In today’s uncertain times, planning for the unexpected is critical

By James S. Cassel

If a disaster or other unexpected event were to strike your business, would you be prepared, and would your brand be protected? How would a data breach, product contamination, loss of a key member, negative accusation, hurricane or earthquake affect your business?

Particularly in today’s uncertain times, planning for the unexpected and responding appropriately is critical. It can mean the difference between your business suffering irreparable damage or surviving unscathed, or if you manage to do things right – emerging stronger.

I have seen many middle-market business owners neglect to plan properly. Focusing too much on managing day-to-day operations, they are caught unprepared and therefore put their businesses at risk by taking reactive rather than proactive, strategic approaches. I know a business owner who racially profiled by adding tips to the bills of certain minorities. When a complaint was lodged against him, he defended his inappropriate behavior rather than apologizing. This killed his business. The practice was wrong and the response could have and should have been handled better.

Compare this to the steps taken by Starbucks last week after the manager at a Philadelphia location refused to allow two black men to use the bathroom while they waited for a colleague, calling police to have them arrested.

CEO Kevin Johnson took immediate action, flying to the location, speaking with national media and community groups, apologizing, and announcing the closing of over 8,000 company-owned U.S. stores for an afternoon to provide racial-bias education for U.S. Starbucks employees. Following this response, the store — which had been closed temporarily because of demonstrations — reopened and returned to business as usual, according to news reports.

In our experience counseling middle-market business owners through all types of disasters, we have found some general principles to be helpful. Following is some practical guidance:

Consult experts to prepare a SWOT analysis (strengths, weaknesses, opportunities and threats). This can help guide development of an appropriate crisis plan.

Consider the needs of your internal and external audiences. For example, what do your employees, clients, partners, investors and other stakeholders need from you — consistent service, effective communication, reassurances for future growth, etc.? Develop a road map to ensure their needs are met.

Work with a crisis-management expert to develop a communications strategy and train your people on it. Communications are critical, as they can provide the necessary reassurances to retain the trust and confidence of your internal and external stakeholders. In this fast-paced world of social media, crises move very rapidly.

▪ Cultivate, train and prepare someone to be the face of your company.

▪ Identify people to appoint as interim personnel if necessary, and train them to quickly assume the desired roles. You do not want anything similar to what happened with Alexander Haig after former President Ronald Reagan was shot.

▪ Run practice drills for your crisis plan.

▪ Have appropriate insurance. Some insurance policies cover certain types of crisis management as well as financial exposure.

▪ Every step of the way, you must acknowledge the problem (consulting with legal counsel, insurance providers, and communications experts) and consistently communicate your company’s unique value proposition, proven track record, and plans for continued growth and success.

Tylenol did this and emerged from its product recall scares as a stronger company. Consider Facebook’s response to its own crisis, first with denial and then finally with the CEO and COO issuing public statements and making the appropriate public appearances. Now Mark Zuckerberg has spent more time on Capitol Hill than he probably ever imagined — first trying to appear humble, then apologizing and finally talking about the steps Facebook is taking and needs to take to stop the problems from recurring. Time will tell how much damage has been done and how Facebook will fare.

Planning is vital work. Business owners who recognize that unthinkable disasters can strike, and who take the necessary steps to prepare and protect their best interests are more likely to position their companies for continued success. Those who bury their heads in the sand, as time has proved, tend to not be as fortunate.

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How to Help Spot and Minimize Employee Stress

Employee stress is a common problem that harms morale and productivity. These steps can help you identify and manage stress in your company.

By Julie Bawden Davis

April is Stress Awareness Month, and that’s probably a good thing for your business. According to the American Psychological Association’s 2017 Stress in America survey of 3,440 U.S. adults, employee stress is pervasive. Sixty-one percent of Americans are stressed about work.

“Stress is present in many areas of people’s lives, and the workplace is no exception,” says Daniel Clark, CEO of, which produces music to help people focus and sleep better. “Stress distracts employees from getting their jobs done. The distraction can be a few minutes an hour, but compounded over days, weeks and multiple employees, costs employers millions in lost time and productivity.”

Employee stress may very well be at an all-time high thanks to today’s advanced technology, believes James Cassel, chairman and founder of Cassel Salpeter & Co, a midmarket investment banking firm.

“The internet and the assumption it fosters that one should respond immediately is a great stress for many,” says Cassel. “Employees face constant deadlines and expectations to move quickly, many times without the opportunity to really think things through. This can cause substantial friction.”

There is perhaps no greater inhibitor to an employee’s performance than stress, notes Jason Hall, founder and CEO of FiveChannels Marketing. “If employees are stressed, they’re not thinking clearly, their creativity is reduced, and they’re more prone to mistakes, all of which can negatively impact your company.”

Causes of Employee Stress

A variety of factors in the workplace can lead to employee stress. “Unreasonable and unreachable deadlines, toxic coworkers with bad attitudes and poor job fit for a person’s skills are the three most common driving factors I see that cause unnecessary stress,” says Brian McHugh, owner of McHugh Construction

Tash Jefferies is co-founder of, a company that helps women and people of color find their dream tech jobs. She believes that stress often leads to people leaving their positions. “Stress results when people work long days, experience high job demands (too many tasks and responsibilities) and a lack of a community of peers or executive level support.”

It was a survey of his employees two years ago that alerted Justin Goodman, president of Goodman Insurance Services, to the pervasiveness of stress at his company. “The survey was performed in person by an outside company, and the employees were guaranteed anonymity,” he says. “The results were pretty sobering. Most of our employees explained that their stress came from fear of not performing to company expectations. They also feared that I as the president didn’t understand some of the day – to-day challenges they faced.”

Identifying Employee Stress

Without performing an employee survey or looking at the statistics, how can you spot employee stress? Here are some signs that your workers are heading for anxiety and burnout.

  • Confusion. “If you know tasks have been explained thoroughly and clearly and employees show confusion, this is a sign of stress,” says Casey Thomas, co-founder of the Creative Soul Music School . “In my opinion, confusion is the precursor to frustration.”
  • Change in behavior or performance. “Any real sudden change of performance and/or behavior is a good indicator that the job is getting to the employee,” says Lior Rachmany, founder and CEO of Dumbo Moving + Storage. “Changes for employers to look out for that indicate stress include lack of focus and attention to detail, taking longer than usual to finish tasks and showing up late to work.”
  • Physical clues. “Changes in skin coloring, hair texture, redness of the eyes, consistent nodding off and lack of energy, failure to eat or overeating are common signs of stress,” says’s Jefferies.
  • Mood swings. “Stress can cause people to experience emotional roller coasters more frequently, sometimes on a daily basis,” says Jefferies. “Be on the lookout for crying, anger, frustration, temper tantrums or any other disruptive emotional behavior.”

When an employee who is usually positive and outgoing suddenly seems overwhelmed and negative, suspect stress, according to Mike Grossman, CEO of GoodHire, an employment screening company. “If someone is more withdrawn than usual or displays unusually aggressive behavior, these can also be signs of stress.”

6 Tips to Help Ease Employee Stress

Once you’ve identified that employee stress may be at play and the potential causes, it’s ideal if you can ease the stress so that everyone can have a better work experience. Try the following ideas to help reduce stress.

1. Create an open door policy. “It’s important to foster an environment where employees feel comfortable speaking to their managers about stress-related issues,” says Kareem Bakhr, head of risk management at Selby Jennings, a recruitment company. “There’s often a stigma to admitting feeling overworked or overwhelmed. The first step to successful stress mitigation is establishing an open and accepting platform for people to feel comfortable sharing their challenges without being judged.”

2. Openly discuss the issue. “The best thing leaders can do when they spot employee stress is to bring it to the surface,” says Heather Younger, founder and CEO of Customer Fanatix, LLC, which provides coaching in leadership development and employee engagement. “Let employees vent, if they’re open to it. If they’re not forthcoming, make it clear that you’ve noticed a change in them and that you’re there to help.”

When you discuss the source of stress, you may even find that the employee’s state of mind has nothing to do with the workplace. “Employees have lives outside of work where stressors could be impacting both their home and work life,” says Jonathan Marsh, owner of Home Helpers of Bradenton, which provides in-home care.

3. Make expectations clear. “Prevent unnecessary stress by setting clear expectations about timelines and deadlines and follow up to ensure that the expectations are reasonable and that employees are able to meet those goals with a positive attitude,” says McHugh of McHugh Construction.

4. Provide opportunities to unwind during the workday. “Offer employees an area where they can socialize and decompress during breaks. Sitting at a desk all day alone is not conducive to a relaxing and enjoyable work atmosphere,” suggests Bob Ellis, owner of Bavarian Clockworks, an online shop that sells German cuckoo clocks.

“Find ways to create relaxed environments with an open communication policy and culture,” adds Nick Murphy, host of The Job Lab Podcast. “Whether it’s an employee lounge with beanbags and a Ping-Pong table or frequent team building events that get people away from their screens and out together in a relaxed environment—it’s important to encourage and support time to decompress.”

5. Ensure job fit. “Often, employee stress comes from someone being in the wrong role for the person’s personality type and abilities,” says Michael Maibach, CEO and founder Lab Society, which offers lab supplies and equipment. “It’s not easy finding the right set of tasks to suit each individual in a complex team with a lot of moving parts, but dedicating time to discover how to modify employee roles to better suit their personalities and skill-sets is well worth the effort.”

6. Provide workplace flexibility. “When possible, give employees the flexibility to choose the hours they work and to work from home if needed,” says Shane Green, founder & president of SGEI, a corporate training company.

Being open to giving employees some leeway in their schedules goes a long way toward a less stressful workplace, agrees Chris Padgett, co-founder and CEO of Fusion3 3D Printers. “Allowing workers to start a little later and leave a little earlier or work from home on occasion can have a positive impact on their overall quality of life.”

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Private Equity Sees Profit Potential in U.S. Malls

By Myra Thomas

To say that the American mall is dead is a gross exaggeration. While many shopping centers across the country are struggling, so-called Class A mall real estate, typically in densely populated major metropolitan areas with attractive demographics and innovative concepts, is doing well and piquing investor interest.

While the shopping center of the past was largely dependent on large, well- known retail anchor stores, today’s mall developers are retrofitting space to become lifestyle hubs, relying on a mix of fine dining, entertainment, hotels, offices, health care providers and retail, among other concepts, to help generate traffic.

“There are more upscale restaurants and more activity in malls today,” says James Cassel, chairman and co-founder of Cassel Salpeter, a Miami-based investment banking firm. “Malls have to change to bring people through the doors to help out their other tenants.”

Brookfield Asset Management’s $14.8 billion takeover bid for publicly traded General Growth Properties in November made it abundantly clear that Class A malls are still in vogue. The following month, Australia-based mall owner Westfield Corp. disclosed that it was looking at a “potentially significant” corporate transaction.

While only 20 percent of malls qualify as Class A, they account for 72 percent of mall sales, with the top 10 in the U.S. averaging more than $1,000 per square foot, or 2.5 times the industry average, according to data from Fung Global Retail & Technology.

As they evaluate opportunities, investors are doing more legwork before taking on projects, looking closely at population trends and lease terms, says Greg Ross, national managing partner for the construction, real estate, hospitality and restaurants industry practice at accounting firm Grant Thornton. According to historical deal volume data from real estate research firm CoStar, private equity investment in U.S. malls in the past decade peaked in 2015, and 2017 appears to have had significantly less activity, though numbers are still being compiled.

“The focus for private equity is on major metro areas,” Ross says. “Location is the key.”

Location, Location, Location … and Creativity

The creativity of developers is as important as location as innovative retailers look for ways to compete with online sales, says Ronald Goldstone, senior vice president of NAI Farbman, a suburban Detroit-based real estate developer and brokerage. And that means coming up against 1970s zoning laws that don’t take into account the more sophisticated, mixed-use plans of today.

Despite complicated ordinances, repurposing must happen without delay, says Steve Agran, managing director at New York-based investment bank Carl Marks Advisors. “They’ve got to view (a property) as something they can turn around in a short period of time—something they can monetize quickly,” he says, adding that PE investors simply can’t afford to sit on large real estate holdings.

Agran contends that the shopping mall needs to foster a sense of community, incorporating residential space into the commercial mix. “We have a complete upheaval in the industry, and we are running up against (retail) overcapacity … so we’re seeing heavy-duty repurposing, whether it’s a car dealership in a section or housing and condos above ground,” he says.

Paul Laudano, chair of the real estate department of Boston -based law firm Choate Hall & Stewart LLP, notes that the shifts in retail are not a brand – new phenomenon. “These are gradual trends, and it is a fair hypothesis that the better-located and more flexible assets will survive just fine in the foreseeable future,” he says.

Choose Wisely

High-end malls are attractive to investors for their revenue potential, but the most deeply discounted real estate assets lie outside major metropolitan areas. Many remaining malls in the United States, especially those in rural areas, have seen a drop in sales, as their anchor retailers, such as Sears, Macy’s and JCPenney, shutter stores.

“Everyone is certainly talking about anchors going away and the need to completely reposition regional malls,” Laudano says.

Despite lower levels of private equity activity, mergers and acquisitions of mall real estate are trending upward, according to JPMorgan Chase & Co.

“There is increased activity globally in the regional mall space in the form of mergers and acquisitions, shareholder activism, and buying from well- known value investors,” the bank wrote in a note, reported by Bloomberg, before Westfield’s announcement. “This activity reflects a sector trading at a material discount to fundamental valuations.”

The Private Equity Advantage

Filling space left by a massive anchor store can be challenging but not insurmountable, says Joshua Harris, academic director and clinical assistant professor of real estate at New York University’s Schack Institute of Real Estate. He points to the addition of a Xerox SunPass customer service center and a Bed Bath & Beyond commerce call center at the lagging West Oaks Mall in the Orlando metropolitan area; department stores Sears and Belk had vacated the property, which is now owned by private equity firm Moonbeam Capital Investments.

According to Harris, private equity players have an advantage. “They don’t have quarterly reporting requirements, and they have the free cash needed to do rehabs and conversions, and to change the configuration for new tenants,” he says. “Private equity is looking for deals, bu t it’s very individualistic.”

It takes the right spot, the right government incentive, and the right people to make the repurposing work. Once a big retailer goes under, that’s when a value-oriented investor can come in, add capital, and turn a property around, he says.

“For a mall to work, it has to be all about innovation—delivering on experience, whether it’s concerts, spas, consumers going hands-on in an Apple store, upscale dining,” says Grant Thornton’s Ross. “In the past, the retail anchor was the thing. Now malls have to rebrand as family and entertainment centers.”

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How Small Businesses Can Prepare for Impending Inflation

By Adam C. Uzialko

If you watch or read the news, you’ve noticed more references to potential inflation on the horizon. Inflation means the purchasing power of a dollar has decreased; put simply, there is a general increase in prices for goods and services.

Naturally, as a small business owner, increases in prices affect you, but if you’re not a board member of the Federal Reserve, there’s not much you can do about inflation, right?

On the contrary, staying aware of inflation and anticipating its impact on your business is key to crafting a comprehensive strategy to retain customers despite rising prices across the larger economy.

Inflation isn’t inherently good or bad

The first thing to take note of is that inflation isn’t good or bad; that’s a matter of perspective. For some businesses, inflation could be a bad thing, forcing businesses to raise their prices and contributing to a loss in customers. For others, it could be a benefit, spurring activity in their industry that would otherwise occur elsewhere if prices were lower. Moreover, the level of inflation matters; a little bit might be desirable, while too much could grind consumer spending to a halt and send the economy into a tailspin.

“Inflation can hurt some small businesses while providing a boost in profitability to others,” said Jeff Miller, a realtor for AE Home Group, who used

his industry as an example. “Inflation in real estate causes an increase in home prices as new construction becomes too expensive and an increase in demand is met by a stagnant housing inventory. This is great for real estate agents who will then earn commissions on higher sale prices.”

On the other hand, Miller said, too much inflation has the opposite effect. If inflation rises too drastically and prompts the Federal Reserve to hike interest rates, it could reduce the demand for home loans, which would become more expensive as a result. If that were to happen, he said, small real estate businesses would feel the sting.

Inflation can also sometimes signal that an economy is growing, and as long as wages are rising along with inflation, it shouldn’t be a bad thing that will hamper consumer spending. In other cases, too little inflation could mean an economy is stagnating. While nobody likes rising prices, everybody likes a growing economy. Managing inflation, and our collective expectations surrounding it, is the real key.

There are things you can do before raising prices

While inflation means the purchasing power of a dollar has decreased, it doesn’t necessarily mean you have to (or should) raise prices right off the bat. Even if you have to raise prices, you can balance increases with cost reduction to keep hikes manageable over time and avoid shocking the market. Drastic increases scare your customers off, while gradual, measured increases are often expected.

“From a business perspective, what drives increased costs?” said James Cassel, founder of investment banking firm Cassel Salpeter & Co. “Labor costs are starting to go up a bit, service costs are starting to go up. If you’re a manufacturer, you’ve got your material costs [which are rising as the economy gets better.]”

While inflation is often the natural byproduct of a growing, healthy economy, it’s important to take steps to manage inflation ahead of time. You don’t want the rising costs of goods and services to eat into your profit margins, after all.

Cassel offered some tips for small businesses thinking about how they will deal with inflation.

  • Consider productivity: One way to combat inflation without hiking prices is to figure out how to maintain the same levels of productivity with less staff. This is particularly useful when labor costs are what’s driving inflation, Cassel said. “If labor is going up, is there a way to do the same amount of business with nine people, instead of 10?” Cassel said. “Assuming there’s [resistance to raising your prices,] you’ve got to figure out how to take the same amount of people and produce more goods and services.”
  • Implement new technology: In some industries, such as manufacturing, labor costs can be reduced through automation. This trend is largely underway as a means of staying competitive, Cassel said, but it can help curb rising costs. The same could be true in the fast-food industry, he added, where automated kiosks are reducing the number of in-store staff.
  • Reduce material costs: Finding efficiencies wherever you can is a good thing. If you can get necessary materials at a reduced cost from a different supplier, for example, that could offset the effects of inflation, Cassel said. However, there is a danger in “going cheaper, as opposed to less expensive,” he added. “Where you have to be careful is cutting corners,” Cassel said. “If quality starts to fail, it becomes a bigger headache than the problem you had before, because that’s how you ultimately destroy the value of a business.”

How to raise prices the right way

Unfortunately, raising prices is inevitable. You can stave off hikes for some time, or reduce the impact to your customer base all at once by using cost- cutting measures, but there will always come a time when you must adjust your pricing.

“You can only do so much. At some point you have to see if you can raise your prices,” Cassel said. “Test it, bump your price and give your customers some notice, enough so they appreciate it, but not enough that they move elsewhere.”

How can you know when it’s time to increase your prices? Cassel suggested watching your closest competitors, knowing what they’re doing and then determining whether undercutting them will force you to sell at a loss or if your profit margin can support it. He also added that staying transparent with customers goes a long way, especially if you can find a way to add value to your product or service without increasing your costs.

“Be careful, pay attention,” he said. “Know your competition, know your customers, and be sensitive to their needs.”

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