My Deal Has Come Apart

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week we start with an update of how 21 hats has been doing since its sale brought new resources and new Ambitions spoiler alert it's not going great then Dana White tells Shan busy and Jay goz about the progress she's made on multiple fronts attempting to sell franchises to revive her struggling Midtown Detroit location to open new salons at Fort Bragg and in Dallas and to secure financing the owners discussed Dana's financing options Venture Capital private Equity Bank Loan assessing in Shawn's Words Their degrees of evil plus Shawn explains how his views on remote work have been evolving and Jay explains why he's tired of being called a tyrant even though no one's actually called him that 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 and facing challenges same thing with our daily newsletter the 21 hats Morning Report which highlights the most important news of the day for business owners and which you can subscribe to 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 Sean busy CEO of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy Jay gos whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home and Dana White who is CEO of par Boyd a Detroit based chain of hair salons the episode is titled 21 hats will remain 21 hats welcome Sean Jay and Dana great to have you here we're going to start this week by talking a little bit about me as you know in January I agreed need to sell 21 hats to the owner of a venture back software company wample that processed a lot of PPP loans for very small businesses the idea was uh that I would get a nice salary and the resources to turn 21 hats into a real Media Company you may also recall um I've been having some discussions about whether the business would continue to be called 21 hats or would assume a name that served to promote the parent company well the good news is that uh hats is going to remain 21 hats the bad news is that that's because I've basically been fired what as you might guess I'm a little disappointed by this I do feel as though an opportunity has slipped through my fingers but I actually have to give my now former boss some credit when we first started having serious discussions he brought up the possibility that you know you just never know we could reach a point where we would have to agree to disagree and uh at that point early in the discussions we agreed that if things didn't work out I would get 21 hats back and I would also get a nice cushion to go on and that's what has happened it turns out we were not as aligned as we thought we were and to his credit uh my now former boss has uh stuck to his commitments and even though you know the course of my employment for him lasted barely long enough for me to get a cup of coffee I get that nice cushion that uh was promised so I've been fired before this is a new uh land speed record even for me it is disappointing but I'm in a better position today than I was when we first started talking and I'm kind of excited that 21 hats will remain 21 hats and I'm going to keep plugging away okay any questions oh yeah I'm going to argue with the phrase it's an opportunity slip through your fingers no it wasn't the right opportunity it wasn't the right fit good for your boss and you to figure that out early on disappointed okay fair enough but that certainly wasn't an opportunity to slip through your fingers it turned out well it sure seemed like it I got it but it was a miss you you know after getting fleshing it out some more the two of you figured out early on that this wasn't this wasn't going to work so that happens it was nice feeling financially secure for a a month or so there I'm sure scared me I was afraid that that meant you got I said you got fired so I was like so so does that mean no more Lauren hosting the podcast cuz I was like you know how I am about that I don't know the next person you realize all this has done has put you back in our game of feeling insecure every day so that's okay it's an okay Place to Be Welcome to our world that's our world we live in well you guys are a little further along than I am yes but I hear you hindsight you didn't do anything wrong there was no way of knowing and you gave it a shot it wasn't a bad decision it just didn't work I do feel like a a an opportunity has slipped away but but I also agree with you just with what you just said it was it was too good an opportunity not to give it a shot yeah you know I'm sorry it didn't work out but if it was not going to work out better quickly than you know taking a long time or five months from now right okay Shake It Off we're moving on so can I have a question Lauren and so how did it feel transitioning back to being an employee did you cuz I know entrepreneurs are like I could never be an employee again um and so I said I wanted to hear how that felt it was it wasn't completely comfortable going back was a little bit difficult I think it would have worked out fine if we had been more aligned we had significant differences that emerged very quickly once we had signed the documents that made it harder I don't know Lauren man I think you had significant differences long before you signed the documents you know we said the right things to each other um I think maybe we both heard what we wanted to hear there was reason for optimism in my opinion but you know the history of It kind of proves you right we were talking about this you know before you Clos the deal for me I was looking at the profile of the owner and I was like you know he he really strikes me as the antithesis of what you passionately believe in which is the owner operator who's really kind of built it from nothing often does not have outside funding you know really the small business owner and and really he's the profile of a Silicon Valley you know came out of an elite College got a bunch of money from other people um and continues to get money from other people you know so it's like yeah he did something Innovative with PPP to to his credit um but but really that the profile did not line up from from my outside perspective you're right uh he does come from a venture back Silicon Valley um background and that is very different from what I've been you know trying to do and uh trying to promote with through 21 hats uh that said you you know he he devoted a lot of time and resources and effort to support supporting very small businesses not unlike mine so again I think there was cause for optimism there this falls under the category of nothing ventured nothing gained you know you gave it a shot didn't work you're back here we are we'll find another opportunity yeah I am glad I'm glad you came to this conclusion quickly slow death is really awful when it comes to business Partnerships thanks for uh for hearing me out I appreciate that we could keep going I mean we can I'm to move on no it's all been said and good for him that he was smart enough that you were smart enough really I give the guy credit I agree yeah and that he did write by you says a lot yeah no harm no fault it was it was I don't think anyone had bad intentions next topic Dana we haven't talked to you in a while how are you doing I'm doing great we have started selling franchises uh we are in the sales process for seven locations around the country and so that's going well have you sold any nope we just started that process and you know what I'm glad we took our time because there were some cultural things for the you know the business of the salon that I wanted to just hammer down um and I still have some work to do I've still got some work to do with operations and the marketing um but as far as contacting um people that are interested um we've scheduled and had calls with about seven people so far the Fort Bragg location is being white boxed um and I'm moving forward with that um hopefully with the help of uh PNC there's a great team of people over there at PNC that are kind of help and helping me and supporting me um from senior vice presidents to the loan coordinator to everybody they're all emailing me really supportive what does white box mean white box means they're getting ready getting it ready putting the drywall up um you know making sure everything's running so that when I do go in there we can decorate it make it our own put the equipment in there and do the rest of the buildout they're doing the same thing in Dallas and just to be clear PNC you're talking about PNC Bank yes PNC Bank so this is my first time going to a bank um and we'll see what happens they say I'm perfectly situated they said the key is the fact that with your business plan you're submitting a million uh military contract that's huge um and so the new news um which is going to be released soon is that I'll be the first African-American woman to receive a multi-base global contract so we're looking at Germany the UK Italy South Korea Japan the military has been really great on um putting me in locations that are going to work for me some of their smaller units aren't going to work their revenue is just too low and even though I could come in and and increase that Revenue that's just a low starting point nexcom has also reached out to be the Navy and and they're interested in two salons in um North Island and San Diego so we're going to see I'm I'm slow and steady as a pace I'm not in a rush um unfortunately my Midtown location is not doing well um it's just not um and my team and I have evaluated what is it what is it what is it what is it not doing well from a business a revenue perspective from a revenue perspective and you know when you go to Dallas there no for hiring signs anywhere when you're here in Michigan they're everywhere and people are having a really hard time you know I remember listening to a previous podcast on this show um about the hiring and it's really really really challenging and I've been committed to not just hiring a pulse I want somebody who's got a strong work ethic and who's committed to delivering the service we want to deliver for our staff that means we're going to be short staff for a while because the people who are applying are not all always those people so we're actually taking our time and evaluating these people um to make sure they're a right fit um and if they're not they don't show and we're okay um if they're not we don't hire them and that's okay um but because we're short staffed we're no longer 7even days a week that sends a message to our customers about when they come and get their hair done so our revenue is down and we're really you know trying to come back Detroit in and of itself is not a a typical Metropol itan City it's not a walkable City parking even though we have ample parking available this is a Suburban metro area they want to park in a parking lot and go into your building um and they don't want to park on the street and they don't want to park in a structure so people are like well if you validated parking we'd come and I said yeah but we have to have the volume to validate parking that volume takes time to get to which I'm not sure I'm willing to keep putting money into the salon for a a market that's not ready so I'm ready to try my hand at a larger market is that what you were referring to with Dallas uh Dan you had told us about it a little bit the last time you were on that's not a military or a franchise location that's a paral boy location yep separate company and everything and that's moving ahead oh yeah that's moving ahead splendidly and then we're looking for a mid June July open and so I'm getting ready for all of that now and that will better equip me to pay you know pay what I need to pay to you know I have Debt Service getting ready to come up from the eidl um you know I know it's quite a ways away um but it's still you know I need to have a corporate Salon generating Revenue more than what Midtown can do and I'm convinced that Midtown was a great place to start a business but it is not a great place to grow a business and I'm not the only Personal Care Service brand that feels that way in this area wait just to be clear when you went to PNC Bank they're lending you against assigned government government contract correct yes that is the collateral I believe so yeah because my guess is no signed government contract no loan I just want to clarify that they didn't give it to you because you got a nice business plan yeah no no no they still haven't given it to me yet so they still may not give it to me um but I've they've strongly encouraged me to um submit my application I included my banker on the pre-performance conference with the military so he Not only was able to hear what their expectations are for Fort Bragg but what their expectations are for other military bases around the world and he was extremely excited um I will say that again after listening to past episodes of this of this show and doing some thought you know really thought provoking sessions with myself I'm going to throw my head in the investor world I've talked to um a friend of mine who just closed the $6 million round I've talked to a private Equity person that has reached out to me a major private Equity person person um and these people the right people around you will help you find the right investor if you are just throwing your hat in the VC world just to throw it yeah you're going to get VCS that want your firstborn child but the people that I'm working with have known me for a little bit and they know which VCS would work or which private Equity would work and which wouldn't um and so when it comes to scaling these military locations scaling the franchise and corporate locations not to mention scaling the product brand which I'm signing the paperwork for those to be on exchanges across the military even before I may even have a salon on Bay this you know taking a loan paying it off taking a loan paying off that's the Slow Roll um I would much rather scale it quickly and sell it done hey Dana I need a little uh context in terms of so was your first Salon in Detroit like that was that was so that was the Prototype yep Southfield okay and then you're selling franchises have you built another Salon outside of Detroit or is is that the only location nope so I had two locations here in metro Detroit and after Co I closed the Southfield location and then I just kept with the Midtown location um so I have the Midtown location currently but it's not doing well um and now that we've understand after months of trying to understand why this just hasn't launched we understand why so it's like you know what it's the market we've just got to go to another Market where we know um and I know more now I know more now than I did in 2016 2017 when I opened the numbers the demographics so for example within three miles of the door of my Dallas location there are 14,19 people that are in my market that's within three miles yeah yeah um that's huge give me 10% of that wait wait wait how does that compare to Detroit they're not as close and the Detroit customer doesn't want to drive more than 15 minutes to go get their hair done and so I'm my Midtown location is located by where they work but they're no longer working downtown anymore they're all at home they're still working from home so I've I've talked to several of my customers who have said I would I'm when are you opening in Southfield because I'm not driving 25 minutes to Detroit and it's the stigma of driving to Detroit they feel it's bombed out Beirut even though Midtown is gorgeous um it's just not like downtown Chicago it's just not like the the loop or you know the South Loop it's not like that here yet we're about 10 or 15 maybe even 20 years away from Detroit being a city like that okay I think that's a legitimate analysis that they're not going downtown like they used to so I you know I think that all makes sense I think we all need to acknowledge like Co really effed up your business model and and so we need to have a lot of empathy there but you know if if I put my um Banker hat on and I I hate Banks I don't trust them I think and I'm sure Jay is with me on this um so you haven't you've got a struggling business that has some debt um I don't see how the bank is going to loan you money on that but but it sounds like they will loan you money on the military work it sounds like again this is all speculation they might say no the only good news is is that an SVP has reached out for me from their corporate office everybody's really excited they want to be a part of the story okay you I think think you've got your head on straight with that but I'm glad that you're being qualified because you're dealing with the bank salese and I've been through this 20 times oh we all want and then they down to the dungeon where the person who makes the decision is exactly nope next nope and then they come back Dana I'm feel bad but yeah like I said good for you that you say you haven't gotten it yet you're not sure you're going to get it I think that's all true the fact that you have a government contract I think is definitely uh uh makes it more likely but who knows Banks be fair Banks they make a tiny little percentage really they're not venture capitalist they can't afford to be given bad loans they're only making a couple point spread on it I get it so what Jay just said it it sounds like this is why maybe you're going to explore the VC uh outside investor route because they don't necessarily have the constraints of the bank yeah it's like I'm I'm tired of the challenge es that face me as someone whose dad isn't Elon Musk or Jeff basos or Jay goz or you know what I mean like whoa It's just know you see how I threw you in there you see how I threw that in there wasn't that cool I did see that yeah I just do that no but seriously it's just you get tired of the capital question and I'm not saying that Capital question is going to go away can I help you with this this is the reality you've recognized that trying to scale up a business that's as hot as yours with such a strong good concept that that has proven to have a market waiting will and willing to go you've recognized that it's not practical to think that you're going to do it the bootstrap way exactly I can't argue with that I can't argue with that it's just not going to happen and so instead of saying well all VCS are bad um months ago on the show we were we all got off the line and you know hey Dana what are you doing today Lauren asked me and I told him hey I'm speaking of private equity and I gave him the man's name and Lauren knows who he is and Lauren's like wow that's a big call and I said it is well we've kept in touch and I had a call with him and I said listen I need to be set up so in 5 to 10 years I grow this business so you will buy me out in the end wow who can we talk to now cuz my cuz he cuts checks for 500 you know 300 500 million so I'm obviously not wouldn't be in his portfolio but there are people in his company that work with companies my size and he said I'm glad to hear it give me your deck and will go from there my friend who just closed a $6 million round he said I don't introduce many people at all to this company but I'm going to introduce you give me your one pager and we have a call scheduled for next month so it's all about getting connected through your network that people that know you and know the type of VC that you want or the type of private Equity that you want and they're not in the time wasting business those guys do not want to waste a lot of time with people oras banks have nothing else to do they spend their entire day going out and calling on customers going oh we want to build a relationship with you and we want to lend you money and then they leave you at the altar nothing exactly and so I'm expecting to be left at the altar and I'm expecting you know I go okay and I walk out and then there's a limousine with like five other people in it saying hey we all want to give you this amount of money so you can scale this out can you tell us more about the franchising opportunity now that you're actually uh in the process of trying to sell them can you give us more details on what exactly you're selling yeah so I mean we're we've started talking to about seven people that we think maybe good you know early adopters for this franchise so the sales process takes about they say 60 to 90 days um and we're in the first couple weeks of that process it's a lot of background checks it's personality tests um it's meeting uh having them come here for Discovery day giving them a quick you know one 23 of the salon or to go to Dallas one 123 of Dallas and then sitting down and say hey do you like me do I like you if so let's enter into this franchise agreement together and that's it so we're still early days yet how did you find those seven people once the announcement was made and up until about a week ago we've had about 98 people email us saying their interest in the franchise so of that 98 uh we're talking to seven can you tell us what the sale pric is I think I can now that I'm registered looking for something to do so this might be an opportunity no um so our franchise fee is $445,000 um and then from that you receive financing so you can own a perly boy with a $445,000 franchise fee and then after that you would probably need to have financed or if you have it in your account um anywhere between $400 to $600,000 which that number is very appealing to seasoned franchise people because they're like you're the quality of dry Barb with the Wing Stop price point they really like that so how does that compare I really don't know you'll buy a Subway or something how much does that compare to the typical franchise is that pretty much in the mid-range it's competitive yep and then they're obligated to pay you a percentage of Revenue going forward yep every week they uh gross I get a percentage of the gross you're getting positive response from the people you uh responded to excited we've been waiting okay with the terms oh yeah because it's standard it's not like I'm asking for so much more than any other franchise you know McDonald's is less but you spend more money on the financing I think McDonald's is 35 and I think for the personal care industry it cost less to buy a McDonald's than a paral Boyd because but look how much money you're spending to open a McDonald's though so they cost less in terms of the initial Fe more to actually build a location exactly and so for personal care Brands you're looking anywhere between 45 and 55,000 for your franchise fee I mean when you do the math if they finance the half a million dollars is 6% even it's 30 grand a year not bad I mean you know and then you pay the fee to her I'm just going to guess what are you guessing they need to grow to come out well uh 800 Grand a million dollars no way less than that if they can do five to six they'll be fine okay 5 to 600,000 in annual sales that's why the locations are key yeah we've got people who are interested here and we're just going to say you know we're really just not interested in opening um in the Metro Detroit area I might go North to Flint I might go west to the west side of the state of Michigan but just the mentro Detroit area we're going to leave that alone and then maybe come back in a couple of years are these people who are interested have they owned franchises before or owned salons before three of them I believe have owned franchises before I think one of them has owned a salon before but that's our concern um again this business is so it hasn't changed in you know decades and so we when we have a hair stylist or a salon owner Say Hey I want to own one we really are on pause we're taking like we don't know because are you going to be able to adapt to the way we do it um I had a lady say oh I'm interested but I want to change the name and I want to do this and I want to say then you don't want to own a perly boy why even buy a franchise I mean at that point right my guess is most people that bought McDonald's were never in the restaurant business exactly well that's changed over the years obviously it has it has why do you say that oh because people know how to they have the expectation has been set for over 30 years for what it's like to open a McDonald's for but when McDonald's first came on the scene and that's what my franchise consultant said you're like McDonald's early days you're going to get people are going to want to serve pork chop dinners and meatloaf dinners out of your salon because it's so new it's not a standard and the standards franchises that are for hair salons are Great Clips Super Cuts just don't cater to this Market you compared the economics of your deal to those of Wing Stop and I forget who else how does it compare to others in the salon business it's comparable I mean you know for dry bar were less I think their franchise fee is 50 and then you have to have between I think 700,000 to 1.2 million to open one um there are several you know Personal Care brands that are they're a little higher so my cost to entry is low but they're not surprised because I've leaned out everything I'm very lean not cheap but lean you know I know where to get certain things Source certain things that bring that cost down do you require a certain amount of resources what does someone have to have uh to do this or is it okay just to finance it it's okay just to finance it we would like to see some liquid but we haven't determined what that number is because we don't want to make the bar too high without evaluating who our first or who our earlier adopters are um and then that's of course you know you may have to put some down on your loan but again you have to pay the franchise fee so the franchise fee is $45,000 non-refundable and that's cash like it's not in installments that's upfront before we move forward with you so most people who are going to be going forward are going to be able to pay that and so we'll get that and then we will use that $445,000 to you know help them through their process get their opening kits together um but there's still a lot of things that they have to pay for so yeah it's it's it's I won't say it's inexpensive but you're not going to break the bank and that's the other thing I want to set my franchisees up to succeed I don't want them at zero when they open did you pick those seven people primarily because of who they are and what their experiences and what you think they can accomplish or because they're in the right location or both the first one and then the second one it was like okay who are these people I think two or three of them have owned other multi-unit franchises so I think two or three of them are probably just going to want five out the gate uh and then where are they wait they're going to want five locations yep so we have a single unit sale and multi-unit sales available and so two I believe of these seven people are interested in multi-unit sales and that means they've just locked down a territory and I think there are people that are interested in Georgia which is hot Atlanta area there's the Texas area that's hot I think in California in Virginia those are where we're getting getting interest from and in Michigan as well if someone's just started listening to your story there's some people out there are probably thinking to themselves wait a second you've got one location that's not doing well and you're franchising and then you said something that totally makes sense to me that you're in a product that isn't going to compete with hamburgers it's a need in the marketplace it's a breakthrough service that isn't available there's tremendous demand for and as a result the normal rules of franchising that don't necessarily fit what you're doing you're not opening another Subway you know kind of franchise so even though you don't have you know five locations are doing well this service is so needed in the marketplace that it should have needed to do that and I I buy that I've had naysayers um respectfully say Dana you know your salon in Detroit should be grossing over a million before you consider this you should have several locations again this is not a million-dollar hair salon Market when I spoke with reges and reges is the largest franchise personal care company in the world they've even said Detroit is not Metro Detroit is not or those salons aren't grossing over a million dollars so then I asked okay understood the the black and white of your argument makes sense however give me a salon that's a franchise where women with thick and curly hair primarily African-American women what Salon chain caters to them let me play the other side of that okay so um I actually think you that there's this might be a case of multiple people being right in that I think what Jay is saying is you have a remarkable Insight around a product Market fit and then the other side of the coin the folks who are critical are saying well you haven't proven the model and and this is the entrepreneurs dilemma right which is most entrepreneurs are doubted uh because it hasn't been done before so my I would take a third tact which is you know there's there's the vision and the idea but then there's the execution and I'm really curious is this all on your shoulders right now do you have I mean other than these Consultants do you have somebody who is you know your Lieutenant who's out there getting stuff done you know communicating with these franchises like this is what you need to do and this person is like in lock step with you absolutely so the young lady that's working with me opened 226 Sports Clips she was the director of operations for Lady Jane's Haircuts and she was a regional manager for Great Clips wait I thought I thought she quit no she did but remember we talked that was an old episode oh this is this is before you came on Sean wait so she quit and then came back yes oh okay okay yeah and it wasn't I don't want to work here there was some things going on in her personal life that made her freak out for like 2 seconds seconds okay okay all right sorry about that that's okay no no I saw you Sean thank you for saying cuz I was thinking that and I'm glad you no no that was out there all right we're all yeah that was out there no no no so she's back that was last season yep and now everything is is cop pathetic so she's handling that splendidly she's been a part of the sales training with me um so we know how to take one person from one phase to the next together and then we have our our calls um going over the who what when and where it um but that frees me up to go do the other things that I need to do have you thought through you know like Hey how do you make it a win-win for her if this is successful yep we've talked about it she's told me what she wants and I've told her you know okay that's what you want I'll give it to you you're not and made sure that what she was asking for wasn't unreasonable and it's not um and her and my manager have said you know listen we really believe in what you're doing because we're in the industry we see what you're doing cuz we've been here for a long time over 20 years we're just going to sit tight until this blows up I'm 45 when I'm 55 I want to sell this company for $1.2 billion that's it like I'm just saying I put it out there I mean when you look at my products the military contracts the franchises Dana would it be okay if it were a little less than 1.2 billion if she sold it for 800 million she'd be a loser I mean let's just be realistic 800 million fine but I'm going to do my best to be the first Personal Care brand that sells for a un as a unicorn I I don't like unicorning I got to tell you for one who's Bing shows the Unicorn thing's taken a little hit lately between we work and the rest of them and Elizabeth Holmes I get it yeah all of them yeah get rid of the that as your like oh my gosh Dana your mission of who you want to support and the women that can feel heard in your place that is so much more valuable than all the that gets held up no no no you're absolutely right but when we're talking about the numbers the unicorns are the 1 something billion doar compan please stop using that phrase stop using that phrase okay unicorn but I care I care because in order to give those Sean in order to give those women a voice in order for those women to be seen I have to be in places I have to be a lot of places in order for that to happen I can't do that with two locations in Michigan I between having two locations in Michigan and being a unicorn can we just say wildly successful with 3,000 locations the word okay and so to me 3,000 locations and all locations on locations on bases and a product with a valuation of that to me that is wildly successful great let's go with wildly successful I won't say unicorn even though there aren't any other personal care brands that have sold for that much but but and again all things considered it may not happen but if I don't put it out there if I don't reach for it no one's arguing with that I'm just telling you the Unicorn word has been taken a major hit no Sean you are spoton Sean you are absolutely spot on make make your vision the north star of of of helping women of being out there creating a voice don't make it money because honestly employees are so cynical of that idea and quite frankly it's not inspirational you know tack onto the thing you care about the reason why I get up is because I want young girls to walk into a space that is reflective of them and you are beautiful you are enough right that's what gets me up every day but I'm not a nonprofit no and you don't have to and I don't have to be I make and have a great purpose is why wildly successful covers it all can I get into this conversation wild successful covers both financial and all those other touchy Fey good things that are so important what do you want to say Lauren Dana here's my question I guess there there are a couple things one that throws me off a little bit is hearing you talk in the same conversation about wanting to sell and wanting to to be a unicorn th those things seem to be in in Conflict to me why are you thinking about selling because there's only so much I can do and I think once I sell it could be sold to people that are more capable of taking it same reason why the lady who did Carol's Daughter there's only so much she could do but guess what Estee Lauder did okay can I play your attorney again here's what she's saying the reason she's planning on selling is she's got to take in private equity which means she's not running her own show anymore totally and she'll put up with all that stuff for a while and then she'll get enough money that it'll have been worthwhile to have done that whereas if she just owned it 100% herself maybe she wouldn't be so hot to sell it let me ask about that taking in private Equity thing then do you have enough Capital right now Dana to do the things that are already on your plate meaning do you have enough Capital now to to open Dallas to open Fort Brag and to proceed with selling the franchises well to proceed with selling the franchises yes to open Dallas yes to open Fort brago I have to get a loan but that's that's the one that's easiest to get a loan for presumably if you you have that military contract you should be able to get a loan to build out one location you're not listening Lauren they're Banks nothing easy yeah you don't know and then there's private Equity that's already excited there's private Equity that's like you know what we're not a shark we're a dolphin we know who Dana is we've been talking to her for months let's find the right partner and it still may not be but I can't sit and wait for the banks and I think to further Sean's point I think pushing for the growth is in furtherance of my commitment to the vision and the why right because like I said if you only have one location and you have this great vision well that helps the women around that location it doesn't help the young women who are want to join the swim team but have to fight with their hair every every week in in California they're not flying to Michigan to get their hair done and so when I am thinking about scaning part of the reason why I'm thinking about scaning is because this is an answer that is needed to be solved for women with thick and curly hair everywhere walk in walk out pay a good and fair price and keep it moving and it's not out there right now see I like that that kind of thing gets people excited to be part of your cause and if you can connect the dots between I need Capital because I I can fulfill my my mission in a more powerful way so that tells me that your number one goal is to find money that is values aligned and I promise you the banks are probably not going to be it and and here's the other thing and guess what private Equity may not be it either because the problem I'm solving for doesn't hit home for them so I've got to I've got to say Hey listen I need you to get out of your lane and see what I see and it wasn't until I said that that they said oh I've never thought of what it was like for a black woman to get her hair done I didn't know Sean I love you you're a little naive that whole thing that you got to find someone who's values align no they want to make money and and they're I do think they need to make money and I think she's got a way of doing that no I get it but hey like I am fresh off of a conference that just opened my eyes to a whole world of capital and purpose run businesses that are connected to each other and I was I was stunned I mean totally I totally get that I totally agree with that those two things work together nicely together they work together I just I guess I would say that it's degrees of evil but they are out there I have seen it poorly I have some clients where they thought all the best things in the world world and then afterwards it was like wow that really changed that business profoundly you got to watch out for that but but I do think it is changing let's stop here uh on this topic I knew that would happen though I said o as soon as I say the pevc word on the show it's G to be what what are you doing sir that isn't what no that wasn't the problem I'm telling you the second you said the were in unicorn both sh oh my God and that was the it wasn't private Equity no one's aru about private Equity I would argue about private Equity the Unicorn thing I just got done with TW with watching you know Eight Episodes a week oh my God crash crash hard to watch hard to watch oh painful before we go today I want to move on to something else which is something we've talked about in the past remote work we we've talked about this a lot but I sense that as this whole thing is dragged on there may be some evolution in people's thinking about it Jay let me start with you I know most of your people have to be uh in in the office or in the factory do you have people who work from home I got 130 employees and maybe I've got there all maybe there's two or three that are doing some work from home um and they've been these these particular people have been here for many years meaning 10 years plus I would just ass soon everyone come back to work my issue is reading some of these articles from people who don't run businesses there's no right or wrong to this for some people it's going to work out lovely well tell me about you has it been working having these people out of the office I would rather have everybody at work I can walk down the hall and have a conversation I can have a meeting what at this point what is stopping you from requiring that well most the people are back um the the CO's not done yet and it's still floating around and it's now my people are back to wear masks in my factory because the numbers are up in Chicago CO's not over yet so I've been holding back to make an edict that everyone needs to come back to work so and my point is this isn't make you a bad boss or a good boss everybody has rights people have a right to go to work at a company that has the ability to work from home that's their right and is a business owner I have the right to want everybody to be at work every day and will it lose me some employees will lose me some poent maybe but again that's my right and it's everybody's right who works for a living to decide where they want to work I'm just getting a little frustrated reading articles from people that are talking about anyone who doesn't let their people work from home as some kind of dinosaur or Tyrant or whatever I'm not sure what you're reading but it's in your report baby it's right there in 21 hats there was a whole article from a guy put the word Tyrant together with letting people work from home no actually that was in the morning report I know the article you're referring to I chose not to highlight that oh I stand correct and maybe I did okay you're right I sent it to you actually all right take that out edit that out it was on another I just signed up from that I did sign up because of 21 hits so ultimately it's your fault [Laughter] Lauren agree Sean you uh early on uh sent your people uh home allowed them to work remotely uh you gave up the space that you had had the offices um where do you stand now what's your thinking wow I mean it's kind of fresh in that you know I'm looking at slack this morning and I see another employee got Co and his family has it and uh you know I think Jay brings up a good point it's not over even though every conference I go to now nobody's wearing a mask so I think that's a that's a consideration you know I just was reflecting on you know all the things I had done in my office to to make it to make work efficient and to get rid of the friction fast networks fast servers lots of monitors ergonomic desks and you know you see people hunched over their couch working on laptops uh I I just I think there's going to be a lot of hidden consequences to it that we're not really seeing right now I think long term we're going to get another office I think we will probably try to do the hybrid model where you know there's an expectation of people coming in a couple days a week um to to collaborate in teams but not the expectation of five days a week I have seen PE some folks really actually thrive in the work from home and actually probably get more work done than when they were in the office because we had an open Office environment um but then I've also seen other people like even myself I'm like I hate this you know it's it's just not enjoyable over the long term do you have a feel overall in terms of productivity do you think the company productivity has gone up or down over this period yeah I mean this is a good case for using some scientific process because our productivity you know if you just purely measure it is down um and we do measure it it's really hard to separate though is it down because people you know had to teach their kids from home and they don't have daycare and if we fix those problems will it go back up uh or is it down because you know fundamentally it's just not as efficient but at least the numbers right now tell me that all of us working from home does not match all of us working in the office from a productivity perspective there's another issue here which is the results aren't going to be instantaneous like for instance you can have a hundred people start smoking and everyone's not going to get lung cancer after 3 months that's not how it works well you can start having at work home well until you start to have employee turnover and now all of a sudden 30% of your employees have turned and they've never worked in the office what is the long-term effect going to be when all of a sudden you're not taking your 10-year veteran employee in there working from home now all of a sudden half the people that work from you have never been at the office it's gonna make a profound change over time I think that's a great Point Jay I I think the flip side of that that you do hear uh occasionally is there are businesses who believe they've benefited by expanding their talent pool instead of just hiring locally they've been able to hire around the country cases of that and Sean I think you've done a little bit of that right or have you hired around the country or people your existing employees moved around the country I went through no I went through a period of optimism around that idea and I've since decided it's terrible why I think to Jay's point I didn't realize that smoking was bad for me so um so so here's the thing I have an employee who has been with me 8 years she's amazing and wonderful before the pandemic she went and worked remote because lots of Life reasons and I was like we are going to make this work uh it's her 8ye anniversary so she's been four years remote four years on premise I think her success remote is directly tied to the four years of being at the office versus employees we hired like right before the pandemic or even in the pandemic it's been really hard to create connection um with those new employees like I don't know them as well they don't know me as well and so I think I'm not excited about the idea of hiring folks who have never spent meaningful time within the culture wait wait that's only half of it there's another half how many times do we hire people and we're with them every day and after six months we realize they're not very good they're at home you don't even know what they're doing I mean you can't really assess someone's quote unquote work ethic Talent anything they're not with you that's problem Dana you obviously uh can't allow your stylist to work from home but you've had a a couple of key people working uh from home haven't you I have and I agree with Sean I'm going to go to a hybrid model you know I used to work in a job that I hated going to every day and I just got more done when I wasn't in the office because of I like the job I just didn't like the people in the office and so so what I it was just bad anyway um and so we're going to go to a hybrid I'm just not a microman manager and a lot of my work from home views come from being in bad work environments where they use keeping you at work as a way to micromanage you and I just never wanted to be that person that leader this is another example of like the tech sector hegemony right so like we we look up to the tech sector as being like the thing and they're largely the ones who have made the case for work from home for many years and and now this is their moment right to say see I told you so but if you look at the tech sector I mean just setting aside its social impacts on our society like you look at the profile of the worker you look at the kind of work that's being done it's very different than a lot of businesses out there you know a lot of businesses where you know it's the human collaboration the support the training the management you know the kind of interface in the the millions of unspoken Communications that happen in a day body language gesture coaching meltdowns all that stuff yeah it you don't get that and and I think this is another great case of you know we're we're looking to the tech sector in many cases and the media loves to look to the tech sector but but I would argue that's not necessarily the sector we want to admire for lots of reasons or follow it kind of goes under the category of mind your own business like if that works for you great just stop telling me what I should be doing because you don't understand what I do for a living okay okay let me let me play Little Devils up just for a minute even though I threw it all under the bus I do know a few companies that are doing it well and here's the one secret trick that I have seen which is they are investing heavily in bringing people together in the real world for Meaningful moments so you know if they are all remote they're bringing them together to a space and they're having a weekend together or they're they're kind of going through experiences I think if companies want to do this if they really want to be highly remote they got to reinvest in that they've got to spend money to bring people together uh to make that happen otherwise yeah all the bad stuff all right we are out of time my thanks to sha busy to Dana White and to Jay goz as always really appreciate it guys 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 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 just th Baron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]