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Joe Wall

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2022-07-26

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2022-07-26

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1. “Created, small business owners are creating that future. And I think this opportunity here where history is being made, meeting with lawmakers about what needs to change, tangible solutions are going to be really what the economy needs.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

2. “So, the prognosis I'd say is cautiously optimistic. It's never been easy running a small business. No one said, I'm going to open a small business because I want the easy route. But it's really never been this hard. And so there's a real sense of unease and uncertainty that's really in the air. And we see our business owners really running between the raindrops to move, pivot to really work through the challenges that their businesses are facing. But here's what I'd say. Small business owners know that opportunity doesn't knock twice and they're taking advantage of the windows that they're seeing to grow their business. So we're seeing growth. A lot of them say, give me the manpower and the business is there for me to grow this business. That's what any economy wants. That's what the American economy wants and needs is business owners, small business owners who are saying, I'm going to seize that opportunity. And we're seeing our business owners do that time and time again. You know, I love that saying the best way to predict the future is to create.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

3. “So, for most of our small business contracts, it's about a five year contract. But in that five year, I get a 3% escalator. Joe just told you how much inflation is increasing by, right? We had 9%. How can I keep up with that? Year over year. I mean, I'm really kind of taking a loss by employees or taking a loss because I can't afford to give them raises to keep up with inflation at this point.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

4. “You don't want to increase pricing such that you price yourself out of the market in the DoD industry, for instance. I've got to compete with large businesses and they're able to bring to bear more resources that drive their costs down. So what will really impact me may not impact them as much, but I got to still compete with them. So I'm not going to raise my price as my profit, margins, or anything to cause me to lose contract opportunities. So I'm going to be a little bit more reluctant as a small business to increase it by that much. But believe me, we are all feeling that we need to be able to increase and like I said in DOD, government contracting, you've got a contract that says, here's how much you're going to charge for the life of this contract. I'd love to wait to talk tomorrow to our congressional representatives to say, hey, you got to find a way with the SBA, first of all, reauthorizing them, and then allowing them to help us go back to the negotiating table as inflation continues to rise. I got to be able to recoup some of that cost so that I remain.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

5. “Allison, one interesting nugget from our survey was that Asahi pointed this out that north of 60% have raised prices. But when we ask him, well, how much have you raised them by? North of 60% say less than 10%. So if you look at the inflation data nationally in the Wall Street Journal last week, they had it sorted by every sector, industry, and it's well over 10% across just about everywhere. But I think small businesses have actually been increasing their prices by much less than larger businesses.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

6. “And Natalie, I'm sure your material costs are rising as well. Have you had to raise prices? Are you absorbing those costs? What does it look like? Yes to both, so we have had to raise our prices. We've also absorbed quite a bit of costs. We, you know, from a supply chain perspective, we're purchasing differently. So we're intentionally purchasing a lot more inventory and we're carrying that. Now the good side to that is we've been able to win business because others haven't been able to deliver. So we have won some contracts that way, but it does tie up your cash flow. And it's a balancing act that we're looking at on a daily basis.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

7. “You deal with How are you navigating that? Well, one of the things that we decided to do in my business is I had started to go down the path of getting more office space, for instance, since the pandemic and with inflation, you know, with government contracts, you're locked into a price and a fee that you're going to get. You're not going to get any more than that. So what we did was implemented the distributed workforce teleworking, basically, if you will. And so my employees, my support staff is happy. We were able to negotiate, even with some of my government contracts, that those guys get to work from home as is practical when they can. So that's helped us cut some cost that helped me be, at least on par, profitable at the end of the day than I would have been had I had that large overhead of an infrastructure to sustain. Now, that may be hurting the guys in the commercial real estate area because there's more small businesses do their distributed work for us.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

8. “Strategy if your consumers will pay them. But let's talk about some firsthand experience with people in the room here, Merv, you deal with a lot of government contracts. So it's more challenging for you to pass on the inflation. How are you navigating that?”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

9. “That they need and skill them up. So we're seeing these kinds of stories emerging from our business owners, from state to state across the board. However, they're still saying that they're concerned about the recession. They're still saying workforce continues to be a big challenge. And a number of them in particular have had to increase their prices 62% have said, look, I've been forced to increase my prices because of inflationary pressure. So we've got this optimism on the one hand and belief and conviction in themselves and their ability, but we've got this uncertainty that they're facing. And so these changes that they made to their business is one of the key strategies that they've employed to sort of deal with what's going on. Small business owners, we know, tend to be the canary in the mind, right? They are the economy's early warning system and they're speaking and we fail to listen to their voices at our peril. Well, raising prices is not necessarily about.”

   2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

10. “They, in fact, are pretty good. They're working well, and they want to keep them permanently. And so that's one of the sort of macro changes that we've seen. Interestingly enough, I was talking to a business owner this morning as I was walking into the conference, and she said that they were having supply chain issues getting wood, she's a hardwood floor manufacturer, the Ukraine and Russia had been their primary source for European oak, which was the number one seller. Well, she says we've now switched to American oak. We've been doing that for some time. They come in smaller lengths, did not know that fun fact for your audience, but they're working incredibly, incredibly well. And so you see the agility, you see really the sort of movement, the nimbleness of this small business community time and time again. Another example is Pirella in Des Moines. She runs a construction company similar to Merv, similar to Natalie, having trouble finding people in the construction industry. She said, you know what? I'm going to open a construction school. I'm going to teach people the tools.”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

11. “I couldn't set it better, Joe. I mean, that is exactly why it is so fun and great to be here because there is no one else like a small business owner who has the drive, the passion, and is a doer. I think we need more of that in our society broadly. And we have seen, and as you just said, Joe, so many instances where small business owners have adapted. They have been agile, resourceful, and getting through the challenges and taking advantage of the opportunities. So talk to us a little bit from a high level about some of the pivots and strategies small business owners have been taking advantage of during this period to get through these challenges. You know, one of the most interesting things that we're seeing as I talk to business owners across the country is that we've moved beyond the pivot to the permanent. And what I mean by that is business owners who pivoted as a result of the pandemic are finding that a lot of the changes that they made, those new products that they introduced, those new services that they're offering,”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

12. “Impassionate. Nothing is getting in their way of succeeding. But even so, they're naturally very worried about the signs that they're seeing in their business just from an economic perspective. But that's not holding them back from innovating and sort of thinking forward. And I think they also realize”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

13. “Well, I think, as you'll see in the room today and at the baseball stadium tomorrow, small businesses are just optimistic by nature. And they have to be because in order to start your own small business, right, you have to think somewhat counterintuitively. It's a huge risk, right? And for someone like Merv, who had a job at a very big corporation was doing just fine, but decided to take a big risk and start his own business, which I'm sure some of his friends and family like, Merv, what are you thinking? But that's the small business community, right? They are the most resilient, dynamic in terms of pivoting on a moment's notice.”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

14. “Our government I said, I need help, and we're manufacturing. So I think that there's a real need to. Excite people about manufacturing because we need to make things here in our country. And so we're going to younger and younger students. We're going into high schools and even junior high schools and educating on what is manufacturing because it's pretty cool. It's robotics. It's automation. It's programming. And so we're trying to get to a younger group of people to say, hey, manufacturing is a great. Can have a career there, and you can have a family in your home, and you can do some really cool things. And we make So”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

15. “We've done that CATIS Enterprises, we've partnered with the Salt Lake Community College, and they do all of our onboarding now. So our team, before they even start on our floor, they go through a week of training, they get formalized safety shop skills training that they can take anywhere with them, but that frees up an internal resource for me, and they have now the real safety tools because we work with power tools, and that's a risk. So they do that training that's formalized and they get accredited hours for that. And that's in a partnership with the Salt Lake Community College to do that. It helps also then take them to another level. So we're training frontline leaders as well”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

16. “Just wanted to piggyback on Joe's comment about what we can do legislatively. One of the things I think that I've learned through the Goldman Sachs program that we were taught to look for are industry partners with colleges and universities. Maybe the SBA or our legislators can think about how they can help feed a pipeline for training our workforce that we need. I've got contracts where I need people certified and operating systems and security plus cybersecurity is big today and everybody's field, I imagine. But I think if we can get the legislators together to understand how important it is that they help provide incentives for colleges to help small businesses kind of incubate training and internships, things that we couldn't afford to do on our own, as Natalie mentioned, she's got to spend time training. And if you lose someone, now that process starts over and over again. By the way, then for the colleges, the JCs and the nation to take that responsibility up.”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

17. “Yeah, we're absolutely facing workforce issues. I mean, just attracting, retaining, and then developing them as well. So there's a lot of training that has to happen. And that ties up your internal resources to do those trainings. So that's been a challenge. For example, I've had an HR management physician open for over four months now. And that's hard to manage your business when we have 76 employees without that key position.”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

18. “Even today, I have requisitions out. So I'm glad you mentioned that, Jill. It is extremely hard for a small business to find the resource to get out and get after this talent pool that you're looking for in a market where larger businesses are able to have a recruiting machine internally. Small businesses have to rely on those other industry human resource outfits that help us go find the talent. I still have two months, two and a half now that's still looking for an IT engineer for a project I have now. And my challenge has been how much money do I spend? How much of what I plan to make can I afford to do this? I mean, you go into too much and it also drives on now that you may attest to this, I got to take my time to interview these people, to put them on a job site. So it's really, really challenging for the small business community to keep up with that kind of demand when I'm going against large businesses that have that resource internally. So that's my experience.”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT

19. “Yeah, so a lot of small businesses are struggling, quite honestly, to compete with larger businesses. And they can try to compete when it comes to wages where they have an incredibly difficult time competing is when it comes to benefits. So we found in our prior survey data that only 41% of small businesses are able to offer retirement benefits to their employees. And that number drops down to the mid-20s among black small business owners. So when it comes to that competition with large employers, more often than not small businesses are on the losing side, when it comes to trying to hire new employees and also retain existing employees. And we asked a new question in our most recent survey in late June, and that was, how long does it take you to hire someone? And we found 55% of small businesses say it takes over two months to fill a single opening. And you can talk to...”

    2022-07-26 · Goldman Sachs Exchanges · Small Business Owners Pivot from Challenges to Opportunities · IDENTIFIED FROM THE TRANSCRIPT