Women-Owned Businesses and Minimum Wage with Anita Ron [e105]

Full Podcast Transcript

NASIR: All right. Welcome to our business legal podcast where we cover business in the news and also answer some of your business legal questions that you, the listener, can send in to ask@legallysoundsmartbusiness.com. And my name is Nasir Pasha.

MATT: And my name is Matt Staub, and that sounded like you were just reading a script right there almost. That was so fast and it was like a disclaimer at the end of commercials and things like that.

NASIR: Well, I wanted to rush through it because we have a guest today so I had to get through it fast.

MATT: Yeah, we didn’t have a guest for a few weeks. Getting back into the second week in a row, we have a guest and, today, we have Anita Ron with BriteWorks.
Welcome to the show, Anita!
ANITA: Thank you for having me! I’m really excited to be able to let you know a little bit of an insight about the small business world.

NASIR: Sure. You know, Anita has been somebody that we’ve been looking for for a while and we’ve been looking for a business owner that she’s a woman-owned business and it has certain certifications for that so we definitely wanted to touch that and then, also, in California, we just had a minimum wage increase back in – was it June or July?
ANITA: July.

NASIR: Yeah, July, and so we wanted to talk to somebody that has been affected by that minimum wage increase. And so, what’s the idiom? Two birds with one stone? I’m so terrible with that.

MATT: Yeah, you’re terrible with those but it’s fine.

NASIR: Well, anyway, Anita, first, please let us know kind of a little bit about what you guys do and how maybe the women-owned certifications that you’ve gone through, how that’s kind of helped your business out.
ANITA: Well, I started a company about 18 years ago which was called BriteWorks Inc. We started the company with $700, three vacuum cleaners, and a lot of determination not to fail. Fast forward to now, we are at 70 employees and we’re right in that situation where we’re over 50 employees and now we’re going to have to provide health coverage and that’s kind of like a big hurdle that we’re going to have to go through but we provide high-end quality janitorial services for commercial, industrial, and government organizations throughout the Southern California area and we’re hoping to extend that in 2015 into other areas and regions.

NASIR: Very cool.

MATT: Anita, we actually get this question a lot when people call in to us and they ask – not the podcast, I’m talking more on…

NASIR: Yeah, I was going to say, we don’t have live callers.

MATT: Because we’ve written a couple of things about certifications for women on businesses and they can read through it and see the process that you have to go through, but the question that usually comes up at some point is, “Is this worth it?” and “How is it going to benefit my business?” We were hoping, if you had some insight on just how exactly your business has been affected once you’ve gotten that women-owned small business certification?
ANITA: Well, one of the things is, if you qualify for business small certification, if you qualify for being a woman doing business, or if you’re a minority owned business, then you have some opportunities out there because, as you know, the government is trying to assist other individuals to go up on the scale as far as being able to be successful in their businesses or what they’re trying to start up and provide jobs in our communities. And so, there is some certification, one is for women and it is an extensive process. You actually should be in business for about three years because you’ll have to provide your tax returns letting them know that you’ve been in business and that you’re a solid company and this is what you’ve been making for the last three years. Then, there is a profile on you, the business, and bios about your organization and yourself. Then, there’s also the certification for 8(a). 8(a) is a government SBA program that is actually there to help minority businesses and you need to own 51 percent of the business. They’re looking for someone that is honestly a minority and is not saying they are and they’re really not. What that does is it gives you a little bit of leverage to be able to compete in the government world to acquire businesses that they offer which is, say, another entity of the government and what you’re doing is being able to get an opportunity not to be bidding with other large conglomerates. Not only that, not bidding like twenty or thirty or forty or fifty other companies. They actually narrow down the margins that you’re able to bid with just a couple of organizations that are minority-owned or they’re considered to set aside that they’re willing to give it to a small minority business so the competitive level is a little different and it’s actually put there in order to have some of these small businesses actually get off the ground.
The program is there for nine years. Once you’re in the program or you’ve been in the program after the nine years, you’re churned out and then the certification is not there and you don’t have those opportunities that you had. But it’s the whole coaching and learning process that they give you. They try to get you and they try to develop your organization so you can understand doing business to business and business to government.

NASIR: Yeah, the SBA is very good about that and getting involved. We should mention that, when Anita says 51 percent owned, it’s also controlled and managed. You know, you can’t just put, so to speak, your wife as 51 percent owner and the husband’s the actual one running the business. It’s actually controlled and managed, genuinely, as she says, owned and managed by a minority. This is for the Section 8(a) program and so forth.
And you notice that, I assume, Anita, the reason why you’ve been able to take advantage of this is because you’re looking for contracts that are with companies that actually give benefits from the federal government because, otherwise, there wouldn’t be any kind of connection to that or you’re contracting directly with the government themselves.
ANITA: Well, the government entity is something different when it comes to 8(a) certification. With that, I want to say you do apply for it. It is an extensive process. I did it and it took me about three months but there are consultants out there that’d be willing to charge you a good $1,200 just to get that certification that’ll help you through it. You could do it yourself but one of the things that I want you to know is that they do check up on you. They do look for all the documentation. They want to know that you are who you are and, if you are not that person, you will not get on that program.
Be honest. Let them know all the information because you could actually get other assistance through SBA and one of the things is training.
Now, what’s supplier diversity? I know you’ve probably heard about that – supplier diversity. A lot of the corporations now are required to at least go and search out and try to give business to minority-owned business. And so, what you’re hearing is a lot of people are signing up to meet that supplier diversity representative and see if they could get business from corporations and that’s another way that you could try to grow your organization if you are a minority or woman-owned. That way, you’re able to at least give yourself a little bit of leverage in the playing field but it does not mean that they’re just going to give you the contract. Let me repeat that because a lot of people get the certification and they feel that they’re just going to get it handed to them – no way. Nobody gets anything handed. You really still have to work for it. You still need to make those contacts and you still need to be committed to give a good quality bid or proposal and a good dollar amount there on your bid. That way, you can make sure that that door opens up and you can actually get a contract of some sort. Just because the first time you did it you didn’t get it, keep on doing it because what you’re doing is sharpening your fall in your organization to get better every time you do it. A lot of people get frustrated and they do one because a lot of these times these proposals are very extensive. I mean, I know a business owner that said, when she did a proposal for the government, it usually costs her $10,000 each time they do it and that’s pretty expensive for a small business.

NASIR: Absolutely.
ANITA: I mean, that’s something that a lot of people can’t afford. What I’m saying is collect stuff. You did one proposal, hold onto it and then use it for the next one because, the better you are in your proposal, the more descriptive, the more you’re able to get the angle that they’re looking for and what they want, that’s how you’re going to get it. Sometimes, it’s not the lowest bid number. Sometimes, it’s the provided services that you’re going to give them for the amount that you’re charging them. It’s a whole different ball game of some sort, but yet there’s many people that could now be in the playing field which is much more exciting.

NASIR: Yeah, and that’s great advice for those that are looking in the same kind of area of getting certified. We should mention, there are different certifications. There’s WBE, there’s Section 8(a) for SBA, and so forth.
But let’s talk about the July 1st minimum wage increase. It went up to $9.00 an hour and then it’s going up to $10.00 on… is it January 1st 2016, I believe? And that’s California. And then, of course, from a political perspective, there’s a lot of talk about getting a national minimum wage increase as well which will likely not affect California because of its advancement already and then, of course, we also have local cities that are thinking about doing it – everywhere from San Francisco which has already done that to San Diego, Los Angeles, et cetera.
With your business, how has it been affected by the minimum wage increase already?
ANITA: Well, for us, there was a good significant amount of people that were working for us that did get an increase. One of the things I think small businesses are finding out perhaps somebody was getting $12.00 an hour to do that job and now the person that is getting minimum is now at night. Well, now they say that you should increase them as well. There’s a little bit of pressure right there and people are a little bit frustrated because they want to have their salaries increased as well. But, for us, I remember one of the times prior to the minimum increase; I think it was – what was the last time? In 2007 or 2006? I don’t remember the year.

NASIR: Yeah, it was around that.
ANITA: But, because of that increase, it was a very hard time for us because a lot of companies felt, “Well, we can’t afford this anymore,” so the first company that they let go was the janitorial service. At that time, we had lost about eleven of our clients just because there was an increase of that sort.

NASIR: Wow.
ANITA: But, this time, it seemed like we were able to retain all of our clients which was a great blessing because we were able to provide that quality service to them knowing that this was something that really was needed in order to help their business grow as well because a small business really needs to concentrate on the business. You know, I hate to say that, but that’s what it is.
So, by us doing that, they’re able to concentrate more on what’s important – bringing in dollars, bringing in the quality of service that they need, or sending out the quality product that they have to do without worrying about how clean their own facility is. But, as far as the minimum wage – and I think it’s happening all over – now that you’re seeing this increase, and maybe it is needed, but so many immediately right back to that, I think is probably the biggest hurdle because you’re still trying to get what the 2014 increase and then, all of a sudden, a year and a half later, you’re going to be doing it again. I think you need to actually balance things and soften things up for our organizations because, as you’re aware of, there’s other increases that are happening.
One of the increases is now healthcare. If you’re over fifty employees, you’re going to be stuck with that. Another additional is workers’ comp. It seems constantly escalating. The last time I read the Business Journal, it was stating that there’s a projected increase in workers’ comp for everybody all across the board. With all these other additional increases, you know, it’s hard for a small business to actually project properly and then later to feel that they’re comfortably doing well. When dealing with a service organization such as ours – or any food, restaurant, or anything like that – they have low margins and so we have to remember that. Service organizations run on a low margin already. To put something like this in is going to be a huge burden and I’m hoping – I’m actually praying – that our government agencies actually give some type of cash rebate or something that will help some of our small businesses through that process.
I’ve heard that there are to be some type of rebates or credits that can help them out, but I’m hoping that it’ll also help some of these service organizations such as ours, such as the restaurant industry. One of the things that people don’t realize is we increase the minimum wage, this is what happens – everything around us is now going to be increased. Now, if you’re going in there and paying $2.00 or $3.00 for a burger, well, guess what, you’ve just increased it a couple more dollars. Now, it’ll be about $5.00 or $6.00. That’s the scary thing about everything and I think there needs to be some type of balance and we just can’t be leaps and bounds.
Now, when it comes into having different cities with different minimum wage, that just means that, as a business owner, we’re definitely going to have to do our homework and it will be very sad to say that, if you went into Orange County and you were able to pay for a McDonald’s burger at this price and now you go to Los Angeles County and you’re going to be paying $3.00 or $4.00 more. It’s going to be something interesting to see but I would say, as consumers and as business owners, we really need to keep our eyes open and we really need to talk to our leaders out there and letting them know how we feel or getting our questions answered. How is this going to happen and what should we be expecting and what are the best ways for us to be able to soften the blow?

NASIR: Sure.
ANITA: Those answers are not here yet.

NASIR: Very good. That’s a very interesting perspective from you regarding that. I haven’t heard anything about that rebate but it just seems like such wishful thinking knowing how California…
ANITA: Tax credits and you keep on hearing them say, “You’re going to get a tax credit. So, you’re not to be getting charged here but you’re going to get charged here but we’re going to help you out somewhere down here.” Those are the things that I’ve heard that will happen but yet it’s not in place, just like the healthcare coverage and things like that. A lot of the stuff you hear but then it gets changed in eight months. “I’m going to learn this,” and then, “I’m ready for it,” and then all of a sudden, it gets changed a little bit. I think we’re still in that change process and one of the things that I think is that you really need to be on top of what’s happening in Sacramento. For example, I went to an event yesterday and I was telling another business owner, “Hey! How’s that three-day sick leave? Is that going into your business?” because she already has thirty employees. She goes, “Oh, when did that happen?”

NASIR: That’s a good thing that you brought up. Did you already have that policy? Because we’ve found that a lot of businesses of substantial size already have some kind of sick policy so, the California sick pay law, did it affect you?
ANITA: Not everybody has that policy. Now, think about it.

NASIR: Sure.
ANITA: You’re a small business. You’re in service. You’re actually charging an organization for the service. You can’t just go back to that organization and say, “Hey, you know what? Now, if my employee doesn’t work today, you’re going to cover that.” You think the small business is going to be happy with you on that? Absolutely not. They’re going to say, “No way!” But what I’m really concerned with, a lot of our small businesses don’t even realize, I’ve already talked to about three or four of them, they didn’t even realize those laws effected July 1st 2015 and, you know, one of the things I want to see out there, for any small business or anybody who’s thinking of being a business, please educate yourself. There are so many organizations that are out there that want you to succeed. One of them is SBA. Take advantage of it. It is absolutely free. Find out. Go to some seminars, conferences. Find out these rules and regulations because, you know what, there’s one thing that you’re doing it and trying to work really hard in your business and you’re in the trenches and you’re rolling up your sleeve and you’re getting up early in the morning and you’re going to sleep at night. But then later to find out that it’s all taken away because you didn’t know something? I mean, I was just talking to someone else yesterday and I said, “Oh, do you have EPLI insurance?” and she says, “No.” I said, “What? You don’t have EPLI insurance and you’re over the million mark?” She said, “I didn’t even know about it.” I said, “You know what? If you’re already over that level in sales and revenue, you need to do something about it. Protect yourself. You need to protect yourself as much as you’re protecting your property with liability insurance. You’ve got to start waking up. You’ve going to start reading. You’ve got to know what is coming down the pipeline.”

NASIR: Anita, you’ve basically covered all the topics that we’ve covered in the last six months in a very succinct fashion. Yeah, we love it. You’re preaching our previous episodes so it’s great and I really appreciate that insight.
[MUSIC]

NASIR: We have barely enough time for our question. Let’s get it in, Matt.

MATT: All right.
“I allow my employees to bring their own device – BYOD – for their jobs. What should be my biggest concerns or should I scrap the idea all together?”

NASIR: It’s funny that they asked that as an acronym as if it’s common use. I still don’t think it’s to that point yet but, yeah, bring your own device. We’re talking about cell phones, laptops, and so forth. But there can be some issues with that – whether you’re dealing with privacy and all the privacy laws that go wrong with using cell phones and so forth. But then, also, think about security. Also, if they’re answering their cell phones off of duty. There was just a case not too long ago in California which talked about, even if the employee is using their own cell phone but an unlimited plan, the employer still may have to reimburse a percentage of the use of that phone if they’re being used in a work capacity. There are a lot of issues and I don’t think we have a lot of time to go into detail about that but, Anita, what are your thoughts? Do you allow your employees to bring in their own devices or is that not just part of the job from your perspective?
ANITA: I allow my employees to bring their own devices because, you know what, they’re at work more than they’re at home so they need to be comfortable where they’re at. As a mom, I think it’s important to be able to be connected to the family still. In that sense, most employees are finding themselves actually compensating a portion of the use of their device because some people feel very much more comfortable using one phone than having two phones on them. You’re absolutely right about the laws and what needs to be done. I think, if you do let your employees, there’s privacy laws there and you just need to make sure you’re following up because there are now rules and regulations and you just hit on them so you’re absolutely right with that but I think everybody is to their own. But, most of the businesses are letting them use them, but there are some restrictions but it is stated in advance so then they’re aware of it.

NASIR: Exactly.
ANITA: You can’t tell them, “I want to see your Facebook page.” That’s privacy for them.

NASIR: Yeah.
ANITA: That’s funny that you mentioned the two cell phone thing. I remember it used to be very common for people to literally have their BlackBerry issued by their work and then their personal cell phone and how ridiculous that all was. But you’re right in being responsive to your employees being able to have access to their personal devices on the job. It’s, I think, very important in that respect.
ANITA: There’s one thing I just want to say.

NASIR: Sure.
ANITA: You know, you just hope and pray that you’ve actually bid the right job in the interview process, that you’ve found quality individuals that respect your organization and believe in what your mission is. By doing that, in the hopes that you have the best people for that job and, usually, when you have the best people for the job, they’re working diligently because they love to do that and that’s what they want to do. Respect to that for our workers out there who are always in the trenches every single day. 99 percent of them want to do their best job ever. And so, they understand the fact about phone usage and things like that. Now, some of our newer young folk that come in, they don’t see that and they don’t feel that, if they’re on the phone when someone’s talking to them, that that’s not professional. I think it’s more of a coaching thing that we have to teach them so they’re ready for the working field of tomorrow, that they’re ready for that. Some of them come in and they’re on their phone and I hate to see if one of them comes in on the phone when they’re in an interview. You know they’re not going to get that job. I think they need to learn a little bit and maybe they need some coaching on that.

NASIR: Very good. Again, you’re preaching our mantra so that’s really awesome.
Anita, why don’t you tell us a little bit about BriteWorks and where people can contact you if they have anymore follow-up questions from your insight which is very valuable?
ANITA: BriteWorks, like I said, we’re commercial janitorial services. We provide janitorial service for organizations, commercial, industrial. We believe in that high quality of cleaning and we believe in high standards. We go out there to check up to make sure everything that we’re asked that you provided or requested in your unique need of cleaning, we actually do it and make sure we’re above that standard so you guys are always taken care of. As far as small business, we’ve been in business for 18 years. If you need to contact me, have a question, I’d love to be able to help you out. That’s one thing – we have to share knowledge because that’s the only way we’re going to help our communities grow. I feel that a small business can actually help a whole entire community and lift up a whole entire community so, if you want to talk to me, you can reach me at anitaron@briteworks.com or you could reach us on the phone – 626-337-0099. We’re located in Covina, California. One of my commitments because I started with actually nothing, I started it when I had a six-year-old daughter and a six-month-old son, and one of the reasons why I started the business because I got tired of going to work when it was dark and coming back and bringing my kids back home when it was dark. I just feel, if anybody’s in that position where they want to start a business, please feel free taking me out for coffee. I always make that commitment, when someone’s out there asking questions about business, I’m really happy to assist them because that’s the only way we’re going to help get jobs out there in our community. So, Anita Ron, and you could take a look at us at www.briteworks.com.

NASIR: Absolutely, and we’ll also plug that in our show notes as well. Thank you so much for being on the program.
ANITA: Can I just say one thing before I leave?

NASIR: Sure.
ANITA: I want to say thank you to you guys because you guys are really at the cutting edge, letting people know out there how important it is to know some of the rules and regulations and how important it is to take care and make sure that you know what’s going on so that you can equip yourself properly. If you said that you’ve already talked about a lot of these things prior to me talking to you today, thumbs up on that and continue doing that because small businesses really need your assistance and really need people to really go above the norm and help out and make sure that we’re actually being educated because that’s what it’s all about – making sure that we’re able to grow our communities and draw us out there and have that knowledge out there. Thank you very much.

NASIR: Thank you so much for those kind words. We’ll definitely put that information in our show notes. Again, we appreciate having you on the program. Very awesome insight, actually. I think people are going to really listen to this a couple of times just to make sure they get all of that.
ANITA: If you have any questions or want to talk to me later on another subject, I’ll be more than happy to help you guys out. You guys take care.

NASIR: Thank you so much for being on the program.

MATT: Great. Thank you.

NASIR: All right. Thanks for joining us, everyone.

MATT: Keep it sound and keep it smart.