Delegating more in your Small Business, learning to say no and surviving the $15 minimum wage increase – Small Business Show 121

The Small business show episode number one two one for Wednesday, May 31, 31st, 31st, 2017. Greetings folks and welcome to to the show by, for and about small business owners. The Small business Show here at BusinessShow co. And here in Durham, New Hampshire, I'm Dave Hamilton.

And in the San Francisco Bay area, I'm Shannon Jean. How are you, man?

I am, you know, I'm good and I'm happy to. I said this to you in pre show, but I didn't explain why I'm happy to be alive. We took apart this old tree house that was here at the house when we bought it. Kids used it for a while. Yeah. And you know, we demolished the whole thing. All good. And then came time to like put all the crap in the dumpster. And so we did that Monday morning and it was easy. I got it, you know, just had a dumpster delivered to the house. Sure, we're putting stuff in. I had a couple of these, like. It was like maybe an 8 foot long 4x4. That was one of the support beams for this thing. And it was in a. It had been placed in a cement footing and there were like nine of these, you know, that had been in footings and they all just lifted out, no problem except this one. And I knew that it wasn't cemented in there, you know, I just knew that it was like dirt over the years or whatever and it was just packed in tight. So I'm like, I just gotta whack it or something. So I'm pulling on it and yanking on it. No, no, no. And so I see a rock and I'm like, great. So I pick up this thing and like swing the footing at the ground and it hits the rock and it does not come loose. And as soon as it hit that rock, 8ft worth of 4x4 swung around and hit me in the side of the head. Oh, and there was a nail on the other or a screw on the other side of it. Thankfully it was on the other side. Yeah. So it, I mean, it hurt when it hit and I, my, my ear bled like crazy. My ears are pretty swollen right now. Oh, yeah, yeah, yeah, yeah. It cut my ear somehow. I mean, you know, this thing was old and it had like, yeah, sure, splinters and stuff on it, but. And you know, I had a headache for about a day. I don't think I ever had a concussion or anything, which was my initial concern once I, you know, wasn't worried about being dead, but. But it was, you know, it. I easily like, it easily could have gone way sideways the other day when this happened. So. So it's like, yeah, I'm happy to be alive. And, you know, and it's one of those things that made me realize, yeah, make sure your family knows about your life insurance policy.

Yeah, exactly.

You know, I don't mean to be morbid about it, but it's just the practical reality of a scenario.

Well, we have a file that we share between my wife and I that has all our stuff in it, a digital version of it, and we sync it back and forth, and it is just that kind of stuff. You create a new account, you open up this. We do a lot of banking and transactions online, and it's like, gosh, you know, we gotta start tracking all this stuff. If passwords change, whatever. Just think about all the things you have hanging out there that someone would have to wade through.

That's the key. That's the thing. Right. Yeah. Take your. If you use one password or whatever it is, share that archive and somehow share your one. You have to share your one password for that with your family or something in some way. Yeah, that's right.

Yeah. And it could be something as simple as a word doc that, you know, I mean, it's not the most secure thing, but just the details of, you know, this is how this works and this is what happens, and this is who you call. Because, you know, just think about it. If you're one of your loved ones or someone has to step in and pick up the pieces, they're going to be. The last thing they're going to want to be focused on is, oh, man, how am I going to deal with this?

How. Right, yeah, exactly.

You can give them some guidance. I knew, unfortunately, one of my former business partners who passed away. I remember. Yeah. And after he passed away, when I was helping his wife go through everything, I found a FileMaker database that was just built just like that. And it had different records for all these different things that needed to be handled. It was fascinating, all these passwords and who you call and this. And he had created this over the years, and it was tremendously important and it eased, you know, the transition, especially, you know, for us entrepreneurs that are often, you know, rely on ourselves for everything. Sharing that stuff may not seem as natural, but, yeah, it's really important.

It is important. Yeah, yeah, yeah. So I. I am happy to be here.

Truly happy. I'm happy you're here, too.

Yeah, Same. Right? It's all. It's all good. My ear hurts a little bit. You know, it's like, it's just a good reminder. And also, don't do stupid things like that, you know?

Well, it's often, you know, you don't realize you're stupid until you're in the midst or right after.

Yeah.

And you say, oh, you know, I should not have done that.

I shouldn't. Yeah, but. But, like, if. If that had not happened, I would not have, even at this moment, even looking back, if you said, okay, you did all these things, I want you to really focus on just this one thing. Do you think that was stupid? I'd say, no. No, it wasn't. You know, it was the right move. I swung that thing. It seemed to make sense at the time. It makes sense now.

But, yeah. Yeah, that's cool. Well, hey, you know, last week we did some listener questions. We've got some great feedback from that, and I thought we would take a couple more. We have some great interviews coming up, a return guest next week that's going to talk about investing and diversifying, building a revenue stack like we've talked about here. And as well as selling a business, we have Kyle coming on to help us with that. But why don't we jump in and answer a couple questions here?

Sounds like a plan. All right, let me pull up our first question here, which is going to be from Robert. Robert writes, guys, I am overwhelmed. Welcome to the club, man. My business is crazy busy and we seem to be doing great. The problem is, at the end of each day, I'm completely wiped out. And at the end of each month, we don't make as much money as I think we should have. I have eight employees, and we use contract workers when we need them. Can you offer any tips? I wish Robert had told us what business he's in. But, you know, my first thought on this, Shannon, is take a look at what you're actually spending your time doing every day. And not just you, Right. But everybody on your team. Like, are you focused on the things that are going to bring you success? And I am reminded again of the key takeaway from that most recent Scott Adams book, which is that goals are for losers. So take a look at what you're doing every day and think about it in terms of systems. Are you doing the things that, you know over time will result in money? Right. I mean, you gotta have a. This whole goals is for losers thing is something that needs an asterisk by it. It's that you don't want to get to the end and say, oh, I got there. And then stop. You just want to put systems in place so that you just keep going, but you need those systems to be aiming toward the result that you want. And it sounds like you might have some systems in place, intentionally or otherwise, that are not aimed at, in this case, generating revenue for your business.

Yeah, I would agree. And I definitely have been there, Robert. I find myself there still now, even though I have a little background with this stuff. I would say that if you have a couple things, if you haven't read the E. Myth book and we'll link it in the show notes, you need to read it because one of the things it really focuses on is transitioning from the worker bee mode or even the superhero mode into a business owner learning to work on your business instead of in your business every day. And then we've talked about it here, Dave. Making an org chart, you know, organizational chart for your business. Even if your name happens to go in every slot right now, you want to start, you know, how can you find people to take those spots? And I read an article, you know, this morning. It was really well done. It wasn't new, but one of the things that this guy up on entrepreneur.com and again, we'll link it up there. He said the most important question you need to be asking yourself as a small business owner over and over and over is who is going to do this for me? And what he meant by, you know, is let go of the burden of your time, begin delegating more, managing more, and becoming the leader that your business needs instead of just another employee that is doing the work. And I thought that was really, you know, concise. I like, you know, and over and over I've mentioned here, I love these little concise tidbits of advice that you can compartmentalize and just take in. But that one, it's powerful. We all get stuck working on these things or in your business day in and day out. But if you step back and you may have to hire someone, you may have to increase your contract workers, and maybe you're not going to make as much money in the beginning, but over time, the way your business is going to grow, grow is by letting go and not having that feeling of, you know, being overwhelmed at the end of the day because it's just, it's not sustainable.

Right.

I just, I really don't think it is. So, you know, we'll, we'll link this article up there for you, Robert, and you know, pick up a copy of the E. Myth. I think now it's Called the E. Myth Revisited. It's been around for a long time, but it was one of the. It's really a powerful book that can get you on the right path. Another one of my favorites is Rework, and it's by the guys from 37signals, or basecamp.

Oh, yeah, right.

Basecamp. And we've talked about that one here, too. And it's a book all about balancing your company, your business with your personal life. And I really appreciated the way. And it's almost like reading some of the stuff kind of gives you permission, if you will, to take a step back and learn to learn to manage these things differently, and that that's how you're going to make your business more successful over time. It's real important.

Yeah, no, it. It. It's. Yeah, it just. I mean, you know, we. We can fall back on the. The favorite saying of work smarter, not harder. But. But that requires some attention, you know.

Yeah. We have to be deliberate about it.

You have to be deliberate about it. And. And sometimes, you know, it really does mean, like you said, working on your business instead of in your business. If all you're doing are the things that you've always done in terms of just grunting out whatever work it is, who is there leading the ship? Who's there saying, whoa, whoa, whoa, wait a minute, is that the right thing to do? I know it was a good thing to do two years ago. Whether it was the best thing to do two years ago or not is actually another good question to ask, because it can help inform you for the future. But regardless of how great it was two years ago, is this the right thing to do right now, and is it the right thing to be doing in two more years? And sometimes you got to kind of cut either a customer loose or even an entire segment of your business loose.

Exactly. Yeah, I'll bet. And again, we don't know what business Robert's in, but I bet that you could sit down and look at all. All the things that you're doing in the day and the customers that you're trying to, you know, make happy. And, you know, it sounds like you're running around like crazy and, you know, taking on these things, you know, learning to say no and that, oh, we're going to pass on this. That is critical. And maybe. And part of that learning to say no is, you know, maybe you need to increase your prices, you know, if you're in a service business, you know, increase your. Your billable hour prices until you start to reach an equilibrium where you don't feel so overwhelmed or increase the price of whatever it is you're selling to to. There's a balance there. Right. You know, if you're, if you're cutting your costs and doing more business but you're not making any more money, I mean, maybe it's better for you, Robert, to, you know, increase your prices 20% and take, you know, X percentage less business. If you lose some customers.

Yep.

In the long run, that' to give you some breathing room may give you some more profits and allow you to be the leader that, you know, your business really needs you to do your, your business doesn't need unless you're all by yourself and it doesn't sound, you know, you are here in this case, your business doesn't need you to be another worker. You certainly want to oversee and you have that experience and have done this work as most business owners, you know, get them, get their start. But they, but you have to manage like Dave says, you have to. Where are we headed and is this a good thing or is this a bad thing? So take a step back.

This whole concept of increasing your prices, there's a corollary to that and that's don't just ride your prices down to the bottom either, if you find yourself. And it could be argued that certainly one of my businesses, Backbeat Media, is a sales business, but if I stop and think about it as a sales business, we will be out of business very, very quickly. And the reason is if all we're doing is selling something, then that's not a valuable skill to our customers. Right. It might be a valuable skill to the people who provide a product that we sell for a time, but long term it's not even going to be valuable to them. Right. You know, what we have to do is we have to be in the business of serving our customers on both sides of the equation. And that means being in the service business. So yes, right. We have to sell to bring in revenue. That's how that works. But in order to sell again to that same customer. Well, the right way to do it, I think is that you focus on the service aspect and you're not really a sales business, you're just in the service business and you happen to sell this thing that you then have the opportunity to service and hopefully that customer appreciates that level of service and onward you go.

That's right. Yeah, it's, you know, that's one thing. And having been in business with you and on a, you know, web based businesses, I was always Impressed, sometimes frustrated that, you know, you really have held the line in, you know, keeping the value where it is. Where I would think, oh, we have, you know, this, let's just sell this space race to the bottom. Yeah. And that's the race to the bottom and where you're like, no, no, we don't have the right person for this yet. And we need to do this and hit these benchmarks and you know, you're really, you want to go to a customer and offer a solution instead of just like, hey, we need to stick somebody in this slot and you know, make, make some money.

Right? Yeah. Because it's short term money.

It is short term money.

Yeah, yeah, I agree, I agree.

So read the book, Robert, and find the links up on the site.

Yeah, There you go. Cool, Cool. All right. You want to read the next one, Shannon?

Sure. So we get a message in from Gail and Gail writes, I recently listened to the episode where you discussed the impact of the proposed $15 per hour minimum wage on small businesses. What episode was that?

Was that 59?

59. Yeah. We'll link it up on the show. Not own a few local ice cream shops in an area where this may soon become a reality. Even with part time teen workers, our business struggles to be profitable now and I don't know how we'll make it when we have to increase wages, which also means paying more payroll taxes, hire workers, comp, insurance, et cetera. Any ideas on how to prepare for this? That's a tough one. Yeah, that's a tough one. You know, we have talked about this and you know, being business owners, you know, my first knee jerk reaction is like, oh, I don't like it when a bureaucrat that has never met a payroll in their life is going to make rules that apply to people that have to make payroll. At the same time, I do appreciate the fact that it's expensive, especially out here in California, and people need to live. I get the concept of, well, if there's more money coming in, there'll be more money to spend this kind of thing. But I certainly have some opinions on, I think it's coming. And I don't know that there's anything you can do about it as far as you need to adapt to it. I don't think it's going to change. And the first thing I would say is in an ice cream type thing, can you do more with less? Can you do more self service? I noticed the difference between yogurt shops and ice cream shops is that ice cream's always behind the counter with people back there working where? A yogurt shop. You walk in and there's 20 machines serving. Serving yogurt. You serve yourself, and then they go up to the front. There's one person in the entire place.

That's interesting. I mean, my guess is the. How would that work? If it's with soft serve. Right. Which is what yogurt is. I can totally see that. Working for an ice cream place. Right. Because it's the same model.

Sell it by the pound or whatever it is or the ounce or whatever.

Yeah, but are you gonna have idiots that come in and mix the flavors in the buckets? And now you've spoiled your. Or they've spoiled your inventory. Right. So, I mean, maybe. Maybe there's another way. Maybe it's okay, look, we'll scoop it for you, and then you go and, you know, fill it with whatever nuts and crap.

And. Yeah.

You know, make it fun. And then off you go.

Yeah, because if you go into. And you go to these ice cream places and. And you often have, you know, there's people stand behind the counter and it's like, okay, what kind of this do you want? What kind of cone? What kind of that? You know, what do you want on the top? And I think, wow, you know, it would be interesting if you could do that.

Well, and could you do it online, too? Right? I mean, could you have people, you know, say, oh, this is what I like. Instead of asking all the questions, could you show them the menu, but have the menu be interactive? Right. You know, put an iPad up or.

Something and create it in front of them. What it looks like as you add things.

Right. Or as they add things.

That's what I mean. As they. It's, oh, I want sprinkles. No, I don't want sprinkles. I want this. Or I want, you know, you could kind of gamify it, if you will. You know, one of the things I love is when you. This. You go to these yogurt places, at least in my area, they always have this thing, pictures posted of who got the heaviest, tallest amount of yogurt in the little cup. And I'm like, that's brilliant. It's like 100 bucks. Somebody filled it up so much, it was like $107. And I was like, wow, this is like a game. And people are competing, but they're using your product to do it. So those kinds of things, I think would be great. And then other ways to do it. I read one article about a bookstore in San Francisco that was like, hey, we just can't do it. We're going to close. Because we know the San Francisco is going to 15 an hour before the state of California is sure. And they came up with some different ways and actually was a suggestion from some of their customers was like, well, how about a membership program that we could get certain perks and everything from. You could, you could rent their entire facility out at a discounted rate. You know, you got, you know, Met authors, you know, they built this thing and they charged 100 bucks a year for it. And they were trying to get 300 members and the first year they got over 800 and it changed their whole business around. And, you know, it's kind of like the Amazon Prime Prime Costco.

Yeah, this is, this is because, I mean, we build the show notes folks, as we're doing the show. And what I wrote down or what I typed is not just membership program, but I wrote membership loyalty program because that's really what we're talking about here.

And.

That'S where it gets interesting, right?

Yeah, it can be. Go ahead.

No, I was going to say if you can find things that you can offer people that, that either cost you very little in comparison to what the customer, to the value that it provides to the customer, or perhaps costs you nothing, but just offers some additional level of love that you can provide your customer, that's a huge thing.

I think so. I think it's hidden revenue. And along the same lines, can you continue to change your business model? Maybe you're already doing some of these, but I don't know. Can you host parties, you do ice cream catering service where you deliver because the ice cream stores have all the cool flavors and can you deliver that to people's parties and that kind of thing. And then the last thing I had on my notes from this question was don't sell vanilla. Be unique. There's no reason why you should be selling the ice cream. They can get it at Safeway or at wherever, you know, really be unique. And what I've noticed, there's a lot of growth in restaurants and specialty places, whether it's donuts or hamburgers. And I'm going to link, there's a place I really love to go. It's called Yax Y A K S and it's way up north in Northern California. And it's. They have a huge banner on the side of their building. They have a small little place next to the freeway off Highway 5. And it says we're in the top 100 restaurants in the country, and the first time I saw that, I'm, ah, there's just no way. But it's true. And if you look up Yelp's top rated restaurants, this place is in there. It's like number 58 or something. And my comment is like, they sell an $18 hamburger.

What?

Yeah, but it's unbelievable. And the place is always packed. And so, like, I was up there a few weeks ago with a buddy of mine, and we had a couple of burgers, and each had, like, one beer, and it was like 50 something dollars. But it was the way they make it. Nothing is usual. Even the ketchup, they don't have regular ketchup. They make their own lavender ketchup. They don't have regular. So everything is unique, and you cannot compare it to, you know.

Right. That way you're not racing to the bottom with your prices.

Yeah, there's no comparison. Who's to say this $18 bourbon bacon burger is not worth 18 bucks? I mean, I got it, and I was like, it's unbelievable. You know, I could only half of it, and I took the rest with me. But, you know, if they can sell an $18 hamburger, why can't you sell a $10 ice cream cone? You know, you just have to create it. You have to create the story, and you have to, you know, build around it of, like, why come to us? There's a. There's a place up in Seattle, famous donut place called Voodoo Donuts. And you go in there and there's a line out. I mean, literally, there's always a line out the door of people waiting to buy donuts that are very expensive. If you compare them. Them to, you know, the donuts at Dunkin Donuts, right? Yeah, yeah, but they're totally different. They're in all kinds of crazy shapes and different things and interesting combinations with, you know, spices and not all just as sweet, you know, type of thing. So again, it comes back, don't sell vanilla, you know, be. Make yourself unique and stand out to where you're just not. Another local ice cream shop, you know, make it different where people seek you out. I mean, some of these places, like this yak's place and the Voodoo donuts, I mean, tourists go to these places specifically to eat there. Well, that's what you want, you know, you want these folks to go and come to your place when they visit your town. Oh, we got to go to this ice cream shop because they. They serve, you know, this ice cream with. With these tequila in It. Or worms or, you know, whatever. What's the hook? What's the gimmick? I would encourage you to, you know, come up with something like that. Now, maybe you can't change your whole business that way, but.

But there's gotta be something. But there's something, right? Yeah. You have to differentiate yourself on something other than price. Yeah.

Cause it's ice cream, right? Yeah. Maybe the greatest ice cream, but still, you know, even, like 711 with their Slurpee, you know, they do this thing. The other day, I noticed everybody going in and out with these giant jugs and huge containers. And, you know, once a year, you can bring whatever size container you want and fill it up with a Slurpee. And, you know, my son has this huge igloo, you know, water container, and they take it in and fill this thing up every year. And again, it just gets people in the store, gets people talking about it, all that kind of stuff. That's what maybe the number one thing you could do to, you know, generate more revenue so you can, you know, deal with the increase in those wages that are coming your way.

Wow. Yeah. Okay. Yeah. Give it away once. Find the time of year or the product or whatever it is, whatever it is that doesn't sell at that time of year. Right. I mean, we're in mud season right now. Right. So. No, really. And, like, nobody's thinking about Slurpee. But you're gonna be like, you want a nice, cold, refreshing beverage when the weather finally breaks and it's warm.

But they don't do it in August when it's the same. That's super hot.

Right. You do it in May.

In May, yeah.

And you get people thinking about it, and it's. Oh, that Slurpee in May was sure nice. I'm gonna go buy one in August. Every day. Yeah.

Yeah, yeah, for sure. So those are. You know, those are good things. And we'll post some links up in the. Again in the show notes, a few articles and some tips on this stuff. And I got.

I have one more thing for Robert.

Yeah.

And. And that is, you know, as we're doing the show, and. And I'm thinking about Robert saying he's crazy busy and he's working really hard, but he's not. Not finding the path to the revenues that he wants. Take 10 minutes. And just. Whether it's meditating or just sitting and breathing, do something every morning before you dive into work where you're just collecting your thoughts. Some people drink their coffee. I know a guy who drinks his Coffee and organizes his to do list for 30 minutes. Now, nobody needs 30 minutes to organize their to do list. Right, but that's not the point. Right? Sure, he could do it in 30 seconds, but he doesn't. He drinks his coffee, he organizes his to do list, and he gets a real feel for, okay, I'm in control of my day. And then he starts his day. And of course he's not in control anymore, but he's thoughtful about what he plans to do for the day. And. And I just think having. And Really, I think 10 minutes is enough where you're just not in crazy mode. You're not being interrupted, none of that. I think doing that every day will allow you to kind of do what you need, where you take that step back and you can look at the bigger picture. And over time, I think that's going to pay off for you. I don't know, it might be me being.

I agree. No, no, no. I think that one of the things that I would say I spent years and years always wanting to, requiring myself to be the first one in the office and the last one to leave. And not, I mean, not until. I mean, not too long ago, you know, four or five years ago, I started, you know, I need this just like you're talking about. I need a half hour just so I can sit and I can think about, okay, what's going on, and even just separate from everything because, you know, I'm working at night doing all these crazy things, and now it's like, I just am not worried about being the first one in. It's more important to me to come in with a frame of mind of, okay, who am I going to do this? And usually when I'm sitting at my house getting ready and working on some stuff at home, things start rolling in via slack from one thing over another. And you start, oh, okay, how do I react to that?

Yeah, now you're in response mode, not proactive mode.

Yeah, yeah, that's right. And then you know that that stuff's going to hit you. So if you can just take a breath. You know, I really do think that that's a great point, Dave, is to, you know, be able to stop and to think and then plan. Otherwise you're just running around like crazy. It's great to be busy, but if you're not productive and if you're not developing these systems that we're talking about, it's not good.

Yeah. And I think if you do that, you will find yourself being more thoughtful throughout the day, even in those crazy moments when things are nuts, you'll say, oh, wait, wait, no, I've trained myself. Because that's what you're doing. You're training yourself to stop and think. That's really what this is. And so by doing that, your mind will be going in the right direction as opposed to just like you said, you're just in reactive mode. And that happens to all of us. You know, there's going to be a part of your day where you're just like putting out fires all day long and you can feel like you've accomplished something. And yet in the end, does it get you what you need? And to go back to Robert, the answer is not quite as much as I would like.

Yeah, that's right. Awesome. Well, we wish both of you well and you know, follow up with us and you know, join us in the small business support group on facebook@businessshow.co facebook and let us know how it goes and whether you think we're going to. We're, you know, we have a great answer for you. We're full of crap.

Let us know.

We want your feedback. We take it either way, any way we can get it.

Yeah, no, we love these questions. Feedbackusshow co. Please, please, please send us your questions.

Keep em coming folks.

Keep em coming. Absolutely. That's it. And keep living that charmed life. That's the goal here, is not only for us to help you live the charmed life, but by doing that, we kind of help guide ourselves too.

So it's good stuff for sure.

Yeah. Have a good week, Canon.

Yeah, you too, man. Take care of yourself. Don't do anything stupid.

Yeah, that's the idea.