Why Not Become the Strategic Buyer?

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Shan busy Karen Clark Cole and Jay goz compare notes on some of the many choices they've made building their businesses such as the emphasis they've placed on growth the risks they see in growing through acquisition and as Karen has recently experienced the rewards of being acquired they also discuss whether the great resignation despite forcing companies to pay higher wages in work harder to find and keep Talent just might be a good thing for business owners as Sean says this puts more people into the marketplace looking for businesses where culture matters where the owner has compassion and empathy where families are valued and if you're that employer you win even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter that 21 hat Morning Report which highlights the most important news of the day for business owners and which you can subscribe to at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are regulars Sean busy CEO of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy Karen Clark Cole who is CEO of blink a seattle-based user experienced research and design firm and Jay goz whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home the episode is titled why not become the Strategic buyer welcome Sean Karen and Jay Karen this is the first time we've spoken to you since way back in I think October after you sold your business in September I believe uh you sold blink for $94 million as we discussed here you told us all of your dreams had come true have all your dreams come true it has gone very well if you think of um the like what's the best scenario possible uh that has actually uh played out it's been it's everything that was promised to us in terms of how we would be working together with our new parent company you know we joke that we probably could have not told anybody and nobody would notice uh That's how little change has happened inside of blink um and for our employees for our clients nothing has really changed what has changed is we've got some extra resources to help us grow we've got uh all kinds of new client connections for more work and you know less less concern about the ownership although I have to say that that's sort of a hard pattern to break so I actually don't I don't actually feel any different about running the company and having that level of responsibility it's not like you can just turn it off so our our last two quarters were really you know record-breaking so you know no one's really had much time to sit down and worry or think about much other than the job at hand so that that's helpful for sure Karen do you think those record-breaking quarters were kind of in the pipeline anyway or is that to some extent the result of the uh acquisition no it's not the result there's really very little difference as a result in terms of our business so this is just what we call our Core Business um we have we track it now for purposes of the earnout really mostly what we call Synergy work which is with the parent company bringing their clients to us and us working within their bigger contracts so we're just getting started on that um they've really wanted us to not be distracted or you know deprioritizing our main Consulting work um that's been the biggest concern and so we've sort of kept a lot of that at Bay and just at the beginning of this New Year we're starting to focus on how can we uh work together when it makes sense when there's a big strategic opportunity and there's loads of them so but again we're being really careful because we don't want to blow the wheels off our bus because we the you know the goal is to keep growing blank for with what we're doing and that's why they bought us because they wanted us to keep growing this work that we're doing so they want to make sure that we don't get um overwhelmed with all kinds of new opportunities I mean their clients are chomping at the bit to try to have some of our services so but we only have so many people so we kind of have you know the opposite of um people switching jobs leaving we're hiring like crazy and so our our main barrier now is just how fast we can hire there's there's work for as many people as we can hire Karen you told us uh back in October that you were not at all worried about going back to being an employee with a boss to report to in fact you told us and I quote uh I can't wait to have someone tell me what to do Jay do you remember what you said in response to that well I just be consistent I go I can't wait to ask you in a few months if that's still the case because you said you're going to write it down yeah so I have a question which is this is an entrepreneur question so we all get in business or most people I think get in business because you want to control your own destiny and you want to make money blah blah blah so my question is this I assume you're still working a lot of hours right how many how many hours you working oh I'm pretty good I mean I I don't I'm not insane okay so let's say 50 hour okay so the question is now that you have a considerable clearly I don't think this is a big secret given that you now have more money than you could possibly spend more than I need let's say that someone from the outside could say wait a second you don't really need the money anymore and you're working a lot have you had any moments with the that you've thought like you know I wouldn't mind I would have loved to have taken the weekend off like other people do I would think it would change the dynamic in one's head I don't know or does it not yeah you would think that was the big question and concern with before these guys acquired us is cuz they needed myself and my co-founder to keep running and driving the company um and they were worried for exactly what you just said ah okay that's a good answer okay you're fulfilling your yeah well but the the yeah the point is I've never worked for the money um so you know I don't get up in the morning because I'm going to make a lot of money that's not what has ever driven me so I love what we do so nothing really nothing has changed and I and the same is true of our leadership team so our whole we had 28 shareholders when we sold the company and you know they all made a decent amount of money and so you know you could say the same for all of them as well are they all still there everyone is there and and everyone is working the same as they were you know like I said we could have sort of not said anything and nobody would have known the difference because everyone in the company is still really engaged in fact even more because now we actually we can grow faster which is what we've always wanted to do and so now there's just you know between our work and the work that they want to bring to us you know what we talk about all day long is is it scalable Karen I've got I got two questions for you is there an earnout in place for you as well as for the other 28 yes so everyone has an earnout right yes it's the same package yeah got a percentage of the deal up front of the cash it was a cash deal so it means there was no stock trading or anything like that so it was all cash we got um 70% of it upfront and then uh 15 after the first year and 15 after the second year so uh and that's based on our targets and so what's also unusual about our deal is the parent company didn't give us a Target and that was very hard to achieve which is often the case um it was these were our targets it's what we said we can do and so far we we we exceeded the first one uh so in the first year you know the second part of the year after the acquisition we also had a Target so we have three targets um and that was that was essentially doing what we said we were going to do for the money that we already got and so if we didn't meet our targets for last year we would have been docked for the future years so so all it says is that we have to do what we said we were going to do which is why they're being really respectful of not trying to get in our way and not trying to overwhelm our system so that we can do that that's the first priority and then the next priority is okay how can we grow together how can we bring on you know how can we help you higher faster so that you can do some of our what we call Synergy work and that's where it's very collaborative um and they really you know if we succeed everybody succeeds so that that's really their top priority I mean by industry standards that earnout is pretty favorable that's probably one of the one of the better ones I've heard of really you think you think more than 30% earnout is is normal because that surprises me oh yeah I mean what what a lot of the offers we got was 60% earnout oh that's interesting I didn't know that so you get like 40 or 50 upfront and the valuation is quite low and and the ter the terms for getting that earnout are really high and and hearts are hard to meet they're hoping to not pay yeah that's really common no it's it's I mean by by standards it's remarkable Karen I'm really hats off to you it's not uncommon for the earnout to start at three years and sometimes go to Five you know so imagine Jay like you've got to perform like this incredible way over this three to five year period and then yeah it's I think like Karen said a lot of these folks are banking on you failing well I will tell you when you have a small business is not in the high-tech space many people try to get a much higher number because they're going to assume they're going to get screwed out of the back end of it and and and that's okay in your case you got plenty of money up front and you probably will be able to perform to get the rest of it but I think when you're selling your business for whatever $5 million people are very skeptical of the getting the rest of the money out of it and that's why frequently from what I've seen they want to make sure they get enough money in that first check that they're good because who knows what's going to happen the other piece I was curious about Karen is is I'm just seeing a flood of Acquisitions in the Portland Market um agencies that have been around a long time just suddenly announcing hey we've joined such and such multinational conglomerate blah blah blah it's amazing it's awesome you know everybody spins it as the greatest thing I'm kind of curious if you're what's your thought on that is it just generational like a bunch of agency owners are like seeing the end of the rainbow and want to get out or is there something else that play cheap money yeah didn't didn't you see it the end of the rainbow was there I keep looking for it well I think it could just be the space that you're in I mean if some of those agencies are touching on product design user experience you know anything in that sort of digital product world I think that's where all of the snapping up you anything sort of digital transformation remotely related there's massive consolidation going on and that's just because everything is digital now and so you can't take no the you know what's that customer experience like you know so it's become a business requirement now and so a lot of these companies who are trying to stay in the game and win um they can't do it without that and so that's why you know if there's an agency who's doing some of that because I know a lot of agencies sort of have started doing that kind of work because it's really high value that's the kind of frenzy that's going on I mean we saw when we were in our um sort of pitch phase you know we talked talk to 50 or 60 a like big companies big agencies who are dying to get into this space And so there's a real market for sure yeah and now we get to do the buying too so now um you know we're we're looking to grow faster and so I'm sort of looking at companies that we can roll into us now so it's sort of back to the the fun part but I think that's what's happening you know there the big digital transformation of everything and so um I think that's why the timing is now and then there's you know there's some P up demand from Co and then just the way the world is going is everything's digital because you're so shrewd I assume that you're considering buying into the picture framing industry in one of your expansion plans oh well I I have a lot of framing piled up that I need done so I sort of am if only you knew someone I hear you can order that online it's really great sorry jay I'm well just messing with you he's not even responding I have to tell you this thing spotty from it's going in and out I don't know if it's just me I'm only catching every other word here I'm sure you said something very um complimentary to me though while it was skipping out oh definitely yeah let's take a quick break to hear from our sponsor we'll be right back I'm here with Rob Levan co-founder of work better now which provides businesses with highly talented virtual assistant Rob I've noticed that owners tend to have certain questions about virtual assistance for example what exactly can they do yeah Lauren we get this question all the time uh because people really know deep down that they need an assistant but they're not exactly sure how it works and what they can do for them I would say that our clients use our assistance in one of two ways they will either use them much like I've been using my assistant for the past eight years as an executive assistant handling my calendar which takes up so much time email management database file management personal tasks creating documents for me and then lot of our clients basically operationalize our assistance so we have assistance with titles like project manager marketing associate operations manager and customer service representative I think some owners worry they'll spend more time managing their assistant than it would have taken them just to do the test themselves how do you respond to that right right right this is a deadly trap not only with assistance but really with any employees which is oh I can do it faster myself and the reality is you might be able to do it faster yourself of course it's impossible to grow your business if you're doing everything yourself I was very much uh of a similar mindset and what I did with my assistant is I basically told him what needs to be done and had them document it I hate documenting tasks but I know the processes are so important now we have a manual full of my uh tasks I only had to tell him once that he can follow time and time again and if he's out somebody else can follow and also think about it this way if you're a business owner making something like let's say $200,000 a year which is about $100 an hour you're basically paying somebody to do administrative work at $100 an hour if you're doing these tasks yourself that makes a lot of sense what does it cost the cost is $1900 a month and as you know Lauren we are offering 21 hats readers and listeners $150 off per month for 3 months just by mentioning the word Lauren there are no contracts also very important for people to know can you promise a return on that investment if you're not getting a return something's not going right all of our clients are not only getting a return with the first assistant they've hired but many of our clients are now on their second third and fourth assistant where can we learn more work better now.com and again when you sign up for a 15-minute consult just mention the word Lauren we'll make sure to give that $150 off for each of the first three months thanks Rob and we're back we have a question from a reader in response to our recent episode in which Jay Paul and sha talked about their succession plans and Paul told us that he's hoping to double the revenue in his uh business in the next 5 years so he can better position the business in case he chooses to sell it uh the question comes from Buzz Park uh a listener who's founder and CEO of Lightyear Management Group uh which buys uh service and manufacturing companies let me read the question to you I want to encourage Paul that there is a much more efficient way to double his customer base than trying to grow organically 14% per year for 5 years may I suggest Paul seriously consider scaling through acquisition buying other Furniture companies there are multiple benefits to this type of growth and often these Acquisitions can be made without a huge cash expenditure out of pocket not only could Paul instantly double his customer base he would also be instantly gaining the talent and Manufacturing capacity to handle the growth postacquisition consolidation could reduce overhead and costs also he could potentially cross sell to his new customer base and vice versa uh there's so many other potential benefits too many to list um so if his exit strategy is to grow large enough to be attractive to a strategic buyer why not become the Strategic buyer with this strategy he could even grow large enough to become attractive to private equity in less than 5 years and sell at a much higher multiple frankly this strategy is viable for all your guests including Jay so Paul's not here today uh but I can tell you I ran the suggestion by him and his immediate reaction was I don't want to work that hard yeah no well that's what I was going to say Lauren is that's what we did uh so we bought we had bought um like four or five or six companies over the years just small ones and while everything that the listener said is true it's it is a huge amount of work it's it's intense the amount of work that's involved that's what you were doing before we started the podcast and I think you had just about reached the point where you stopped doing that right when the podcast started um and you were kind of drained by the whole experience if I recall correctly well I was dra Train by trying to get investment money that was the problem to pay for the rollups yeah I mean that that was part of a um a bigger growth strategy you know especially if you're in a Services business and you know it's different for like even like what Laura did with the Acquisitions that she made she even talked about all the cultural implications that go with that but when you're in Services particularly those people are messy and you have to it's a lot of work to integrate and make and pull that off so it goes well um and then you got to find the money to buy the company so it's absolutely a great way to scale quickly and you get a lot of good stuff hopefully but it's it is a lot of work Paul's right Jay any interest my new thing is it's not about balance it's about alignment and my alignment is I'm finally after all these years happy go to work no one's bothering me I'm not getting posted notes no one's calling me at home I I just they don't know if I'm here I'm not here life is simple and easy now and then compared to what it used to be for sure I have absolutely no desire and the business is big enough which I didn't used to think was such a thing it's 20 times bigger than I ever thought it would get I have zero interest in trying to make it bigger and we've discussed on this podcast I thought about buying a frame shop and I'm glad I didn't because I don't need more frame shops I'm good and I just I'm in a happy place I I've had to very consciously I am a recovering entrepreneur holic and I need to stay in the wagon I need to stop starting businesses because it's battle alignment I don't need more more you know cash flow things I don't need more it's it's fine I'm good so if I was at Paul stage maybe that'd be a different story but I my company's you know four or five times the size of his I I don't need to to grow it it's it's it's good where I'm at so I agree that that's a great strategy for many companies you have to have the mindset to do that Sean have you ever thought about being the acquirer yeah you know I'm in I'm in a fortunate position and that I see a lot of businesses do this stuff you know past clients um friends Etc and I think the biggest issue that I have is most people look at it through the lens of a spreadsheet first so oh look our financials work their financials work um we'll get rid of all these people that are redundant that's always the dream right you know oh we don't need two bookkeeping departments so we'll we'll create all these synergies etc etc economies of scale throw that yeah that that's what they always think the economies scale and then and then after they do the deal and everybody's high-fiving and drinking champagne they look around and go holy crap our cultures are totally different and and that's the thing I see more often than not is there's not a good strong evaluation of the culture that's changing but um a lot of times especially if private Equity is involved it's more about the spreadsheet and then the the consequences and and I think this is what Paul's talking about like the amount of work that has to be done to make that n work can be really significant you know I've got a great thing you it's funny Karen was like saying how we both start at the same time and I'm like wow I'm like one 100th her size or whatever in terms of you know valuation and I'm okay with that you know I like the culture here I like the people I love the clients um you know we we grew really fast for a number of years and that was fun and rewarding but it was also really stressful um um and when you lump on a new company that's quote unquote fast growth and you know it just depends if you like that kind of thing some people do you're 100% right though that nowhere on the spreadsheet is any of that there it's those are just numbers there's nowhere on the spreadsheet does it show anything about who's working there what's their whole you know unique selling proposition what's the corporate culture none of that's on a spreadsheet and uh I've seen private Equity mess up a lot of good companies I think everyone has uh it's more than just the numbers yeah so buying those companies is a lot of work to integrate them well and then but finding them is a lot of work because of that you have to get in there and do a lot of just hours and hours to evaluate the different companies I think the point your caller makes which is a really interesting one I don't know if he's saying this specifically but money has been so cheap and it still is relatively his by historic terms and so a company like Paul I could see an acquisition there making a ton of sense because you could almost sidestep a lot of the culture challenges there if you're just like Hey we're buying these businesses for their customer base you know and I mean that's kind of a cold callous way to look at it but you know he could kind of go that way and like you know see if he can adapt the culture to his culture and if not you know he's just got a bigger business now no no your point is is is absolutely but there might be someone out there that isn't looking for that much money because they don't know what to do with the company and it happens to integrate really well with him it's really a question of does that company exists out there yeah it's certainly the he certainly got an excellent point everybody who wants to grow a lot should certainly look at that as an alternative because I'm sure that those work out extremely well sometimes Karen you said that you are uh getting into this uh area again looking around what what are you looking for it's the same like you know what what we're doing so um mostly you know companies because we're in the services business so we're looking for companies who have you know great employees we are looking for um people you know companies and people in Geographic locations where we are not and it's it's all access to Talent strategy so we're just trying to be creative about where our pockets of grads or experienced um people who are working in user experience in some way or another so that's the that's that's the goal and so you know one way to get a bunch of people quickly is to buy a company um but again it's it's it's a lot of work you have to they have to be the right kind of people has to be the right kind of company we're you know we have some good strategies for how to evaluate all of the cultural aspects as well as and certainly work quality so it's it's not I'm just sort of lightly looky I'm not really that's not our primary strategy right now you know in the big picture it really comes down to one thing which is why this podcast I believe is so valuable it comes down to what makes you happy and Lauren to your credit you put together people that are in a very very different places in that spectrum of I just want to go to work and be happy I don't need to grow it a lot Paul's looking to grow Karen did her thing which is great for what she wanted to do Sean your it you really should sit down and think about what makes you happy because unfortunately many of us including myself jump into stuff thinking we're going to get what we want out of it and then we end up with some unexpensive consequences like oh wait I I'm never home now it was already bad enough before and and now it's even more stressful and I did do that to myself years ago and maybe I shouldn't have cuz you know I had three kids at home and it made it even more stressful because now I went from working six days a week to sometimes seven and I wasn't thinking about it cuz I was absolutely drinking the entrepreneurship Kool-Aid and just couldn't grow fast enough and couldn't do enough and I try to councel people that are younger than I am that you ought to take a moment to think about before you do it I love that you said that Jay especially because you've achieved quite a bit of Financial and business success because I I think there's a Dogma out there it's almost like a religion that you know like here's some of the mantras right if you're not growing you're dying or oh uh she has a lifestyle business it's not a real business right because it's not of a certain size you're hitting on all my hot spot you areund and Lauren knows that I hate those phrases so many organizations feed that dogma and it it makes for a lot of miserable people and it's not to say that growth is wrong I mean you know a lot of people really thrive on it and like it just fulfills them but very few people like ask the question what makes them happy and then I think the other piece that I've observed is that a lot of businesses get stuck in the zone of death meaning they don't grow enough to realize the benefits of the larger size but then they're too big to realize the benefits of being in control of everything so it's like this is awful awful awful place to be and they're miserable all right I want to talk uh about the great resignation a little bit um Karen you mentioned that you're hiring like crazy uh I'm eager to hear a little bit about how you're managing that uh but I want to start with a question that I I haven't really heard asked um directly which is this I is the great resignation and what's happening with the labor market is it a good thing or a bad thing anybody I it's good I'm with you I'm indifferent I think if I've lost one person that was unfortunate I said call me in a few months tell me if this is working out because I don't think I know where she's going and I don't think it's going to be what she thinks it is I you know it certainly put all of us under a little stress of if you didn't weren't aligned with your employees yeah I'm sure you're losing some people but knock on wood I I can't tell you I've had a lot of that so why did you say you were indifferent I'm indifferent in that I don't know if it's good or bad I it's if it happened okay maybe it's not bad but I I don't know why any I don't know why I would say it's good um as a business owner because people are getting more happy they're living their lives in ways that are more meaningful and better for them okay if for that from the perspective of the employee yeah sure then that would be good but the perspective of the our our our world right if there's more happy people in the world it's better for everybody and so I think what this has done is it's it's forced people to think outside the box and think hey wait a minute do I really like commuting into you know the downtown core of my big city every day well actually I don't like whoa what if I could work from anywhere what if where would I go and then people are just going I think it's amazing I love it you know what that totally goes under the category of I've got my business owner hat on right now and as a business owner I don't know why they'd be good but you're totally right in forgetting about being a business owner sure people should be happier well wait a second let me stop you there I I think you can make an argument and maybe Karen or Shawn would that it's good for business owners as well Karen or Shawn do you agree yeah more happy people means they're going to have more they're paying what like a a fifth of what they would have been in a big city that means they've got more money to frame their art right and they're more happy because they're in their house more and so they need more art like actually that whole thing has got to be good for you I mean I think it's great for you Jay because here's why as a business owner you've got a bunch of people leaving jobs because they were terrible jobs and and so what what people do when they realize they're in a bad situation is they look for something better you know I started Kinesis because I worked for a terrible employer they were awful on every level and essentially started this business because I was like I want to build something that people enjoy coming to work at that that was it and so this puts more people people into the marketplace looking for businesses where culture matters where the owner has compassion and empathy where families are valued you know like just on and on on and on and if you're that employer you win like you totally win in this environment I I think I mean I don't know Karen yeah that's what's happened to us I mean Sean I just want to give you a big hug you're just saying some good stuff today no that's no no you've got a really good point with that I feel like I do run a good company and I do think I've attracted and now that you mention it everyone complains about Millennials I just hired a few no I just hired a few lovely happy totally with the program Millennials because they're into what we do and we treat people nicely here and we're on a mission to make people happy and yeah no I buy what you just said for sure I like what you said about your former employer I have a pet theory that behind many entrepreneurs there is a terrible boss who forced those entrepreneurs to take the leap that they might not have taken if they had been working for a better boss it sounds like you might be one of those Sean well and look at like rates of new business startups like they're going through the roof right and and a lot of that was you know people got laid off but I think a lot of it is just re-evaluation of their past life and you know they're spending more time at home with their kids and they're realizing that they that they love their children and they want to be with them and and not in a car all day commuting to Karen's point and so so I think a lot of those folks are like you know what I can do this thing on my own you know with all the software and everything in the cloud you can spin up a business so fast now and make pretty good money at it and and so like honestly I think that's the challenge for employers more than anything is that really self-motivated people are going in that direction so how do you spin your business in a way you're like well yes you have a lot of autonomy like you'd have if you have your own thing but also you have community and that's the opportunity I think for businesses that want to take advantage of this situation right now is sharing how they create Community how they're creating a diverse workplace how they're empowering employees you do that and you can have an awesome awesome set of folks working for you Karen tell us what it's like um in your situation where you're hiring like crazy is it are you frustrated because it's so hard or is it uh coming together no uh no I'm not frustrated um because we it's new for us to be have just open the floodgates have all positions open hire whoever we can you know whoever's the right fit up until 4 months ago we very careful about hiring so we you know do we have a position open what is the pipeline look like you know what what are these projects who's rolling off who's rolling on and it's in very very slow and careful hiring and so it's just sort of um it's just fun and exciting and it's it's a it's a challenge to solve not it's not frustrating no are you concerned that you may have problems if you're not as careful as you once were with your hiring no but look who you're asking Lauren I would never answer yes to that even if it were true no because I I wouldn't it wouldn't be true for me because I wouldn't see it because all I see is like the you know what's possible and and you know focus on how we're going to get there so I talk to other people to show me where the red flags are cuz I never see them no I don't no we're just it's kind of fun for me because we have to think differently we have to think totally out of the box and do things that we've never done before um in order to find more people they're out there and so to me that's just super fun challenge have you found any interesting strategies that are working for you are you yeah I mean we we just opened a head count for a recruiter in Atlanta which we've never done before because we wanted to get more people from that area and so the thinking was okay let's focus our recruiting in that area I'm like well why don't we just hire a recruiter in that area who has connections knows the market um so that's what we're doing that's a direct uh reaction to the great resignation I assume into the pandemic I mean you probably wouldn't have thought to hire remotely that way before all this happened would not have been possible exactly um right and so cuz we are permanently hybrid work environment so now anyone can work from anywhere there's some you know technical things that we have to have in place like we have to be set up as an employer in the state in which we're hiring so we can't just sort of go in every state overnight we have to have it all set up so there's some but for the most part it's totally freed us up to think differently as well and I I think it's super cool I think you know gosh I don't want to go to the office every day why why should anyone else do that so it's you know it's allowing people to just to you know again be be flexible and live in a place that they're really excited about I mean we have all kinds of employees who have moved to different cities like moved to remote Islands moved from Boston to San Diego you know like all kinds of crazy stuff and I just think it's so cool is it working I mean yeah it's totally working it's totally fine you know we're we're lucky though we're you know we're not in a store where the door has to be open for people to come in you know we can do our work you know it's in the computer basically we we come together to meet in person for workshops for big collaboration sessions we meet around our clients coming into town so a client will go to one of our offices and then we'll all just go there and meet them so it's uh yeah it's just sort of like taking the chains off is what feels like to me like everyone's just more free to move around and you know our expenses are much lower because we we generally are just traveling less and so now everyone's saying do I really need to get on a plane for that meeting or can we just do that over zoom and we'll get in person when we can spend two days you know hashing it out but if it's just a onh hour meeting we would have gone on a plane before but now it's like no we can do that on Zoom it's just fine Jay have you thought about hiring picture framers in Atlanta um as she's talking we just have opposite businesses I very few people that work here that don't physically have to be here because we're framing pictures we're selling furniture it's just the completely opposite end of the spectrum so no I'm not going to Atlanta to find a framer I mean I I literally only have several people that could work from home so out of 130 Sean you've had some people move around the country has it had an impact on your creativity brainstorming that kind of thing uh I I mean we just launched a a couple of new websites uh for some clients and some new strategies and brand and that work is exceptional I'm biased uh but it it was truly truly amazing stuff and I think the work product is good as it's ever been I think to I think it was Karen made this point the money issue is huge so there's going to be a massive capital redeployment for service-based businesses like ours who can be remote saying you know what that $110,000 month lease or whatever it was that was just too much we don't need that so we're going to have a $3,000 month lease or whatever we work space and then we're going to use that $7,000 and create awesome events for our employees to come together and meet and have more meaningful experiences together so I think that's the shift so the pingpong table is at their house now instead of at the office basically uh well you know but they've got no one to play with at home I don't know if you figured that one out yet yeah yeah if they have a keg that's really what drives where the location is no but I mean I'm I'm serious in that you have to work harder to create culture with the all remote situation and I think you're going to take that money that was going to commercial real estate and you're going to use that money for that that's my theory I'm sure there's going to be a change in office space but anyone who thinks oh it's 50% of people aren't going I don't believe that to be true I think that many businesses will function better in an office space and I think the numbers back me up I don't think that it's a disaster out there for office space right now Google and Facebook are taking space hand over fist well then what I said must be true if Google and Facebook are taking space since they are the new America half the population is going to work for Amazon Facebook or Google any day now I thought they already did are yeah oh man way to paint the dystopian future okay I'm obviously being sarcastic there for those of you that don't get it I know yes I'm tracking Sean you did let your office space go are you thinking of taking smaller space Oh yeah yeah yeah I mean you know we have employees now in San Diego Maine B I mean but you're going to you don't have any space at all right now right before that were they all in Portland they were all in Port well one was in s luckily one moved to San Diego a year or two before the pandemic which was a godsend because we got we worked got all the Kinks of remote work through her and it was so fortunate Karen because going to remote is hard and I and and when we had to do it all at once with everybody was not nearly as bad as it would have been had we not had Susie you know kind of lead the way I feel the same about our offices we had some practice that would have killed us if we didn't yeah yeah I don't and yeah Lauren your question uh I believe in collaboration in in real space I really do and I want to get back to that um but you know we have really cool awesome employees whove who've made choices to move to other places and I want to support them and keep them in the in the fold so but can I just ask I might have missed that episode of what you just said everyone's working remote we're going to shut down the office and figure it out later or what what happened we shut down the office almost a year ago we had a clause to where we could we could get out of our lease and we exercised it so we went from being a moderately remote company to fully remote and we've we've done a little bit of wew work stuff but then we keep getting these variants and all this stuff you know it's like we thought we're good to go and then Delta and then Delta's starting to Wayne and we like oh we're good to go and then Omicron and so you know we we'll get back to space but it won't be the same I'll tell you what I'm looking forward to this mask thing it's not the end of the world but I literally have half a dozen employees I've never seen what they look like and I see them every day with the mask on well well Jay let me ask you we're we're at that point right now I think isn't there a change in Chicago or Illinois I think it's about to happen I'm gonna it could be that in a couple of weeks we're done with the masks but the problem is are you just going to follow if the Mandate goes away I believe so because I'm telling you I go into room some I don't even know who's in I don't even know is that a new employee is that the one you know looking at someone's half face it's it's it's it's a little tricky to figure out did I already meet them and it's it's it's not ideal it's not the end of the world but it's not ideal so I believe I'm going to guess that in a couple of weeks we're going to be done with the mask we're going to tell employees if you want to wear a mask do what you'd like but we're not going to tell customers to continue wearing masks because in Chicago I look at the covid you know dashboard every day it's down like 90% from where it was a month ago I mean it's it's dropping straight down so I think I'm hoping in a couple weeks were done I'm hoping well to Sean's point there could be another variant maybe yeah I don't know let's hope listen do we just remind people that haven't listen Karen told me two years ago oh it's going to come to Chicago and I like yeah right I mean that's how things have changed I she was the first time I ever heard about how bad it was and I was skeptical that it was coming to Chicago and here we are two years later it just shows you that you know wow you know who knows all right we're just about out of time I want to ask about one more thing it's we're we're getting close to to tax season here and we've we've talked about this before on the show but I think it's something that a lot of business owners are missing and that's the employee retention tax credit uh which for certain businesses can mean a lot of money and I'm wondering if uh the three of you have looked into this uh Sean yeah I think Paul described it as a giant pile of money in the previous episode and um it was just not on my radar cuz you know our financials weren't amazing but they weren't terrible too so I was just like oh I'm sure we're not eligible so two two things that I think are worth paying attention to one is they changed the parameters of it to where uh it originally was a 50% decline in gross receipts and then it they changed it to 20% for 2021 if you had a good 2019 and a mediocre to poor 20 21 you could be eligible for it but let me interject there it's it's not done by the year I don't think it's done by quarter so you you could have a very good year but just a bad quarter and still qualify yes yes so that's huge you know and then the second test for it which is really interesting and I'm looking into it now which is what's called a government order test which means if you're impacted by government shutdowns you can be eligible for it and it seems very Broad and very vague uh but you know a lot of us were affected by government shutdowns um so I think it's worth looking into I think it's worth talking to your CPA about it and ideally get a CPA that knows what it's all about um and isn't just kind of going through the motions that would be my advice Jay if I recall correctly you looked into it after that conversation with Paul that episode we are getting something from it it it was a moving Target because you know a month or two before I was told we're not you know eligible but then I'm told we are so no we are getting something out of that and my guess Karen is you are not getting it because you probably did not have a down quarter no no we did not how unfortunate all right my thanks to Shan busy Karen Clark call and Jay goz as always thanks for sharing guys wait wait don't leave yet if you have a question or a comment that you'd like the 21 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 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