Warrior Mode

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman back in the fall I started having weekly conversations with five business owners in which we tracked their entrepreneurial Journeys and talked about the challenges each business was facing early on we spent our weekly sessions talking about pricing hiring firing digital marketing these days we talk survival we recorded this episode at noon eastern time on Friday April 3rd the first day that Banks started taking applications for the the SBA backed paycheck Protection Program rescue loans all three of this week's participants had their applications in the works all three had already laid off employees and all three were trying to game out what their businesses might look like on the other side of this pandemic and what it might take to get there this week's 21 hats podcast lineup includes William Vander bluman who is founder and CEO of Vander bluman Search Group a recruiting firm that specializes in working with churches and other faith-based organizations Dana White who is founder and CEO of paral Boyd a chain of hair salons based in Detroit and Jay goz who has several businesses in Chicago including a picture frame shop artist frame service and a home furnishing store Jason home it was William who set the tone for this conversation when he told us he'd cut 40% of his payroll the day before my decision he said was I would rather cut deeper fewer times so I'm going to do this once owning and running a business can be a lonely Pursuit even in Good Times our hope is that these weekly conversations will if nothing else let business owners know they are not alone in facing these extraordinary challenges if you find some value in this please know that 21 hats is a pre-revenue startup and we too can use all the help we can get if you know a friend who might benefit from this conversation please share it please subscribe wherever you get podcasts review us rate US it makes a big difference we are also doing weekly live webinars now the 21 hats War Room Thursdays at 2 Eastern Time where we give you access to an expert we've chosen to help you get through this crisis you can find out who the guest is each week by subscribing to our daily newsletter the 21 hats Morning Report you can subscribe at 21h hats.com you can also contact me with questions or suggestions at L Feldman at21 hats.com thanks for listening let's start with a quick update uh how are each of you doing where do things stand with your businesses uh Dana your hair salons obviously are still shut down how have you uh how have you been spending your time I've been spending my time um getting ready for who and what Peril Boyd will be um when we reopen um I've been spending my time uh trying to understand small business loans and grants and County grants and um loans and just trying to you know wait for applications to be ready online things are changing by the hour so I spend my time just kind of staying in the know and um you know trying to keep up with everything so I can get as much help moving forward as I can when we spoke last week we talked about the possibility of your creating uh Hair Care kits to uh keep your customers uh healthy and engaged during this period but you weren't sure about the timing of it have you gotten any further along in your thinking with that I have but the timing is still it's still not something that I'm going to be ready to bottle and label you know you hear different things about how long this is going to go and so I'm just going to keep moving forward and and if we find that we do have the time for it then I'll do it but for right now it's just a matter of just taking it day by day William I know you've invested uh a tremendous amount of time in analyzing the uh cares act and figuring out what it means for businesses like yours as well as for faith-based organizations that you serve um and I want to talk about that but first what's going on with your business well I think uh Lauren we're all learning as we go um I had a I've LED from my gut for a long time and now I've learned some things where I check my gut against stats and data and uh I have a fantastic coo who thinks makes his decisions through thinking so our gut and our thinking lined up a while back saying you know this is just not the time to sell uh particularly when you're selling to people who are trying to provide hope whether that's through a school or a nonprofit or a church and so we made the uh decision knowing it would cost us sales which you know our sales bill out later so so we won't see the revenue dip from that until summertime so your your revenue is still good now and you expect it to hold up for for a couple of months uh through April you know and and it it'll trickle down but the gist of it is we sell something and then it bills out over either three or six months so we're still riding the tale of sales we had a very very strong January and February our best ever and that was really good but we knew this would this would hurt I've told our staff three things first of all connection Trump's content right now connection is key I I I have a list of 15 pastors that I personally call every single day and I'm amazed how long people want to talk because everyone's you know loneliness is is the signature of Hell in any faith we've said if if when you connect care for them not and I saw on Forbes yesterday one of the trending articles was five alternatives to how are you doing because nobody nobody's doing well oh so like care for people in their moment and then finally produce content and then and in the last week with this cares act we've been able to do all three things at once and it's been a a swamp of business for us just unb geometrically higher web traffic than we've ever ever ever had hadn't produced One sale but uh you guys all work with sales funnels and you know there's the top and the middle and the bottom I think we've actually created a new part of our funnel called the tippy top and that's not why we decided to serve but but people are like I trust you more than my bank right now we're not doing a search but whenever we come out of this we're calling you and that was not the intent behind the service the service was really just like this is the right thing to do right now but I think on the long side of this Gap that we're in uh it will prove very fruitful are you employees all still working no no we did furlows and layoffs yesterday how did that go well how does it always go sometimes better than others I mean if my pastor friends are listening they're going to get mad at me right now but do you guys see Good Morning Vietnam a long time ago yeah yeah and and Robin Williams did the weather forecast for Vietnam that day and he said today the weather will be hot and shitty and just with another front of hot coming through so it never goes well it's awful uh but uh uh I think that unlike some businesses we actually take time to pray with our employees before and after and and uh uh that's a long separate episode but it is a painful time but in order to see the other side of this Gap we just had to make some changes and hopefully be able to bring everybody back but but it it is what it is how many people are we talking about William uh we did so we did a combination of things first of all I for I threw my salary away for the rest of the year as the first move and made sure everybody heard that so uh I'm not taking a salary and my lead Team all uh very willingly agreed to take a 25% pay cup for the remainder of the year um so that was where we LED from and then it was a combination of uh layoffs where we're probably not going to bring you back you need to go look around furlows where this is probably going to lead to a surge of business later and we want to be let you know we'd like to bring you back and then uh pay cuts and we we chose not to cut people's pay at the bottom of the pay scale because they're already living a more uh I don't want to say hand to mouth but they a pay cut would hurt them more it's so funny you say that cuz I sat down with my CFO we haven't done any pay cut yet but I came up with the exact same formula you did we're going to go to the top people meaning over a 100 Grand and say 25% and our Line in the Sand was 60 Grand and if you make less than 60 Grand a year we're not touching them that's that's almost identical to what we did Jay and the the bottom line you asked what it was we cut 40% of our payr yesterday yeah I got 115 employees we we immediately um let go of 10 of them and the rest of them were waiting to see I haven't done the pay cut thing yet but most of them are on on Furlow now I will also tell you that if you talk to the law firms and I've been on some of my daughter-in-law is a labor attorney she's with a big law firm and even the head person there he says something about our understanding of they're not even sure that's right it it is not Crystal Clear what's the difference between a Furlow and a layoff or a it would be really helpful if somebody in the government would simply give us some guidance that's cuz the rules are changing every day literally uh they've changed every day this week Jay I would just encourage you next week the this week we're not focusing on layoffs we're focusing on the cares act next week go to church covid19.ca.gov need for knowledge on that and actual knowledge and it is changing every day so we change the site in real time William I'm I'm curious especially given the nature of your business how exactly did you do the layoffs did did you do them over Zoom well so that's the hard part right I mean we're it's hard enough anyway but you got to do it over Zoom so a couple mechanics um so we so so for right or wrong my decision was I would rather cut deeper fewer times so I'm going to do this once and if we get through Q3 and it's and this we're still in a mess and it's an ice age and not a winter then we'll have another round but what I didn't want to do was have two people get laid off this week and then two people next week and then and everyone's wondering is it my week this week and my best people start looking around I I I didn't want that right so we decided we're going to cut deep and uh Wednesday evening um I sent out an email saying hey guys appreciate all the hard work who could have seen this coming uh We've analyzed our second quarter and what happened and and this is how severe it was for us Lauren uh January year-over-year we were 18% ahead of this year over last year February 18% ahead this year over last year q1 so you add March in we 18% below year-over-year so it eradicated all our sales growth and then took us down below that so it was bad I have a question so you're like your your best people are looking you know they're going to go elsewhere where are they going to go I think there's always room for really talented people because I know everything is shut down right now and so that's where my I had some of my staff threatened to quit um and I you know I discouraged it because of you know I I laid them off and provided temporary leave early um like March 15th right and so they're like okay well I'm going to quit and I said well before you do that I know you don't like being laid off and it's emotional right now but if you quit I can't pay you unemployment right I have to report that you're no longer an employee so they're like I'm just going to go get another job and we said okay but know that this is coming down the pike and we're going to be a na you know a state Disaster Area nobody's hiring right now except for grocery stores and and you know some convenience stores and people that need help you know with stocking and stuff and even then they're going to hire INF flux of people and then when this abates it's going to they're going to lay off more people again or they're going to let people go so with your industry where are good people going to go and get money faster than already being on staff with you well it's a great question and I don't know the answer we're making it up as we go right if there's any way I can provide certainty in the middle of this incredibly uncertain time I'm trying to provide it well here's the word I Ed and I'm 100% % with you on this this is about avoiding collateral damage that's what this is about and if we can give that and it's about confidence and if you do your first cut and you stick okay he knows what he's doing and round this together to your point the dripping of every two weeks it's not a good thing it's bad leadership so so the answer is if we can provide a sense of stability of okay guys we made some adjustments this should get us through this whole thing and okay then everybody's a little calmer we don't need to make people start thinking about boy he sounded really nervous I wonder if he's gonna be out of business in six exactly right and that's why I did it yeah yeah and and that Jay to your point I uh sent out this email the night before saying we've looked at q1 and you know Q2 and possibly Q3 the fiscal Outlook is not good and in order to be able to serve our clients on the far side of this we're going to have to make some changes so join me tomorrow morning all staff on Zoom unfortunately and we met for an hour and you know honestly I approached it like a funeral you know no laughing no jokes as much as you want to lighten the moment it's just not light and told people what was up and then everyone received a personal Zoom meeting throughout the day and that was probably a long day for the people that had the 4:30 and 5:00 meetings but uh so firing over Zoom is a really interesting thing right I don't know there's Playbook but we decided even though it costs time and and money it's worth it to care for our people and probably worth it from an HR standpoint that every call involved at least three people so so there were no one-on ones and again smart people didn't find out at the big group meeting who specifically was staying and who was going no in fact I was late for our recording today because we have our weekly all staff right before this and this was the weekly all staff right after yesterday where we had the zoom call and everybody's like looking to see what panels aren't there and we had to go through okay here's and here's why here's the why behind what we did we weren't we didn't share that during the the adjustment nobody wants to hear that not not then but afterward today we spent a long time saying guys here's the why here's what the sales funnel looks like here's how long it's going to take to refill it here's what that means for the sales cycle here's what that means for revenue and even with the cares act what we don't want to do is burn resources so hard through the summer that we wake up in the fall and we have to fire people right when our surge is coming back well that's what I want to ask you William um everybody I'm on your staff I'm sure is well aware how much energy you've put into figuring out how the car's act works and I I suspect you know that they understand that that act was designed to try to keep uh businesses like yours from having to Furlow or lay off people would did that se confusion were they uh understanding that you had to make this move or did they wonder why the cares act wasn't saving their positions well Lauren I'm the wrong person to ask because I doubt any of them are going to tell me the truth you know the first day you're the CEO is the last day you hear the truth that's just I got to tell you I think you're both exactly right Lauren you're correct people are a little confused like oh well I thought they were gonna come and save the day but William you're also right no one wants to come right out and ask you hey by the way am I going to get paid when you get all that money from the government nobody wants and I had my six key people on the phone with me yesterday on a conference call I'm talking about they all have been with me literally 20 years plus and nobody had the nobody wanted to ask me the at the end I go anybody have any questions about you think we're doing anything wrong right and don't think that I don't have in the back of my mind I called my cousin who's one of my people I go Neil do you think there was any passive aggressive whatsoever is anybody wondering should Jay be paying all this and we both agreed no but I don't know if any you know I can't know when you're an entrepreneur it is this moment this situation that truly makes the difference between you and everyone else like it's it's it gets down to this whole team thing there's no team in losing money there's no team in this situation it's the boss and what we're going to do and I just want to make the public statement that there's a there's a range on the left side of it is they're just employees business is business cut them off and plenty of big companies that's how they operate and that's is what it is I'm not in that camp on the far right is they're my family I'm going to do everything possible to save them and then there's a little bit to the left of that which they're like family I'm in that category they're like family which means I'm going to do everything possible to make their lives easier lower anxiety and try to get through this whole thing but they're not my children and I'm not going to go broke taking all of my last money that I have very little left can care cash I read an article about a company that's paying their their 10 employees because it's not fair they should have to suffer through this and I just want to really it's not fair where does that come how is that not fair to employees I mean this has nothing to do with about fair this has to do with if somebody's got a ton of money and they can pay their employees through this whole thing hats off to them really but the fact is most businesses just don't have that kind of money sitting around I certainly don't and I'm going to do every everything possible including helping him get you know sending him over to unemployment if anybody's going to starve I'll I'll give them money if someone's GNA get thrown out of their apartment uh I'll give them a thousand bucks 2,000 bucks but but this mentality that the boss somehow should be responsible for everybody 100% is just not uh William I'm curious I assume you're planning on applying for a payment uh Protection Program alone yes what do the layoff mean for that don't you have to keep a percentage of your employees in order to for those loans to be for forgiven well Lauren there's a page full of resources about this at church covid19.ca.gov through March against your last year average monthly payroll and so we're a little leaner than we were last year intentionally not because we actually grew but got leaner and uh so we stood to have 91% of the the loan converted to a grant right we were going to have to pay 9% back um by making the cuts we made it it it drops based on what is your payroll on June 30 um we're going to have to pay about 76% of the money back but the money we're going to save and payroll from today through June 30 is far greater than that and frankly it's also cash on hand versus a loan owned to the government and with a little maybe thrown in there because who knows what there's always a maybe the other issue to this whole thing is if your employees said to you Jay I gotta ask you a question um if you get all this money are we gonna get paid back my answer is just like William saying I don't know that we're going to have this great bounceback that people are in their houses and they want to get more framing done they want to buy more furniture there things are roaring or my customers are going to be devastated themsel and I have no idea if this is going to be a bounceback a little bit down so I tell everyone I have no clue mine is GNA be a bounceback women are coming hair they they are emailing me yeah they're emailing me could you please take me privately I won't tell anybody you know Dana are you going to apply for a loan absolutely do you have that in the works I do I'm waiting I've been in touch with my banker um and we're just waiting for the loan to be active I also have a girlfriend who has uh the paperwork ready to submit through a certain lender so I'm reviewing and I went to the treasury.gov yesterday after minuchin promise that it would be ready today through all banking institutions I went to the treasury.gov and um looked at the sample and it's going to be a fairly easy application I think you know everybody's staff is different and so with my staff they you know I've assume that I'm a millionaire except for my leadership team my leadership team understands but my team that's on the ground most of them or some of them believe that Dana has she's a business owner and she's a millionaire so why can't she pay us through this pandemic they're not connecting that Revenue equals payment if I had to learn this that less is more for me and Swift decisive action is what they need gradually laying people off would have been the worst for me and waiting to do it would have been even worse and now it's a matter of keeping in touch with my operations person letting her know what I'm doing every day um and understanding that these these programs and the stipulations and qualifications around these programs are changing hourly and then now it's just about getting the loan process Dana if if you get the payment uh protection loan will you bring back those employees so that the loan uh will be forgivable absolutely I I'm going to need to bring everybody back and do your employees know that yes so Dana I sent the same text to the woman that cuts my hair come on Caroline I'm not going to tell anybody you could just sneak over because it's getting bad over here I got enough working against me I don't need bad haircut too but uh you know I get I think that every smart business owner is going to have to look in the mirror and say let's assume there's a bounce back how fast does my business bounce in a bounce back Dana is going to bounce back immediately I tried to buy Clippers on Amazon last night they're like 100 a year till they show up you know it's ridiculous you know restaurants should bounce back pretty quickly we will not we will start conversations once churches start meeting and then we enter the sales cycle and fortunately we've been pretty anal about keeping our data we know exactly how long a sales cycle is so so back to the original what about PPP and why does that create confusion we we actually created a slide deck this morning that was pretty simple that just showed uh income versus expense and what that means for net income if we don't do anything and of course it's way down below the waterline and what happens if we don't do anything but we take the PPP and it takes us a little less down below the waterline but it stays below the waterline through the year and what happens if we reduce expenses and keep our powder dry and take the PPP and it puts us in a healthy but certainly not greedy position and we just put it out there very transparently in front of our people and I I right now I'm getting slack messages from all of them thanks so much for the graphs thanks so much for their graphs I'm in between both of you there's no question people need to get their haircut so you're in a good place and there's no question you know how long your sales cycle is I literally could either have a great bounce back because people have been pent up in their houses and they want to fix their house up or they can wait till three months from now so I'm I don't know which way it's going but um I'm certainly letting everyone know I'm planning on bringing them back and I've got I'm telling you I've got people my average person's been here 10 and a half years I I am fully committed to digging in and doing everything I can to make sure we bounce back so what I'm doing now is I'm working on a new a marketing thing the second this the second the green lights on that this is over quote unquote to a degree about hey you've been sitting you know you've probably got stuff to frame we got a lot of inventory and blah blah blah we're working on it because uh there is some stuff I can do to prepare for that and then the other problem with this is it's not going to be a light switch going on it's going to be okay the government stopped the stay-at-home morar but still say six feet away from people and there's still going to be people including me that are going to think twice I don't know that I do want to go in a big group of people and I'm already getting pressure though my I have a lot next to my home store a big lot it's filled with plants in the summer and people are asking us when are the plants coming in because I saw my landscapers working you should be able to open you're like a landscaper and I have to explain to everybody we're not like landscapers they're outside by them themselves you're in inside looking at him through a glass window it's not the same as going into a lot with a bunch of people mingling around to BU plants and there will be some Vigilantes that will see us doing this They'll call three literally in Chicago there's a bounty now you call 311 and you can get a reward if someone's uh operating their business someone's going to call up and say those greedy people over adjacent home are out there subjecting their employees to blah and I'm not doing it I'm just not for Peril Boyd it's a matter of managing the influx so right now with the unemployment going up I think they're going to add $600 uh either a week or per Pace period to the um unemployment that will be more than what some are making at per Boyd and so I'm expecting you know some of my staff to not come back um and so I have to scramble hire and then manage the perspective volume because this is where Perle Boyd comes in everybody's going to be running to their stylus to get their hair done stylists are going to be booked weeks out per boy is going to be one of the only places where you can come walking only seven days a week so we've got to manage the volume and so our message now to our staff is I understand that you want to leave however look at your hiring cycle you have to one find a job two get hired three work for two weeks or a week and a half before you get paid where you when we reopen you can come and make money that day because we're going to be slammed well I think there's two parts to it first one of them is can they make money sooner and part of it is they just want to give you a hard time they're just angry part of this is just like they're just mad which is unfortunate like how anyone could be but I get it they don't get it do you have any of that with your employees Jay do you think your employees understand what's going on um I believe so but I have to tell you I have people I get choked up when I say this I have people that walk J we're going to be okay we're going to get through they are on the mission with me they've always been on the mission with me and the people that weren't on the mission with me are long gone I couldn't be prouder and I'm going to do everything in my power to make sure that every single one of them comes back I was in a business group with a guy one time and he's got like 10 employees and he says oh um yeah my guys are trying to unionize and I go what you got this little company well I don't know why blah blah blah and I said to myself something's wrong with this picture and and previously to another meeting he said he didn't have a bonus plan one year so he put a note up on the Bolton board there'll be no bonuses this year so I got an idea of what his management style was so I just said to him let me ask you a question do you ever loan your employees money oh no never I would never do that and I gotta tell you it was that moment that I figured out at the end of the day it's about one thing do they think you care period I've given out literally two 300 loans over the years at any given time I've got five people that owe us money that are paying it back I've gotten stuck once once in 42 years if someone's going to have their gas shut off and you can't lend someone 200 bucks that works for you they don't think you care because you don't and taking it to today my employees know we care that's that's that's what my bottom line is they know we care so no not at all I disagree I I think and and like the good thing is that and in previous podcast we've all talked about the different Dynamics there are with staff and there were things that I've shared with you you're like you've had to call the police on your staff yes right I've had staff ask me for loans we've helped one person we helped one girl whose mother kicked her out of her house she was living out of her car and we gave her spending money for food clothes and we temporarily put her up in a place we never saw her again wait how old was she she was in her early 20s and how long had she worked for you exactly and so how long had she works for you under a year okay so I'm just saying in that case I get it I'm not saying this always worse I'm talking about I've got people that worked for me for for my average person's been here 10 and a half years it's not it's not the same thing and they're also not 20 so I'm not saying and I'm not telling anybody go loan your employees money I'm just telling you in my case yeah it's um it's been a it's been a tremendous benefit for them I'm happy to do it and certainly you have to be careful doing it we're running short of time here and but before we end this I I'd like to go around and hear a little bit about what your daily routines are like William I'm curious forgive me I've lost track of how many kids you have but I know you have a number how many of them are with you right now well I've lost track of that Lauren we have uh seven children two of them are out of the nest and employed and for now they're jobs are safe it's amazing what you pray for in these times right um we have five well we have four in the house in secondary school or lower and then one in college who's now home uh so we have five at home and thankfully we have enough space that that we're not my poor brother is in this tiny little house in DC area and he's got three kids and the oldest one's five and they're crawling all over him and I don't know how both of them try and work during the day but but we we're fortunate to have a little bit more space and be in a neighborhood where you can take a walk um we have decided that uh I think remote work takes twice the focus and discipline of working in an office and so like I have dedicated spaces my laptop really doesn't leave this little bunk room that I'm in today it's like I walk in the office I walk out of the office and we have a very almost like uh running a military base routine I mean it is down to the minute so that the kitchen isn't open all day and there's not noise when I'm on something like this and it's posted every day and there's a spreadsheet she of which kids doing which chore um so so for me you know I am staying up a little bit later I'm working probably a little too much I'm finding that the the work life balance is harder to keep in sync I worry about some of my highest Achievers I worry that they're not able to turn it off when the office is right next door to their bedroom or in their bedroom or or whatever so we're trying to keep a schedule both to not overdo and to not underdo and I don't understand I don't even know what the Tiger King is or whatever it is GNA ask is anybody watching I don't I know I'll download that later but right now it is burn the Midnight Oil and and we are taking time like all the kids stop what they're doing at 3: and we all go downstairs and have an afternoon coffee and we always have dinner together and we're actually a little more disciplined about family devotions now than we we were before and every night at 8:30 we stop and we have a little evening tea and and talk and then everybody does so it's it's pretty regimented and Adrien gets the credit for that Jay how about you did you get out of your bathrobe today well today I came to work because I was doing the podcast and I needed to hook up a here but I was home I've been home more in the last two weeks than I I I've never been home the entire day doing nothing ever and if I feel like I'm on a Month of Sundays every day Feels Like Sunday so I'm I don't have kids in the house anymore but I was working all day yesterday I spent more time on my phone for sure than I've spent in the 15 years I've lived in this house for sure and I ordered a headset because of that because it's hard to sit there on a phone all day long um I'm dealing with with employees I'm dealing with bank I'm dealing with my CFO I'm I am in full out Warrior mode and I would suggest to anybody who is listening to this that's in business that wants to stay in business I would suggest move from worrior to Warrior big difference Focus figure out what to do and do it and that's what I'm doing and kind of on adrenaline at this point I am fired up ready to go and I'm going to do whatever I have to do to save my employees jobs to save the company and to take care of the customers is your wife enjoying living with a warrior um H um she's kind of used to the drill she doesn't really you know what she said to me she said to me a couple weeks ago she goes you know you you were talking your sleep you were really angry I go yeah she goes is it at me I go no she goes okay and that was the conversation she didn't bother asking me who I was angry at but uh um no she's used to it Dana how about you what's uh what's your daily routine like so I'm up later than I normally am um I wake up I have a light breakfast and then um I'm on text messages emails and Facebook groups that are addressing the latest with these issues and I'm applying for Grants um and loans and you know seeking advice from my accountant and um planning you know what the next iteration of per boy it's like I don't eat dinner until late later than I'd like now um and so and then I I go to bed around 10ish but I don't go to sleep until we early hours in the morning and that's also because I'm a binge watching Tiger King because I've been oh I am I I've been so plugged in all day I think that's exactly how long it takes for me to for me to take it down um and so I'm I'm with Jay I'm in Warrior mode it you know let's go let's get to work Jay goz Dana White William Vander blumin thank you so much for taking the time I really appreciate it stay safe out there thank you you too Lauren thanks for listening everybody this episode was produced by Jess thubron founder of blank word Productions remember we started the 21 hats podcast to help business owners feel a little less isolated to let the know they aren't the only ones fighting these battles if you got something out of this conversation please help us reach more people tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter at 21h hats and let me know if you have a question or a comment or a topic you'd like us to cover my email address is L Feldman 21h hats.com see you next time [Music]