Welcome to Health Insurance Season!
Guess what. Rates are going up. But in today’s Dashboard, Gene Marks has suggestions for how businesses can save money.
Good morning!
Here are today’s highlights:
Forbes says Diane Hendricks is the most successful female entrepreneur in history.
The strong dollar is threatening the rebound in U.S. manufacturing.
Americans are running low on personal savings at just the wrong time.
Mark Zuckerberg’s metaverse may be further off than he thought.
PROFILE
After her husband’s tragic death, Diane Hendricks took over the family business—and took it to $18 billion in sales: “A teen mom who once worked as a waitress to pay her bills, she co-founded ABC Supply with her husband, Ken, in 1982 and built it into the nation’s largest wholesale distributor of roofing, siding, and windows. After Ken died in 2007, Hendricks continued the business’ rapid expansion, buying rivals and more than doubling its store count to 900. Revenue hit a record $15 billion in 2021. ‘We’ll do close to $18 billion this year in sales,’ Hendricks says. ‘It’s not a little company anymore. It’s five times what it was when Ken was alive.’”
“Hendricks, who owns 100 percent of ABC in addition to a real estate development firm and a holding company with stakes in 18 businesses, is now worth $12.2 billion. That’s triple her net worth from just five years ago and more than any other female entrepreneur in U.S. history.”
“By way of comparison, America’s second-richest self-made businesswoman, Judy Faulkner, who pioneered electronic medical records (and who also lives in Wisconsin), is worth ‘only’ $6.7 billion.”
“‘The things she’s done, I’m not sure Ken could have done,’ says Rob Gerbitz, the CEO of Hendricks Commercial Properties, her real estate firm, which recently paid $42 million for a hotel in Santa Barbara, California, and built a $40 million minor league baseball stadium in Beloit.” READ MORE
The son of a South African farm laborer, Paul Siguqa now owns the winery: “He grew up resenting the scenic winelands near Cape Town, watching his mother toil in the vineyards so that white people could sip their merlots and chardonnays in luxurious cellars. Yet here was Paul Siguqa on a recent Saturday, swirling a chenin blanc in the airy tasting room he now owned. What Mr. Siguqa, 41, has accomplished is nothing short of exceptional: The son of a farm laborer, he saved for 15 years to buy, restore, and last year open Klein Goederust Boutique Winery, the only fully Black-owned winery in Franschhoek, one of South Africa’s two most prestigious wine valleys.”
“After university, he successfully launched a communications company and an events company, all while searching for a wine farm he could afford.”
“Two years and 23 million rand ($1.3 million) worth of renovations later, Mr. Siguqa opened his winery on Dec. 3 of last year. It offers five varieties, including a shiraz, a cabernet-merlot blend and a dessert wine.”
“He said he kept the original name, Klein Goederust, established in 1905, because he knows the psychology of his country. Consumers might associate a brand named Siguqa Wine with lower quality because of the African name, he said. ‘Apartheid did a heavy one on us mentally,’ he said. READ MORE
THE 21 HATS PODCAST: DASHBOARD
This week, as many businesses find out what they’ll pay for health insurance next year, Gene Marks talks about how businesses can save money. Gene explains why self insurance has become more feasible for smaller businesses and why he thinks it makes sense to offer employees better health coverage instead of a pay increase. Also, it’s probably time to revisit your workplace drug policies. Plus: how the issues important to small businesses often get overshadowed by those of big businesses.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
MARKETING
Do you need an audio logo? “The nonprofit Wikimedia Foundation recently announced that it is, in effect, looking for an answer to that question, issuing an open call for submissions for a ‘sound logo’ that will identify content from Wikipedia (and other Wikimedia Foundation projects) ‘when visual logos are not an option—for example, when virtual voice assistants answer queries.’”
“‘We’re getting to a place where if you don’t have an audio strategy,’ says [Scott Simonelli, co-founder and CEO of Veritonic, an audio analytics and research firm], ‘you’re missing a huge part of the market, and you’re really missing the zeitgeist.’”
“Veritonic publishes an annual Audio Logo Index, evaluating which sonic identities in various categories are the most effective.” READ MORE
MANUFACTURING
The strong dollar is threatening the U.S. manufacturing rebound: “The U.S. dollar’s surging value relative to the euro, the Japanese yen, the British pound, and other currencies is making foreign-made goods cheaper to import, while exports of U.S.-made goods grow more expensive for foreign buyers. For U.S. manufacturers operating overseas factories, their sales in foreign currencies are worth less in dollars now because of the unfavorable exchange rates caused by the strengthening dollar.”
“Foreign companies, meanwhile, are gaining a price advantage on exports to the U.S. at a time when U.S. companies have been adding production.”
“Baltimore-based Marlin Steel Wire Products, which makes wire baskets for industrial and medical uses, picked up more work during the Covid-19 pandemic supplying equipment to U.S. hospitals that had previously used suppliers in China. Now, the company is producing mesh baskets for semiconductor plants being built in the U.S.”
“[Owner Drew] Greenblatt said his European rivals are being held back by soaring energy costs and recession concerns but have pricing power with their imports because of the strengthening dollar. ‘Our foreign competitors look like they’re having a 10-percent or 20-percent sale,’ he said.”
“‘It has a debilitating effect on U.S. companies,’ said Harry Moser, president of the Reshoring Initiative, an advisory group for U.S. companies interested in returning foreign manufacturing operations to the U.S.” READ MORE
HUMAN RESOURCES
More businesses are looking to hire job candidates with criminal backgrounds: “Some organizations that advocate for employment for people with criminal records say the current labor shortage has led to more interest from potential employers. In a survey of almost 900 human-resources professionals by the Society for Human Resource Management Foundation that concluded in January, 46 percent said they recruited people with criminal records more often than they did a year ago. ‘There’s so many employers that are desperate to hire workers,’ said Mark Drevno, the founder and executive director at Jails to Jobs Inc., a Lafayette, Calif.-based organization that helps people with criminal records find jobs. ‘It makes economic sense and so that’s why it’s on their radar I think.’”
“About 600,000 people are released from federal and state prisons annually, according to the Justice Department. And just having an arrest record can hurt people’s employment prospects, even if charges were dropped.”
“The Second Chance Business Coalition—a group of companies that work to share best practices on hiring people with a criminal background—was formed in 2021 with 29 companies and now has more than 40.” READ MORE
THE ECONOMY
Americans are running low on personal savings at just the wrong time: “In June, according to data from the St. Louis Federal Reserve, personal savings hit $555.7 billion, the lowest since the trough in August 2009, in the teeth of the financial crisis. The latest figure, in August, was $652.8 billion—not that much higher. In comparison, in April 2020, U.S. savings reached a peak of $6.42 trillion—an artificial peak, admittedly, driven by sudden covid lockdowns that constrained consumer spending, and by the three waves of stimulus payments issued by the government the previous month.”
“The slide since a second peak, in March 2021, has been prompted both by a renewed ability to spend—as lockdowns eased—and by high prices resulting from supply chain snarls and other factors.”
“All through this year, consumers have had to dip into their savings to counter these headwinds. In June, the personal savings rate was 3 percent, the lowest in 14 years.” READ MORE
TECHNOLOGY
The metaverse is off to a slow start: “Last October, when Mark Zuckerberg, the chief executive of Facebook, announced that the company would change its name to Meta and become a ‘metaverse company,’ he sketched a vision of a utopian future many years off in which billions of people would inhabit immersive digital environments for hours on end, working, socializing, and playing games inside virtual and augmented worlds. In the year since, Meta has spent billions of dollars and assigned thousands of employees to make Mr. Zuckerberg’s dream feasible. But Meta’s metaverse efforts have had a rocky start.”
“The company’s flagship virtual-reality game, Horizon Worlds, remains buggy and unpopular, leading Meta to put in place a ‘quality lockdown’ for the rest of the year while it retools the app.”
“Some Meta employees have complained about frequent strategy shifts that seem tied to Mr. Zuckerberg’s whims rather than a cohesive plan.”
“‘The pressures Meta’s business is facing in 2022 are acute, significant, and not metaverse-related,’ said Matthew Ball, an investor and metaverse expert whose advice Mr. Zuckerberg has sought. ‘And there is a risk that almost everything Mark has outlined about the metaverse is right—except the timing is farther out than he imagined.’” READ MORE
THE 21 HATS PODCAST
Seth Goldman Brews Another Ice Tea: In a special bonus episode, Goldman talks about getting the disappointing news that Honest Tea, the brand he built and sold to Coca Cola, was being discontinued—and how it took him about two weeks to decide to create another tea business, Just Ice Tea, to fill the shelf space that Coke was vacating. Along the way, Goldman talks about why it made sense to sell a mission-driven business to a soda company, what he wishes he had done differently in the sale, what he’s been doing since leaving, and whether he’ll end up selling this business to Coke, too.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren