On-Demand: Pivoting During the Pandemic
- Feb 9, 2021
Our panel of dynamic entrepreneurs and advisors discussed how they have pivoted successfully during the pandemic.Our panel of dynamic entrepreneurs and advisors discussed how they have pivoted successfully during the pandemic.
Good afternoon everyone. My name is Nkrumah Pierre, director of business development at EisnerAmper and also, head of the Friends of the Firm program. Today, we have a dynamic panel. We have two panelists. Two dear friends, Brett Dearing and Sharene Wood. I'd like to first say, thank you to each of you for joining us and we're excited about the conversation. First, I'd like to open up and say, and reiterate that right now, is a super sensitive time. We're about one year into the pandemic. It's a tough time for each of us working from home. Parents like myself are having internal daycare programs taking care of your kids while working. It's a super difficult time. We must not only be compassionate but also empathetic during this time.
Nkrumah Pierre:Many of us have friends, colleagues, business contacts, clients and/or family members who've been infected or even lost their lives due to COVID. Our thoughts and prayers go out to each of you. Each of you who have lost a loved one and we thank our doctors, our nurses, our medical professionals on the front lines as well as those who continue to deliver our packages, our mail, and help us continue our lives daily. I'd like to also say our prayers and blessings to Sharina who actually was unable to join our panel today due to a loss in her family. So, we are keeping her in our prayers. Now, switching to our panelists, Shay, we'd love to hear about your background and introduce you, welcome.
Sharene Wood:Thank you. Thank you so much. My name is Shay Wood. I am a lifestyle entrepreneur. I have several brands that are around lifestyle, arts and entertainment. My first business is 5001 Flavors, a custom clothing company catering to various personalities in the entertainment industry. We make custom clothes for tours, award shows and appearances. We expanded into Harlem Haberdashery, our retail boutique, uptown in Harlem at 245 Lenox and we proudly expanded from that business to HH Bespoke Spirits three years ago by launching a curated collection that includes a rum, a gin and a vodka.
Nkrumah Pierre:Shay thank you so much and as a fellow Harlemite, I love your businesses and Harlem Haberdashery. I've also, actually, I found out that a friend of mine, gifted me one of your liquor brands, so I've supported it in many ways, so good to see you now that you're joining. All righty, my man, Brett, dear friend, client. I mean, we ride together. We used to hang out together, pre-pandemic. The floor is yours.
Brett Dearing:We literally ride together. Yeah, listen, I want to start off by first saying, I appreciate the opportunity, Nkrumah today to speak about something that I think has affected all of us. For those that don't know me, my name is Brett Dearing. I've been in the industry for about 30 years. I have been working with privately held and family owned businesses for the majority of that time in some form or fashion. Started my career at Goldman Sachs sitting across from business owners as they were deciding to sell their business and quickly understood and realized that business owners were not prepared for that moment and spent the next decade to almost 15 years, trying to find a way to align myself, my services and my experience to be able to help family owned businesses and business owners benefit from that experience.
I'm a partner at a firm called Cerity Partners. It's a registered investment advisor. We have about 12 offices across the country, based out of Chicago. We have two offices in New York. We have about just under 30 billion dollars in assets under management. We're the 10th largest registered investment advisory firm in the country and I head up their business owner advisory group, focusing on and working on helping business owners through growth strategies, succession strategies and/or helping them get their businesses prepared for transaction. So, I've had a chance to see firsthand how the pandemic has impacted business owners and it'll be an interesting discussion.
I look forward to sharing some of those comments with you as well. So thank you Nkrumah for having me on today's webinar.
Nkrumah Pierre: Brett, no problem, Shay, thank you so much. Let's get the party started. So I will kick off the first question. So, each of you both are savvy within your respective businesses. You both work with business owners, entrepreneurs and other small businesses. I guess the first question and Shay, I'll direct it to you first. How do you help entrepreneurs/small businesses and also middle market business owners? So I'll repeat it again, how do you help entrepreneurs and small businesses, in addition to middle market business owners?
Sharene Wood:Well, first, let me say that I definitely need Brett's services. That was a dynamic introduction. So Brett, we have to connect offline because I'm definitely someone that needs your help. So for me, collective resources is absolutely what we need during a pandemic. I didn't realize there was such a need to collectively work together, economically, helping each other with information. So the way that I help entrepreneurs is definitely by supporting them, promoting their goods, promoting their services but also, like I said sharing collective resources. There is tons of ways to support, that's liking comments but there's also purchasing their goods and using their goods when you're gifting.
Using their goods when you have corporate gifts that you're given. As a small time entrepreneur, I didn't realize that the mom and pops, that the restaurants are always a few months away from closing if they don't get the constant business. So the way that I also support is to change the business model that we are operating in because there's a new business norm that's coming and it's not going to just be what happened before. So we all have to unfortunately, switch, pivot and move, do something different and diversify. So as I'm helping other business owners, I'm also helping myself kind of learn what's the new normal that's coming.
There are tons of different funds that I support. There's a Black Businesses Matter Fund by Sage Digital that I'm a part of that also benefits other businesses in a community. So I'm very active in helping everyone sustain and stay relevant and stay in business, that is most important for small businesses, uptown Harlem, especially
Nkrumah Pierre:Shay, thank you. Brett, your thoughts?
Brett Dearing:Yeah, what's interesting, I mean, if you think about the types of business owners that I've worked with, on a regular basis, I would say the majority of my owners are privately held, family owned, kind of mid-market companies. Most of them are baby boomers, well into their mid to late 50s, early 60s. They've realized in some form or fashion that the next generation does not want to take over the business. I think for a lot of business owners, that's something that's difficult to understand and so, they struggle with that. Once they make that transition, the conversation then becomes, "Well, Brett, what do I do from a transition perspective with my business?"
I want to enjoy my grandchildren. I want to start transitioning, so the services that I offer candidly are really focusing in three key areas. First and foremost, helping them around growth planning and strategy, right? So what are the operational components and efficiencies that they need to maximize their business, most importantly, maximize revenue, and maximize the efficiency of their overall business model which has been tested by a lot of different business owners based on the pandemic. The second thing that I focus on is succession planning. So maybe they don't want to sell their business today. Maybe they want to sell the business over the next three to five years.
What a lot of business owners don't really understand is it takes about two years to properly prepare a business for an exit and an exit defined by us is where the business owner completely sells to either management, sells to the employees via an ESOP or they sell to a third party purchaser, right? So, there's a lot of things that need to get done. Just like when you sell your house, a lot of cleaning, a lot of painting, a lot of kind of fine tuning to make sure that you maximize that dollar. Then, the third area of service that I focus on is transaction services. So, not necessarily being an investment banker, but sitting on the same side of the table as the business owner, and being that project manager and that point person for them, to help them move through that process.
A lot of times business owners fail to realize that there's probably five to six people at any one time, that's a part of your transaction team. So, business owners have to continue to run their business. So, for them, it's very distracting to have all of these individuals needing information and always being a part of that process. So for me, I sit down and I work with the business owner, help them come up with a plan for transition, make sure that from a tax planning perspective, we're maximizing those proceeds pre-transaction or post transaction, excuse me, but a lot of that work takes place before they even get to the table and have that discussion with a potential buyer. So that's where I spend the majority of my time.
Nkrumah Pierre: Brett, thank you. You mentioned selling a home. I'm in the midst of selling and buying a home, right and I couldn't agree with you more, that touch up, right? That painting and cleaning up just to make sure you get that top dollar, you're totally right. The same thing happens when selling a business. Shay, you mentioned something that really struck a chord with me, and you mentioned a lot of the restaurants and small mom and pop businesses are two to three months away from potentially going out of business, if the clientele does not continue to come through the door. I know you have a beautiful brick and mortar store in Harlem, which I've been to. Could you touch on, I guess some of the strategies that you've had to use in this current time, during the pandemic to really pivot your business?
Sharene Wood:Well, before there was a strategic pivot, there was a little bit of a panic and I'm speaking for myself because before I'm an entrepreneur, I'm a mom, I'm a wife, a daughter, a sister. My mom had just gotten over a medical emergency and was home and had been in a rehab facility for three months in 2020. So before you can sit down and have a really intelligent conversation with yourself and your team members, there's panic. What's going on with the world? You're worried about your employees, you're worried about your customers. The day to day for a business entrepreneur is to maximize your productivity and your profitability and when you don't have those impressions, and those, people coming through the doors and contributing in the profit to your business, you're at a standstill.
I think every business owner, unfortunately, had to ask themselves very hard questions about the stability, the health of their business. Most of us are taught to have a large sum of money for a personal emergency but I can guarantee you that most small businesses do not have a year's worth of expenses to cover. We were closed for three months, and we were home for three months. For a small business owner, fixed expenses do not stop and so not having any income in was terrifying for me and for other businesses. So, like I said before you pivot and before you have that moment, there's a slight moment when you panic, because what you knew as normal is no longer.
For my main business, which is the custom clothing company, the entertainment industry was closed, so there was really nothing to do. There was nothing to pivot. There were no clients, there were no calls. There were no tours, no concerts, no possible concerts coming up. For our clothing store, we really already had the design intelligence because of our custom clothing, business and the manufacturing capability to really pivot and to make them PPE for the state, for the city and for local organizations. We already have manufacturing capabilities because we make custom clothes and so it's just a matter of sourcing, medical grade PPE. We did that through our 501 C3 organization, Take Care of Harlem and we're really able to partner with some pre-existing community partners to get them PPE that they needed.
They were underserved and did not have access so we used our manufacturing capabilities for good so that made us feel good. It didn't make us a lot of money but we knew that we had that capability. Ultimately, our HH Bespoke Spirits actually expanded and we were able to really built some great strategic partnerships, because everybody was home after the panic and everybody needed and wanted a liquor, so that expanded for us. So in the midst of tragedy of COVID, there were actually some great expansion opportunities that I didn't know existed but before there was a pivot, there was a panic and I'm glad to say that we're coming out of the pandemic, a lot more strategically partnered and looking forward to what's coming up in 2021.
Nkrumah Pierre:Shay, thank you and I appreciate you being so honest, right? So you're totally right and I think all three of us on this call, and probably a lot of our listeners and viewers can attest to the fact that we all panicked during the beginning of this, myself included. I think Brett actually got a call from me when we're running two weeks into this and I was like, "My brother, what are you doing, because I don't know how I'm going to sustain myself at my firm." So, we all have that moment, right, and then of course, as you mentioned, being a mother, a daughter, a sister, a wife, right, each of us have our families as well and listen, my son can't see me panic, right?
My wife can't see me panic. I don't have a choice. I have to figure it out and each of us have, so I appreciate you being so honest. Brett, we'd love to hear your thoughts.
Brett Dearing: Yeah, you know, it's interesting. I mean, I think the panic for me, from my perspective was that, in a lot of cases, when I'm working with business owners, I'm in their offices. I'm in their manufacturing plants. I'm somewhere deep in the bowels of their business. So, when the pandemic hit the first question, I always ask myself is well, how am I going to do that? What I will fast forward and say, on my behalf from my business is that the last four clients, that we've brought on have been clients that I've never met face to face. So I think that in itself is where the real change is in the pivot, which is getting comfortable with kind of what I can call this, kind of virtual agility.
Being agile around the virtual element of your business and allowing people to get to know you and understand who you are and what you represent from a firm perspective, from a company and services perspective, virtually. I think a lot of us say, "Well, yeah, that's common sense Brett, I get that," but the question is, do you really because that's going to be the most important component moving forward for a lot of us, especially if you're in some type of consultative practice where you're working with individuals that you're never, not never, but you're not going to have an opportunity to see or meet them over the course of the next, 30, 60, 90, maybe even 120 days.
So, you need to take that into consideration. What I would say, from my perspective, what are the three things that I've noticed with business owners that have struggled, because I think it's important to share that as well is their ability to create and be virtually agile, right? I think a lot of business owners feel like, "Hey, my staff has to be in the office every day”, you've gone from that format and from that mindset to, literally in one week. That's it. No one can be in your offices, and now, there's a liability, right? Where there's a potential opportunity for somebody to contract COVID in your business. So what are some of the components from a liability perspective that now you have to focus on?
So that's been an area that I've been working with business owners around their COVID planning and what their protocol is, right? If New York State knocks on your door and ask you for your COVID protocol, the last thing you want to say is what is that, right? So there's some liability pieces that you need to start piecing together to make sure that your business is safe, but also your employees are safe but you're able to do it in a way, in this kind of new kind of pivot that we're seeing from a liability perspective. I think the second is the ability to reimagine your business model. What I find with a lot of owners, and maybe because they are baby boomers, is that they have this reluctance to reimagine what their business model should look like moving forward.
They want to stay on the same path and the same strategy and everything that we're seeing today based on facts, based on what we're seeing in the economics, the economy, what we're seeing from a business factor perspective points to, the norm that we've noticed for the last two, three decades is gone. So, what are some of the things that you need to do to help yourself reimagine what your business is going to look like post COVID? I think, that was one of the things that Shay was talking about as well, which is having to sit down with her team and say, "Okay, what do we look like moving forward based on the pandemic and that that pivot?"
Then, I think the single one most important thing that I feel a lot of business owners are struggling with, that they're going to have to come to grips with is the ability to sell fund. So looking at your P and L, looking at your profit and loss statement and say, "Okay, what do I need to re-appropriate, to be able to help my business grow out of the pandemic, and reestablish growth rates and revenue?" So, looking at your P and L kind of 2020, looking at it, going into 2021, what are some of the things that you can do to limit the expenses? How can you redeploy cash? How can you redeploy some of the products that you're offering.
If you have products that aren't profitable, then guess what, you may want to get rid of those products and re-appropriate the expenses and cash that you need to lift into other products that are going to be more profitable long term. These are hard decisions, right? Some decisions I think a lot of people don't want to make, just because of the panic, right? If I just sit tight and I don't move, and I just squeeze and close my eyes, this thing is going to pass over me. That's not the case. You have to be proactive in the planning piece and I think that's one of the biggest impacts that I've seen for business owners that are struggling, which is they haven't been proactive in planning.
Those that I've seen been more successful and kind of that hockey stick out of the pandemic are those that are willing to reimagine their business model, willing to plan and willing to really focus on the difficult questions.
Nkrumah Pierre:Right, you dropped so much knowledge, just right there. I don't know where to even pick up but I'll try. So one of the things you mentioned was, the pandemic has forced business owners and businesses to reimagine what it's like to move forward, right? So one of the things, I think of plastic bags, right? Plastic bags in New York City, anytime you went to the bodega, you went to the grocery store, they gave you a plastic bag, right? To my friends who are into ESG, my friends who are into the environment, plastic bags are some of the worst things for the environment, right? They're not biodegradable. They end hanging on the bottom of a bird or in the middle of the street and they're a mess. So obviously, Cuomo and De Blasio made it illegal to have plastic bags.
Those are plastic bag bin and folks are like, "Oh my gosh, what are we going to do? Life is going to end," and no, it was fine. We figured it out. We now have brown paper bags, right? We've pivoted. So I think of that with regard, of course, it's not in the same level as the pandemic, but when you have no other choice but to comply, right, and use the resources that are in front of you, we figure it out. So I guess the question to Shay, then also, I'll pass it back to you, Brett, service providers. So I hear the conversation often, especially now, during the pandemic, folks are like, "Well, you know, I was just so busy before, I didn't have time to think about moving to QuickBooks or upgrading my accountant or my wealth advisor, right?"
Now, we have time where we're sitting and really reassessing our businesses and to your point, Brett, cutting expenses, right? Trying to be more efficient. So Shay, I'll go to you. I mean, what have you done to level up your business during this tough time, maybe from a service provider standpoint, I'm just curious to hear your thoughts.
Sharene Wood: Well, Nkrumah, it's funny that you even mentioned that because that's how you and I met because I really had to have a sit down conversation with myself, and rethink my roadmap for my personal stuff and my business. I had to reimagine post COVID what am I doing, and I was too busy myself to even set up eCommerce. It was something that I'll do later. Then, when the pandemic happened, eCommerce was the only opportunity, the only sales channel I had. So we had to build out a more robust eCommerce during the pandemic, which wasn't ideal but it was a part of my business that I didn't necessarily value as much because we had our retail, it was business as usual.
I think for a lot of entrepreneurs, they did not have the forward vision of what if this ends because you're so egotistical about your brand and the world that you don't really think about, what would you have to do if something changed? I think for fellow business owners, though, the pivot was so hard because they didn't have social media intelligence, they didn't have the ability to understand and creating a network to get out of the pandemic for me was easier because I already had one foot into the social media, I understood what eCommerce. There are some businesses that have not adapted any sort of technology in their business or don't incorporate. Some businesses don't even take credit cards uptown. Some businesses don't understand what hashtags are.
So I've seen some of my fellow business owners not been able to pivot as quickly as we have. I mean, I'm not a millennial anymore. I'm two ticks away from 50 but I'm young enough to understand that if I cannot do what's needed, I have to have a team around me to help me pivot. So I'm very thankful for the younger members of my team that helped me understand what was needed, that kept us relevant and that kept our impressions going and allowed us to employ some of these strategies. So eCommerce was definitely something that we pivoted to, for our HH Bespoke Spirits and we were able to, like I said, strategically partner with a company, ReserveBar.com, that took over our shipping logistics for our spirit business, which is really important because that supply chain being broken was really hard for a lot of businesses to use the shipping system and mail systems.
So we picked up a really great eCommerce partner that took over that part of our business and expanded our territories to about 30 more states than we had access to. So, it really was about building up our capabilities and partnering with other organizations that were able to do services and provide services that we were not able to. The hardest thing is to imagine success in a pandemic, well, we actually did have some success. It was hard, it was different. It wasn't what I planned in January 2020 but it's where I had to go to be profitable and to maximize our impressions.
Nkrumah Pierre:Shay, thank you. Brett. Go ahead, please.
Brett Dearing:It's interesting, because when you think about Shay's commentary, the one word that I would use, not necessarily to sum it up but one word that I think fits into the discussion is transparency, right? I think for a lot of business owners, the pandemic has created a mandatory need to have transparency into their business, right? So if you think about kind of the decision timeline, pre-COVID, business owner makes, decides that they want to make a decision or not, right? They could sit on a decision for 24 months and not have an impact to that business ultimately. It could have some kind of negative impact but nothing that would be to the detriment of the business.
Fast forward today. That timeline is six months. I mean, what we're seeing for a lot of business owners is the time that you have to make that decision, that mandatory business decision is no longer the tails, no longer two years, it's six months, and not only is it not the six months, it's no longer that gut feeling. Well, I feel in my gut that this is the right decision to make. They need to have that transparency around their business so that the decisions that are made, they know exactly what the impact is going to be so that they can benefit from that decision and the only way you can do that is through transparency, and having data points into your business so that you can understand how those decisions that you're making are going to impact your business.
So I mean, I look at the pandemic, and I was literally on the phone before I was here, before we got on the webinar with a business owner and the conversation that we were having, the business owner said, "COVID has been so difficult on my business. It's really caused a lot of issues," and I pushed back and I said, "You know, I hate to say this, but I don't necessarily know if COVID was the element that caused the problems? I know your business and I'd arguably say these issues and challenges were already in your business COVID just magnified those issues within your business. So now the question becomes, how do you address those issues?"
So those are some of the things that I think that a lot of business owners are, to Shay's point, it's kind of that pivot. It's not easy, because you have to almost step back from everything that you know, everything that's almost made you successful, to now incorporating elements that maybe you're not familiar with. Data, key performance indicators, transparency into the business, redeploying your P and L, taking expenditures that you're taking and saying, "Okay, I'm no longer going to make that. I'm no longer going to have that expense, I'm going to redeploy it towards development or another product."
So these are some of the things that I think, arguably, are some of the biggest issues around pivoting but what I would say to everybody is, it's not that bad, right? It sounds bad but it's not that bad. If you sit down and think about what your strategy and plan is for it, and you have a great team around you or a great consultancy of groups, of individuals that can help you, that's important. The last point that I'll make for service providers is the two words that we all love to talk about, but all hate to think about, billable utilization, right? Do you understand what your billable utilization is currently in COVID?
If you don't, you want to start thinking about that, because I can tell you that on average, everyone that's in that position around billable utilization has dropped anywhere between 10 to 22% in just over the course of the pandemic, just because of now working out of home, right, and not having some of that productivity and some of those components there. So if you're a consultant or you're hourly billing, you want to start to think about, and your team is our hourly billing, you want to start thinking about billable utilization and making sure that you truly understand what expenses are rolling up so that you know what your net margin is, when it comes to utilization. So I'll stop there.
Nkrumah Pierre: Brett, thank you. Again, more nuggets. You and Shay both. I'm taking notes here, so I'm running out of paper actually. In terms of billable utilization, here in the accounting world, we call it realization, right? When it comes to how profitable are the hours that we're dedicating to a client or a project. So I guess that's a really good segue with regard to efficiency and I think of myself and our firm, where I'm a salesperson, and my job is bringing as many opportunities to the firm, as many of the right opportunities to the firm as possible. Of course, as a salesperson, I used to travel a lot, right? My expense account, probably, thankfully to the executives at the company, that it's a lot less than it used to be, right?
What I've learned about myself is that I can be so much more efficient with my time, right, if I'm more discerning with my time, before, you could go on a business trip for two days or three days out of state and maybe hope to draw up some business or maybe you'd go to a conference and spend 10 grand and maybe you'd meet a client or prospective client, right? I think those days are days of the past, where you really have to have a compelling reason. If you're going to fly out of state and spend five grand or if you're going to spend $10,000, at a conference, I think you have to really have that business proposition, the value proposition to do that. What I found also is that now everyone schedules calls.
Before, I could just pick up the phone and call Brett. If I call Brett I get a text back on the phone, "Call you back," right? Now everything is all about having it scheduled on the calendar and think about that. I have seven, eight, nine calls a day, they each last half an hour, I also need to eat and go to the bathroom in between and watch my son in between, there's not that many hours left in the day and by the way, yes, thank goodness, I'm sitting at home. So I can take all those calls but what if I had to travel and go somewhere or jump in the car, right? Things would be thrown off? So I guess what I've learned about in this pandemic is one, the power of no, right?
Because not everyone deserves your time. Two, really buckling down and figuring out is this a good use of my time and/or the firm's resources, whether it'd be an investment into a sponsorship or something of that nature. Then, three, adding value, I think the biggest thing, one of the biggest, another big thing through the pandemic I've learned is the power of really good relationships, right? Brett, I've known you for about seven years now and we've spoken more in the past two and a half years than in the previous seven or five, right, like it's just been wild. I love that, so I guess I'll stop talking but just a lot of gems during the pandemic, I guess, I'll leave it at this point where would love to hear your thoughts when it comes to social media efficiency and also being more discerning with your time.
Brett Dearing:Yeah, I think a lot of companies are trying to understand social media and I think you have to be equally as discerning with your social media efforts as you do with your business development efforts, right? Not every like is a good, right? Not every contact is a good contact. Now, if your business is some type of product where you're selling a product and you need broad exposure, that's a whole other question. I'll give you an example, about two and a half years ago, I had probably close to 5000 connections on my LinkedIn. I unconnected, probably about 80% of those connections.
I started rebuilding my LinkedIn with individuals that were either prospects or individuals that would want services, need services or was a service provider that could help service a client, right? Right now, I probably got close to the 3000 but these are all middle market business owners that I have conversations with via, in mail, questions, they'll ask me questions. I think that's the point. It's, don't rush to social media and look at that opportunity as well. I'm just going to broad market because that's not your market. Be specific to who you want to speak with and make sure that you're marketing and I'd rather have 3000 individuals that I know are in my market, that I know understand my services and know that I'm a resource to them, that having 10,000, that have absolutely no business relationship to me, to my firm and/or to the services and how I can help them.
So, it's kind of those elements that you have to think about and I know that's counterintuitive for a lot of people, right? That's not the culture that we're in today, where it's like, "Hey, I'm up here," and that gives me an opportunity of influence. The question I would ask is influence what and how does that benefit you? I don't know Shay, what your thoughts are about that, because you're in a much different business and for you, broad market exposure is key, I'd love to hear your thoughts on that.
Sharene Wood:Well, social media has always been easy for us. We're in an entertainment based lifestyle, industry. So, we understand the value of image and people having the impressions of our clients and our success. So that was something that we did not struggle with at all. I guess for me, as a business owner, there was a lot of magic in being still and a lot of joy in the simplicity of the pandemic for me. I didn't realize that what I was doing was a lot of movement, a lot of action but it wasn't as profitable to me as I thought it was. So, the pandemic allowed me to along with, build a strategy around our brand and reassess our social media presence, it also allowed me to really strategize about what am I doing, and one of our marketing campaigns at Harlem Haberdashery, that I'm trying to build a transferable legacy of business of wealth and brand.
We had that terminology, but I really didn't have the strategies to actually do that. One thing that the pandemic let me know is that you got to do it now. You can't talk about it, it can't be in your plan because you never know. Futures have a way of falling down midflight and I think pandemic was an eye opener, and like Brett said, it was a magnifier, that you got to get it together. Your strategy has to start now and he's right, that 24 months is too long. We don't know what's going to happen. Let's execute now. So I was happy to actually sit down and regroup because I was running around doing too much. My daughter was in a dance class, she was on a Girl Scout, she was on a football game.
I was doing too much with my business, too much planning, not enough execution. Although I know what I wanted to do, I wasn't doing it. So I'm at a place now where of course, I don't want COVID to take over our lives but I'm at a place now where I have a clearer strategy. Before I had the thought of what an exit strategy is that I'm actually preparing that, that is something that is part of my roadmap. Before it was too far off but I do have an exit strategy and I'm trying to get my 25 steps to at least get there. So I am ready, willing and able for the post COVID entrepreneur phase of my life. I'm ready, willing and able to be healthy, and for everyone else to be healthy. So I'm excited about the future and very nervous about the past. I don't want to go back to where I was before.
Nkrumah Pierre:Got it. Shay, thank you. Brett, thank you. We are going to pivot, I guess the key word of today, to some of the questions from the audience. We have a couple so just going to dive right in. First, one is from my executive coach, actually. So hello, how are you? The question is what guidance would you give to entrepreneurs like myself, in the leadership, coaching and consulting services industry, who have had to shift from working with business-to-business, working business to business with larger corporate budgets, to business to consumer, where individuals are much more hesitant to spend out of their own pocket? So I guess I'll try to boil it down a little bit.
Guidance for small entrepreneurs, who I guess used to sell leadership coaching to businesses, where now they're going more to consumers, business to consumer. Who'd like to take that one?
Brett Dearing:I'll start off Shay, if that's okay. I think two things. I think first, maybe re-visit, the ability to go B2B. There's a lot of companies that are out there that may be shrinking their budget but what I will tell you is the biggest dynamic shift for them is maintaining talent and being able to keep that talent at their company. So, I don't necessarily know if it's something that you should stop doing, maybe it's more repositioning so that they better understand that you are a resource to help them maintain and keep their top employees. So maybe it's just a little bit of a re-imagining what that business model looks like for you with those individuals.
I can tell you this is the biggest pain point for a lot of companies, is maintaining, finding ways to maintain their key talent. So, maybe you can use your business model as a way for them as a value add to say, "Hey, I'm here to help service your key executives” and make sure that they know that the company is investing in them, and keeping them as a part of that business. The other thing that I would say is, I don't know if you're doing this now but I would call people like myself, people like Nkrumah, people like Shay and just say, what is the single one thing that you're hearing from businesses, that is a challenge for them?
Try to understand it, so that you can think about how you can position your leadership business so that it helps to overcome those issues. There's no question that leadership at this point is key. There's no question that people need that guidance. The question now is how do you position it in a way where it's equally if not, more valuable now, in the pandemic than it was before the pandemic? I think maybe that's a good question to kick around and think about, and ultimately figure out how to answer. I'm more than happy to sit down and have a quick phone call and help in answering that question, if I can do that for you.
Nkrumah Pierre:Thank you, Brett. Shay, any thoughts?
Sharene Wood:Well, I definitely know that big business and small business, everyone is decreasing their budget output. Everyone is being a little hesitant about spending, even larger corporations, larger stores, even brick and mortars are closing because they don't have the traffic. The second that you realize that everyone is suffering, and that it's not something that you're alone in, that I think we'll all succeed when we realize that we're literally all in this together. For larger corporations, the decreased occupancy, the limited hours, because unfortunately, there are regulations that you have to have COVID hours, which is less than you previously had and everybody was so used to operating at their maximum productivity to get the maximum profit, but because of COVID protocols, even small businesses, you have to scale back on your hours of operation.
You have to scale back about the amount of individuals you have in your company. So big businesses are also feeling unfortunately, the burn of COVID. I would think that the fear in that statement that I heard is that direct to consumer is a different budget and profitability for yourself as a consultant. That is so true. For me, being direct to consumers, they're spending less. They don't want the high end products that are served anymore. So I actually had to diversify our product offering to account for the new casual wear instead of that structured, big statement piece. So the fear is that, yes, we are doing business differently, business is still there. There are tons of great organizations and corporations that are committing a lot of dollars to a lot of businesses.
So I would say to maybe pivot into that space where you are being a resource for people to stay on track, get on track and also understand that business will come back, it'll just come back differently. So instead of being fearful of big business is not there to support you anymore, you really have to figure out a way how to pivot into what big business is really doing because they've changed their focus right now.
Brett Dearing:Yeah, and one last thing I would add to that Shay, that I think just makes great point is business to consumer, that is more of a plug in business model, right? So, think about creating an educational platform, right? Think about creating multiple educational platforms that people can plug into. So, A, it becomes scalable for you. Again, a lot of work that you have to do to kind of build that and understand what platform you want to use. Now, it gives you the ability to really have people plug in and kind of ala carte, what they're looking for, right? It allows you to be a lot more personable to those individuals, but it also allows you to now mass market to a demographic that would be interested from a consumer perspective, around what you're offering and guidance.
There might be some other components around retooling and what do you need to retool to become more valuable in the marketplace, right? So there's a lot of dynamics that are happening to Shay's point that I think you can really focus on that can help you, in my mind, I look at it and say, "Not only just focus on the individual but also continue to focus on those businesses." They're dropping their budgets but it's equally more important to them to keep what they have and not have their top talent being pulled away from other firms and I think you could be a great way for them, to use you to keep that from happening.
Nkrumah Pierre:Yeah, I couldn't agree more, Brett and Shay. I think two things that actually come to mind hearing both of you speak and then also obviously, knowing Robbie because she's my coach, is that budgets getting cut but they're not going away, right? So even our marketing budget has been cut tremendously, but it's not zero. So again, back to the original point, I think earlier, we had mentioned, making that business case or that value proposition for moving forward with an investment or a sponsorship, I think the same thing holds true here. Then, also and we can speak about this offline, maybe doing a blend, right? Maybe the company, they can supplement the cost and the consumer, a person like myself or another executive can pay the other portion, right?
So maybe the corporation pays two thirds and the consumer pays one third, so I have skin in the game, right? Both parties have invested, that might be a solution. All righty, going to question number two, we have more questions coming in so that's good and feel free to use the widget to add your questions. My friend, Calvin, hello. His question is, "Does your company or do the companies you work with utilize outside board members to make key decisions on pivoting their business and strategies going forward?" I'll repeat that. Does your company utilize outside board members to make key decisions on pivoting their business and strategies going forward. Open mic, feel free to jump in?
Sharene Wood:Well, I'll start on that. So my brands are founded by myself and my husband, he's my business partner, so my board members are all family members. I would love to say that we all have a vested interest in our brand, as I say our goal is to build generational wealth. I work with my brother, my other kids and other family members and our job really is to figure out what is the best strategy for our brands. So I would love to say officially, it's a board but we are all building our own separate brands, so what we've done is we've had all brand strategy meetings where the goal really is to help each other. I've done this with other businesses also.
I always said that I was going to form an advisory board to help me make key decisions, it never materialized so my all brand meeting was with each member of my team, my employees to go over what's working for the brand, what's working for you because that's important. I think the pandemic absolutely made me start to think in a more human aspect of what's needed in everyone's lives to succeed. Are you safe? Are you financially secure? We've even had conversations about that. I think most entrepreneurs realize that their profit and loss was kind of a fairy tale because when you stop coming in, the hard conversation to have with yourself is, was I really making as much money as I thought I was.
So, as much as I would love to have an official board, it really became kind of a personal decision about what am I doing moving forward?
Brett Dearing:Yeah, I would say that if you think about what we call through-cycle outperformers, right? These are companies that consistently were able to, from a revenue perspective, outperform and growth during pandemics, during the recovery phase. These were companies that were able to consistently outperform other companies and competitors in their perspective or respective space. What I will tell you is one of the things and one of the reasons why these companies were able to do that is because they had a formalized advisory board to Shay's point. The formalized advisory board, the way that you build those are you build those with individuals that have a few things. First and foremost, they have connections in the sectors and areas that you want to build and grow your business in, right?
So they're there to help you with business decisions, Calvin, but they're also there as a resource to you. Another potential advisory board member is somebody who's done what you've done, has been successful at it, has maybe even sold their business, doesn't want to go back to working, 80 to 120 hours a week but wants to help a company like yours based on their experience and expertise and their Rolodex. That's another advisory board member that you want to look at. Then, the other component would be somebody that has the operational efficiencies and expertise to be able to help you answer those difficult questions in growth periods and also in disruptive periods, right?
So, if you think about the impact of an advisory board to a business, the three years after formalizing that advisory board, businesses that had that advisory board grew their business anywhere from 12 to 22%, annualized over the next three years after formalizing their advisory board. So this is something that and quite candidly, only 30% of privately held businesses have formalized advisory boards. So to answer your question directly, Calvin, yes, it's a great way for you to be able to, it takes a little bit of time and there's a little bit of effort to formalize that and do you pay and do you not pay, and there's some elements there.
The difference between an advisory board and a committee or a board of directors, right? So there's some components there that you want to make sure you differentiate. I'm more than happy to help with that but I would say, to Shay's point, now is a great time to have that discussion. Even if you're just finding one or two people that you can incorporate into an advisory council now, to help you with those questions just gives you an opportunity to triangulate in your decision making.
Sharene Wood:One thing I can add is that I think as an entrepreneur, what has limited me has been my non-access to resources and opportunities and strategic partnerships. So I realized what I was doing was keeping myself small by not allowing my brand, that opportunity to get a view outside of myself. Sometimes as entrepreneurs, you're very emotional, you're attached to your business and you see it almost as your child and you don't really think about the bigger picture. I think that what I realized is that I was limiting myself, the growth, the profitability, the access to resources and it's better to have many people speaking your name and branding yourself.
So, for me, I think COVID gave me a wider vision of what I need to do for myself, and how I need to expand my brand. So, that's where I'm moving and so, I've made a lot of reach, strategic connections and contacts that are going to help me amplify my brand and so that I'm not the only one whispering it and I think a board is a great place to start and good luck.
Nkrumah Pierre:Awesome. Shay, thank you. We got to connect through Colin and the good banks. So, I'm so thankful for that connection and your store is five blocks from my home, and we had never met but a lot of my friends know you. We have similar contacts. So I'm glad we got to connect. I'm very thankful for that. We have one more question from the audience and then, we're going to do a quick fire round with regard to some quick tips from each of you, and then we'll wrap up the panel. So thank you all for your patience and for your contributions. This one question is from Harvey. It's directed at Brett but I'd love to also hear from Shay as well.
The question is many generation one business owners, reluctant to share their financial situation with the next generation and if so, how do you overcome this? I'll repeat it. Do you see many generation one business owners reluctant to share their financial situation with the next generation and if so, how do you overcome this. Brett, to you first and then to Shay.
Brett Dearing:hat's a great question, Harvey and that question, lets me know that you're definitely in the wealth management business. So you understand this, right? So the answer to that question directly is yes. I've had conversations in conference rooms with business owners, and they've had two sons that have walked out and they've said, I don't care what you do Brett but no matter what, don't let my two children have this business, right? There's definitely this wall between financial privacy with gen one of the business owner and gen two. So, what you can do, I mean, you're in a great position because really what you are, is the interface between the business owner and that next generation and the interface that you're utilizing is education, right?
So the answer to the question is, how do you overcome it is through education, through educating that second gen around kind of what the first gen has done to create that business? What's the mission statement for that business? What's the mission statement for the family? What do they want to do with the proceeds, right? So it's not just about the money. It's about what are you going to use the money for when you receive it? So, when you start having those types of discussions with both the generations, you start to create that connective tissue between the first generation who is trying to figure out why the second gen doesn't want the business.
The second gen who goes, "You know what I understand kind of what the mission is and the purpose, and now I can utilize that as an opportunity from my perspective to take, maybe not the business, but take the proceeds from that business and direct it in the same way that maybe the first gen does." Harvey, you're in a really good situation, to be able to assist business owners with that. I would just say the challenge is getting them in a mindset where they're open to hearing that discussion. That takes a bit of time but it's through education and you can help them with that.
Nkrumah Pierre:Excellent, Brett. Thank you and Shay, I know your business, you have family members involved. So I'd love to hear your thoughts.
Sharene Wood:So I am definitely generation one business owner. I think the hesitation is probably that generation one is visionary and have not made it as much, maybe one of the things they haven't made as much progress as generation two, think they should have. They don't have a blueprint. So for me, as a first generation business owner, I'm trying to work through bad habits, not knowing what I'm doing but building a brand and haven't be successful on the forefront, but maybe not as successful in the profitable area. So there's a lot of different hesitations for me as a business owner to pass on my business because one, people don't have the passion that generation one have.
Number two, the new generation didn't necessarily work as hard and create something out of nothing, so you're kind of very protective, you felt like this is like you said, your child that you've nursed and you've birthed, when other people tell you don't, you're not worth it, it's not going to happen. So there's a lot of emotion involved with working hard. Then, having someone else come in and not be interested or someone come in and change your vision and I do think, for me, if that's my goal is to transfer my business, my trademark, my network, you do have to be more open and I'm glad there are people like you that can bridge that gap because the worst thing I would want to do is even as a generation one, trying to figure out is lose all of my hard work to not planning or not someone taking it over. So I hope that helps.
Brett Dearing:Great answer.
Nkrumah Pierre:Awesome. So we are close to the end. I know we could probably talk for another two hours, but we got to go. So I guess we'll go to the lightning round and the lightning round is the question, and you can add additional thoughts as well but the question at the heart, what is what is the most important thing you learned during this pandemic from a business standpoint? Brett I'll go to you first and Shay, we'll end with you.
Brett Dearing:Most important. Transparency. I just feel like that's the lifeline, blood and air of which an entrepreneur and business owner will breathe for the next five to seven years. That's what will keep them in business. So I just feel like from a business owner perspective getting that transparency, understanding what issues and challenges you have remedying those the best you can and creating opportunities to reimagine what your business looks like post the pandemic, I feel like that has been the nutshell of what I would take away and share with everyone here today. Hopefully, that's helpful.
Sharene Wood:For me, it was about strategizing for my future, expanding my opportunities and resources. Realizing that I had to go and get the partners that I needed, instead of waiting for them to come to me, changing my sales channels so that it was more diverse, not just sitting at home waiting for the old normal to come back, but really forging ahead with a new plan for my business and brands and family and even personally, and doing things that were more purpose driven for the success and my ultimate exit strategy is probably the vision that I got during pandemic.
Nkrumah Pierre:Okay, thank you. Nkrumah, what are your thoughts? Thank you for asking, Nkrumah. Very quickly, I'll just say the power of relationships. I reached out to each of you and you instantly said yes, I'd love to sit on the panel and just having the ability to, again, be honest, like Brett said, reach out to people. They have your back. They'll tell you when you're messing up. They'll be honest, transparent and also supportive. So the pandemic has definitely taught me the power of relationships. So I thank each of you. Thank you for serving on the panel. I thank each of you who are listening and watching. Feel free to email me directly, happy to connect you to both Brett and Shay via email. Again, just want to say thank you. So please take care.
Sharene Wood:Thank you for the opportunity, Nkrumah.
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Nkrumah Pierre is a Managing Director and Head of EisnerAmper’s Friends of the Firm providing support to clients seeking to hire accounting, finance and human resources executives and providing job opportunity referrals, search support and coaching.
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