On this special episode of the Capitalist Sage, Karl Barham and Rico Figliolini sit down with Democrat Carolyn Bourdeaux, who is running for Congress in Georgia’s 7th District. Join them as Carolyn shares her views on healthcare, education, immigration and much more.
“Everybody wants affordable quality healthcare. We all want that. We all need that. We need that for our families, for our businesses, for our community. How we get there. We can come up with different ways to get there.”Carolyn Bourdeaux
[00:00:30] – Intro
[00:04:30] – Carolyn’s Background
[00:06:11] – Taking a Closer Look at Healthcare
[00:13:43] – Uniting the Parties
[00:18:37] – Data and Privacy
[00:21:40] – Education
[00:28:46] – Bi-Partisan Work
[00:29:37] – Immigration Issues
[00:34:59] – Carolyn’s Race
[00:36:57] – Closing
Karl: [00:00:30] Welcome to the Capitalist Sage Podcast where we talk to business owners, leaders in the community about things that matter here in Peachtree Corners, in surrounding areas, where informed people, share information with folks, and just help people understand some of the issues that might be impacting, whether it’s their lives, their homes, their businesses, and so on. I’m Karl Barham with a Transworld Business Advisors, and my co host is Rico Figliolini, Mighty Rockets Digital Marketing, and the publisher of the Peachtree Corners Cagazine. Hey, Rico, how are you doing today?
Rico: [00:01:05] Hey, Karl. Good, good. Let’s talk about some sponsors.
Karl: [00:01:08] Yeah.
Rico: [00:01:08] I’ll do that. So let’s get that out of the way before we get into our guest today. So we are at Atlanta Tech Park in the City of Peachtree Corners, and it’s actually an accelerator that houses about 90 plus companies. It has a far reach through the Southeast because of the venture capital work it does as well. And because of the executive Robin Bienfait, who found this location and this place when she was an executive with Samsung, back there and few other companies. So, we’re glad to be here. We’re glad there are spots that allow us to use the podcast room. This place is located on Curiosity Labs at Peachtree Corners, which is about a one and a half mile. It’s an autonomous vehicle track that anyone could come to. It’s a living lab essentially. So Autonomous vehicles. Internet of everything. People walking, people driving, everything’s live. There’s no make belief here, and you can bring your company, small or large, larger startup or established company and actually test things on this lab, on this one and a half mile track, and the backbone of this, which is enabled by 5G Sprint, 5G technology. Everyone’s talking about 5G. You can’t do autonomous vehicles without 5G. You can’t do the internet of everything without that. But you’ve got to bring the internet to it though, right? And so you still got to use cable and fiber to be able to do that. And our lead sponsor is Hargray Fiber. And they’re the backbone of Curiosity Labs. They actually provide the fiber for this to be able to work there. This one and a half mile track.
Karl: [00:02:41] It’s incredible the technology that is already being deployed right here in Peachtree Corners to enable smart city application. Everything from E-scooters where you can get here on the scooter that driverless shuttles, both, both the backbone that’s being built and then the Sprint 5G network is enabling that to, a lot of companies are coming into this area too, to explore the technologies.
Rico: [00:03:06] Tremendous map, almost like, I mean better than planted up in Michigan, which is, we got the place to be. So if you want to find out about Atlanta Tech Park, it’s AtlantaTechPark.com. HargrayFiber.com for if you’re a small business or an enterprise size business and you’re looking for fiber and enterprise solutions.
Karl: [00:03:29] Well, today we have a special episode of Capitalist Sage where, one of the things we like to do is share, the different types of leaders and people. Thought leaders in the
community at the top, contributing to the success of our community, whether it’s through business, whether it’s through government, whether it’s through citizenship and private individuals. And today it’s my pleasure to welcome Carolyn Bourdeaux, running for the US Senate seat here.
Carolyn: [00:03:57] Congress.
Karl: [00:03:58] Congress, seventh congressional district here in Georgia. Hi, how are you doing today?
Carolyn: [00:04:04] I’m doing great. Thank you all for having me.
Rico: [00:04:06] Sure. It’s pleasure. Actually, the second time. Second for us. Yes. When you ran back in 2018.
Carolyn: [00:04:12] 18 yeah. I’m back to finish the job.
Karl: [00:04:14] Oh, fabulous. So one of the things we wanted to start off with, just kind of reintroduce you to folks that may or may not know who you are and, and kind of learn a little bit, why are you jumping into this and serving your country by running for Congress?
Carolyn: [00:04:30] Right. So a little bit of my background. I live in Swaney. I have a, my husband and I, we have an eight year old son who’s enrolled in public schools here. My day job is I teach at the Andrew Young School of policy studies at Georgia State. I teach public policy and public finance and have spent a lot of my life working in various roles in public service. I worked for several members of Congress for US Senator. I was director of the Senate budget and evaluation office here in Georgia. I founded the center for state and local finance and so have been in public life and in public service in many ways for a long time. I got into this race back in July of 2017 and was motivated by several things. But one of the big ones was health care. And what’s happened with healthcare reform in this country. And, my parents passed away, two years ago after my father, after a really prolonged illness. And, you know, all of their discretionary income was eaten up, paying for healthcare costs. And so watching the skyrocketing prices of prescription drugs, the extortionary rates that many of us pay for health insurance in this community. We have 110,000 people without health insurance. And so that was a big driver watching the destruction of the affordable care act and just sort of the many, many issues that many of us face in healthcare.
Rico: [00:05:48] That was a big issue at the time. Still is actually.
Karl: [00:05:52] It’s very topical because, you know, as you hear more about other countries battling health concerns and so on. What are some of the things you’ve seen in other countries that might help us look at healthcare and how we do it here differently?
Carolyn: [00:06:11] So I’ll start with healthcare generally. And, you know, most other countries have some form of universal healthcare and they have different ways that they’re trying to get there. They use different strategies. The one I talk about a lot is, you know, going back, standing the Affordable Care act back up. Actually implementing that legislation. A lot of pieces of that were never implemented, including the expansion of Medicaid here in Georgia. By not expanding Medicaid in Georgia, the state basically returns to the federal government between $2.2 and $3 billion a year.
Rico: [00:06:46] That’s voluntary.
Carolyn: [00:06:48] It is voluntary, yes. So they volunteer $2 billion a year at least, you know, as much as $3 billion now. And that means that around 500,000 people in the state don’t have health insurance. And that’s a lot of people to hang out to dry. I also am someone who thinks we need a public option on the exchange. We still, that won’t cover everybody. And we need a low cost alternative for small businesses and for individuals to opt into as well.
Rico: [00:07:18] How do you feel about everything that’s going on in, there’s podcasts galore now and shows about Coronavirus, the Novel Virus, Depen Damick according to see. Well, who will probably happen? It is expanding. You could get the test, maybe if you’re lucky and someone’s gonna pay for it, but if you want to get the test, I mean, there’s so many questions about who’s going to actually pay for it and how are you going to take care of hospital bills, if you’re actually affected that late and you have to go to the hospital, what’s your thoughts on that?
Carolyn: [00:07:55] So we just saw a story in Florida where a person thought they had, you know, some kind of Coronavirus. They went to the hospital and then were immediately slapped with a $2,000 bill for it. I think one of the things about Coronavirus is it really or the Covid-19 is it really shines a bright light on some really serious problems in this country. And one of them is that we have hundreds of thousands of people. We have millions of people in this state, over a million people without health insurance. And, you know, even if you’re not worried about them, you might be worried about yourself because it would be really helpful if they feel sick, if they can see a doctor. And so, I think it is. You know, we face a situation where we may be in real trouble because we still, after years of arguing about this, still do not provide health care and access to a doctor for many, many people in our community.
Rico: [00:08:53] For the people that lead it, they can’t afford it. Then I’m not going to go because they can.
Carolyn: [00:09:00] Exactly. Yeah. They are much less likely to go. And I think, you know, we talk about the response to Coronavirus and people are like, well, you know, don’t touch your face, or, be sure to wash your hands. And that’s right. I mean, and that’s good. That’s important. But we also have to recognize that the response also needs to address the gaping holes in our, I don’t want to say safety net because we think of that as being associated with poor people, but
we all need a safety net at different times. Another huge issue is paid family medical leave. We have lots of people in our community, who live paycheck to paycheck. What are they going to do if they are quarantined? We have lots of people who don’t have any kind of paid family medical leave and they need, you know, that, that money, what are they gonna do? And so when we talk about how we respond to the pandemic, we need to think not just about sort of those basic health care, washing your hands, those kinds of things, but also how as a society do we respect.
Rico: [00:10:04] Well, their economic impact.
Karl: [00:10:06] Yeah. If you do some, if you think about it, some simple math, if people start getting sick. They’re going to flood emergency rooms and the cost of service saying that many people, it’s gonna. It’s gonna really be huge.
Rico: [00:10:22] Not just the cost, but there won’t be enough beds, enough ventilators, enough equipment, enough safety equipment for the healthcare workers. Can you imagine? Yeah. Some people showing up.
Karl: [00:10:34] So there’s going to be an economic impact. The question is, you know, can you plan ahead and spend the money wisely so that people could, can go earlier before it requires an emergency room, get treatment.
Carolyn: [00:10:51] I think it’s, you know, it’s a start and we’re going to have to take this one step at a time. But there are many tiers to this issue, right? One is sort of the, you know, how do we deal with this as a society? There’s another, yes, how is our healthcare network going to deal with it? And obviously we really have to try to protect our healthcare workers. And we saw thousands and thousands of them in China get sick from the Covid-19. And, we’re going to have to think about that and do we have what they need to be supported. And one thing I see when a lot of folks are talking about, you know, it’s a small percentage of people who die from this or need hospitalization. Our problem is that even a small percentage of a large number can quickly overwhelm our hospitals. And one of the reasons we quarantine and kind of shut things down is not, because you know, it’s gonna wipe out and kill lots of people. It’s just that we have to stop that overwhelming of our healthcare system and try to manage, you know, how, the diseases unfolding. And so, you know, I know they’re good people thinking about this. I just hope, you know, that they have a voice in this process and are able to help us manage through.
Karl: [00:12:02] So I’m always curious about the impact for small business owners. So, I saw a statistic 44% or so of people are employed by small business to 99.7% of all businesses happen to be small businesses and native, they don’t, may not have the ability to extend, large company healthcare benefits that people get to enjoy. What are some of the strategies that business owners at least have available to them, and what can they do to get their voice heard, to help drive change so that they can, they can offer their employees better options.
Carolyn: [00:12:39] Well, again, there’s sort of the immediate crisis issue, right? And then there’s the bigger picture issue. And you know, for me, ensuring that we have, you know, some form of universal healthcare coverage is a small business issue, right? And we need to do it to protect our small businesses so that they are not being crushed by the burden of health insurance and healthcare coverage, and that they can provide that for their employees. So, you know, one of the many reasons I really advocate for that is because I hear from small businesses all the time and how they really struggle to get insurance for themselves and for their employees. The immediate crisis is you know, I think folks need to start advocating with the state government and with the federal government, to, you know, get some real solutions coming down the pipe. Some real ideas for what is going to happen and how we’re going to manage through this if this happens and how we’re going to protect small businesses. I think that is an issue and I don’t think it’s really been addressed.
Karl: [00:13:43] Yeah. And I hear it often when I talk to small business owners that they are doing what they need to do to survive first. And they’re, they’re one catastrophe or something away from really losing their business very often. I get asked a little bit, so as we see problems like this and healthcare is a big one, there’s a lot of others like that. What are ways that the two parties can work together to come to a solution? There seems to be a blockage of that, that used to exist many years ago. But it’s getting more polarized and we’re not seeing people come together. Have you seen hope that that can be improved?
Carolyn: [00:14:30] I, you know, I wish I could say yes, but it’s a tough situation we’re in. I have worked with Republicans, you know, in the past when I worked in Congress for, I worked for a Democratic Senator, Ron Wyden. Every single piece of legislation I worked on had Republican co-sponsors. I think that coming together is very, very important. But I think our first step is we need to agree that everybody needs health insurance. And have some basic fundamental agreement on those issues and the electorate needs to send that message, did that something they want. And then there are lots of ways to solve that problem, I think in ways that, you know, Republicans might agree with. Actually the affordable care act, right, was originally introduced in Massachusetts by Mitt Romney. It was a Republican idea. It was a bipartisan idea and we need to go back to that. A time when we can have that kind of conversation.
Rico: [00:15:30] That was a bit of a moderate, moderate Republican idea, but they disowned later though, right? So I don’t know if they’ll ever go back to that. At least this set of Republicans.
Carolyn: [00:15:41] It’s very unfortunate. It was a market based idea. If we’re trying to address, you know, get us to universal health coverage.
Rico: [00:15:49] How do you find them? For example, right now, Warren, Senator Warren decided to bow out at this point today made sense. I mean, she said no path to go, so we have to. I mean the third one, close, but she’s like 2% so there’s really two candidates, right? Two different plans. All, it’s like almost all or nothing. So where did we go from this, if, if between the
two of them? Between Biden and Sanders. I mean, I feel the burn, but I don’t know if I can go all the way there. But how do you feel about that?
Carolyn: [00:16:23] You know, when I talk to people in the district and I’ve spent a lot of time talking to people about this issue, we start with where we want to go. And I think it’s the same issue as we try to, you know, bring, you know, Republicans along and have a bigger coalition around it. Everybody wants affordable quality healthcare. We all want that. We all need that. We need that for our families, for our businesses, for our community. How we get there, we can come up with different ways to get there. You know, again, I think we already have a law on the books. That’s the most straightforward way. I do believe in fiscal responsibility and, you know, the public option has been shown to save money. And you know, I think we can come up with ways to get there. Whether it is, you know, a Sander’s way of buying weight, we all have to focus on the goal of where we want to go and then work our way through how we’re going to get there.
Karl: [00:17:14] Very often you’ll see, you know, different strategies play out, and public policy. How do you get grassroots involvement on an issue like this? How do you mobilize people to, to really get out there and like, what specifically can people do to whether their representative is Republican or Democrat get done to look at an issue in a bipartisan way?
Carolyn: [00:17:42] Yeah. I’m a big believer in education and having dialogue with folks. The most difficult policy issue I ever addressed was, helping the state balance the budget during the Great Recession. And it was a really tough time. George’s revenues dropped by 20%. And what I did and many other policymakers did was we did public forum after public for after public forum. Showing what was happening with the state revenues, showing how we’re going to try to address this issue. And I think we need to have something similar on healthcare, where we are just out there talking to folks. And I, you know, as part of the campaign, I do hundreds of community meetings and, you know, and we talk about these kinds of issues. And I think that’s very, very important for, you know, getting people, having a chance to kind of hash out those ideas in a community.
Rico: [00:18:37] Well, let’s see. We’ve got technology. You know, we talked about business a lot on this podcast, but recently Google was found to have been working with a healthcare provider that does the back office work that you all, so they’ve been accumulating data and not just generic data, but names and everything like that. It’s coming to the forefront now. Google and Facebook, I mean, they’re all in there in the mix. Apple’s doing stuff, but Google is the biggest gorilla in the room, if you will. How do you want to deal with technology where on the one hand, something like that can actually help during a crash, like an epidemic? Or can help bring down costs, but you have to share that. Oh, they got rid of the privacy limit. The privacy in this, it’s very shaky. How do you handle that?
Carolyn: [00:19:28] It’s particularly an interesting question for me because as somebody who does research around public policy, I see the enormous power of data and how it can really help
us fine tune public policies to have a much more significant impact. So for instance, Georgia state, uses analytics to try to target students who might be more likely to drop out of school and then intervene early before they run into problems. And they’ve been enormously successful with this. They’ve been really very successful driving up their graduation rates. So I see, I see both sides of it. On the other hand. I’m a pretty passionate advocate for privacy and, you know, it’s just a personal thing. I don’t want everybody knowing every click I made and every location I have been. And I would imagine most of us don’t. And, you have these, you know, very large companies. Now you have maybe the government as well, just collecting tremendous amounts of data on us. So I am interested in looking at ways where we do put some brackets around this, where, you, you see Europe and California now have passed legislation, legislation laws. To, if, if you do collect data, it really does have to be anonymous. There have to be a lot of protections around it. As an individual you need to know, so what data is being collected and you’re allowed to inquire and find out about it. And that’s very important. And as a citizen, you’re also allowed to say, I want you to get rid of all the data that would identify me. And so I think, you know, legislation around that is, is calming. And you know, we do need to find, you know, think about how we’re leveraging its power, but at the same time, protecting privacy so you’re not able to identify individuals and really drill down in a way that can be very damaging to someone should information, you know, get out.
Rico: [00:21:21] Okay. I mean, you look at China, we looked away, they left one province in a country like that can’t do that because there’s no privacy. Because the privacy, they can lock it down and just stop in there. Supposedly, if we can believe there, their rates of infection, it’s way less now than it was four weeks ago.
Karl: [00:21:40] I’m curious if, like if I get asked a little bit about education, you, you work a lot with, students and folks that are going for, I see now the emphasis on education. Kind of getting deemphasized in a lot of circles. There was a time where we led with EDU educating everyone, free education. It was, maybe a national security issue as well as a way for economic advancement. And now, there’s a lot of people there. They’re paying for colleges getting expensive, and you’ve got some candidates that are, you know, everyone should be able to go to college for free. And, and most jobs are now requiring that. How do we balance or rebalance our focus around educating our young?
Carolyn: [00:22:30] So this is a district where we care a lot about education. You know this is, the seventh district is about families and children and raising our children and giving them access to the American dream and the opportunity. And I would venture to say that most all of us agree that one of the keys to that is having a really good education. And, you know, I do think we have taken our eye off the ball there. And, when I left Georgia state, one of the things I was working on, was looking at currently about 40% of young people, in Georgia get some sort of higher education, whether it’s through our technical schools or through colleges and universities. To compete with countries like Korea, Canada, and Japan, we need 60% to get through. That’s a big shift. I think I calculate the back of the envelope. It would mean investing around a billion more in our public universities in Georgia to get to that. So we spend, I think around $2 billion in
state funds on our universities, so that’s an enormous jump and investment that we would need. We need to start thinking about that. I generally am not a free person, but I am an affordable person. When I graduated from college, I had a tremendous amount of student debt. It is a big part of my story. And so I’m deeply sympathetic to young people now with that ball and chain around their ankle. And so it needs to be within reach of every student who wants to go to get a higher education. They should not see cost as a barrier.
Karl: [00:24:11] That’s one of the things now, I feel there’s a generation from 2005 to probably 2015 that went to college or in the economic crisis when they came out, they were probably underemployed because of the economy. And I feel they were at least five years behind where previous generations or peers were. And I don’t know if they ever caught up or at least they haven’t caught up yet. They might’ve already wanted economically. Where they’re getting married at 27 to 33 and buying the first house. They’re delaying starting a family by five, six years because they’re still paying off student debt and those types of things. What can we do? you know, for that group that’s now getting older and what do we do to prevent that if that were to happen again? So, so many folks don’t get left behind.
Carolyn: [00:25:10] Yeah, so we have, you know, one, we just, we have not made the baseline investments, in programs that are used to reduce the cost of higher education. I went to school on Pell grants and I don’t think we’ve increased the Pell grants in almost a decade instead of what that covers. We have disinvested in our public universities. In 2007 or so, around 75% of the revenues for our public university, 75% tax dollars came from our investment, 25% came from tuition. Now it is below 50% comes from sort of the state, you know, guarantee or the state input. And, you know, over 50% comes from tuition. And we’ve seen that in dramatic jumps in the tuition. So one of the big things we need to do also is just reinvest in those public universities so that they are affordable. You don’t go to them and you have, you know, some people have hundreds of thousands, but a lot of, you know, $20-$30,000 in debt when we leave. So those are certainly some things we can do to try to address that. I’m interested in some of the loan forgiveness as well. I think, you know, there are a lot of folks out there who have a lot of earning potential, right? And they, it’s not going to be a big issue, but, you know, for lower income folks, people who choose service jobs, people who choose jobs that are, you know, in the community that might not make as much, you know. Pegging their student loan repayments to a smaller percentage of their income is certainly something we can do. Forgiveness, you know, for people who go into that.
Rico: [00:26:49] Really what’s going on now, right. Because the education department now have the program of forgiveness for a certain set of people that applied and mostly that that’s not happening.
Carolyn: [00:26:59] They, they’ve undone it. Yeah, yeah. Yes, absolutely. I mean, I’m running, I deeply disagree with the priorities, right. That we’re setting right now.
Karl: [00:27:08] Even Frost, they go into a field like teaching, they’re leaving because the salaries they’re making, they can’t live. And anyone here could tell you. I remember a teacher that probably changed the course of your life because of the way they were able to impact you.
Rico: [00:27:24] They even spend their own money. I mean, most of them do buy stuff for the classroom.
Carolyn: [00:27:28] I tell them the most important person in my life right now is not some wall street banker. It’s not. It is my son’s second grade teacher and we need to treat her and pay her, and I support her accordingly.
Rico: [00:27:45] Do you think I’m saying this, been talking to her a little bit more? I think not a free, again, free, but everything could be free I guess, but a free childcare and talking about providing that childcare. And also making a creek in kindergarten. You know, putting an investment in the lower grains to hopefully bring, because it is a big difference, I think for a kid that’s young that doesn’t get 12 well, it doesn’t have the right exposure. I mean, what do you think?
Carolyn: [00:28:16] I do support moving towards universal Pre-K. And making that available. Not, not mandatory, but that any, anybody who wants to, does have access. Just like we have kindergarten, move that down a grade. And that’s important. But we need affordable childcare too. There are lots of women, you know, we want people to work. If you want people to work, then you need to support them as they do work. And you know, having quality childcare is also extremely important.
Karl: [00:28:46] You’re running as a Democrat. And I’m curious, are there things that you see the Republican party doing well in policy, something where they think you think they’re on the right path and they might be leading the way in any particular area of policy currently.
Carolyn: [00:29:05] I think there’s a lot of good bi-partisan work, around the VA and around veterans issues. That’s something where we have a situation that is, is quite bad in the VA. I talked to lots of veterans who have had to wait years. I had a friend whose brother killed himself, as he came back and didn’t get the mental health treatment that he needed. And I see people in both parties, you know, working together to address those issues. And those are very important ones and I’m glad to see them move forward on a bipartisan basis.
Karl: [00:29:37] I wonder like, issues like immigration there, there’s a lot of polarizing opinions about it. But you do hear some talk of, of finding ways to bring more people, to be naturalized citizens or to become citizens within the country. I hear it on both sides. Republicans talk about it. They seem to get stuck and how, and when, and the pace to do it. But our approach to immigration has drastically shifted in 30 years, where I grew up in New York and there was the Statue of Liberty. And, and, and I remember it on school trips. It was a premiere, poor, and, and,
and, and arms opening. And, and there’s been a shift, and I don’t know if it’s a shift in the people, is it, or is it a shift in the policy?
Carolyn: [00:30:28] Oh, well, I mean, I think Trump clearly ran on a huge anti-immigrant platform and, the seventh congressional district, 25% of the people in this district were born outside of this country. And it is the policies coming out of Washington now around immigration just strike at the heart of this district. And it is interesting, you know, the business community needs immigrants. And, we have always benefited from bringing the best and the brightest from all over the world, hard workers from all over the world, coming to our country and, making a life for themselves and their families. And, you know, we have rolled that back and I was interested to see Mick Mulvaney out there the other day, you know, I guess he slipped up and said that, you know, wait a minute. These really do have a big economic impact. If you all will recall back in 2007, Georgia passed a huge anti-immigrant piece of legislation and it’s kind of evaporated. And what they found was right away, after they passed it, you know, hundreds of millions of dollars of crops rotted in the fields in South Georgia. And, you know. So it’s this weird dichotomy. They’re like, we don’t want immigrants, but then, you know, once that kind of fewer passes, Oh wait, we really do need them.
Rico: [00:31:51] How would they not realize that?
Carolyn: [00:31:52] Right. I don’t know, but you know, and then they’ve legislation kind of, you know, it was found to be unconstitutional or illegal in various ways and kind of vanished. You know, we’re going to see that same thing cycle again. And one of the problems we have is that our immigration laws do not match the economic realities on the ground, and we need to have that match. I mean, the other thing about immigration is that, you know, we are now, you know, we are a country that deeply believes in human rights and respect for human dignity and to see what’s happening at the border, with these camps and, you know, taking children away from their parents. You know, everybody’s a parent just feels in their guts, you know, to how wrong that is. And we have just lost our moral bearings now around immigration. And that fundamentally has to be reestablished. I was just in a Hispanic church a few weekends ago and sat down with a man whose brother was here. He ran a landscaping business, you know, in our community right here. And his, wife, for some reason ended up being undocumented, was deported by Ice back to Honduras. And, he followed her back and was shortly thereafter killed. His hands were chopped off, his head was chopped off and his wife was raped. And we’re sending people back to their countries and they’re being killed. And, that’s really, really wrong. And we have to address that. Both the moral, the human rights issues, as well as the economic ones in our immigration policy.
Karl: [00:33:28] There’s a lot that’s going on here in Metro Atlanta with immigrants. If you go to areas like Clarkston and others where you’re seeing, I’d call it a rebirth. The immigrant communities building businesses there, there’s a program there called Start Me, with Emory where they’re partnering with the universities and friends of refugees and nonprofit organizations in the community to help new Americans and refugees build businesses here in
the community. And, and it’s amazing when you see folks that have the ability. And all they might need is some help and guidance on navigating. There might be some language skills that they’re, they need some help with, but they’re putting out good business. Catering businesses and restaurants and clothing businesses and so on because they want to provide, they want to create jobs within the community and make sure the money stays within the community. So you know, if folks want to get a sense of how immigrants are thriving, you know, there’s areas right here in Metro Atlanta that they can go and experience that if they, if they want to kind of just meet someone, have lunch, have coffee, and it changes your perception.
Carolyn: [00:34:40] It’s not a zero sum game, right? They are creating business and opportunity and that in turn is lifting everybody up. And I think that’s another important point about immigrants coming into our community. You know, they bring a tremendous amount of economic growth and vibrancy to our community.
Rico: [00:34:59] You know, a few minutes left. And then we gotta let Caroline go. But I want to get, if you don’t mind, just a couple of questions in about politics. That’s just not issues. But, so we have Sanders and we have, do you have a choice? As far as you know, down there, they’ve been talking about Sanders and down the ticket and how that may affect other candidates. You have six, I think, running as the democratic primary in the seven candidates in the Republican. So they’re having a free for all on the other side, but you’ve raised the most money, you feel good about winning.
Carolyn: [00:35:44] I do. Yeah. I come in with, you know, I came within 433 votes last time. I’m flipping the seed. It was the closest race in the country. And, you know, I’m starting at, you know, tremendous momentum coming out of that. I think a lot of folks. Saw what we accomplished in 2018 and saw it as a victory. I mean, we closed a 20 percentage point gap in this area, to get to that point. The previous Democrat came in at 40%. and so, you know, that enthusiasm and momentum and excitement, you know, it is reflected in my fundraising numbers, right? Those are not. But also any endorsements. I just picked up Hakeem Jeffries, a Congressman who came, Jeffery’s endorsement. He is a rising star in the house leadership, democratic house leadership. I have John Lewis, Andrew Young, Hank Johnson, Sam, you know, a host of local folks. And it’s just, you know, we are coming back to finish what we started last time.
Rico: [00:36:43] How do you feel about Kelly Laughlin?
Carolyn: [00:36:46] Oh, bless her. Welcome to politics.
Rico: [00:36:57] I appreciate you coming down with us. Carolyn: [00:36:58] Absolutely.
Karl: [00:36:59] Just getting to talk to folks and get to hear more about what you think about policies, and issues that are affecting people every day, you know. Thank you very much for coming and joining us today.
Carolyn: [00:37:15] It’s a real pleasure to talk with you guys.
Karl: [00:37:18] Well, we want to thank everybody for listening to the Capitalist Sage Podcast, today. I’m Karl Barham with Transworld Business Advisors. You, we help business folks, figure out exit strategies for businesses. Rico, what do you have coming up?
Rico: [00:37:34] Sure. So Peachtree Corners Magazine, if you go to LivingInPeachtreeCorners.com, you can find out. Well about what, what’s going on in the city. But the next, this one is about youth sports, doing good with homegrown nonprofits. And a few other stories that were chock-full stuff. So that’ll be coming out in April / May issue. So April 10th, right after spring break downs.
Karl: [00:37:58] And I’m going to suspect in the next few weeks and months, there’s going to be lots of activity here in Atlanta Tech Park, our sponsor, and where we broadcast this podcast from, part of the City of Peachtree Corners, Georgia. We want to bring, be a place where business people can come together, interact with people in politics, in the community, to help make what the city’s really all about. So, I want to thank Atlanta Tech Park and invite anybody to come out here and take a look whenever they have a chance. And for that, that’s the end of this week’s podcast at the Capitalist Sage. Thank you everybody for listening. Take care.
Rico: [00:38:38] Thank you.
Capitalist Sage: How to Financially Survive COVID-19
Business taxes and financials are already tricky enough to navigate, but with loans and other financially related acts surfacing in a response to COVID-19, the financial waters are even harder to tread. Luckily, in this episode of the Capitalist Sage, Steven Gu founder and CEO of Gu and Company shares some of his professional insight. Join Karl Barham, Rico Figliolini, and GU as they discuss PPP loans, the Care Act, COVID-19 response, and much more.
Facebook : https://www.facebook.com/stephen.koo.5682
“We went through a change a little bit. When we do the tax plan before pre-COVID-19, we always try to focus on how to save people money. But now we are looking, not just at saving people money, saving people tax, but also helping them to generate cash. Bringing the cash to your pocket right now.”Steven gu
[00:00:30] – Intro
[00:02:49] – About Steven
[00:04:23] – Preparing for the Crisis
[00:07:06] – The Loan Process
[00:09:13] – Large Banks vs. Community Banks
[00:13:57] – Changing Laws
[00:24:09] – The Tax Benefit Buffet
[00:30:16] – Long Term Planning
[00:35:02] – Closing
Karl: [00:00:30] Welcome to the Capitalist Sage podcast. We’re here to bring you advice and tips from seasoned pros and experts to help you improve your business. I’m Carl Barham with Transworld business advisors, and my cohost is Rico Figliolini with Mighty Rockets, digital marketing, and the publisher of the Peachtree Corners Magazine. Hey Rico. How you doing today?
Rico: [00:00:47] Good Karl. Thank you.
Karl: [00:00:49] Why don’t we get started by introducing our sponsors?
Rico: [00:00:52] Sure. Our lead sponsor for this show, as well as the other family of podcasts that we do is Hargray Fiber, and just want to introduce them. They are a regional company that handles cable fiber, optic connections. Bandwidths large for small businesses, as well as enterprise sized businesses. Providing solutions for collaborative work, providing bandwidth that’s needed for teleworking and being able to provide solutions for businesses of all sizes, customized to what they need. And they’re not the cable company, I can say that they’re not Comcast, they’re not AT&T. They are actually in your community providing services to the community and they’re there to be able to come to your door when you need them. So check them out. That’s HargrayFiber.com, or you could go to Hargray.com/business. Thank you.
Karl: [00:01:45] Oh, that’s fabulous. It’s great to see businesses that are focused on the business community here in Peachtree Corners and surrounding areas. Today, I am so blessed to get to introduce everyone to Steven Gu, who is the founder and CEO of Gu and Company, a fractional CFO tax and business advisory firm that services small and medium sized businesses. Today, we’re here to talk about EIDL loans, PPP loans, the Care Act, COVID-19 response. Lots of people have been going through reopening now. They’ve secured loans from the government and from their banks and they need to know what’s next. So we figured we’d have a conversation about that today. Hey Steven, how are you doing today?
Steven: [00:02:35] I’m good. How are you Karl? Hey Rico.
Rico: [00:02:38] Hey Steven. I gotta say thank you by the way, because I personally use Steven to help me get my PPP loans. So thank you for helping me do that.
Steven: [00:02:47] No problem.
Karl: [00:02:49] Cool. Well, you know, Steven here on the Capitalist Sage, we’re here to try to help people understand different things they can do to help their business. And we’ve been working over the last several months in helping business owners with cashflow leads. And how to access these PPP loans. But before we talk a little bit more about that, why don’t, why don’t you introduce yourself and tell us a little bit about why you do and how you got to do what you do today for so many business owners.
Steven: [00:03:19] Sure. Like you introduced me, you know, we normally what we do is really tax planning and that fractional CFO service, but during the COVID-19, we helped a lot of you know small, medium businesses really helping them to secure that EIDL or the PPP loan. And also there’s other financial resources available. So that’s our mission to help them to locate as a financial security, financial, to have them survive that COVID-19. And right now, we are at the second stage. So there are lots of business already called their PTP loans. So in a way, we are helping them how to plan the PPP loan, how to know how to use them, how to use a fund. So that as those money could be forgiven and also there’s other resources, other tax incentives, tax aids, and also you know, forecasting, budgeting, how to basically help them to survive and thrive during this COVID-19.
Karl: [00:04:23] You know, so many business owners when this started were caught and were surprised by the impact on people from a health standpoint. I remember, you were one of the first people starting to warn and advise of the impact of it. Tell me a little bit about how you were able to start seeing this coming. And some of the things you started learning that we needed to do when the crisis started.
Steven: [00:04:58] Right. Actually Karl, you’re one of the people sort of bombarded by me, you know, talking about a PPP for almost three months now. And you probably didn’t know, I think way back in, in March, around the middle of March. You know, you heard me talk about the idea or the talking, sometimes they don’t, they have no word for the PPP yet right? And then we started helping people get the idea, because know, when we have our cloud, we realize this COVID-19, this how bad it’s going to impact business. And we’d realize they are EID available. So we start to reach out to our clients, tell them one, you have to look at how much cash reserve that you have. And the two is like how to take advantage of all those financial aid available. That time is just a family, family first act. Like, so we started that and that time we went a platform, the idea was a website just crashed. At the time is the only, think it’s only a $6 billion. We would apply the website crashed all the time. We don’t really know where you get, it took us, like literally 12 hours to apply for one client. And it often would get done and then the website crashed multiple times. And then in April, early April, the CARES act came out and they added the 10K advanced payment, you can repress the 10K that’s where the 10k come from. It’s added by the CARES act. And then, because, I think as they probably lost it in beta, so they said, Hey, you know, whatever you submit on account, you have to reapply. And that then made is that the bit of the process extremely simple. Now you go there, you just need to spend less than five minutes. Just go submit your request of 10K. So I could, so before that, it’s very, very complicated. So that’s how it started. And at that time though, people, when we talk about a PVP, you know, if you’ve talked to other folks in your, nobody, nobody’s talking about that. But nowadays, if you go there and talk to other CPA, other advisors, probably they talk nothing but for PPP, but it’s a journey.
Karl: [00:07:06] There was a dynamic that happened in this, about getting to the front of the line. Those that had people that one, knew how to, knew the urgency of getting these funds and the necessity for cash in their business, along with how to do it, what documents and information
was going to be required. I noticed how those people with that finance support were able to get to the front of the line and get loans. When, when folks got through that, what were some of the things that, that you saw small business owners didn’t do properly that might have delayed their ability to get some of these funds? What were some of the challenges you saw in some of your early clients in getting funding?
Steven: [00:07:56] Well, first of all, you know, for funding, they typically wait. Let’s say, a typical people is going to screw these up is you know, they don’t have a sort of financial statement, right? For the business, right? And you know, some, some businesses, they don’t even issue a W2 and that they not pay for payroll tax, right? Those are screwed the most. Basically, those are document that the bank files when you file a QPP. And the other issue we also see is really, you know, the financial, it’s not a, not ready. And, you know, tax returns are screwed up and also they’re sort of, they can do to themselves, this thought of the bigger bank is going to help them. And they, they’re just keying in a number they saw just in the application form. And they eventually going to turn it down. We saw that multiple times people just put whatever number they think. And then eventually the back comes back to, Hey, this is not accurate. And you have to wait for another one. And then first of all, the money by now, you come to the last month and the other millions of people ahead of you. So we definitely see people screw up because of that.
Rico: [00:09:13] Let me ask you something, Steven, when you helped me out, actually it was. We will be, they were between legislation, right? The second time it was coming up. We had,actually had talked about putting together the package and, we were ahead of before the legislation passed. So we were doing it ahead of time, right? Hoping that knowing sort of 90% sure that legislation was going to pass. So we were ahead of the curve a little bit, but I had other the friends that were out there that were applying through banks. And what I realized is that you can’t, you know, at the time anyway, many banks did not want to deal with you unless you had an account with them. Or you might’ve had an account with them, but you weren’t big enough.
Steven: [00:10:02] Yeah.
Rico: [00:10:03] In essence, Chase bank, wouldn’t be able to do what you want that maybe a smaller bank could or regional bank. So that’s, that’s where I saw the advantages, right? Does that make sense? Is that what you saw during that time?
Steven: [00:10:17] That’s exactly. Because, you know, we were monitoring this CARES act way before they passed, right? You know we, we read the Congress version of the PPP act. We read the earlier version, right? So we sort of know what’s going on before Trump signed that into the law. And then before he signed it into the law, we have to, we’ll started communicate the ways that different bank offers SBA lending, right? And to our surprise, we thought the bank, were excited. It’s sort of, they’re going to make lots of money. We realize the bank is not a, it’s not a very interested, especially, bigger bank. That’s to know that they cannot make too much money out of this and they’re employees are like, I have to wear the masks, go to the bank and apply, document all these things. They are not incentivized at all. And then we realized, Oh, this
is going to cause a big problem, right? Because, and also they told us like, look, we’re going to take care of our prefered customers first. I mean, it makes sense. I mean, if I’m the business owner, I would take care of my you know, the important clients first. So that’s when we realized this way, would be like, you know, is this a web of chaos? Right? And the bigger bank does not necessarily give you the best service. And they don’t necessarily have your best interests in their mind. So that’s why, that’s when we tried to persuade people, try to tell people, let’s say look, if possible, you know always go to the community bank. A small bank that you have strongest relationship that they can take care of you. They can look at to return and look, look at your application, not necessarily the bigger banks. But at that time, lots of people do not trust us. And they’re like, Oh no, I’ve been dealing with Wells Fargo for how many years. I think first of all, we’re smarter than that, you know they try to game the system. They tried to get away from doing this. This is the first time the community bank really represented the meaning of community.
Karl: [00:12:21] You’ve highlighted a key lesson that a lot of successful business owners have learned is when the crisis hit, everyone ran to their safe place. But those that had built a relationship with their local community banker. And local community banks, they saw an advantage in this particular case to do that. And we always try to advise business owners to make sure they’re having relations. We’re not saying you shouldn’t do banking at the big banks. But you should also have a relationship with the community banks who’s able to pivot, move quicker. They know who you are. They get to understand what you need and be able to provide that service to you. But I think you highlighted something else that I wanted to make sure folks realize. The people that were able to get the loans and the funding first had payroll records. They had their financial statements ready. And I know a lot of people may wait til tax time to reconcile their financial statements if they have it. But if you ever need to go to a bank or a lender, all of those records are going to need to be done. And that just really shows as a business owner. There’s an element of the business of keeping up the financial records and your scorecard that’s important to be able to react quickly should the business environment pivot.
Steven: [00:13:55] Right.
Karl: [00:13:57] So now that we’ve gotten the loans and folks have gotten the funding. I’ve seen some news come out about more laws and more rules. And when it comes to, can you explain the difference between what originally people signed, everything got easy and they just signed something. But when they signed the first time, what were the terms of those loans that they got. Why didn’t they have to pay it back? What did they have to spend it on? And has there been any changes in that in recent weeks?
Steven: [00:14:29] Yes, great question. So this is the first time I, you know, I ever deal with that. So, so much uncertainties. You know, for the PPP application itself, the department of treasury and the SBA, they issued more than 20, like rulings and guidelines more than 20 times, right? And now after people get the money, they issued a new ruling that May 16. So they issued as
that people that got PPP forgiveness, the preparation for. And a few days later the department of treasury issued a regular issue to some guidance on how to calculate the forgiveness portion. It’s, the application, PPP forgiveness application form it’s 11 pages. And as a department of treasury guide is 26 pages. Okay. And then, two weeks later now we just had a PPP flexibility act. It changes lots of things. Lots of important things, a lot of forgiveness. So it’s, it keeps changing, keep changing. So, yeah, there’s a few, let’s talk about before change. Before they make the big, before the flexibility act, they passed the law, the requirements are, you know, the money you receive. 75% of the money received has to be used on payroll and then for the remaining you can only use multi-interest, rent, or utility. Only those three, okay? And also you are required to remain a payroll number, right? A head account let’s say a full time, full time equivalent, meaning full time. Or if you have part time, you have to convert the part time into full time. Okay, so FTE, full time. So you have to maintain those payroll numbers, okay? People, how many people you have, and then you also are required to maintain the payroll level. If your payroll is reduced to more than 25% compared to prior quarter, the forgiveness amount will be reduced accordingly. A secondary requirement. That’s third requirement, the fourth requirement is you have to restore your employee headcount by June 30th. And if you don’t, then the forgiveness portion will be reduced. That’s another law. Right now under the, under the flexibility act. The 75-25 split has been changed to 60-40 split, I’ll explain why, okay? That’s one big portion. And also, previously you have, you have eight weeks to use this PPP money, eight weeks. And then, now they extended to 24 weeks. So you have more, you have more time to, to use up this PVP money, okay? And previously you only have up until June 30th to rehire, to restore your employees. But now you have up until the end of the year, okay? And, and also previously, if your PPP law is not forgiven, you have to pay back. You have two years to pay back. And then now they extend to five years. Okay, you have five years to pay it back. Okay.
Karl: [00:18:20] Why do you think, why do you think they did, they made these changes? What was the concern? What were they trying to address that they saw happening?
Steven: [00:18:29] The biggest one, there was a few things. If you think about it, once people get the money, think of a restaurant, okay? Once they get PPP money, they cannot basically, they cannot use the money for the, well that can, but even if you got the money, you probably see lots of employees they refused to return back to work. Why is the conditionings not permitted, it’s still unsafe or the restaurant simply is not open yet, right? And the third problem is really the restaurant owners are now competing with unemployment benefits. In California, for example, California state pays the employee people for like $550 a week. And the federal government matched another $600. So that’s like the people, people got to like $4,400 a month tax free, just unplanned benefit. So they are not like, they don’t want to, I make it for your, for your PPP, how much you pay for them, for the people working is probably less than $4,400. So they’re like, I would rather just stay at home, watching Netflix. I don’t want to go back to work, right? That’s why. And then for other businesses, they are really not ready to go back to business yet, right? So that means really, yeah you help the employees, but they are not ready to help as an employer because the money you’ve got already doesn’t help you restore, reopen the business, right? And so that’s why they extended that, extended the time. So say, okay, you
don’t have to use it within eight weeks. You can use it within 24 weeks so you can decide, okay, I want to restore, I will ask the five people back first and then I’ll add more and more and more. Now it really makes sense now, right? And also I get previously, like if I want to use a PPP minus, so if my employee doesn’t want to come back, should I call the state to report them? If I report to that guy he’s not getting any benefit anymore. So it was putting the employer in a very odd situation, but now you don’t have to do that because now you have up until the end of the year to rehire all the people, right? So that’s, that’s the main, that’s the main concern. The other, there was also other people, like, again, they extended to rehire period back to, pushed it back to December. So the first period that’s kind of the same concern, like, Hey, If people, what if people don’t want to come back? Or what if you know, the condition is not ready to reopen yet. So really we give people more flexibility. And plus previously you only have eight weeks to pay, to use our money basically caused some issue because you got a 2.5 of your month to payroll that’s your PPP loan. And you’ve only got two months to use it. So you really have to think about what’s the way to use it right? I have to use it on something now. But now they give you more time. So really the policy is really want to make sure you know, almost everybody can get the money, be forgiven.
Rico: [00:21:45] It sounded like, it sounds like to me, the original policy was meant to be a shot into the economy to get it moving at a point where it’s stuck in the mud and it’s not going to move, right? I mean, people, customers are not coming back as quickly, right?
Steven: [00:22:02] Right.
Rico: [00:22:03] So you got that, and you’re right about unemployment. Now unemployment runs out that extended unemployment, I think in July.
Steven: [00:22:10] July 31st. Yeah.
Rico: [00:22:11] Right. So once that runs out, one of the restaurant owners I’ve spoken to, he’s like, you know, the problem is he says, is that they don’t want to work. Like you said, because maybe they’re getting more money.
Steven: [00:22:24] Yeah, exactly.
Rico: [00:22:25] By the time they come back. Some of these restaurants may not, some of them may not reopen anymore.
Steven: [00:22:30] Right.
Rico: [00:22:31] But we hope the majority will, and there won’t be as many jobs. So they’re looking at short term money. As, as versus looking at the long term, if they’re going to have the job three months from now or a month from now.
Steven: [00:22:44] Exactly. So that comes right down the mix, especially for tip workers. Like, you know, if I hired them back, for two months and then do I just fire them again, because we’re not ready? It’ll make no sense.
Rico: [00:22:55] Yeah. And then some companies who did we talk to that was, they had the cheese business, I think. And, essentially, Oh, you weren’t in that this was a different zoom podcast, but it was a cheese manufacturer, small business you had about 50 employees. She couldn’t let go of her employees. She had to use the money. Cause how can you retrain cheese manufacturers? If you will. It’s not a job…
Steven: [00:23:22] Right.
Karl: [00:23:24] They, folks once you let people go, they might find other jobs and other places and they won’t be able to bring them back. So those are some of the things that people have to pay attention to for the PPP. They’ve gotten some flexibility, some bandwidth. What about on the tax front? I know we would, they’ve got a delay to, a six month delay or one quarter delay, excuse me, for tax from April 15th. What’s the new current deadline for tax filing it? What does it mean for business owners? What do they have to pay attention to in filing their tax? Do they have to make sure it’s filed and pay by this new date? Or is it, or what do they need to worry about Steven?
Steven: [00:24:09] Well, they’re required, actually, I call that a buffet, I call that a tax benefit buffet, a COVID-19 tax benefit buffet coming in from a different acts. Coming from CARES act, coming from your Family First act. And maybe they tried to attempt to add more in under the Hero’s act, but it did not pass. So there are a lots of things, I think I summarized eleven of them. I cannot remember them all right now. But once there is, you know, basically the IRS extended everything. Whatever you do before, it’s all extended for six months. Plus, the majority of the returns or forms are extend to July the 31st. July 15th, sorry. So you have enough time and then you don’t have to pay. The payment obligation is also extended. So you don’t have to pay. And besides that they have many other important benefits available that is worth, worth doing some tax planning. Now I want to make sure people understand the difference between tax preparation and the tax planning. So the biggest problem, Karl, you and I talk almost every week on this and before COVID-19 I was, try to always educate that to folks. Tax preparation is really a cost. Something you have to do. It’s like you’ve got all your information for last year. You give it to your tax preparer, put it in the software and then send it to IS, right. It’s just to report information you have. Tax planning is really, you have to look at lots of legal intricate structure and locality or personal life insurance, retirement, look at text, no tax costs different than the CARES act, all those things, and then come up sporadically, typically it’s done before the end of the year. For example, under the Family First Act and the CARES, they have lots of stuff. For example, they have lots of benefit. You can use, you can take advantage. One simple articles, called section 139. Section 139 was drafted really for section nine, really for 911, what time, you know, lots of victims of 911. So they passed the law. Basically say if there are certain victims, their family or your employees that are impacted by that tragedy, you can pay your employees a
certain amount to really support a family, right? But the sentence was drafted as a national disaster. So if you’re paying your employee, because of national disaster, you can, the employer can pay a certain amount to the employee and the employer can deduct those expenses. An employee does not have to include that in their income. So it’s tax free for the employees. It’s almost like double dipping, right. But it is really for the tax, for the national disaster relief. So now we have another national disaster, COVID-19, so you can do the same. You can do the same for your employee, for example, you know Karl, literally I think a you and I both now with the kids at home, we really cannot work. So we can literally, we can pay the employee. You can hire a nanny for your employee to take care of their kids so they can work, right? Or you can pay for the internet service, so maybe computer or camera, if they are required to do that to work from virtual, right? Or if you have to buy certain, something to keep them safe. As long as those are necessary expense to help them to go through this thing. Those could have be tax deductible for the, for the employers, I mean, deductible for the employer and the tax free for the employee. That’s why. And there’s quite a few other things. For example, you can always, you can get the retention credit, right? You know, if you’re keeping employees, you can get a retention credit and you can defer your payroll tax for two years. So you know, those 15.3% you’d have to pay now. And QIP, that’s very important, but if you did some qualified improvement, you are allowed to write them off immediately, right? And also like if you have net operating loss in previous years and you can, you can just, they are allowing you to carry it back and then you can convert those net operating loss into cash now. So you can receive a check now. So we went through a change a little bit, when we do the tax plan before the, pre COVID-19, we always try to focus on how to save people money. But now we are not looking, not just at saving people money, saving people tax, but also helping them to generate cash. Bring the cash to your pocket right now, so.
Karl: [00:29:22] That’s a key thing that you highlighted a couple of great, great suggestions, but I know a lot of people are impacted with employees that have to work from home. At the same time, a lot of the childcare services that were traditionally available weren’t available or aren’t available. And so these are costs that people have to account for because of COVID-19. And if I understand you correctly, there might be opportunities where you can in addressing some of those things, there might be some tax advantages or tax things you need to understand and know that can be applied to help you and your business.
Steven: [00:30:05] Yeah. Huge advantages, especially the people involved in if they do, if they have some new manufacturing boards, they have some real estate warehouse related. There is more benefit out of that.
Karl: [00:30:16] So, you know, as you think about it, we we’ve started off by talking about, COVID-19 and all the loans that help push money into the economy. I’d like to ask you to maybe take out your crystal ball a little bit. And you’ve got a perspective on, you know, the future of both from you do a lot of business with international businesses that do business in China, North America, all over the world. What are you seeing and hearing, you know, over the next year, that business owners should be considering. How not, not so much how long this is
going to last, but just what should people start preparing for when it comes to cash? The financials of their business over the longer term?
Steven: [00:31:06] What they, I would say it’s hard to predict what are the future looks like, but I think the chances are, you know, maybe yeah we’re gonna reopen. You know, maybe some, maybe school is gonna reopen in September, but eventually the risk of a second wave of infection is very high. If you’re considering given lots of negative, if you see people on the, right now into the protests. Lots of, lots of crowds. I mean, not a lot of them wear the masks. I feel like almost like the second wave is becoming evitable. So those are, how does that impact the business? I think we needed to really consider what, we have to plan out what if the second wave is true, will come? And does the business have to shut down again. How do you plan, right? How much, you have to look at, you know what if your business just returns to only 90% or 50% or 20% and how much cash you have? What if they use up all the PPPs? What if there’s no more free money from the government, right? How much your burn rate you have? How much money you have in your bank and how much money you have before you use up all your critical or other loans? So that’s the thing I think, as a, the business to think about, I know you do, they have to really think about it. And right now we do, we have the client do some forecasting budgeting. They look at your cash, you know earn rate and do some prediction on how much revenue you can incur that, how much to recover the revenue loss during the lockdown. And in the future, how much they’re sort of factoring the possibility of second wave. Anyway, it’s really become the exercise of doing a, doing a forecasting budgeting and getting prepared.
Karl: [00:32:59] This is critical. We just experienced about 11 to 12 year expansion, economic expansion. So there’s a lot of business owners that came into the business over that period of time. And they didn’t have to focus on the financials, the cashflow of their business for the last 10 years, because they were growing consistently. It was predictable. When you enter into a period of uncertainty and we don’t know the probability of a second wave, or even other things that are impacting the economy happening over the next 24 months. But planning the financial scenarios, what cash you need, what lending or borrowing or equity injections is going to be needed, where you need to pivot your business. How much will that cost to do. If you need to remodel your restaurants to enable social distancing from its current floor plan, you might need a general contractor and other funding that. There are mechanisms to fund that, but you need a plan, financial plan for your business to be able to do that. And that’s where if you have the skill set and knowledge to manage the financial of your business, now’s the time to use it. If you don’t have that knowledge and skill, now’s the time to learn it or to reach out to people that can help you. Your business might depend on it over the next 24 months. So I think it’s wise advice that you describe the role of a CFO in your business, no matter their size. Because it’s looking forward on how to plan for the financial needs of your business versus rearward looking on what did you do last year and how much taxes you owe. So really appreciate you sharing some of those ideas and tips with us. How would people get in touch with you if they wanted to learn more about tax planning, COVID-19 financial planning and others.
Steven: [00:35:02] Well, if they’re already connect with you, you know, just send you an email, but I can also be reached by firstname.lastname@example.org. That’s my email. And I do either a one point, Karl and Rico, you probably agree with me on this. I call myself a war time, COVID-19 war time CFO. Really we have to plan ahead, but I think we will never return to what we were three months ago, or even maybe six months ago. We will never. Because look at, we have 38 million in unemployment. Think about that. Even if we add 1 million a month at an average of one million a month, that’s going to take 38 months. Probably we will never again, we will never return to what we used to be. So we really need to plan. We need to plan ahead.
Rico: [00:35:56] I agree with you that we need to plan ahead. I’m hoping that we do return at some point somewhere. It might take a year. It was that boom economy for the last 10 years, like Karl said, can be a bit tough to do that anytime soon, I’m sure.
Karl: [00:36:14] Or industries will change. I think, you know, we are able to adapt. That is one thing that both here in America and around the world, we adapt to changes. After 911 flying on planes were different, but they, the people flew again and people travel and new industries emerge. Uber is a post 911 industry that, that flourished and there’ll be others. For the business owners that are out there trying to navigate today. The goal is survival. But also start looking forward to how to change the nature of your business for what the future may look like. Those that are able to do that faster, they’re going to be more successful in the long run.
Rico: [00:37:02] Especially with businesses like Steven said that have to look at maybe a second wave coming. So just be prepared. If you’re going to have to close down again, if that’s what we have to do,
Steven: [00:37:13] Right. Again, not all the business were impacted all the same. Some are really, they probably could have, cannot survive. Some are just impacted a bit, they can bounce back. But some are, is just a beneficiary out of the COVID-19, the Ecommerce, you know, some health care. You, know, it’s different.
Karl: [00:37:31] Well, again, I’d like to thank Steven Gu. He is the founder and CEO of a Gu and Company, a fractional CFO tax and business advisory firm. You shared a lot of great information. For some people you know, this might highlight some opportunities where they can get more precise and efficient with how they run their business and whether they reach out to their accountant or anybody else, or reach out to you. It’s time for folks to really pay attention to this important aspect. If nothing else taught us a lesson, when the government had free money to give out those that knew what to do and how to do it, and those that had their books and records and good accurate business records, they got to the front of the line, they got the money quicker. And so should that happen again, people have a personal mission to look at their own situation and see if they can make some improvements. So they’re more ready for the next, the next time. Thank you very much. We’d like to thank everybody for tuning in to the Capitalist Sage podcast we’re continuing to have new and interesting guests come in and talk about things to help you improve your business. I’m Karl Barham with Transworld Business
Advisors, Atlanta Peachtree. And believe it or not, this has been a time where people have reevaluated what’s important in life and we have more qualified buyers and investors in businesses that you would think. People are looking to invest in different businesses. And we help them find the right business. If you’re a business owner and you decided that, you know, you want to move on to other things in your life. There is a process to help get your business sold so that you can do what’s next. And so feel free to contact myself, one of my agents. We’ll be able to help you with that. You can reach us at KBarham@TWorld.com or visit our website www.TWorld.com/AtlantaPeachtree. Rico, why don’t you tell us a little bit about what you’ve got coming up?
Rico: [00:39:41] Sure. Before I get to that. Steven don’t don’t log off when we sign off, hang in there for a few minutes. And for those that need Steven Gu’s information, I’ll make sure it’s in the show notes also. So you can track back to his Facebook or LinkedIn pages, or certainly reach out to me or call. But you know, Peachtree Corners magazine. The newest issue is in the mailboxes. I got mine today, so hopefully everyone’s getting them their copy over the next few weeks. We’ve been fortunate to have a support of the city, local businesses continuing to advertise. So it’s a strong issue. This one’s about, stories that brighten our spirits. So a lot, a lot of people doing a lot of different things during COVID-19. People making, so Steven Shininess is our cover story, along with four other stories of people that have decided to do different things than what they were originally doing. So he’s 3D printing face masks. Howill Upchurch is a videographer, but he also creates guitars. So he was making guitars in his workshops. And there’s a bunch of people like that. Lots of stories. So pick it up. You could pick it up at, there’s still places that are carrying the publication that are able to do it in this COVID-19 environment. So check them out. Dunkin Donuts, Ingles, lots of restaurants that are opened for dining. You’ll see, you’ll see it there. Or go to living in PeachtreeCorners.com, you can find the digital edition there. Mighty Rockets, that’s what I do, social media, videography and all that. We’re still doing gangbusters, so there’s a lot of work out there for what I’m doing for companies. I need to get online, whether they’re doing a webinar or podcasts or other things, I’m busy doing that. So MightyRockets.com. You can email me Rico@mightyrockets.com and I’ll help you guys out.
Karl: [00:41:40] Well, thank you again, Steven for joining us today. And for everybody out there, stay strong. Keep pushing forward. Take care. Have a great day.
Capitalist Sage: How Barter Can Help Small Business During COVID19- Pandemic [Podcast]
An age-old tradition of bartering between businesses is still alive and well thanks to the Southern Barter Club and founder Laurie Sossa, our guest on today’s episode of the Capitalist Sage. Learn how your business can barter and the benefits of working with SBC. Join Rico Figliolini and Karl Barham as they chat with Laurie about how SBC works, the benefits of barter, and exactly how to make bartering a part of your business.
“We are here for the community. So, you know this is a time, more than ever, that we have to really just be a resource to one another… So definitely, what I’m hoping that everybody gets out of this more than anything is even if they don’t work with Southern Barter club, start slowly even with just leveraging what you have, your time, your resources, your assets, and don’t be afraid to approach another business owner you want to do business with. That’s your neighbor or colleague or someone you’ve always worked with… So if anything, we hope there’s awareness to bartering and trading.”Laurie Sossa
[00:00:30] – Intro
[00:03:17] – Laurie’s History with Barter
[00:05:42] – How Barter Works
[00:07:09] – Typical Trades
[00:14:29] – Businesses That Could Benefit
[00:18:28] – Pricing Concerns
[00:26:41] – Why Doesn’t Everyone Barter?
[00:29:23] – Business Expenses
[00:32:13] – Closing
Karl: [00:00:30] Welcome to the Capitalist Sage Podcast. We’re here to bring you advice and tips from seasoned pros and experts to help you improve your business. I’m Karl Barham with Transworld Business Advisors, and my co host is Rico Figliolini with Mighty Rockets Digital Marketing and the publisher of the Peachtree Corners Magazine. Hey Rico, how are you doing today?
Rico: [00:00:47] It’s a beautiful day, Karl. Glad to be out here.
Karl: [00:00:50] Absolutely. Things are opening up. And little by little, I see activity happening throughout. So, we’re here doing this virtually, as we continue with the COVID-19 pandemic, but today… Innovative ways for, that folks are handling business during the pandemic. Let’s start off with our sponsors Rico.
Rico: [00:01:15] Sure. Well, let me introduce the sponsor, our lead sponsor in the family of podcasts, is Hargray Fiber. They’re a very large Southeastern based fiber cable company that provides solutions both to small businesses and large enterprise businesses. When it comes to internet connection and working online, teleworking and providing the bandwidth as well as fiber to these companies to be able to do what needs to be done across the Southeast. They’re not your cable guy, they are right in your community. They’re involved in the community and they’re there in quick notice to be able to help you do what you need to do. They’ve upscaled to be able to meet the challenges during this pandemic. So great place. They are offering all sorts of tools for free to be able to do online work, they’re HargrayFiber.com so this is, see how things can work for you.
Karl: [00:02:13] That’s fabulous. Well, today we’ve got an interesting topic. We wanted to, a couple of weeks ago, Rico and I were having a conversation as we were talking about how business people are figuring out ways to navigate some of the economic restrictions that have been put on businesses. And the topic of Barter came up. And for those of you that may not know much about Barter throughout the history and the present of it, we’ve got a fabulous guest here today. Laurie Sossa is the founder of the Southern Barter Club, and today we’re honored to have her on to help educate us a little bit around how Barter has been used and is being used by business owners to help them, not just today, during these economic times, but also how we can help people in their business, in particular, conserve cashflow. Hi, Laurie, how are you doing today?
Laurie: [00:03:11] Hey, good afternoon, and I’m doing well as well as can be. Thank you for having me as a guest today.
Karl: [00:03:17] No, we appreciate it. Why don’t we jump right in and start off by telling us a little bit about yourself and what led you down the path to discover and Barter as a business.
Laurie: [00:03:30] Well, my background is marketing, research and advertising. And we’ve worked with businesses that had products and services, and we were involved from the
beginning to the point where we helped them with marketing implications and recommendations and product launches and distribution. And we realized early on, especially manufacturer, everybody has their own costs of doing business. So there’s a lot of opportunity for leveraging. And so we realized early on that, you know, especially a business that’s just launching. That they could actually provide a marketing budget and expand it because if they leveraged something that they had the ability to earn at their costs of doing business, but yield the spending in the value of whole retail, it’s really a game changer. So early on, this is back in the nineties, we facilitated a lot of direct one-on-one trading, and I love the opportunity of being a resource to entrepreneurs and startups. Creating our own little ecosystem. But what we did realize is that there’s always a challenge. Have either, I don’t know if either of you or anyone you know, has ever done some type of barter. So that’s, that’s an interesting question because sometimes there’s a challenge of two people being interested in what the other person has to have to begin with, right? And also the value of being there. And so when we started seeing that, that’s when I decided, you know, I want to be a resource to entrepreneurs and to, you know, businesses, nonprofits that are cash strapped and take out of the equation, we call it the incidence of coincidence. You know, that’s when people actually have something that each other wants and that the value is there. And so we created our very own barter system, and 11 years later, it’s strong. And it’s not just here in the Southeast and Atlanta, but we actually have, several thousand throughout the state of Georgia and several thousand throughout the country. And we have reciprocation of 50,000 businesses around the world, that by itself…
Karl: [00:05:42] Wow. So I’m curious, how does Barter work typically? I’m a business owner and I need something in my business.
Laurie: [00:05:54] Well, the starting point is that we actually have what’s called a trade dollar, and it’s equivalent to what a US dollar is. And it is taxable. So in other words, the IRS sees the value of it. Our role as a barter organization and in the industry we’re called a trade exchange, by the way, the official terms in this $12 billion industry. And so we are the third party record keeper. So we manage all the debits, all the credits, and we utilize a trade dollar equivalent to what a cash dollar is. So a member is any type of business that has goods, services, resources, any type of underutilized asset that they otherwise don’t have a buyer for the cash. Or they have downtime and seasons and maybe not budgets but full cash. So it makes sense for them to bring it to a trade thing, such as SBC, Southern Barter Club where we’ll map the buyers and the sellers. So simply the people who participate are business owners. They’ve identified what services, resources, or assets that they want to make available and accept another form of currency in lieu of cash, in trade dollars.
Karl: [00:07:09] Got it. At a time like this where folks have been challenged with finding revenues and customers, can you give me an example of a typical trade that might happen?
Laurie: [00:07:25] Absolutely. Well for starters, we have what’s called a online platform. So just like all of us use day to day online banking, so you’re not going to go through the drive through right? Of the dry cleaners, or a fast food if, unless you’ve checked your balance right in your
online banking account. So we haven’t, this is a little house on an online sophisticated, but very easy to use platform where members keep up with their trade dollars that they’ve earned. So the members simply just move past except what’s called these trade dollars. And they bank them and they may have something very specific in mind that they want to spend them on. Or they just bank them knowing that when the rainy day comes such as right now, unfortunately during this pandemic, that they’ve already been earning and building up and have this alternative currency in their account that they can tap into to offset spending cash to help grow their business. I did want to ask if we could put the slide up to show the model of how it works.
Karl: [00:08:28] Okay.
Laurie: [00:08:30] Okay, wonderful. So with that, how it works, it shows the SBC in the middle, so that’s our currency equivalent to one cash dollar is the trade dollar. And so a dentist can be contacted by SBC broker and tell the dentist, we have an automotive company that does car repairs and they want to be able to send one of their employees to get some dental work. And so the dentist may say, Oh, well, I don’t have any need. My son owns an auto repair service, so I don’t have any need for auto repair. That doesn’t end there. What he does say is, but I will accept your trade dollars. And so the automobile company now has to provide automobile repair maybe to the hotel owner or maybe to a restaurant owner, somebody else in the network that would want and need auto repair, and he accepts in lieu of cash, for the labor only not the product. He accepts in lieu of cash, trade dollars for the labor, puts it in this online account. Let’s say as an example he earned 1,000 trade dollars for labor on a transmission, let’s say for the restaurant owner. The restaurant owner already earned their trade dollars by letting the landscaper, the plumber and the hairstylist eat at their restaurants and in lieu of cash accepted trade dollars. So they’ve already banked their trades dollars. So now the restaurant owner goes to the automobile shop, thanks to SBCs directory and brokering services and says, we’d like to get $1,000 worth of transmission repair. Not the actual, you know, transmission, but the labor and the services. And so they’ve accept whats called trade dollars. For facilitating that SBC charges a 6% cash transaction fee. So now the restaurant has provided a thousand dollars worth of dining. But at a core restaurant their cost of doing business is maybe 28 to 30 cents on the dollar. I know you know that as a business advisor and a business coach and business consultant, everybody has their own cost of doing business, but the restaurant, it’s 28 cents to 30 cents on the dollar. So for them to provide $1,000 of gift certificates and $20 increments, that’s could be resold over time. In reality to fulfill it, it’s only going to cost them tops $300. Okay. But at the same time, they just say, thank you, SBC for bringing me that thousand dollars sale. Here’s your $60 cash fee processing fees 6% okay. And now they earned that 1,000 trade dollars in their virtual account. It cost them $60. In hard costs, it may have cost them over time to fulfill each time the person was using the gift certificate. It perhaps cost them that $300 let’s say for food. You know, but other than that, what’s happening is the pasta is boiling, right? The water is on, in the pot, the pasta is boiling. The lights and electricity are on. The waitstaff is there. We don’t want them twiddling their thumbs. So if we could identify for the restaurant certain times of the week, certain times of the month, that is good. Monday nights, it’s dead. Monday through Thursday during lunchtime, we don’t have a lunch crowd. We would like to
accept those certificates during those times. But we really don’t want to barter on Friday, Saturday, Sunday cause we’re jam packed, our tables are filled. But we would welcome, you know, not having empty tables Monday through Thursday. And so we’ll take barter for currency. And so there’s a lot of things happening there in bartering. They earned more power bar currency. Now they have a thousand dollars they wouldn’t have had otherwise of spending power, not cash, but barter trade dollars. But now they also have filled, you know, open tables in the restaurant. Their wait staff is going to earn their 20% cash tip because it’s tipping as always. Now, here’s the best part. Let’s say it was an attorney that purchased a gift certificate and took one of their clients to the restaurant. Well, we know what happens when there’s a job well done and a fantastic experience, right? They’re going to come back. They’re going to remember the great experience. And so what happens is word of mouth advertising naturally just happens. And the person or the business contact that the attorney had brought in for the meal, they don’t know if it’s participating in a barter system. They don’t know was paid with alternative currency. They just know that they were taken by their attorney to this restaurant and it was a great experience. And they’re going to come back. And so barter, at the end of the day, does help with word of mouth, advertising, marketing, branding, filling, you know, empty tables, helping get tips, you know, and some business for the staff that’s on hand, and filling their barter account with spending power. So now they’ve earned, and now they say, my employee needs dental work, or my employee needs a new transmission. So I’m going to spend that thousand dollars I just earned, and I’m going to go ahead and maybe go to the dentist or maybe go to the automobile company and get the repair done and use the barter dollars. So let’s say it’s only $500 in barter, simply a 6% transaction fee, $30 in cash, $500 in dental work, or the automobile repair. And now they still have left over $500 from their initial earning of the thousand barter dollars.
Karl: [00:14:11] So I’ve got a question for businesses today…
Laurie: [00:14:23] So how are businesses today using the barter during pandemic?
Karl: [00:14:29] What types of businesses? Services? What types of businesses would most benefit from this?
Laurie: [00:14:35] We have a directory that literally is A to Z. So anything from an art gallery, accommodations, acupuncturist, all the way to theater tickets, yoga, zoo tickets. So it’s literally an A to Z directory. Every business has capacity. So if there’s a dentist or a plastic surgeon or an eyelash extension company, massage therapist that has appointment times, if they’re not at full capacity, you know, if they have an eight hour day that they’re open and they have time slots that are empty, they can simply either call or alert, SBC Wednesdays pretty low, in us filling our bookings. Can you please send a blast out to your network and let them know that we’ll accept some clients and accept the barter currency. And sometimes it may not be that they reached out to us and that’s what our businesses love. It may be that we answer the phone and it may be the plumber who all along for the past several years, it’s his business model. He’ll, except when he has downtime at his convenience, when it works for him, you know, clients we wouldn’t have
had otherwise. Yes, I’ll perform the plumming. Banks online, this barter currency, and uses it as a spending power for when the needs come up. So it may be six months later when he realizes, Oh, you know, I need to go to the dentist, or, Oh, I need to, you know, reward my employees as a retention tool and give them tickets to a concert, or send a gift basket to a client. So this actually becomes a spending account. So it could become an account for business expenses. Some of our clients actually have stretched their marketing dollars, and have used their barter funds that they have received and been building up. And when it comes to, you know, some type of a marketing campaign, they will tap into their, their barter currency, get on a billboard without paying cash, use radio stations.
Karl: [00:16:31] I wonder if that’s something that folks can do today. If they don’t have the capacity, whether it’s a restaurant or massage parlour, in exchange currency for future services, or gift certificates to employees. They may be able to get marketing help, or accounting help from somebody else. Which would lower an expense that they would normally have for that.
Laurie: [00:16:59] Absolutely. It absolutely, it really is just business as usual, you know, provide your services, but just accept the help of an agency that is going to drum up the business for you. And it’s a different form of currency. You know, more than ever. We, I’ve never seen business like this before. I’ve been, we’ve owned Southern Barter Club, SBC Global Barter for 11 years. We’ve been running on seven days with brokering our clients. So we have, with the initial outbreak now things are the supply chains, a little bit improved, but we were getting panicked phone calls where, you know, we need hand sanitizer, we need free, you know, toilet paper and we need masks, facial masks, you know? You know, all these types of things that, because they would go to their supermarket, you know, and the shelves were bare. Okay. And they’d have to wait. And so we have done thousands, probably 10, 20,000 or more, you know, worth of transactions of our clients that we’re picking up and buying un-inflated prices. Very necessary, supplies. Hand sanitizer, facial masks, toilet paper, paper towels, things like that. That they otherwise maybe couldn’t even tap into back in March, by the way.
Rico: [00:18:28] Let me ask you, since you brought that up, about the, the price, because that’s always been a concern of mine with when it comes to barter. Two things, how do you sort of vet the members to make sure that they’re doing the right thing. And how do you make sure that these members, you know, if it’s a $1,400 transmission job, let’s say, that they don’t say it’s a $2,000 transmission job. Because I’ve seen that in other organizations sometimes where the price doesn’t make sense, and it’s still cheaper to go pay cash for it. So how do you protect the membership from those types of things that might happen.
Laurie: [00:19:08] That’s a good concern. And unfortunately, the reality is that there are people who attempt to do that. People are who they are in the cash world. If that’s who they are, and that’s how they do business, they’re that way in the barter world. What we do is we establish ethics where it’s according to the fair MSRP. So if there’s a business out there and you know, their price on the menu is established price on the menu. When you go with dine in that restaurant, that’s the established price. But if you’re going to hire a contractor. In the cash world,
you’re going to hire a contractor and they’re going to come to your home or your business and gives you a price to paint your home, and they tell you it’s $2,000. It wouldn’t be really prudent and really just, you wouldn’t be a good consumer if the first person you just called randomly, you’re going to say, yes, I’m going to pay you $2,000 cash to come paint my house. So there’s an obligation that goes back on the buyer to do their due diligence themselves. We’re a directory, just like the yellow pages has always been for those of us who remember the yellow pages, it was delivered. So we house the directory and we do all we can. We do actually employ, since that’s my background, mystery shopping. So if somebody calls with a concern that like this dry cleaner, this happened actually, we had a dry cleaner in Buckhead that was for years clients of ours. And everybody was happy with their services, but it did take one client that out of there, for whatever reason, out of their little area that they, that they lived in, out by Toko Hills decided that they needed to go into Buckhead. And so they looked in the directory and they went to a dry cleaner in Buckhead. And they came back and they were astonished and they said, what? I’m paying, you know, such and such for my dry cleaning. And why is it so much more expensive there and they’re using the barter system? So we hear what our clients say and we don’t just leave it at that. So what we did was we sent a mystery shopper. So we sent someone who actually went in and they said, Oh, I’m new to the area and I’m going, you know, and I would like to be using for my husband’s shirts. You know, apples to apples, you know, what it was going to be was laundering and dry cleaning of shirts. And, you know, we’re interested in knowing what your prices are and I just wanted to introduce myself. Can you write it down for me? And it was right on his, he also happened to own a gym. And he had some, like trifles or whatever for the gym, can you write it down for me? And he wrote it right down on there. And we found out that the prices were exactly what the prices were. He was Buckhead rent, so the prices were a lot more expensive than the Toco Hills area where he was getting his shirts done. However, I do want to say that several years later, a different company, the same exact thing, a concern happened in Buckhead. And we would, we were actually, well maybe it’s the same thing. It’s Buckhead rent, but three different people brought it up. We sent somebody and sure enough, they had pricing written on the board, you know, behind the counter. And it was like 50 something cents more. And so they were changing the prices and we told them that he needed to do fair trading. And he had all the reasons why he felt justified. And we just said, well, we can’t bring you new clients. We’ll help you spend out your account and close your account. And that’s what we did. So when it’s brought to our attention, we don’t ignore it. But the only way that we can fix the problem is if it’s brought to our attention. So we have a rating system. So when you have done a transaction, finished a transaction at a rate, the person that you just traded with at one to five star. And you know, accountability is a big thing. Knowing that you know the person. I do want to give one other example. We had a Mexican restaurant in Lawrenceville, Gwinnett County that wanted to have the vestibule built and they had received cash prices because again, we always tell everybody. Don’t just go with the first price that somebody puts you in barter, like do your due diligence and get several quotes, you know? So if I’m going to get my house painted or I’m going to build a vestibule, I’m going to get at least three quotes. And if it’s too low? Hmm. Something to think about, right. If it’s too high, well, I don’t want to be taken advantage of. But if it’s right in the middle and it sounds right then that may be. And you have to take into other considerations is, are they using contractors? Are they using
employees? Do they have a warranty with their work? So this Mexican restaurant had, actually, picked up day labor and that’s how they wound up getting their, their vestibule built. So it was different people that were working on it different days, and there was no warranty. And it wasn’t apples to apples when they compared the price that was maybe double the price, but it was with an established company that had employees and it did have a warranty. So, we just have to put the responsibility back on the buyer. Just business as usual in cash business. I’m not going to just go with the first quote. I’m going to get two or three and be an informed consumer.
Rico: [00:24:21] And I like the fact that you have reviews on there and the star rating because transparency, right? Because everyone knows it’s not like, just it’s like there’s the company name attached to the account. So if there’s good transparency, so they’re getting a review and it’s a bad review, whoever is saying it is standing by it. If it’s a great review, they’re standing by it.
Laurie: [00:24:48] Absolutely. One of the things I did want to manage expectations, and I think it’s a simple, very simple illustration, but I think it really does hit home is, if anyone has ever gone into Macy’s as an example with their mindset, I want a size large, Navy Ralph Lauren sweater. Right? They can go into Macy’s or any retail store, and if they’re going to pay full retail, they’ll get a very big variety of sizes, brands, and available options, right? Different experience if I head over to the clearance rack. I still want the Navy blue, Ralph Lauren size large sweater, but it’s only $20 it’s discounted patch. And I’m looking on that rack and I see black, not blue, but then again, it’s$20, it’s on the clearance rack. I’m not paying a hundred retail or I see Calvin Klein, not Ralph Lauren, but it is Navy blue and large and it’s $20 so that’s how I like to manage expectations in our network is we are a clearing house. So it would be unreasonable to think that I’m going to get something on barter when cash is king and it will always be king. You know, it’s an incremental opportunity to hold onto your cash, minimize your cash outlay, and you’ve earned it the same way. So wouldn’t be fair for a hotel owner as an example to say, no, we’re not going to barter on 4th of July and let you book it six months in advance. They wait to the very last minute when they realize that otherwise goes unsold for cash because that becomes perishable, right?
Rico: [00:26:33] As long as you’re setting expectations, that makes sense. People should understand that.
Laurie: [00:26:38] Yes, absolutely.
Karl: [00:26:41] So I’ve got a question. What are the challenges of people? Why don’t more people do this nowadays? I mean, obviously cash, but what do you see as some of the reasons why people don’t find ways to barter more?
Laurie: [00:26:55] I think the biggest, the two biggest things is number one, not knowing that they even have the ability to do it within a structured professional setting. So, you know, somebody could say that, I want you to build me a website and I’ll give you haircuts. And
oftentimes they’ll go ahead and build a website and then the place goes out of business and they’re stuck without payment, you know. And they got the short end of the sick. It also could be the situation where they don’t need a haircut, their daughter owns a salon. So I think most of the time there’s a brick wall when it comes to barter, where they don’t, where most consumers and business owners don’t realize that everybody has capacity. Everybody has something that they really could leverage. Time, talent, resources, something that’s even sitting, collecting dust or locked up in a storage or basement. So even though we’re a barter network for businesses, everybody has their core business that they provide and something in there. Not everything, by the way, like I haven’t in Buckhead, we have a center that will do laser hair removal and tattoo removal and weight loss. But they’re very clear that they do a hundred percent barter. They list everything in the directory, and we will recommend those services on a hundred percent barter. So everybody has to provide something at a hundred percent barter. However, they don’t have to provide everything at a hundred percent barter. So they list that we do. If you go to my website, you’ll see we do Botox and other types of services, but we’re not going to do Juvederm and Botox on barter. Now, if we don’t have that otherwise available on barter, and someone says, Oh, I see that that’s what they do, but I want it on a hundred percent barter. We could let them know that look, anything else that they do on a hundred percent barter or take advantage of it, they’re playing by the rules because they offer all these things on a hundred percent barter. If we can’t source it for you on a hundred percent barter, you can make an offer and ask them, can I do it with 50% with my barter currency, and then at least compensate you since you didn’t enter this in your profile as an offering. Can I, you know, can you accept 50% in cash? And so that’s not our practice, but it does happen on occasion and we’re fine with that when they’re already offering something else on full barter.
Karl: [00:29:23] One of the things I think that I, that I think that I’m hearing, I want to highlight that business owners today that might be struggling with what fundamentally is demand for customers, but they have capacity. Is this something where they can at least for a period of time, offer up some of that excess capacity, bank up barter dollars that as things return to normal. They may back up how much, you know, their capacities are to fill up, but they have barter dollars that they can use to fulfill other expenses in their business. Is something like that possible?
Laurie: [00:30:02] Absolutely Karl. So right off the bat, anyone that needs help in whatever way, so they need clients that, you know, maybe they have their brick and mortar, that everything has always been done brick and mortar. Maybe it’s an, I don’t know, but let’s say it was a some type of a yoga exercise class and now they can’t do that okay? So if they were in the barter system, and they have no barter dollars, and they now realize, wow, I have to figure this out, I have to adapt and integrate a new way of doing business. So now we can say to them, well maybe you have something here where you can now offer your yoga classes online. So let me introduce you to a company that can build an app for you. Let me introduce you to a company. That could, you know, build your website or produce your videos for you. You know, and now advertising that you can have on the radio that’s saying that, you know, we have virtual yoga classes, and they could just cash out them and to have entrance to be able to, now, you know, all do this
together. I’m again, just thinking a little bit outside the box, trying to make it an example, but if she doesn’t have barter dollars she’s already earned, that’s okay. We at, during this pandemic, we’re giving lines of credit. So during this pandemic, she could now say, you know, if I need $5,000 SBC, we can give them a line of credit for $5,000 and how are they going to pay me back? Well, they’re doing virtual classes for yoga, then let us promote it. And if you have capacity for 12 people online to be on your yoga class and they’re paying you cash to be in that yoga class, can you take two people that will pay you in barter dollars? And we’ll fill that class up with the two people on barter. And then when things settle and to the new norm, and there’s other ways that she can earn the barter, we’ll help her come up with the ways of paying back, you know, that. And she could think outside the box and say, well, you know what? Yoga is my business that’s struggling. I need to get that up and running. But, you know, I also sell Mary Kay cosmetics. You know, I also, you know, can do tutoring. Like we’ll help them think outside the box and tap into and leverage resources.
Karl: [00:32:13] That’s fabulous. Well, we’re coming to the end of our time and I just wanted to ask if people have questions or wanted to learn more, how can they reach you?
Laurie: [00:32:24] So our website is SouthernBarterClub.com and SBCGlobalBarter.com. And so they could email us from there. Our office number is 678-547-0900. And so they can call, send a message and set up a complimentary consultation. And we are here for the community. So, you know, if this is a time, more than ever, that we have to really just be a resource to one another. We also, you know, I mentioned to you, we’ll give lines of credit, but we’re also, with the membership fee, we’re doing it at 50%, so it’s normally 299. But they said we had created a code called, CSage and yes, thank you. And so that’s 149 instead of the 299. So definitely, what I’m hoping that everybody gets out of this more than anything is even if they don’t work with Southern Barter club, start slowly even with just leveraging what you have, your time, your resources, your assets, and don’t be afraid to approach another business owner you want to do business with. That’s your neighbor or colleague or someone you’ve always worked with. Because no commerce at all is, you know, a big difference from, well, look, I could give you this or I could, you know, and there’s some activity going on and you’re not stuck and staying in stuff. So if anything, we hope there’s an awareness to bartering and trading.
Karl: [00:33:56] Sure. Well, I want to, I want to thank you very much, Laurie, for joining us. It’s Laurie Sossa the founder of the Southern Barter Club. Just exploring different ways that businesses can pivot and find ways to use their capacity and skills to earn a different type of dollar, barter dollar that they can use in other ways going forward in their business. So keep their employees engaged, find ways to reward people. And I liked the example you gave, you know, maybe building out a new capability on online sales now for future exchange of services where you could use the barter dollars for something else to cover an expense in the future. So really good tips and just wanted to let people know there’s so many different options in how to navigate and pivot through this pandemic. Thank you very much for that.
Laurie: [00:34:54] Absolutely. Thank you for having me on as a guest.
Karl: [00:34:58] You’re absolutely welcome. I’d like to say I’m Karl Barham with Transworld Business Advisors of Atlanta Peachtree. We’re here to help business owners figure out ways to improve the value of their business so they can successfully exit it when the time is right. We help with selling and buying businesses. Rico, why don’t you tell us a little bit about what you have coming up and going on?
Rico: [00:35:20] Sure. So I publish Peachtree Corners magazine and you’ll, we are in the midst of writing stories for this upcoming June – July issue. That’s going to be out, hitting the post office on June the fifth. So it’ll be out for that June, July. Good solid run issue. Similar to what we did last issue. We’re still printing, we’re still mailing 18,800 copies every household, in the city of Peachtree Corners, and then some are like Norcross. So some good stories we’re working on about how people are handling this situation, how they’re opening up their business and some of the stories as well in there. So we’re doing that. And I’ve quite frankly, I’ve been busy too, Mighty Rockets, my company that does digital marketing, and we’ve been been picking up several company Facebook pages, LinkedIn pages to manage. We’ve been doing a lot of video work through these video chats. And creating good, some good quality video content for companies, even doing it online like this. So it’s worked out really well. So I’ve been busy. I am thank thankful, for the way it is and thankful for all the other people working in this stuff so that we can all stay busy.
Karl: [00:36:34] Yeah, absolutely. Well, I’m just impressed while people are working together to get through this. So continue doing that. Stay safe, everyone and I think as you take some of these advice and tips, find ways to pivot your business, stay successful. Thank you. Have a great day.
Capitalist Sage: Real Estate Strategies for Business Impacted by COVID-19 [Podcast]
Frank “Tradd” Cannon, joins us to discuss what businesses can do to improve their situation right now when they reopen, and long term, from a real estate perspective. With your Capitalist Sage podcast hosts Karl Barham and Rico Figliolini. Recorded socially safe in Peachtree Corners.
Frank’s Phone Number: (404) 597-5737
Frank’s Email: Frank.Cannon@colliers.com
“We help owners, occupiers, investors of real estate. And for me specifically, I help occupiers of real estate. Office tenants with their whole real estate footprint, whether they own a building, whether they lease two offices in Atlanta and Buckhead, or they have a portfolio across the United States. And right now what we are doing is helping clients with rent deferrals, rent forbearance, renegotiating their leases as this is chaotic as it is. It’s a very opportunistic time for companies to revisit what the real estate footprint looks like and how they can optimize that going forward in a post COVID-19 world.”Frank “Tradd” Cannon
[00:00:30] – Intro
[00:03:00] – Frank’s Background
[00:03:57] – Impact on Tenants and Landlords
[00:07:26] – How to Negotiate Rent
[00:09:45] – Difference between Retail Types
[00:13:36] – Changes in Pricing
[00:15:58] – From Location to Innovation
[00:18:21] – Shift in Office Space
[00:26:32] – Investing in Technology
[00:37:51] – Closing
Rico: [00:00:30] Hi everyone. This is Rico Figliolini with Capitalist Sage and my co host Karl Barham. Hey Karl, how are you?
Karl: [00:00:38] I’m doing good. Rico, how are you doing?
Rico: [00:00:41] Good. Good. Working from home like everyone else had my cat in the background, so if you hear the meows, this was from the cat. But, the Capitalist Sage is on as usual, we have a great guest today. I’m going to let Karl introduce him. Before we get to that, though, I do want to talk about our sponsor for the family of podcasts, and that’s Hargray Fiber. They’ve been a great sponsor of ours, a supporter of Peachtree Corners Magazine that I produce. Hargray Fiber is big in the Southeast, certainly big here in the Metro area in South Georgia. They handle all the fiber optics for a lot of major companies and small businesses, so got to know them a little better. They are so involved in the communities that they go into. They are not your cable guy. So for a fiber cable company to help you with your business connections and provide support like you need to be able to do the telework and that we’re all doing or to work from, you know, the main office as we all go back into reopening, they’re the people to talk to HargrayFiber.com I’ll leave that with you and Karl, why don’t you take this into our guest.
Karl: [00:01:49] Absolutely. Well, today I’m so honored to have Frank Cannon, an associate with Colliers international Atlanta office here to talk about real estate strategies for small businesses that are navigating and dealing with the COVID-19 pandemic that’s hitting so many businesses. We all know that businesses have been hit hard, especially small businesses. And they were forced to close in many cases all across the country. And they have to still deal with these bills that are coming in. Including bills from landlords, bills from suppliers, bills from utility. And so today we wanted to talk about some ways to approach understanding the landlord side of things, understanding the tenant side and have Frank share some strategies and things that can help people work together and partner. So we all get through this successfully. Hey Frank, how are you doing?
Frank: [00:02:57] I’m doing great. Thanks, Karl. Glad to be with you all today.
Karl: [00:03:00] Oh, that’s fabulous. Well, let’s start off by just, you know, tell us a little bit about yourself and what made you get into real estate, commercial real estate in particular.
Frank: [00:03:08] So I am an associate with Colliers. We’re in Midtown Atlanta. We’re a full service commercial real estate firm. We help owners, occupiers, investors of real estate. And for me specifically, I help occupiers of real estate. Office tenants with their whole real estate footprint, whether that’s they own a building, whether they lease two offices in Atlanta and Buckhead, or they have a portfolio across the United States. And right now what we are doing is helping clients with rent deferrals, rent, forbearance, renegotiating their leases as this is chaotic as it is. It’s a very opportunistic time for companies to revisit what the real estate footprint looks like and how they can optimize that going forward in a post COVID-19 world.
Karl: [00:03:57] So I’ll jump in with the first thing just to kind of ground everybody that that’s, that’s looking at this. What, what have you been hearing? The impact has been on landlords and tenants. Let’s start with hearing from your tenants that you represent. What are some of the things that they’re dealing with in making decisions? And then we’ll talk about things from the tenant standpoint that may have to deal with landlords.
Frank: [00:04:24] So the initial sentiment for most tenants, most companies is like everyone else, a slow down. You know, everyone has pulled back for companies and they budgeted accounts, they budgeted sales for May for June, and simply some of that’s not going to happen. And the sentiment for landlords is almost a trickle effect is, well, tenants may make a quarter or half of their May or June rent as their sales slowed down. And overall it is what we do to solve this rent problem, and solve this revenue problem, and you work together as a landlord and a tenant to ensure we all come out of this together. Communication has been great. For a lot of tenants and landlords. Because at the end of the day, we’re both in the, we’re all in the same boat and we’re working to figure out how to best get out of this together.
Karl: [00:05:27] Yeah. And then it’s an important thing, not only on the, on the pandemic health side. You’ve seen the theme that we’ll get through this together everyone. I think it’s really important when you think about landlords and tenants. So let’s say I’m an operator of a retail shop in a shopping center and I know that I may have the ability to pay this month’s rent, but I’m really concerned about paying the other expenses, maybe trying to keep some employees on, maybe being able to fund opening up again. What are some of the things that I should be thinking about? Just as everything is closed down, I should be doing immediately.
Frank: [00:06:14] So number one right away is have that conversation with your landlord. They, again, like I said, they’re willing to work with you and you just kinda need to tell them, you know, this is what’s going on. I have applied for a stimulus. I have enough funds to keep my staff, and here’s, here’s where I was pre-COVID. Here’s where I am now. And your landlord, you know, makes it easy on them. Let them know you’re working hard and what you need to keep your boat floating. You know maybe that is, maybe that’s May and June, I’m gonna need some help. I’ll repay it back by the end of next year. You know? On the other hand, if your lease is coming up soon. The last thing your landlord wants you to do is leave cause no one’s gonna feel that given all the uncertainty there could be talk to, talk to your real estate advisor, talk to your legal counsel, feel free to give us a call. You know, Hey, what we have right here to make sure that we survive three to four months. We can continue this partnership as you know, the best people placed in your shopping center, for example.
Karl: [00:07:26] What are some of the mistakes you said? So that’s interesting having that conversation in the case of where the lease is coming up within a six to one year period. What mistakes do you see small business owners making. When it’s time for a lease renewal or asks you for a new lease, and then bring it also into the context of with a pandemic COVID-19 happening, where we don’t know if something like this may happen again, where they have to shut down because of an outbreak in a particular area. It may not happen everywhere, but it
could happen in a zip code. Well, they happen for a week. What are some of the things, mistakes people are making when they, when they try to negotiate that?
Frank: [00:08:09] So a lot of, a lot of small businesses upfront, you know, it’s not their world to think about the landlord’s shoes, but at the end of the day, it is very tough for a landlord to fill an empty spot. There are costs to, you know, if you had a, if you were a pizza store and you’re moving and now the landlord wants a, call it a hair salon in there. They’ve got to reconfigure the space. They have to market it, and then they have to, and then they have to give the new tenant a reason to move in such as, you know, free paint, free carpet or a spruce up allowance, if you will. On the other hand, if a tenant just stays, that saves them a lot of money and a lot of headaches. A tenant has a lot of leverage to stay. So the first mistake is not asking for what they deserve to save the landlord a headache. And the tennet, you mentioned now that we have a pandemic world going forward, flexibility for any small business is going to be key. Instead of committing to a five year, we’re going to see a lot more three year commitments because we’re going to want the ability to get out sooner and with less headache. Look for more termination penalties. Maybe, Hey, if something comes up, I’ll give you a six months notice, Mr. Landlord and I’m going to be out of here. And you know, maybe a year ago, that’d be a harder push, but everyone at that table is going to understand what just happened. And again, we have common sense, you know, we can put in a termination penalty into a lease going forward.
Rico: [00:09:45] Do you see, Frank, do you see a difference between maybe retail office space, manufacturing space? Do you see a difference in those industries where there may be more leveraged in one than in another?
Frank: [00:09:57] You know, in the past, absolutely. You know, a retail, you know, the dentist in the dinner with practices, their clients were there. He’s maybe done the braces for all three kids and their mom, you know, he, he’s going to be there. Whereas offices, especially going forward, you know, more people are working from home. An office tenant may not be as inclined to stay in that place for 10 years they’ve been, because now half their guys can, half their guys and gals can work from home. And if there’s a cheap flight, cheaper spot down the road that satisfies their postcoded requirements, it could be a free game. Again, the existing landlord doesn’t want that to happen, but we can ask for a better reason to keep that small business in their current building.
Karl: [00:10:48] There’s something interesting. So when, when we work with business owners and we look at their lease, very often, we get a good sense of what the price per square foot is for a particular retail spot or office spot. So we kinda know what the norms are. But when those numbers came up, it was baked into an assumption for a restaurant space that might be 1,400 square feet versus 2,800 how many people fit in there? There was, or much revenue you can generate in that space? And a lot of commercial real estate is, the value of it is based on the income it can produce. If for a period of time folks are required to social distance in their place, how does that impact the price that they would, a landlord can expect for the same space in new leases?
Frank: [00:11:57] So I think we’re going to see, so you cut out for a bit. How are we going to see the price for space to be affected? Because basically the whole game’s changed. So I’ll harken back onto my original point of a shorter term, a three year commitment versified. The thing is, we don’t know the true appetite for the consumer to come back to these public spaces. You know, are they going to all of a sudden fill up, you know, a J Alexander’s dining room again? Probably not. It’s going to be more of a trickle and same thing for an office. Is everyone gonna run back into their dense open office space? We’ve got, we’re probably gonna return back in phases. I mention this because we don’t know what sales are gonna look like in the post COVID world. What dining out percent demographics is going to look like, and you do not want to be locked into a rate that escalates for five years when you don’t return to pre COVID levels for a while and all of a sudden your rent’s gone up three times.
Karl: [00:13:11] But that’s, that’s one thing that I’m curious about because if, if a business was generating a certain amount of revenue per month for the last five years in a space and not because of anything the business did.
Rico: [00:13:30] You froze up Karl, a little bit.
Karl: [00:13:36] Okay.where folks might have to today. In the last five years, they were generating a certain amount of revenue. Because of the laws, they now have to cut the amount of people they can service, whatever, whatever, the businesses. So let’s be,the reality of it, if rents stay at the same level and revenue, the volume goes down all of these businesses, it’s not just one, many businesses won’t be able to sustain the same rent levels and it’s okay to keep it that way, but a lot of businesses will, will probably fail in that model if they do that. If someone was signing a new lease, do you think that there’s, there’ll be a drag on the price per square foot if this continues on too long?
Frank: [00:14:29] There, I absolutely believe there’ll be a drag on price per square foot, especially in the retail world, because demand is simply not going to be there. Owners of retail establishments are going to be prudent and nervous are my two key words. You kinda hit it. We were doing so many sales with this much space and this many rules. We can’t serve as many people and consumers are scared. That I would say is 99% of a restaurant owners mentality right now. They’re not gonna wanna pay pre COVID rents, and I’m, I’m not a restaurant expert. I can guarantee you the guys who are leasing these restaurant spaces probably think the exact same way, if not way more detail on exactly what the new rent levels will be. And it’s not going to be for, for retail centers, they’re all the same. Rent one, one restaurant is going to be one, one over the other three. They’re not going in either one right now at the levels because they can’t afford it. And I think we will see a drag on a lot of retail rents and especially more reason to not commit to a five year term during this, during this time of uncertainty. You want to argue for flexibility, argue for a reason to get out if things turn sour like in this pandemic, which on one would have seen before this time.
Rico: [00:15:58] I was thinking about the, everything’s location, location, location, right? So the place where a restaurant might be, that might’ve been a hole in the wall place or something like that, where there they have to be found. I could see those going low. I could see sometimes in certain, certain areas, like let’s say prime downtown areas, they’re holding their strength a little bit because there’s still people there, right? Cousens is opening up 20 malls. By the end of the month, they’ll have 20 malls open reopen I should say,
Karl: [00:16:35] No, new malls.
Rico: [00:16:37] No, no. These are the reopening of the existing malls, you know, like, like Gwinnett Place Mall, maybe where the walking dead is being shot or something, I don’t know how many people actually go to these malls. So I can see certain types of properties really losing their renters, right? And, and maybe, does it make a difference whether it’s owned by your rate in New York or whether it’s owned by a local business in Atlanta?
Frank: [00:17:04] So I would say a little bit of both, but first and foremost depends on your relationship with your owner. I actually just read an article today. Add Acts, the, one of the owners of Add Acts. His name’s Mario Salayah. Atlanta was one of the first locations he reopened. As you know, Georgia has pretty aggressive reopening rules. He was able to talk to his landlord and the conversation is pretty much the tune of, Hey man, this is tough for all of us. Stay safe. We’ll get through this. Easy landlord communication. Hallmarks of any relationship, doesn’t matter if you’ve been paying the same guy for 10 years and again, it’s, it’s all the same thing in life. You have a conversation, you open it up. If, you know, if you haven’t had that relationship or, and you’re not transparent with them, your landlord may not be as willing to work with you. And if you, again, you’ve been there forever, the owner of your building or center recognizes your value. You’re tenancy and they want you to, they want, they need you there as much as you need to be there, I would say it doesn’t make a difference in ownership, it matters relationship.
Karl: [00:18:21] If I could ask, we’re talking about retail and I’m curious of how business operations or business models are changing for the office as well. Because many people are being asked to work from home, and that’s been happening in some form or shape for many years. But if we see a 20 point shift in the amount of people that were at home. There’s not as much need for office space combined with the fact that we shouldn’t have people in cubicle farms as dense with a guy next door might be coughing a lot and all of that’s going to create some dynamic. How can businesses shift the way they use their office space or models?
Frank: [00:19:10] So I think we, going forward, we will not recognize the, the office going forward and this pandemic expedited the timeline. We can argue that the last big change was everyone getting dense. You know, you see the old law firm, it’s all private, private offices, big wooden desks, you know, got 10 people in a whole floor just to be, just to be exaggerating. And then we shifted to the rework of the open office where you add 10 people in a 100 square feet. I think this is going to spur the move back towards less dense. Social distancing will be
implemented in the office where you know different teams have their own section, so if one gets sick, everyone goes home and they’re six feet apart, and this’ll be a great time for a business owner to reevaluate how much space they need. Because you may have figured out your sales team can do a lot more at home then you previously thought. You may have discovered that, Hey my top two engineers only need to come in twice a week. They don’t need their whole lean.
Karl: [00:20:30] Employees will love to hear that, but I’m wondering what, how do we, how do we resuscitate the, all the managers that you just put into cardiac arrest where they can’t walk down the hall and see all their people huddled over a computer looking busy.
Rico: [00:20:47] Let’s even stop there for a second. Cause I saw something come across the news and Kemp has extended the state of emergency public state of emergency through until the middle of June and it’s extending the stay at home for certain populations. So just to let you know. It was yesterday.
Karl: [00:21:09] Breaking news and impacting the conversation.
Frank: [00:21:14] So with that in mind, I think is just going to emphasize that a work from home policy is now going to be essential to any company going forward. Whether that is a digital check, a zoom check-in, whether it’s a phone call, whether it’s just an email conversation, how are you doing on your projects? But now again, we just, we have another month and a half to ensure people are being productive. And, well, you know, maybe we have another podcast where we determine how these digital check-ins happened, but at the end of the day, either teams figure out how to work from home for extended periods of time, or there, you know, things may not get done and that’s just not ideal for anybody.
Rico: [00:22:04] You know, I’ve been listening to some companies that have been putting out, if you, if you’re working can be done from home, then you need to do it at home.
Frank: [00:22:13] Right?
Rico: [00:22:14] Because they’re going to fear, right? The news is all talking about fear and people going back to work, being forced to go back to work cause it’s helping, right? And stay at home is gone. That means you should be able to go back. It’s a liability. Where do you put the kids? Kids are out of school. There’s no summer camps. Will these aspects, even if you go back to work, how are you going to deal with the individual office spaces and the common areas, the kitchen areas and all that? It’s going to be a mess now.
Frank: [00:22:47] So we’ve actually, we’re working on the reentry guide. Reentering the work, the workplace, and we’ve got a couple, one of the main points we hit on is beefing up your office’s cleaning schedule. You know, common areas, like you mentioned the lunch room. You know, you may have to start, your cleaning expense may go up twice, twice as much. Having
someone come in and disinfect doors, refrigerators, tables, chairs, people touch it. That’s, that’s now our new normal.
Karl: [00:23:18] I could see, I don’t know if you’ve ever gone into some workspaces that don’t have touchless toilet flushers and sinks. And you know, obviously it’s gone everywhere, but you go into them now and you gotta wonder what’s going on, right? There’s technology that can be played or force a shift. And I’m wondering, businesses that are in that market, installing, implementing those things might be seeing some demand coming as you’ve, people don’t want to touch things. And we have to start figuring out ways to exist in this new, in this new world.
Frank: [00:23:59] So besides the obvious one of toilet paper, I would say, everything digital, you know, the company’s zoom, WebEx, and like you mentioned touchless technology. Doors that, you know, open motion sensing doors, all retrofitting companies to make its workspace healthier. I feel like those will see demand all over the place. It’s interesting adding with a lady who ran, who was one of her biggest clients is Home Depot’s paint department and they’ve been going crazy cause a lot of people are home. What are they doing? Home improvement project. She was actually in a place up in Cumberland and the space next to her was empty and they did a lot of onsite training and we were having a conversation that then they wanted to look at that space, just used for a training room, training employees. They’re one of the bigger offices in Atlanta. And once I’ve gone by, business is booming, they’re training companies on zoom. Now all of a sudden they found they can do more with less. And it’s just, that’s one of the countless examples. This is just expedited change.
Rico: [00:25:15] I work at a newspaper in Sandy Springs, and the same thing we put out two, two papers all online, and so his 1,500 square feet were probably dropped down to maybe 700 square feet.
Frank: [00:25:29] Absolutely. And you’re going to save a lot of money that you can now put towards other avenues of your business. What, just out of curiosity now, that you’re reducing your rent expense by half. What are you going to invest in or what are some wishlist items for the newspaper?
Rico: [00:25:50] Well, so now there’s the problem though, right? It is a newspaper and it’s sort of an industry. My magazine works out fine because it’s where we are, but some publications have fallen by the wayside. Paper newspapers out in Dekalb and Marietta. They might as well close up. I think the last issue was six pages. I mean, they just might as well close. Some other publications are doing this stuff, but even online, Curb Atlanta. I think people know curb.com well, every city sort of has their own curbatlanta.com. Curb Atlanta let go of all it’s people from what I understand. So even online companies are seeing this issue, so.
Karl: [00:26:32] So it’s interesting. Rico, you mentioned about location, location, location when we talk about real estate. That has been the paradigm for as long as I’ve known anyone in real estate. So think about an office building. If you’re a fancy law firm, where do you want to be?
You want to be in Midtown on 14th street. If you’re a retailer, you want the Apple store. The Apple stores are only located in high dense retail areas, type of thing. Is there a shift that, that this may be accelerating where a location is probably not as important as the premium that’s paid on businesses for a location now shifts to something else. And I don’t know if you’ve heard of the building the Edge in the Netherlands. It is the greenest building in the world. But what it, what it highlights is a technologically advanced building that has sensors everywhere and what they built was a building where you want to be there because technology drives the value of the business. The building more than the physical location, and so I could see it, I know the technology exists, I’ve seen it. You’ve seen it in movies where you can measure the temperature of people in the room down to the individual. You see it in the movies when they see the hotspot and they drop the bomb on that place with swell people. And you can see, well, that technology is not that difficult to deploy in building. So if a coworker’s temperature is up three degrees, there might be a way to indicate that that room may have a problem. What do you think about investing in these technologies, types of things in place.
Frank: [00:28:39] Investing, and you cut out there for a bit. Investing in these technologies?
Karl: [00:28:43] Yeah. So to attract new tenants, landlords have been living on location. Now, now the question is, do they have to shift and shift their business model to leverage technology that now addresses safety. As part of.
Frank: [00:28:59] So I primarily think for the really retail and the industrial world, it’s still going to primarily be location. You’re going to put, you know, example Amazon, last mile distribution centers. They’re going to base that decision on location. The Apple store, they’re still going to want to be in a high traffic area. Office sector, I think you hit on it with talking about the Edge. It’s not, it’s going to, location will lose importance. It’s not going to be about where the space is and how much, how big it is, but the quality. There’s going to be an emphasis on quality. Two big reasons that this popped into my head. One, everyone’s going to want it to be clean. Everyone’s gonna want it to be sterile. Everyone’s going to have social distancing, self-opening doors, that’s going to be on the forefront of anybody who goes into the office a lot. I think overall we’re going to see less people go into the office as much. Not drastically, but over time there will be less people going into the office, nine to five, given what happened. So you’re not going to need as much people in there. But when they do go in there, what are they gonna want? They’re gonna want, they’re gonna want the AC to change depending on how people were in the room. They’re going to want the internet of things to know, Oh, Karl’s here at 8:30. He likes his latte at 8:45 delivered from the inside starbucks. Karl would get the text, it texts your phone. Would you like your Starbucks? Yes or no. Rico and Karl are and a meeting with three people. We don’t need the AC running on full blast cause there’s a conference room for 10. We only have three in there. And that recognizes that from your outlook calendar, this technology is there. And again, this is just being expedited in going forward. People will want better, safer more technologically advanced spaces as opposed to the location premium.
Rico: [00:31:05] You know, it’s funny when you think of Tesla, for example, right? The, the biggest, one of the biggest things in there that they talk about is the, is the filtration system in Teslas. That it’s actually better than, let’s say M95, you could be, if there’s something outside the car and you close yourself in, then you would be safe from it, right. Because of the filtration system on that. There’s going to be, and they’re working with, I think it’s ResMed now to make, to make those, what do you call it? The ventilators. What’s the company doing that? That’s based out of Atlanta I think. But I agree with you, Frank. There will be changes and stuff, but I think it also depends on what that business and specific is, right? If you’re a service business that you could do anywhere, that makes less of a big deal where you’re geographically, like you said, if you’re in Amazon, then you’re that last mile fulfillment. Certainly you want to be near transportation likely. A hub like Atlanta.
Frank: [00:32:07] To take a step back. I just remembered, so I’m sure, are y’all familiar with the lead verification system for buildings, energy efficient? Something is, or is lead gold, lead platinum. There’s also, I think we will see an explosion. There’s a relatively younger standards called the well building standard and it basically rates how healthy a building is for its employees. Things you know, how much natural light are buildings getting? What’s the fitness center like? How many times is the air changed? I think we will see that explode and that will take a larger spotlight in decisions going forward. You know, maybe only the Tesla health advocates knew about how many air changes per 1,000 people were happening on a floor. That I think it’s going to start to take a major spotlight.
Karl: [00:33:01] There might be one other interesting thing when we talk about technology, especially mobile technology, all the apps that allow you to check into a location, or you walk into a store and it sends you a coupon to your phone, tracks your Bluetooth. I could see that being used in a different application. Now, if a salon has a customer that five days later tests positive for COVID-19, they have the ability to know everyone that came into that salon. It could be as simple as there is a credit card transaction, to more sophisticated where you walk into some businesses or gyms and you literally have to check in with an ID or your phone so it knows you were there and they can go in, identify all 300.
Rico: [00:33:57] But that’s almost gyms, right, with the passes that you go in
Karl: [00:34:00] With the passes, exactly. Okay. So contact tracing could become easier because you could find and message 350 people that have been in that space or interacting with somebody from the time the person that tested positive and they can get a notification to go to their testing center and get tested and self isolate. Now that technology exists, small business owners are thinking about that. Well, I can think of some companies, point of sale companies, others that could diverge into these areas and offer this to give clients comfort, customers comfort that, that there’s something that’s helping control this as they go into space.
Rico: [00:34:47] Do you, Frank, do you see, I can see that and I can, you’re familiar with like Simply Safe and the Nest thermostats and stuff like that?
Frank: [00:34:56] Right, right.
Rico: [00:34:56] Smart technology, right. All those are plug and play pretty much in a home. I mean I can, I can also see maybe commercial space being like that, right? Because a lot of that is plug and play. A lot of that doesn’t cost a lot of money because it’s either using Bluetooth or wifi technology to communicate. And modualize and put into different rooms in, in an office suite, I mean.
Karl: [00:35:22] We were seeing some of this technology at Smart Expo last year. They’re putting the sensors in lights and…
Frank: [00:35:38] I haven’t seen it in person, but the most common that I’ve read about it’s a sensor in your employee ID badge. You know, the one that you use to get off, you swipe in elevator, it takes you to your floor and then you buzz that and to get into the, if your office has a security system and there’s that. No, this is Karl’s workplace. This is, this is, Karl has an appointment at three and again, the dispensers know how many people are in a conference room, the lunch room at any given time. Maybe we get to that to where it’s on your phones as well.
Karl: [00:36:21] Well, I’ve got a question that comes back to dealing with, with the current state that folks are going. I’ve heard of subsidies partnering with major landlords, that were tenants, where a landlord that give deferral, get some kind of recognition and/or benefit for that. Have you seen that? And can you describe how that really works?
Frank: [00:36:49] Right. For two, and they’re real close to us. Sandy Springs and Peachtree Corners. You know, so I get their alerts all the time. Just trying to stay connected. Peachtree Corners was offering for any landlord that offered their tenants a 60 day rent deferral, a free showcase as a community partner. They get better advertising opportunities. It’s just really a focus on you helping the city, helping these businesses survive and thrive during these tough times. And for Sandy Springs perimeter chamber was offering a free advertising spot for mother’s day essentials during this crisis. I mean, mother’s day is right around the corner these days, all blurred together. And that’s typically a, that’s a big, big sales event for some companies, and these are just a few of the examples, but a lot of people, a lot of these landlords, cities all coming together to try to make things happen during this tough time.
Rico: [00:37:51] Guys, I think we’re towards the end of our time together.
Karl: [00:37:58] Yep, absolutely. Well, you know, I want to thank you so much, Frank, for joining us today and sharing some of your knowledge about, real estate and how to deal with tenants and landlords. Really helpful information to do that. How would people reach out if they wanted to ask you questions? What’s the best way to get in contact with you and learn more?
Frank: [00:38:27] Honestly, I would say just shoot me a text or email me. So I’m Frank.Cannon@colliers.com and then, I mean, shoot me a text at (404) 597-5737. That’s anything from, Hey, you know, my lease is coming up in three, five, six months. I don’t want to leave, but I’m not sure what to do to make a decision going forward. Or if you’re, you know, you might be struggling for May or June rent. You know, this is, this is a headache. This is a time stop for a lot of business owners who have a million things to worry about right now. And for us it is our job and it’s a free service for tenants to occupy space. Just give us a shout and we can, let’s have a conversation. We’ll negotiate with your landlord on your behalf. And so we can do that and get through this together.
Karl: [00:39:19] Thank you so much for that. And we do recommend, get in touch with real estate professionals if you don’t know how to negotiate with your landlord. But it’s as simple as picking up the phone and having a conversation. You’re both in partnership. You both got to work through this together and you got, you’re typically in a contract for a number of years. I’m Karl Barham with Transworld business advisors of Atlanta, Peachtree. We’re working a lot with business owners in this time to help them figure out ways and strategies to continue to improve their business. And help think about different scenarios of where they need, they may want to exit the business. Right now it’s about surviving, but it is the best time to start planning on your exit strategy for your business. And you can contact me at 770-766-9855 or KBarham@TWorld.com if you want to talk to myself or one of our other advisors to help you navigate through this and talk about your exits. Rico, how bout yourself? What have you got coming up in the upcoming months?
Rico: [00:40:36] Sure. So we’re working on, we’re actually working on the next issue of Peachtree Corners Magazine, the June-July issue. It’s going to be chock full of a lot of stuff in there dealing with what’s going on now. Some great stories that we’re going to be telling about what people are doing during this COVID-19, how they’re repositioning themselves a little bit during this time because a lot of people that just home, not that they’re not doing anything, we all should be teleworking, right? But some people are just pivoting if they own their own business or they’re doing a gig economy and the trying to figure out what to do with that. So the magazine will be coming out the first week in June, I believe is where we’ve said it. And if me personally also doing Mighty Rockets, in social media and podcasts and doing a lot more podcasting, with Karl and bunch of other people, doing a lot of branding, a lot of online social media a lot of video work. I’m doing it socially safe. So if you need me, MightyRockets.com if you need anyone to help you with production or social media content or branding, or you can call me or text me, 678-358-7858.
Karl: [00:41:47] Well, thank you so much Rico and Frank. Really appreciate you joining us and give us some, some really good tips and insights that hopefully.
Rico: [00:41:58] Hopefully we’ll be there at some point.
Frank: [00:42:04] It was great. Thank you again for having me
Rico: [00:42:09] And thank you.
Karl: [00:42:10] Alright, take care everyone. Bye.
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