December 9, 2025 • 32 mins
In this special episode, Ben sits with Tino McFarland, CEO of McFarland Construction, and Michelle Rockwell, Founding Member & Licensed Customs Broker of Sheltered International, for a roundtable discussion in Florida. They discuss the state of small business in America and, through the lens of commercial real estate and freight forwarding, share the realities of working through labor shortages and tariffs, as well as how inflation and policy changes affect crucial staffing, budgeting, and operational considerations. Listen in as they discuss how small business owners can become more unshakeable in the face of uncertainty.
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Speaker 1 (00:04):
Ruby.
Hi everyone, and welcome to a special episode Of The Unshakeables. During our episode with Imani Ellis, I shared how one of my favorite parts of my job is the bus tour I get to take every year, and it's definitely not the bus itself that makes it my favorite. What I love is talking to our clients, the small businesses that are the heart and soul of America, and the backbone of our economy. And talking to them is a great way to get a feel for what's going on in the economy because they have to face those issues head on every day.Now, there have been many conversations this year about inflation and tariffs and labor, and a few industries in particular come to mind when I consider those things. Construction, supply chain, and logistics. They're some of the first to feel the impact in economic shifts. Interest rates and material costs can fluctuate, finding skilled labor can get harder, and global supply chain issues affect imports and exports. I thought it was crucial we worked to understand what's really going on, so we invited two of our clients in those industries to join me for a special recording of The Unshakeables in front of a live audience.On today's episode, Michelle Rockwell, co-founder of freight forwarding company, Sheltered International from Fernandina Beach, Florida, and Tino McFarland, CEO of McFarland Construction from Charlotte, North Carolina.Michelle and Tino, welcome to The Unshakeables, and we're live. Okay, Michelle, I'm going to start with you for a second. According to the US Census Bureau and the Bureau of Economic Analysis, for the first seven months of the year, imports rose about 11% compared to the same period in 2024. Now, that's a number that many people would find counterintuitive given the news cycle around tariffs. So tell us what you're experiencing. Are clients moving as much freight as they used to? What's changed?
Speaker 2 (01:54):
No, they're not. They're actually holding back because of the tariffs.
They want to see what the next step is going
to be. The first half of the year, they probably
did import a little more, and a lot of that
is based on because they knew the tariffs were coming.
There was already those threats.
Speaker 1 (02:09):
So what are they doing about it now?
Speaker 2 (02:11):
Calling us multiple, maybe three times a day. They're real conservative because it affects the price of their goods. There's a lot of uncertainty with the importers of record. We have seen business slower than normal this time of year because ultimately the end consumer has to pay those additional costs. It's inevitable. We try to explain... And we sympathize with them. We completely understand. And unfortunately we've had those hard conversations because what happens is sometimes those things go into effect and there's no backdating. So it doesn't matter when it departed, those tariffs are going to take effect. And it doesn't matter if your cargo was already on the water and you were only expecting to, say, pay 20% or 30%. Now, tomorrow, going to pay 55% and it's hard for them to swallow. And I get it. I completely understand that.
Speaker 1 (03:08):
Michelle, when you and Andrew set out to start Sheltered International, I understand that you both had been in freight forwarding for quite a while. You had great relationships in the industry, I'm sure that'sPage 2 of 16how you were able to start the business. Tell me about how those relationships have evolved over time and specifically, I know you've been dealing with a different kind of price sensitivity, which I suppose is not surprising given everything we've seen, but how has the nature of the business changed as a result, and how have you dealt with that?
Speaker 2 (03:33):
So typically in our industry, they always say that the customs broker marries their importer record, because you have such a close relationship with them, and usually you have them for years and years. We are finding now that they're more price sensitive and for lower rates, ocean freight, drainage, what have you, they're looking into those. So they are using those quotes against us and we lost a customer not long ago, it was over a couple hundred dollars on a $70,000 shipment.
Speaker 1 (04:03):
Wow. So is it squeezing the margins on your business
as a result. Oh?
Speaker 2 (04:07):
Absolutely, And our margins are really low right now. But
we've got a business to run too. And the difference
in us is when you call us, we're going to
pick up that telephone and we're going to answer you
because we're small and that's what we have to offer
a service.
Speaker 1 (04:21):
And do you find that there's as much of a
dichotomy as there needs to be in terms of some
customers appreciate that service and are willing to pay for it,
or is that shrinking or how's that changing?
Speaker 2 (04:29):
We still have quite a few they only come to
us because they need a certain level of service and
that's what they expect, whereas some of them, depending on
what market they're in, the price is important to them.
Speaker 1 (04:41):
During the recording, Michelle shared with us that they'd recently lost a client over a $200 fare difference on a $70,000 import. Especially in an industry where clients and freight forwarders are locked for life, this is unusual if companies aren't able to drop prices. So small companies like Sheltered International are making up the difference with white glove service. With the constantly changing federal regulations, that support can make a huge difference for clients.Are there any tools you figured out to help them along the way?
Speaker 2 (05:13):
We watch the Federal Register closely and the customs messages that come out. It doesn't go into effect until it's actually printed in the Federal Register. That's what we have to follow. And unfortunately until it's printed there, as this has been changing, we have literally seen three different changes in one day. So just because they keep saying, "Well, I'm going to do this and I'm going to do that," doesn't mean it actually goes into effect until it's printed in the Federal Register.
Speaker 1 (05:45):
So Tino, I want to switch and ask you, if those economic pressures really are that challenging, let's talk about what you see in the construction sector.Tino McFarland started his company, McFarland Construction, with his wife, Tamara, in 2008. They were working out of a spare bedroom in their townhouse back then. But McFarland is now one of the largest commercial construction companies in Charlotte, North Carolina and has grown into $185 million a year business.What's going on with demand? Where are you seeing pressures? What are the opportunities out there?
Speaker 3 (06:16):
So first, thanks for having McFarland Construction here this afternoon. It's a privilege for us to be a part.To answer your question, the givens are there. Of course, you're seeing cost increased on the labor side of the equation as well as on some of the commodities of structural steel, concrete, asphalt goods, plastics, lumber, gypsum board, you name it, you're seeing inflation impact those commodities. But then also in some of the things that maybe aren't so given. In the commercial terms as we negotiate with some of our clients, there's pressure on fees and pricing. There are requests to extend payment terms. And then there are other things that come into play. And there's a repurposing of some of our skilled employees to maybe do a different building type. If they were doing type A today, maybe they're doing type B tomorrow.
Speaker 1 (06:56):
Like no more offices and lots more data centers exactly.
Speaker 4 (06:59):
We're seeing a lot of that.
Speaker 1 (07:01):
We've seen what Tino is describing in the construction industry more broadly. There's essentially two different construction markets right now. Industrial is doing really well, things like warehousing factories and data centers, but it's more challenged in places like residential, offices, and retail.
Speaker 3 (07:18):
The other thing would be this expectation of some of our clients to have a crystal ball and play economist, and figure out what's going to happen 12 quarters into the future and to bring that pricing in today and guarantee kind of where things are going to finish up at. And so those are the things we're seeing on the impact side. The opportunities, there's a shift. So we're moving from maybe so much spend that used to play through our cycles in industrial construction, or in office space, or retail has really slowed down over prior cycles, and it shifted into life sciences and technology and even the banks are building more in our region. So we're seeing that shift happen and those are where the opportunities that exist as well.
Speaker 1 (07:51):
So unbalanced, would you say you see more risk or
opportunity in the marketplace? How does that balance feel today?
Speaker 4 (07:58):
It feels more risky. We're taking out work at maybe lower margins, more aggressive schedule with some guarantees early on in the project that sometimes put us on the side of procuring and locking in pricing sooner. And if we can't get it done, then we're maybe absorbing some of that risk. So I feel like it's a little more of a risky environment for us right now.
Speaker 1 (08:13):
And do you sense the same from your clients, Michelle? Oh?
Speaker 2 (08:16):
Absolutely.
Speaker 1 (08:17):
Have you had any customers sort of interrupted mid import
where they couldn't get their goods in?
Speaker 2 (08:21):
We've had a customer that we did business with for
many years that because of the dominimus, they came in
and then they ship small package to the US and
they have won under.
Speaker 1 (08:31):
Oh really they've gone under.
Speaker 2 (08:32):
So all that's gone away and they just they cannot compete.
Speaker 1 (08:37):
De minimis is a Latin term that basically means minimal things. So in imports that term refers to the size or monetary value of a shipment coming into the US. Last fall, the de minimis amount was $800, meaning that if you were importing goods worth $800 or less, there were no customs or import tariffs on that shipment. That was what allowed so many people to shop online and save from places like SHEIN, Temu, and other fast fashion retailers. Earlier this year, the rule was changed so that there was no longer any de minimis. Any import to the US from any country was now subject to the tariffs assigned to that country. Michelle explained that to me in a bit more detail.
Speaker 2 (09:18):
The de minimis was a huge one that was hit because if you're ordering, say clothing, I'm going to use textiles because that was a big one that I know was hit, it used to be able, they could come into the country and there was no duty charge because the value was so little. So they would do what we used to call a Section 321 entry and there was no duties and taxes. Well, that has been put a stop to, so they can no longer do that. And I think now there's $100 duty automatic on any small package you get like that. Well, going from free to 100, that's a lot, especially if you're talking, you bought a $20 dress or a top, whatever, it's not worth it any longer.
Speaker 1 (10:00):
As a result, many clothing and textile retailers had to
shut down. Okay, so let's talk a little bit about the job market. And Tino, I want to turn to you. You hire a ton of people, I'm sure. Construction sites are pretty labor intensive. I travel the country and talk to small businesses all over the place and I hear consistently that finding even unskilled labor has gotten difficult, much less skilled labor. Are you finding labor shortages? Is it affecting your ability? What are you sensing in the labor market?
Speaker 3 (10:30):
So I think COVID changed the dynamic with labor force quite a bit, and we're still seeing some of that play out even today. So the expectations of workers, that's changed drastically. I always joke with our COO that this bacon too crisp notion has come into play. Back in 2008 to 2010, it was this thing, if I could just get a warm bed and something nice to eat and a cold shower, it'd be great. And now it's the bed's too hard, the water's too cold, the bacon's too crisp, and they're off to the next thing.
Speaker 4 (10:57):
And so some of that's on.
Speaker 3 (11:52):
In our business, we have a pretty healthy side of our equation that is professional services. They're engineers, architects, and that type of discipline. And so it's a race and a battle to attract that kind of talent and keep it.And then on the skilled labor side, we get involved in some unique projects from time to time. As an example, we have one in Indianapolis going on right now. We're a little ahead of our tech competitive project, which is going on across the street. It's going to be a mega project. And there, they will have a different level of worker experience. So cafeteria for the job site workers, these luxurious porta johns, chiropractic care. And so now you're trying to compete with the hourly labor to stay on your job site or to go across the street, maybe make a dollar or two more an hour and to get these benefits.And so the demands I think are a little higher, and there is a push. Our industry is pretty robust right now, I believe. And there's a lot of large opportunities and project opportunities out there that are attracting a lot of resources away. So you have to figure out how to be competitive and attracting to your business.
Speaker 1 (11:52):
One quick follow up, which is I hear that story... The bacon crisp is just fantastic. I haven't quite heard that take on it, but I do hear a lot of times that the expectations of workers has gone up, even when you hear sort of general softness in the labor market, in the job market, job hugging, and all those kinds of things. What is it that people do want??
Speaker 3 (12:11):
So I think culture comes into play. In our industry, our environment they want a little bit of autonomy. They want a place where they feel secure and welcome to be their self. So we drive diversity in our workplace. And so across our headcount of about 105 employees, there are about 13 different nationalities represented. And so some of the events that we have and the team building things that we do really bring people in and create a little bit of stickiness.When we think about our project levels, they do want some of the amenities. And so how do we attract the skilled workers? They want training, they want pay, they want to come to work and have good facilities. So is it the cafeteria? Is it clean porta-johns? The things that make work a little more tolerable if you will, not so cold to them. And so it's kind of thinking about the environment and the culture of just the projects and/or the home office is what we're striving to do. And coupling with wages and education and a little bit of autonomy.
Speaker 1 (12:56):
And what do you see, Michelle? You have so many clients who do so many diverse things. Are they constrained by labor?
Speaker 2 (13:02):
We are seeing that some of our clients are having
more work at home employees that are looking for things.
Ourselves were not because we're a very small operation. But
the clients, some of them, I don't think, have hired
as many as they could because you know, obviously their
shipments are down yep, and they don't know which way
to turn yet.
Speaker 1 (13:21):
So I wonder if you could talk a little bit about whether you've seen any impact. This is a fraught topic, but I don't want to get into the politics of it. But everything that's going on with immigration, have you seen any of your clients or your businesses affected by the change - have you seen anything out there in the marketplace?
Speaker 2 (13:36):
We actually had a friend not long ago that he had a container hauler that his was apparently an undocumented driver, and they pulled him over and took him into custody and the load sat., the load sat, so it had to be recovered.
Speaker 1 (13:49):
And how about you, Tino, I mean, obviously it's an
industry that historically has had to deal with us for
a long time.
Speaker 3 (13:54):
Sure, yeah. I would say directly, most of our projects require pretty healthy drug screening and background search. And so we're kind of getting through the verification process. I do hear some rumblings about it in the marketplace. I think what has comes to the forefront of our attention right now is this H-1B visa process and some of the changes that may take place with it. So on our side of the house, probably 7 to 10% of our workforce are sponsored H-1B candidates. And so about six or eight weeks back, there was this little bit of noise in the media about some changes to the program and maybe an escalation in the fees and change in some of the administrative process. And it hit close to home, not only for us, but also with the workers that are under that program. What does it mean for their future? And all the certainty isn't there yet, but now they're the headline, and some changes are coming.And so those things I think create a little bit of just uncomfort.
Speaker 1 (14:41):
This is not the first time our guests have experienced challenging times. As you know on this show, we talk about the moments that can make or break a small business. I was curious to know about an incident Tino had on a job site early in the life of McFarland Construction.Tino, we talked about skilled labor, but I want to return to a specific story you told us when we first talked to you about a worker who hurt his knee laying down floor protection. Guy on the ground, tweaked his knee. I'm sure that happens all the time. Things went a little bit haywire after that, right?
Speaker 3 (15:09):
So the headline is in the construction industry, safety is a very critical component of how contractors are selected and able to engage on projects. And there's this lagging indicator called an EMR, which is a measure of your safety performance, but it's a lagging indicator and it looks at your expected losses versus your actual losses. And the long and the short of it is if it's north of one, you're viewed as being risky. If it's south of one or one, you're viewed as being a safe vendor. But again, a lagging indicator.
Speaker 1 (15:38):
It seems like a bit of a dull instrument, but okay, a.
Speaker 3 (17:13):
A bit of a dull instrument. And it lived with you for about three years after it's measured if you have an event. And so the long story short, it's a function of payroll, a function of size. So if you're a larger business, you can have more incidents. If you're a smaller business, it can really throw your EMR out of whack.So as an example, you can have a fatality on a project as a very large contractor, and your EMR may not go above one. If you're a small contractor, you can have a guy tweak his knee and your EMR can go north of one and all of a sudden you're viewed as a risk. And so it doesn't seem very balanced.So now we've got this project going on, an employee that had been with us for maybe a year. He's on the project site, we're finishing it up. The vendors have laid the carpet and he's protecting the carpet, on his hands and knees literally spreading out floor protection and taping it together, and he tweaks his knee. And so goes and sees an orthopedic doctor. A little bit of PT. Later, the orthopedic doctor recommends surgery. Surgery. Later, he's doing PT again and he tweaks his other knee. So now he's under a worker's comp claim, and so everything is under the claim.So he gets it all straightened out, and what's the first thing you think this guy does? Resigns. So now he's off probably running marathons and playing horse with the neighborhood kids, and we're living with this thing for three or four years trying to justify the fact that our EMR is, like, well north of one. And at that time, our biggest client was the Army Corps of Engineers, and their threshold really was 1.10, and anything north of that, you really had to get a variance to continue to work.So became an exercise of educating the client on who we were and our track record really around safety. We got our insurance company to partner with us and write some good guy letters on our behalf share with the Army Corps of Engineers.
(17:55):
We really leveraged up our approach to safety in general. So we hired a number of safety professionals just to go around and start auditing, and partnering, and consulting with our projects, and then invested in some more technology to allow daily observations of workplace, the environment to be kind of publicized. We could use that data to come up with plans to mitigate potential incidents before they even happened. And so we start to educate our clients on this whole process, as well as educating them on different indicators that were more real time to use as a measure of how safe contractors were or are.And so that got us moving again with the Army Corps of Engineers and ultimately allowed us to move our business into some different sectors that have a pretty strengthened safety process. But that's something we lived with for a while and really had to work our way through.
Speaker 1 (17:55):
Did you ever lose a contract over it?
Speaker 4 (17:57):
Yeah?
Speaker 1 (17:58):
Yeah, Yeah, that's got to be tough. Yeah, Okay. We
talked about tariffs, and we talked about labor. Let's just
talk about inflation itself for a second. Have you seen
it ease off? Have you seen it accelerate? What's going
on out there in the market. Either of you can answer.
Speaker 2 (18:18):
I think the end consumer is getting that inflation. I
do think it's coming. I think it has maybe steadied
a little bit because the tariffs have for now, the
tariffs have kind of at an even where they've been
for a while. We're still waiting for.
Speaker 1 (18:33):
The new changes. Say what are you telling your clients?
Speaker 2 (18:35):
We tell them what we know. Most of the time,
we've heard what they've heard, but until it's printed in
the Federal Register, for us, it's not a fact, so
it doesn't go into effect. It won't affect their shipment.
There could be a grace period, there may not be,
but we're transparent with them because we don't know what
to tell them or how to tell them to run
their business.
Speaker 1 (18:54):
That's obviously up to them, right, And what about you Tino?
What do you see on the inflation front? Is there
anything out there that could cool it down?
Speaker 3 (19:02):
It seems like it's a vicious cycle. We're going through
our annual COLA and merit increases, so none of it was good enough
on the wage price spiral, yeah, and so you've got
the wage price spiral going on. Things have flattened out
a bit, but they're still climbing. As far as the
commodity pricing goes. Our vendors will guarantee pricing for a
shorter amount of time, and so there's this revisiting of
(19:24):
pricing more frequently through.
Speaker 1 (19:25):
The So now you've got the spread between how long
it takes to deliver your project and how fast your
input prices are going up.
Speaker 3 (19:30):
To how fash you buy and how fast you lock
them in the contract. And it all comes into play.
Speaker 1 (19:34):
Yeah wow, Okay, Look, you've both survived ups and downs before, right,
you know. Tino I think you started during the '08 crisis. Michelle, you lived through COVID obviously when everything was stuck. So Michelle, let me just start with you. Compare this moment in your business to COVID, because there was stuff stuck in port all over the place back then. There's some stuff stuck in ports for very different reasons now. How does it feel similar and how does it feel different?
Speaker 2 (20:00):
Before, we were so busy with COVID because everybody wanted their product yesterday because everybody was at home and everybody was ordering. I guess that's what they did when they sent it home. But now people are working but not knowing what the tariffs are, so they don't want to order. The product may be ready and ready to ship, but they're checking in daily, reading the news, watching the news, what have you, trying to see if it's the right time to bring it in. So you're just as busy, but for a different reason.
(20:28):
You're not really moving the freight now, you're just dealing
with the customers on a different level because you don't
have that crystal ball to tell them what to do
or what's the best option.
Speaker 1 (20:38):
And I'm trying to parse is this because they're worried
about demand or is it because they're worried about what
it will cost relative to what they think they can charge.
Speaker 2 (20:45):
They're worried about the cost. It's the cost, yes, because
they know that with all of the tariffs that that
has to increase the price of their product to the
end consumer.
Speaker 1 (20:56):
Tino, can you talk to us a little bit about
how this is obviously tough. You've described a number of challenges.
How are the pressures changing.
Speaker 3 (21:43):
I would suggest that COVID years, it was more about the cadence and just figuring out how are we going to get stuff done, and worker spacing, and cleanliness, and sanitization of the project sites. And once we got that cadence down, it was kind of back to business. And now, I think the labor thing is a big shift.And the other thing, I think on the input side of our business, there is a robustness in some of the sectors where the demand has shifted to. And so when we think about the tech sector and the scale and size of some of these projects going on and what the clients are really driving, there's a little more robust than COVID and life sciences sector. It's the same way. And then I think even in some of the institutional sectors, as you think about the Sunbelt region and school construction, and fire stations, and airport construction, that's all pretty robust right now as well.
Speaker 1 (21:43):
Maybe a Chase branch here there, Maybe a.
Speaker 4 (21:45):
Chase branch here there as well.
Speaker 1 (21:47):
Many of you probably don't know, but Tino and his
company build some of Chase's new branches, which now number
over five thousand across the US. And as luck would
have it, one of those branches he built opened to
North Carolina when I was there on the bus stops.
So I want to ask each of you a couple of closing questions. And the first is, if you had one message for, I'm going to call it policy makers writ large, but that could be for governments, for people who are making decisions, for legislatures, what would you want them to know that would make running your business easier, clearer, and make it easier for you to grow and hire? Because that's ultimately what people want.
Speaker 2 (22:26):
I would like to see them actually maybe behind closed doors,
figure the tariffs out before they start scaring people. Like,
I don't think they understand what they do to people
at our level, and it does affect and it affects
you know, all the customers we do business with.
Speaker 1 (22:43):
Got it, Tino, Yeah, I think.
Speaker 4 (22:45):
I would generally agree.
Speaker 3 (22:46):
I don't know what the percentages are, but I think
it's forty or fifty percent of America's employed by small business.
Speaker 4 (22:51):
And so consistency, in our book is king right.
Speaker 3 (22:53):
The more that we can plan and predict and move
according to what is known, the better. And so I
think there are a lot of variables that are truly
variant right now that if they could put a little
more consistency around them, we would be able to be
more stable, make more job investments and investments as a whole.
Speaker 4 (23:07):
So consistency would be the big thing for me.
Speaker 1 (23:09):
And then my last question Tino you know I'll start with you.
We ask every guest on the Unshakeables the same question,
which is, you know, we know how tough it is
to be a small business owner. You're everything from particularly
in the early days. You're the custodian and the CEO
at the same time. We understand, what's one piece of
advice you have for aspiring or current small business owners
who are trying to make it out there.
Speaker 4 (23:26):
So don't do it. It's not an option rightist.
Speaker 3 (23:32):
Yeah, I would say it's not for the faint of heart,
but it's definitely it's possible. And I think you have
to leave with strategy and mindset I think is everything.
And so if you really take a hard look at
yourself and where you're strong and where you're weak, kind
of that swat analysis thing, and figure out your resources
and your talents and kind of align them to drive strategy,
and surround yourself with the good people that can do
the things that maybe aren't so natural for you. There's
(23:53):
a lot opportunity for success and then to do things
for and with people you enjoy and that value you
and your service, because small businesses, for the most part,
aren't just going to take off on day one, and
so they are going to be a lot of challenges
and long days and long nights, and so if you're
doing it with people that respect you and that you respect,
it makes it a little easier to kind of work
the way through the beginning.
Speaker 1 (24:12):
Great show your final thought, you have the final word here.
Speaker 2 (24:16):
I agree with them. You do have to partner with
people or someone that, you know, kind of is your opposite.
You're going to have to stay positive and work hard. Great,
but you're going to have to work together.
Speaker 1 (24:27):
Thank you very much, Michelle, Tino, thank you for joining
us on The Unshakeables. Kathleen, what did you think about
our live episode?
Speaker 5 (24:41):
I wish I could have been there for one. It
was fun, yeah, and I liked it because it got
into the meat and the potatoes of small business ownership.
You know, you guys really got into the brass tack.
So it was a good one.
Speaker 1 (24:52):
Yeah, I personally thought it was a good chance to sort of give people a feel for really what's going on out there right now. We spent a lot of time telling stories and how did we get here, and what was your, "Oh my goodness," moment? I think that it was a good chance to talk about where we are as an economy.And I think the answers that our guests gave really spoke to the confusion and the lack of clarity that people seem to have about the economy at the moment. On the one hand, you heard a lot about the impact of tariffs and how it's making things pretty uncertain and how it's forcing a reaction, particularly among her customers around how they are looking for margin everywhere they can find it and the pressure that's adding to businesses. On the other hand, it painted a picture of pretty resilient demand, which you sort of see. The jobs numbers came out, they were pretty good. The GDP numbers came out, they're pretty good. Unemployment, despite all the layoffs that you've seen, remains pretty low. We just keep getting conflicting data points, and you could hear that in their stories.
Speaker 5 (25:53):
Yeah, it's interesting. It almost has had this unifying impact
on small business owners, who I think, do actually very
well when they feel like they're backs up against a
wall and you know, not knowing what's going to happen
one day to the next.
Speaker 1 (26:08):
Well, Michelle talked about her customers asking for discounts where
they never had before and really squeezing them on margin.
A lot of times, when we see stuff like that,
it ends up making our clients stronger. It's brutal when
they go through it, and I don't want to make
light of the anxiety that that causes, but what it
does force them to do is to alter their business
model to get their own costs down, to think about
do they need to pivot to other sources of revenue
(26:29):
and they end up being stronger for it in the end.
Speaker 5 (26:32):
Yeah, I think we talked about this on another episode.
Just visa vis social media and near daily talking about
something that's happening in the news cycle or media right
or a cultural moment that's happening. And so likewise, here
it feels like you've got to still do business as usual.
You need to pay attention to what's going on, but
(26:52):
you need to also focus on the business at hand
and tuning out that noise.
Speaker 1 (26:58):
Yeah, you have to tune out the noise. And I think also if you're a small business owner and you see disturbing stuff in the news, it's a data point and nothing more. What I tell people is watch the street, not the TV. The street tells you what's going on and you're on the street more than the news anchor. So trust your gut and what you hear on the street. And I think also you have to accept that we live in a world that moves fast now. Loyalty doesn't exist the way it used to. You can't count on your business model to just sort of be resilient forever. If your client finds a better way, they're going to take it. It's not personal, it's just the pace at which the market moves today.
Speaker 5 (27:33):
You know, I'm watching all these small business owners who
are saying they're shutting down shop at this point due
to the tariffs, And part of me wonders, were you
wanting to shut down because the business wasn't healthy for
quite some time and now there's that intellectual alibi to
do that. Are you seeing lots of businesses shutting down
citing tariffs or.
Speaker 1 (27:53):
No, quite the opposite. And I talk to customers who
import stuff all the time, and I would say, by
and large, they have said it's a pain, but we're
figuring out a way to deal with it. Overwhelmingly, So
that's been the response. I had someone say to me
a couple weeks ago, Look, yeah, we took a hit,
but we're fortunate to be in a healthy margin business.
So now our margins are just slightly less healthy and
(28:15):
we're fine. Yeah. And I've had others say we've had
to source product from other places and that's bit of pain,
but we're figuring it out. I've had other places say
we tried to source product from other places. It doesn't exist,
and we don't have enough margin to absorb it, so
we've passed it on. But so far our clients appear
to be accepting it, and we're finding ways to make
that work. I mean, some flavor of those three responses
(28:37):
is far more common than throwing your hands up and
just saying I guess I'll close it down. I do
not hear that a lot.
Speaker 5 (28:42):
I thought it was wild during your interview where they
were talking about cargo, And sometimes that's just sitting on
the water and deciding when to bring it in because
of the tariff, numbers can fluctuate, and so you're trying
to figure out the perfect window to bring something in.
Speaker 1 (28:56):
There's actually a whole industry that sprung. Well, it existed before,
but not on the skin that it is now because
they can store the freight before it technically gets imported.
So now you have to weigh, well, what's better do
I pay the storage costs and keep it out before
I bring it in? I mean, it's a whole thing.
Speaker 5 (29:09):
The costs have to go somewhere. When costs of good
change tariffs are added, usually that's to the end consumer.
How are you seeing that? Going back to the received example,
are you seeing transparency in that?
Speaker 1 (29:21):
Very different by industry. In B2B industries, I think people are having, and you heard some of this, particularly Tino's talking about how he prices his projects. You just have to have a straight up conversation with your customer and say, "This is what it is." But one of the really good things about the American economy is it is fast and dynamic. And so as fast as you can say, "Oh, I'll just put the price up," the competitive nature of the market kicks in and you can't get away with highway robbery.So I think this is a marketplace that adapts faster than anywhere on earth. I actually do believe that. Not that we're the best at everything, but I think we're very good at that. But when I think about some of this employment mismatch that we have talked about before, where the skills that are needed versus the jobs that are open don't always match up, that's pushing up wages in certain areas and pushing down wages in others, and that's creating skewing effects all over the economy. That's creating pockets of demand that are excessive and drive prices up. It's creating pockets of demand that are soft.And by the way, I'm a big believer that some of this has still fallout from COVID. The ripple effects of the pandemic continue to push through the economy, on top of the big policy changes that have been a result of a change in administration. And you sort of add all that up and there's just a series of ripples moving through the economy, sometimes in amplifying and sometimes with dampening effect. And I think you heard that from Michelle and
(30:40):
Tino the other day. There's nothing moving all in the
same direction at the same time, and I think that's
what we're all living through.
Speaker 5 (30:46):
Yeah, there's a lot more that is getting factored in
as people have more choice also and where they're going
to work. One of the things that I think can
be helpful for small business owners, especially if you've got
a lot of hard costs, is just making whatever this
skill hopes our proposals are time bound, so it expires
after a certain period of time, and you can reassess
(31:06):
where things sit. So little switches like that where you
would previously submit something and then someone would come back
a year and a half later ready to do work.
Now maybe it has some constraints around it.
Speaker 1 (31:17):
Yeah, I think that's right. Ultimately, I came away from that conversation actually quite optimistic, because, in Michelle, you had an industry that's been harder hit. In Tino, you had an industry that's been less hard hit. Although even in the construction industry, we've seen pretty bifurcated outcomes. Residential and office, pretty hard hit. Industrial, off to the races, particularly with the AI boom, so uneven results. But I think despite that, they're
(31:41):
both continuing to run their business, continuing to adapt their business,
and it's not like either of the more closing up shop.
They're going for it. So my view is it gave
some really good insight into the complexity of navigating today's
economic environment. But I think it left me with cause
for optimism that, as usual, we're going to figure it out.
Speaker 5 (31:58):
I have nothing more to say on that, Mike Drop
that was perfect.
Speaker 1 (32:02):
Okay, Well, this was really fun and I'm so glad
we got to do it live. Kathleen. I'm sorry you
weren't able to be there, but thank you for joining
me to talk about it, because we had a lot
of fun.
Speaker 5 (32:09):
Yeah, glad to be here.
Speaker 1 (32:14):
Thanks so much for listening to this episode of The Unshakeables.
If you liked this episode, please rate and review it
next time. We're talking to a woman who bet her
company's success on Web three and had to kill part
of the business she loved to keep it alive.
Speaker 5 (32:29):
How much would you say you spent on aggregate on
the Web three metaverse strategy? Probably three hundred and fifty
to a half a million dollars.
Speaker 1 (32:40):
WHOA, I'm Ben Walter and this is The Unshakeables from
Chase for Business and Ruby Studio from iHeartMedia. We'll see
you back here soon.
Ruby.
Hi everyone, and welcome to a special episode Of The Unshakeables. During our episode with Imani Ellis, I shared how one of my favorite parts of my job is the bus tour I get to take every year, and it's definitely not the bus itself that makes it my favorite. What I love is talking to our clients, the small businesses that are the heart and soul of America, and the backbone of our economy. And talking to them is a great way to get a feel for what's going on in the economy because they have to face those issues head on every day.Now, there have been many conversations this year about inflation and tariffs and labor, and a few industries in particular come to mind when I consider those things. Construction, supply chain, and logistics. They're some of the first to feel the impact in economic shifts. Interest rates and material costs can fluctuate, finding skilled labor can get harder, and global supply chain issues affect imports and exports. I thought it was crucial we worked to understand what's really going on, so we invited two of our clients in those industries to join me for a special recording of The Unshakeables in front of a live audience.On today's episode, Michelle Rockwell, co-founder of freight forwarding company, Sheltered International from Fernandina Beach, Florida, and Tino McFarland, CEO of McFarland Construction from Charlotte, North Carolina.Michelle and Tino, welcome to The Unshakeables, and we're live. Okay, Michelle, I'm going to start with you for a second. According to the US Census Bureau and the Bureau of Economic Analysis, for the first seven months of the year, imports rose about 11% compared to the same period in 2024. Now, that's a number that many people would find counterintuitive given the news cycle around tariffs. So tell us what you're experiencing. Are clients moving as much freight as they used to? What's changed?
Speaker 2 (01:54):
No, they're not. They're actually holding back because of the tariffs.
They want to see what the next step is going
to be. The first half of the year, they probably
did import a little more, and a lot of that
is based on because they knew the tariffs were coming.
There was already those threats.
Speaker 1 (02:09):
So what are they doing about it now?
Speaker 2 (02:11):
Calling us multiple, maybe three times a day. They're real conservative because it affects the price of their goods. There's a lot of uncertainty with the importers of record. We have seen business slower than normal this time of year because ultimately the end consumer has to pay those additional costs. It's inevitable. We try to explain... And we sympathize with them. We completely understand. And unfortunately we've had those hard conversations because what happens is sometimes those things go into effect and there's no backdating. So it doesn't matter when it departed, those tariffs are going to take effect. And it doesn't matter if your cargo was already on the water and you were only expecting to, say, pay 20% or 30%. Now, tomorrow, going to pay 55% and it's hard for them to swallow. And I get it. I completely understand that.
Speaker 1 (03:08):
Michelle, when you and Andrew set out to start Sheltered International, I understand that you both had been in freight forwarding for quite a while. You had great relationships in the industry, I'm sure that'sPage 2 of 16how you were able to start the business. Tell me about how those relationships have evolved over time and specifically, I know you've been dealing with a different kind of price sensitivity, which I suppose is not surprising given everything we've seen, but how has the nature of the business changed as a result, and how have you dealt with that?
Speaker 2 (03:33):
So typically in our industry, they always say that the customs broker marries their importer record, because you have such a close relationship with them, and usually you have them for years and years. We are finding now that they're more price sensitive and for lower rates, ocean freight, drainage, what have you, they're looking into those. So they are using those quotes against us and we lost a customer not long ago, it was over a couple hundred dollars on a $70,000 shipment.
Speaker 1 (04:03):
Wow. So is it squeezing the margins on your business
as a result. Oh?
Speaker 2 (04:07):
Absolutely, And our margins are really low right now. But
we've got a business to run too. And the difference
in us is when you call us, we're going to
pick up that telephone and we're going to answer you
because we're small and that's what we have to offer
a service.
Speaker 1 (04:21):
And do you find that there's as much of a
dichotomy as there needs to be in terms of some
customers appreciate that service and are willing to pay for it,
or is that shrinking or how's that changing?
Speaker 2 (04:29):
We still have quite a few they only come to
us because they need a certain level of service and
that's what they expect, whereas some of them, depending on
what market they're in, the price is important to them.
Speaker 1 (04:41):
During the recording, Michelle shared with us that they'd recently lost a client over a $200 fare difference on a $70,000 import. Especially in an industry where clients and freight forwarders are locked for life, this is unusual if companies aren't able to drop prices. So small companies like Sheltered International are making up the difference with white glove service. With the constantly changing federal regulations, that support can make a huge difference for clients.Are there any tools you figured out to help them along the way?
Speaker 2 (05:13):
We watch the Federal Register closely and the customs messages that come out. It doesn't go into effect until it's actually printed in the Federal Register. That's what we have to follow. And unfortunately until it's printed there, as this has been changing, we have literally seen three different changes in one day. So just because they keep saying, "Well, I'm going to do this and I'm going to do that," doesn't mean it actually goes into effect until it's printed in the Federal Register.
Speaker 1 (05:45):
So Tino, I want to switch and ask you, if those economic pressures really are that challenging, let's talk about what you see in the construction sector.Tino McFarland started his company, McFarland Construction, with his wife, Tamara, in 2008. They were working out of a spare bedroom in their townhouse back then. But McFarland is now one of the largest commercial construction companies in Charlotte, North Carolina and has grown into $185 million a year business.What's going on with demand? Where are you seeing pressures? What are the opportunities out there?
Speaker 3 (06:16):
So first, thanks for having McFarland Construction here this afternoon. It's a privilege for us to be a part.To answer your question, the givens are there. Of course, you're seeing cost increased on the labor side of the equation as well as on some of the commodities of structural steel, concrete, asphalt goods, plastics, lumber, gypsum board, you name it, you're seeing inflation impact those commodities. But then also in some of the things that maybe aren't so given. In the commercial terms as we negotiate with some of our clients, there's pressure on fees and pricing. There are requests to extend payment terms. And then there are other things that come into play. And there's a repurposing of some of our skilled employees to maybe do a different building type. If they were doing type A today, maybe they're doing type B tomorrow.
Speaker 1 (06:56):
Like no more offices and lots more data centers exactly.
Speaker 4 (06:59):
We're seeing a lot of that.
Speaker 1 (07:01):
We've seen what Tino is describing in the construction industry more broadly. There's essentially two different construction markets right now. Industrial is doing really well, things like warehousing factories and data centers, but it's more challenged in places like residential, offices, and retail.
Speaker 3 (07:18):
The other thing would be this expectation of some of our clients to have a crystal ball and play economist, and figure out what's going to happen 12 quarters into the future and to bring that pricing in today and guarantee kind of where things are going to finish up at. And so those are the things we're seeing on the impact side. The opportunities, there's a shift. So we're moving from maybe so much spend that used to play through our cycles in industrial construction, or in office space, or retail has really slowed down over prior cycles, and it shifted into life sciences and technology and even the banks are building more in our region. So we're seeing that shift happen and those are where the opportunities that exist as well.
Speaker 1 (07:51):
So unbalanced, would you say you see more risk or
opportunity in the marketplace? How does that balance feel today?
Speaker 4 (07:58):
It feels more risky. We're taking out work at maybe lower margins, more aggressive schedule with some guarantees early on in the project that sometimes put us on the side of procuring and locking in pricing sooner. And if we can't get it done, then we're maybe absorbing some of that risk. So I feel like it's a little more of a risky environment for us right now.
Speaker 1 (08:13):
And do you sense the same from your clients, Michelle? Oh?
Speaker 2 (08:16):
Absolutely.
Speaker 1 (08:17):
Have you had any customers sort of interrupted mid import
where they couldn't get their goods in?
Speaker 2 (08:21):
We've had a customer that we did business with for
many years that because of the dominimus, they came in
and then they ship small package to the US and
they have won under.
Speaker 1 (08:31):
Oh really they've gone under.
Speaker 2 (08:32):
So all that's gone away and they just they cannot compete.
Speaker 1 (08:37):
De minimis is a Latin term that basically means minimal things. So in imports that term refers to the size or monetary value of a shipment coming into the US. Last fall, the de minimis amount was $800, meaning that if you were importing goods worth $800 or less, there were no customs or import tariffs on that shipment. That was what allowed so many people to shop online and save from places like SHEIN, Temu, and other fast fashion retailers. Earlier this year, the rule was changed so that there was no longer any de minimis. Any import to the US from any country was now subject to the tariffs assigned to that country. Michelle explained that to me in a bit more detail.
Speaker 2 (09:18):
The de minimis was a huge one that was hit because if you're ordering, say clothing, I'm going to use textiles because that was a big one that I know was hit, it used to be able, they could come into the country and there was no duty charge because the value was so little. So they would do what we used to call a Section 321 entry and there was no duties and taxes. Well, that has been put a stop to, so they can no longer do that. And I think now there's $100 duty automatic on any small package you get like that. Well, going from free to 100, that's a lot, especially if you're talking, you bought a $20 dress or a top, whatever, it's not worth it any longer.
Speaker 1 (10:00):
As a result, many clothing and textile retailers had to
shut down. Okay, so let's talk a little bit about the job market. And Tino, I want to turn to you. You hire a ton of people, I'm sure. Construction sites are pretty labor intensive. I travel the country and talk to small businesses all over the place and I hear consistently that finding even unskilled labor has gotten difficult, much less skilled labor. Are you finding labor shortages? Is it affecting your ability? What are you sensing in the labor market?
Speaker 3 (10:30):
So I think COVID changed the dynamic with labor force quite a bit, and we're still seeing some of that play out even today. So the expectations of workers, that's changed drastically. I always joke with our COO that this bacon too crisp notion has come into play. Back in 2008 to 2010, it was this thing, if I could just get a warm bed and something nice to eat and a cold shower, it'd be great. And now it's the bed's too hard, the water's too cold, the bacon's too crisp, and they're off to the next thing.
Speaker 4 (10:57):
And so some of that's on.
Speaker 3 (11:52):
In our business, we have a pretty healthy side of our equation that is professional services. They're engineers, architects, and that type of discipline. And so it's a race and a battle to attract that kind of talent and keep it.And then on the skilled labor side, we get involved in some unique projects from time to time. As an example, we have one in Indianapolis going on right now. We're a little ahead of our tech competitive project, which is going on across the street. It's going to be a mega project. And there, they will have a different level of worker experience. So cafeteria for the job site workers, these luxurious porta johns, chiropractic care. And so now you're trying to compete with the hourly labor to stay on your job site or to go across the street, maybe make a dollar or two more an hour and to get these benefits.And so the demands I think are a little higher, and there is a push. Our industry is pretty robust right now, I believe. And there's a lot of large opportunities and project opportunities out there that are attracting a lot of resources away. So you have to figure out how to be competitive and attracting to your business.
Speaker 1 (11:52):
One quick follow up, which is I hear that story... The bacon crisp is just fantastic. I haven't quite heard that take on it, but I do hear a lot of times that the expectations of workers has gone up, even when you hear sort of general softness in the labor market, in the job market, job hugging, and all those kinds of things. What is it that people do want??
Speaker 3 (12:11):
So I think culture comes into play. In our industry, our environment they want a little bit of autonomy. They want a place where they feel secure and welcome to be their self. So we drive diversity in our workplace. And so across our headcount of about 105 employees, there are about 13 different nationalities represented. And so some of the events that we have and the team building things that we do really bring people in and create a little bit of stickiness.When we think about our project levels, they do want some of the amenities. And so how do we attract the skilled workers? They want training, they want pay, they want to come to work and have good facilities. So is it the cafeteria? Is it clean porta-johns? The things that make work a little more tolerable if you will, not so cold to them. And so it's kind of thinking about the environment and the culture of just the projects and/or the home office is what we're striving to do. And coupling with wages and education and a little bit of autonomy.
Speaker 1 (12:56):
And what do you see, Michelle? You have so many clients who do so many diverse things. Are they constrained by labor?
Speaker 2 (13:02):
We are seeing that some of our clients are having
more work at home employees that are looking for things.
Ourselves were not because we're a very small operation. But
the clients, some of them, I don't think, have hired
as many as they could because you know, obviously their
shipments are down yep, and they don't know which way
to turn yet.
Speaker 1 (13:21):
So I wonder if you could talk a little bit about whether you've seen any impact. This is a fraught topic, but I don't want to get into the politics of it. But everything that's going on with immigration, have you seen any of your clients or your businesses affected by the change - have you seen anything out there in the marketplace?
Speaker 2 (13:36):
We actually had a friend not long ago that he had a container hauler that his was apparently an undocumented driver, and they pulled him over and took him into custody and the load sat., the load sat, so it had to be recovered.
Speaker 1 (13:49):
And how about you, Tino, I mean, obviously it's an
industry that historically has had to deal with us for
a long time.
Speaker 3 (13:54):
Sure, yeah. I would say directly, most of our projects require pretty healthy drug screening and background search. And so we're kind of getting through the verification process. I do hear some rumblings about it in the marketplace. I think what has comes to the forefront of our attention right now is this H-1B visa process and some of the changes that may take place with it. So on our side of the house, probably 7 to 10% of our workforce are sponsored H-1B candidates. And so about six or eight weeks back, there was this little bit of noise in the media about some changes to the program and maybe an escalation in the fees and change in some of the administrative process. And it hit close to home, not only for us, but also with the workers that are under that program. What does it mean for their future? And all the certainty isn't there yet, but now they're the headline, and some changes are coming.And so those things I think create a little bit of just uncomfort.
Speaker 1 (14:41):
This is not the first time our guests have experienced challenging times. As you know on this show, we talk about the moments that can make or break a small business. I was curious to know about an incident Tino had on a job site early in the life of McFarland Construction.Tino, we talked about skilled labor, but I want to return to a specific story you told us when we first talked to you about a worker who hurt his knee laying down floor protection. Guy on the ground, tweaked his knee. I'm sure that happens all the time. Things went a little bit haywire after that, right?
Speaker 3 (15:09):
So the headline is in the construction industry, safety is a very critical component of how contractors are selected and able to engage on projects. And there's this lagging indicator called an EMR, which is a measure of your safety performance, but it's a lagging indicator and it looks at your expected losses versus your actual losses. And the long and the short of it is if it's north of one, you're viewed as being risky. If it's south of one or one, you're viewed as being a safe vendor. But again, a lagging indicator.
Speaker 1 (15:38):
It seems like a bit of a dull instrument, but okay, a.
Speaker 3 (17:13):
A bit of a dull instrument. And it lived with you for about three years after it's measured if you have an event. And so the long story short, it's a function of payroll, a function of size. So if you're a larger business, you can have more incidents. If you're a smaller business, it can really throw your EMR out of whack.So as an example, you can have a fatality on a project as a very large contractor, and your EMR may not go above one. If you're a small contractor, you can have a guy tweak his knee and your EMR can go north of one and all of a sudden you're viewed as a risk. And so it doesn't seem very balanced.So now we've got this project going on, an employee that had been with us for maybe a year. He's on the project site, we're finishing it up. The vendors have laid the carpet and he's protecting the carpet, on his hands and knees literally spreading out floor protection and taping it together, and he tweaks his knee. And so goes and sees an orthopedic doctor. A little bit of PT. Later, the orthopedic doctor recommends surgery. Surgery. Later, he's doing PT again and he tweaks his other knee. So now he's under a worker's comp claim, and so everything is under the claim.So he gets it all straightened out, and what's the first thing you think this guy does? Resigns. So now he's off probably running marathons and playing horse with the neighborhood kids, and we're living with this thing for three or four years trying to justify the fact that our EMR is, like, well north of one. And at that time, our biggest client was the Army Corps of Engineers, and their threshold really was 1.10, and anything north of that, you really had to get a variance to continue to work.So became an exercise of educating the client on who we were and our track record really around safety. We got our insurance company to partner with us and write some good guy letters on our behalf share with the Army Corps of Engineers.
(17:55):
We really leveraged up our approach to safety in general. So we hired a number of safety professionals just to go around and start auditing, and partnering, and consulting with our projects, and then invested in some more technology to allow daily observations of workplace, the environment to be kind of publicized. We could use that data to come up with plans to mitigate potential incidents before they even happened. And so we start to educate our clients on this whole process, as well as educating them on different indicators that were more real time to use as a measure of how safe contractors were or are.And so that got us moving again with the Army Corps of Engineers and ultimately allowed us to move our business into some different sectors that have a pretty strengthened safety process. But that's something we lived with for a while and really had to work our way through.
Speaker 1 (17:55):
Did you ever lose a contract over it?
Speaker 4 (17:57):
Yeah?
Speaker 1 (17:58):
Yeah, Yeah, that's got to be tough. Yeah, Okay. We
talked about tariffs, and we talked about labor. Let's just
talk about inflation itself for a second. Have you seen
it ease off? Have you seen it accelerate? What's going
on out there in the market. Either of you can answer.
Speaker 2 (18:18):
I think the end consumer is getting that inflation. I
do think it's coming. I think it has maybe steadied
a little bit because the tariffs have for now, the
tariffs have kind of at an even where they've been
for a while. We're still waiting for.
Speaker 1 (18:33):
The new changes. Say what are you telling your clients?
Speaker 2 (18:35):
We tell them what we know. Most of the time,
we've heard what they've heard, but until it's printed in
the Federal Register, for us, it's not a fact, so
it doesn't go into effect. It won't affect their shipment.
There could be a grace period, there may not be,
but we're transparent with them because we don't know what
to tell them or how to tell them to run
their business.
Speaker 1 (18:54):
That's obviously up to them, right, And what about you Tino?
What do you see on the inflation front? Is there
anything out there that could cool it down?
Speaker 3 (19:02):
It seems like it's a vicious cycle. We're going through
our annual COLA and merit increases, so none of it was good enough
on the wage price spiral, yeah, and so you've got
the wage price spiral going on. Things have flattened out
a bit, but they're still climbing. As far as the
commodity pricing goes. Our vendors will guarantee pricing for a
shorter amount of time, and so there's this revisiting of
(19:24):
pricing more frequently through.
Speaker 1 (19:25):
The So now you've got the spread between how long
it takes to deliver your project and how fast your
input prices are going up.
Speaker 3 (19:30):
To how fash you buy and how fast you lock
them in the contract. And it all comes into play.
Speaker 1 (19:34):
Yeah wow, Okay, Look, you've both survived ups and downs before, right,
you know. Tino I think you started during the '08 crisis. Michelle, you lived through COVID obviously when everything was stuck. So Michelle, let me just start with you. Compare this moment in your business to COVID, because there was stuff stuck in port all over the place back then. There's some stuff stuck in ports for very different reasons now. How does it feel similar and how does it feel different?
Speaker 2 (20:00):
Before, we were so busy with COVID because everybody wanted their product yesterday because everybody was at home and everybody was ordering. I guess that's what they did when they sent it home. But now people are working but not knowing what the tariffs are, so they don't want to order. The product may be ready and ready to ship, but they're checking in daily, reading the news, watching the news, what have you, trying to see if it's the right time to bring it in. So you're just as busy, but for a different reason.
(20:28):
You're not really moving the freight now, you're just dealing
with the customers on a different level because you don't
have that crystal ball to tell them what to do
or what's the best option.
Speaker 1 (20:38):
And I'm trying to parse is this because they're worried
about demand or is it because they're worried about what
it will cost relative to what they think they can charge.
Speaker 2 (20:45):
They're worried about the cost. It's the cost, yes, because
they know that with all of the tariffs that that
has to increase the price of their product to the
end consumer.
Speaker 1 (20:56):
Tino, can you talk to us a little bit about
how this is obviously tough. You've described a number of challenges.
How are the pressures changing.
Speaker 3 (21:43):
I would suggest that COVID years, it was more about the cadence and just figuring out how are we going to get stuff done, and worker spacing, and cleanliness, and sanitization of the project sites. And once we got that cadence down, it was kind of back to business. And now, I think the labor thing is a big shift.And the other thing, I think on the input side of our business, there is a robustness in some of the sectors where the demand has shifted to. And so when we think about the tech sector and the scale and size of some of these projects going on and what the clients are really driving, there's a little more robust than COVID and life sciences sector. It's the same way. And then I think even in some of the institutional sectors, as you think about the Sunbelt region and school construction, and fire stations, and airport construction, that's all pretty robust right now as well.
Speaker 1 (21:43):
Maybe a Chase branch here there, Maybe a.
Speaker 4 (21:45):
Chase branch here there as well.
Speaker 1 (21:47):
Many of you probably don't know, but Tino and his
company build some of Chase's new branches, which now number
over five thousand across the US. And as luck would
have it, one of those branches he built opened to
North Carolina when I was there on the bus stops.
So I want to ask each of you a couple of closing questions. And the first is, if you had one message for, I'm going to call it policy makers writ large, but that could be for governments, for people who are making decisions, for legislatures, what would you want them to know that would make running your business easier, clearer, and make it easier for you to grow and hire? Because that's ultimately what people want.
Speaker 2 (22:26):
I would like to see them actually maybe behind closed doors,
figure the tariffs out before they start scaring people. Like,
I don't think they understand what they do to people
at our level, and it does affect and it affects
you know, all the customers we do business with.
Speaker 1 (22:43):
Got it, Tino, Yeah, I think.
Speaker 4 (22:45):
I would generally agree.
Speaker 3 (22:46):
I don't know what the percentages are, but I think
it's forty or fifty percent of America's employed by small business.
Speaker 4 (22:51):
And so consistency, in our book is king right.
Speaker 3 (22:53):
The more that we can plan and predict and move
according to what is known, the better. And so I
think there are a lot of variables that are truly
variant right now that if they could put a little
more consistency around them, we would be able to be
more stable, make more job investments and investments as a whole.
Speaker 4 (23:07):
So consistency would be the big thing for me.
Speaker 1 (23:09):
And then my last question Tino you know I'll start with you.
We ask every guest on the Unshakeables the same question,
which is, you know, we know how tough it is
to be a small business owner. You're everything from particularly
in the early days. You're the custodian and the CEO
at the same time. We understand, what's one piece of
advice you have for aspiring or current small business owners
who are trying to make it out there.
Speaker 4 (23:26):
So don't do it. It's not an option rightist.
Speaker 3 (23:32):
Yeah, I would say it's not for the faint of heart,
but it's definitely it's possible. And I think you have
to leave with strategy and mindset I think is everything.
And so if you really take a hard look at
yourself and where you're strong and where you're weak, kind
of that swat analysis thing, and figure out your resources
and your talents and kind of align them to drive strategy,
and surround yourself with the good people that can do
the things that maybe aren't so natural for you. There's
(23:53):
a lot opportunity for success and then to do things
for and with people you enjoy and that value you
and your service, because small businesses, for the most part,
aren't just going to take off on day one, and
so they are going to be a lot of challenges
and long days and long nights, and so if you're
doing it with people that respect you and that you respect,
it makes it a little easier to kind of work
the way through the beginning.
Speaker 1 (24:12):
Great show your final thought, you have the final word here.
Speaker 2 (24:16):
I agree with them. You do have to partner with
people or someone that, you know, kind of is your opposite.
You're going to have to stay positive and work hard. Great,
but you're going to have to work together.
Speaker 1 (24:27):
Thank you very much, Michelle, Tino, thank you for joining
us on The Unshakeables. Kathleen, what did you think about
our live episode?
Speaker 5 (24:41):
I wish I could have been there for one. It
was fun, yeah, and I liked it because it got
into the meat and the potatoes of small business ownership.
You know, you guys really got into the brass tack.
So it was a good one.
Speaker 1 (24:52):
Yeah, I personally thought it was a good chance to sort of give people a feel for really what's going on out there right now. We spent a lot of time telling stories and how did we get here, and what was your, "Oh my goodness," moment? I think that it was a good chance to talk about where we are as an economy.And I think the answers that our guests gave really spoke to the confusion and the lack of clarity that people seem to have about the economy at the moment. On the one hand, you heard a lot about the impact of tariffs and how it's making things pretty uncertain and how it's forcing a reaction, particularly among her customers around how they are looking for margin everywhere they can find it and the pressure that's adding to businesses. On the other hand, it painted a picture of pretty resilient demand, which you sort of see. The jobs numbers came out, they were pretty good. The GDP numbers came out, they're pretty good. Unemployment, despite all the layoffs that you've seen, remains pretty low. We just keep getting conflicting data points, and you could hear that in their stories.
Speaker 5 (25:53):
Yeah, it's interesting. It almost has had this unifying impact
on small business owners, who I think, do actually very
well when they feel like they're backs up against a
wall and you know, not knowing what's going to happen
one day to the next.
Speaker 1 (26:08):
Well, Michelle talked about her customers asking for discounts where
they never had before and really squeezing them on margin.
A lot of times, when we see stuff like that,
it ends up making our clients stronger. It's brutal when
they go through it, and I don't want to make
light of the anxiety that that causes, but what it
does force them to do is to alter their business
model to get their own costs down, to think about
do they need to pivot to other sources of revenue
(26:29):
and they end up being stronger for it in the end.
Speaker 5 (26:32):
Yeah, I think we talked about this on another episode.
Just visa vis social media and near daily talking about
something that's happening in the news cycle or media right
or a cultural moment that's happening. And so likewise, here
it feels like you've got to still do business as usual.
You need to pay attention to what's going on, but
(26:52):
you need to also focus on the business at hand
and tuning out that noise.
Speaker 1 (26:58):
Yeah, you have to tune out the noise. And I think also if you're a small business owner and you see disturbing stuff in the news, it's a data point and nothing more. What I tell people is watch the street, not the TV. The street tells you what's going on and you're on the street more than the news anchor. So trust your gut and what you hear on the street. And I think also you have to accept that we live in a world that moves fast now. Loyalty doesn't exist the way it used to. You can't count on your business model to just sort of be resilient forever. If your client finds a better way, they're going to take it. It's not personal, it's just the pace at which the market moves today.
Speaker 5 (27:33):
You know, I'm watching all these small business owners who
are saying they're shutting down shop at this point due
to the tariffs, And part of me wonders, were you
wanting to shut down because the business wasn't healthy for
quite some time and now there's that intellectual alibi to
do that. Are you seeing lots of businesses shutting down
citing tariffs or.
Speaker 1 (27:53):
No, quite the opposite. And I talk to customers who
import stuff all the time, and I would say, by
and large, they have said it's a pain, but we're
figuring out a way to deal with it. Overwhelmingly, So
that's been the response. I had someone say to me
a couple weeks ago, Look, yeah, we took a hit,
but we're fortunate to be in a healthy margin business.
So now our margins are just slightly less healthy and
(28:15):
we're fine. Yeah. And I've had others say we've had
to source product from other places and that's bit of pain,
but we're figuring it out. I've had other places say
we tried to source product from other places. It doesn't exist,
and we don't have enough margin to absorb it, so
we've passed it on. But so far our clients appear
to be accepting it, and we're finding ways to make
that work. I mean, some flavor of those three responses
(28:37):
is far more common than throwing your hands up and
just saying I guess I'll close it down. I do
not hear that a lot.
Speaker 5 (28:42):
I thought it was wild during your interview where they
were talking about cargo, And sometimes that's just sitting on
the water and deciding when to bring it in because
of the tariff, numbers can fluctuate, and so you're trying
to figure out the perfect window to bring something in.
Speaker 1 (28:56):
There's actually a whole industry that sprung. Well, it existed before,
but not on the skin that it is now because
they can store the freight before it technically gets imported.
So now you have to weigh, well, what's better do
I pay the storage costs and keep it out before
I bring it in? I mean, it's a whole thing.
Speaker 5 (29:09):
The costs have to go somewhere. When costs of good
change tariffs are added, usually that's to the end consumer.
How are you seeing that? Going back to the received example,
are you seeing transparency in that?
Speaker 1 (29:21):
Very different by industry. In B2B industries, I think people are having, and you heard some of this, particularly Tino's talking about how he prices his projects. You just have to have a straight up conversation with your customer and say, "This is what it is." But one of the really good things about the American economy is it is fast and dynamic. And so as fast as you can say, "Oh, I'll just put the price up," the competitive nature of the market kicks in and you can't get away with highway robbery.So I think this is a marketplace that adapts faster than anywhere on earth. I actually do believe that. Not that we're the best at everything, but I think we're very good at that. But when I think about some of this employment mismatch that we have talked about before, where the skills that are needed versus the jobs that are open don't always match up, that's pushing up wages in certain areas and pushing down wages in others, and that's creating skewing effects all over the economy. That's creating pockets of demand that are excessive and drive prices up. It's creating pockets of demand that are soft.And by the way, I'm a big believer that some of this has still fallout from COVID. The ripple effects of the pandemic continue to push through the economy, on top of the big policy changes that have been a result of a change in administration. And you sort of add all that up and there's just a series of ripples moving through the economy, sometimes in amplifying and sometimes with dampening effect. And I think you heard that from Michelle and
(30:40):
Tino the other day. There's nothing moving all in the
same direction at the same time, and I think that's
what we're all living through.
Speaker 5 (30:46):
Yeah, there's a lot more that is getting factored in
as people have more choice also and where they're going
to work. One of the things that I think can
be helpful for small business owners, especially if you've got
a lot of hard costs, is just making whatever this
skill hopes our proposals are time bound, so it expires
after a certain period of time, and you can reassess
(31:06):
where things sit. So little switches like that where you
would previously submit something and then someone would come back
a year and a half later ready to do work.
Now maybe it has some constraints around it.
Speaker 1 (31:17):
Yeah, I think that's right. Ultimately, I came away from that conversation actually quite optimistic, because, in Michelle, you had an industry that's been harder hit. In Tino, you had an industry that's been less hard hit. Although even in the construction industry, we've seen pretty bifurcated outcomes. Residential and office, pretty hard hit. Industrial, off to the races, particularly with the AI boom, so uneven results. But I think despite that, they're
(31:41):
both continuing to run their business, continuing to adapt their business,
and it's not like either of the more closing up shop.
They're going for it. So my view is it gave
some really good insight into the complexity of navigating today's
economic environment. But I think it left me with cause
for optimism that, as usual, we're going to figure it out.
Speaker 5 (31:58):
I have nothing more to say on that, Mike Drop
that was perfect.
Speaker 1 (32:02):
Okay, Well, this was really fun and I'm so glad
we got to do it live. Kathleen. I'm sorry you
weren't able to be there, but thank you for joining
me to talk about it, because we had a lot
of fun.
Speaker 5 (32:09):
Yeah, glad to be here.
Speaker 1 (32:14):
Thanks so much for listening to this episode of The Unshakeables.
If you liked this episode, please rate and review it
next time. We're talking to a woman who bet her
company's success on Web three and had to kill part
of the business she loved to keep it alive.
Speaker 5 (32:29):
How much would you say you spent on aggregate on
the Web three metaverse strategy? Probably three hundred and fifty
to a half a million dollars.
Speaker 1 (32:40):
WHOA, I'm Ben Walter and this is The Unshakeables from
Chase for Business and Ruby Studio from iHeartMedia. We'll see
you back here soon.
Hosts And Creators
Ben Walter
Kathleen Griffith
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