Everyone Needs a Coach
Without one, Steven Wilkinson argues, your entrepreneurial experience is likely to be “stressful, exhausting, and unprofitable.”
Here are today’s highlights:
Some business owners say they are already feeling the downturn.
Benefits have officially become political.
There’s a lot of competition for summer interns.
In this week’s Dashboard: how your CRM can help you fight inflation.
Steven Wilkinson makes the case for hiring a business coach: “I can’t think of any high-performance activity outside of business in which so many of the main protagonists have convinced themselves that it is a sign of intelligence and fortitude to do as much as possible by themselves, without consistent training, coaching, and holistic support around all the factors that determine consistent successful outcomes. No professional athlete in their right mind would imagine that they could possibly deliver permanent top level performance with bad diets, bad sleep habits, little to no training and development, and only sporadic recourse to professional support and have a chance of winning.”
“And the results of the SME business universe speak volumes: 85 percent of all businesses seeking to be sold, fail in that objective and end up being liquidated.”
“Over 100 percent of the value added (measured by EBIT or operating profit) by SME companies in every industry is captured by the top 35 percent of companies. The rest are either breaking even or losing money.”
“Most U.S. business owners (substantially greater than 50 percent) make less than $50,000 in annual total take home remuneration, in no way compensating for the risk or the hours worked.” READ MORE
Some business owners say the recession has arrived: “Jorge Aurichi, who owns Level Five Painting in Newton, [Mass.] sensed the economy shifting in March when gas prices surged after Russia invaded Ukraine. Even though spring and summer are prime seasons for painting, Aurichi noticed a 20 percent drop in calls from prospective clients compared with last spring. He expected his business to grow in 2022, but now he forecasts flat revenue for the year, even as costs for labor, paint, and gas soar. One example: A gallon of oil-based primer that two months ago cost $24 is now $33. That’s on top of a nearly 25 percent increase in the price of gas for his fleet of trucks and vans since last year.”
“Leodalys Montero, who owns D’laly’s Beauty Salon in Dorchester and Roxbury, says her business is slowing, with revenue off by 30 percent in May alone. … Worried about a downturn, Montero sold her Jamaica Plain shop in May and is paying herself less.”
“Still, Montero had no choice but to raise prices two weeks ago because the costs of shampoo and conditioners have been going up. A wash and set now costs $40, a $5 increase.”
“In Massachusetts, 40 percent of small-business owners are reporting they don’t plan to hire this summer because they can’t afford to add payroll, according to Alignable.”
“That may explain why there are also fewer concerns about a labor shortage, with only 48 percent of small-business owners in Massachusetts saying they have trouble finding workers to fill open positions. That’s down sharply from 72 percent in Alignable’s May survey.” READ MORE
Gene Marks has a warning for business owners who aren’t taking employee mental health seriously: “A company in Kentucky this past March was ordered to pay an employee $450,000 for wrongfully terminating him after he suffered two panic attacks while at work. The employee, who has an anxiety disorder, was triggered by a birthday party thrown for him and left work abruptly. He was later fired because of ‘concerns that other employees had been frightened for their safety when the employee suffered the panic attacks.’ After a two-day trial, a jury found in favor of the employee, saying that he had a defined disability and that he was able to perform the essential duties of his job, yet suffered an adverse employment action because of his disability.”
“Why have I been showing this to my clients? Because my firm serves hundreds of small businesses and most of them fit the typical demographic of an employer-owned company. They are family-run, B2B, industrial or service-oriented, and generally still in the control of someone who is over the age of 50 ...”
“This is a generation — my generation — that has been raised to ignore mental health problems. These are things best left to deal with privately and not a matter for the workplace. Mental illness is not like a physical illness, we were told by our parents. It’s just a thing in your head. Switch it off. Get over it.”
“I realize that for some of these clients, I’m not going to change their minds. But they need to understand that ignoring this trend will result in losing out on new talent and may even cause some of their existing employees to seek other opportunities at companies that better appreciate their situation.” READ MORE
Amazon is hiring 15,000 interns this summer, its largest cohort ever—and paying them a lot: “Most of them will do hybrid work, the company says in a blog post. Typical internships last 12 to 14 weeks and ‘mirror a full-time job,’ according to the company. Amazon plans to hire people in 40 countries around the world. In addition to offering hybrid work, the company pays its interns—really well. Amazon pays interns a monthly median of $8,000, making it the fifth-highest paying employer for interns, according to this year's Glassdoor ranking. The company offers a relocation stipend for students whose hybrid internships require them to temporarily move to a different city. All this means that if you're in the habit of hiring interns every summer, this summer may be harder because you're suddenly facing a lot more competition.”
“There are few things ambitious young people want more than to be given real responsibility and then have that work acknowledged. Do that, and pay them a proper salary, and they'll have no reason to even consider Amazon.” READ MORE
Big companies are being told they need to address the abortion decision: “‘In the past, there had been a knee-jerk assumption that if it's about abortion, a company won't touch it, that it's not a business conversation. What you see now is that companies recognize their role as an employer,’ says Andrea Hagelgans, the managing director for U.S. Social Issues Engagement at public relations giant Edelman. She also leads the firm's Roe v. Wade task force and is advising companies on their response. Hagelgans says C-suite conversations about reproductive rights have gone up ‘exponentially’ since the draft was leaked.”
“Companies hesitant to weigh in on reproductive health care should keep one final item in mind, Hagelgans says: Social activists and some legal scholars say the Scotus decision could lead to future rulings that would curb the benefits companies offer to other marginalized employees, notably LGBTQ staff.”
“And it goes without saying that such groups will closely watch the corporate response.” READ MORE
Roe had a dramatic impact on the lives of American women—as will its reversal: “Since the early 1970s, American women’s rate of marriage has halved and their college degree attainment has quadrupled. The number of women who do not bear children has more than doubled, and the number of women who forgo jobs because they are raising children is half of what it was. Put more simply: Over the past 50 years, because of access to legal, safe abortion, women have been able to make choices that reshaped their lives. Now that Roe is overturned, some of those choices, and some of those life paths, might not be available any more.” READ MORE
Benefits have become a political issue: “Companies that choose to cover abortion—and any travel necessary to get one—have to balance alienating employees agitating for their employers to take a stand versus the risk of legal attacks or political blowback in states that have banned the procedure. ‘Benefits are suddenly starting to become very political, and it’s forcing employers to take a position,’ said Michael Turpin, executive vice president at USI Holdings Corp., an insurance brokerage. There are also questions of how much employers, especially smaller ones, can afford to invest, according to human-resources executives, CEOs and insurance experts.”
“Without health insurance to foot the bill, obtaining an abortion can be costly. In the U.S., the median self-pay price for a medication abortion in 2020 was $560, and the median cost of a first-trimester procedural abortion was $575, according to a study published in April in the journal Health Affairs.”
“Some 14 percent of large employers surveyed beginning in early June said they had a travel benefit in place, while another 25 percent said they were considering it, according to responses from nearly 300 employers to a survey being conducted by benefits consultant Mercer.” READ MORE
Can a business claim ownership of a color? “On a summer day in 2019, Daniel Schreiber opened his mailbox to find a threatening letter from one of the world’s largest telecom companies. In the letter, Deutsche Telekom AG (the parent company of T-Mobile) accused Schreiber’s small insurance startup, Lemonade, of trademark infringement. Schreiber was confused: He hadn’t used T-Mobile’s name. He hadn’t appropriated the company’s logo or tagline. Hell, he wasn’t even in the cell phone business. But as he read on, he realized his ‘crime’ was using the color magenta.”
“When a color becomes synonymous with a brand — think robin egg blue jewelry boxes, brown delivery trucks, or orange scissors — a company can claim a certain form of ‘ownership’ over it.”
“But how is it possible for a single corporation to call dibs on a color? And what effect does this exclusivity have on its competitors?” READ MORE
Here’s what happened when an entrepreneur decided to sell Jordan’s national dish in a cup: “The idea struck the restaurateur like a bolt of lightning after he spilled food on his suit while eating in his car. What if he were to take Jordan’s national dish — a milky mountain of mutton and rice called mansaf, which is traditionally eaten by hand from a large communal platter — and sell it in a paper cup to diners on the go? The restaurateur, Muhammad Taher, soon opened his first shop, Our Mansaf in a Cup, offering takeout servings at the bargain price of one dinar, about $1.40. Business boomed, and three more branches followed.”
“Not everyone hailed his culinary innovation, however, in this conservative Arab monarchy where traditions like mansaf are tightly bound to national identity.”
“Copycat restaurants popped up, cutting into Mr. Taher’s profits, even as traditionalists accused him of debasing the national dish and eroding the cultural foundations of the nation itself.
“‘Destruction begins with small details,’ warned Abdul-Hadi al-Majali, a newspaper columnist who derided the very idea of mansaf in a cup.”
“The mansaf dust-up has roiled the kingdom for the last two years, pitting traditionalists against innovators, those who eat with their hands against those who eat in their cars ...” READ MORE
THE 21 HATS PODCAST
Dashboard: Keep Calm and Carry a Lot of Inventory! Gene Marks, our man in London (at least for this week), reports that small businesses in the UK are doing quite well, thank you! Marks also discusses how your CRM system can help you fight inflation, the good news about bankruptcy laws, how to increase profits without raising prices, and whether it’s now okay to swear in the office. Cheers!
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren