How Would You Spend $10,000 a Month on Marketing?
There are more options than ever, and there is more confusion than ever. In our latest podcast, we asked our owners how they would spend marketing dollars right now.
Here are today’s highlights:
There’s now a better way to administer your company 401(k).
Restaurant workers in San Francisco are demanding serious perks, including unlimited PTO and pet insurance.
If you’re asking how to raise venture capital, you’re asking the wrong question.
These are not normal times for Ukrainian entrepreneurs.
THE 21 HATS PODCAST
How Would You Spend $10,000 a Month on Marketing? Shawn Busse, Hans Schrei, and Sarah Segal explain what they would do if I gave them $10,000 a month to spend on marketing. As we all know, there’s a lot going on right now. No one’s entirely certain where the economy is headed, and no one’s entirely certain where digital marketing is headed. So it seemed like a good time to ask our regulars where they would place their bets if we offered them each an imaginary pot of money to promote their brands. Spoiler alert: Their responses gave us a good sense of what these business owners think is working right now—and it’s definitely not billboards.
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Whether your business already has a 401(k) or you’re looking to start one, Gene Marks thinks you should consider a pooled employer plan: “Why? Because a PEP can save you and your employees a lot of money — and potential headaches — by allowing you to pool retirement plan assets with other companies and share an administrator to oversee the funds. ‘We’ve seen a big jump in the number of clients moving to our retirement plan administrative services over the past year, thanks to PEPs,’ said Michael Majors, a vice president of human resources services at the payroll processing firm Paychex. The firm recently announced that it had passed the 100,000 milestone for the number of 401(k) clients it serves, and Majors credits PEPs as a big factor.”
“Before the SECURE Act, a pooled employer plan could be established only among businesses sharing a ‘nexus’ of interest, such as being in a similar industry, or those located in the same geographical area. But no more. Now, small businesses from anywhere and doing anything can band together in a PEP. And more small businesses are taking notice.”
“‘We tell our clients that there’s a single employer, 401(k) option, and then there’s this other option called a pooled employer plan,’ Majors said. ‘And in most of the cases we’re finding that up to 70 percent of the businesses choose a pooled employer plan. It’s really shifted the dynamic of the number of plans we do in those categories.”
“‘Our small business clients are not experts in making investment options or running the plan,’ Majors says. ‘They want us to assume these responsibilities.’” READ MORE
In San Francisco, restaurants are enticing job candidates with corporate-style perks: “Medical, dental, vision insurance, and 401ks? These days, that’s just table stakes. How about unlimited PTO, signing bonuses, pet insurance, and group meditation retreats? Al’s Place, which was crowned America’s best new restaurant by Bon Appétit in 2015, is so desperate for line cooks that it is offering a $5,000 new-hire bonus, on par with what some corporate professionals receive. And pet insurance, which only one-third of Fortune 500 companies provide, is becoming an increasingly common offering for local restaurants.”
“Compared to pre-Covid, the number of restaurant workers in San Francisco and San Mateo counties has declined by 18 percent, according to the San Francisco Office of Employment and Workforce Development.”
“Local restaurateurs think those workers may never come back. Because employment was so tenuous during Covid, some workers permanently switched to other occupations.”
“General managers at fast casual restaurants are making $90,000 to $100,000 these days, compared to $80,000 a year ago.” READ MORE
Despite many attempts, live-streaming does not seem to be taking hold in the U.S.: “Walmart has announced it will host regular live-shopping streams on Talkshoplive, a live-shopping platform. Meta, YouTube, and Amazon have been co-opting influencers to host live-shopping streams on their platforms. Elsewhere, VCs have been pouring money into the space. Some small U.S. businesses also found a lifeline in live-shopping during COVID-19-induced lockdowns. Yet despite all the recent activity, the live-shopping market in the U.S. ‘is so slim that we don't forecast it,’ according to Insider Intelligence. In comparison, the live-shopping market in China was worth almost $300 billion as of the end of 2021, and is on track to be worth almost half a trillion dollars by the end of this year.”
“‘It's not going to happen, certainly not on the same scale as in China,’ said Arnold Ma, founder of Qumin, a marketing agency helping brands like Marriott and Papa John's expand in China.”
“‘You see people selling literally billions worth of products in the same day. I'm going to stick my neck out and say that's never going to happen in the west, on live-shopping.’” READ MORE
Joe Procopio says that if you’re asking how to raise venture capital, you’re asking the wrong question: “Every once in a while, I'll get the better, wiser question: ‘Should I raise money for my startup?’ And there's really only one time I'll answer in the affirmative, and it's almost always totally unique to the idea, the founder talent, the problem, and the proposed solution. Here it is:
“IF there is a problem that is broad, universal, and painful enough to touch almost every business and/or consumer (preferably both), and...
“IF there is an existing solution, and especially an incumbent company, that has lost touch with solving the problem in a technically advanced, cost-efficient, and customer-delighting manner, and...
“IF there are several new entrants into the market of solving that problem an entirely different way, and...
“IF the person asking the question has a solution that is novel, at least a little proven in the real world, and better than both the existing solution and all the new solutions...”
“Then yes, it's time to raise money.” READ MORE
Inflation expectations are easing: “Expectations for U.S. inflation three years ahead fell to 3.6 percent in June from 3.9 percent a month earlier, the biggest drop since January, according to the latest survey by the Federal Reserve Bank of New York. The decline may ease the Fed’s concerns that inflation expectations are at risk of becoming unanchored, one reason why the U.S. central bank changed course last month and raised interest rates by 75 basis points. The three-year outlook hit a high of 4.2 percent in October.” READ MORE
Falling gas prices can be a headache for the independent operators who run about half of the gas stations in America: “Fuel station owners set the prices consumers see at the pump, based on what they initially paid to fill their underground tanks of gasoline and diesel. They have to sell that fuel for a corresponding amount to recoup their investments and manage a profit, which can take days or weeks, depending on how quickly they turn over their inventory. Heightened volatility makes those pump pricing decisions painstaking for gas station owners such as Doug Robinson. When prices drop, he still has to sell the fuel he already bought for his two stations in central Texas at a higher amount. Because he doesn’t know where prices will go next, he also risks losing money on every new fuel order he places.”
“Mr. Robinson ... said he made a decision earlier this month not to place an order to refuel one of his stations, hoping that prices would go down by the following Monday. More drivers showed up at his pumps than he expected, and he ended up running out of gas, he said.”
“When wholesale prices go down, the owners also tend to lower prices more slowly because they have to recoup what they have already paid to fill the tanks.”
“‘You’re just rolling the dice every time,’ Mr. Robinson said.” READ MORE
California cities, including Los Angeles, are considering banning new gas stations: “It's unclear how such a policy would go over in Los Angeles, a city with about 65 times as many people and a transportation infrastructure that still heavily relies on vehicles. Lobbyists for gas stations said they will oppose the motion in L.A. if it moves forward. But [Los Angeles City Councilman Paul] Koretz said such a ban would better prepare the city for a future that doesn’t rely on fossil fuel-powered vehicles, which California has pledged to stop selling by 2035.”
“‘Given Gov. Newsom’s timeline to end the sale of gas vehicles by 2035, gas stations are a dying business,’ Koretz said. ‘Their toxic chemicals take years and millions of dollars to clean up.”
“According to the Environmental Protection Agency, about half of the nation’s 450,000 brownfields — sites containing hazardous substances, pollutants or contaminants — is property compromised by the presence or potential presence of petroleum, much of it leaking from old gas stations.” READ MORE
Even half way around the world, the long arm of trademark law can find you: “The Delhi high court has permanently restrained a bakery owner in the southern Indian city from using the name ‘Facebake’ or ‘Facecake.’ It has also barred the shop from using the website facebook.in, related email addresses, or any trademark resembling those of the social media giant for its products and services. The bakery’s name and signage strongly resemble Facebook’s official colors and patterns, including a deceptively similar logo. Facebook, which has almost 240 million users in India, filed a suit against Noufel Malol, the owner of the Bengaluru bakery, in 2020.”
“The company’s counsel argued in court that the store was degrading Facebook’s trademark and confusing the public. On July 6, the judge agreed with Facebook.”
“The court also said that Malol must pay Facebook’s parent Meta nominal damages of 50,000 rupees ($628.50) and the cost of the suit.” READ MORE
These are not normal times for Ukrainian entrepreneurs: “Across Ukraine, many companies are adapting to life at war by making it part of their business. In the southern city of Odesa, a local fashion brand had all its divisions, even its lingerie seamstresses, sewing cloth vests to fit body armor plates. In Lviv, some of the businesses that flocked to this safer western region of Ukraine are working on installing armor on existing vehicles, military uniforms and, more secretively, ammunition. ‘We have many businesses requalifying themselves to help the army,’ said Volodymyr Korud, the vice president of Lviv’s chamber of commerce. ‘Some are even involved in weaponry, but that is something we cannot discuss,’ he said, for fear they could become military targets.”
“Oksana Cherepanych, 36, said it was not only self-interest that fueled her decision to redirect her company from making hotel and restaurant uniforms into a manufacturer of Ukrainian regimental outfits.”
“‘It’s also about saving jobs for our workforce,’ she said. ‘We need to motivate people to stay in our country by making sure they can find work here. That way, we support our country’s economy.’”
“Her company, Gregory Textile, based in Lviv, now has contracts to make uniforms for the Ukrainian military. She was able to save the jobs of the 40 seamstresses she had on staff, and even added 10 positions. She offered those jobs to women who fled fighting in Ukraine’s east.”
“And though the company is making only 60 percent of what it earned before the war, she said, it is still turning a profit.” READ MORE
THE 21 HATS PODCAST
Dashboard: Email or Text? This week, Gene Marks talks about the continued rise of text-message marketing and how it can be integrated with your CRM system. Gene also warns businesses off of Twitter—even though he’s a power user. Plus: How do you plan for a recession and a labor shortage at the same time? And is that $10 billion in SSBCI money flowing yet?
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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