What happens when a small business owner doesn’t solve problems and lets employees down? – Small Business Show 97

The Small Business show. Episode number 97 for Wednesday, December 14, 2016. Greetings, folks, and welcome to the Small Business show here at businessshow Co. The show by, for and about, Guess what? But small business owners here in Durham, New Hampshire, I'm Dave Hamilton.

And in Concord, California, I'm Shannon Jean. How are you, man?

I'm doing well. I'm doing well. Yeah.

We're on the home stretch here. A couple more. Well, actually a couple more weeks. Right.

Yeah. You know, the thing is, we're going to CES because we cover. There's enough stuff at CES for Mac observer and macgeek gab to cover. So it's always like, there's the home stretch of Christmas and that week between Christmas and New Year's, which this year is the week between Christmas and the day I leave for ces, which is January a second is always sort of a weird thing, but. Because there's lots happening right after that. But nobody's really around that week between Christmas and New Year's.

That's right. Yeah. Including me.

Right.

Yeah.

So it's like, I always caution the team guys, don't. That week will be a dead week. But if you wait until then to plan things, it won't happen because there's no one to plan with.

Right.

So you have to get all your planning done. I always set December 15, which is tomorrow, as like the drop dead day. If I don't have everything I need by December 15, it's a risk because that's when people start kind of disappearing.

Yeah.

As you get closer to the 20th, to Christmas and families start doing things, kids start coming home from college and people start getting ready to bug out.

Yeah. The distraction kicks in big time.

Yeah.

And people say, well, I can ignore them. And then in a couple of weeks, it's Christmas and. Or a week, it's Christmas and then. And then I have an excuse.

Right.

So, yeah. Yeah. I always say December 15th, that's the cutoff. But then that week between Christmas and New Year's is actually pretty good because I can. That's where I sort of prep my. My technical life and not just technology, but how I'm going to pack what I'm going to bring. The logistics of the whole thing that I can totally punt off until that week because I know there's nothing that's going to get in my way, you know?

Yeah, that's good.

I like it. So, yeah, you learn these things. So. Yes, we're in the home. Stre.

Fetch. Ish for me.

Yeah.

Kind Of.

Yeah.

Based on the calendar only.

So speaking of trade shows, conferences, there was an interesting post that came up today, and this is not our dirty laundry, but it's definitely an airing of the dirty laundry of a different show, a show, a conference that was called Blog World Expo initially and then changed its name throughout the course of time to New Media Expo. It was. It acquired a show called New Media Expo, then it was called Blog World and New Media Expo, and then it was just New Media Expo again.

That's right. I remember that.

Yep, yep. And I was. I paid very close attention to this. I went to many of these shows. I went to the New Media Expos long before they were affiliated with Blog World, when they were out in Ontario, California, and they were the Podcast Expo. And it was a great show. It was like the first year of podcasting. Somebody put this show together. It was great. Deb Ng. Deborah Ng, who was the. I think. I'm trying to think of what her job was. She was conference director starting in 2010, right after they acquired New Media Expo. So it was Blog World and New Media Expo. She was hired on board by the conference's organizers, which were Rick Calvert and Dave Sinkin. And I know these guys and consider them friends. We've had both of them on macgeekab years ago. I didn't go to every Blog World, but I went to lots of them, especially once I got podcasting involved. And they are people whose hearts are in absolutely the right places. And I think Dave Sinkin split off from that organization a while back, but certainly initially it was him and Rick Kellert that. That put it all together. But Rick really, really was sort of the public face. If. If one person, if somebody thought that there was a single founder of this thing, it was. It was definitely Rick that everybody would. Would have assumed he. Very personable, very good guy.

Right.

That show fizzled out, though. Went through kind of a weird path. And Deborah details some of this in her post. Stood on its own for a little while, and then it partnered up with nab, the national association of Broadcasters show, or North American Broadcasters. I don't know which one it is. NAB is what I always called it. So it happened in Vegas, sort of parallel to nab. They worked together on it, but it was weird because they were NAB sessions that were at the same time as New Media Expo sessions. And so it was sort of a weird fit. But at the same time, it also did fit because so much of broadcast is, you know, podcasting and broadcasting and blogging and all of that are, you know, a means to reach people with content.

Right.

But things got weird, Deb. And Deb detailed all of it in.

Her post and yeah, she posted up on, On Media. On Media. We'll link that in the show notes. It's, it's a, it's a good read. I mean, it's not a. I mean you could tell she really struggled whether to post this up there or not. And it's definitely her follow up stuff is definitely good to.

Yeah. And so she tells the story of sort of the demise of New Media Expo, or NMX as it was called, which, which is good to hear because there were many people, myself included, that didn't quite know what happened. But in telling this story, she pulled no punches and obviously told it from her perspective. And there might be people out there that disagree with her or have other color to add, but basically what happened to the show is the CEO, Rick Calvert, as it turns out, in Deb's eyes. And as Deb paints the picture, totally detached from the business, ignored people, stopped paying bills, stopped essentially holding up his end of the responsibilities of running a business and had some excuses and reasons for this along the way. And she details them all. That's the dirty laundry part. But as I read this, I thought, man, as a small business owner, I mean, there's two sides to this, right? There's the side of, as the small business owner, you have to stay up on top of what, what's required of your business and what your employees and your customers and your vendors require. And, and as Deb tells the story, and I believe she might not be inaccurate, Rick ignored his employees, didn't pay them, ignored his contractors and didn't pay them and didn't make good on promises to customers, specifically with regard to what they call this VIP pass or something.

Right?

That's right, yeah. Where they had content from the conferences that they would then deliver to you after the fact that never happened or it happened like years late, I think.

Right.

She really, in a nutshell, posted well, obviously just to share this story, but, but she says, you know, I'm posting this, I'm still owed money 30 months later or 18 months later. This kind of thing, which you know from a business owner, you just can't do that. And if you do owe people money, you have to communicate with them and deal with it. So where they know what's going on to avoid just this kind of thing, that's the key.

Yeah. And that was what really kind of resonated with me and I do want to. I'm going to sort of punt off the conversation to the second half of the show. I want to talk about the flip side of this. But. But, yeah, you know, it sounds like he just didn't communicate with her.

Yeah, yeah.

Over and over. The examples that she shows and even his responses up there, you just see that. And you can't. No matter what, if you can't handle it, then you need to delegate it to somebody that can. And we've all been there where things don't quite go the way you think they are.

Do they ever?

Yes. Yeah.

And sometimes you don't have any money, you know, and so, you know, especially if you can't reach in your own pocket and offset some things for your business or businesses, you have to talk to people. And if you're transparent and honest and you continually keep the lines of communication open, you're going to have a much better time. And those people will respect that. It's when you're in the dark and they don't know what's going on, that's when they think the worst. And that's when things come to a head like this.

Yeah. In any business. And if you haven't been there yet, you will be.

Right.

But wins always. And when I say wins, I mean good things that happen. That could be cash flow. Cash flow certainly is a good thing. A big sale, those kinds of things that can smooth over a lot of problems.

Right?

Sure.

Including foundational, fundamental problems with your business. If you've got money coming in, despite the fact that you're not running it properly, you're still going to be okay. And oftentimes that's how businesses get started.

Right.

It's certainly true of me.

Yeah. You know, I would say that kind.

Of got going, got lucky early on in that, you know, maybe we prioritize the right things or maybe we literally just got lucky.

Right.

But it was enough to, like, kickstart some momentum and then you're going to run into a wall of some kind at some point, and that's when you need to not just rely on luck, and hopefully by then you've put some of the right things in place. But if you haven't, honesty, transparency, like you said, Shannon, and then just buckling down and working to fix these problems and coming up with a realistic solution. I've seen businesses fail on apologies.

Right.

When someone's heart is in the right place, it doesn't matter. I mean, it does matter. But someone just saying, yes, you're right, I'm Sorry. You know, like, I mean, I've seen this with employees that I've had to let go.

Right.

If somebody shows up late. Oh, I'm so sorry. Okay. All right, fine. I believe that, you know, now the 20th time you tell me, I'm sorry. I believe that you're sorry, but I also believe that that now has become a habit for you.

Yeah, that's right.

Well, you know, there's no. Well, in that case, there's no repercussions. And unless there's a repercussion, you know, sometimes they don't. They're not going to get motivated. In the case of this, you know, this situation or you're, you know, any one of us gets in a situation where you can't pay somebody.

Yeah.

There's all kinds of ways to. To come up with alternative solutions, and that's really. If you really, truly don't have the money. Now, it's one thing if you have the money and you just won't pay to pay someone, that. That's. That's a different. That's another show. But if. If you are really being transparent to the point where you're. You, you know, you're telling them, hey, look, you know, I. I want to do this. I have. I made a mistake. I failed here. Let's get together and talk, and let's come up with some alternative ways to compensate you. You just don't know what it may be. You may be able to introduce someone to someone to help their business in some way. You know, whether that's a supplier or a new client. I mean, people, if you talk with them and really are transparent, you'd be surprised at how much empathy you can actually get when you screw up.

Yeah, but you have to be careful how frequently you play.

You can't do frequently.

Yeah, that's right.

You could maybe do it once, you know, with a group or a person or company, and they may never want to do business with you again, regardless.

Yeah, the sec, Right. That's right. But certainly the second time, I mean, to me, that's a warning sign.

It's like, whoa. Yeah. Yeah.

Even the first time, it's like, okay, short leash time.

Yeah, the first time. Yeah. You're going to go through. Okay, let's work this out. Because, you know, if, like, you know, I'm dealing with a supplier right now, that. That shorted a big shipment to us, and I'm really gauging how they're reacting to this situation to where, you know, I really want to do more business with Them, but if they don't react in a. In a timely manner and what I consider transparent and authentic manner, I'm, you know, they're going to lose me as a customer.

Yeah.

And it's the same kind of thing with you, whether you're dealing with an employee or whether, you know, not paying your employees to me is the. Could possibly be the number one worst thing you can do as a small business or any size business owner, because these people are relying on you for everything.

Right.

And often waiting for Friday to get that check. And, you know, that is why we, many of us, as small business owners, pay ourselves last. I mean, they always say pay yourself first, but once you have employees, man, if you're short, you can't short them. You know, they're the lifeblood here and they're the people that are depending on you, so you have to get them. So it really strikes a chord when I read her article about not getting paid, and it's just unacceptable, you know, it's crazy.

Yeah. I mean, it. I get how a business could get there. The problem is the lack of communication and just, you can't. I mean, if there's a lesson to be learned from this, and hopefully Rick learns this lesson too.

Right.

I mean, it's. It's just that you have to face the bad times head on.

Right?

Yeah.

And I always say to kind of bring it around to what we talk about here. I always say that's part of leading the charmed life. Because people always ask me, they're like, wow, you're fortunate. Of course I'm fortunate. Yes. That goes without saying. However, I always say the key to leading a charmed life is you gotta let the good stuff in because you also have to let the bad stuff in. You can't just like, put up a shield and the bad stuff, the only thing that stays on the other side of the shield is the good stuff.

Right.

Because the bad stuff's gonna get in. So you might as well just embrace that and get the shield out of the way because the good stuff won't be blocked then. And it just happens. And sometimes a great thing will happen. Don't stop and ask why unless it's to repeat that good thing from, you know, again.

Right.

But otherwise, just. I've seen that, you know, that fear of failure is very much married to the fear of success. And, you know, because it's a fear of change is. Is what?

It's the other side of the same coin, right?

It is, yeah.

Yeah, yeah.

And I think it's funny when, when.

I say it's a fear of change.

And you mentioned pun intended. That's pretty good. That's. I'll plan that. You know, the other part of it is, you know, we talk about on this show a lot about creating your own reality being. And I'm a super positive, optimistic person, but you also have to be able to re. You know, when during that point of creating your own reality, if things aren't going, if you can't create it and stuff is happening, well, you have to really stop. And like you say, you have to let that bad news or whatever it is, and you have to be able to look at it and go, okay, this is not working. We are not succeeding here. And I do think that is a small business owner's dilemma.

Yeah. Because you have to ride that carefully.

Yeah, yeah.

And you know, you can look at things a certain way. Oh, it's going to turn around once we get this, once we hit this. And you know, I've done it myself and often that alone can pull everything along.

Right.

Your own belief in your own myth, if you will. But at the same time, the, the dark side of that, if you really don't see it or don't take advice from someone else who sees it, that can be bad. And it sounds like this may have happened in this case where he wasn't generating the kind of revenue or over committing and paying for things or debt and then at the end of the day, not having the funds to pay things and then not wanting to deal with it. When I was in college, the first job I got in the Mac business was a great guy. But one of the things that would happen is this was before I knew anything about what cash flow even was. And this guy would get sick on payday over and over and over. And as a young, you know, college kid, I was like, ah, that's just really weird. You know, Why I don't understand what happened. Well, now I totally understand. You know, he's the night before going, oh, no, how can I owe these guys, these young kids, this money? And how can I don't have it when they're billing it? And now I could tell them why he didn't have it, you know, and you go, go open the inventory racks up and this is why you don't have it. And you got this machine and your customer hasn't paid you in this. And it's all about cash flow. But as a young person, I was just like, hey, what do you mean I can't get paid? You know, so it's.

I saw the money come in.

I saw it. That's right. It's what happened to it, you know, and now from the other perspective, you know, you know, oh, well, you got to set that aside because these people are going to have to get paid on Thursday and whether you're here or not, you know, so, yeah, direct deposit.

Honestly, was one of the best things that ever happened to me because, you know, you have to have payroll in three days ahead of payday.

That's right. That's right.

And that meant, for whatever reason to me that made it that I had to have payroll in like a week and a half ahead of payday. And I'll tell you, man, it like, it hasn't been an issue since. And I certainly ran into that scenario more than once where it was like, okay, how can I make sure these people get paid tomorrow? Like, you know, you're thinking of it. That's right.

That's right.

It's like, no, no, because I guess. I guess the reason Direct Deposit fixed that for me was because it's unforgiving, right? If I. If it's Thursday and I'm just going to write you a check on Friday, I can write you a check on Friday, and I can write, you know, let's say I owe 10 people $1,000 each, right? But I'm only got five grand in the bank, so I can write those. Those 10 checks for 1,000 bucks. And I know that I got all weekend to figure out how to get that money in the account in time. Somebody might go cash their check that day. But if I know my employees, you know, I can say, well, that person's just going to deposit it, so I've got a little time, right? You can play that game with the bank. You can't play that game because they take the money and then they send. Well, they don't take it, but they won't cut the checks if the money's not there. So it really helped fix that. And it's obviously not something that I would want if direct deposit went away. I wouldn't change anything about what I do. But it was one of those things where it was like, oh, yeah. In retrospect, now I realize that fixed an early problem that we had because there's the temptation to, well, it's Monday. I really want to spend this money to do this.

Oh, yeah.

And I've got the time, you know, until Friday, so I can do it. Whereas as soon as it was, well, no, the money has to be there by Wednesday, you know, and you can't. You don't even have an extra minute to fudge that. Okay, well, then on Monday, I'm not going to spend it, you know, and it's good.

It's a. It's a very good planning tool and requires you to be disciplined.

Yeah. It just added discipline.

Yeah.

So I want to speak to the flip side of this, though, because there were two kind of parallel thoughts happening for me as I read Deb's piece. One was exactly what we just talked about. The other was, look at this world that we live in, right. Where there is, you know, you're a small business owner, and your employees have an audience, and oftentimes that audience intersects almost directly with the people that you are doing business with. So instead of just having a. And disgruntled might be the wrong word for this particular scenario, although I don't think it is. But I'm sort of abstracting it here. You know, it used to be that if you had an employee that wasn't happy and you screwed them, and I'm not advocating for any of this, but if it happened, and even if the employee was wrong in his or her interpretation, they might go complain to their friends, their spouse, whatever, and threaten to. I'm gonna tell everybody. But the reality is, it's very hard, or it was very hard for someone to tell everybody.

Yeah.

What kind of. They didn't have the platform.

Yeah. What do you mean you're gonna tell everybody you're out of a job? How are, you know, like, how are you gonna find the time to do that? Well, these days, that's not the case. Any. Any idiot can start a podcast.

We prove that.

But really, I mean, with. She posted this to Medium, which is a site that people visit even if they don't know why they're going there. And Medium is also very good at keeping you there. So when you read one piece, it says you might also like this other one. And so now. Or Facebook.

Right.

I mean, I think Facebook's arguably a better platform than Medium, although for these kind of pieces, Medium actually has really carved out a nice niche for themselves. But regardless of the platform, it exists, and everyone is on it. So, you know, you screw up and push somebody too far, this not only can happen, it will. Because it doesn't take very long for someone to write an assessment of you and your business practices.

Yeah, it's like your own. You know, we've talked here before extensively about, you know, customer reviews and that kind of thing posted online and this is really, you know, your employees, you know, giving, reviewing this situation, what happened and how they were treated and sharing it with the world.

Right. Yeah.

And oftentimes your employees have the same voice that you do. Especially, I mean, you know, this is sort of this Blog World Expo and NMX is a special scenario. I mean, this was all about people, you know, connecting with other people.

Yeah, yeah.

So she's written a blog post about. It's perfect, right?

Yeah, it's perfect, right? It's like it's full circle now. Yeah. And, and, and, and she had this prior, but, but during her employ at Blog World Expo, of course she was put in touch with and, and eventually revered by all of these, these people. So it's an, you know, that side of it was very interesting to me. Like, you know, and, and I'm, I'm in the same position if I were to screw John Martolero tomorrow and do something to him where he was furious with me and rightfully so. I mean, he has had our platform for over a decade, so he has an audience that is my audience. I mean, there's no difference there.

Yeah, yeah, yeah, yeah.

It's challenging and you know, and, but I come back to, and you know, not to bust this guy's shops. I don't know who he is too much. But it's, it's really not that difficult to avoid this type of situation.

No, things can go bad and they don't have to get this far.

You got it. Even owing people money, if you are super transparent and you know, I've been in a situation with the business before where we had to throw the books open to really convince this other party that, hey, we don't have the money. I'm not saying we're not going to pay you, and I've always said that I will find a way to get you paid. But right now, this was decade ago with a situation we were involved in and we said, well look, we're really transparent. You want to see our books? Here you go and go meet with our accountant. He'll tell you exactly what's going on. You can see our bank statements. And it really went a long way to convince him, oh, these guys are not just stringing us along. They're having some trouble. And we eventually paid these guys off and they were very turned out in the end to be a great partner for us because we didn't let it all go to hell. And even though we owed them tens of thousands, maybe hundreds of thousands, I don't remember the amounts Back then, but we paid them off slowly but surely. But as things got better, which they inevitably do, we paid them more and we made things right in the long run. And at the end when it was all done and you know, we had a great relationship with them because we had come through. So it's actually, you know, it really can be an opportunity if you change, if you flip it.

Well, we talked about that.

Right?

I mean, that's, that's the. Yeah. Bad signs or bad times can be an opportunity both ways. Yeah. Yeah, that's right.

That's right. Because these guys had no idea. Because at the time, with this company that I was involved in, we were very good at spinning our, the perception of everybody on the outside a certain way, which was our marketing plan.

Right.

And it worked. And everybody thought of certain things certain way. So these guys, you know, this, this company was like, there's no way. You guys don't have any money because look, look at all this great press. This.

Right.

It was like, well, no, let me.

Let me tell you, let me show.

You how we got that far.

Yeah, let me show you. And we've, we've, you know, we got overextended and everything, but, you know, we're not telling you we're not going to pay you, but this is what we're going to have to do. We're going to have to come to plan. It's almost like the irs. You know, we had that IRS show and talking. You can owe them a ton of money and as long as you're honest and transparent, they work and communicative. Communicative. That is a problem. And it's the exact opposite of what. Especially me. When that stuff happens, I don't want to talk to anybody.

No.

I feel whole. Yeah. I feel ashamed. I feel embarrassed. I feel like I failed. And, you know, it goes against my whole mantra of, you know, positive things. And I'm an optimist and I make my own reality and succeed. So when it all goes to hell, you really have to force yourself to go, I gotta call this person.

Yeah, this is not gonna be fun.

Yeah, yeah.

You eat the meal of crow, you make it, you know.

Right.

It's. It's a one course meal.

That's right.

And you eat it all at once.

Yeah.

And you can't, like, you know, to your point, you can't do it over and over again. But certainly, you know, when you screw up and make a mistake, that's the first thing you need to tell these people that have relied on you for Something. Hopefully it's not your employees because your business will just not be around very long. But if it's a supplier, whoever, a government agency, you need to talk and say, I made a mistake. I'm willing to get this figured out. Can we sit down and work out a plan here to make it right? And nine times out of 10, those people will be so happy to hear from you and that you're taking responsibility for it. They'll bend over backwards to make it. It right, to make it work. They will. You know, so that's my experience of it. So.

It's crazy.

Yeah.

It happens. It does.

It does.

Yeah.

So take a look at the. You know, we'll link this article. We'd love to get your feedback, you know, feedback@businessshow.co. or you can come up and we'll post it up in our small business show support group on Facebook and love to get a dialogue going up there, see what you think. Thinking for a complete, completely wrong. Tell us. We're not going to believe it anyway.

So, you know, we'll respectfully talk with you.

Yeah, we would love to talk with you about it. Absolutely. Absolutely. So good stuff.

Yeah, it's just, it's an in. You know, at the same time as me being, you know, feeling like. Like Deb was totally justified in doing what she did as a business owner. It's like, man, I need to make sure I never get into a position where. Where that happens.

Yeah.

And I think it might. You know, you got to know there's even more backstory on everything she tried before.

Right? Yeah, yeah, yeah, yeah, yeah, yeah.

And I mean, I like, you know, I think we were talking about a little bit before show. I, I actually, I. I knew these guys. They wanted me to run their podcasting segment, and I just had too much going on and I had to, you know, beg off of it. And some people might say right now, oh, you know, good, thank goodness you didn't. And I, I would say no, never know.

Yeah.

Right.

I don't. I don't look at it that way necessarily. I mean, you know, it's opportunity cost and. And it certainly cost me an opportunity. Maybe it would have worked out differently.

I don't know. Yeah, yeah, yeah, yeah.

Anyway, yeah, you. You told them where to find us, so I think that's all we have to say. Thanks for listening, folks.

Enjoy the rest of your week.

Yeah, Let that charm life in.

It.