We’re Not Failing Because We’re Idiots

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Paul Downs tells Lena Maguire that because his business has not picked up he has had to lay off two employees Paul explains how he chose which employees to let go including to what extent he considered who was just had a kid and who just put a down payment on a house we also talk about whether Paul should start experimenting with different ways to attract business or whether he should continue to do what's worked in the past and try to write it out and then there's this Paul has managed to do what so many owners strive to do which is take himself out of the day-to-day operation of his business but what does that mean when there's very little business coming in how should he be spending his time now plus Lena and Paul respond to a small business subreddit post from a business owner who quit a comfortable job to pursue the idea he just couldn't get out of his head now he vacillates between thinking his business is going to be huge and thinking he's made the dumbest mistake of his life and he wants to know if anyone else has experienced that kind of doubt I think we know the answer to that one even in Good Times owning and running a business can be a lonely Pursuit our hope is at these weekly conversations will it owners know they are not alone in facing challenges in fact that's the whole idea behind the 21 hats Community engaging with other owners to get the kinds of insights only another owner can offer if you're interested in learning more step one is to sign up for a free trial of the Morning Report which highlights the most important news of the day for business owners so you don't have to go looking for it step two is to get on our slack Channel where you can ask questions get vendor recommendations and tap the wisdom of a very impressive crowd just search the 21 hats Morning Report to subscribe joining me this week on the podcast our regulars Paul down CEO of Paul Down's cabinet makers which is based outside of Philadelphia and makes custom conference tables and Lena Maguire CEO of spoka kitchen and bath which is based near Syracuse New York and designs and manages Home Remodeling projects especially for those looking to age in place the episode is titled we're not failing because we're idiots welcome Paul and Lena it's great to have you here I want to start with you Paul last time we spoke you told us that after having your best year ever uh in 2024 your phone had kind of stopped ringing and you were burning through your backlog and realizing that you were probably going to have to lay off some people did that in fact have to happen yes it did it was uh very distressing distressing for me even more distressing for those laid off I laid off two out of uh 26 and one took a voluntary leave of absence she had to help care for her parents overseas and uh so she was happy to take a couple months off but it's terrible to have to disassemble a team that has been carefully put together and trained over the course of years and now we got to go back uh I've been in business a long time and I'm pretty clear on what number of people I need in the building to do what amount of work and I just don't see this heading the right direction for us I'm very worried that I may have to make more drastic Cuts so there we are sorry to hear that yeah it sucks you told us that your expectation was that these people did not see it coming and were going to be blindsided by it is that in fact what happened they I I yes I mean it's not like I had said hey next week I'm laying everybody off I I just I just got up in front of the whole company and and gave them the numbers and said this is what has to happen so that the company itself can survive were they blindsided I think that that one was but uh he also has a side business that was starting to heat up so he was not so bothered by it uh the other one may or may not have been we had had some performance issues earlier in the year and had sort of been like you know you better straighten your game up so given that there were three people in his Department it was a department that was needed to be cut because we just don't have enough work for it I don't think he was completely surprised uh that doesn't mean he was happy about it sure he begged me to get rid of one of the other guys instead and uh and I was like no I'm not doing that but um anyway it's a bad day for everybody involved but I mean they qualify for unemployment so I told them to go file for unemployment and Jay's um warnings not withstanding about the uh cost of unemployment the long-term cost of unemployment is high but the cost of inaction is much higher I've learned the hard way that if you if you hang on too long to a cost structure let's call it that that's suited to a different level of business than you're actually achieving you're going to cause a lot more harm if the company runs out of cash because of that so um not my happiest day but the rest of the companies seem to understand the need for it I haven't noticed any huge problems with morale or anything this week and the sales staff is very clear on what they need to be doing which is closing deals but we're only working with the people who show up and and I honestly can't think of anything that we've done to Poison the Well you know like there have been other times when I was having a bad time and looked around and saw nobody else was and it turned out it was something that I was doing and I just don't see it this time because we're basically doing all the same things that led us to success over the last you know 10 years and last year all these same plans and approaches to the market resulted in enormous success so what is it what's different well I think we all know it's different and uh I feel that the confidence level in the economy is is probably dropping fast I've talked to a couple of other business owners and they all feel the same thing like nobody really knows what's going to happen next and that's a bad thing for businesses that rely on people feeling good about spending money in order to succeed Paul have you just not attracted new work or have you actually had people cancel uh projects or or stop projects that they were close to signing up for uh there's a number of projects that are sort of hanging out there and that should always be true it's always true that you've got projects in all kinds of states of stasis that we have a lot of clients who are sitting on opportunities for pretty long periods of time before they pull the trigger but there's a healthy mix and there's an unhealthy mix and at the moment the projects that we've got hanging out there are all at root uh funded by the federal government and that makes me extremely nervous and we have not seen as many projects that were sort of in the control of just a person and their money not so many of those on the books at the moment and then we had one pretty substantial project that was going to go to Canada uh we hadn't sold it but they were making all the noises and then Trump pulled out his tariff things and they did a complete one and said no sorry given the uncertainty we're going to find a Canadian company to do this wait do you think it was economics or do you think they were angry with the US and wanted to support a Canadian business probably both so that's where I'm at right now and um since our last conversation we did close one reasonably sized deal so we went from complete disaster territory to just bad territory but I don't feel a lot of momentum going through February and uh we've got work at the moment through more or less the end of March so I got about 6 weeks to get something going and at that point you have to re-evaluate if the numbers are working for you oh I'll be re-evaluating before then because you've got to slow down you can't be carrying the costs of the $6 million year Factory to the point where you run out of work just can't do that and it's just terrible I I wouldn't I don't want to get rid of any of my people they're all good and then if they go somewhere how easy is it going to be to get them back situation I've been in before and I try to tell myself it's not quite as bad as the worst situation I've been in but it's not great and I'm not feeling great about it Paul how did the other employees react um to your having to do layoffs well as I said I have not had any push back I think that that's one of the things that uh over the years the way I've managed the company is to try to keep people always informed about what I think is going on with the business and I keep enough data about what's normal to be able to see when some when we deviate from that and I keep the company informed of that and so I think that that they were when presented with the facts they were just like well that's what it is and there's two things you can do when you're in trouble you can try to get everybody to feel a little bit of pain or you can concentrate the pain on a couple of people and get rid of them and the people who are who remain much prefer that you got rid of a few people rather than say cutting everybody's pay or ours so that's just human nature are you sure of that absolutely cuz I've heard a lot of examples of companies where employees have come forward and said this is a tough time we want to try to protect as many people as we can we're willing to take pay cuts to save jobs I've never had anybody volunteer to do that although I have done it and when I did it it was accepted I didn't have as many defections as I thought I would but people are very unhappy about it and what they're mostly interested in is when we can restore the pay levels but that doesn't actually solve the fundamental problem which is you've got a machine that's just gobbling the work too fast faster than it's coming in cuz if you keep everybody around even if you paid them nothing eventually you'd run out of work I mean you run out of work pretty quick so there has to be a balance between what's coming in the door and what your capacity is and it's just yeah I mean that's really what it comes down to we have a a product that requires human hands in a certain quantity and if we have X amount of work we have X amount of hands and if you have half X you really got to have half X hands so we need to maintain a backlog in order to actually operate you can't be hey sell it today build it tomorrow it just doesn't work that way there has to be probably at least a 6- we backlog to actually operate the company if it goes below that it's very very bad so the good news is that I I've got the data that tells me what I think is likely to happen uh I'm not being blindsided by this on the day-to-day level like okay I'm blindsided on the wow I can't believe that six months ago I was telling people to go away if they weren't willing to pay our their highest prices we could think of but you know okay I know what changed and so now it's just a new normal and I have to have to do what I have to do Lena are you looking forward to having employees absolutely not this is scary um but I know it's necessary um so these are learning experiences I'm interested to figure out you know how do you determine which people and which method like you said you could spread it cross all of the people or just cut a couple and I definitely agree with what he says about cutting one or two people and keeping that morale up and also keeping you know the business going like you know the Machinery of the business going um but as far as you know which of those people are you going to let go um Paul did you have any idea that somebody wanted to take a leave of absence that somebody else had a side gig going on so it wasn't going to be as detrimental to them or was that something you discovered after you had made your decision who it was that you were going to cut no I take it into account I mean I knew that the guy with the side gig had the side gig he told me that when he was hired and I was like great and didn't bother me it was uh something that he also has a business uh building and maintaining guitars which is a tough business in itself but uh he's got enough work lined up that he was having trouble doing because he was working for me that it was a fairly painless Landing for him now I'm always pretty aware of the the situations of my employees and this guy couple of weeks ago had just put down a down payment on a house and so that was something that was in my mind but it turned out I talked to him last week that uh the house just absolutely failed inspection so he backed out of the deal and that made it easier for me to be like okay you're on the list the other guy I not as familiar with the ins and outs of his financial situation but his wife is working and he's never really seemed to be in a situation where he needed every penny but now once we're through with those two it becomes a lot less obvious who to do next because I am aware of their situations I do know who just bought a house and who just had a kid and who did this and who did that that absolutely enters into my thinking when about you know okay How likely am I to to choose this person as to choose that person but we're at a point now where all the decisions are bad and I just like H there's no no easy way to get through this but I think it is important that a boss understand what people what their situation is and how are you mitigating it so that you're not losing sleep at night knowing that you made the best choice you can because that that's something I worry about because as the owner you have awesome responsibility the the phrase not losing sleep at night if that if that scares you you should never own a business no I I know it's going to happen but how do you mitigate it so that you can actually you know balance that out because like I said the responsibility of being a business owner you you have all these people if you hire an employee you have responsibilities and a lot of it you you take it personally I think I don't know how how are you doing it so that you can say okay this is good it's business not personal but you know you know these employees well a lot of it is comes down to having numbers to back up your decisions and so I could demonstrate very clearly to the company that here's where we were and this is what we did and this is what happened and here's where we are now and this is what we have to do and it's not like we've never been in this situation before like last year we did 6 million this year let's say 3.2 million well I was at 3 and A5 million in 2013 or whatever it was and so I'm quite familiar with how many people are required to do that work and what it looks like so if the decision is is the only decision it's easier to make your peace with it that makes a lot of sense so what what we have here is you have years of experience you've been in these situations it's almost cyclical where I'm I'm new with this I haven't made any hires so obviously I haven't had to fire anybody let anybody to go or make any changes like that so well I think that one of the things it points out is the value of just keeping records even from day one when you start of keeping records about certain things that a lot of people don't keep any records about like for instance I track every call that comes in the business so I have some idea of how many a normal year consists of what's the relationship between the number of people calling and the sales and having done that for a long time now I have a very good sense of okay this is what's likely to happen given these conditions these starting conditions it all starts with us with people picking up the phone or sending us an email and saying hey I'm interested in buying a table and if you have X number last year we had about 1,275 of those great that yielded this and now at this point I'm looking at maybe 2/3 of that and so that's likely to yield this and I have to then match my all my costs to whatever is happening there now one of the thing that makes it easier for me to make a decision doesn't help me sleep at night is of course I immediately stop paying myself so now this year I'm likely to make $0 cuz that's just what has to happen now I will say one of the thing about leadership which is that one of the things that people look for in leaders is first of all are they rational second of all are they confident and so that even if you're making a tough decision if it's a rational decision and you're like I'm confident this is the right way to go this is the best way to go this is what we have to do and if anybody's got any other ideas lay them on but just being confident as you get up to have these discussions helps everybody else accept it because most people are wired to trust their boss and uh if a boss is smart they create an environment that enhances that trust and I've always done that by being well informed as to the state of the business sharing that with everybody and being credible about it so at the beginning of last year I was looking at the trends and I said hey everybody we're about to have a great year we need to hire some people we did worked out great so then when you get back up and you say everybody things have gone to hell and we need to go the opposite direction you have some credibility and so uh how you relate to your workers to enhance credibility is something that you can't you can't suddenly start doing it at the moment of Crisis you have to do it all the time so that you have credibility and that's part of what makes me able to have a certain measure of peace with my decisions Paul do you think maybe you risk some of that credibility if you start taking into account the personal situations of your employees I mean it seems like a really tricky calculation you're deciding you know someone has a particular circumstance that you're concerned about whether it's buying a house or a sick relative or whatever it is uh versus performance in the office and if it's perceived that you're favoring one over the other and it and the rest of the employees recognize that is that something you worry about no although when you put it the way you just put it um it's probably something to worry about and the other times I've had to do layoffs it was it was like a a wipe out that was in 2008 where I had to lay off half the company one day and uh performance in the office obviously is going to have something to do with it but I don't have any weak performers right now so I don't know the answer to whether it's more palatable when you realize the boss is taking into account those secondary things or whether it's just about are you the best on the shop floor best here best there we don't really run an environment where people are competing with each other to be the best of whatever and in a lot of cases it's not even possible to measure that that contribution so uh but I'm going to consider that like for instance if I had my best performer was a billionaire or something that was just working for Chuckles it would be stupid to not take that you know both of those things into account when thinking about it if you lose your your best person who's your second best person who could step in could we perform the functions but the way I have the company staffed right now everybody who's here is capable of doing their job so then it comes down to secondary things this is uh I think a challenge that smaller businesses have that big companies don't I've worked at some big companies that went through layoffs where the bosses had no idea about the personal situations of their employees so it was you know they just did what they felt was right for the business but when you work in a smaller group and you get to know people how could you not take into account some of the things you learn well I think that that's the plus and minus of running a small business I enjoy knowing my my employees I enjoy every day I'm with them they're good people and I like to have an environment where when I walk in everybody's sort of glad to see each other and we're getting work done and the opposite that sort of soulless Corporation you know we just treat people as numbers that's not how I want to live my life so uh I could run my business that way I just choose not to because I think that the personto person connections you get even if they're somewhat I don't want to say tainted but uh tainted by the the power imbalance of somebody hires and somebody works for somebody else and I have all the power in my hands to hire or fire or do whatever I feel like that should not in my mind prevent me from having a decent human to human relationship with my employees and I know that other people feel differently but that's how how I want to have my life run you told us that you're basically doing all the same stuff this year that you did last year when it all worked really well are you considering trying anything different now are you looking for other ways to drum up business no I've always felt that if you if you suddenly try to shift your business into a different model you're quite likely to fail because anything that we could do differently than what we do is somebody's already doing it and they're doing a better job and they've got the marketing and so me trying to do that as a shortterm solution just seems quite likely to fail um when covid came along we sort of had a demonstration of that that everybody was like oh we need sneeze guard so we need this or that the pandemic pivot the pandemic pivot into or home office or any number of things and I was like we're just going to get our brains beat out trying to compete with people who are set up to do that because we're not and we don't have the the cost structure to deliver something different to the marketplace at a price that would beat you know what's on Amazon and so I feel that that we are in a very Niche business that doesn't have a deep set of Market competitors who can do what we can do and my suspicion has always been just write it out because every time these waves of difficulty come come by you lose even more competitors the piece of equipment we make a big conference table is not going away people are going to need them they're going to need him 10 10 years from now so that if we survive this difficulty and we're the last guy standing two years from now will be in even better shape that's been my my Approach for for decades now and I haven't seen anything that made me think that that was wrong what about not changing your business model not changing your your main function but changing the way you try to attract business different marketing initiative going after some different Market uh but with the same product uh well we've been kind of trying to do that for for years now and it's that that the root of it is Google is by far the most efficient way to connect someone like us with someone who wants to buy that there has ever been and every other marketing channel that we participate in is mostly driven at at at the beginning by a Google search somebody finds us and then we may turn them into a more reliable client but it's just driven by Google searches and I don't think that that we're going to suddenly become the kings of Tik Tok or Instagram or anything although I'm you know I'm trying to post on Instagram a little more often and doing some LinkedIn stuff but I just think that we've got this thing that has been quite successful and I have doubts about whether you could ramp up anything quickly that would be anywhere near as good so I don't really want to spend a ton of time doing something that that keeps me from just keeping my eye on the ball of the operations we have here now and that may sound like a a very stupid thing to do like every was like well you could just be doing this you could be doing that I've thought about all that and I just don't believe that we can make a quick pivot into other markets and other products are you spending more money on Google AdWords no if that's your best Channel why not I don't think it makes much difference anyway honestly uh the only reason we give Google money for AdWords is just to give them some money you're looking out for Google I am looking out for Google cuz Google's been delivering for me for for 23 years now so I think that they want money we give them money uh but the stats we keep on where calls come from suggests that the money is a waste if you just considered okay I spent this and I got these number of calls that seems like a waste of money but if the the larger project is to keep throwing things into the volcano to make sure the volcano God is happy with you then I'm happy to spend that money but I don't feel like increasing it because we don't see much correlation between the number of clicks we get on any given day and who calls us it's almost entirely driven by organic traff so my theory is that Google for all the things they say about there being no connection between organic results and paid results I just don't believe that and I'd rather give them some money and make sure that that I'm checking that box it's not a huge amount of money it's about 3,000 bucks a month at the moment but you know it's something I feel like that's worth throwing into the volcano to keep the volcano God happy and they keep changing the rules too with the uh with Google's AI the organ the organic searches are coming below the AI information at the top so people are reading what the summary is and then they may not even go to the actual links to take you to an actual website all right so anybody got Google pulled up no no I can okay do this and then type in who's the best custom boardroom table maker in America and I would be curious to see what the answer is like if I do it from my IP address I'm not sure what we'll see got to use the word custom and I could be thoroughly embarrassed here in the next 10 seconds we have sponsored sponsored sponsored okay so we have shrin Valley custom furniture comes up as the first sponsor sponsored ciet Furniture is the second sponsored Paul Downs cabinets is the third sponsored and the first organic is Paul Downs cabinet makers good then I feel fine about AI I mean clearly if it's shagrin Valley that they're they're biasing the results for a local search to you I'm presuming sugarin Valley is somewhere near you yeah so this doesn't have one of those AI things at the top this just comes up as the ads so let me just put in C system wardroom table Yeah I didn't get the AI either and I got different results but but equally good for you well that's good I mean that's that's what I believe in right you know that's where I'm I'm staking my business on that process that you just did uh is still going to deliver for me you are not coming up first under custom boardroom table who is Casey custom Hardwoods and then and custom conferen tables.com that is me that's you okay and then Greg pilatti furniture makers oh Greg used to work for me ston line designs all right yeah so as long as custom conferen tables.com is up there somewhere yeah that's the second organic one so I think that that you know I'm I'm going with Google and my feeling is the the problem is not anything I'm doing or anything Google's doing and I think it's people are starting to feel very unsettled about what's going to happen in this economy that's my theory all right well I just uh put the same question into chat GPT and uh it responded selecting the best custom boardroom conference table maker in America depends on your specific needs design purposes and budget here are some reputable companies known for their exceptional craftsmanship and Custom Designs number one Paul Down's cabinet makers great so we we worked very very hard to make sure that we're always putting in fresh content and that we have good SEO and one thing that's been sort of in the back of my mind is how were the llms trained about this uh so that when people start using them more as just a basic search engine are we going to score well sounds like yeah I mean if there was some way for me to pay chat GPT money for advertising I would do it in a heartbeat but I'm not aware of that they have anything like that yet I've been told that the things that uh improve your SEO with Google are likely to improve your uh results on chat GPT and the other llms as well yeah it wouldn't surprise me so it it makes sense you know given that you have the history that you do that you would show up well on the AI llms well I'm glad to hear it worked and and for those of you listening out there no this was not a setup it was not faked I sprung it on him risking that it would turn out that there' be somebody there and my I wouldn't uh be in the results at all but well I think our listeners will be very happy if they were to hear that this got you some business we'll see I wouldn't worry let's go on to something else uh unfortunately it's not too much cheerier um but I want to get your reactions Especially Yours Lena to a uh recent post on the small business subreddit it comes from a somewhat distraught business business owner who wrote so yeah I quit my high-paying job to build my own startup no co-founder no big savings just an idea I couldn't get out of my head I had a comfortable life but every day felt like I was wasting time working on someone else's dream now I wake up stressed I go to bed stressed and my brain never stops some days I feel like a genius other days I wonder if I just made the dumbest decision of my life it's a constant cycle of this is going to be huge and what if I fail and have to crawl back to a job money's running out faster than I thought of course and I'm realizing that building something people actually want is way harder than just building something cool but at the same time there's this weird excitement in the chaos like even if I fail at least I took the shot right if you've done this before how do you stay sane if you haven't would you ever take the risk Lena how do you respond to that cuz you're kind of doing something similar yeah welcome to owning a business that's exactly how you're supposed to feel and it doesn't really go away you just learn how to deal with it so the ups and downs of owning a business and learning how to run a business um how to be a business owner that's all power for the course so um I I think you're in good company I think the reader uh has what it takes it sounds like you know they're doing what they need to do when they're having the same kinds of fears that every entrepreneur does the key is to figure out what is your bottom line as far as your finances you don't want to lose your house you don't want to lose your spouse so you have to know if it's really not working when do you go back to that job or do you take a side hustle because when you start a business I know for myself personally it was about 2 and a half to three years before I could take a paycheck because every time you make a profit you roll it right back into the business basically because you have to so how you set up the business I think is key I went through a score FastTrack training that was invaluable most of the sbdc centers will have a course it's around $1 $125 a 5day thing and it teaches the importance of having a bail team which would be your Banker your accountant your insurance agent and your lawyer that's going to help you set up a uh stable Foundation which is where I made my mistake I did do the course twice and I still only have a banker and insurance agent um I'm just now going into my third year here working with an accountant and a bookkeeper um I have an attorney but uh reviewing contracts and actually having contracts that are consistent their boiler plate that I could just use that's something that's a work in progress so yeah there's a lot of things that you have to do and getting a support group of people who are in your shoes that I think is the most helpful thing you can do get that Foundation set and get get in contact with other people this podcast is a great place you listen to other people you realize they have the same issues that you do and they have issues that you'll face in the future so you'll be better prepared for them Lena on the uh your first uh episode here I think you told us that you and your husband said sat down and decided how much money you wanted to put into the business was that also a decision how much money you were willing to lose absolutely uh in my mind um I view the money differently than my husband does um we both agree it's an in capital investment into the business and the business is going to get us a better return than any other investment we could do we both believe in the business but I look at it as a loan from my family that if I lose this money somehow it's going to hurt my family but in reality we have enough that we're not giving or allowing that much money to come out that it would hurt us and if we lost all of it it wouldn't hurt us so these are hard conversations to have you have to wrap your head around reality what does the business need and we're not talking I need a couple hundred I need a couple thousand dos I mean I'm opening a showroom for a kitchen dealership uh $100,000 is a drop in the bucket but that's my initial investment so you you got to you know do your cash flow statement for your person personal and then do the cash flow statement for the business and see what those lowest month numbers are and you got to be able to cover the bills every single month are you committed to the idea that if you did in fact run through that money you would shut down the business I would have to make some hard choices I don't know that I would shut it down but I would probably get a side gig going work part-time like I did in the beginning um to get my first Studio space uh I did do a part-time job about 20 hours a week for two and a half years until I could fund myself and then I quit the part-time job but if I had to go back I would you do what you have to do um having a business is like having a baby you have to take care of it nurture it and put the time and effort into can't shut it down a baby though true but if you have adult children who are living with you you can kick them out Paul you started your business a long time ago but did did you go through that kind of thought process yeah um although I was 22 so the consequences of failure were pretty pretty low I think the thinking back about how do you stop worrying part of it is are you making small gains along the way like this person started some business we have no idea what the product is or what what it should be doing but when you can start to get people paying you for your thing that that aren't related to you then that starts to be a confidence booster but there has to be a trajectory to to it you're never going to be all that good at what you do the day you open you're going to have to practice and so hopefully what you're seeing is some clients signing up that give you the opportunity to do the thing you wanted to do and get better at it and as you go along for longer and longer periods of time that confidence becomes more internalized like okay I'm going through a pretty bad year this year but I could point to to other years and other projects and I can say listen we actually know how to do what we're doing we're not failing because we're idiots we're failing for a different reason but at the very beginning you just don't know whether you're going to fail or not so I don't think there's any way to avoid going through that process of self-doubt you know unless you're completely duded but you're going to doubt and what you need to do is be looking for reasons to not doubt the reasons to doubt are always going to be pounding on your door there's people are going to tell you it's never going to work and you can see your own money disappearing and whatever like you don't need to drum up any reasons to worry about things what you need to do is look for the things that that can give you some confidence that you're on the right path and if none of those are appearing then yeah you're on your way to failing so it's not an easy place to be I don't think that most people are wired to really succeed as entrepreneurs because of this thing which is it's really really hard to keep your head in the game when times are tough so good luck to that person yeah there is an exercise you can do I learned from coaching it's a reflection exercise so if you sit down once a month or once a quarter and you write down all of your accomplishments like maybe I I'm no longer I'm getting just jobs from my family I've uh I had three new clients and these people are not people I knew or I got phone calls or um I completed something quicker than I thought or I made extra profit on something so you just write down your accomplishments because it is so easy to focus on I didn't do this I didn't accomplish that but if you look back and see that you did like Paul was saying you have these small steps forward you get that confidence and it makes it much easier to keep moving forward because it gives you the strength to see that yes I can do this I have done this look I have evidence in the past Lena I think you also told us uh previously that last year was not as good for you as you'd hoped your Topline revenues were fell short of your goal but that you were able to maintain your margins and you still managed to make money did that happen by Design um or was there um some Serendipity to that uh the the losing the business was not by Design but the maintaining the margins was so um the reason I lost business or Revenue not coming in was because I had not done any marketing I was flying high on a high growth period where I had more work than I could do and I just didn't see the need to Market but what I was working on while I was doing all this was maintaining the the margin so every time I had a new project coming in I was looking at those line items and doing a a postmortem on the projects I completed to make sure that the numbers were aligning so the actuals versus the projected were in line and I was very good at keeping that margin that I need to run my business so even though I had about a 35% decrease in on Revenue my um earnings were exactly the same as the year before and that gave me the confidence to say okay I did something right I just need to do the thing that I didn't do right which was the marketing so now I'm working on the marketing but I'm still maintaining those margins and still watching them like a like a hawk to make sure that every business every project that I do is going to come in and make money for me not be a a loser by managing that you're increasing your Runway and giving you more time to keep going and get your footing yeah and I'm also watching that cash flow so that when the dip months come in which for me are between November and March I live in in Central Central New York area where it's snowy and people aren't anxious to remodel their kitchens and cook outside like they are in the summer so we typically have a little bit of a slump in the the winter season so I don't have as much Reven Vue coming in but the bills are still the same I still want to take a paycheck so having enough in the reserves to cover all the bills and your paycheck without the revenue coming in is key and that's where you know when they say cash is King that to me that's pretty much what it means can you cover your lowest points without begging all right well last thing Paul I'm curious aside from generously spending your time with us here what do you anticipate you personally doing over the next week as you as you deal with this well uh that's one of the things that's that's uh toughest for me to deal with which is that I've got people doing most of the operational roles that there are in the company and so it's not like I could suddenly shoulder aside one of my salespeople and do a better job they're good at it and so uh I'm just kind of waiting it out see what happens uh how many people call us what happens to them we're being a little less picky about jobs we we work on you like we'll give anybody a price for anything at this point and a year ago it was not that we were being more choosy about only concentrating on projects that look like they had a high chance of success but aside from just watching and waiting there's not any huge change in the in the things that I can do every day I just have to have some faith that we're going to get through this one way or another and that's the flip side of what people are talking about when you grow the business and you're trying to get yourself out of the operational roles and just be more the leader and the boss you know that's great uh until a day like today when you're just like okay I can't do anything differently other than watch the company try to perform and so it is mentally tough you know I've got this this feeling in my stomach every night when I go home that just feels like a ball of pain in there and I just have to just have to tough it out and so no no easy answer to that one I can imagine that being really frustrating uh I mean obviously as you said it's it's a a great thing to be able to pull yourself out of the day-to- day and have your business be able to operate without you but sitting there not being able to dive in and do something at a time like this um I can imagine why you have that ball of pain I'm also very cognizant that I don't want to hover around my people and just like let my nervousness fall all over them that I I think that's a a bad thing for leaders to do that people need to feel that the one in charge has some has some guts and some courage and can can be the calest one in the room makes it easier for everybody else to perform and so that's been my Approach so far and I've been through a lot of crisis in the business I I just basically feel like people want to feel like you're not panicking and uh so if the boss looks like they're panicking that everybody will Panic if the boss looks like they're they're dealing with it then everybody can keep their eye on what they need to do well listen it's easy to talk about your business when things are going great and happily sometimes we get to do that but I really appreciate both of you talking about what it's like uh especially you Paul right now when you're going through it my thanks to Paul DS and Lena Maguire really appreciate both of your sharing glad to be here happy to [Music] help one thing before you go everything we do at 21 hats is created by entrepreneurs for entrepreneurs to help us all learn together if you get something out of listening to these podcast episodes consider joining the conversation you can do that by joining the 21 hats sounding board a slack Channel where you can tap the wisdom of a very smart crowd or by becoming a founding member and joining our monthly Zoom Forum where you can be part of conversations much like the ones we have on the podcast you can sign up for both by subscribing to the morning report if you have any questions you can email me at Lauren 21h hats.com and if you get something out of this podcast or out of the morning report please tell a friend tell an enemy tell every business owner you know your word of mouth owner to owner will always be the most effective way to build this community for all of us thank you it means a lot this episode was produced by another entrepreneur Jess ston founder of blank word Productions thanks for listening everyone [Music]