6. Gina Schaefer’s Recovery Hardware: Culture, Values, and Doing the Unexpected
EPISODE 6
From hiring previously incarcerated folks and those in addiction recovery to implementing an Employee Stock Ownership Plan (ESOP), Gina Schaefer's story of entrepreneurship demonstrates what it can look like to understand and support the community you serve.
Join Julie and Gina for a masterclass in resilience, adaptability, and community-centric business strategies.
Catch the Conversation
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When Gina Schaefer moved into a forlorn neighborhood that needed a hardware store, she built one. When she thought the recovery community needed businesses to believe in them, she became one, and when she suggested that inequality could be helped with business ownership, she began selling hers to her team.
Gina Schaefer is the Founder and Co-Owner of 13 hardware stores located in Washington, D.C., Baltimore, MD, and their suburbs. She and her team of 300 have helped millions of customers shop right where they live, in their urban communities, despite continuous pressure from bigger, stronger competitors.
Gina is a professional speaker and storyteller, engaging audiences on topics that include competing in a male dominated field, building a strong corporate culture, business succession planning, and all things small business.
In her book, Recovery Hardware, Gina chronicles her experiences building a business while learning from non-traditional teachers like folks from the recovery community and returning citizens. She serves as an advocate and spokesperson for causes directly related to raising wages, anti-monopoly legislation and small business development.
She draws her inspiration from fellow entrepreneurs who strive to be creative, think differently and help make a difference. People like Judy Wicks, founder of the White Dog Cafe in Philadelphia who inspired her to use her voice as a force for good; Paul Saginaw and Ari Weinzweig, founders of gourmet food group Zingerman's Community of Businesses in Michigan, from whom Schaefer learned innovative business strategies and Father Gregory Boyle, founder of Homeboy Industries in Los Angeles, who taught her that nonprofit organizations need to think beyond simple charity.
Gina serves as board chair for the Institute for Local Self-Reliance and is a member of CCA Global Partners’ Board of Directors. She spent 9 years on the corporate board of Ace Hardware and 12 with the House of Ruth. She relaxes by making greeting cards (she's a big believer in the power of the written note), kayaking, traveling, and reading.
Gina’s guiding principle comes from a treasured quote “I always wondered when somebody would do something about that. Then I realized I was somebody”.
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Julie Ellis (00:00:04) - Welcome to Figure Eight, where we feature inspiring stories of women entrepreneurs who have grown their businesses to seven and eight figures revenue. If you're in the mix of growing a bigger business, these stories are for you. Join us as we explore where the tough spots are, how to overcome them, and how to prepare yourself for the next portion of the climb. I'm your host, Julie Ellis. I'm an author, entrepreneur, and a growth in leadership coach who co-founded, grew, and exited an eight figure business. This led me to exploring why some women achieve great things, and that led to my book, Big Gorgeous Goals. Let's explore the systems, processes and people that help us grow our businesses to new heights. If you're interested in growing your business, this podcast will help. Now let's get going. Hello and welcome to this episode of figure eight where we chat with women entrepreneurs. And today I have Gina Schaefer with me. Gina, like many of us, started her business because she saw a need in the market.
Julie Ellis (00:01:18) - She moved into a forlorn neighborhood that needed a hardware store, and when she couldn't find one, she decided to build one. When she thought the recovery community needed businesses to believe in them, she became one of those businesses. And she helped, um, overcome equality in business. Um, she's done many super interesting things. She built her business to 13 hardware stores. She has a book called Recovery Hardware, which chronicles her experiences in building a business while learning from non-traditional teachers like folks from the recovery community and returning citizens. She's a strong advocate and a spokesperson for causes directly related to raising wages, anti-monopoly legislation, and small business development. And one of her guiding principles is coming from a treasured quote. I always wondered when someone would do something about that, and then I realized I was somebody. So today, welcome, Gina. I'm excited to talk to you.
Gina Schaefer (00:02:23) - Thank you. I'm excited to be here.
Julie Ellis (00:02:25) - Yeah. It's fantastic. Um, and I'm so interested in your journey as you build this amazing business on sort of small urban footprint stores and in an industry that probably doesn't have a lot of women.
Gina Schaefer (00:02:41) - Uh, no. And those of us that are here were hidden, tend to tended to be hidden. When I first joined the co-op that I had to look, um, I had to look very hard to find my my cohort.
Julie Ellis (00:02:52) - Isn't that interesting. And, yeah, the ones who were there had their heads down and they were working hard and they knew they were really great businesses. Right, right. Yeah. And you were able to build a really great business from that one hardware store in your neighborhood to 13.
Gina Schaefer (00:03:09) - Yeah, we have um, I've had two that failed. So I always feel like I need to give some credence to that, only because I feel like when I talk about the successes in the journey, um, it often sounds like it's too positive in my head. Like there's no way things were that good. Um, I very conveniently overlook the negative things or forget some of the struggles that I had, but we did unfortunately have two stores that didn't work. So technically there have been 15 over the last 20 years.
Julie Ellis (00:03:36) - Yeah. And I think those are the things we often learn the most from the ones that don't work.
Gina Schaefer (00:03:42) - Yeah, they're hard to forget. Like, what did I do wrong? What could we have done differently? Just one more day? I mean, we ran both of them for ten years. And so it's not that we didn't try, but we couldn't get out of the leases that we were in. And so we did not give up until the very last day we could finish those leases. And so we tried everything.
Julie Ellis (00:04:01) - Yeah, that's a hard part about retail too, right? Is you have you are in for the long game even when you have no idea whether things will work out.
Gina Schaefer (00:04:09) - Correct. Yeah.
Julie Ellis (00:04:10) - Yeah. So tell me about how you I mean, obviously you saw a need in your neighborhood. How did you go from that to actually opening a hardware store?
Gina Schaefer (00:04:20) - Yeah. So I mean, the the origin story is pretty funny, I guess. I was working for some tech startups in Washington, DC in the States, and my, uh, the final company that I worked for was the fourth company to go out of business that I had worked for, and so I kept getting laid off.
Gina Schaefer (00:04:36) - I was working for these, um, just startups that would get all of this money and then fail. And the the last time it happened, um, the general counsel walked into my office and he said, hey, call the investors and apologize and then pack your stuff and go home as if you know, that was it. That was the end of the conversation. And so, um, I did exactly what he asked me to. And I was driving back from the suburbs to my home in downtown Washington, and I started thinking about the neighbors and all of the things that we wished we had in this neighborhood that we were helping to revitalize. And one of the things that we asked for all the time or we talked about was a hardware store. And so I thought, well, I mean, I don't have a job. Why can't I open a hardware store? The most natural thing in the world, right. Sure, sure. Yeah.
Julie Ellis (00:05:20) - And how long did it take you from that drive home to actually opening the store?
Gina Schaefer (00:05:26) - I gave birth to the first one. It was nine months. Um, it was probably longer than that, but that's the story as I tell it. Um, about nine months, I guess. I had to do a lot of work. So, ace, I'm a member of the Ace Hardware cooperative. A lot of people don't know that Ace is a cooperative, and the programs for starter for new investors now are so much better and different and more robust than when I first started. And so there was a lot of work, physical labor that I had to do because there wasn't those like wraparound support services there are now. Um, and I was also opening in a building that was just really kind of derelict. And so, uh, it it might take as long now because there's a lot of perfectionists that open businesses. I like to be fast. And at the time, that was about as fast as we could do it.
Julie Ellis (00:06:08) - Right and did that. It must have felt like a really long time for someone who likes to be fast.
Gina Schaefer (00:06:13) - I mean, it felt like years. We. One funny example of that time frame is we, um, because the building was old and needed a lot of renovation, it needed all electrical and heating updated and in the middle of winter. So we opened in March of 2003. And that winter prior, I got tired of waiting for the contractors to finish, and I asked Ace to just ship the products and send me a visual merchandiser. And I remember working in literally in the dark with two women. We would wear gloves with the fingers cut off and coats because there was no heat, and we had to merchandise the products and we would all go home at four when the sun went down, because there was very little natural light in the space. And so that was an example. I don't really think of myself as an impatient person, but I was tired of waiting for the people who were supposed to be helping me get this business open, to get to get their stuff done. So, yeah.
Julie Ellis (00:07:04) - And you get in that place where all you're doing is writing checks and spending money and, you know, until those doors open, nothing's coming in.
Gina Schaefer (00:07:11) - Yeah. You know, I've told a lot of entrepreneurs that since we can wait until everything's perfect, but nothing is ever perfect. And so the second we can start putting money in the cash register. And when I say we. Now there's two components. My husband joined me about three months after I opened that first business. He decided, uh, he came home from work one day and said, you're having way too much fun. Can I join you? And so he's been my business partner ever since, and we might get to this later, but we're now selling the business to the team through what's called an employee stock ownership program. And so we now. Is really my my teammates are are part owners. Um, but we've said since then, every time we've opened a new location, the second we can start putting money in that cash register, we are opening the doors whether we're ready or not.
Gina Schaefer (00:07:52) - Now we need permitting and inspections passed, and heating and lighting helps at this point. But you know, if it doesn't look perfect, it doesn't matter. People want people want to buy the things they need in their neighborhoods, and they're walking in the door when we're setting up anyway.
Julie Ellis (00:08:07) - So yeah. And so you had said to me at one point, so your average store size is like 8000ft², which is really small. And so how do you merchandise that store and how many products do you sell compared to, you know, those of us who live in the suburbs think about those big suburban, you know, hardware stores.
Gina Schaefer (00:08:28) - Yeah. So we have about 20 between 25 and 30,000 items, which is actually a lot. So the big suburban stores sell. I mean, I don't know their skew count, but they sell things. They can sell in mass quantities, and so often they have fewer products because they might. I'll just a a toilet seat. I'll use that as an example. They might have one option and they have a thousand.
Gina Schaefer (00:08:51) - I'll have five options, and I'll have it in a much smaller footprint because of our space. And so the merchandising is very different. Um, we depending on the jurisdiction that we're in, there's a, there's a width requirement for the aisles, you know, so wheelchairs and people can comfortably pass through. And so we, we maximize whatever that is. That's where we go, which is also smaller than you would see in a suburban store, are tighter, uh, visually and spatially for the customer. And so we go as high up as we can, eight feet in most cases with storage above it. If the ceilings are high, the aisles are as narrow as, as legally allowed. Um, and we, we pack things in and a couple of my, um, stores have garden garden centers, we call them, but it's a couple thousand square feet outside. Most of my stores sell live goods and plants, mulch, bagged goods on the sidewalk. And so we maximize any kind of space, even outside of the store, that we're allowed to give us more square footage.
Julie Ellis (00:09:49) - That's so interesting. And I would think, too, depending on neighborhood, you could have some more specialized items that, you know, if it's a really old neighborhood and old houses need different things, or like that sort of assortment tailoring that can happen.
Gina Schaefer (00:10:04) - Yeah, we've done that. Um, my, my second location opened in 2005, and the first location was actually in an up and coming neighborhood where there were not a lot of children. And the second one was in a more established neighborhood where there were. And so it was a really good lesson for us early on to cater to the demands and needs of the neighborhood. That neighborhood didn't have anything like, for example, we started selling garden supplies that were built for children because there were a lot of yards, but there was nowhere for moms or dads to buy those kinds of things. And so, um, that's just a minor example of how we figured out how to tweak the product assortment. Um, some of the planters that we carry, the grill sizes that we carry, all of those things depend on what the neighborhood wants and needs.
Gina Schaefer (00:10:49) - We started renting tools because several of our neighborhoods are have a lot of small condos. People don't want to buy the tools, they don't have a place to store them, or they might only need them once. So why would you buy a drill if you're only going to use it to hang a picture every now and then? And so we would rent them so people didn't feel obligated to buy one, or they were buying them, using them and returning them, which you didn't want. And that's also really frustrating.
Julie Ellis (00:11:12) - Yeah, yeah. Because that's just hard for you to then deal with. Um, that's a great way of also, I think weaving yourself into the fabric of a neighborhood. You know, becoming a part of it, becoming that go to place for knowledge, information, all kinds of things.
Gina Schaefer (00:11:29) - Exactly. Yeah. We tried, um, I mean, we were kind of charting new territory. The co-op didn't have a lot of stores that were urban, and so we didn't have a lot of role models.
Gina Schaefer (00:11:38) - The few that we did have were tremendously helpful across the country, but there was a lot that we were learning on the fly, um, as we were growing, especially because once we opened that second store, we opened one store every year for ten years. And so we were experiencing some pretty rapid growth at the same time, trying to still figure out what all 25,000 items that we carried actually does.
Julie Ellis (00:12:00) - Right. Yeah. Yeah. The, uh, yes. The optimizing at the same time as the growing and the scaling. Correct. And yes, now you must have gotten pretty good, though, in terms of a process for opening stores, what it took, the efficiencies that you can find when you've done it over and over again.
Gina Schaefer (00:12:17) - Yeah, I had a teammate who said to me one day, hey, Gina, do you keep opening locations so you can fix your screw ups from the last one? And we got the biggest chuckle out of that. It's so true, because we would figure out something that made us feel so smart, and then the next time we'd open a store, we would get that thing right and we would inevitably either forget, overlook, screw up some other component, um, or there would be some new something like I had.
Gina Schaefer (00:12:45) - I guess I'd had my first two stores didn't have any parking, and the third one had a public lot. And so even just some of the logistics with that were things that we hadn't experienced before. So, um, we learned along the way, but we still screwed up along the way.
Julie Ellis (00:13:01) - I think it's the sign of any good project is that it never goes. Exactly. And then you learn and then you try again. And sometimes you make those mistakes over and over, and then you wonder why we roll with them.
Gina Schaefer (00:13:12) - Yeah. How you roll with them makes a huge difference. The, the, um, the psychological toll or emotional toll that those kinds of errors can make or just the constant trying to figure things out. Um, if you can do it with the right attitude, you can continue to do it. And that's exactly what we were doing.
Julie Ellis (00:13:31) - And how did it change for you as you opened more stores with a bigger sort of infrastructure? You know, it's a little the ship is bigger.
Julie Ellis (00:13:40) - Everything's, you know, can feel more cumbersome and more people need to be in the know. And some of the things that happen as you get bigger and bigger. How did you tackle that and what was it like?
Gina Schaefer (00:13:51) - I had a fantastic mentor who said to me one day, you know, the bigger you get it, the easier it doesn't get. And I think maybe that's a misperception, misconception among a lot of people, that the bigger I get, the more help I'll have or the more money I'll have. Um, we put a bunch of things in place at the beginning that we were very smart about. One of them was just solidifying what our core values were, and the reason that I pick on that one was because a lot of people said going from 1 to 2 locations was going to be super hard. And I realized, you know, retail, hardware, retail is very generational, very mom and pop. Um, at the time, the majority of the owners in the co-op had one location.
Gina Schaefer (00:14:31) - And so when I started hearing that repeatedly, I was thinking, you know, the struggle that folks are having is they can't be in two places at once, and they're trying to warn me about that. And that first location for me was so incredibly hard to open because I didn't I didn't know anything. And so everything was something new and I had to be excited about it. So I thought, gosh, by the time I do it this again, it's going to seem very easy. Um, but I knew when we went to that second location that I wasn't going to be able to manage both of them. And so we created, um, really just our value system, and we documented them. We worked on it with the team, and then we promoted somebody within to manage the current store and within to manage the next store. And that just set us on this path of continuously paying it forward, if you will. As we opened, including when we went to Baltimore, Maryland, which is an hour away, taking someone from DC who wanted to move to Baltimore, who already understood our core values and how we wanted to operate.
Gina Schaefer (00:15:25) - And he moved to Baltimore and opened our stores there for us. And so that charted this path that I think really made it. Um. I. It made it easier. I mean, people think that I'm exaggerating or I'm making it sound too easy, but that was a huge help for us.
Julie Ellis (00:15:42) - Yeah, yeah, I would I I'm a firm core core values believer. We, we spent time and effort crafting our core values for Mabel's Labels, and it was hugely transformational for us in really articulating what it all meant and getting the right people on the team who believed in it with us and who could really pull. We all pulled in the same direction.
Gina Schaefer (00:16:04) - Yeah, it makes a big difference. And then on top of that, we always knew. Now my husband is our CFO and thank goodness, because he's just brilliant when it comes to numbers. But we were always very diligent about making sure that we didn't hire a new support staff person until we could truly afford it, which meant that we couldn't avoid those roles.
Gina Schaefer (00:16:23) - One of us had to fill those roles or someone else on the team already. And so, you know, we had, um, I think three stores before we promoted a buyer. And she was someone who worked in our store already, and then 3 or 4 stores before we promoted someone to really start controlling our inventory. And he had worked in this. He was a he worked in the plumbing department. And so we very organically grew as we could afford that role. And if we couldn't afford it, we had to we had to fill it with our own, you know, our own sweat, which we did.
Julie Ellis (00:16:54) - Yeah. It's amazing what you can learn. Yes. Jobs, you know.
Gina Schaefer (00:16:59) - Yes. Sorry. No. And it's amazing. Like, you know, the expression works smarter, not harder. If you are efficient, you can get a lot done in the day. And some of that efficiency for me was tough because I get very excited about the next thing. And like I said, we opened one a year for ten years.
Gina Schaefer (00:17:17) - So I was constantly on the lookout for new projects, which meant there was always a new project going on. And so, you know, you have to balance what the tasks are to maintain the current ship as you continue to add to the fleet. And so, um, there were times in our past where I can see. Not where I wasn't as efficient, because I would get so excited about the new stuff that I would drop the ball on the old stuff because you you really have to keep that focus.
Julie Ellis (00:17:44) - Yeah. And then did you get to a point where you were better at balancing, or did you get to a point where you could hire people who really could focus on the old stuff to free you up? Like, what was the secret to how it worked for you?
Gina Schaefer (00:17:59) - That's exactly what we did. So each one of the managers was really treated like an owner, and now they actually are, which is really cool. But at the time that was always our mentality. They were in charge of everything within their four walls.
Gina Schaefer (00:18:12) - They hired, they fired, they canceled. Um, they did payroll. Uh, we use an automated ordering system with ace, but they they had to approve it to make sure that they were getting the products they wanted. And so they were trained and very much expected to act like they were the owner of the business. The turnover, the assistant manager and management level for us has historically been less than 10%. Like it's fantastic, our turnover for retail. So whether that means we've picked the right people or we just have a really fantastic staff or I mean a combination of all of it that left me or my husband and I that let let us have the ability to continue that growth and add to the support staff. So once we had someone in buying, doing the buying, we didn't have to do any of that. And you know, so we've only had. So we're almost 21 years old. We've had four people in the buying role, which I think is really impressive. We had a senior buyer who worked with us for ten years before she retired, and she trained a junior buyer and then the replacement.
Gina Schaefer (00:19:14) - And so it's been a nice continuation. And our senior leadership team meets once a week. So if there's issues or questions but otherwise they're in charge like she and her assistant are expected and capable of doing all of the buying with the exception of that automatic automated system for mace. Right. And so some of it's empowerment.
Julie Ellis (00:19:35) - And how do you. Yeah. And how do you think as a leader, you built that sort of culture of accountability and empowerment within your team?
Gina Schaefer (00:19:44) - I think a little bit of it is trust. So I always said, if you don't trust the people you work with, you've probably hired the wrong people. Um, and then I think you have to articulate that I'm going to trust you to do this job, Julie. Um, and there will be checks and balances, but you're going to do it, and you're going to rise to the occasion. And again, maybe I'm oversimplifying it, but they almost always have their I can think of one time on the senior leadership team in 21 years, where we completely fell flat in that whole concept for us, and we had truly hired the wrong person.
Gina Schaefer (00:20:18) - And I think she worked with us for maybe, maybe three months. She was in HR and she was it was almost immediate that we had made the wrong choice. So you have checks and balances. You make sure you hire the the right people. In some cases, they have grown up in the business, like our junior buyer started in, well, several of our several of our back office staff, maybe all of them now started working on the sales floor so they understand what it's like to be a sales associate and provide customer service, and they know where and how the products go and look and what customers are asking for. And so that's a big part of it too.
Julie Ellis (00:20:49) - Yeah it is. Yeah. You don't want the disconnect between the customer facing and the admin background. You need that synchronicity for everything to work properly.
Gina Schaefer (00:20:59) - Exactly. Yeah.
Julie Ellis (00:21:01) - Yeah. So now you you trained them to be owners and now they're becoming owners. Yeah. And I think that's so interesting. As an exit strategy or retirement strategy, what can you tell me.
Julie Ellis (00:21:12) - How did you decide to do the ESOP and what's that been like.
Gina Schaefer (00:21:18) - So we decided in Mark and I started talking about it, um, probably very seriously in late 2020, early 21, um, people had asked me for years what my exit strategy was, and we hadn't really. They hadn't really thought about it. I mean, we're still I mean, I think we're still young. And so I'm like, well, I'm not going to retire. I mean, people started asking me when I was 35 what my exit strategy was. And again, it's very multi-generational. I don't have children. So going, you know, bringing in the next generation was not going to be an option for us. And then in the 2020, 2021, a bunch of protests started happening in Washington DC. You know, the political climate was strife, the Covid was causing havoc. And a lot of those protests marched down the street in front of our main office, and we felt it very acutely. It had to do with income inequality, racial inequality, um, you know, big business getting bigger and uglier and all of those things that we heard about in the news.
Gina Schaefer (00:22:14) - And one night at dinner, we were talking about what we could do to be part of the solution. And we had read about an ESOP, but we didn't know anything about it. And I said, why don't we figure out if this is something we can do? And so we both we started doing some research. We met with a few attorneys, a few advisors, and I found another ace owner who had formed an ESOP, um, out west. I called him and just pestered the heck out of him. He was amazingly helpful. Um, and that's when we decided that this was going to be the the path for us. Um, and it took us about two years from the time we started talking about it to the time we made the first sale to the company.
Julie Ellis (00:22:51) - Yeah, yeah. And so tell tell me at a high level a little bit about how it works.
Gina Schaefer (00:22:58) - So you create a trust and you sell the business to the trust. And the trust basically holds the shares on behalf of the employees.
Gina Schaefer (00:23:06) - And so that's the very simple explanation. It works like a qualified retirement fund. So kind of like a 401 K. The employees don't put any money in the business buys it on their behalf. So that's a very interesting component. A lot of people don't know that. They say things like, well, how can your cashier afford to be an owner? Um, which is a little narrow minded, but regardless, uh, we say it doesn't matter. He or she doesn't have to actually put any money in. So once you have worked with us for one year and 1000 hours, you are automatically part of the ownership share and then the business is valued once a year. So unlike the stock market where the the cost of a share could fluctuate daily. Um, in an ESOP you only get a valuation once a year, so you get one shot for it to be up in one shot for it to be down, and then it stays that value for another 365 days.
Julie Ellis (00:23:59) - Interesting. And if somebody leaves the company, what happens to their share?
Gina Schaefer (00:24:06) - We have to buy it from them.
Gina Schaefer (00:24:07) - So it vests. Um, you vest 20% for five years until you're fully vested. And so if you are terminated or you retire or quit, we have to pay you for whatever amount you have already vested. Um, and we have five as the terms of the, the planner that we have five years to pay you out so that there's not, you know, some catastrophic.
Gina Schaefer (00:24:28) - Requirement. Yeah. On the company. Um, the only example or the only difference is or the exception. When we announced the ESOP, if you were 65 or 63 years or older, you were automatically 100% vested because we wanted our folks closer to retirement age to be able to benefit. And that was amazing. We don't have a lot of older teammates, but the ones that, um, the ones that were older, that automatically vested, uh, ended up in a really nice place.
Julie Ellis (00:24:55) - Nice. And that's meaningful from a from an employer perspective, human resources and caring for your people perspective. So meaningful.
Julie Ellis (00:25:03) - Yeah.
Gina Schaefer (00:25:04) - Yeah, yeah. One of the, um, one of my teammates that I talk about in my book was a gentleman who was homeless. And he started he started running. Long story short, he became a runner because of a nonprofit organization that had a really big influence on his life. And I like to say when I talk about him that he he ran himself to an apartment. He's not homeless anymore, to a job, to a 401 K, a health care program. And then he ran himself to becoming an owner in my company. And the reason it's really meaningful is that he ended up having a stroke a couple years later, and he had to finally quit working. But he was 100% vested in the ESOP because he was there when we made the announcement. And so he never would have had, um, that money if we hadn't formed the ESOP. Um, and then made that a particular requirement. So it's I love being able to think it's not life changing money in the sense that, you know, it won't carry him for the rest of his life by any means, but he wouldn't have had it in that instance in his life when he truly needed it, and when he when he had to quit if if we didn't form the ESOP.
Gina Schaefer (00:26:05) - So yeah.
Julie Ellis (00:26:06) - And now he's just one example of the kinds of people that you've hired who might not be thought of often, you know, whose resume might not look that good or, you know, can't, can't perform the way they're expected to in a job interview or those, you know, people are afraid of hiring people who are different, I think.
Gina Schaefer (00:26:27) - Yeah.
Julie Ellis (00:26:28) - Yeah. And what made you lean into it?
Gina Schaefer (00:26:31) - We I mean, it was almost by accident. So we like to say that we remove the obstacles to employment. So when we open that first location, uh, in the States, it was still legal to put a felony box on an application. Um, it's been banned in most places. There was a ban the Box campaign, and I think DC, Washington DC was probably one of the first places to ban it. But I didn't like that question, so I erased it from the application. Um, and I didn't, uh, my first employee had been in prison for 17 years, and I would have I would have known that had I kept the box on the application.
Gina Schaefer (00:27:04) - But he wasn't getting hired anywhere because of the box, and he ended up working with us for ten years. He was amazing. I didn't know until after he had worked with us for quite some time that he had even been in prison, much less for that long. He was a wonderful, um, teammate. And so that stigma was was gone. And then down the street. So our neighborhood was really revitalizing. But one of the things that was in the community was this amazing health care organization that had a recovery program inside. And the second teammate that we hired came from that recovery program. And he was honest about it. He was up front because he was afraid that we would hold it against him somehow, or if we found out there would be repercussions which there would not have been. But he didn't know that. And he said, um, I'm six weeks clean. I used to use crystal meth. Will you give me a job? And the story is funny. He and I, in fact, I was with him yesterday.
Gina Schaefer (00:27:51) - We still joke about it because I didn't know what that meant at the time. Like, it didn't occur to me that six weeks is nothing. And. The life cycle of, you know, getting your life back on track from a substance use disorder. But he was amazing. And so he came and worked with us. And then he brought somebody else and somebody else and somebody else. And before we knew it, we were hiring all these folks from from the recovery clinic based on referrals, not because they were from there, but they were being referred anyway through that network. Um, and so it was very organic. And then it just spread after that.
Julie Ellis (00:28:24) - And how did that like if I look at sort of now, the book you wrote, the causes that you believe in and support and, you know, serve on the boards of all kind of come out of some of that beginning of the people that you hired. And how did it sort of like like a seed you planted, how did it grow and become such a part of your life?
Gina Schaefer (00:28:48) - I think, um.
Gina Schaefer (00:28:51) - I'd like to thank. Everyone can do this, but if I look back on the last 21 years, I can almost see moments of empathy that hit me over the head when I had like when an understanding really solidified and cemented itself in my heart. You can't unsee it or unpeel it. So the minute that I realized, since we talked about him, the minute that I realized I was working with someone who had been in prison for 17 years, my mind immediately shifted, um, about what that meant. To know somebody like that, to be able to ask questions about someone who had that experience in his or her life. And we started to build this very transparent workplace. Um, if if I wanted to ask you a question about your experience, we build a workplace where I could ask you that question and you felt comfortable answering it. And so I think I'm kind of babbling your answer. But the the moments of empathy that were occurring because of the people we were interacting with and cities just in general, are full of a diverse group of people.
Gina Schaefer (00:29:49) - Um, it really informed how we grew and hired going forward. No. Does that answer your question?
Julie Ellis (00:29:56) - It does, it does. And I think I just think it's interesting because people do end up with jobs because of their network and because of referral and because of all of those things. And so as a business that had, you know, doors open for things that weren't typical resume type things, I can see how it would grow.
Gina Schaefer (00:30:16) - Yeah, yeah. One of the beauties that really that came out of writing the book was being introduced to companies and businesses all across the country that do similar things. And I wouldn't say that I thought we were the only one, but oftentimes there's a little bit of a stigma. I mean, I got called crazy, I got called stupid. I heard everything you could imagine when when some people would find out who we were hiring and working with. And so it was really gratifying for me to be introduced, um, to other businesses across the country that were doing similar things.
Gina Schaefer (00:30:49) - Mhm.
Julie Ellis (00:30:49) - Yeah. It's funny sometimes how you're you're in that little echo chamber wondering, you know, convinced of what you're doing but not knowing, you know what else is out there. Yes.
Gina Schaefer (00:31:00) - Yeah. We're not crazy. We're also not special. And I never wanted us to be considered special. But until I found out that there were two or 3 or 4, 17 of us, I felt a little a little more, um. Special is not the right word, but lonely, I guess. Yeah, yeah, well.
Julie Ellis (00:31:18) - And it is something to be talked about, I think. And the story, I mean, your book is behind you, so, um, you are, which is amazing, but it is that sort of thing that, like, people are just uncomfortable. And, you know, it isn't that they might not take a chance and, and, you know, do do things, but they don't, you know, they feel uncomfortable. And so they do nothing.
Julie Ellis (00:31:43) - I think that's often the case when we're uncomfortable.
Gina Schaefer (00:31:47) - Um, my first teammate that stole from us, which is typically what everyone assumes when I talk to them about hiring. My favorite manager was a former drug dealer. What this is when I really got called crazy names. Um, the very first employee that stole from us was, uh, a 24 year old college graduate with parents who owned a business in the Midwest. He had never been in prison, as far as I know. He had never had a substance abuse issue in his past. He had a college education. He was articulate. He had every. Amount of of, um, privilege that you could imagine. And he stole thousands of dollars from us. So when someone would say something like, how could you hire somebody who sold drugs? Or how could you hire somebody who had been in prison? I told them about that kid and like. You never know. And if you're going to. If you are going to immediately judge one group, that means you immediately have to judge everybody because you just never know.
Julie Ellis (00:32:41) - Yea yea yea and what a difference it can make. Like now you've got long term employees who have, who own your business, who are have blossomed and found their feet and that is a huge difference in somebody's life.
Gina Schaefer (00:32:58) - Well. And you think about just just as women, you know, if you can see it, you can be it is a great expression. And to see women in the hardware industry made me believe that I could be a success in the hardware, in the hardware industry, to have a teammate who can say, I've been clean from a drug addiction for 20 years means the new people on our team can see him or her and know that can be them. And that makes all the difference in their recovery, in their health and their success. Um, you know, we've had folks who were, frankly, professionals somewhere else who hit rock bottom because of their substance use, and those places might not have wanted them back. And they have to start somewhere because people need a job, people need to pay their bills.
Gina Schaefer (00:33:39) - And so if they had to start in a retail business, um, you know, at the very beginning all over again, they could and they did, and then they could work their way up and out if that's what they were looking for. And so we wanted to be that stepping stone.
Julie Ellis (00:33:53) - Nice. That's a really, really great way of looking at it. And so that obviously led to you writing the book. And now that you have employee ownership, what's next for you?
Gina Schaefer (00:34:08) - Well, um, as part of the succession planning, the exit strategy was my exit strategy. And so when we announced that we were selling the business to the employees, we announced that we were hiring a CEO to replace me. I decided that 20 years was long enough. Um, I'm still the chair of the board and majority owner, so they tease me that I can't get away. Um, but I'm working on building a professional speaking career. I'm taking a little bit of a break. I'm taking some art classes.
Gina Schaefer (00:34:37) - I mean, it was. It's just been since July that my replacement started. Um, I still meet with him weekly as a, you know, more of a mentor role, um, advisor. And so I'm just, I don't know, I'm just taking this year to have fun and figure out what I want to do next.
Julie Ellis (00:34:52) - It's good. And yeah, and that can be I mean, for some entrepreneurs. And I know in my own story, sitting on the plateau was in a time of change was one of the hardest things because I think as entrepreneurs were so wired for the climb, you know. Well, domination. And yeah, there's.
Gina Schaefer (00:35:09) - Always something next. Yeah.
Julie Ellis (00:35:11) - Yeah, yeah. And it can be hard to just find yourself on that plateau and looking to sort of reinvent yourself for your next act.
Gina Schaefer (00:35:19) - Yeah, I like the expression serial entrepreneur. And when I meet one I'm always impressed. But I also always feel like it's either somebody who can't relax or somebody who doesn't have a hobby.
Gina Schaefer (00:35:28) - And I don't mean that as an insult, because I mean, I probably should fall into that category, but I had so many other things that I wanted to do that I could take a break and do them, like taking a professional speaking class that I was really, really grateful to have those opportunities. And I didn't feel like I immediately had to start, um, building something as a business, even though it's fun to think about.
Julie Ellis (00:35:49) - Which is a nice luxury to have for sure. Yes. Yeah.
Gina Schaefer (00:35:52) - So super nice luxury.
Julie Ellis (00:35:54) - And I think it also like, has it informed you at all about like where you can give back and what other things you might be able to do in your life that are, you know, about, you know, helping lift up other organizations.
Gina Schaefer (00:36:09) - Yeah. I, you know, so as a business, we had a ton of philanthropic efforts and my husband and I did two. But now I get to think about them even more strategically. Like last night I went to a, um, I was invited to a meeting with a very interesting and diverse group of people who want to do impact investing in the DC region.
Gina Schaefer (00:36:28) - And so what that might mean is actually investing in startup companies, um, particularly owned by, um, we talked a lot about women of color because the investment, the investments made in that community are abysmal. Um, and then we also talked about grant making. So non-profit organizations who want to build revenue streams to fuel the really amazing stuff they do in specific communities. So now I can think about stuff like that. And I think what would happen is even beyond, you know, being able to put some money into the program, I have the ability to hopefully. Lend some wisdom or some experience to a young entrepreneur, and I would find that so much more gratifying right now than starting another business that I hope I can do more of that. And then on the national level, you mentioned it at the top of the podcast. I lend my voice as a spokesperson to a couple of causes, and I hopefully be able to do more of that too.
Julie Ellis (00:37:22) - That's great. That's great. But it is always interesting, I think, how how the circles in our lives.
Julie Ellis (00:37:27) - So here you are, back to the startup community that, you know, getting turfed out of your fourth role was what sent you into entrepreneurship to begin with.
Gina Schaefer (00:37:38) - But it's all a big circle.
Julie Ellis (00:37:39) - Well, and hopefully though, having somebody with the wisdom that you've now gained, um, you can help other entrepreneurs not end up out of business, right? Maybe. Yeah, it would be nice.
Gina Schaefer (00:37:49) - And I think, you know, when I look back. There are so many more questions I should have asked, and I always I did ask a lot of questions, but a lot of them were geared towards our vendors, like, what does this widget do? How do I fix this? Um, I just didn't have time to really stop and think about what should I be doing for HR or what should I be doing for finance? Um, and so now that I know just enough of those things to make me dangerous, I'd like to maybe help some folks not make the mistakes, or have to wait as long as I did to figure out what they all mean or can do to improve the business.
Julie Ellis (00:38:21) - Well, yeah, I feel I feel that way too. Like the, uh, you know, not in charge of anything, but I know a lot about many things. And so it's, uh, figuring out. Right. But it does sound like you'd make a perfect wing woman for somebody who needs help on a broad scale as they grow a business.
Gina Schaefer (00:38:42) - I hope so. Thank you for thinking that. I definitely hope so.
Julie Ellis (00:38:46) - Good. Well, thank you so much for taking the time to talk with me today. Um, all of your links for your book and for you will end up in the show notes. And I thank you so much for this really, really interesting conversation.
Gina Schaefer (00:39:00) - Yeah. Thank you.
Julie Ellis (00:39:03) - I hope you enjoyed today's episode. Please remember to hit subscribe on your favorite podcast platform. So you won't miss any episodes. Figure Eight isn't just a podcast. It's a way of seeing the big, gorgeous goals of women entrepreneurs coming to life. If you're interested in learning more, you can find my book, Big Gorgeous Goals on Amazon anywhere you might live. For more about my growth and leadership training programs, visit www.julieellis.ca to see how we might work together. Read my blog or sign up to get your free diagnostic. Are you ready for growth? Once again, that's julieellis.ca. When we work together, we all win. See you again soon for another episode of Figure Eight.