“This Is How To Be A Very Dirty Fighter When Negotiating”
People don’t realize; they’re always negotiating.
When you’re negotiating, what type of negotiator are you? Are you fair – you want the other negotiator to feel she’s happy with the outcome? Or, are you someone that seeks to get the lion’s share? Good negotiators adapt their style of negotiations to match the individual with whom they’re negotiating. And sometimes, you must be willing to be a dirty fighter to put the other negotiator down and win the negotiation. The following is when you might consider darning that persona.
While Ackerman Wines is one of the highest quality boutique wines in Napa Valley, it wasn’t always that way. Lauren told me that when she bought the vineyard in 1994, they didn’t bring their first commercial vintage to market until 2007.
“We started making wine in 1995, but just by experimenting with it,” Lauren remembers. “We wanted to see what the property would produce. So, we just made a couple of barrels of Cabernet Sauvignon every year, about 50 cases or so, and did that for nine years. Checking on the quality, making sure it was what we liked. We made some changes based on the input we received from people we gave the wine to. We didn’t even sell it back in those days. We literally gave it away and said, ‘What do you think?'”
Making wine was a giant leap for Lauren. She had been working in the San Francisco Bay area in technology and as a business consultant. While she didn’t know winemaking, she understood business and learned the rest as she went along.
“I was able to look at the wine industry with a different set of eyes and ask some of those questions, ‘Why can’t you?’ ‘What about this?'” Lauren recalled. “You could definitely make some changes in how you approach things and others you had to go by what was actually realistic for farming and harvesting grapes. I think for me, it was about patience.”
After experimenting and giving the wine away, Ackerman Wines set out to go to market. Their first offering was a 2003 vintage that went public in 2007.
“I remember the concept of going to my very first wine tasting, which was in Orange County (CA). It’s sort of like putting your first artwork or your first child on display and wondering if people are going to enjoy it, or like it, or respond positively to it,” Lauren said. “When they do, it’s this amazing satisfaction like, ‘Okay, we can do this. This is on the right path.'”
Building a brand is tough, and the wine business is no exception. According to Lauren, there are 20,000 brands in the wine industry. Just like the process of making wine, getting your name out there can take time. She says she relies on her consultant roots — looking at where she wants the brand to be in 5 years and ten years or, as she likes to call it, the short game and long game.
“There are things that change along the way, but you always have to keep your eye on what the long game is and make adjustments in your short game to get there,” Lauren said.
Wine can be a fickle business because everyone has a different pallet. While Ackerman Wines try to appeal to everyone, Lauren knows she’s not running a popularity contest.
“Certainly, our style of wine, coming from this cooler part of Napa, which is less fruit-forward and if you know your wine terms, a little more mineralogy, deeper berries. That’s a different style and taste all together than what people might see from St. Helena, Calistoga, or other parts of the Napa Valley,” Lauren said. “I don’t take personal offense. There’s a lot of other styles out there that you can try. We all wear different styles of clothing or fashion. Wine is also that kind of commodity.”
Wine is also something that takes time or, as I alluded to earlier, patience. The process is very intricate and doesn’t happen overnight.
“It’s always an interesting process. It’s like creating a new artwork,” Lauren said. “It’s creating a painting, and you’ve got the various tools to create that painting. The winemaker does too with yeast or with barrels or harvest and fermentation time. I tell people if you think of an artist with 100 colors on their palate, we have those colors in the ability to create something different whenever we want to and create the best that we possibly can.”
Like all businesses, COVID-19 has forced the Ackerman Family Vineyards to places it’s never been before. The wine business is seeing a lot of adversity, and Ackerman isn’t immune.
“It’s definitely been a challenge,” Lauren said. “Shutting down restaurants affects us too because restaurants tend to buy our wines, and they are not selling either. Dealing with that and being innovative, and how do you address it? We do virtual wine tastings, and we do virtual events to introduce our brand to various people around the country.”
Besides the pandemic, all California wineries have another unknown to deal with — wildfire. While the fires have left most of Napa Valley intact, the smoke in the air could ruin this year’s crops.
“I’m not alone in this. Many wineries are wondering and waiting because the harvest is looming whether or not we will be able to harvest our grapes and make wine, whether or not there’s going to be a smoke taint issue,” Lauren said.
“What we don’t know yet in Napa is to what extent all of the 700 or so wineries…are going to be truly affected by (the smoke) and how many of us will have to make the very difficult decision to drop fruit and not make wine at all,” Lauren said. “Laboratories that we depend on to give us a sense of where we are, are backed up. We’re waiting, and harvest is impending. It’s an interesting time to make both a financial decision and making the decision to make a wine that may or may not in three to four years’ time, when you put in on the market have an Issue with that smoke taint flavor nobody really likes.”
With so much up in the air for the 2020 vintage, Lauren knows Ackerman wine isn’t alone in this process. Even with all the competition, she considers her fellow Napa Valley winemakers’ family.
“I think that’s something people haven’t really understood about Napa,” Lauren said. We’re all competitors at one level, but we all work very well together to make sure coming out of Napa Valley, we can produce the best Napa Valley can produce.”
Well said. Whether you want to call it your community or tribe, we are all stronger together.
I really enjoyed my time with Lauren, and I really enjoy Ackerman Family Vineyard’s wine.
If you’d like to hear more of my conversation with Lauren and the Q&A session she did with our C-Suite Network community, click here.
The story of the notorious Yeti cooler started in 2006, when two dreamers turned what was once a boring consumer product into an iconic American lifestyle brand beloved by outdoor adventurers, tailgaters, bull riders, beach bums, and novelty hunters across the nation.
The company more recently went public in 2018 and is currently valued at $4.3 billion dollars with sales expected to reach $900 million by the end of 2020. Yeti is living proof that innovation can be developed even in one of the most unlikely commodity markets.
But how did that happen? I mean, to be fair, this isn’t the next silicon valley tech start up, it’s a cooler designed to keep you beer colder for longer…
They took a product category that nobody was thinking about innovating since Igloo put wheels on a cooler in the 1990s. More to the point the company successfully transformed the icebox into a coveted lifestyle brand.
That’s an impressive undertaking even for a well-established business with access to unlimited resources, funding, and marketing experience. But the Yeti Cooler brand was born from a series of homemade paper drawings, a personal need, and an unwavering determination to create something the founders wanted for their own hobby.
Here is the story of how two brothers from Austin Texas started a cooler company out of their dad’s garage and turned what was once a low-end commodity into a high-priced, high-end, globally recognized brand.
Two Brothers, a Passion, and a Problem:
Ryan and Roy Seiders, spent their entire childhood making memories in the outdoors. Their passion for the outdoors was infused with business potential when their father Roger Seiders, quit his job as a teacher and turned entrepreneur decades ago after he designed a fishing rod epoxy called Flex Coat he has been selling since 1977. The brothers got to see up close how to take risks and turn a personal interest into a business by finding a gap in a market by creating a solution to a common problem.
After graduating college, the boys set out to follow the familiar footsteps of their father. They attempted to start a series of businesses ideas of their own. Ryan tried his hand at building a custom-fishing-rod business and Roy began building modified fishing boats for anglers, specifically those targeting redfish in the shallow, hot, coastal waters off the Gulf of Mexico.
Neither venture was a success by their own admission, but it was their first dip into the waters of entrepreneurship. Like thousands of entrepreneurs before them, they sought out to solve a problem for the customers they served until one problem presented a unique and unexpected window of opportunity for the duo.
The first hint of Yeti began when Roy was customizing fishing boats for his clients. A challenge emerged when Roy was tasked with determining the best spot to put a cooler on his clients’ fishing boats that had very limited storage space. He knew that many fishermen (himself included) liked to stand on their coolers while casting, but the conventional cheap plastic models would buckle under their body weight, ultimately getting damaged or completely ruined.
Not satisfied with the available coolers on the market, Roy enlisted the help of his brother Ryan to help identify a more durable cooler for the custom boats at the outdoor trade shows they frequented.
Their agenda was pretty straight forward. They set out to locate a heavy-duty cooler to purchase for the custom fishing boats they were selling. Only to find, there wasn’t one. They needed a cooler strong enough that their clients could confidently stand on, that would also stay cold in the hot southern coastal temperatures.
An Idea Emerged:
The coolers available just weren’t up to the outdoor adventures the brothers were experiencing with their friends and clients. Not only did the cheap lids cave in, the handles would break, and the latches would frequently snap off due to the heavy weight of the ice and cargo. Forcing them and their clients to replace their portable coolers after every fishing season. It was out of this frustration that encouraged them to solve the problem on their own.
The idea of the YETI coolers was founded by the Seiders brothers: two outdoorsmen who needed a solid, durable cooler that could also keep their catch, kills, and beverages cold for a longer period of time in the hot Texas heat.
On a Mission:
They quickly dismissed the popular idea that coolers should be cheap and affordable. Instead they turned their attention on building an indestructible cooler built for serious outdoor performance.
As their website states, they decided early on that product innovation would have to come from a place of necessity and firsthand experience. Not relying on market research and data analysis.
The mission statement for the emerging company was founded on the belief that life is about having a good time doing what you love. And for the Seiders brothers, that was getting primal in the outdoors hunting whitetail, catching fish, and spending time with family and friends making lifelong memories.
“We’re wild at heart. So our coolers couldn’t be anything less.”
– Yeti Coolers
Reinventing the Wheel:
While attending trade shows looking for inspiration, Ryan stumbled across a rugged cooler model from Thailand, and the brothers set up a business to distribute their coolers for a short-lived time.
But eventually they found, the product just wasn’t what they were ultimately hoping for. While at the time, it was the best cooler out there, the product quality wasn’t up to their standards, and the brothers weren’t in love with the design either. They traveled to Thailand to meet face-to-face with the manufacturer to suggest changes only to discover the manufacturer couldn’t actually fulfill on their specific expectations.
Ryan and Roy took more steps to realize the product they envisioned. They mocked up their own handmade drawings with specs and soon found a manufacturer in the Philippines who was willing to try their ideas and provide them with a working prototype. The game was on. But they needed seed capital they didn’t have to build the initial proof of concept model.
To help fund the idea, Ryan sold his fishing rod business, and the brothers pooled what little money they had to cover the cost of the initial prototype and tooling.
The New & Improved Yeti Design:
The YETI shell is made from a common plastic material called polyethylene in a plastic manufacturing process referred to as roto-molding, that infuses high temperature and low pressure to create one piece of solid piece of plastic molding. It’s the same process used to create durable kayaks, eliminating any seams and joints making them stronger and more insulated.
By making one solid plastic case equates to higher plastic strength integrity and allowed less cold air to escape the seams. The shell walls were additionally injected with 3 inches of industrial strength foam and they installed a freezer quality rubber gasket sealer found in high-end refrigerators to make the lid air tight.
The solid design, combined with the depth of the insulated walls, insured the cooler’s contents would stay frozen longer.
With their protoype nailed solid they had to focus on selling the product to regain their initial capital investment.
Paving a New Path to Distribution:
They soon realized they would have to sell their product for $300 apiece for their smallest model in order to cover the costs of the premium design. They understood what they were up against from a retail perspective from the start. Yeti couldn’t focus on high volume sales through traditional retail distribution in the beginning. Instead they went after a niche clientele willing to pay top dollar for a quality product.
YETI didn’t try to compete with traditional retail’s cheap $30 coolers available at big box retailers like Target and Walmart. Instead they focused their efforts on specialty sporting goods stores and targeted the outdoor trade shows they were familiar with attending. It was here, in their familiar outdoor network where they could attempt to capture the attention of their primary audience. The goal was to get the buy-in from hunting and fishing guides to build Yeti’s grassroots reputation.
In addition to outdoor tradeshows, they spent their early days cold calling local hardware stores, tackle shops, and small outdoor retail owners offering them a new value proposition: Why waste your time selling a $30 cooler only retain a $5 margin? When you can sell their premium $300 cooler and keep $100? The grass roots approach slowly made progress but it wasn’t an overnight success.
Growing Pains:
The brothers launched Yeti in 2006. Sales reached $5M by 2009, and by 2011 they were pulling in an impressive $29 million which would earn the company its third consecutive appearance on the Inc. 5000 listing for their explosive growth.
They started hitting their stride when they finally broke through to premium outfitters like Bass Pro Shops and other specialty retailers. But that win brought them a whole new set of problems. The coolers were flying off the shelves faster than they could meet the production demand. Yeti ran into a major supply chain obstacle. They were selling more coolers than their suppliers could build on time. The Seiders’ needed to outsource help, fast, and the brothers proved their resourcefulness once again.
Private Equity Partnership:
They were now in a dead sprint to find a partner to help them navigated the next stages of growth to help fulfill their growing supply chain constraints.
The Seiders reached out and vetted pitches from more than a dozen private equity firms.
In June 2012, they pulled the trigger and sold two-thirds stake of the company for $67 million to a private equity firm that specialized in leveraged buy-out transactions. The Cortec Group firm targets specialty middle-market manufacturing, distribution and service companies, particularly family-controlled companies.
Cortec, based in New York, was founded in 1984. Since inception, the firm has raised over $2.6 billion of capital across six investment funds and has completed more than seventy transactions to date.
Cortec had major strategic advantages with IP and manufacturing connections that Yeti desperately needed. Cortec proved invaluable in navigating the necessary trademark battles (including going up against and winning a lawsuit with Walmart and other large players) that soon plagued the popular brand.
Cortec also proved useful in helping the brothers expand the product line beyond $400 heavy-duty coolers to include drinkware (mugs and tumblers), bags, lawn chairs, and even an off-road electric scooter eventually dropping the “Coolers” name from the now Yeti brand. This product category growth would soon prove to future WallStreet investors that they were no longer a cooler company.
Additionally, Cortec offered a subjective external perspective the company needed for high growth, negotiating new venders, marketing agencies and process management for the now 700 employees under the Yeti label.
By 2014’s year end, they quickly grew to $147 million in retail sales as the brand started creeping into the new expanding brand categories.
Yeti went public in 2018 with an IPO valuation at $1.7 billion. They were well on their way to building a globally recognized brand.
Marketing a Household Name:
How does one make a cooler company cool? The answer in short; marketing.
Yeti developed a marketing strategy that told their story, engaging people on a shared love for the outdoors and the best equipment to enjoy them with.
The combination of high-quality, field-endorsed products and outlandish prices translated to high consumer interest and desire.
The company leveraged a network of influencers they named their YETI Ambassadors, who had already grown like audiences to endorse the brand. YETI’s influencers include hunters, fishermen, snowboarders, professional skiers, bull riders, and cowboys.
YETI Ambassador Video Example:
Embracing their audience on social media YETI currently has more than 1 million followers on Facebook and 1.4 million Instagram and are leveraging Youtube with millions of views across their 197 original videos to date.
They even share social proof of their brand promise claiming for example, that Yeti’s are even Grizzly proof.
Here’s the proof:
Yeti took their marketing strategy a step further when they hired Melisa Goldie as the company’s very first chief marketing officer. Goldie was formerly global CMO of Calvin Klein Inc.
You might think, why hire someone previously responsible to sell a clothing label to oversee their marketing strategy?
But considering over 70% of Yeti’s consumers are under the age of 45. Goldie came with a breadth of experience in lifestyle branding, promoting product lines across a wide range of consumer categories at multiple price points across a wide range of geographies.
YETI Business Strategy:
Yeti was a brand that arrived onto a product category that existed since the early 1900s. Instead of fitting into what others were doing they made bold moves to set themselves as far apart from their competitors as they could get in terms of price, quality, and speed to production, to gain a competitive edge.
In order to manufacture such a high quality product in mass, the company deployed an “asset light” strategy. They outsourcing the production and distribution their products keeping their overhead low while focusing on growing sales year over year.
While forgoing profits by investing in third-party production, they were able to capture faster market share as the first premium quality cooler brand while other copy-cat brands started following their coat-tails.
Yeti recognized the need for strategic help to grow the company by partnering with the Cortec Group. This deliberate decision rapidly increased operating efficiency to overcome supply chain growth deficiencies.
Similarly, Cortec was essential in diversifying the product lines for Yeti into drinkware and soft (bag) travel coolers which accounts for nearly half their sales which is something Wallstreet investors rewarded in their IPO. Their experience in strategic licensing positioned the company as a global player.
The brothers scaled by bringing in the right growth partners yet again by hiring outdoor-retailing executive Matt Reintjes to replace Roy as chief executive officer. While Roy remains the Chairman of the company, by giving up some of the control as founder to an external CEO, the Seiders were signaling to Wallstreet that they were playing the long game of strategic growth by putting all of the right players where they needed to be positioned.
While the company is experiencing peak growth their story is very likely far from it. The Yeti Ice Monster started out as an idea, turned opportunity, and ultimately into another great American business success story.
“Failure only becomes exploited once you become its deployment assistant.” -Greg Williams, The Master Negotiator & Body Language Expert (Click to Tweet)Click here to get the book!
“This Is The Latest In How To Exploit Negotiation Failure”
People don’t realize; they’re always negotiating.
When was the last time you experienced failure in a negotiation? Do you remember the source of the loss, the emotional feelings you had when you realized you’d failed to achieve the outcome you sought? At some point during the negotiation, did you feel the other negotiator was exploiting you – taking advantage of your good-naturedness or your naivete? If such a recall challenges your memory, you may be failing in more negotiations than you think.
The perception of failure and exploitation in a negotiation is as personal as the individual experiencing it. One thing is for sure when you have the sensation of loss, or that of someone exploiting you, the experience leaves a bitter stain on the reality of your mind. But from within every negotiation failure, success resides. To recognize it, you must clear your mind of the thought of failure. And, you must understand how you arrived at the perspective of being the victim of exploitation. Here’s how to do that.
Aren’t we all always on some kind of “Treasure Hunt?” The Fifth Step of the Faremouth Method, “Be a Hunter,” was born out of the many requests I have received through the years to find “Hunter” type candidates as opposed to “Gatherers.” When I think about it, all of us are hunting at some point in our lives for our own personal treasures or something to give us “More.”
That “More” can change with our evolution as human beings and the significant life experiences we encounter. We might want more success, more friendships, more love, more free time, more serenity, more training on technology, more material gifts, etc.
The Trick or Treaters I had knocking on my door last night seemed to want “more” candy. When I dropped only one Snickers bar in their bag, they looked at me as if to say, “Is that all you are going to give me?” as I went to put another bar in their bag. Yesterday, I went on my own little “treasure hunt” to Round Top and decided to go on my own type of quest for small treasures with the beautiful cool weather and visit all the tents with various antiques and craft booths. I really felt the hunt to enjoy the lovely weather was my own type of a “More” experience that made me smile.
With Halloween behind us, we have “the most wonderful time of the year,” as Andy Williams sings in his famous Christmas song, staring us in the face. We can also consider this the most expensive time of the year as well. That may bring up some serious concerns if we have had a salary reduction, just lost our job, or have been furloughed.
Like anything in life, we can look at these times in one of two ways, just like in the famous opening line that I love so much by Charles Dickens when he says:
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…….it was the spring of hope…….”
What hope? Where is the hope in this situation? I want to believe there may be a financial and professional silver lining that you may have overlooked. The holiday season brings a great big surge of seasonal job opportunities.
While we traditionally associate seasonal jobs with the retail industry, other high-demand industries involving e-commerce also increase hiring during this holiday season.
The “More” ingredient in this situation might offer you an opportunity to try out a new company or industry on a short-term basis while providing much-needed collaboration with other individuals to alleviate some of the quarantine time aloneness and isolation. It might also serve one to feel MORE purposeful or useful. There might be “more” to be gained than just a paycheck. For example, you may possibly learn a tremendous amount through seasonal job training and even in the relationship area, which may be invaluable to you for years to come.
I remember when I first moved to Houston in the 1980s,
I worked in a small personnel agency, and there was a big market decline. Being on a commission-type compensation basis, my income was severely affected. During the holiday time, I took a position with a “high-end” retailer, and the benefits from that experience were many. I remember in my training session, and I met a wonderful woman who became a very dear friend and even became a bridesmaid at my wedding. The other advantage was that I met several people in this seasonal job who later became my clients. One gentleman happened to be a Senior Executive of a manufacturing firm and hired over 20 people from me the following year. The customer service training I learned in my training session in this retail company allowed me to transfer those skills into my placement job, and I soon became one of the firm’s top producers.
To decide whether or not a seasonal job might be right for you, let’s take a look at a few pros and cons of short-term or temporary employment during this holiday season.
Good Reasons to take a Seasonal Job
a. New Company Experiences – A seasonal job may give you insight into how a different company conducts business and may also introduce you to people that might be future clients or prospective job opportunity affiliates. It can enhance your skillset and give you additional references to use on your applications. You are also “test-driving” a new job experience that might give you the advantage of face-to-face contacts as opposed to online submissions that might advance your permanent job search.
b. Personal and Professional Relationships – A part-time seasonal job might offer you an expanded relationship base that might prove to be fulfilling in both your personal and professional life. These contacts might also be very good networking affiliates that might know of other opportunities you would never have heard of with your own efforts. What is that old saying, “it’s not what you know, but who you know.” If someone you meet on your seasonal job has contacts that might be beneficial to you, it might move you up in the process during these days of online submissions to have more of the Human Element contacts.
c. Resume Expansion – A seasonal job allows you to expand your resume with an enhanced skill set that might make you more marketable and stand out among the competition. Showing you worked in another area besides your primary skillset demonstrates to a prospective employer that you may be flexible to take on additional duties and have more of a multi-dimensional skill set that would be more attractive to them in a tight market.
d. Expanded Opportunities for Possible Full-Time Employment. If you go into the seasonal job with a mindset of “I’m going to give this job 150%,” and your Manager or Executive Director sees your positive attitude and determined work ethic, you may be considered for a full-time position when the holidays are over. Through the years, I have had many of my clients hire my temporary employees because of their willing attitude and dedicated work ethic. Make sure you always arrive early, stay late if possible, don’t take the entire time for your lunch break, and keep a positive attitude that is infectious. People like to be around positive people. Your supervisor could have a spouse that might need someone with your background, and a personal referral of someone who has seen the work performance of an employee is always worth more than a letter of recommendation.
Concerns of why you might NOT take a Seasonal or Temporary job
a. Your Free Time Will Vanish – If you are using a seasonal job as an addition to a full-time job, you might have less free time with family and friends. If you are unemployed and still looking for permanent employment, consider how this part-time position will impact your full-time job hunt.
b. Training May Be Limited – Many times, employers often don’t invest in extensive training or development for their short-term employees because of the short-term nature of seasonal jobs. You might have to jump right in and adapt to perform right away in an area that may be very unfamiliar to you.
c. Compensation Restrictions with No Benefits – Seasonal jobs usually don’t yield high dollars with impressive perks. There usually is not any health insurance or retirement benefits included in the package. Company discounts, outings, etc., may not be part of the package, and you should discuss before you sign any contracts or agree to appear on the job.
Investigate what you might be hunting for to give you MORE in your own personal and professional situation during this holiday season. A seasonal job might very well offer you more true gifts that might not necessarily come in the form of wrapped presents with lovely bows. The gifts might be more intangible relating to the contacts you make, the relationships you form, and an expanded skill set that will set you apart from the competition and give you an advantage in a very competitive job market.
When we have the opportunity to combine the duality of full-time work in the field of our heart’s desire and the seasonal job that offers an entirely different set of possibilities, it creates an alchemical wedding of spirit, of sorts. When we can’t do exactly what we want, take advantage of another opportunity, which might get us to our goal through a different avenue. Recognize that a different avenue may be disguised and not all that obvious to us until we are able to get to the other side and reflect back to find that treasure that might have been hidden from you initially. Decide to make this holiday season one of the “Best of Times,” not the “Worst of Times” during this “most wonderful time of the year” by doing MORE to make your life MERRY and BRIGHT in your own search for that special treasure!
The election cycle in the United States is unlike anywhere else in the world. We have the longest cycle – a total of 1,194 days by the time tomorrow rolls around. Unlike many other developed countries, there are no laws limiting the length of a campaign or how much money can be spent.
Whether you’re tired of the political climate, election results have a direct correlation to Wall Street and eventually Main Street. We may not pay attention to politics, but politics certainly affects all of us on a daily basis. Wall Street will be OK regardless of who wins, but many outside the famed street face more dire consequences with loss of jobs, businesses, and even housing.
I recently sat down at a C-Suite Network event with Danielle DiMartino Booth, CEO & Chief Strategist at Quill Intelligence, for a candid conversation about the effects of the election’s outcome, the ramifications for Main Street, and what trends to look out for that can predict the country’s economic future.
I started by asking her how would Wall Street react to a Biden, or Trump, victory and she stated that if the Senate flips (for the Democrats), there will be a capital gains tax increase. Should Joe Biden win, his proposed tax plan includes raising long-term capital gains tax rates and taxes on dividends to 39.6 percent, according to an article on Financial Advisor. Danielle added that investors are looking at their gains in Q4 because their capital gains taxes will be lower during the remainder of 2020.
We all know that Wall Street will recover, but what happens to Main Street?
Danielle called what has already happened to small businesses an “unmitigated disaster.” She stated that 1 in 7 small businesses are now gone with data suggesting that at least 2 percentof small businesses have disappeared, according to researchers at the University of Illinois, Harvard Business School, Harvard university and the University of Chicago. Restaurants haven’t fared any better – with 3 percent having gone out of business.
As a business owner myself, I can relate the difficulties many have gone through the past few months but I made up my mind a long time ago to push pedal to the metal and do whatever it takes to thrive with as few bumps and bruises as possible. I’ve never worked harder in my life than I have during this pandemic, but we’re starting to see some of those efforts pay off and it’s incredibly gratifying.
However, small businesses aren’t the only ones bearing the brunt of the current economic downturn. Renters are also facing nearly catastrophic results – with 42 percentof them facing eviction. Additional data shows that just under 12 million people are facing eviction in the next four months without a stimulus package.
With Congress adjourned until November 9th, and without the possibility of a new stimulus package, renters and small businesses face an uncertain future. Danielle mentioned there are 7.9 million evictions ready to be filed and more families being at risk of being evicted than ever before.
In fact, Danielle sort of predicted this. During the conversation she said, “If there’s no stimulus spending before the election, you won’t be able to make it as a small business.”
The loss of income is also affecting white collar workers and it’s not just renters either. Homeowners are also feeling the pinch as layoffs have moved up the income ladder. By the end of the year, millions of U.S. households could owe $7 billion in unpaid rent, according to a report by the Federal Reserve Bank of Philadelphia. The Mortgage Bankers Association also reported that 6 million renters and homeowners missed their September payments.
Danielle emphasized that we have a “societal crisis in the making,” emblematic on the discourse currently taking place in Washington, DC.
The news seems grim, but there’s a glimmer of hope for those looking to reinvent themselves and create new paths to success. The word “crisis” can create panic among many, but great leaders know that is yet another test and it requires keeping your cool and your wits. Crises also serve as the perfect place to find opportunities capable of opening doors we weren’t even aware we were seeking.
Danielle says that never have we seen this “magnitude of an explosion for small business applications” according to data from the Census Bureau. Business applications for Q3 of 2020 were over 1.5 million – an increase of 77.4 percent from the previous quarter. The current situation will create a plethora of opportunities for many to join the entrepreneurial ranks in higher numbers than ever before. To me, that’s American ingenuity as its core.
As if national politics wasn’t enough to frighten the toughest of us, we also have to keep an eye on the global ramifications. As the world’s largest super power, this election “is more important to the global economy than any other in modern history,” Danielle stated. The global debt has crossed 100 percent of the GDP, which surpassed levels not seen since World War II.
She added that it’s “incumbent on the U.S. not to fail the global economy because China is depending on us to fail.” She continued, “China is focused on the U.S. stumbling” and we’re at a critical stage globally. China is closing the economic gap with the U.S. and after the election, it’ll be a time to rebuild alliances. As China’s economic power increases, who will our allies be? Who will side with China and who will side with us?
The geopolitical ramifications are very interesting and closer to home we have plenty to rebuild, including the pharma industry. We need to recognize that as a National Security issue we need to rebuild that industry because if we don’t make it a number one priority, we haven’t learned our lesson.
It was a fascinating conversation with serious undertones and ramifications, but I always enjoy talking to Danielle. Her knowledge of the industry is unparalleled and she always teaches me new facts and figures that resonate with me as a business owner.
I want to thank her for her time and insights. Listen to the full interview here.
