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We Don’t Have a Brand
In the latest 21 Hats Podcast, Paul Downs talks about how he thinks he has to change his marketing strategy to double his revenue.
Here are today’s highlights:
It’s worth keeping in mind that Russia’s economy is severely limited.
A CPA offers a refresher on the tax benefits available to business owners.
The important lessons one owner has learned about hiring remote workers.
Meanwhile, the big tech companies are still betting on a return to offices.
THE 21 HATS PODCAST
We Don’t Have a Brand: This week, Paul Downs talks about why furniture makers traditionally have not stamped their names prominently on their work—and why he’s rethinking that now. That change of heart is the direct result of Paul’s unlikely experience connecting two very different businesses: a Mennonite company manned by master craftsmen and a startup manned by tattooed hipsters with a mastery of Kickstarter. Not only has the resulting culture clash changed the way Paul thinks about his own business, it’s also the subject of a book he’s writing. In this conversation, Paul explains what he’s up to and also talks about how close his business came to failing, how he plans to double his revenue, why he’s thinking about trying TikTok, and how he feels about his son’s success in the alternative reality of venture-backed startups.
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The conflict in Europe is causing oil prices to spike: “Even before the Kremlin ordered Russian troops into separatist territories of Ukraine on Monday, the tension had taken a toll. The promise of punishing sanctions in return by President Biden and the potential for Russian retaliation had already pushed down stock returns and driven up gas prices. An outright attack by Russian troops could cause dizzying spikes in energy and food prices, fuel inflation fears and spook investors, a combination that threatens investment and growth in economies around the world.”
“But unlike China, which is a manufacturing powerhouse and intimately woven into intricate supply chains, Russia is a minor player in the global economy.”
“Italy, with half the people and fewer natural resources, has an economy that is twice the size. Poland exports more goods to the European Union than Russia.”
“‘Russia is incredibly unimportant in the global economy except for oil and gas,’ said Jason Furman, a Harvard economist who was an adviser to President Barack Obama. ‘It’s basically a big gas station.’” READ MORE
The Wall Street Journal says smaller businesses are bearing the brunt of rising prices and snarled supply-chains: “Most smaller firms don’t have the heft and sophistication to thrive in an environment of booming demand and short supply—the same forces that many of America’s biggest companies have been able to ride to higher earnings. High inflation, a tight labor market, stressed supply chains and dwindling liquidity are straining many small businesses, exacerbating the existing power imbalance between small and big firms. It all deepens the challenges that small companies have faced since the onset of the Covid-19 pandemic. And stresses will mount for those that take on more debt as the Federal Reserve raises interest rates.”
“Haig Service Corp., a 27-employee provider of fire, security and safety systems, has been waiting more than eight months for products from Honeywell.”
“Richard Haig, chief executive of the Green Brook, N.J.-based company, said he can’t pass along the retroactive increases to his own clients who placed orders in 2021. ‘They are already bid projects and we can’t raise the price,’ he said.”
“In July, Rockland Trust Bank said it wouldn’t renew Haig’s line of credit, which expired in November. Rockland granted the company three one-month extensions but said that later in February it will reduce the size of the credit line and increase the interest rate.”
“‘We have met all our covenants. We always have,’ Mr. Haig said. ‘It’s just because of the size,’ he added. ‘The timing is really terrible.’” READ MORE
Here’s how a boutique owner in Charleston, S.C., is building her business through live-streaming: “Since her store is closed on Sundays, [Mimi] Striplin uses that downtime to go live on Instagram every week for 15 minutes to showcase new styles and artist collaborations. She describes these shows as conversational and geared toward a young audience of loyal customers who want to have a good time and cheer on her business. ‘I'm just getting on and sitting face-to-face with them and being able to communicate that way,’ she said. She also hosts live shopping events on Facebook once or twice a month, for about 30 minutes, which she describes as more of a ‘QVC setup’ that appeals to an older audience who want to be educated about the products. After her show, she'll stay on for several minutes to answer questions about sizing and availability. Setting a consistent schedule keeps loyal customers coming back week after week, Striplin said.”
“‘It blows our mind how many repeat customers are tuning in and shopping. They are that invested in us.’”
“Striplin founded The Tiny Tassel in 2015 to earn extra income and afford her life in Charleston. She began by making pink tassel earrings out of embroidery thread to sell on Etsy for $12 each.”
“Last year, The Tiny Tassel made more than $970,000 in total sales, which Insider verified with documentation.” READ MORE
Are you making the most of the tax advantages available to business owners?
Over the weekend, Jim Kalb of Triad Components Group offered this thoughtful comment about hiring in the age of remote work: “In the past, mostly due to geographical proximity, we were forced to use Zoom to conduct virtual interviews. No matter how much time we put into the interviewing process, in EVERY case (a sample size of about 10), the person we hired turned out to be a bad fit (mostly culturally). In trying to examine what went wrong, I have concluded that the new employee never quite bought into our company's culture and often felt isolated from the rest of the team (including those members of our team that currently work remotely).”
“Today, we only hire local people (almost exclusively from local universities), have them live inside our culture for 12 months or so, then allow them (or ask them) to relocate.”
“During their first year ‘under roof’ they are provided constant training and feedback. It also allows the new hire to become immersed into our culture. For us and the employee, this new system has proved significantly more successful.”
“And when they do leave the nest, they feel like they are fully ready and have found a lot of success in their position, regardless if they now reside in N. America, Asia or Europe.” LEAVE YOUR COMMENT
Have you considered re-onboarding your current employees? “We’ve all been through the onboarding process at a new job—some of us more often than others. For those who have been with the same company for a while, many things may have changed since that original ‘getting to know you’ process. This is where re-onboarding can accomplish three goals: One, shape employees’ understanding of how the company has evolved. Two, help teammates get a complete understanding of our business achievements . Three, lay out the major goals and obstacles on the horizon. While a solution to integrate newcomers can be straightforward, we at TheSoul Publishing struggled with getting current employees to this same level of engagement and up-to-date knowledge—especially since we’ve made significant changes in overall processes, production optimization, and tools to promote a remote-first culture.”
“A re-onboarding program allows existing employees to become more ingrained in a company’s evolving culture while establishing a mutual understanding of how it is applied to day-to-day operations.”
“At TheSoul, in particular, our approach was focused on highlighting the company’s asynchronous communications model.”
“With this new model, we introduced new tools for communicating, so knowing how, and when, to use those new tools became imperative to about 1,400 veteran employees across 60 countries.” READ MORE
Are skills tests better than resumes when it comes to assessing job candidates? “Applied, a U.K.-based recruiting organization, is one of a handful of companies offering tools that try to create more equitable and arguably more accurate ways to judge potential candidates. It makes software that businesses can use to come up with standardized, anonymous assessments for the initial screening. The clients can then narrow the field by scoring all applicants’ answers against a strict rubric, says Applied Chief Executive Officer Khyati Sundaram. The key, she says, is to address discrimination not through recruiting efforts that explicitly consider race, but instead by eliminating the ways bias has kept people from unrepresented demographic groups from advancing.”
“A tech company, for instance, might send a potential programmer some broken code to fix. A publishing company might ask an aspiring employee to come up with a book pitch to present during an interview.”
“‘Let’s create assessments that will be predictive of whether this person can actually do a job,’ says Sundaram.”
“More than 80 companies including Dell Technologies, JPMorgan Chase, and Pfizer have signed on to a multiyear initiative organized by the lobbying group Business Roundtable to reform hiring practices along these lines.” READ MORE
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In Philadelphia, restaurants are no longer required to demand proof of vaccination—but restaurants are doing it anyway: “The Inquirer, which began tracking policies last year, has identified more than three dozen restaurants that will continue to demand proof of vaccination for indoor dining. To many restaurateurs on this list, the need to relax indoor masking is paramount; science debates aside, many hospitality workers believe that mask-wearing impedes the dining experience.”
“‘Our businesses need people to be able mingle and interact with each other,’ said Jason Evenchik, whose holdings include Vintage and The Goat in Center City. ‘You can’t do that with a mask on. Hopefully this will be over soon.’”
“‘Alex Tewfik, who opens his South Philadelphia restaurant Mish Mish on Friday, said he would call for vaccination cards. ‘We don’t want to wear masks and it’s simply the right thing to do,’ he said.”
“The owner of Hop Sing Laundromat in Chinatown, who is known simply as Lê, said he would continue to ask for proof of vaccination — and it must be a physical card or digital app, not a cell-phone photo.” READ MORE
Big Tech companies are betting that their futures still lie in offices: “The frenetic activity in the Phoenix suburbs is one of the most visible signs of a nationwide recovery in commercial office real estate fueled by the tech industry, which has enjoyed unchecked growth and soaring profits as the pandemic has forced more people to shop, work, and socialize online. Big tech companies like Meta and Google were among the first to allow some employees to work from home permanently, but they have simultaneously been spending billions of dollars expanding their office spaces. Doubling down on offices may seem counterintuitive to the many tech workers who continue to work remotely.”
“But companies, real estate analysts and workplace experts said several factors were propelling the trend, including a hiring boom, a race to attract and retain top talent and a sense that offices will play a key role in the future of work.”
“In the last three quarters of 2021, the tech industry leased 76 percent more office space than it did a year earlier, according to the real estate company CBRE.” 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