don't know if I call it passion or having the heart for it but you have to really want to do and the last one which is the biggest one which is a problem you have to have the stomach for this and most people do not have the stomach for this so I said to them you might be better off running your one or two person frame shop and having a nice life because if you try to grow this and you don't have the DNA the wiring whatever I suggest to all them you might want to take this test it was very eye openening I've got a guy that does it he does some counseling he explains to you what it all means and how to use it and know thyself there's something to be said for knowing what your head's at they always say is like you know like a throw of oh what keeps you up at night that's literally a problem there are some things that people could gets they will not sleep at night I mean you got to have the stomach for this so I know for a fact that most of the people in the room are not going to build whatever million dooll year businesses they'll be happy running their $250,000 business with no employees Paul are you sleeping at night I think I sleep for minutes at a time uh Les this week no I have not been sleeping when I I mean just picture it I'm coming to the real Iz ation that I need to do something that involves reducing staff and of course that's an incredibly unpleasant thing to do and you have to at some point sit down with this person and say you got to go the terrible thing about it is that the impact of that on them is much worse than it's going to be on me I'm fixing my business so that it can survive and I will survive and I'm throwing them over the side of the boat because that's the only thing that can be done but it doesn't mean you like seeing them in the water there and uh it's a horrible thing and I've done it before I'm going to do it again but it is awful does it get any easier no does not get any easier do you learn anything do you get any better at it uh I guess I'll see in in another week but as long as you have an explanation that actually makes sense it's a little bit easier I'll tell you one thing I've learned with that the last thing you should do is tell them how sick you are about it and blah blah blah cuz it's almost insulting they're the ones that are out of a job now and they don't really want to hear about how upset you are blah blah blah so certainly we should be sympathetic empathetic and say listen I'm really sorry this has come down with this but you know I've got no choice but on the other hand I just have to tell you cuz I am a little older than you are we're not killing anybody I mean we it's just that you have to do what you have to do to keep the business afloat the point of the story is you might not be sleeping at night but you also have paired that with you're not going out of business cuz that's what we do yeah I think that that's a that's a good comment and it's definitely worth reminding everybody of that particularly the you know like saying oh this is going to hurt me more than it hurt you no that's not true you don't want to dwell on oh this is so hard for me no it just has to happen it's just surgery that has to happen and look at the clown in Washington if you want someone to blame well the reality is though we provide nice a nice workplace for people and as long as we can it's like you and he's got a nice reference you'll be happy to help him out with that we treat people nicely and I that's worth something so like yes we have to lay off in 46 years very very little if I had to lay people off but I have and the fact of the matter is it also goes into the formula while they were there they had a nice job and they learned some things and they're going to get a good reference so it's not like they're not better off as for working for you that's the point they're better off they were than they got there that's all I I agree and and the last time had to do a big layoff was 2008 and I was struck by how many people came up afterwards and just thank me for providing that good workplace experience they they knew that I didn't do it lightly and that I didn't not care that I was taking someone's job away you've heard those stories where they email people to lay them off oh that's awful that's right it's but it happens all the time and you think like my God are you such a coward you can't sit there with another human being and say listen I feel bad about this but that's just disgraceful yeah I mean big business is terrible but we're not big business people we're we're small business owners and we see our employees eye to eye every day know what's going on in their lives and uh so it's more than just the dollars and cents even though that has to drive the decision you would have to be just like a horrible psychopath to not understand what you're actually doing to somebody and no it's not like I would have done it at just on a whim tomorrow if I had no reason no I would I want these people to be here I just can't support them so that's that's what it comes down to we only have a few moments left I'd like to run one more thing by you there was uh an item on the small business subredit recently um and I'd like to get your reactions to it it's from a business owner I'll quote I manage a team in a physically demanding high-risk job and lately I've had a serious issue employees coming to work High this work involves heavy equipment large machinery and real safety risks a mistake could seriously injure someone the team is decent overall not rock stars but they get the job done the problem is it's already tough to find people willing to work in our area so replacing them isn't easy I've been avoiding drug testing because I don't want to police what people do after hours I just need them to show up sober and ready to work how have other employers tackled this Zero Tolerance policies warnings something else what actually works I think a lot of it has to do with first of all what is the prevailing practice in the industry so my understanding is roofers 100% are high and if you work in a in a kitchen somewhere chances are pretty good someone's hide right next to you and then the other thing would be what do they high on so I have two employees um who both partake in in different drugs one smokes cigarettes perfectly legal stops and has a smoke break a couple times a day I've smoked cigarettes they have an effect on you you're high but it's an effect that is not incompatible with doing work another one I happen to know goes out in the truck in his truck at lunchtime and gets high on marijuana and I have noticed this a few times and have sort of been like hm we have a policy of instant discharge if someone is caught being h but that is actually discretionary on my part like I know this guy gets high at lunch but the nature of his job and of his performance it doesn't seem to be detrimental to it so I haven't made an issue of it because I don't necessarily want a fireman so he's not working with a saw or anything no okay but you know it's a tough one but I think a lot of it has to do with what message I mean what do you want to what do you want to accomplish by disciplining somebody for that I think that in a way if employees are hard to find and they're doing something particular that the right move might be to actually acknowledge it particularly if you're in a state where it's legal for people to smoke dope and so it's like well you can't hardly blame them for doing it if it's perfectly legal it would be more about training around it that would be my Approach if I knew that my people were coming in high that it was legal for them to buy it and do it at home and we had to accomplish a task I would be like let's figure out how to how to make sure that you're as safe as you can possibly be even if you're high like what is it that being high does to your judgment if you were drunk you would have no judgment anymore and you'd lose your physical coordination and we know what a problem that is and like no you don't want to be doing heavy machinery with marijuana it's not so obvious to me what the negative effects are and so I think that maybe the next re Revolution for industrial training is working well High you know like let's let's figure out how to do it and uh cuz again with cigarettes it's pretty much the same thing people can smoke cigarettes all day and they they're in an altered state and we've decided that that's fine nobody really cares about it wow that's all I can say I think I'm taking the guy what he said dangerous stuff yeah I got to think about killing people I really don't want to be responsible for killing somebody so the rest of this not well it's hard to find yeah I don't want to kill anybody so if this person is truly operating machinery and could kill someone this could be far beyond hurting them then I think uh drug testing is probably appropriate the problem with the drug testing is that if they get high at home on the weekends it's still in their bloodstream so whereas liquor isn't like that so that's a problem I don't know how to work around that one but have you ever tried drug testing Jay no we don't do it for people unless we think it's almost never happened but pre-employment drug testing we've done I don't we're not doing it once they're here unless we think there's a problem which has almost never happened and trust me I've had to have conversations should we still do we be doing the pre- drug testing and you know what to be honest I'm not sure we are still doing it because it is a problem because it's in their system and like according to one of my people oh everybody gets high okay that's an exaggeration but lots of people are getting high I got that but if they're operating a forklift piece of equipment to kill somebody boy I think you got to you you got to worry about killing somebody and stop worrying about oh it's hard to find people okay well let's keep someone who might kill someone that Mak sense well people might kill somebody in any any any state of uh intoxication not to complete and so my what I was trying to say is that the guy should probably just double down on safety training at all times like really make it a safe culture and acknowledge what the problem is so that he can get some Buy in from his from his employees how does and I don't know enough you tell me so how does safety training make up for the fact that someone's high I don't know I mean that's but this is the world we're in I easy got it like I think someone's GNA have to come up with some I I don't I don't know the answer to that Sean I know you don't have heavy machinery but uh it could make a difference if someone were routinely coming to work High what do you have any kind of policy not really I mean you know the policy is are they able to do their job successfully and if so I don't really care what they're doing off hours but they're also not operating forklifts so I think the world changes once you get equipment involved that is dangerous to either fellow workers the person themselves or or you know the public so I would have a different approach if I ran I mean this guy's saying I I have a business where people are put in danger it seems pretty clear to me he's got a problem that he has to deal with I mean Sean what's the worst going to happen with you someone comes up with some bad ad copy yeah I mean there's just very very low consequence but but you know I mean if it starts to impact their work product I'd have to deal with it but it doesn't so I don't worry about it on my end but I'm I'm in a lucky position in the type of business I have you know I uh it's it's not a sa life safety issue you know I got people driving trucks yeah you know Paul have you tried drug testing no I would not routinely do it I don't when you say routinely does that mean I'm pre-employment or while they're working there either um in our manual what it says is if you're visibly High when you show up you will be fired on the spot and if there's an accident and we suspect you're high we're going to drug test you at that point and we just passed 2,198 days without a lost time accident so whatever I'm doing seems to be working reasonably well and uh I also have some hesitation to come down completely Draconian when I get high myself because I do uh usually with edibles but I don't show up at work high but I use so do you show up to this podcast High I want to know depends on who who else is on the show I might be I might not be what do you think uh I'm gonna have to gauge that per per session I'm not sure I want to thank Sean busy Jay gz and especially Paul DS thanks for sharing everybody I appreciate it have a good week cool man one thing before you go everything we do at 21 hats 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 you can do that by joining the 21 hats sounding board a slack Channel where you can tap the wisdom of a very smart crowd or by becoming a founding member and joining our monthly Zoom Forum where you 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 Lauren at21 hats.com and if you get something out of this podcast or out of the morning report 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 ston founder of blank word Productions thanks for listening everyone [Music]