This Is Where We Get Into Therapy

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman once again this week our business owners discuss things business owners don't often talk about in public Laura Xander says she feels guilty about taking vacations about making more money than her employees and about knowing that her husband is closer to their son than she is Paul down says he recently reviewed 29 years of pnls and was reminded that he lost money in 18 of those years he also explains why he routinely tells his employees and US precisely how much money he takes out of his business J goz meanwhile says he's now embarrassed to be called a CEO and acknowledges that he's thought maybe he should have worked 20% less while building his business but he isn't sure if that would have resulted in 20% less revenue or perhaps 100% less Revenue this week we also set a podcast record for use of the phrase oh my God even in Good Times owning and running a business bus can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which 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 are regulars Paul DS who is founder and CEO of Paul DS cabinet makers which makes custom conference tables outside of Phil Philadelphia Jay goz whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home and Laura Xander who is CEO of Jimmy Bean wool a digital yarn store that is based in Reno Nevada and mateline TSH a wholesale yarn supplier in Fort Worth Texas the episode is titled this is where we get into therapy welcome Paul Jay and Laura great to have you here Laura's we haven't seen you in a while what's been going on yeah I'm glad to be back the last God month or two has just been a series of travel you know we took a vacation wow yes yeah so Huck Doug and I took off for a little over a week and went down to the Bahamas um at the beginning of May nice you know you guys probably know so when you take a vacation it means that you work 50% more the week before and 50% more the week after you get back and 25% less while you're away yes exactly exactly no we completely unplugged um I'm in a spot right now thank goodness you know after this last year and a half of taking over the business in Texas where we have a good team um things I've got some people in positions that are really running things so um we hired a production manager for Texas um and he started on Monday just a couple of days ago so I spent a good month you know really trying to hire somebody you know doing interviews and put pulling that all together and then um so spent a couple weeks in Texas and then I went on my own little vacation for nine days by myself so no Doug and Huck and I just got back a couple days ago um and I went into the mountains of Southern California um where there was no self service and basically just hiked and ran and ate really well and tried to get my energy back so now I'm home for a week it's hu's last week of school so I'm kind of you know working halftime and then next week I go back to Texas did that n-day break work did you get your energy back um you know I did not realize that I have been holding my breath for the last year and a half and have had like this anxiety you know where I can barely kind of catch my not barely but I don't know if anybody else has um you know where their anxiety kind of manifest through their breathing and they feel like they're constantly trying to get a breath you've talked to us about this a little bit you know at a couple of points where things were tough in Texas yeah yeah it's just this kind of like weird physical manifestation you know it's like this cue of how I'm feeling you know it's not it's not even necessarily uncomfortable I just know that I'm stressed out when I'm having trouble not having trouble but you know when breathing is not quite as easy and fluid anyway so yeah two or three days into this um into this adventure and I realized I am breathing like I was meant to breathe um and I did some training before this nday thing so the week before I actually worked about halftime you know I spent three or two or three hours I've been trying to get my fitness back um and I'm finally leaner and more fit than I've been in the last four years which was you know four years ago that's when it was the beginning of we lost money for two years in a row you know then we did a couple Acquisitions blah blah blah so it's been this long fouryear slog of just trying to survive um and I think we're kind of coming out of it um we're definitely coming out of it so I'm trying to kind of get my body back get my mind back and then now figure out how to transition from survival mode to like growth and exciting mode wow so you've taken two vacations since we last spoke to you uh Jay when was the last time you took a vacation a what yeah I honestly can't even tell you I don't know three years ago two years ago I it's the last thing on my mind at this point Paul when was the last time you took a vacation an actual vacation I took it my wife and I went up to New York for a day a couple weeks ago that was nice I don't think that's that counts I'm sure it was a nice day no last July I I drove across the country with my son which was 6 days of driving through covid infested North Dakota and all that kind of place are we calling that a vacation then that was a vacation okay that's about as much as I ever take Laura how did it go while you were away both your businesses the one in Reno the one in Texas how did they manage without you um totally fine like I don't know that they really need me well you make it sound like that's a bad thing that's a good thing right yeah it is a great thing but it's like I'm starting to feel kind of guilty cuz you know the well and the difference like vacation wise for me between the three of you guys is that I have a kid that just turned 12 you know so I've got a sixth grader you know and what I've heard and read is that you're supposed to spend time with your kids when they're kids so I'm doing that good thought yeah it's overrated yeah um but you guys have you know so I'm making that a priority so this summer you know the goals is to kind of work halime and spend as much time as I can with my kid especially you know again the last year and a half for two years I've been traveling so much I'm trying to make up a little bit of that time can I just add at this point because I think this is important I wish somebody would have told me this you know that old addage about there's nobody laying in their deathbed wishing they spend more time with their business that's kind of a cck because at the end of the day you're going to be dead in a few days it's the day you you drop them off of college hopefully and they walk away from your car and you want to vomit because you think oh my my God my kid's childhood's over and did I spend enough time and the difference is you hopefully have another 30 years to torture yourself about that so um it's not about the deathbed thing it's about you got five years before your kid's going to be walking away from your car going to his dorm room and you want to feel good about that and say okay I pulled this off I was home I did what I was supposed to so good for you that you're thinking about it yeah totally I'll give you the the opposite perspective which is I was home every night for dinner spent a ton of time with my kids have a great relationship with them and I think it seriously affected my business success in a positive way or no extremely negative oh sure yeah I just never put those hours in back at that time when it could have made a difference and I'm not suggesting it should be one of I get it I think one has to figure out what the balance to that is to put enough in to make sure you're making a living and providing for a livelihood I'm not saying it's all or nothing I'm just you know in my case for instance you know I have three sons so it was all about the little league and stuff and I thought okay I got to be at every game and then I realized nah I'll go to half the games and that was my compromise and it worked I think I I think that going to one extreme or the other you pay a price for it and uh um I so I think everybody has to find what works for them well let let me let me just throw in one more thing which is that you it's not a sliding scale that you can necessarily choose where you want to be on it in my case with a with an autistic son I had to be home yeah and so that there's going to be plenty of business owners who are in a situation where there's some kind of personal situation or distraction which prevents them from putting everything into the business and then but you get measured against all these people who are billionaires or whatever and it's very easy to fall into the Trap of thinking you're a failure because you could not achieve those things and I've come to think that it's like it's just the way it happened it's just what happened to me and there's there's no right or wrong I made that choice to to not sacrifice my family for the business and my circumstances made it easy to make that choice but I don't beat myself up anymore about how poorly the business did for so many years that's good because I will tell you most of these quote unquote successes that you read about personal lives are a mess so I don't even call that they're finan successful but I certainly wouldn't call them successful in life so I had to deal with that also and I'm perfectly happy with writing it up that I that it's not the income it's the outcome and My outcome worked out these other people with the billions and the kids are suing each other and the parents are suing each other and the EXP parents are suing each other and everybody's suing each other I don't call that success okay but those are the people you hear about because there's going to be people who felt like they couldn't put it all into the business and then the business failed yeah for sure they're not in a great position sitting on their billions no it's it's difficult I'm not saying any of this is easy at least to be conscious about it and you did what you needed to do and good for you well it's like I mean isn't it like anything else I mean if you're a pro athlete you know I mean you just have to put the hours in like if you're going to be elite at any in any field whether it's business or Athletics or music um I mean there are only so many hours in the day and there's only so much energy I tell you the sacrifice that that I've had to make which is you know kind of um flips the switch on the gender roles a little bit is that Doug is actually much closer to Huck than I am you know because I'm gone half the time and that was the decision as a family that we made you're gone half the time because you spent half your time in Texas with the company you bought yes and I just you know I simply work more than Doug does you know I I enjoy it um I get a little you know I not as much anymore but I used to get kind of frustrated that Doug didn't want to work more I'm like why are you g to spend so much time with the kid you know like can't you just work more how old is Huck he just turned 12 last a couple weeks ago so sixth grade okay in my experience boys are going to start to pull away from mom over the next five six years anyway they just will that's what I've heard and then I've heard like when they do go to college they're gonna um you know they kind of come back a little bit and realize that they actually miss their moms but you know point is that you know there's Doug's a better Doug spends more time Doug's a better parent and that was just the decision that we had to make you know that we chose to make uh you know I mean this is for us especially with these recent acquisitions this is our life savings this is all this is our net worth you know the majority of it and so we just can't let it go away um and I'll tell you one thing Paul you know and my situation is obviously different than yours but you know when we had or I guess I when I had Huck um the one thing that I really noticed that changed as far as work was concerned is no longer could I just Brute Force work 18 hours a day and do everything myself I had to figure out how to let other people do stuff and that was a really hard transition for me um but I simply you know before I had a kid I could just work and work and we I mean I worked seven days a week you know all the time and now all of a sudden like your hours shrink and you got to figure out I mean I had to figure out like how to be more efficient I had to figure out how to hand things off um how to let things go and our business actually grew as a result of me doing that because I didn't realize that I was kind of holding us back you know I'm often the bottleneck because I want to do things myself and then I don't have time to do it and blah blah blah so having taken these two vacations and being a away for two stretches of time and having things go well at the business with you you know unplugged does that change your mindset at all are you going to do anything differently as a result of having that experience um what it tells me is that we're in a good spot and now I can get out of you know I've been doing so much in the business you know setting up the software systems working on the metrics like you know kind of building the found foundation and so what it tells me is the foundation's pretty built and so now I can take a step back and I can start to think long term again and I can do you know my my favorite thing to do is to read and to think you know and then to do math so you know I'm still kind of holding on and maybe I should I'm wondering if I should start to let go but I'm still managing all the finances so I'm like our CFO you know and I'm doing projections and um and pricing and all that kind of stuff so if I can do what I love to do which is that financial piece plus TR starting to keep up again with you know what's happening in the world and where I see our brand going and where I see our business going in the next couple years then that's amazing I don't need to be in the office to do that I mean I can get on the trail and and just think you know I remember in the days when we had like massive growth that's where I was at and that's what I would do is I would come up with all these crazy outlandish ideas you know and I just needed the time and the downtime to be able to let my brain like percolate and think of all these things so hopefully we're in that spot again I thought the part of the business that you enjoyed the most was kind of the the crazy idea the marketing part not the CFO part are you are you doing both of those yeah but I love the CFO part because I love the data like I you know there're very few things in the world that make me lose time and looking at a spreadsheet I will lose time and I'll Lose Myself you know just like manipulating numbers and figuring out like reports and stuff like that so it's those it's the combination of those two things it's the creative side and then having the numbers kind of to support it and coming up with like cool formulas I haven't been able to think of the crazy ideas because there's been too much housekeeping which is just what we had to do Paul if you wanted to could you take a week and be completely away from the business oh yeah sure so what's stopping you I like coming to work I mean the the the thing that stops me from 9 days without internet is not work it's uh my personal situation and I needing to reserve bandwidth in case something is going on with my son so um I'll give you an example last time a couple years ago my wife and I took a vacation and we hadn't taken one in 30 years but we signed up to fly to Finland and stay in hellsinki for a week and I set it up so that my autistic son was a camp that week and uh so we drop him off a camp then we get on the plane fly to him Finland and we didn't just choose Helsinki out of nowhere my my other son was working there for the summer we're having a lovely time my wife and I were walking through the art gallery in in in hellsy and my cell phone rings and pick it up and someone says are you are you Henry DS's father and I said yes what's going on and she said well they just came and dropped him off in the emergency room here and there's nobody else with him and we don't know what to do he he can't speak he's and uh and I'm like well I'm afraid I can't help you I'm in I'm in Helsinki and it turned out that he had had a seizure while at camp and fallen on his face in the gravel Street and the now the Camp staff were actually great but they had put him in an ambulance and the ambulance got to the hospital faster than a private car they wouldn't allow anybody from the camp to get in the ambulance for some reason so the ambulance shows up and there's Henry and uh and the car is following because it just can't get there as fast as the ambulance so they I don't know how they knew to call me but they called me but that's that's like okay uh there's a certain piece of me which always needs to be ready to get that phone call and having sat through that feeling of helplessness while I'm in a I'm in hellsinki and my kids in an emergency room and can't explain himself and um I'm loathed to take a long vacation that's just me so there you go that's understandable I have to say it just it should remind everybody that everybody you know you know some people have much bigger struggles than other people and you should be thankful if you don't and I this is part of why I put so much energy into helping my guy with autism Workforce because I know having someone on the Spectrum can be either very difficult or a little difficult and I'm I'm glad to help out anybody that's got that situation because it's it's it's and this is the word a woman told me it's exhausting hats off to you for doing what you got to do yeah honestly I've set up my business so that it doesn't require a 100% attention from me every day and then just coasted you know it's like it's okay we I I try to do strategic things that are going to grow the business and we have a number of efforts like trying to get a GSA contract and uh we're just engaging a new marketing firm and I'm doing a bunch of stuff but I delegate everything I can La you talked about having your child and realizing you couldn't work well in 1994 when I had my children when the first ones arrived culturally it would have been fine if I had just said to my wife you know here take the kids and um uh and I had just continued to work a lot but we had twins and one of them very quickly turned out to have special needs and it just wasn't an option so I got my head around that same thing of needing to learn to delegate and ever since then I've really become like well why wouldn't you delegate uh I make a lot more money and work a lot less hard by delegating everything in sight and now I can come in and do a podcast in the middle of the day or take a nap if I feel like it and no I'm not going to be the next Bill Gates I'm not pushing hard enough to do that but my business isn't really one that's that simple to scale anyway so I'm pretty satisfied with where I am the fact is you are a tremendous success given everything you're a tremendous success and you should feel good about that because you've managed the balance at all and and good for you I take my hats off to you far more than I do to these people that are billionaires and got messed up lives so good for you yeah and what if we measured success not in like the number of dollars but the amount of flexibility you know and free time and I I mean I hate to say the balance stuff because it's not that but it's the freedom you know so now all of a sudden it's a trade-off you know we could sure we could probably make more money as well if we pushed harder and harder and harder and harder but I just I don't want to you know like I want to hang out with my kid you know one of the tricky things I think is you if you you can say to yourself I'm going to work 20% less or 50% less or you know whatever you choose but you really can't control what the ramifications of that are you don't know that working 20% less just means you know 20% less Revenue you are reliving a conversation you and I had five years ago when I said to you you know Lauren I bought all this real estate along the way I'm more successful than I thought I was going to be and I really don't need I could have worked 20% less and I still would have been good and you said that to me you said you don't know whether that 20% less would have meant complete failure or not and you know that's that that was true then and it's true now you're right it's it's not a linear relationship 20% less work doesn't necessarily mean 20% less success maybe it means you didn't have the critical mass to succeed it all who knows I work as hard as I need to work you know and the only way that you know how hard you need to work is to look at the metrics and to look at the numbers and to try to identify Trends and you know maybe we're having a bad day today or a low Revenue day today is that indicative of the next three months are going to be low and that's why I think the numbers are so important Paul you've been very open and public about the ups and downs of of your business throughout its history and there have been multiple causes for that that you've talked about before but were there ever times that when you worried about the need need to spend time with your family and the impact it was having that it could actually cost you the business sure absolutely how did you deal with that I I don't know you know it just I did everything I I I just went in every morning and and and worked the business and uh and it never quite failed that's the only answer I can give you I mean there were moments when it should have and and I was fortunate that I could call somebody and get some help you know family money on a couple of occasions was critical I actually my brother who is a shareholder his accountant asked uh whether my brother had enough basis to to take a loss on his taxes last year because the company lost a lot of money and uh he got his K1 and an accountant comes back says can you actually deduct this so I had to go back and do a basis calculation I don't know if you've ever had that fun but what exactly does that mean basis is boy well let me answer that because I know that answer and I I've had to deal with that basis is how no it's how much money do you have invested in the business you can't write off more than your basis was you can't write off more than you put in the business so even at my stage I've had issues with that with how much basis is left in the company if you took some money out so you can't deduct more than you had in it so the accountant is asking your brother did you lose more money than you put in the business basically right so that good good explanation and the he's been a partner since 1992 so the basis gets recalculated every year based on the profit and loss of the company and I had to go back and try to reconstruct whatever that is from 1992 29 years of of uh pnls and a lot of times you know it's just hard to get my hands on the records but I dug through the back room and went through every K1 and we had lost money in in uh 18 out of those years and we're still theoretically in the whole just on a p&l basis now there were loans to the company that affect basis there was stock purchases that affect his basis so I don't really know what the answer is for him but I got to say it was sobering to look at that and just looking at say the company results from 2003 or something it brought me right back to those moments and and just thinking like oh my God what a year that was and and uh um honestly I don't know I I can't give you an actual answer like I did this and it meant that we survived or I did that and it meant that we we uh we had less Revenue there's just no answer in a way going back and trying to reconstruct because you don't even know you don't even know uh what caused this person to call me at at a critical moment when I needed business what caused some other person to not call me when I could have used the business there's there's such a a swirl of possible uh reasons that things happen that there's I don't think there's much value in trying to really pin it down and say I did this or here's three rules for Success you know what I can tell you that 30 years ago I was completely out of control I was over my head I always had I was taking care of customers and and always did you know what I think was decent marketing and the business was growing like crazy but I was always two or three years behind I as soon as I got comfortable managing 10 people I had 20 people as soon as I figured out what managing 20 people is I had 40 people and I was all day long putting fires out and I once had a customer say to me I had some problem and he looks at me he was older than me by by 20 years he goes Jay the bigger you get the harder it gets and I thought to myself oh my God please don't tell me that and the fact is he was absolutely wrong um it took a while but I finally figured it out I got things under control once you slowly but surely you learn what you're doing hiring firing management it does get easier and then the other thing I'd like to just say is there's such a thing as having enough money I didn't think that was possible but there is a point to where you have enough money that you can buy what you want and you really don't need to be worth $200 million and and um it's okay and um so it does get easier I've told Laura that numerous times I it it gets easier it's it's not like an athlete that's got natural Talent worked really hard and at 22 they're at their Peak no no no that's not how business works it takes years to get the skill set to run a business sounds like Laura might be reaching that point where it gets easier yeah sounds like it yeah I mean it's yeah well because of Jay because of the great mentoring and because of this podcast you know and Paul's advice mostly because of the podcast right podcast exactly exactly but thank you for saying that you know there's some truth to I mean I'm saying it in just but oh there you go I I just want to say several people have sent me emails saying that you do elder abuse on me and uh I just want you to know that then I you know just think you should know well maybe you deserve it yeah okay um I was just going to say you know part of um the getting easier also is having more friends and mentors you know as you get a little bit older and it took forever to find somebody you know that like Jay that I can text and send messages to and say okay have you ever experienced this have you ever experienced that but that takes some time are we still in the Jess mode now or is that real now I'm I'm confused it's real it's really real I want to move on to another topic the topic is Amazon we've had a number of items in the morning report this week uh based on an investigative report in the New York Times looking at their the way they handle their uh employees uh a couple of uh key points they apparently have uh an employee turnover rate of 150% uh and they've had uh Executives there have serious conversations about whether or not they will run out of Americans that they could hire uh as the company continues uh to grow apparently a lot of this stems from a basic belief that Jeff uh basos has expressed that um most people are lazy and that they actually want turnover there because people come in and they work hard for a while and then uh they slack off they it compared Amazon to some other very large employers uh for example Walmart promotes managers of its stores from within whereas Amazon at its warehouses and distribution centers that's a a very hard thing they basically give somebody a job to do and and that's the job uh they do it 10 hours a day and there's no uh there's no real track for uh change or advancement what do you guys think of that what do you make of it when you read that stuff I find the whole thing extremely disheartening and embarrassing that like I I've said this before I don't want to be called a CEO anymore if that's what a CEO it's just it's just it's embarrassing that a CEO could say that and think that and and Walmart never got an award for you know employer of the year but now the fact that they look good compared to Amazon gives you an idea of what's going on in the world I mean it's it's it's really just disappointing disheartening and troubling and and it begs the question where's the government I don't know is the government supposed to do something about or about they broke up Standard Oil 10 and some years ago they you know it's it's we're in the age of robber barons again where people are just taking advantage of people and becoming multi-hundred billionaires it just it's and I don't have an answer I'm not that smart but it's really just depressing to read that stuff I mean these jobs involve walking 10 to 15 mil a day on concrete um like why wouldn't there be 150% turnover I see that sounds low uh you know if uh and I invite Jeff Bezos to work in his warehouse for a couple weeks he'll figur it out I mean but to a certain extent should the government be involved because Amazon has the power to fix this thing tomorrow if they feel like it and they probably they probably will well the government got involved in the 1920s with factories that are working people to the Bone I mean I mean this isn't a new phenomenon well at the point where they've hired all Americans and and given them a go and still can't staff their warehouses they'll probably figure it out but uh the other thing though is I think that the framing of the story uh is one that that kind of bothers me which is a problem has arisen sometime in the last year or two and there needs to be an instant solution or we're going to throw government at it and I don't think government is capable of why do you think the problem has only Arisen in in the last year don't you think this has been a problem for some time uh possibly but possibly not I mean the co brought this tremendous expansion of these warehouses there's one going up just down the road from me that uh 6 months ago it was a functioning pharmaceutical Factory got leveled and now they're putting up an Amazon warehouse so I would say that that there's been a big shift in the economy and this is part of that story which is that an adjustment is going to need to be made but you sometimes you just need to be patient to see how the adjustment plays out you know that's easy for you to say but did you read the story about the guy that got covid he's now in a in a vegetative state he can't talk he and they keep sending him emails saying hey when are you coming back to work I mean that's just one guy out of the thou this is this had some serious serious consequences this isn't about people getting tired and quitting this is about serious employment abuse you can you could find a story like that in any organization pretty of any size oh my God I I couldn't disagree more I think there are actually some corporations out there that still have a conscience and and treat people properly I don't believe that everybody is the level of Amazon I don't believe have I'd have a hard time finding another CEO that would go and tell someone that people are inherently lazy and I don't want them hanging around too long I want to keep juring people you've never you've you've never heard that remark from any business owner oh my God I haven't maybe you have oh my God sure I've heard that remark so many hundreds of times let's say that's true is that right is that a good thing is that some people are inherently lazy clearly I'm not arguing that all right next Topic in a business like the businesses you guys run there are always certain people who know more about what's going on than other you as the owner have to trust certain people with information whether it's your accountant your assistant um that you may not necessarily want to share with everyone in the business or certainly everyone publicly is that uncomfortable uh not for me I just tell everybody anything they want to ask really somebody says hey Paul how much money you make this year you tell them I put it it's on the wall right now really complete with my salary highlighted and it says Paul's share right on it wow it eliminates all questions about I don't make an outlandish amount of money I made like a quar million bucks last year and uh and none of my people have ever expressed any problem with that that's going to surprise a lot of listeners Paul do you have you ever sensed any resentment not at all because I think that they all assumed that I was making a lot more than that what and then I pay my people well too that's so much money oh my God why is that so much money I mean I there's a couple of guys in my vistage group who have companies that have the same gross revenue that make five times as much as I do what some businesses are very very profitable mine is when run correctly is kind of profitable I mean that's like 8% it's not huge let's let's remind everybody that's not just the salary that's a return on investments included in that he's put many many years and many dollars and took many risks along the way this is a return on investment it's not just like he's an employee somewhere making 250 it's it's buried in that is all the investment that he put in the place over these years so that's the profit basically right there's no profit after that right I pay myself a salary usually somewhere I mean it sort of dials up and down like last year I dialed it down a little bit paid myself a salary of about 175,000 and last year was sort of a weird year because the the the the co situation and the PPP rules kind of led me to do some spending in in December that I wouldn't otherwise have done but let's say it would have been a break even year I would have probably taken home about 200,000 bucks and uh on revenues of 3.6 million the year before that I took home 275,000 on revenues of 4.1 million and this year will probably be about the same so here a question what if you tweaked your computer thing and you got more business and next thing you know you're doing six million a year and now you can pull out $650,000 a year you putting that on the wall yeah I would okay that's me and and I run my company in in a way it's me and my company's culture if if I was running an ice cream stand with minimum wage teenagers in a cash business and I was taking out a million bucks a year no I would not tell them about it cuz they would start stealing from me that's not to pical in my business with my employees they're all well compensated better than they can get anywhere else it's a nice place to work and uh and I and I've told them for years like okay I'm the owner I should make some money I don't think it's an outlandish amount I don't think 600,000 would be an outlandish amount what is an outlandish amount I would say that that taking home 30% of the revenues is is starting to get to be like wow but I know guys who take home 25% of the revenues like my target is usually 8 8% and I generally can make it in a good year if I bumped it up to 10% I don't think anybody would be would be really upset because I wouldn't have done it out of their backs like we get that money from our customers not from my employees everybody gets the money from somebody outside this building and again I've made that clear to people Laura let me ask you what given your surprise your business I think might be two or three times the size of Pauls in terms of Revenue what do you think is a reasonable amount for a a CEO owner to to take out in salary uh that's a great question I I don't know I guess Lauren I question the whole basis of reasonable I don't think there's such a word she owns the business what she makes she makes what is unreasonable I mean I'm reacting to Laura's reaction to the amount of money Paul was taking yeah yeah I guess I think about it in terms of what's my replacement cost so if I had to hire somebody to do what I do what would we have to pay them and I just don't know that somebody I don't know that we need to pay somebody to I don't think I'm worth 200 Grand this isn't a public company it's your company if you could make $3 million a year that's not unreasonable and you can lose $3 million you're a $10 million a year business yeah more but yeah and you don't think that you could you don't think you'd need to pay someone 200,000 bucks to run that that surprises me I think so oh for sure something is very different in Reno you know like is housing free or something but no uh on the East Coast that wouldn't get you much no and that's true I mean it is less expensive out here but but I but I you know I haven't looked for somebody um now Doug's job I think is you know we would have to pay somebody hundreds um to do what he's doing you know probably three to 500 we're conflating two different subjects one is what it would cost to replace yourself and the other one is what's unreasonable you don't have any investors if you had an investor you'd have a responsibility not to quote unquote pull too much out of the business before the profit are split up but you own the company so my argument is this whole thing's a mood conversation cuz if you could make a million six on your business more power to you I I mean it's not unreasonable there's no such thing as unreasonable if you own the business yourself and you don't have investors and Paul your friend who's who's making that who's making 25% if if he or she built a business that could have that kind of hey more power too again not unreasonable you're not taking it from anybody he's built a business that was profitable yeah I don't think that that uh I don't think that I'm pretty sure his employees have a fairly good idea what he makes cuz he's a very open guy too maybe not as much as me but yeah it's like if if if all of a sudden my employees were at my door you know villagers with the Torches or something like you're making too much money I'd be like oh [ __ ] off get out of here go start your own woodworking business see how it goes 36 years later see how see how you feel and uh that's that's what I'd say to them I don't think there's any shame in what I'm doing no and I think you know and Doug feels the same way I think maybe it's a female male thing I think for me it's just the guilt it's like I feel really guilty making more than somebody who's there every day 40 hours a week and but who did you take it from you you g your your customers gave you the money for for providing them with wool that they valued at the selling price there's the money you didn't take it yeah but my employees are the ones who are doing the work to make the money come in are they well paid are are you making them walk 12 miles on concrete every day no know they're well paid but their house is not as nice as mine and that bothers me oh my God Laura you need to get over this do it doesn't bother you does it bother you when you can't sleep all night because you just lost money and you had two bad years in a row does that do you feel guilty about that that they're not sharing the guilt with the the the the pain and misery of it it's like you really need to get over that because that's the you know that's the nature of owning a business here's the thing you gave them money but you never asked for money back and that's that's that's the dividing line between an owner and a non-owner that there have been moments when I had to you know reach into my personal checking account and and put significant money into this business so that they could be paid no you're totally right absolutely and we've had to do the same thing I mean we're still paying ourselves back um so we are in debt to ourselves right now all right so you're over the guilt now did we do it no yeah hopefully Jay how many people at your business know how much money you take yeah uh just a couple the CFO and the person that runs payroll are you at all uncomfortable with that did they know um there are times where I have to do something with finances that I frankly wish that I didn't have to go and tell the person that that yeah but it's the nature of the Beast if I decide I got to pull out x amount of dollars because I got to pay down a loan or whatever I you know I just can't do everything myself it's you know so they know and that's the way it goes I it is what it it is what am I going to do run the payroll myself Lauren do you remember when I first proposed writing a column in the times that said how much money I make sure and you were like are you sure you want to do that and then uh and then my wife it was like are you going to do that and then I did it and guess what nobody cared it was no problem whatsoever my employees didn't care cuz there wasn't anything outlandish about it you keep using that word and I still challenging you're right what the amount of money you're pulling out nobody could argue that you deserve that but my question is nobody could argue that he doesn't deserve that no my no no he clearly deserves that and like no I don't I'm not surprised no one gave you a hard time because it's not that that that it's not that much more than they're making but my point is what if you could have pulled out 800,000 is that does that mean that's outlandish no it just means you're more comforable but when but when business owners don't fess up and don't talk about this then everybody's left with the wrong impression because I as I said when I told people uh most of them were surprised how little it was my employees that's a great Point that's one that Jack stackus the you know inventor of open book management has discussed frequently he he always tells people who are considering opening their books that you know whatever fears you have your employees probably assume you're making a lot more money than you're actually making so you might as well tell them what it really is exactly and and then it becomes a convers ation which is freighted with shame and oh my God and you know Jay you're claiming that that that everybody should be proud of the amount of money they make which is fine I don't disagree but unless there's some some cultural understanding that a business owner taking home 10 to 20% that's just what it is and and uh then it would be so much easier to have 10 million conversations that would be useful to have and uh and when we when we wrap this thing in mystery and everybody skull around like oh my God I can't possibly tell you how much money I make from owning a business well people start businesses with bad expectations people work for businesses with just fiction bouncing around in their head oh we did 4 million in sales last year that means the boss made 3.8 million you know like believe me that is happening when you don't provide real stories real facts to people they just make stuff up and then you're really in a in a crazy world I generally I can't I don't argue with that generally but but again if somebody happens to figure out how to get a better bottom line and they're making 800 Grand I don't know what the point of telling everybody that is Laura I'm curious with you given your feelings of guilt are you uncomfortable with the idea that there are certain people at your company that know how much money you're taking um sure yeah I mean my salary is low you know my payroll salary is low and I mean not low but I'm not the highest paid person at the business um and neither is Doug so that doesn't bother me wait wait wait what I know you employees making more money than you're making from a salary standpoint yes okay but then we take distributions right right now we're just paying back you know the loan that we made to ourselves so certainly there are things that I get uncomfortable with like you know one of our um our office manager our accountant sent our taxes to her the other day and I'm like no you know I don't want her to see like you know the all of it plus your social security number now oh I don't care you say that please you say that until it happens then you're gonna find out I'm sure yeah I'm sure uh so yes yeah it does me I mean because I feel guilt and I feel but I'm learning a lot just from listening to you guys I'm surprised after all of the difficult times you've had CU I certainly used to feel like you did I'm surprised that after all of the difficult stressful times you've had you haven't finally figured out this is why I make money because I did and maybe maybe just because I'm older than you at finally some point I realized this is why I deserve versus guilt replacing guilt would deserve this is why if I happen to do well because of what I did and the business is really profitable I no longer have any guilt I certainly used to um it's the deserve thing even taking this last week off I feel so much guilt because everybody else is working and I'm not don't they get vacations your employees they do yeah they do what's the problem with that I you know I mean this is we're going to get into therapy I think we're already in it so just finish it out it boils down to the deserve thing I don't deserve it you know because I haven't worked hard enough I've made too many mistakes you haven't worked hard enough I could have worked harder oh man you should go you should go read that book uh what is it the jungle okay uh where the guys like in in the meat packing industry and every time he gets utterly screwed by yeah he gets screwed by everybody in sight and then his reaction is oh I should work harder it's like no you're getting reamed by the politics the business the government you know like everybody's on him and you're just seeing it I don't know who taught you to do that you should go slap them because you you I'm done Laura is this a surprise to you cuz it was a surprise to me when someone pointed out to me 20 years ago would it be a surprise to you if I said that you're obsessive do you know that about yourself oh absolutely okay well this is part of being obsessive you don't think you're working hard enough you don't it's all part of being obsessive and I I I my I was talking to my friend one day and I we he was he I said boy the guy in the article I think it was Bo Burlingham actually he said you know he called me obsessive and I was telling my friend this who's know me since I was 10 years old and he goes Jay you are obsessive you didn't know that you used to time yourself when you cut the lawn at home and I go what do you mean I used to time myself you know but but I got to tell you I'm obsessive and now I recognize it and I made some adjustments yeah no you're absolutely right of course you mean you don't time yourself to see how fast you can get the mail and see if you get a PR doesn't everybody do that oh God yeah it's crazy which is a with myself yes it's with myself and and I think there's probably some maybe it's not narcissism but it's that I you know feel like I'm the center of the world and so you know everybody's sitting there watching what I'm doing and paying attention to whether or not I'm working um and I realized that that's not uh rational and not accurate but anyway so yeah I'm fighting it well let me just say thank you for for sharing that cuz I know for a fact that there are a lot of business owners who feel the same way you and uh I think will'll probably benefit from this conversation I think just one thing that has helped me a little bit and Jay and Paul you just talked about this is the return on investment so if I can switch my thinking and reframe it as okay here are either the hours that I've invested and or the capital that we've invested over the last 20 years now you know I'm getting a return on investment of 7% you know or whatever that number is then that kind of help helps me step outside of it as if I'm an investor in the business you know my my job as the CEO is a paid job and is different but then I also have a role as an investor just to put some numbers on that since you brought it up the return on investment in a business should be in the 20s at least because if it isn't you'd be better off just putting the money you know into real estate or the stock market totally so so you should be able to have a metric that you should be able to figure out here's how much money I've got invested in the business and you should be able to get a 20 some per or more return Paul your friend that's pulling out the big money might have a 300% but you shouldn't have an 8% return on investment running a business there's too much brain damage to get 8% you could you know go get an index fund and make that that's I would I would say that that's a metric but it's not the only metric because part of it would be how much you enjoy the business sure absolutely there's a big part of my my life today which is my business allows me to be have a place where when I walk in the door everybody kind of pays attention to me and if I didn't have that or you like what you're doing I I absolutely no absolutely I like the power and I like the influence and it doesn't show up on an Roi calculation so you know like if the money was in the stock market what would I be doing all day just sitting at home reading the New York Times I mean God bless it but that's not that's not nearly as nice as having a business my thanks to Paul DS Jay gz and Laura Xander as always guys thanks for sharing really appreciate it wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's l r n at21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe subcribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess Theron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]