Self-Employed during COVID-19

Self-Employed during COVID-19

Are you self-employed? If so, check out this recent episode of Lawgitimate Podcast, your favorite legal podcast, with hosts Rochelle Poulton and Mike Poulton.

“Self-Employed: Managing Income and Expenses… During a Crisis” with special guests Paul Hershenberg with Hershenberg Stonewalsh Insurance Services and Patrick Lewis with Realty Executives, Phoenix. Here are some takeaways and quotes from our guests…


How Coronavirus has impacted the Self Employed and Small Business Owners

This pandemic has caused a lot of changes for people who are self-employed and small business owners. We put a huge amount of time and effort into getting our law firms moved to a work-from-home and virtual work arrangement for ourselves and our staff but we are still operational using telelaw.

For the insurance industry, Paul deals with several hundred small businesses here in town because he handles their employee benefits. One of the services he offers is any time they let an employee go or hire somebody, they just send him a quick little email and he manages their employee benefits. Paul has seen a very small amount of new hires, and a very large amount of employees getting laid off, furloughed, you name it, they’re seeing a lot of that. It’s probably about a 10 to one ratio right now.

For the real estate industry, Patrick is managing broker with 18 years of experience and says it’s a little bit of a mixed bag right now. We still have contracts being created every day, there are still listings going on. Like it or not, people need a place to live. They have to have a roof over their heads. Patrick thinks we’re incredibly fortunate here in the Valley because people have equity in their homes, and if the market drops most people will be fine. He doesn’t anticipate a crisis but is seeing closing dates being extended right now. The Arizona Association of Realtors came out with a Coronavirus/COVID-19 addendum for agents to use in these transactions, and it gives you a little flexibility to either cancel the contract, get interest money back or extend close of escrow. A lot of it is close of escrow extensions, people are still moving forward, they still see the value that they’re buying real property, they’re owning a piece of the land. A lot of escrow companies, title companies, lenders, they’re all working from home, so it’s definitely created delays given the process, and that’s primarily why we’re seeing a lot of those extensions. We have not had a huge amount of cancellations. In fact, the number of contracts our company created last week, year over year, is right about the same. It’s only down maybe about five percent right now.

How different industries are coping

Paul, I’m wondering if you’re seeing people pivoting, changing their business approaches as a result of this.  I don’t think I’ve seen anybody really changing their line of business, we’ve got clients that went virtual, like just work from home and not really skip a beat, we’ve seen several clients have to shift, we got a lot of restaurants. Obviously they’ve had to shift and go more delivery, and more to pick up. Construction clients that were just so busy going into this, they’re still going a million miles an hour. All the crews are still working. We’ve seen other clients that truly have just gone from 100 miles an hour down to zero.

So we’ve really seen the whole gamut. It just really depends on what that industry was. If you are a dentist, for example, you’ve probably gone from eight employees down to one or two. But if you’re a construction company, you probably haven’t laid anybody off yet. So really just depends on the industry, but we definitely have seen a lot of businesses be able to go to more of a home type situation.

What is the new normal? 

We’re never going to be back to normal. The United States has changed permanently, and probably the world has changed permanently. The way we do business after this is not going to be quite the same way it was done before. And for my firm in particular, I don’t see a strong drive for us to go back to a typical daily work schedule in the office. Once we’ve put the effort into getting set up for work at home like this and we’ve got the collaborative tools in place and we can do it efficiently, why would we all go back to that when it’s just more inefficient, and there’s more overhead associated with it? Have you guys been thinking about that or been talking to other people about how this may be a lasting change even after the virus passes?

I can tell you we’ve definitely had those conversations, we have about 25 staff, 20 staff, right around there, and formally a lot of them were working remotely right now. And I agree with you, I think it’s kind of creative strength. You’re forced to bring efficiencies to it because this is what you have to work with so you find solutions within it. I think the challenge that I find is that building that culture, and that camaraderie, and those relationships are much more difficult this way.

That is difficult. Wandering around the office and meeting people and just joking around the water cooler, even metaphorically, is important. It’s hard to do that.

I really agree with Patrick on this one. Even though, yes, we’re going to lose efficiency by going back to the office, the only reason why we’re so efficient right now is because of the relationships that we’ve built with each other over the last 10 years. And that camaraderie is the reason why we’re being so efficient right now and why we’re getting through this so well. I don’t know how long that would take to break down if we weren’t going back to an office setting. And I think also for newer employees coming into the picture, it’d be harder for them… obviously a well-established employee, we’re probably okay, but that new employee coming in, they probably need a place to go, they need to understand the culture, they need the time to develop those relationships with their coworkers as well.

But you’re right, Mike, things have changed forever, and I do think that we just need to be able to take the good, and take the old, and figure out how to blend the two together. It’s going to be interesting to see how this all shakes out.

The pitfalls of working from home 

We went virtual. We already were starting to do mostly phone and video conferencing for consultations. And now with the court systems, most courts are doing telephonic hearings these days, including bankruptcy court, it’s left up to the trustees. So a lot of this stuff is now going to be telephonic, and I’m not really sure why they would go back. There’s really no good reason to make people appear if you can always just have a telephonic hearing. One of the other things we use as a team is Zoom Meetings, obviously, that’s pretty handy for our weekly team meeting, just to make sure everyone’s on the same page and we’re all alive and kicking.

And then chat is awesome. So, just being able to have everyone on there, ask questions throughout the day, post GIFs, do whatever, has been really helpful at, one, kind of taking the temperature of how everyone’s doing and seeing who’s working when… I’m trying to maintain some semblance of work-life balance, because when you’re at home, and your office is your home, you can work at 2:00 in the morning and it doesn’t really matter, but it’s really kind of important to sort of build in a little bit of a schedule for yourself.

I’ve been working from home now for a couple of weeks. Full disclosure, I do have to go into the office every now and again. Fortunately there are parts of the real estate system that still only use checks, and so there are still checks to be processed, people still have to be paid right now. So I do have to go in every once in awhile, but… I will say I agree with you, I think the work-life balance, or harmony, is definitely disrupted for me. The other piece that’s thrown in there is kids not being at school now, and trying to be able to manage my work, and because my wife has things that she’s got to get done too, so I have to take over some of those duties sometimes, so those things can get done. And so it’s definitely hard, I will be happy to go back to an office.

Yeah. For one of my employees, she’s so awesome. She’s got two young kids at home. For her it’s like, you’ve got the dogs, you’ve got the kids, and it’s 24/7 parenting now for a lot of people. The problem is you still have to teach your kids, have a structure for them, and try to work at home. And so now, people are just cooking more, they’re definitely walking that dog a lot more often.

Mike usually sees me walking around with my headset. He’s like, “Can you stop pacing?” I know both Paul and I loop… how we get steps in – we take phone calls.

I could probably go out on the patio, but that’s the other issue too, in about a month from now, it’s going to be triple digits. It’s going to be a little hot. And then getting out of the house, I think we’re going to see a lot more people walking their dogs at about 4:00 AM or 11:00 PM at night.

How to generate Revenue during COVID-19: Relationships, Pivots, and Marketing 

How do you make money being self-employed in this day and age? Well, especially right now I think the big issue is some business owners are feeling desperate. Like what do you do with sales, especially if you had a brick and mortar, and now you’re closed, you’ve got employees, and you have overhead? Or if you’re in the service industry, and you have services. What are you going to do? And I think the big key is, you’ve got to keep marketing. You still have to continue to make a presence. But what would be your recommendations for people in your industry?

So, for me and the insurance industry, the relationship is still always the most important. So really, what I’ve been doing to generate sales right now is doing what I do always, which is pretty much just calling my clients, seeing how they’re doing. When you make that phone call, it is a lot of hey, you need to talk to my cousin, brother, uncle, friend, neighbor. And then that’s what kind of spurs it. So really it’s just doing what I’ve always done, which is just trying to communicate. We’ve obviously ramped up all of our social media and MailChimp stuff to keep clients informed as to what’s going on. That helps a lot, too. But like I said, the main thing is just responding when there’s a question, reaching out, and then just trying to do some general marketing where instead of maybe marketing to a product, you just try to market to… you try to do something that’s fun, something that is going to take their mind off things for a few minutes.

What about you, Patrick? Obviously for us, in the real estate industry, we’ve had to do quite a bit of pivoting in the last couple of weeks. For just showings primarily, that’s obviously been a big shift with listings, people wanting people coming through their homes, things like that. But I’ve told agents that lead generation is what they need. They need to find a way to create customers and clients. I always believed business relationships come from knowing your audience, but also it just comes from being helpful. And so I’ve encouraged all of our agents right now just to use this time as an opportunity. Reach out to your clients and people that have bought in the two or three years. Offer to be a resource. Answer questions for them. Can you help them, what are they struggling with, did they just lose a job? I think there’s a lot of those types of opportunities for us just to be human and carry one another, and yet still have that as a way to, like in my business, which is really top of mind marketing, to stay top of mind and to stay in touch with people. And I will say in this kind of age of quarantine, it is one of the things I can do on a daily basis that helps me feel normal. So it’s just reaching out and having those conversations with other people.

Mike, your business has undergone some changes. So, when it comes right down to it, I think my business was impacted probably almost as much as some restaurants have been impacted. Although, fortunately, we’re in a position to deal with it more easily than a lot of restaurants are. We are no longer looking for new medical malpractice cases. For most of my career in law so far, my firm has focused on medical malpractice litigation. We represent people who have been injured by the healthcare system, suing hospitals and doctors who have caused serious injuries or deaths. I think in the last month, we’ve seen some fundamental shifts in the way Americans relate to the healthcare industry. And a lot of shifting of blame where people used to feel frustrated with their local hospitals and even their local healthcare providers, they now are directing that frustration at the government, and at regulators, and at administrators at the government level. And that’s not something that I can help with. That’s not a narrative or a paradigm that works well for medical malpractice claims. I don’t think that the traditional approaches to determining the strength or value of a medical malpractice case will hold in the long run, and as a result, I’m not taking those risks anymore.

Our firm is shifting now, whereas we used to do about two-thirds medical malpractice and one-third small business law and other types of law, we are now dropping med-mal, except for the cases that we are still litigating, which we will continue to pursue, but we’re looking now more for small business claims, and for individuals with legal issues that are transactional in nature. We’re going to get back to helping local business owners, restaurants, cleaning company owners, the types of entrepreneurs and self-employed people that we’ve helped more in the past, we’re going to return to serving that community locally, because they need the help right now.

Lots and lots of advice. Yeah, for me at AZCLG, we did credit repair, credit counseling, debt consolidation, and bankruptcy. And right now with the state of the economy and the uncertainty, it’s just very complicated giving people blanket advice right now. It’s so individualized, and for so many people it’s like you got to wait and see what’s going to happen. And for some people it’s like, yeah, you’re probably going to end up filing bankruptcy in six months. So that’s just sort of the reality of it. But with X Firm, we primarily just do financial consulting and help people with financial transaction planning, which is a little bit more strategic advice. But with any business that’s trying to pivot or decide what their next step is, the key is you have to keep moving forward. Even though the world seems like it came to an end, it didn’t. We’ve got to keep moving forward, and we’re all in this together, and there are tons of professionals out there that are happy to come together and give people advice.

Planning for the future

Now is a great time to do all of those really boring adulting things that you’ve been putting off for a decade or so. If you did your estate plan back in the 90s, it is time to update that. If you got married or divorced since you did your estate plan, you should know that in Arizona, it’s presumptively invalid now. You need to start over. It will not be enforced the way it was written before. Your kids are grown and got married, and you’ve got grandkids. There are so many things that just happen all the time. Doing an estate plan now is just a really, really good idea. Your estate plan requires maintenance, as does business. This is a good time to cross the uncrossed Ts and dot the undotted Is.

For the people who have like LegalShield specifically, now is a great time to get your POAs and your Will done. We’re all looking at our mortality every day here, so go ahead and just bite the bullet and figure out what you want.

And that is an important thing. Our firm is pivoting into areas that include estate planning, so it’s a bit of a plug for us here, but I’ve had a number of people, friends, and family, who’ve approached us in the last couple weeks asking about getting their estate plans in order because they’re in high-risk groups for Coronavirus, and the fact of the matter is, that is a good decision. That’s something that you should do at this point, because this virus does appear to be Russian Roulette. You never know if you’re going to get it, whether it’s going to be quite serious for you, or whether it’ll be no big deal at all.

We all need to have things in order because if it turns out that you find yourself in bad health in the near future, you’re not going to have the resources available to you to handle that at the last minute. This is not business as usual for anybody in society right now, and you’re not going to be able to have someone come to your hospital bedside or tend to you if things take a turn for the worse, to get your estate plan in order. It doesn’t work these days. So, just like stocking up on toilet paper and rice and beans, probably a good idea to get your estate handled.

And also set up a business continuity plan. Absolutely. Critical. If your business relies on any individual for daily operations, if you’ve got any single point of failure when it comes to people in your business, you better come up with a way to handle that because they could be out of commission for who knows what reason. Maybe Coronavirus, maybe just something else. By the way, not only do you need to create one, but you need to summarize it and share it with your clients so they know what the plan is.

If you’re a 1099 contractor, you need to create your LLC. Also, get some life insurance, now is the time.


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