Listener Questions about Health Insurance, Family Funding and Hiring

The Small business show, episode 295 for Wednesday, September 23, 2020. Greetings, folks, and welcome to the Small Business show, the show that is by and for small business owners. And it's about small business. In fact, we will Small business is how it works. Sponsors for this episode include build hr@yourhrsource.com and PDF pen from smile@smilesoftware.com podcast. We'll talk a little bit more about each of them later. For now, here in Durham, New Hampshire, I'm Dave Hamilton.

And in Lafayette, California, I am Shannon Jean. How are you, man?

I'm good. I'm ready to Small business here. We've got some, we've got some feedback from you folks. FeedbackusinessShow Co is where all of these folks sent in their questions and we want to answer some of these questions, but we want to answer yours too, or if you have anything to add. Feedbackusinessshow co. What was that? What's the address, Shannon?

Yeah, it's feedbackusinessshow Co. Right to the top. There's no middle management on this podcast.

That's great.

Right to me or Dave. And the other thing I wanted to comment on before we get into these questions is, you know, we're only five away from 300. So the countdown to 300 begins this week and I'm excited to get to 300. I can still remember you telling me when I came to you and said, hey, we should, you know, I'd like, I have this idea, we should do this show, need your expertise. And you're like, okay, great, we're going to start recording. We're just not going to release them because you won't be any good at this. Which I, well, we, we, we as.

A duo, were not good at it together is really what it comes down to. Find your.

Yeah. And I remember recording those first few and, and those kinds of things. I, I still remember doing our first interview, you know, where I was very excited and barely let the guest talk. So I've learned to be quiet. It may not sound like it right now, but it's been a great run up to 295, and I'm looking forward to, you know, we'll have to have some kind of celebration. Yeah, I would say, you know, we should go to Mexico or something, but that's kind of out right now.

Yeah, I don't, I don't think maybe.

We can get some company cars, something small like that.

A good idea. Yeah, that's better. That's safer than going to Mexico right now.

Yeah, it is. It is.

I. I don't know. Maybe I, you know, I don't know.

You never know. But I'm excited to answer some questions today. We always ask comments and questions@feedbacksinessshow.co. we definitely want to hear from you. We're on this learning journey with you. Right. Even though we've run a bunch of businesses and together as well as separate.

You know, like we were talking about pre show, the only thing that having each run several businesses separately and together has taught us is that we need to keep learning like that. Like, if nothing else, I know less now than I did when I started. So there you go.

Yeah. There's so. There's so much. And I always make the comment, especially after interviews, I always learn the most.

I learned the boast here. I definitely. Yeah, I'm pretty sure the whole time.

You know, our guests are talking, I'm. I'm sitting back and I got my microphone muted because I would just be like, oh, that's great. Oh, I never thought of that, you know, so I, I love that part of the show, and I'm excited to share these questions.

Yeah. Yeah. All right, can we. Can we start with. With Charles here? Because I think Charles asked a question that's really interesting for everybody, and he says, what do you two do about health insurance for yourselves, your families and your employees?

That's a great question.

Yeah.

And a very important and financial question that you have to, you know, try to figure out.

Right. Yeah. So I'm crazy, but I. What I used to do, and I sort of still do this, but times have changed. I used to do every year is I would look at what my family spent on health care costs, what we spent on insurance, and compare. Because I always wanted to know, do I have the right plan for us or did I have the right plan for us? I know that every year is not going to be exactly the same. Some of, you know, I had surgery this year that's going to make this year a bit of an anomaly. Right. To put it mildly. But, you know, like, looking at that and, you know, we. I've never had. I guess I should rewind a little bit. It's been a long time since I've had group health insurance for my employees that I, you know, that I would then also include myself in when we. We had it, when I. When I ran computer nerds back in Austin back in the mid-90s, because we had everybody in the same office, and it all just made sense. Right. But as soon as we started Mac observer and Backbeat, and we had people all over the country and in fact, you know, some people, perhaps even out of the country, it was very difficult to find a plan that was affordable. Now, thankfully, everybody in the company was able to get their own individual plans at the time. Nobody was excluded because of like some pre existing conditions or whatever. Right. And again, I'm rewinding 20 years here. Obviously ACA changes that and quite honestly, as a small business owner takes the pressure off because now everyone must be able to get insurance even if they have a pre existing condition. So it, it allowed us, you know, some freedom in that regard to be. And don't, don't get me wrong, ACA is not perfect. And I'm gonna. All right, I'm gonna talk about that here in a minute because I, I'm almost living a hypocritical life. But, but ACA does open that door and it, it really did, like, like I said, relieve some of that pressure of, okay, now we don't have to worry if we bring somebody new in, because the way it would work is if you do have a group for your, you know, for your company, pre existing conditions are allowed. Now what happens is your group rate goes up if you bring somebody in that has one of these.

That's right.

But they, they are allowed. Whereas on individual plans in the past, they could just simply say, no, you know, or we, you know, we're not going to take you. That's not the case anymore. Or at least for the most part, it's not the case. So what we do, so we don't offer it for our employees, but I do recommend that you have a relationship with an independent insurance agent that can tell you about and be your insurance nerd. Right. The person that understands all of these options spends all the time researching and can just sort of guide you or at least whittle down the options and tell you, yeah, okay, here's this, this and this. Let's, let's run the numbers and see what happens. But for me, for my family, given that I've had an individual plan for a long time, I'd run a spreadsheet every year and decide. And the decision that happened every single year was not the one that I wanted. Because the one that I wanted, Shannon, was the one where I said, oh, every time I go to the doctor, I pay a $25 copay and I never have to think about anything else again. Right. But the problem was that plan would cost me like triple what I'm paying for. What I have. So what I have is trul. What I call insurance. It's not a maintenance plan. Just like I don't have a. I mean, I guess I could have a maintenance plan on my car, but I don't. I have insurance on my car. It means that when I go get an oil change, I pay for an oil change. I don't submit a claim for an oil change. I don't submit a claim when I need new tires. But if I get into a collision, it's insurance. It protects me from bankruptcy. And I treat my health insurance the same way. I've always gotten, you know, I've always wound up with the math telling me a high deductible plan is the right one for you. And so that's what we have is a plan. You find your comfort level with that deductible for a family. It can be anywhere. I assume you can go as high or as low as you want, and you just pay premiums that are the opposite of that.

Yeah, you can have just a catastrophic plan.

That's basically what I've had now because of health insurance regulations that have sort of morphed and evolved over the years. Even catastrophic plans now, they didn't used to. Now must cover physicals from $0. You know, preventative care in general, I guess, from $0. And that includes testing and lab work and all that stuff. And there's a few other things that they have to include. But, you know, our plan is. Is actually a pre ACA plan. We got it. You know, we would do it every year. We would. We would reevaluate and either stick with the plan if the new pricing made sense for us, or we would shift if there was something else better. And the plan that we have, we stick with. And we've had now since the year before ACA went into effect. We are able to keep it because we have it. If we get. If we were to abandon it and, you know, move to, like a marketplace plan or something, or even a non marketplace plan, we couldn't get this plan back. It's. We are grandfathered in. And the law, you know, allows them to do that, but they can't let us back on it if we were to leave. Right. But what's nice about it is we were able to pick a plan that doesn't have maternity coverage. We were able.

Oh, yeah.

Well, even when. When had our second child, we were on one of these plans and I looked at like, okay, does maternity make sense? And the reality was, like, maternity is a fixed Cost event, you know, having a baby, if you go talk to a hospital, talk to a doctor, they're like, they will tell you exactly. But in a very rare moment, they actually know what it's going to cost in advance. Because complications from pregnancy are covered even by the catastrophic plan. Right. It's just the standard stuff is a fixed fee. And so I was like, great. And I compared the fixed fee to what it would cost us to add maternity coverage. And I was going to pay an extra two grand to add maternity coverage that was only going to cover that fixed fee. It was like, why don't I just pay the fixed fee? So, you know, but you can't do that anymore. Like, plans have to include maternity. There's a lot of. There's those 10 things that they have to include. And I, I sort of understand, I mean, I do understand why they've done that. It makes sense. It's just financially, there's not necessarily a benefit there. So the reality is you got to spend some time and look at the options because you don't have to buy insurance through the ACA marketplaces. Many states will allow you to buy off marketplace plans, but you've got to research them and you've got to know what you're buying. And you need to look, you should look, price it on the marketplace. The timing is about to come up when you can do that again, you know, the open enrollment and then talk to your, you know, find an insurance agent that can really guide you.

There's. Yeah, I think for me, and I have a long history of providing healthcare to employees.

Yeah.

And I have a lot to say about the topic. But the, the most, one of the most important things that I would say as a business owner that you should do is you need to get away from the annual increases in those costs coming to your bottom line it back, you know, many, many years ago, we just paid for everything and we absorbed it because the increases were, were pretty minimal. Sure. You know, it was like, okay, it' percent. But in the last, you know, 10, 15 years, you've seen those costs can go up 15, 20%. And it's very, very dramatic. So what. And this was on the advice of one of these independent brokers, which I agree, you need to have as part of kind of your advisory board.

Yeah, your advisory board. Yeah.

And we started, we decided one year. Look, okay, this is what we are going to offer. Here's this baseline coverage that this is what we will cover and that's going to stay relatively the same. And if you Want something more than that. You can pay the difference or you could just take this baseline coverage. And this baseline coverage was, was pretty static, so we wouldn't see these big increases, but we would, we could definitely say, we will cover you. You know, you, you will have a healthcare plan. You may pay a little more higher deductible, but you're, you'. You're covered. Sure. Yeah. But that got us out of the, you know, every year having to struggle and having to go to employees and go, hey, you know, we're going to pay a little less. We were not going to pay 100% this year. We're going to pay 90 because it went up this much. And this year we're going to pay. So finally we said, okay, we offer this, you know, bronze plan or whatever you want to call it.

Yeah, right.

And that plan may change over the years, you know, as, as healthcare continues to change.

Yeah, it's constantly evolving. Sure.

So you, we were able to move and maneuver the, the plan so that our cost was relatively static and then you could plan for it because there's nothing like getting hit with a 20 increase when you didn't plan for it. And you know, I, I know one year we had, you know, had a good year, I recall, gave out some big bonuses and then immediately in January, you know, we were hit with this 20% increase in health care. I was like, Dan, that's, that's a killer. I mean, I had, you know, 20 some odd people on our staff. It was not inexpensive.

Yeah, right.

So, so separating out is really important, that independent insurance agent critical because you want them to sit down and educate you and to show you all these options.

Right.

You can go to a established, like a nationwide company like Health Markets that I've used in the past.

Okay.

Or you can have a local guy who, you know, you may have met through your accountant, your lawyer or whatever. Ask around.

Yeah.

And they're, they're great too. And it now with the health marketplaces, you know, in the states, you may find that that's a good option for you.

Yeah. Check it all out. And you know, usually, usually the, with health insurance you like, even if you're, if you're, at least in my state. And it's, it's like you said, it can be different in every state. But my agent can be my agent for a marketplace plan. Now every year he advises me, he advises me not to do that because it would cost me. It would like triple my rates, but. Which is bizarre to me. But anyway, you would think That I would be the one relatively healthy, although this year. And maybe not the case. Maybe they knew, maybe they knew better. But you think that they would want to make my rates the same so that I would be in the marketplace and all that. But that's a different story, you know, but he could earn a commission on that without my rate changing. Like the rate that I would pay going in the front door versus going in the front door with him at my side is the same. And you know, he can earn a commission on it. That's how he makes a living. So. Or you can find an agent that you just pay a consulting fee too, if you want.

That's right.

I suppose so, you know, whatever you are more comfortable with. But yeah, like you would with anything. Folks understand the economics of how the person that's helping you makes money and, and know, just know that, you know, be smart. It's. Yeah, it's okay to ask people, like when you're talking to an agent, how do you make money here? I want to know that there's nothing wrong with that question.

Yeah. And I think that like I said, for me, disconnecting away from the details of, of yeah. What they, each employee did made all the difference because I, you know, it's really complicated and you can't do that.

Yeah, there's.

And yeah, so if you're involved in all this stuff and this, this plan and that plan and we're going to do this and somebody doesn't get. No, it's like, look, this is the way it is and every year it's going to be the same and any changes are on your end so you can learn. And typically that independent agent is happy to sit with your employees and help them figure out what they should do. That's part of their service they're offering you. They're getting paid, they're going to get, they're getting kickback.

Yeah, that's part of their job.

Yeah, exactly. Right. So they're going to sit down and they should be holding, you know, at a minimum annual meetings with your employees to say, okay, is there any life changing things coming up? We had, you know, young staff a lot of times, so people are getting married, people are having kids, things were changing. So the best advice I that helped us the most was stepping up outside of all those variables, keeping a one level static as much as possible plan that you offered and then they figure out everything else that makes sense.

That's, that's what we did with computer nerds and that's what our agent Advised us to do. He was like, look, don't like. He's like, unless you've got like tons of extra money and you just want to be really generous, this path is a big, huge question mark of a blank check. You know, it's like, do not do that.

You don't. What happens is you wind up having to take things away.

Yes. And that's what he said. He said, you want to start small. He's like, do it this way for the first year. You know, he says, people got zero last year, right? Like, yes. He's like, yeah, good start here. You've already, like, up the ante, you know, tenfold. So start here. Don't go crazy. I was like, oh, that's actually really smart.

Yeah, totally makes sense.

All right, what's next? What's the next question, man?

Let's talk about Bill's question.

Okay.

About borrowing money from his father in law.

All right.

This is a very interesting topic. So Bill, he writes, my business is growing. We need some capital. I don't have enough assets for a bank loan yet, but my father in law has offered to loan us $50,000 to use as a line of credit with a reasonable interest rate. I don't know what that is. You can say. But any advice on how to handle this type of loan to make sure we don't have any problems and that everyone is protected? Wow, that's a great question.

I almost want to say so. Next up, I want to tell you about our sponsors, but we'll answer the question. I do want to tell you about our sponsors, but we will answer the question first.

Yes, begrudgingly.

Yeah.

This can be a great thing or it can be a nightmare. And I have, I've been in a similar situation and I have borrowed money from my business partners father when we were just getting started and he was, you know, hey, we, we couldn't qualify for a loan. Sure. And he was like, well, I've got some money. I'll loan you guys the money and we'll pay you, you know, again, it was a decent interest rate. And what I learned by this, that this, this guy or my partner's dad, we were just out of college. What I, he was pretty financially savvy. So a couple of things. One, you should have whoever's loaning you money, they should file a UCC financing statement with your state. Very important because that shows the vested interest in your business should something terrible happen, business goes belly up. Or different things. They, they're a creditor, but without that, it's it's much more difficult. And so it's, you know, it's a way to formalize, you know that, that arrangement. It lists them as a stakeholder in your business and you as a debtor. Really important. The other thing that's very important, just like if you're starting a partnership, you want to use our working agreement template template which you can get in our, our partnerships can kill you. Small Business guide up at BusinessShow Co Guides. The the promissory note details the exact terms of the, of the loan, how you can, what you're going to do with it, the length of time it's going to be used, what the interest rate is, what the minimum payment schedule is. You know how that's going to work. You have to have all those details that everyone is going to agree on. Right. If you don't, I think it's a recipe for disaster.

So like I've never done exactly this. I mean I guess I sort of did with my, my father in law. With one business that went in a weird direction. It was, but it was more of an investment than it was a loan.

And everybody similar things though.

Yeah, it was, I mean sort of everybody knew that the money they were putting in was, was at risk.

It was, it was, yeah, that's very important.

Right. Well but this was like this was so clear. It was truly an investing thing. We were building technology to do some auto trading is really what it was. And so the money we were investing was to build up the capital for the, the auto trader to then trade. Right. You know, so we knew like oh, even if we build the thing correctly, like if the markets go in a weird direction, it's over, you know, so, so that one was a little different, you know, but, but even still like it came with that this is family and this is, you know, for me your wife's father. So like, you know, and that it, it end. That business ended terribly but the, the relationship survived because we were all, you know. He knew. Yeah, he knew.

What's important is they understand. Okay, to your point, are you making an investment in the company or are you making a loan? You know, two different things.

Right. Who are you making the loan to? Are you making money to the company or to me personally?

Yeah, that's what I was going with. Am I personally guaranteed paying this loan or is it just the business? And you know, I'd argue if it's your father in law, you probably bet. Well, I don't know.

I don't know.

Look at it both ways. You Whatever you do, you want to be able to come out the other side and still have a relationship with this person.

Right.

And if you don't know that, if you're worried that you can't, then I would suggest you not take the loan.

Oh, I agree.

Because the relationship is worth way more, way more than funding for your business. Right?

Yes.

You'd be better off doing something different. In my case, these were kind of short term loans that we did and we're buying products and moving them out and then paying them back. And we did it a number of times. It was quick in and out. Lines of credit. To Bill's question, lines of credit are typically longer term financial vehicles, but it's not uncommon. If you say, look, okay, you can use it for a line of credit for sometime a year, 24 months, but then after that time period it converts to a term loan and you make payments, you know, on a monthly basis or something like that. That's very common. Banks do it all the time. Because what happens frequently is as small business start growing and they, they're, they're using this capital on these lines of credit. Growth is very expensive and maybe they don't have the cash flow to pay back big chunks like most banks want to see your line of credit paid off at least 30 days out of the year. That's easy for the first year because you just don't touch it.

You leave it alone.

It's always a great trick. So then, then you, you know, you do your, you're borrowing it and hopefully you're paying it back in and out. That's what they want to see. But it may come a time when you, you know, your cash flow is such, where you can't. So banks often say, hey, I'll tell you what, let's term this out. We'll do it on a five year term loan. Here's this. You pay monthly and then we'll free up so you have a line of credit to use anymore. Because if it's, if it's a line of credit that's not being paid back, it's not the way it's supposed to work.

That's a loan. Yeah. That's not a credit. Yeah, yeah, yeah.

So the, the thing, Bill, is, I would just say is, you know, communication critically important that everybody knows what they're getting into. And, and the two documents that really help you with that communication is that UCC financing statement. And it's state by state. If you just se. For UCC, for your state, I think you're In Texas, you know, you search for UCC Texas, it'll come right up when you do that. And you can get a promissory note template online and, you know, fill all that out. Everybody agrees, everybody signs, and, you know, you gotta ask that question, hey, if things go south, are we going to be okay?

Yeah, you know, that, that, that's the important part. Like the documentation that you, you suggest, I would fully agree with. However, before you even look at those forms together, you need to have that conversation, like, look, here's what we're really doing with this business. Because this isn't like you're talking to your bank where you're only answering the questions they ask you, right? This is a family member or a friend, and things can go sideways in a really bad way. We see it, you know. Well, thankfully, I don't think either one of us has seen it, but we hear about it all the time. So have that conversation. Tell them what you're doing. Be more upfront, you know, spill all the beans. Like, what are you worried about? Because chances are not only, you know, might they loan you this money that you might need for your business, but if you go in and you sort of spill your guts to them and say, okay, look, here's what's going on. I really believe in this part of the business. But here's the question, you know, here's the hesitations I'm having. Here's this. If they have the money to loan you, chances are they earned that money and they might have some perspective for you.

Of course. Yeah, of course.

And now you've got them invested also emotionally, like, okay, I know what I'm getting into. Right. And I'm offering some guidance to, you know, hedge the bets that this gets paid back. I'm interested in your success. Like, all of that can really help. And now you might have an advisor, so.

Yeah, yeah, it can be a great thing. I've had it positive, done really well, but I've heard a lot of horror stories and opening up and being super transparent. In my experience, it makes them want to loan you the money more.

Right.

Because they know you're thinking like that. You're not just, you know, pedal to the metal and it's going to be great. And we're never going to fail. Well, of course you're going to fail, but is my money protected? You know, it's okay to fail.

Of course you're going to fail.

We are. Yeah. Or are we going to be wiped out? Or is this. We're going to fail and Learn and then come back and figure things out, you know, that kind of stuff. So, but you know, just take it step by step and I, I, it can be a good resource and as soon as you possibly can, once you've built up those assets, get your bank on board, man.

Yeah.

And pay back.

Yeah.

And you'll have a much. You know, bankers are way easier to deal with than father in laws, in my opinion.

Usually that's the case. Yeah, yeah, yeah, yeah. I'm your business. Anyway, Yeah, I, I, I lucked out on the father in law front, but, but yes, otherwise he, he, well the thing is he runs his own business, so he also hates. Yeah, he knows. Yeah, right.

He knows. It's different.

It's different. Yeah, exactly. Oh man. And he, gosh, he got so he, you know, talk about dumb luck, man. He sold his business three days before lockdown began this year.

Oh, wow.

Right?

That's great.

Yeah, yeah. But he got, he's like, dumb luck. I'm like, oh, I get it. Yeah. He's like, I did not plan this. I'm like, no, of course not. How could you?

That's just terrific.

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Our thanks to BuildHR for sponsoring this show. Next up is PDF pen from smile@smilesoftware.com podcast. You know, we're doing so much with PDFs these days, and you need a powerful PDF editing tool for your Mac, your iPad, or your iPhone. And PDF pen is it whether you're on the road or at your desk, or your desk is on the road or your desk is in your, you know, corner of your dining room, those advanced editing features like being able to sign and email a contract. Right. PDF Pen's got you covered. You can sign and fill out forms. You can correct typos in your PDF. You can OCR scan documents. You can redact sensitive information. Yes, redact like you can truly edit a PDF. It's amazing what PDF Pen allows you to do. And that's all come. That's all standard in PDF Pen. If you get PDF Pen Pro, that takes it even further. You can add permissions. You can turn websites into PDFs. Have you ever tried to do that? It's super difficult with all the page breaks and everything. PDF Pen Pro has you covered. And it even integrates with DocuSign so that you can build those great little forms that everybody can just use. So cool. You got to check it out. Go to smilesoftware.com podcast to learn more. They'll ask you where you heard about it. Of course, you can tell them you heard about it from the small business show. Our thanks to Smile and PDF Pen for sponsoring this episode. All right, the next question that we have up here is from Will, who says, I know the first employee is often said to be the most difficult, but when do you know that it's time to make that second hire, the third hire, the fourth hire? You know, I'm kind of with question. Yeah, I'm with Will on this. Now, maybe it's because it's been so long since I've hired my first employee that. But I find that the growth, right, like adding the first person, like knowing that you need to is. Is pretty easy with that first employee making the decision to actually do it. That's, that's much more difficult. And I do agree with that. But, you know, okay, I need somebody else. Well, as soon as you have somebody else, it's like, okay, well, when do you, like, how do you grow your business? And so I struggle with this all the time, so I'm probably the wrong guy to answer, but I'll throw an answer out. And then I'm hoping that Shannon will stick the landing on this for me. So there's a couple ways to look at it. First, when you notice when you're just doing a job repetitively every week or even every day, you know, ask yourself, what does my business look like with me having someone else do that job? I don't want to call it grunt work, but I want to call it repetitive work. Things that, you know, your business needs on a regular basis. What chains you to your desk? That keeps the business running, right? Not necessarily. That grows the business. That's a different job. But what are the things that you're doing working in the business? And ask yourself, what does it look like if I'm not doing that job? And one of the questions is going to be, well, now I'm paying somebody else to do that job, so I have less working capital. Okay, great, my cash flow is impacted. Make sure you can absorb that. But also then what is it for you up to do? That then helps the business grow, right? I forget who it was that we interviewed that talked about doing the $10 an hour versus the $100 an hour versus the thousand dollar an hour work. But think about that. Is it worth paying someone else a few thousand dollars a month or even $5,000 a month to do that job while you go and do something else? Or maybe bring somebody in part time, Maybe it's only $1,000 a month. There are options here. And then second is probably where you're going to go with it, Shannon, because I learned it from you. You've already built your org chart, even though you put your name in every box. And now you have one box, maybe two boxes that are filled with your first employee's name. Right. Well, you know, where can you, if you're not automatically identifying, wow. Every week I'm chained to my desk on Wednesdays doing this one Thing. You know, put that on the org chart and then. Or look at the org chart and it might help you identify. Oh, wait a minute. There is this thing that I'm doing all the time. I can farm that out to somebody else so that I can free my time up and my headspace up to do other things and grow the business so that I can then hire more people. And, you know, I think there's also a brain hack in here. Shannon. We're all. So. We're all. I'm very much, you know, somebody that likes to be seen as a productive person. Right. And so asking someone else to do my job makes it seem like I'm shirking off some of my productivity. That's not really what's happening. But. But there's a part of me that always sort of puts up that barrier. The brain hack is if you say, well, I want to have a business with five employers. I want to be a business that's growing. So every year, I want to see the number of employees that I have grow. Now, you have to be a little smart about this, because just adding employees can get you into a scenario where you're cash flow negative. That's bad. But smartly growing your business so that you're hacking your brain of. Instead of being. I want to be the person that's doing the work is. I want to make sure that the work is getting done, and I want to see my business grow. That's. That's a good metric to look at. How many people are you employing? So, yeah, that's. Those are my thoughts. Anyway. I don't know.

Yeah, I. I fail at this all the time. Yeah. I think one of the real critical ways or things to have when you get started is that org chart. And we just described in the E. Myth book that we love so much, and that is, you know, just to create that org chart with all the t. Everything that needs to happen in your business. Just create an org chart around that. Oh, we have a. We had to ship this, or we have to buy that. We have to do this. All these kinds. Just create that org chart. Put your name in every single one, or you and your partner split it up how it is. And then I do think you have to start looking at, you know, use of time to. To your point. And like, there's an old or there's a. I don't know how to. How to phrase it, but salespeople forever have known that one of the. The laws they live by is hire an assistant and double your Income.

Right.

Because it, and it is true. I talk to guys in the insurance business and financial planning, all this kind of. Oh, yeah, everybody says, oh, as soon as you get, as soon as you can hire an assistant and you'll double your income and because it frees you up of all these other things that you don't necessarily have to be doing. Maybe you're not even the best person.

Run work of it.

Yeah, yeah, yeah, yeah. And somebody that's organized that can keep you going and focus on that, you know, your sales and just different kind of thing. I think that. And a lot of it. There just isn't a science to it. You have to look at how things are. What is your day like and what's your plan like? Your point? What is your plan? What, what is the next thing we want to do? Well, can you achieve that next thing by yourself? You know, I, you have to ask yourself, okay, well, if I'm, if I'm in my case, you got to give.

Yourself an honest answer because we entrepreneurs are used to just saying, yeah, of course I can.

Of course. You know, I've been a guy that shipped products every day and I have built my whole life around the question at the end of the day, how much did we ship? And so in the beginning it was, okay, well, I can ship X. Let's just, you know, whatever. I can ship 20 widget. 20 widgets. I can get those done, or whatever it is. Okay, well, I knew that if I wanted to ship 40 widgets, I needed somebody in the shipping department, right? And if I wanted to sell 60 widgets, I could probably only still sell maybe those 20. So I needed to hire a salesperson. So I just kind of did it. I backward did it kind of backwards what you were trying to achieve. And now there's a lot more flexibility in the way you can do this, I think with, with, with gig workers and contractors and order fulfillment. Like, if I was in the product shipping business at any type of scale now, I would never house it and warehouse it and ship it myself. It is absolutely. There's absolutely a better, more efficient and more financially sound way to do it. And that's to have someone else who's an expert at fulfilling orders do it for you.

Just hire a like contract with a fulfillment house.

Absolutely, absolutely.

Yeah, yeah.

Third party, you know, third party fulfillment is, is dramatically different. I mean, you can, if you're selling through Amazon, you can have them do it for you. Although I'm not, you know, they're a little different. You lose a Lot of your independence. We could have a whole show about that. But certainly an independent third party fulfillment place, and they're all over the country. That'll make your life easier. And you probably wouldn't have to hire an employee right away or a whole shipping department or a warehouse manager. That those are long term, critically important expenses, considering things like healthcare that we just, that we just discussed.

Yeah, yeah, yeah.

If, if you can get involved with the fulfillment place, you know, it can change your life and allow you to scale your business up before you have to hire that second, third, or fourth, you know, person. But I think you have to plug it into what you want to achieve. But sometimes you just have to go for it and you just have to see how it works.

Yeah, it's.

I mean, I haven't hired my. It's been, you know, a long, long time since I hired my first employee, but not my first employee for a specific business.

I was just gonna say. Yeah, like, like your, your poshmark business. You don't. I mean, it's, it's you and, and I think you and your wife work on it.

It's my wife, yeah. Yeah. But we just hired somebody to help us with our small business guides.

Right, right.

We hired a former employer of mine to be the editor and to do transcriptions and all that kind of stuff. And we're still learning. How about that? It's like, well, work, or is this the best use of her time? And how does this come together? So it's all of adjustments. And I think if you're transparent and, and authentic with whoever you hire, it's a great thing to do. And oftentimes when you hire your first hires, sometimes it's helpful if they're a friend of a friend or a kid of somebody, you know, or something. So you can, you can have that. Hey, we're just getting going. I need somebody right now. Or maybe you even can just say, hey, I need somebody for the summer in May 20turn into a long term deal.

Yeah. No promises. Yep.

Yeah. So you can build in some flexibility there. So if all of a sudden you hire three or four people and at the end of your hot season, if you will, you go, oh, wow, you know, I don't, I don't need those folks anymore. How do I deal with it? So if you've already had that discussion, like, hey, this is for the fall and maybe through Christmas, you know, you build in some flexibility, I really think that's a great way to help.

Yeah. I would even say, because you can let any employee go at any time. Right. But there's that on the, Once they're there, like, you know, if you, during the onboarding process, if you tell somebody, look, this is a short term thing, like, then, okay, great, it's. It's a short term thing and it might turn into long term. I think from my, I'm applying, you know, my lenses to your statements, I think it's. For me, it's more. Because I've done exactly that. Hiring people that, you know and things like that. It's more about trust. Right. Because those first few employees, like, you've been doing everything yourself or you and your partner have been doing everything yourselves, and you're used to this environment of 100% trust, right. Where you know that the people that are there, because it's just either you or another person that's equally invested in the business are truly not going to intentionally screw up the business. Right. You know?

Yeah.

And so I think for me, that first hire, making it a friend or something, it's like, well, I'm changing the trust balance here in the business. You're definitely lowering the trust. Not that you don't trust your employees, but it's a different type of trust. It's just how it works. And so having that opportunity to say, yeah, okay, baby stepping into the world of the unknown, right. You think you're going to trust everybody, but you never know. Somebody could turn out to be terrible. Yeah, right, exactly. So hiring that friend, that, you know, family member, that cousin, that niece, that nephew, whatever it is that is, you know, it's, baby stepping into the realm of, you know, of being a real employer. Of being a real employer. Yes, exactly. And if you screw up as an employer, well, then, you know, you'll get a little bit of that give and take from them too. Like, oh, yeah, I get it. It's fine. It's, you know, I know you, like, of course you didn't mean to ignore me for three days. Like, you know, I know you were busy, it's fine. Whereas if you know that person didn't know you, then they can't say, I know you. You didn't mean it. Well, maybe this person's a flake.

Yeah, yeah, whatever. And just be honest. So if you're going to hire your first employee and you don't know, just tell them. Just be like, oh, you know, hey, I. It looks like I need somebody. Because in my experience, you're going to hire that first employee to do something and they may wind up doing something completely, completely different. I mean, I can guarantee they're going to wind up doing something completely different time.

Yeah, of course.

So you, you, you want to allow them, you want to treat them in, with, in such a way that they know, look, I'm just getting started. This is the way I think it's going to work, but it may not work that way. And so we're going to have to be flexible. Are you flexible type of person. And if they say, no, I have to have this because I've got two kids. Yeah. And this and that. I'm taking care of my mom or whatever. You go, okay, great. Thank you for coming in and I appreciate your being up front. Then if somebody else comes in, say, oh, you know, I'm just getting out of college. I'm trying to figure out what I'm gonna do. I'm looking for something that, well, maybe that's the person that's more flexible for you to hire at this stage.

At this stage.

Yeah, you know, something. So, so think about that. So it, but again, sometimes you just have to leap. It's almost like the leap of starting your business in the first place. You don't know. Right. Or maybe you have some inkling and you have some, some data that is telling you to start this company and you know, that kind of thing, but.

Make that leave of faith. Yeah, absolutely.

Yeah, yeah, yeah. It's good though. These are some great questions. I love getting this kind of feedback because it really allows Dave and I to, to think about our experience and to revisit things we've been through and to learn a lot. You know, we, we hear what's going on, everybody's opinion, so please keep them coming. Feedback, feedbackusinessshow.co the other thing I'll ask of you before you leave is please go leave us a review on your podcast network of choice. If you're up on the Apple podcast, leave us a review. Tell us everybody what you think. It really helps. We really appreciate it.

Absolutely. Thanks so much for your questions, everybody. We had a few more. We'll get to them, we promise. But, but, but send us your questions. We email. We will email a reply to everybody that comes in. Send us a question. Even if we don't get to it in the show or it doesn't come in in a timely fashion in the show, you know, you'll get an answer from us. So. Feedbackusinessshow.co we do really love to hear from you and that's what we got. Thanks for. Thanks for listening, folks. Thanks for sending in your questions. Thanks for. Thanks for sharing the show with your friends. See you next time. Keep living that charmed life. Thanks, Shannon.

Thank you.