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Why Is It So Hard to Get a Plumber to Call Back?
Is it the labor shortage? Or are small businesses just failing to seize an opportunity?
Here are today’s highlights:
Meet the J. Robert Oppenheimer of Barbie.
Ami Kassar is still struggling with a big decision: focus or diversify?
Want more job candidates? Drop the drug tests.
Toast’s 99-cent online order fee is already toast.
Is the labor shortage an excuse for not calling back customers? “The water stain on the ceiling is growing, and the plumber won’t return repeated phone calls. The air conditioner died, and the HVAC technician is a no-show. A new car-charging outlet in the garage must wait until September, the electrician’s first available opening. Why is it so hard to hire a skilled tradesperson? There is blame to go around. Small businesses are strapped for resources. Homeowners are unwilling to pay enough to make the job worth taking. There is a shortage of workers.”
“The skilled-trades industry continues to experience high demand for workers, with job openings far outpacing the supply of qualified workers to fill them, according to an analysis by PeopleReady Skilled Trades, a specialty job-placement company.”
“‘I hear it all the time, business owners who say, You can’t find anyone [to work] these days,’ says Jesse Kuhlman, owner of Kuhlman Electrical Services in Greater Boston. ‘My question to them is, What are you doing to recruit? What are your benefits? What do you pay? Do your employees like working for you?’”
“Kuhlman, whose company is independent, employs four full-time staffers just to take calls and schedule job estimates. In January, he installed a new customer-relations-management system that provides tracking data. Eighty-eight percent of the customers who call for an estimate end up booking one, Kuhlman says.”
“Of those, 50 percent hire a Kuhlman electrician for their job. ‘That 88-percent call-booking rate is critical, otherwise you’re throwing money away,’ he says.” READ MORE
The entrepreneur who created Barbie and changed the world: “In 1945, one of the most influential figures of the past century was building something explosive that would change society forever, the subject of a blockbuster movie that opened this week. It’s not ‘Oppenheimer.’ The J. Robert Oppenheimer of Barbie was Ruth Handler, a workaholic entrepreneur with red lipstick and a pink Thunderbird convertible, and she was a groundbreaking figure worthy of a biopic of her own. As men were testing atomic bombs in the desert, this woman was starting her own company in a garage. And the most popular doll in history wasn’t even her most valuable idea.”
“In the early days of Mattel, the startup that Handler founded with her husband that would become the world’s biggest toy company, she made a series of bold decisions marketing something called a Burp Gun that led directly to Barbie, the ‘Barbie’ movie and the entire Barbie industrial complex.’”
“Handler broke the rules of her business in three ways: how she sold toys, when she sold them and who bought them. She realized before anybody in her industry that parents weren’t her target demographic. Children were. She also revolutionized her business by spending an incredible amount of money to advertise on television shows all year round.”
“She also broke the rules in ways that weren’t exactly legal. Handler and other Mattel officers were charged by the Securities and Exchange Commission in 1978 with various white-collar financial crimes, including fraud and false reporting. She was fined and sentenced to community service after pleading no contest.” READ MORE
Ami Kassar is still struggling with a big decision: “As I sat down to write a column on my dilemma, it struck me that I had written on this issue previously. And sure enough, on April 5th of this year, I wrote a column entitled, ‘Is Now the Time to Focus or Expand?’ Along with being reminded of my poor memory, what struck me the most about this realization was that the problem weighing on me back then is precisely the same problem weighing on me now. In the three months that have passed, I have not moved the needle.”
“My most challenging decisions are around what I call the ‘diversification paradox.’ Do we focus efforts and energy on doubling down and doing more of what we are good at? Or do we work to add some new product and service lines to our offering?”
“As the CEO of a consulting business, I spend a lot of time looking at the issues other entrepreneurs are confronting. And because I am on the outside, it often seems clear to me what these entrepreneurs should do. But when it comes to my own business, it’s not always so clear. I often need help to see through the trees and make a decision.” READ MORE
We’re still figuring out what the pandemic did to the labor market: “Remember the ‘she-cession’? What about the early-retirement wave, or America’s army of quiet quitters? For economists and other forecasters, the pandemic and post-pandemic economy has been a lesson in humility. Time and again, predictions about ways in which the labor market had been permanently changed have proved temporary or even illusory. Women lost jobs early in the pandemic but have returned in record numbers, making the she-cession a short-lived phenomenon. Retirements spiked along with coronavirus deaths, but many older workers have come back to the job market. Even the person credited with provoking a national conversation by posting a TikTok video about doing the bare minimum at your job has suggested that ‘quiet quitting’ may not be the way of the future — he’s into quitting out loud these days.”
“But the big takeaway from the pandemic recovery is simple: The U.S. labor market was not permanently worsened by the hit it suffered. It echoes the aftermath of the 2008 recession, when economists were similarly skeptical of the labor market’s ability to bounce back — and similarly proved wrong once the economy strengthened.”
“‘The profession has not fully digested the lessons of the recovery from the Great Recession,’ said Adam Ozimek, the chief economist at the Economic Innovation Group, a research organization in Washington. One of those lessons, he said: ‘Don’t bet against the U.S. worker.’” READ MORE
As more states legalize marijuana, more employers are opting out of testing: “Across America, attitudes toward marijuana in the workplace are shifting rapidly as more states legalize it and even create protections for off-hour usage. Some employers are dropping THC from pre-employment drug tests, while others are taking a more lenient view when job candidates test positive. Other companies — especially in industries such as manufacturing that are strapped for talent — are advertising that they don’t require a drug test at all in hopes of luring applicants.”
“Brenda Buyce, a human resources manager for assisted-living facility Park Village Pines in Kalamazoo, Mich., said drug testing for THC was eliminating a lot of good job candidates, especially young people. Though recreational use is legal in Michigan, the state-licensing authority does not permit Park Village Pines to hire anyone who tests positive for marijuana. So in May 2022, the facility simply stopped testing for it.”
“Kate Bischoff, Minnesota-based owner of employment consulting firm k8bisch, said she’s also seen a shift in manufacturing. On a drive from Fargo, N.D., to Bismarck, N.D., a few years ago, she saw a billboard advertising that a manufacturer didn’t test for marijuana. North Dakota allows medical marijuana use but not recreational use.”
“‘There’s nothing to do between Fargo and Bismarck, so I called them,’ she said. ‘They said they saw about a 20-percent increase in applications’ after advertising the no-test policy.” READ MORE
An unprofitable software business has decided to drop a fee it imposed on restaurant orders: “Toast is abandoning its new 99-cent online order fee after less than two weeks, amid pushback from many of the restaurants that use its software. Chief executive Chris Comparato said imposing the new fee, which was mandatory on online orders over $10, was a mistake. ‘While we had the best of intentions — to keep costs low for our customers — that is not how the change was perceived by some of you,’ Comparato wrote in a message to restaurant owners. ‘We made the wrong decision and following a careful review, including the additional feedback we received, the fee will be removed from our Toast digital ordering channels.’”
“The Boston company, which is under pressure from Wall Street to eliminate persistent losses, imposed the new fee starting on July 10. The fee was lumped in with taxes on each order and not clearly visible to consumers unless they clicked a button for more information.”
“‘The bigger story here is the pressure they are feeling to get to profitability,’ analyst Eugene Simuni at MoffettNathanson Research said. ‘This is a tricky period for the business when they need to simultaneously maintain high rates of growth and achieve profitability. Hence experiments like the 99-cent fee that might not pan out.’”
“Restaurant owners were concerned that the new fee, coming amid a period of high inflation, would anger their customers. And Toast did not offer an option to allow restaurants to cover the fee themselves.” READ MORE
The biggest winners of the new climate law have been foreign companies: “The Inflation Reduction Act has spurred nearly $110 billion in U.S. clean-energy projects since it passed almost a year ago, a Wall Street Journal analysis shows. Companies based overseas, largely from South Korea, Japan, and China, are involved in projects accounting for more than 60 percent of that spending. Fifteen of the 20 largest such investments, nearly all in battery factories, involve foreign businesses, the Journal’s analysis shows. These overseas manufacturers will be able to claim billions of dollars in tax credits, making them among the biggest winners from the climate law. The credits are often tied to production volume, rewarding the largest investors.”
“The climate law is designed to build up domestic supply chains for green-energy industries, but the reality is that the technology for building batteries and renewable-energy equipment resides overseas. The incentives are leading these companies to invest in the U.S., often alongside domestic businesses.”
“‘It’s a testament to the fact that we still live in a globalized economy,’ said Aniket Shah, head of environmental, social and corporate governance—or ESG—strategy at investment bank Jefferies. ‘You can’t just out of nowhere put up borders and say, It has to be made in America by American companies.’”
“Forecasters estimate the climate law could unleash some $3 trillion in total clean-energy investments over the next decade. U.S. companies are also investing heavily, including Tesla, solar-panel maker First Solar, and hydrogen producer Air Products and Chemicals.” READ MORE
Here’s how a Fresno, California-based startup designed to help struggling cities went bust: “The company, Bitwise Industries, started with a grand vision. The founders, Jake Soberal and Irma Olguin Jr., promised to uplift marginalized communities and change the narratives of underestimated places, like this hard-luck city in California’s Central Valley. Over the years, the two co-chief executives had transformed Bitwise from a small coding academy into an ascendant player in the technology world, with some 900 workers, offices in eight states, high-profile investors, and a valuation of several hundred million dollars, all while cultivating a company culture based on inclusivity and progressive values.”
“Late on Memorial Day, over a glitchy Google Meet call lasting six minutes, Soberal and Olguin delivered the death knell for Bitwise, citing ‘some extremely adverse financial events’ that forced the company to furlough all of its workers, including the two of them.”
“This call, the last time the founders would address their company, was an earthshaking moment for a workplace whose leaders inspired so much loyalty that several employees shared matching tattoos with Olguin. In the weeks since, an alarming picture of the final months of the company has emerged, one rife with warning signs and red flags: bounced paychecks and missing 401(k) contributions, delinquent property taxes and profligate spending.”
“‘We were hoodwinked,’ said Fresno city councilman Mike Karbassi. ‘It is alarming to me how many people bought into the hype. Bitwise used those people. They capitalized on them. They rode this wave until the very last second and hung people out to dry.’” READ MORE
Leaders of owner-operated businesses nationwide are gathering: Now in its fourth year, the Catalyst Summit is taking place on September 7th and 8th in Portland, Oregon. Created by our 21 Hats Podcast regular, Shawn Busse, the event has been designed as a way for you to connect with other visionaries, engage in insightful conversations, and uncover opportunities in your businesses. The theme for this year’s summit is “Bold Type” — and will explore what it means to be bold in business, how other owners have led boldly, and what you should put, “in bold,” at your organization.
The event is designed specifically for owner-operated businesses and the leaders who run them. No salespeople, no solicitors — just peers all facing the same challenges, ready to learn from each other.
The agenda is chock-full of impressive speakers and panelists, including leaders of Inc. 500 companies, "Best for the World" B Corps, and longtime 21 Hats listener, Karla Trotman!
Early Bird Pricing ends July 31st. LEARN MORE
THE 21 HATS PODCAST
Is anybody listening to me? This week, Shawn Busse, Paul Downs, and Jennifer Kerhin talk about the challenges of communicating with employees, especially in the post-pandemic world. It’s hard enough to get aligned on mission and vision, but how do you connect with an employee you’ve never actually met in person? Is that even possible? We also discuss Jennifer’s realization that she has over-performed on sales but under-performed on marketing, which is part of the reason she’s re-doing her website. “I need a higher level of prestige,” she tells us, “so, better copy, better photographs, an all-around more sophisticated look. What we had was mom and pop. You know, Wix.”
“Plus: the panel tackles a question posted on the small business subreddit: “How large can my margins become before I'm ripping off my clients?”
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Thanks for reading, everyone. — Loren