Family Business Dinner Table Lessons

Business Brain, episode 593 for Casual Friday, October 25, World Pasta Day 2024. Greetings, folks, and welcome to Business Brain. Welcome back to Business Brain. If it's not your first time here, welcome on Business Brain. We take an idea or two, or sometimes three, we dissect them, we use them, we analyze them, we employ them to help us learn how best to tune our business brains so that we can keep on living those charmed lives. Our sponsor for this week is vanta.com brain. Vanta automates compliance for your ISO 270017 SoC2GDPR, all while helping you build customer trust. And you can save 1000 bucks at that link. And I'm going to tell you more about how you can do that in a little bit. For now, here in Durham, New Hampshire, I'm Dave Hamilton.

And out here in Northern California, I'm Shannon Jean. A thousand bucks. That's pretty good.

I love that.

A deal like that. That's awesome.

How can you. How can you say no?

Yeah, how can you say no? I love good deals. I was so stoked to have Michael Prendomano on the show on Wednesday and talk about his bin store concept.

We gotta dissect that. That's like. That's how we're gonna tune our business brains here for at least the first little segment. Yep.

Yeah. I love the. Well, I'm sure it's very comp. There's a lot of complexities to it, but I love the simplicity of it. It's that, you know, hey, on. On Friday, and I don't know if I have this exact. But Friday, everything in the store is six bucks. Saturday, six bucks. But on Sunday, it goes to five, Monday, four, and then three, two, one, until it's done. And I, you know, I just love that concept because it's so easy to explain to somebody. And then when people pick out, you know, it's like a treasure hunt when the first group gets through there on that. That Thursday or that Friday and they're finding, you know, Apple watches. Yeah. Whatever it is. Yeah, yeah. For six bucks, man, that. That.

I should have asked him how many elbows get thrown on that, because this reminds me of like, what. Like what. What used to happen. Anyway, I don't know if it still does. There's at like 5am on Black Friday. Yeah, exactly.

Yeah, it might. But I might.

Might.

Yeah, it might. I don't know. I. What I like. And. And I've talked to Michael a few times, and every time he talks about his business, the Focus is on value. And he really gets this fundamental idea, this concept that he. If they don't add value, and they're like, at the extreme right of. Of value, man, where everything. Especially when it comes to price, because, like, we always say, don't compete on price. But his whole model is.

He flipped that upside down. He's like, let's embrace it.

Blow up the pricing model and do something completely different and make it up in the averages. Right. In the volume. They do like 1 point, 1.3 million, you know, packages a year or something like that.

Yeah.

And so. But understanding that there's two sides to it in this liquidation business. One is adding value to the customer because they're getting a great deal on a product that maybe they couldn't afford. I mean, he's talking about people.

Yes.

Not the treasure hunt aspect. People coming in, buying, you know, staples for their home.

Right, right.

Maybe they. Maybe they couldn't afford it or they're just so happy to get it at such a great deal. But the other insightful thing is understanding the value you're adding to the supplier and to the supply chain. That's huge. Because if you treat your suppliers like they're another customer, it's. You just. It's. It's like greases the tracks, man, because they love you and you need them.

And it's such. You know, I said this when we were talking to Michael, but it's such an easy thing to do. Well, let me take that back. It's not necessarily always easy to be delivering customer service, but it's an easy concept to understand that you can say, okay, everyone is a customer. Our vendors are our customers. The people that buy from us are our customers. The people that deliver from our vendors, also our customers, like everybody in our employees, are our customers. Right. You know, treating everyone that's right. In such that they feel valued and actually are valued. That's an easy concept to understand. Organizing your business to deliver on that.

Harder to implement.

Yeah. I mean, it's easier to implement when you're doing it from day one because you're setting the culture that way. But it's not impossible to adapt a business to do that. And you can do it. I mean, really, it just comes down to mindset, I think. But I'm, you know, I'm the guy that's been saying every business is the customer service business for 25 years. So maybe I'm not the right guy to ask about adapting a business to that.

No, no, it's. It can be challenging. But, yeah, if that, if that is your core, you know, your credo or, you know, whatever. Yeah, your, your, your noble cause. If that, it's, it's much easier to push it through your entire organization of like, hey, we've got to make sure this stuff is good for these people that come in and pay and, you know, this and the other thing. And then we've got to make sure we take care of these suppliers and all this kind of stuff and that. And then what I absolutely love about his story is the starting with nothing.

Right.

Learning to sell by selling stuff he had laying around his house.

Yeah. He didn't need to source. He had no suppliers at first. He was the supplier.

Yeah.

His junk, I mean, it's perfect.

It's perfect. I tell people this now. It's like, oh, if you're planning on building a business like selling on ebay or Poshmark or whatever, go register your accounts today. It costs nothing. And learn how to go through the process. Go start watching people that are successful at it. What are the best, best practices? Just get started, you know, and this guy sold out of his, you know, storage shed at his house and then slowly took over the house until, you know, he was like, okay, we got to do it. And then he already had his talents, you know, talent stack in place for his real estate business, which helped him get a great deal there when he was negotiating his first lease. Just a great story. I love it. I think we'll hear more from him.

Yeah. All right, folks, look. Whether you're starting or scaling your company's security program, demonstrating top notch security practices and establishing trust is more important than ever. Our sponsor, Vanta automates compliance for ISO 27001 SOC 2 GDPR and more, saving you time and money while helping you build customer trust. Plus, you can streamline security reviews by automating questionnaires and demonstrating your security posture with a customer facing Trust center. All powered by Vanta AI. This is one of my favorite uses of AI for us as business owners these days. Anything customer facing that can be augmented with AI can make a huge difference. And Vanta is obviously doing that with Trust Center. Over 8,000 global companies like Atlassian Flow Health and Quora use Vanta to manage risk and prove security in real time. And because you're a listener to Business brain, our audience gets a special offer of $1,000 off Vanta when you visit vanta.combrain that's vanta.combrain for $1,000 off. And our thanks to Vanta for sponsoring this episode hey, Shannon, I realized something this morning.

Yeah.

I'm running a family business now.

You have everybody. I don't mean to laugh, but you're right. As I see their names pop up in Slack.

Yeah.

And everything. So you've got everybody employed, even your son?

No, no, no, no. My son has worked for us. I'm talking about Backbeat Media. Yeah, got it.

Yeah. That's awesome, though.

What's interesting, it's. I've always run everyone that has worked for us. I've never called our businesses teams a family first. Our employees have done that. And like, when we were running Mac Observer, Lisa wasn't really involved in Mac Observer. I mean, people kn. She did some behind the scenes stuff, but it was me and Brian and the team that we had. And no one was. As far as we know, no one was related, but everybody called it the TMO family and Backbeat. When we started, it had nothing to do with Lisa. In fact, she kind of thought it was a crazy idea, but it was fine. She supported it because that's important. She's like, well, if you think it's going to work, I'm like, yeah, I do. And the way Lisa got involved was really interesting. I knew that I needed help with the business. I had my partner Greg, he had hired. By that point, I think he had hired another salesperson who's still with us. I've since bought Greg out of the partnership because he went on to form the Brooklyn Zen Center. But I knew I needed help and I was interviewing people and they would work. It was at a time where it would have been tough, I think, to have them work remotely at least. It just didn't. It didn't dawn on us to think about it that way. And so I was bringing people into the house and it was like, okay. And I had space. I had office space that we had built out in the house, but they'd still be in the house. And so, you know, Lisa was like, all right, well, it's got to be the right person because I got to be able to be comfortable with this and, you know, this that, you know, like, yeah, of course, you know. And I had interviewed six or eight people. I was kind of getting close to, you know, finalizing it, and at dinner one night, she's like, hey, I was thinking today, what if I work for you? And I was like, well, we have a very small child. I mean, our daughter was, you know, tattoo or something. It was like, yeah, that. And. But she had already solved for this. She's like, I think I want to hire my sister to watch our daughter during the day. That way I can work for you. She's like, it would allow me to do things that aren't just like in baby land all the time. Right. It's a big deal, which was a big deal. And she's like, I know that, you know, part of what you're going through with hiring people is bringing on somebody that you can trust. And it's going to be a slow road being able to hand them some of the accounting stuff that I know you need to get off your plate. She's like, I feel like having that keeping that in the family might make that easier. And it was like, oh, yeah, this would be perfect. And so obviously I hired her. And that's been the case for 20 plus years. I'd hired my son to do some contract work for the businesses in a variety of different ways over time, doing some programming for us. And then my daughter, who I recently hired at Backbeat, she's been working with us for almost five years at this other company. I have started doing customer service then and not reporting to me at all. We needed to hire family members with this other business because we had not built out our backend robustly enough. And it meant that anybody that had access to the backend to, like, do things for customers could also do things for themselves and sort of use the system. Yeah, I mean, maybe not take all of it, but. But there was a scenario where you could easily set up an embezzlement path. Right. Like, got it. And we. In that hole was not easily plugged the day we needed to start hiring customer service people. So. So we started hiring family members because we figured, well, if somebody's going to embezzle from us, you know, treat it like an inheritance or something, you know, sure, hopefully it didn't happen, but. And I don' because we've put those systems in place since then. But so my daughter came on there and was there for three years doing just customer service, which was a great job for her during college and all this other stuff. And then we expanded her into social media and then into sales. And once we moved her into sales, that brought her kind of into my world.

I see.

And so she's been doing sales with me there for about a year and crushing it. And I was having a chat with one of my folks at Backbeat, I don't know, about a month and a half ago, maybe two months ago now. And he said to me, he's like, you know, there's other salespeople out there. He's like, you know, he was talking about moving into a different, like, expanding his role and was like, well, we need the sales cover. He's like, you know, there's other salespeople out there. I'm like, yeah, we need to bring in. And I talked about this with you here on the show. It's like, well, you know, we don't have the cash flow to hire a salesperson, but the salesperson would help us generate more cash flow. I'm fairly confident of that.

Chicken and eg.

Yeah, it's a chicken and egg, right? And so. So we made that decision, obviously, and brought her in, but it, like, I already know how to work with her. I already know she's going to crush it at sales. And I trust her implicitly, A, because she's my daughter, B, because she's worked for me for a year and one of my companies for four years. But she's also had those dinner table lessons. And I can't stress the value of dinner dinner table lessons enough. The first time I noticed this was with my daughter.

She.

I was teaching her how to play drums for her school jazz band. And years prior to that, we had had a disastrous experience learning guitar together to the point where we could not play instruments together. And then when she started playing the drums, we didn't even know it at home. She was just playing at school, and it sort of came up. She's like, oh, there's a concert on Thursday night. You should come. I was like, you're in the band. Like, what's this about? It's like, yeah, I'm playing drums. I'm like, wait a minute. Yeah, I play. I play drums. Like, what's going on here? She's like, yep, we need to keep this separate. I'm like, yeah, no problem. I remember the past. And then she came to me and she's like, all right, look, I need you to teach me how to play drum set, because I need to learn for jazz band. And, you know, auditions are in four months, and I need. I don't know how to do this, and I want to. And so we came up with a formula and was like, okay, in the studio, we are not parent child. We are teacher students. And, you know, it worked out. Obviously, it worked out great. But where she learned the most was actually back at the house at the dinner table, because she would talk about her gigs or I would talk about mine. And just those, you know, the 10 seconds worth of little tidbits of advice are so cumulative. You Know, you talk about increasing 1% every day and at the end of the year, you've gone up 365%. I would say any dinner table conversation was probably 5% improvement because of just the little things. And she's always been getting those with the stuff we do at Backbeat because I bring it to the table and I talk about it.

Yeah, man, it's a lot to unpack here.

I know. I'll stop talking now.

Yeah, I, I too run a family business. Everybody in my family has worked for us just, you know, pretty much at one time. My wife, who's amazing, has worked now, she didn't work for us at the beginning with my businesses. I think it was about a, we were about a decade into it. Yeah.

Okay. So similar with Lisa.

Yeah, yeah. When I was ready to start another company and I'm always better with a partner and this current. The person that I was going to partner with at the time said, I'll do it under one condition. Renee, my wife, has to run the back office. And I was like, oh, that's interesting. And Rene was working for a law firm at the time. And I said, hey, are you interested? Do you want to come over and do this? And we had very separate duties, so it was great. She didn't answer to me, I didn't answer to her. We both answered to cash flow, but, you know, so we were going in the same direction, but it was separate enough. And, you know, my kids have worked for us. My daughter worked for us as soon as she could put stickers on lollipops as a little kid. And I've got pictures of my son and huge pallet size boxes of iPhones, you know, sorting and this kind of stuff. And they all learned it. You know, I always tell people, if you want your kids to learn about money, just don't give them any. And tell them, especially if you own businesses, you're like, well, if you need money, I can, I can show you how to make money. Come to me and I'll help you or I hire you or I'll show you how to flip stuff. I'll show, you know, help you buy T shirts and sell them or tennis shoes or anything. And we kind of did that and it was great. They picked. They are definitely. They think differently about the way the world works and about money especially. And I feel that it's like a sense of confidence just kind of exudes from their skin because I. We spent our entire life just changing our own reality and creating things that supported us Our family. And we shared that at the dinner table with these kids, and they knew how we did it. There was no guarantees. And when I failed, we shared those failures. And when we made it, you know, we shared that stuff, too. So I love the concept of working with family. You know, there's pros and cons, just like everything else.

Totally.

You know, it's great. Yeah, I think it's. I think it's a tremendous benefit if you have the opportunity.

My. My biggest concern in terms of negatives is the perception.

Yeah.

Potential negative. Like, some people might see it as positive.

Yes.

And I sent out notes after sky had been here for about two weeks at Backbeat, I sent out notes to all our major partners, sort of introducing her. Many of them had already encountered her because I immediately incorporated her into the sales process, because I want that off my desk as soon as I possibly can. Right. But I had one of our folks replied to me this morning. There was a problem I had with my email that I didn't realize until today that there were two agencies that I did not send the email to. It sat in my drafts folder for an extra week, and, you know, it happens. It's fine. So I just sent them out today, and one of them.

Thanks for your patience.

Yeah, thanks. Well, they didn't even know it was late. Like, this was just an announcement. It was a press release, effectively, you know, being sent via email. And. And this one woman said, nice to see another Hamilton join the family business. That's cool. And that was when it hit me. It was like, okay, so this is. There's a perception here.

Okay, that's cool.

Fine. Like, fine. You know, there's. There's more than just us here. There's. I mean, we have employees that have been here far longer than. Than Skyler, obviously, but. And Lisa, in fact, like, you know, Jeff was here before Lisa, so.

Yeah, yeah, yeah, yeah. And I think that perception is everybody. I've had my. My wife comment. She's like, hey, I don't want to be the owner's wife. You know, working here, I'm. I'm. I bring my own value to the table. And. And that's really important. And to recognize that and to include them just as if they were a regular employee. And if and when things come up that are in their purview and their scope of expertise, they manage that.

Absolutely.

And so the. The other thing I would caution people is that they should be treated just like another employee. They should get their paycheck, their benefits, the retirement, the whole nine Yards. Because if you don't do that, you know, like, we, we have some kind of older friends that wives worked at their companies, everything, and they thought, oh, well, we just won't put you on the payroll. We'll save on the employee taxes and the Social Security, and we'll just take it all this way. But you know what? You never know what's going to happen.

Yeah.

And then all of a sudden, they're of an age like, wait, I. I don't have this because I don't qualify. I don't have the 45 units or whatever you got to have.

Yeah, whatever. The things you got to earn for Social Security and all that stuff. Yeah.

And so I would, I would caution you against that method is that they should just be, you know, like anybody else, treat them like anybody else and give them their autonomy and, and work with them just like you would another employee. When you're at work, you're at work, and it's not a husband and wife or father, daughter type of thing.

Oh, yes. Oh, yeah. That's. That's the most important part to manage, I think, is that the separation of, of, of house and business. Right, right.

Yeah.

You know, in, in so much as that's possible. It's going to bleed over.

It does. I think it's. Yeah. I think it's more important to make sure it happens at work. Because when you're at home, we always talked about our business. Of course, it was businesses. It was our whole life, you know, so we, we could easily veer in and out of it. It wasn't like, hey, yeah, it's not. We talk about it too much. So we're not going to talk at the table about business. Well, my life was. Has been business, so we're talking about it, but then we roll right into the kids, school or sports or whatever it is.

It's all the same.

Just kind of. It's all the same. It's.

But at work, we stay away from the family stuff.

You got it. At work, you're not saying my wife, my daughter, go talk to Renee, go talk to whatever it is.

Yep. Yeah, exactly.

They. They handle that.

And I, Yes. I make it clear to all of our, Our partners and everything. It's like they come to me with something and it's like, whoa, like, I, I want to get you taken care of. I have no idea how to help you. I could figure it out, but I'm going to let this person who's the expert at that here, do it for you because it's their job. Talk to Lisa and it's fun.

Yeah, yeah, exactly.

Just like I would if they were. If Lisa was a regular employee, which essentially she is.

They are.

We have a separate relationship. That's not hidden, obviously.

Correct.

You know, but that's the only difference. Yeah, exactly.

Yeah. I love it. I love it. If. So the way you should interact with them is someone who does not know your names and does not know you. Yes. Should not be able to tell that you are related to that person.

Correct.

That's the, that's the test.

That's the test, I think. Yeah. They don't know your names. Yeah, yeah, yeah, yeah, yeah, yeah.

So. But yeah, I'd love to hear, you know, if you've had working with spouses and family members feedback at businessbrain show. If you've got other questions for Michael and his bin store concept, feel free to reach out to us and we'll forward them over to him and have a great weekend.

Thanks for listening. Thanks for hanging out, folks. Like he said. Feedbackusbrain show. Follow us on x. He's Shannon Jean. I'm Dave Hamilton. The show is bizbrain show. And keep living that charm life, huh? We'll see you next week.