I Want to Double Sales This Year

In the latest 21 Hats Podcast episode, Liz Picarazzi explains how she made the leap from corporate marketing to entrepreneurial manufacturing.

Good morning!

Here are today’s highlights:

• A candy maker in Ohio says he can’t afford to match what Amazon pays fulfillment workers.

• Some businesses are finding benefits in hybrid work schedules and in hiring retired workers.

• Lawsuits over web accessibility were up 15 percent in 2021.

• “It’s never going to go back to the way it was before,” says the owner of a downtown wine shop. 

THE 21 HATS PODCAST

I Want to Double Sales This Year: This week, we introduce another new member of the 21 Hats Podcast team, Liz Picarazzi, who talks Shawn Busse and Paul Downs through a series of challenges she’s faced at her business, Citibin. Among those challenges: why she outsourced her manufacturing to China, why she’s trying to bring it back, why she’s struggling to find an American fabricator that wants her business, why she thinks she wasted all of the money she spent last year on digital marketing, how she managed to double sales anyway, and where she found the right person to handle the aspects of running Citibin that she doesn’t think she’s good at.

• You can subscribe to The 21 Hats Podcast wherever you get podcasts.

THE COVID ECONOMY

Squeezed by inflation, a candy maker in Ohio has raised prices 12 percent: “McJak Candy, which has been manufacturing sweets in Northeast Ohio for 40 years, is one of countless small businesses in the U.S. that have had to make some big changes because of sky-high inflation over the last six months. ... [owner Larry] Johns typically raises candy prices about 2 percent a year to keep pace with raw material cost increases and rising wages. In the past, the candy company was even able to keep some customers at the same price for two to three years without an increase. But last year was different.”

• “Along with other factors like increases to employee pay, McJak’s average total production costs went up 20 percent throughout 2021.”

• “Around 63 percent of small businesses increased their prices to combat the effects of inflation on their bottom lines, and about 40 percent say they have decreased staff, according to the Small Business Index report.”

• “And 45 percent  of small businesses say they have gone so far as to deal with inflation by taking out a loan over the past year.”

• “And while he would like to match what other companies like Amazon pay, around $15 per hour at the nearby Akron fulfillment center, he says McJak likely would need to raise product prices by another 25 percent on top of the recent increases to afford that. ‘That might kill the whole business,’ he says.” READ MORE

In New York City, restaurants are in a quandary over omicron: “ZiZi has reopened, like many New York City restaurants that temporarily shuttered in December during the sudden onslaught of the omicron variant. But the decisive moves those businesses took last month, and in earlier stages of the pandemic, have given way to something murkier — a time in which both employees and owners are deeply unsure what to do when they or co-workers test positive for the virus. Keep working and risk infecting others? Call in sick and miss out on crucial income? Close the restaurant to protect staff and customers, or take steps to safeguard them and stay open?”

• “When Sharon Hoota, an owner of the restaurant, and a manager recently called the city’s 311 help line three times to ask what to do if a worker tested positive for Covid, Mr. Hoota said they received differing advice on how soon that person should be allowed to return to work.”

• “Sage Geyer closed his restaurant, Bar Meridian, in Prospect Heights, Brooklyn, from Dec. 17 to Dec. 27 after seven of its 12 employees tested positive for Covid.”

• “‘We just threw up our hands, like, no one is telling us what to do here and we are so exhausted,’ he said. ‘We don’t want to make the wrong decision.’” READ MORE

For downtown businesses, it’s another grim winter: “The variant is everywhere, raging through homes, schools, and workplaces. Late last year, companies like Fidelity Investments and Rapid7 fiddled with return-to-office dates to trounce the virus. Come back this February, some suggested. Or April. Now? Maybe just work from home indefinitely. And so downtown office towers are perhaps a quarter full on any given weekday. Measures of foot traffic and MBTA ridership remain well below pre-pandemic levels.”

• “That’s left Michael Wang and his Financial District sandwich shop out of luck — again. He reopened Fóumani in August after a 17-month closure — they had a party, the mayor came — and then watched Bank of America employees trickle in for chicken katsu subs and wasabi Caesar salads. Still, business lagged at 25 percent of pre-pandemic levels.”

• “By late December, Wang decided to lock up until Jan. 3, the first workday of the year. Dismal sales prompted him to close for another week, until Martin Luther King Jr. Day. ‘Every time it feels like COVID is subsiding, there’s a setback,’ Wang said. ‘And another setback. And another setback.’”

• “[Carri Wroblewski, co-owner of Brix Wine Shop] believes fond memories of the bustling Financial District are just that — memories. ‘It’s never going to go back to the way it was before,’ she said.” READ MORE

HUMAN RESOURCES

Hybrid workplaces are here to stay—and there are some benefits for businesses: “Corporate leaders attempting to coax employees back to the office have largely accepted the inevitability of the hybrid work model — a strategy buttressed by the reality of raging coronavirus rates, a tight labor market, and the nation’s more than 10 million job openings. Now they are learning to leverage its benefits, according to Adam Galinsky, a professor of leadership and ethics at Columbia Business School in New York.”

• “That includes more flexibility and less time commuting for employees, and lower real estate and operating costs for companies.”

• “‘We are fundamentally not going to go back to what we had before,’ he said. The ability to do their jobs remotely has changed when people work, what they wear, and what tasks they save for the office and do at home.”

• “Companies already are seeing the benefits of bigger talent pools. Twitter credited its shift to remote work with making the social media giant’s U.S. workforce more diverse.”

• “Black representation grew by a third, to more than 9 percent, in the past year while Latino hiring grew by half, to hit about 8 percent, the company said this past week in its annual diversity report.” READ MORE

Have you tried recruiting retired workers? “Some economists and business leaders say employers should consider an overlooked source of talent: the 47 million retired workers receiving Social Security benefits. ... While retired workers are essentially waiting on the sidelines, Zhao warned that employers can't drag their heels hiring these individuals. Companies that are slow to begin hiring back eager retirees may find that many have already accepted with companies that took the initiative to target them earlier in the hiring craze.”

• “The labor force participation rate for those 55 and over has been below the pre-pandemic rate with a rate of 38.5 percent as of December 2021.” READ MORE

Many employers still do not understand what’s driving the Great Resignation: “In a survey by McKinsey published in September, 40 percent of employees indicated they were at least considering resigning within the next three to six months. But even this statistic is just the tip of the resignation iceberg. Though the unemployment rate has stabilized from the uncertainty of the pandemic, Gallup found that employee engagement dropped in 2021 for the first time in a decade. Only about a third of employees reported being actively engaged in their work. The percentage of employees who have reported being actively disengaged has gone up since 2019. This hidden resignation underscores why so many businesses are failing to keep their best and brightest from eyeing the exits.”

• “In the rush to offer workers pay bumps and similarly transactional perks — all of which are important — many employers are overlooking fundamental shortcomings of their business cultures.”

• “During the pandemic, fear of redundancy due to shutdowns drove a lot of talented people to start side hustles.Census Bureau data shows that Americans filed paperwork to start 5.4 million businesses in 2021 — far exceeding the record of 4.4 million set in 2020.”

• “While some budding entrepreneurs ultimately quit their day jobs, far more do not. They simply shift time and creative energy away from their salaried positions — a more under-the-radar sort of brain drain on companies.” READ MORE

POLICY

The parent company of T.J. Maxx and Marshalls plans to fire employees who don’t get a booster: “The Framingham, Mass.-based company in December became one of the first major companies to require eligible office employees to obtain a booster shot of the Covid-19 vaccine to return to work. At the time of the announcement, there was no mention of termination for failing to comply. The company previously mandated that all U.S. home and regional office associates be fully vaccinated by November 1.” READ MORE

LITIGATION

Web accessibility lawsuits grew 15 percent last year, with more than 10 such suits filed every day: “Retailers received 74 percent of web accessibility lawsuits in 2021, including 25 percent of the cases involving mobile apps. Twenty percent of Digital Commerce 360 Top 500 e-retailers received digital accessibility lawsuits in 2021, and more than 80 percent of the Top 500 had received such suits over the past four years, UseableNet found.”

• “The legal standard is that websites must be ‘meaningfully accessible’ to all shoppers. That includes people with blindness, visual impairment, seizure disorders, attention deficit hyperactivity disorder or other disabilities.”

• Plaintiffs’ attorneys aren’t necessarily looking to file suits against large deep-pocketed corporations. Of the 1,664 cases filed in federal courts from January through June 2021, 1,115 (67 percent) targeted retailers and other kinds of companies with less than $50 million in annual sales.”

• “Brett Cohen, a partner at the law firm Nelson Mullins, says his clients face such suits at a rate of about one every other week. And the players are familiar. ‘You always see the same plaintiffs and the same firms,’ Cohen says.”

• “[Cohen] recommends retailers hire a website developer familiar with web accessibility and a lawyer who understands the ADA. Retailers should then regularly assess the state of the site’s accessibility and fix them quickly.” READ MORE

HEALTH CARE

In Boston, hospitals are postponing thousands of surgeries amid the omicron onslaught: “The situation is so bad that it’s forcing hospital administrators to make heartbreaking choices to limit all but the most urgent surgeries and procedures. This extends even to some cancer surgeries, forcing doctors to weigh which tumors are growing faster and which slow enough to postpone care. Dr. Ron Walls, Mass General Brigham’s chief operating officer, said hospitals are now fielding calls from patients ‘begging’ to be put back on the list for surgery. ‘This is really, really hard for patients,’ he said.” READ MORE

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