Employees, Contracts and Emergencies

Business brain episode 484 for casual or causal. Friday, September 15, 2023 Greetings folks and welcome to Business Brain, the show where we take some ideas, we dissect them, we analyze them together, and this way we learn something new to tune our business brains so that we can keep on living those charmed lives. Sponsors for this episode include shopify.com business brain where you're going to go to sign up for your $1 per month trial period. We'll talk more about how you're going to do that and why you're going to do that and why. I did it in a little bit here. For now, here in Durham, New Hampshire on Casual Friday, I'm Dave Hamilton.

Casual Friday come from Lafayette, California. I'm Shannon Jean. Happy to be here on Friday. Yeah, good stuff in a very busy and productive week for me. But I, I want to share a conversation that I had with a, a service provider with you, Dave, and feedback on this.

Okay.

Pretty interesting concept. So as I mentioned on the show, I, I recently bought a, another vacation rental property. And this, this one's kind of, this one's rural and it's, it's on a well. And so I'm trying to, I've done wells before, but I want to learn more about this one and I have some, I want to get some updates to it so I can purify the water for guests and all this kind of thing. So I call this well company that installed this and I talked to the guy, super young guy, okay, yeah, no problem. Gotta take care of you. And I said, great. Can I, I'm gonna be back up there on Friday. Can we make an appointment? And he goes, no. I said, what? Okay, yeah. He goes, no, you know what? In my business, everything is an emergency, so we don't make appointments. I said, huh, well, how do they.

I mean, I get this, right? I used to say, and I would even tell clients this when I was doing, you know, on site computer repair. Right.

Yes.

I would tell people, look, I have the unfortunate job of needing to prioritize everyone else's emergencies.

Yes, that's right.

And so I get, I completely, this concept resonates with me. But I still had to make appointments and it was this Sophie's choice that I had to make. Like I am choosing to say that your emergency is the third most important one for me today. And I would just be honest about that. And I mean, people weren't necessarily happy about it, but they, they knew that I was factoring in what I could do. For them, you know. So how, like, how did you get this guy? Like, I'm confused here about this.

Yeah, yeah. So I said, okay, well what's the, the process here? And he goes, well, the process is if you're going to be up there Friday, why don't you call me, you know, Thursday, late afternoon and I'll have a better idea of what my Friday looks like and then we'll, you know, try to get this range of time that you'll be up there and if I don't have an emergency, then I'll show up. And I was thinking, man, it's, I'm, it's either really. I mean, it's gotta be certainly empowering to tell your customers, oh yeah, we just, we don't, we don't make appointments and this and that. But I don't know, I don't, I don't know how you'd make that work. But it struck me, I've never had anybody tell me that before because I would think you would use your method. Hey, yes, I will make an appointment with you Friday afternoon, 2 o'. Clock with a caveat that every, you know, my business, usually things are emergency related. We don't have water in this case.

Sure.

This kind of thing. So there's a good chance I will have to postpone it or I'd be late. But I'll let you know. So it was interesting. I don't know that I have much more to say about it.

That then, wow.

Okay. I mean if you're a contractor in that kind of a field where people are, you know, you're, you're small business and always on an emergency basis. How do you do it? You know? Feedbackusbrain show. I'd love to get some, some thoughts on this one.

All right. Earlier this year, one of the other businesses I have, we had the idea to start selling merch. Right. We wanted to sell T shirts and mugs and hats and that sort of thing. And thankfully I knew about our sponsor Shopify, because if I didn't, I would have had no idea where to get started. But I did know where to get started because Shopify has been sponsoring us here at Business Brain for a while and they really helped us level up quickly. And they can help you too. Shopify is the e commerce platform revolutionizing millions of businesses worldwide. Whether you're a solopreneur or you're IPO ready, Shopify is the only tool you need to start, run and grow your business without the struggle. Shopify puts you in control of Every sales channel, right? So whether you've got like a in person point of sale where you're selling like whatever, satin sheets or something, or you're selling stuff online like we are with our merch or you know, you could be selling olive oil for all we know. It doesn't matter because Shopify's all in one e commerce platform has you covered. In fact, it even works if you're doing like courses and things like that. Shopify can be the engine for that, handles all of that for you. They really are focused on you and your audience. And once you've reached your audience, Shopify is the Internet's best converting checkout to help you turn them from browsers to buyers. Like I said, we started doing this earlier this year and I've used Shopify in the past. It is an amazing tool that instantly helps me level up and it can help you too. So go sign up for a $1 per month trial period at shopify.com businessbrain that's. That's all lowercase. Go to shopify.com businessbrain to take your business to the next level today. Shopify.com businessbrain and our thanks to Shopify for sponsoring this episode. All right, Shannon, we got an email from David into feedbackusinessbrain show and I highlight that because that means David is entered into our contest to win a MacBook Air, which we will be doing the contest soon here because we're going to hit episode 500. David says, I really enjoyed hearing you discuss hiring the first employee last week in episode 481. We'll link to that episode in the show notes at BusinessBrain show so that you can listen to that if you didn't. The part about having times when you don't have enough work for them is a very real struggle. I have six staff, many of whom have been here years, and that issue still comes up sometimes. Making that list of jobs that staff can do when they're not busy is gold. Great suggestion. One other thought I had that might be helpful for those entrepreneurs who are considering hiring a first employee is to make that first hire a remote employee, right? That's much better than saying virtual employee because they're a real person. If continuing with David here, he says if you hire someone from one of the remote employee companies like Belay Solutions or whatever that offer different packages, I. E. Different number of hours per month, that too might make this easier. For example, you could start with one for 10 or 20 hours per month and see how that goes. That will Give you a good idea of how much work there is for the new hire to do without worrying about immediately having to fill 40 hours per week or worrying that the employee will look for another job if you can't give them enough hours. And when things get busier, you. You can increase to a package with more hours per month. And I think he says you can even go backwards. If you come up on a month, you know, will be slower. You can purchase lesser hours in a package that month for the first employee. This might be a really good solution as a way to test the waters because it gives flexibility and the training aspect is much simplified. I like this. I, yeah, buying hours at an agency. I, you know, I. It's gonna sound really weird, but I started my career in corporate America through a temp agency. I, you know, I needed a summer job. I knew, and this was back in the, you know, early 90s, I suppose, and, you know, minimum wage was like, whatever, five bucks an hour, maybe, something like that. And I knew I wanted to make more than that. And I also could type, right? Like, I could type super, super fast. That's not so much of a differentiator anymore, Shannon.

But been commoditized.

It's been commoditized, exactly. But it was not back then. Like, I could type. No one was able to really test my typing speed. I remember I did a typing test at an. At a temp agency. I walked in and they said, great, here's this piece of paper. We'll start the timer, just type it on a typewriter, and then we'll see how far you get, right? And we'll time you for five minutes. Great. So I typed the whole thing, and I brought it over to them, and they're like, what do you mean, you finished? Your five minutes isn't up. And. And I was like, yeah, I know. They're like, well, I guess type it again. So I went back and typed it again. At that point, they measured me at, like, 117 words a minute, but that included me getting up and talking with them. It's a delay in the middle so I could type really fast. This was helpful. You know, I was a nerd. And so I wound up with a job at Citibank as a. Because I could type. And so I was doing some, like, you know, just. Just like, clerical work for them. And then they realized, oh, wait, this guy's got other skills. And that's how I wound up getting the jobs that I had and. And kind of started my career and then realized I didn't want to work for a large company for a var reasons. And, and now here I am. But, but yeah, I mean it like, but I've forgotten about that because it's it that that landscape has changed. But David's absolutely right. If, if the work is the kind of work that can be done by a remote employee and there's lots of work, it's not just typing work anymore, you know, that was on site back then. Yeah, I like this idea, man.

Yeah, I, I think it's kind of like hiring your first employee with training wheels on.

Yes, yes, it is the training wheels method for sure.

Yeah. You get to kind of ramp up on learning how to communicate, how to make sure you've even things like making sure you're, you're giving the proper and correct amount of instructions for a project.

Yeah.

You know, communication style, back and forth. Even if you'll be communicating, you know, mainly written. Um, but I, I, I think it's a great, a great idea and if, if the work you need done lends itself to that, you know, using Fiverr Upwork or the company that, you know, he mentioned it, it's, it's a great idea. I mean we, we went so far as to, we had a, a stretch where we were not very good at hiring people.

Yeah.

And it's a skill, right? Yeah, it is a skill.

And you will fail at it. Yes.

Yeah. Oh, and we, we were failing miserably. So finally I said, you know what? I, until we get this figured out, we had a local temp agency and what I said to them was, look, these are the positions we want to fill. If you have people, great, you can send them to us. But if we find people that we think we want to hire, I'm going to send them to you and you'll hire them. I'll pay you for the first 90 days. So in case one day we're like, oh, this was such a mistake, you, you really don't have to go through the whole wind down process of letting this person go. All you do is call the temp agency and say don't send them back and you're out. So we did this for about a year until we became much better. I almost said expert, but I don't like that word anymore. Much better at identifying the types of people we wanted to hire. And it was more expensive, there's no doubt about it, because you're paying a fee to this group. But maybe more expensive up front, but not in the long run because I would say it during that Year, three or four times. I was able just to make a call on Friday and say, okay, we don't want this person back on Monday. Thank you very much. And it worked out good. So it's a different way to do it, too.

Interesting, huh? Yeah. I like it. I like it. Yeah. While we're here, Shannon, I came across something in an agreement that someone asked me to sign this week, and I loved it. I like anything. My. My purpose of. Of contracts. And I like it when both parties, or all parties think of it this way is. Is twofold. Number one, to lay out everyone's expectations very clearly upfront so that if there is confusion down the road, we can go back and look at the contract. Right. And say, what. What did we think this was going to be like? And are we there or do we need to adjust? I love that part of an agreement. I also like an agreement to discourage everyone from jumping to litigation as a, you know, default position. Right. You know, can be good. And I, and I love when I come across examples of this. One of the, the most common examples is, you know, the clause that says, like, the parties agreed to not sue each other, but instead use arbitration. Right. Which, which is fine, but to me, arbitration is just like litigation. It. It's. You're still going to hire a lawyer.

Same problem.

It's the same problem. It's. It might be a little more efficient and therefore it's cheaper, but otherwise it's lit. It's still litigation. Right. So I found this clause, and it says, it starts with, the parties expressly waive any challenge to the use of arbitration accordance with this agreement. So, okay, there's that phrase, fine like that. I mean, you can still sue somebody when that clause is in there. They just get to say, you said we wouldn't sue each other. We agreed to that, and now you're in violation of that part of the agreement, too. But it's. It's like, it doesn't matter. But the, the next part of this is the part that I loved. And there's a nuance here that you might miss the first time through. I had to read it a couple times before I was like, wait a minute. This is actually a really nice thing. It says, the parties agree that the locale where the arbitration shall be held will be in the location of the defendant. Now think about that. You're the one suing, so you're the plaintiff. Right. That means that you don't get to pick the locale where the arbitration happens. It means in most cases, you as the person who is suing, slash start, you know, filing for arbitration. You are agreeing to travel to the locale where the defendant is and home court advantage. Right. There's something really nice about not having to hire a lawyer like you, you probably wouldn't want to hire a lawyer locally to where you are and then pay them to travel. So more often than not you're hiring an attorney somewhere else. You don't get to go sit with them in their office. You know, you have to travel. And so now you're investing a lot of different time. Whereas the people in the, you know, the, the, the where, the people that live near where the arbitration, it's way more convenient for an utterly inconvenient process. Right. Like yeah, and, and I love clauses like this. And so I wanted to highlight that one, another one that completely different. A friend of mine sold his business and kept shares in the, the, the business that bought him. So it was a part cash, part equity deal for, you know, for lack of a better term. Right. You know, so, so a blend. Fine. This happens all the time. No problem. He put it, they, they had in there that after X number of months he could elect to have the, to receive the rest of his cash by selling the shares back to the company that, that, you know, that, that bought this from him. Right. So they wanted him around for a little while. They wanted him to be incentivized to increase the value of the company, AKA his shares. But then at some point it was like you still, you like you have the right to convert these into cash. The amount was a very interesting thing. It was it, you know, if we, if we can't agree on an amount between us for what that should be, both parties will submit an amount and if it's within 10% of each other, then we average the two and that's the number. Right.

That is interesting.

Okay, but you're submitting these amounts to a neutral third party. Right. So it's like blind. Correct. If the amounts are more than 10% apart, that neutral third party will then, or another neutral third party will then be tasked at our, our mutual expense to come in and value the business. And whichever person's number is closest, that's the one we pick. So it's not. We're going to pick the valuation that we get from this independent third party. We're going to pick the number to whom that valuation is closest. And so this is a huge unknown and not one that you are going to want to, to have to use. Right. Because you don't like that's, that's bad news at that point because you're just, you don't know where it's going to fall. Like, because a business valuation is a very imprecise process. It's, it's not like, it's not like you can say, oh, well, there's, you know, a thousand other businesses exactly like this and here's the price. It's not like, you know, buying a stick of gum or whatever. So I really like that one too is like this disincentivizes us from using, you know, third parties, you know. Yeah. And the figure it out ourselves.

Yeah, yeah. And the first one is disincentivizing, you know, everyone but like, hey, let's work it out. Let's not sue each other, let's not go to arbitration. And if we do, it's going to make it more difficult for whoever the aggressor is. Right.

For who the aggressor is. That's right.

So you're, you're motivated to, you know, try to figure things out. Figure it out. Yeah, yeah, yeah. I think those are pretty cool.

I like them.

Yeah, yeah, yeah. I do too. I think it's great. I mean, I'm not a huge fan of, of, you know, in depth contracts that, that force all these things, but that seems like a great way, especially at the beginning of the contract, that everybody. And if you highlight it and everybody understands the purpose, what it means.

Yeah, yeah. I think that was the one thing that I would do different. And this was a fairly short contract. It was like page, page and a half. Like it was just spelling out some very simple things. And then it had the boilerplate language. And this was buried in the boilerplate. I would if. And I am going to use this. So when I use this clause or something similar to it, I will highlight it by saying in order to disincentivize either party from using any sort of arbitration or litigation, the locale of the arbitration will be in the locale of the defendant. Right. To really spell it out.

Great. Yes.

Yes. You know, it's like, here's why we're doing this and there's two reasons to do that. Number one, so that the primary one, in my opinion, is so that when you're signing and you're drafting and signing the contract, everybody understands why the clause is in there. Right. It's not some hidden thing, but it's also nice in case you wind up in a scenario where you have to use what they call a reasonable man's interpretation of the agreement. If you spell out why a clause is in there, that really helps with that. Reasonable man's because. Because what can happen with legalese is it is it can be interpreted many different ways a lot of the time. Right. And so if you describe the intent, it helps really narrow that down. So. Yeah, I like it.

Yeah, me too. I think it's great. It's really good. Well, if you have, you know, tips like this or things you've put together in agreements or contracts, we'd love to hear them. Feedbackusbrain SHOW Remember when you send something in we mentioned on the show you get entered to win a MacBook Air, which we're giving away coming up pretty soon.

Coming up pretty soon. Yep. Thanks for listening. Yeah. Episode 500. Thanks for sending in all your stuff. Do us a favor, keep living that charmed life and have a great weekend. We'll see you next week.