The cost of doing business seems to be rising by the day. Inflation is hitting small businesses pretty hard. The current economy and labor market are so different than even just a couple years ago. And when you’ve got a team, wages, in particular, are a big consideration in your budget. Because of these unique…

EP #10

Season 4 Episode 10: Inflation and Small Business

The cost of doing business seems to be rising by the day. Inflation is hitting small businesses pretty hard. The current economy and labor market are so different than even just a couple years ago. And when you’ve got a team, wages, in particular, are a big consideration in your budget.

Because of these unique changes, I hope to help you have a bit of a brain shift in this episode. As leaders, we have Two Buckets to recognize: Beliefs and thoughts (including the opinions of others) versus Facts. The impact of all the information constantly coming at us can make opinions appear as facts. This can dramatically affect how we look at, and what we feel about, everything going on in our businesses. It can especially affect our opinion about hiring and paying wages. So let me give you a bit of tough love and let’s talk about all this.

“Or you just decide, ‘You know what? I signed up to be a business owner. The economy’s a little wackadoodle right now. I’m gonna figure out my plan. And I’m gonna execute the hell out of it’.” – Kris Plachy

What You’ll Learn

  • The Two Buckets: Facts versus Thoughts

  • Perpetuating facts

  • Practical decisions without drama

  • Wages and your philosophy

  • Helpful adjustments

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Let’s talk about hiring and paying people money. Right now, it’s a weird time, right? We’ve got a lot going on in our world, and I think there’s some things that I want to talk with you about that hopefully can give you a little bit of a brain shift. So, let’s get started.

Hi, and welcome! I’m Kris Plachy. Thank you for joining me here on Leadership is Feminine. I want to talk with you about our current economy and our current labor market and what that all is doing and meaning to you as a woman running a business. And I want to really think about this from a couple of perspectives because we’ve got very real inflation, which is affecting, honestly, all of us, right?

From gas to buying milk, to buying the supplies that you need for your business, to buying the tools and the assets that you use in your business. And then ultimately what you have to transfer, in some cases, to your clients or customers because of the costs that you’re absorbing. And also, there’s the increase in what it means to hire someone, paying people. People are costing more money to hire. In a lot of cases, whenever we are faced with unique changes, let’s just call these implications or changes or things that are going on in our business that maybe weren’t going on a couple years ago, right? A couple years ago, we were lucky if the doors were open.

As leaders, I think you have to always keep in mind, there are two buckets, there are two buckets that you need to acknowledge. The first bucket is the facts bucket, right? So, facts are neutral, facts do not possess emotions, facts are numbers, are data, are real things. Still, arguably, I think some people think differently, but whatever, facts are facts.

We can look at things in the world and we can say, “Yes, I am now paying $2 more to buy oat milk than I did pay a year ago,” right? I am now…What did I…? I paid $40 more to get a smog check, right? So, there’s just things that’s just provable, it’s just evidence, it’s facts, right?

Then we have the other bucket, which is what I always say, “This is what we make it mean, i.e. your thoughts about the facts”, right? Now, in a world that we live in that is hyper focused on information, meaning you can pick up that phone that—I know you’re probably even listening to this on, and you can find out anything you need to know and a whole ton of stuff you don’t want to know, all within 35 seconds.

So, we are absolutely inundated with massive amounts of information. And the majority of information that we are inundated with, is coming to us from the lens of other people’s thoughts, very few pieces of information that we actually digest are simple facts. Simple facts would be when you look at the weather app, right? That tells you what the temperature is outside.

Facts, when you look at your bank state, No one’s yelling at you—except your own brain, maybe, that there’s not enough or that you need to do more, it’s just numbers. But when you open up any app: Instagram, Facebook, Twitter, LinkedIn, personal apps that you might be a part of, and then of course news, anything like that, email, it’s just filled with other people’s opinions.

And so, what happens though, is for a lot of us, we start to believe that the thoughts that other people think about facts are actually the truth and that is not true. And so, we have to remember that we still get to make our own decisions about what facts mean. So, instead of digesting information from what other people define facts as, I want you to get in the habit as a leader to decide that you are going to interpret facts for yourself.

So, one of the examples is that we often are absorbing information regularly and we don’t even know that what we are absorbing isn’t necessarily true for us. So, let’s talk about inflation. Inflation is provable, we have numbers, we know that certain things that we pay more for than we did before. But what we don’t maybe know is that it’s actually affecting us negatively. Do we know that? Sure, are we spending more money? But is that a problem for you? Or does it just feel like it should be a problem? Have you actually checked your bank accounts?

Now, many of you might be sitting there and yelling at me, “Yes, I have Kris, it really is”. Good, listen. I’m not arguing with you, but I do also want you to make sure you’re actually checking that it’s a problem for you and not just agreeing that it’s a problem. These are very simple things to do, but I know that they’re impeding our ability to make clear decisions and they’re also creating a lot of drama. There’s a lot of drama right now, and when all of us are in negative drama, we actually are perpetuating energetically a lot more negative drama.

I read a quote last night, that was part of the inspiration for this podcast. I follow a site that’s Abraham Hicks inspirational quotes, and if you don’t know who Abraham Hicks is, they are really insightful and I have a lot of great things to say from my perspective. Esther had the television on the other day and she saw commercials in between what she was watching, all the advertisements were pointing at one physical ailment after another, and Esther thought “If a person isn’t paying attention and carrying how they feel, television programming can program you right into absolute and utter vulnerability”. So even if you’re not actually paying attention, your brain is digesting all sorts of information.

Are you paying attention to what it’s digesting? Do you know what it’s digesting? Are you aware of what it’s digest? So that’s step one, and I always want you to have this. These are the facts, this is what I want to make it mean. So then in inflation, we have to look at that. That’s just numbers you all, this is a family budget, a business budget, this is actually what it means to me. Now, does it mean bad things for other people? I guess we could make it mean that although that’s all judgment, right? We’re getting lost in other people’s swirl. And then there’s practical decisions that are based on facts, not on the drama. As soon as you know what the facts are, you just make decisions based on facts. You don’t need the drama, you don’t need the story, right? It’s the question that we ask our clients all the time. What’s actually the problem here? what’s going on? You’ve got a big story about it, but can we just get to the root here? What’s going on?

And I want to talk about paying people because there’s a lot of noise about: Oh my gosh, wages have gone up so much. And I was listening to an article the other day, I was listening to a news report the other day. And they were talking about how wages have not kept up with inflation and cost of living, over a significant amount of time, I think they said 30 or 40 years. So, the real dollars that people are able to take home have decreased, even though maybe we’re paying a little bit more, but it’s not keeping up, right? I saw another fact the other day that it costs like nine dollars an hour to park a car in a parking lot, and in that area, they charge $8.80 or something for minimum wage.

So, costs a parking spot is earning more money than a person, right? So, we have some real catch up to do, and you’re seeing that in the industries that we are all in, because there’s a lot of dissent, a lot of frustration from people who work. And you’re also seeing a lot of people who just left the work place. It may be cheaper for people to stay home.

And so, it doesn’t mean that you should just immediately start paying people more money and you should just incur that and your profits should go down. So please don’t misunderstand my comment here, but what I’m trying to tell you to think about is, this is a real opportunity for you to evaluate your philosophy on how you pay people, and why you pay people and what you want your brand to be as an employer in how you pay people.

I want to be known as somebody that pays people well because I know when people are paid well, they show up more, they are more engaged. We know this is true and if that doesn’t work, it’s okay, you don’t have to stay. One of the biggest hang-ups that so many of my clients have about paying people more money is, they’re worried, “Well, what if…I mean, I used to pay this much for this person this kind of role, now I pay this much, but what if they don’t do their job?” There’s all this fear, like, “I’m going to pay”.

So, let’s say that you used to pay $50,000 a year for a role, and now you’re looking at what kind of is going on and you’re probably going to need to pay 65. A lot of people’s thoughts are, “Oh God, that’s $15,000, what if they don’t deliver? What if I don’t get that result?” First of all, you’re thinking about an entire annual salary, you’re not paying someone $65,000 tomorrow, you’re paying them incrementally more, probably every two weeks.

And the reason why you should actually be How to CEO, if you’re not and haven’t been is because the simple answer to that is in facts, because we design roles, we design expectations, we have one on ones, we hold people accountable, if they don’t do their job, they don’t work for you. You’re not going to pay someone $65,000 if they don’t do their job. You might pay them three months of a salary, but as long as you have really effective performance management systems in your business, it’s not a problem. So be careful that you’re not all, “Woo, it’s so expensive to hire people and they’re not going to do it, they’re all amazing”. And all these thoughts that we’re hearing, I’m like, heavens, it’s that way of thinking about hiring people will prevent you from attracting amazing people.

Do you know what I love? I love to pay people who do amazing work. I love it and I want to be known for that, I’m proud of it, and I believe, just…I had Kendall Summer Hawk in as a guest expert yesterday, and she’s a money expert and she teaches and coaches women who run businesses on how to really think about their money, right? And she talks about that money needs to flow. If we grab onto money and we create constriction around money, we’re not going to earn it either.

And I was having a conversation with a client too—shout out to you, you know who you are. And we were talking about hiring an assistant and she said, “Well, this person I want to hire, wants to make 30 plus dollars an hour,” and I said, “Well, that’s actually pretty reasonable, at least where I am, that’s in California. I don’t know what it is where you are,’ and she said, “Oh no, no, no. It’s like $18 an hour, 18 to 20”. And I said, “Okay, but was that what it was three years ago, when you hired somebody before?” She said, “Yeah, it kind of is”, and I said, “Right, it’s changed”.

But that doesn’t mean we can’t elevate our expectations, you’re not giving up anything and when you believe that you are, you won’t thrive in the process of hiring, right? So, we have to catch up a little bit here. Wages have been depressed you guys, and so the whole point of this news story that I heard was that, yes, we’re seeing a relatively rapid increase in, wages, but we’re also catching up. We probably in many ways have been benefiting from the wages not getting higher.

So instead of us making a lot of noise here, what I really want to invite you to do is put your head down, decide what you need in your business, look at your numbers. If you’re not realizing the profit that you anticipated, what do you need to change? Spending time yelling at inflation is not helpful, it doesn’t do you any good. Can you fix inflation today? I don’t think you can, but you know what you could do? You could look at the facts of your business and make adjustments, and you can decide to be mad about that and have a lot of judgment about that, and be super angry about that.

I direct that anger, I don’t yet even know at who, what? A germ? A virus? I don’t know. Where do you go to get angry? People find people to be mad at. Or you just decide, you know what? I signed up to be a business owner, the economy is a little locka doodle right now, I’m going to figure out my plan and I’m going to execute the hell out of it, and I know I need to hire the same level quality of people. I will find them, I am willing to pay for top performance and I will hold people accountable to deliver it.

There are amazing people who want to work. This story that we’re all in right now, “There’s nobody,” it’s so punitive, and the only person that’s hurting is you to engage in it. There are great people, there always are but you know who they want to work for? People who are also great, people who are also excited about what they do, people who are inspiring and motivated, who are empowered and believe that they can make change, that they have ability to do the work they want to do.

That’s where those people want to go, they don’t want to work in an environment where everybody is buying into a “line”. So, I know this is a little bit of a tougher love kind of podcast than they normally do, but I’m watching people fall into potholes, created by other people. And that is not good for you, you are too damn good and powerful to be falling for that. So, make your list: here’s the facts, here’s what I’ve been making it mean, here’s what I will now choose to believe. If you’ve been believing inflation is going to drive me out of business, how about we believe something else, unless you do want to go out of business? How about we look at the facts and decide just through our own analysis not judgment, what the right next thing is to do.

It’s why we put together the Overwhelm Guide that we have out right now. If you go to www.krisplachy.com/overwhelmed, because I know so many of you are trying to figure all these pieces and parts out and it is, there’s a lot to consider. I get that; there’s a lot of facts. So, go get the guide, it’s really short, it’s two pages, and it’ll help you walk through a lot more of what I’m talking about, how to really sort out your brain. But please stop indulging everyone else’s thoughts and wearing them like truths, they’re not. The only thing that makes that all true is when you execute based on it and you realize the results that prove them, but you can execute based on other thoughts and get different results.

So, two buckets, always two buckets: facts and then what you or others make it mean. I hope that was helpful for you today, if you haven’t gotten it, go get the Overwhelmed Guide, www.krisplachy.com/overwhelmed, and I’ll talk to you soon, thanks for tuning in.

We have a lot of exciting changes coming up here at Kris Plachy Coaching Group. And I don’t want you to miss out. From leaving social media, to offering live interactions only to people on our email list. I want to make sure you don’t miss out. Head on over to www.krisplachy.com and drop your name and email in our little box there. And that way you’ll get all the updates well before everybody else and even updates that nobody else will know about. See you there!

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