Peter Reeburgh, Resort owner of Summit Cove Lodging in Keystone, Colorado shares his story on how his team used their knowledge of the business and the foundation of open-book principles to develop creative ideas around surviving the global pandemic.
Episode with guest: Peter Reeburgh
Resort owner of Summit Cove Lodging in Keystone, Colorado
(This episode was recorded in March of 2020.)
Key Episode Take-Aways:
1. Learn how other practitioners are adjusting. (click to jump to this topic below) There was a lot of feedback from practitioners and how they’re adjusting. How they’re tapping into understanding—educating their employees on how they would look in terms of if we had to do any type of reduced work is how we would supplement their pay in terms of state, federal, and what the company could do.
2. Be creative and share the weight as a team. (Click to jump to this topic below) They’re looking for creative ways to do things, but it was really comforting for me, as an owner of a business, to not have to get in front of everybody and say, “Look, everything is going to be fine.” I was able to tell them, “We’re all in this together, and you know what the numbers are. We’re sharing that with you, we have been sharing that with you, you’ve seen a dramatic drop. Yes, we do have some major problems going on, this is where I need your help. But everyone is informed, I’m not trying to pull the wool over your eyes at all.”
3. It’s all about understanding cash flow.
(Click to jump to this topic below) We did go through a cash flow, we introduced that into the huddle last week, and we kind of touched on it a bit this week. But really what we want to do is show our employees how much cash we have, how we're going to navigate this, what our costs are, and just see what our runway is.
4. Building good relationships can be very powerful. (click to jump to this topic below)
For us, we have a linen vendor that immediately when this happened and the ski slopes closed, I reached out to them. We have an amazing working relationship with them. It's Alsco, a worldwide textile company, and asked them like, “Hey what can we do to defer payments? We're happy to pay the full amount, but we just need extra time.”
And when you have that kind of relationship with a vendor, their response was: “Pay what you can right now and we'll figure that out.” So those kinds of relationships, whether with your bank, or vendors, or customers, anything like that are helpful.
Continue scrolling to read the full episode transcription.
Steve Baker (0:00:07): Good morning everybody. I’m Steve Baker with the Great Game of Business, and welcome to our Friday Great Game Live. Surviving and thriving in times of chaos. I’d like to welcome my co-host Rich Armstrong, president of The Great Game of Business®. How are you, Rich?
Rich Armstrong (0:00:23): Good, Steve. Thank you.
Steve Baker (0:00:27): Awesome. It’s kinda weird to have done this live together last week with Jack, and now we’re all sequestered and quarantined in our homes (laughs). I imagine most of the folks watching out there we are really all kinda dealing with this craziness. We want these Friday talks to be very personal and loose.
Like, I don’t know if you can see it, this is my magical high tech way of showing you some of the resources. Taking Fear Out of the Workplace, Surviving and Thriving in Times of Chaos: A Ten Step Guide, and Black Swan: Action Guide that we talked about last week. And for a limited time we are also offering the book: Get in the Game: The Ten Steps to Implement the Great Game of Business. Free of charge as an audiobook.
We also have with us a special guest today from Colorado: Peter Reeburg. Who is the head of Summit Cove Vacation Lodging in Keystone, Colorado. Hi Peter!
Peter Reeburg (0:02:04): Hi, how are you?
Steve Baker (0:02:05): Really good, thanks for joining us.
Peter Reeburg (0:02:07): Absolutely.
Steve Baker (0:02:09): Peter, we’re gonna start by answering some, or rather, reading answers from the community from last week when we asked the question: What are you doing to keep your team together during tough times, and what suggestions for those people who are struggling to avoid lay-offs and keep their people? Rich, do you wanna start reading those answers from the community?
Rich Armstrong (0:02:31): Yes, Steve I will. One thing as Steve said last week, we wanted to make sure that we got some suggestions from our community of practitioners. Obviously, Steve and I and the Great Game team don’t have all the answers and we wanted to make sure we’re tapping into the community of what they’re doing to keep their people together and, of course, avoid some of the lay-offs in this critical time.
There was, of course, a lot of answers and so I’ve kinda grouped them into four or five/six themes here that I wanted to just touch on. Any of these answers that we are gonna have available on a webpage—that now is available on greatgame.com/crisis, that allows anyone from the community to see the latest in terms of recommendations from our community. All the resources that Steve talked about as well.
So, when we asked that question, in terms of what they’re doing to keep their people together and avoiding lay-offs, the first thing that was definitely prevalent in a lot of the answers was the idea of staying positive and keeping up the communication. It’s important to stay positive, but at the same time to not shy away from the reality. Communicating that reality. A lot of people talked about the anxiety that a lot of employees are having in a lot of the leadership is having as well. The stressful times that we’re in. The best cure for anxiety, of course, is frequent communication, education, and action.
The thing I do want to reiterate there, is to make sure that there is a feedback loop that is not all top down communication. That we’re getting feedback from your people, and we’re getting ideas from your people. That there is definitely a loop of communication going on. That’s plan, act, get feedback, and then adjust. So, think about that. That was definitely pointed out in a lot of the answers.
The second theme that kinda came up was this idea that we have to keep the safety and health of our people as our top priority. Make sure that our people do understand that we wanna keep them and their families safe in this time. I know last week Jack talked about our huddle, our meeting cycle at SRC, and a lot of people talked about that and how they wanted to—how they were trying to incorporate that same kind of rhythm of communication. The first item we talked about in the 9 o’clock meeting at SRC is: “what is the current health of our organization?” Are there any confirmed cases, are there issues with employees meeting and having trouble and getting medical assistance? How can we help? We also cover all the strategies in each of the business units. Getting information from the employees about what they’re doing to help kinda stay healthy in the workplace. So there’s a lot of feedback, and then we take the 1:30 meeting and come up with a plan, and then share, then back out, and then adjust again the next morning.
So, I think there were points made of that same kind of rhythm being used through the organization. There were also some answers regarding if you’re declared an essential business, because you are in that situation where, now, you’re asking your people to come to work and you need to make sure that they’re healthy at home in terms of stay-at-home orders, or stay virtual. But now, you’re bringing them to the workplace. So how do you keep the workplace safe? I thought there were some interesting suggestions. One came from the idea of staggering breaks. A lot of times we have breaks and we bring all the employees into a certain area. Some of our practitioners have staggered those breaks, so they don’t congregate in large groups. Also, the idea of expanding your work day, so that you have part of your workforce coming in the morning, part of your workforce coming in the evening or the afternoon. That way you don’t have any great number, and you’re able to reduce the number of people in your shops at any given moment. I thought that was good.
Taking temperatures of your people coming in and going from the facilities. The frequency of cleaning—I know that my wife works at one of our facilities that’s been deemed essential, and they have to track that they are documenting every day that they are cleaning their areas and how many times a day. So, just, things like that are very important.
Steve Baker (0:07:18): I think one point that I’d throw in too, is that that documentation is really, really important if at some point the government is gonna be doing reimbursement, that sorta thing. Documentation of your processes and what you’ve done could be very, very important. So, I think everyone could take a lead from that.
Rich Armstrong (0:07:36): Yes, exactly, that was actually a suggestion from one of our practitioners. Make sure that you’re documenting everything right now, because that will help you when it comes to tax benefits and things in the future. So great point. Great point.
1. Learn how other practitioners are adjusting.
The other thing is there was a lot of feedback from practitioners and how they’re kind of adjusting for working the “three-legged stool” as Jack talked about in the webinar last Friday. How they’re tapping into understanding—educating their employees on how they would look in terms of if we had to do any type of reduced work is how we would supplement their pay in terms of state, federal, and what the company could do.
The most important feedback was everybody is really kinda rallying around what opportunities are out there in terms of relief funds. The big takeaway is that there are a number of programs being ramped up quickly by the SBA and from the bank—that collaboration. SBA Disaster Relief funds that are up to two million dollars. There’s other relief funds that provide delays in terms of principal payments. Other emergency credit line expansions for operating expenses. So, just encourage you to get with your bank, get with the SBA. I did hear from a practitioner that the SBA has subcontracted out some resources so that they can respond quickly. So, hopefully you don’t see any delays in that communication as well. So that was a big one, and again to Steve’s point: document everything. I heard that a lot, in terms of the answers, is to make sure that you’re documenting so that you have information on the activities that you went through to take advantage of tax benefits.
Steve Baker (0:09:48): Yeah, awesome Rich. One thing that we might throw in as well is that from the individual side, we know we’ve got some individual contractors out there and sole proprietors folks who are working on their own that unemployment has actually been expanded. Unemployment insurance has been expanded to include contractors—self-employed individuals. So, don’t forget to check that out and that is individualized by state. So you can do a couple of quick Google searches and find out how to get to your state’s unemployment insurance site. And, I think they’re trying to automate that as much as possible. So to Rich’s point earlier, they’re trying to take out some of the red tape and some of the obstacles so that we can get people help as quickly as possible. But, the important thing is as Rich started out, you’ve got to take action and do it today.
Rich Armstrong (0:10:45): Very good.
Steve Baker (0:10:47): So, Rich was that about all the categories that you saw?
Rich Armstrong (0:10:52): That was it. Just to make sure that everyone knows, those specific answers and some of that communication will be updated on the webpage. Just for time, being able to write every one of them, these answers, at this point in time is difficult, but all of them will be on the website.
Steve Baker (0:11:12): Awesome, thank you Rich. Well that gives us a perfect segue then into talking with Peter Reeburg from Summit Cove Vacation Lodging in Keystone, Colorado. Welcome again, Peter.
Peter Reeburg (0:11:27): Thank you.
Steve Baker (0:11:28): Hey, man, I gotta tell ya, I joke a lot about my art major and all this sorta thing. I always say I spent most of my student loans in Colorado. There’s a new wrinkle to that: most of it was spent in Summit County. Thanks a lot. Actually, no, thank you a lot. Those were pretty great days. We heard your story from Kevin Walter, one of our top coaches and a practitioner and a co-owner of Tasty Catering in Chicago, Illinois. He’s dealing with his own issues. There’s lots of employees, and everyone in the world just stopped ordering catering, right? So, we’ll be talking to Kevin in future shows, but he told us your story and it blew us away. And I think it’s important that the community hear it directly from you. So Peter, tell us about what happened at Summit Cove, what happened in Colorado, and what’s happening right now.
Peter Reeburg (0:12:20): Okay, let me give you some quick background about our business. So we’re a vacation lodging company and we’re doing short term vacation rentals. Everything is individually owned, and we manage everything from a studio condo all the way up to a six-bedroom private home. We literally do everything in house, so we do maintenance, housekeeping, guest services, owner services—you name it, we do it in house.
When we started the business in 2001, interestingly enough we started the business when I bought my first property in 2001 just three days after 9/11. So, September 14th. So, that was a bit of a scary time. But, unlike this, we only do rentals and things like that. So today we actually have been in business about eighteen years, and have basically anywhere from thirty to fifty employees. So, thirty full-time year-round, and then we have fifty employees during the ski season right about. So those are seasonal workers, housekeepers. We have people in our vacation planning call center, and my wife works in the business with me, too, which is pretty cool. Certainly couldn’t do that without her.
Steve Baker (0:13:33): And part of those seasonal workers now, they come back to you every year because you’re a great place to work, right?
Peter Reeburg (0:13:39): Yeah, a large portion of them do. And so, it’s kinda nice. That’s something where, through this whole thing, and I’ll touch on this in a little bit when I start going into this, but we’re really at our two-week point of making the most money that we make all year and it just didn’t happen. Had all this happened just two weeks later—even two and a half weeks later, it would’ve been just fine. It would’ve been sorta business as usual, and unfortunately it just didn’t unfold that way.
Steve Baker (0:14:07): So basically, two weeks before peak…
Peter Reeburg (0:14:10): Peak season, yeah. Spring Break. Spring Break is our big time of the year. So it’s interesting, kinda going into the timeline of this, we’ve been practicing Great Game. We launched our entire company in October, so we haven’t been doing this very long at all. It’s been about two years of prep, we’ve really had to get our finances and stuff together. But we’ve started seeing some weakness in about the second or third week of February. And that was in our weekly huddle—we could see the numbers. And we could just see the barely beginnings of this, and we weren’t quite sure if this was the virus or not. And so, we kept going along. And then, we had the announcement that there was a case in Colorado. And then it was in Keystone. It was like “oh jeez.” I was texting my competitors “was it you?” and suddenly I get a call around 11:30 at night from the County Health Department saying that the guest isn’t there now, he’s departed, but he was the positive case in one of your properties. It was just like “oh my god, what do we do?”
And so, it was really just very close communication. Initially it was going through and making sure all the contact points with our employees and the guests. We had a maintenance man go in there, fix a smoke detector while he was in there with the guest in house, we had somebody else deliver towels, we had a housekeeper go in 23 hours after the guest departed, and so the Health Department was really great in trying to mitigate and see what the risk factors for our employees. I think overall we had about five or six people that had contact with this guest. The Summit County Health Department has been fantastic. Absolutely great as far as communicating and working with our employees, employing resources, and giving access to nurses for our employees to talk to them, and really squash down that fear. And there really was a lot of fear that happened—literally on the night of March 5th.
March 6th and this was big news. This first case in Colorado. Our company was at the epicenter, and how do we navigate that? So we worked really hard. Our team really came together. I’m so proud of them for coming together with a plan, what do we announce, and that sort of stuff. And luckily, we didn’t need to interview anything or anybody. Really everything kinda came out through the County Health Department which was really good.
Over the weekend, that next Saturday, there were other more cases in Colorado. The shift, the spotlight came off of us and then kinda more into the general part of Colorado but we did have to spend a weekend—the County Health Department they did announce the building that the case was in, and it just has a lot of fear in people, you know? We start getting a good flow of cancellations coming in. Over the weekend we came up with a formula and a plan using—I mean, the CDC website is very good. You just have to dig for the information. It’s not the easiest thing to read, but we also have the county giving us specific pages on how to clean the property.
We went over the chemicals and the process and what protective gear we needed to use over the weekend, but immediately we started doing rapid social distancing as well within our company. So, really proud of our team. They basically—this has been a kicked around idea for years, about drive-in check-in. We do have a front desk check-in office where people do check-in: get their keys, get maps, and get information. So suddenly, we went from that sorta kicked around idea to reality within a few hours. So we had a drive-in check-in. We started communicating with guests about not coming in our office, we would come out to you and hand you your keys in the car. I was on a live chat with my team, and the first three guests just ignored everything. They came right into our office, with all the signs and everything. Made a few tweaks and it went from idea to implementation in just hours. I was so impressed with our team for doing that. So on Tuesday, March 10th, that’s when we finally got all the disinfectants and all the equipment we need to go ahead and clean the property. So it was our housekeeping manager Carmen, and our general manager Tyson, and myself went in and cleaned the property.
That’s unnerving, going into the property. I wasn’t about to send anyone else into the property. I wanted to make sure that I know what I’m doing, make sure it’s safe, and I don’t think Carmen or Tyson felt comfortable sending anybody else in there. It was a long job and we went in and we cleaned. It was—we killed everything, basically. There was nothing living in there at this point in time. But it took eight hours. It was something where you kinda go in the unknown. You have some CDC guidelines for cleaning a room, but during that time when you’re cleaning a room obviously there is doorknobs and handles, but Tyson was like, “Gee, did they open up the blinds? So we have to clean the blind strings.” I was like “Oh, probably. What did they touch? Obviously TV remotes. But did they touch anything else?” So it’s this big project that just explodes on you, as far as getting all that done. So we got all that cleaned, and honestly I woke up the next morning and my lungs were really clear because I inhaled lots of stuff that kills everything.
I felt like, “Oh god, we finally got through this. That was a really intense timeframe.” Well, that didn’t stop. Really fast, within just a few days, our Colorado governor announced that, “Hey this is pretty serious. Anyone over sixty should not go to the mountains.” And so we had a few more cancellations. And then the very next day the governor said “Well, you’re getting and skiing, you’re out in the middle of the air, that’s good. So yeah, you should go skiing.”
The very next day, Vail Resorts who own Keystone Ski Resort decided to close all their North American operations, so Keystone Ski Resort itself closed. So then very shortly after, the county health order came that they are shutting down all ski slopes, and they do want all guests to depart. They gave us about a day and half to get that done. We just got flooded with cancellations. This whipsaw effect, it was not easy to keep up with that. We’re still dealing with it. Things have kind of stabilized at this point, but those rapid fire things, I didn’t see the ski slopes coming when I did, or when it did happen.
So, just trying to prepare ahead of time, and basically I sat down with Tyson and was like “Okay, let’s just plan for the worst possible case scenario and work our way backwards.” By the time the Summit County send out their health order to shut down and let guests go, I don’t think the ink had even dried on our plan.
But when it did happen, I was like “Okay, at least we have something scribbled down at this point that we can start from and have a little bit of preparation,” But, we’ve been trying to stay ahead of this for a long time. So, just a pile of cancellations and phone calls, we did curate a process for cancelling reservations, but literally our income was completely shut off when all that happened. People coming in for Spring Break just cancelled, and we tried to move reservations forward.
Basically last week on Thursday at noon is when all the guests had to be out—it was just, everyone was working so hard and we just got everyone together and I was like, “You know what? We need to make a decision and I think we just need to take a break. This has been going on since March 5th, and we just need to take a break.” So we made a decision, we just had kind of a rough cash flow projection of where we are. We basically gave all employees two paid days off just to take care of themselves, regroup, get back into a fresh mindset. Normally during this time of year, we made sort of a gradual shift into our off-season.
Our off-season activities: all of our guests depart, housekeepers ramp up into deep cleaning and disinfection and carpet cleaning, maintenance, taking care of all those loose chairs and cabinet knobs that need tightening. And so, we do have off-season activities, we don’t ever just shut down. For the very first time in nineteen years we just shut down. We put everything to voicemail and just, we’re done. That was a decision that I feel really good about. Yes, it was costly, but just for the well-being of our employees and our crews, I think that’s just important to do. One thing I did ask everybody is: we had some ideas with how to proceed with off-season and stuff, but we’re in some hard times right now and I need everyone’s input. So we started a document, just a shared document, and just the agreement is that during your break when you’re just thinking about things or when you come back I need tons of ideas. So we have this growing list of ideas right now that’s actually pretty incredible. There’s a lot of really good stuff coming out of this. So that’s where we’re at.
Right now, yesterday, Colorado went into a stay-at-home order. As far as this Colorado stay-at-home order, our business is considered essential in a few different areas: making sure the properties are clean, not freezing, and maintained. And that’s something that’s our mission to our owners is just we are here to take care of your property. You live across the country and we will take care of your property.
That’s where we are right now, we’re not through yet, but we’re getting there. I couple things that we did through this entire process was keeping up with the huddle. And that happens every Wednesday at 12:30 for us. We brought it into an online huddle instead of a live huddle, for social distancing. But we really did a lot of talking to quell the fear in people.
One thing I really like that we were able to do is show people. We saw our plan for profit before tax was $670,000, and it went down here on just Wednesday $30,644. And I’m telling you about the $44 because those $44 makes a lot of difference at this point. But I’ve seen our teams really start dropping any costs that they can.
2. Be creative and share the weight as a team.
Peter Reeburgh: They’re looking for creative ways to do things, but it was really comforting for me, as an owner of a business, to not have to get in front of everybody and say, “Look, everything is going to be fine.” I was able to tell them, “We’re all in this together, and you know what the numbers are. We’re sharing that with you, we have been sharing that with you, you’ve seen a dramatic drop. Yes, we do have some major problems going on, this is where I need your help. But everyone is informed, I’m not trying to pull the wool over your eyes at all.” And I felt really good about being able to share that with our team. I feel like it has really brought our team together in a big way.
Steve Baker (0:26:05): So, Peter, let me ask you a few questions here, because first of all I think the listeners need to understand that number one: you started the Great Game last fall, right? I mean, you’re a newbie baby. You are a newbie. And I love the fact that you’re staying close to those basic practices like the huddle. I love that you said that you were trying to quell fear and give information and frankly you’ve got one of those leadership characteristics that we preach so much about which is courage and vulnerability.
You’re sitting here doing an interview when you just told me you basically lost everything in your revenue side of things, and sounds like your profitability as well. So, two questions. One is, what are you taking because I want some, and secondly, we’re getting questions from the viewing audience saying we’d love to hear some examples from you about the ideas and actions that employees have come up with to help.
Peter Reeburg (0:27:07): Sure. Number one, this is not me. I have a leadership team in our company that is insane, and I get to work with these people. With all these talents. This is what I enjoy. This is not all me, with all these ideas. I do not have all the answers, but collectively we do have all the answers, or getting what we think are the answers anyway. But, I don’t take anything (laughs), to answer your question. Some of these ideas are “we’re gonna have to disinfect all these properties.” We need some new processes. One idea that came out that we’re still kinda kicking around is that it’s expensive to live in a resort town. Through the Summit County order, you can provide long-term lodging, you can’t have short-term lodging. So you have to have somebody stay thirty days or longer, and can we help out our employees? Are there other people we can help with long-term lodging that’s affordable since we’re now in this crisis? Can we help other people cut costs? One thing, kind of an idea that came from actually our governor. Our press conference in the tail end had this pot of gold which is: call your mortgage lenders and your banks see if you can defer those payments.
So the next day I picked up the phone and got my own primary house and own property in Keystone deferred for three months. So we got that information pushed out to our property owners. That gets a lot of fear out of the property owners and our employees are asking for deferments on rent. So we tried to push that information out as far as we could. So those are just some of the few examples of things that we’re doing. We have a vacation planning team and sales team, our sales force. What can we sell? You know is there extra cleaning services for properties that we don’t manage that we could sell? Is there maintenance that we could sell? So there’s been some pretty creative ideas—it’s still kind of a scrolling list just going by as people put things in there. Those are some of the ideas that have kind of come out.
Steve Baker (0:29:23): So the stakeholders in this thing, you're really trying to take the fear out for all the stakeholders. I'm thinking: you've got information, going back and forth with employees, of course, with you seasonal employees, with your property owners, with your county. One of the things that I heard you talk about was, you even had some people come up with ideas of like, “Hey, there are healthcare workers now that basically are going to be in a hotel. Why don't they come and stay in a nice vacation property home?” The idea that I think I also heard you talk about some of the property owner said, “Hey, go ahead and do this work, this maintenance work that needs to be done.” Does that provide you a little bit of revenue in these tough times?
Peter Reeburg (0:30:06): It sure does. I reached out to the county assistant manager who is kind of in charge of the housing of healthcare workers. And in this time we just need to keep people employed. That's all it all comes down to. It's not about profit is keeping people employed, and lightening the load on that payroll. And we're not housing any healthcare workers yet, but I did offer that to the county. And that's something that I hope they do take us up on, because I think it's an important thing that we can do to help our community. In all the communication with our property owners we did say, “Hey, now's the time. If you need painting or a remodel or something like that, then yeah. We have had just a handful of owners on our property program, or measure program, saying, “Yeah, we could use a remodel. We've been waiting for a time like this to do this.” And so there is a little bit of work. It's not a ton, but it's it does help. Every little bit helps at this point.
Steve Baker (0:31:03): Is there anything that that employees came up with or talked about that you probably knew it should be done, but you were too busy before to do it?
Peter Reeburg (0:31:13): You know, like I said, we've been kicking around that drive up check in thing forever. And this is an idea that our general manager Tyson has been, “We should do this.” It's like, yeah we got all this other stuff to do. I'm just seeing that happen within a matter of hours. I mean, the idea and all the chats are really pouring in around at 10am. But that all came together so fast, and I'm just so proud of our team for thinking that way. But just all the social distancing, I mean, the amount of cleaning that happens in our office. We immediately get as many people working at home as we could right now, just the other night as we get the shutdown order from the Colorado governor, we can still do maintenance. And we actually had a meeting at 9pm, with all of our managers talking about, “What do we do? Can we stay in business?” And everybody, I think, agreed that we can stay in business. But the next question Tyson asked was, “Should we stay in business? Is this something that's socially responsible to do?” And we had a good amount of discussion around that. And then once we kind of got over that. We started working on concerns about maintenance.
All of our maintenance, guys use the same computer. So, we're collecting up all the laptops that our vacation planners and our sales team have been using, and those are going to Keystone tomorrow. So that there’s more laptops that we can have more, spread out in our maintenance crew. I reached out to a property owner and asked him, “Hey, instead of us just using this little maintenance shop, can we use your garage?” It's a three Bay garage just so we can have more space, more ventilation. The owner said, “Sure.” You know, it's not just our employees. It's everybody. It's our customers, we've had a lot of encouragement from our property owners that we manage for, and it really is just amazing to see things kind of pieced together. Bit by bit.
Steve Baker (0:33:10): That's, awesome. You mentioned you still have the weekly Huddle. Are you doing any other of the practices other than transparency and communication via Huddling? What other practices of Great Game are helping you, as a leader, through this?
3. It’s all about understanding cash flow.
Peter Reeburg (0:33:25): One thing we introduced, we didn't really touch on it too much this week, we did update it, but just a cash flow. We did go through a cash flow, we introduced that into the huddle last week, and we kind of touched on it a bit this week. But really what we want to do is show our employees how much cash we have, how we're going to navigate this, what our costs are, and just see what our runway is. I mean, our runway, at least last week, worst case scenario was it was into November, which sounds great, but there's a lot of stuff that has to come together for that to work. All right, so a revised one, we basically just ran it through the end of June.
Right now, just to kind of see where we would be at the end of June. So we didn't do the full everything, but we're trying to get more detailed on that. But that's something we did bring into the huddle. We've also just brought in the safety of our employees. That is extremely important. We can't work if we’re sick. So just reminding people: don't touch your face, make sure you wash your hands, wear gloves, if you're cleaning a property make sure you're wearing eye protection.
We have some new disinfectants we're using, that we haven't done in the past. And so there's a lot of things that we have brought in into the mix. That Huddle experience each week, I think it's just great because you have—it’s not just your management team. I talk to them all the time, but you get to actually get to connect with every single person in the company. Which, I think has been very helpful. We've also been half our workforces Spanish speaking. So it takes a little longer and it’s a little more challenging, but I want to make sure that information gets out to every single person.
Steve Baker (0:35:08): Right, right. And you got to cross those boundaries and you've got the universal language there of the numbers. One thing that I would like to throw out there is what I heard you say is that you kind of came up with your immediate plan, what's going to happen in the next 90 days. Jack was talking last week about the next 13 weeks. How do we get through that? And then you're looking out to November saying, “We'll run out of runway about there, what can we do between now and then to extend the runway?” And hopefully that means it's going to be snowing and everyone's healthy and a lot of pent up demand right? What I gotta ask is, these are my Barbara Walters questions right? Knowing what you know now, what do you think you’d do differently if anything?
Peter Reeburg (0:35:52): What a tough question. Get more sleep in-between days, but it's really hard. I think, I don't know that we could have planned any further ahead and kind of looking through my notes here that I made. I don't know that we could have planned any of this. I mean, if you think about it we're on day 22 of this crisis since March 5. I'm counting the days at this point. And what could I have done? I could have executed and started the Great Game sooner. And I know that I'm not trying to make this a plug for Great Game. It just happened two years ago, we'd be done. We wouldn't be where we are right now. We wouldn't be talking. And so that's something I think we could have done getting better. Get everybody involved in your financial picture and get their input. I think that's something I probably would have wanted to do.
But honestly, I think we've done a pretty good job going through this, and I feel like as a business owner there are these times when you have this gut punch, and when they closed the ski areas, and that was a gut punch. And like, “Okay, what do we do?” And I gotta say that our management team is just phenomenal. These, again, are not my ideas. Yes, I just so happened to be the owner of the company, but, in reality, we all own the company. We're all taking care of it in the same way. We all have that kind of ownership feeling. And it's just amazing to see people come together. So sorry, I don't have a great answer for you.
Steve Baker (0:37:28): No, dude, I'm telling you that it's a tough question. And for everybody viewing out there, I did not share this question with Peter. I wanted it to be raw. Just, I think another question out of that same kind of zone is: let's say we get to November-December. Let's say that it's just an incredible year for snow. What will you do differently in your planning, do you think? What's next for Summit Cove?
Peter Reeburg (0:37:53): This entire Great Game thing started for us when Tyson and I went to the Gathering of Games and our minds were blown. And this was a couple of years ago. But we kept hearing about how companies are like, there's times are good now, but you better be saving up. And I think that we do have a better savings than we've had in the past. But, to me, I think this is something that when we do have good times, we're gonna be—we’re gonna be shuffling some money away. We're definitely making sure that we are preparing for the bad times, much more so than we have in the past.
And I feel good about right now, that we have done some preparation. It's not perfect, but I feel like we're in a pretty decent position. But, again, we're still not totally through this and we're hoping that we can open up for Summer time. If we can't open for Summer time, we're gonna have to get even more creative about what we can do. So there's a lot still kind of in flux.
Steve Baker (0:38:54): So we've got a couple of questions for you, Peter. Do you think that there will be opportunities in the offseason, the summer—is there a summer season? That you have diversified business. I'm imagining people coming out for other things: mountain biking and hiking and whatnot. Is that something that already exists? Or tell us a little bit about that.
Peter Reeburg (0:39:14): Sure. So the summer season in Keystone, we basically make about 80-85% of revenue during the ski season, which is basically November through April. The summer season—yeah, there is a summer season, but it's not really that big. Because family reunions, weddings. Really the big drivers of revenue are these festivals. One of my favorite festivals late June is the Bacon and Bourbon festival in Keystone.
Steve Baker (0:39:42): That's two food groups.
Peter Reeburg (0:39:44): Exactly. So there are some opportunities, but it depends on if those festivals can run or not. If they can't I think that it may mean we might have to have a summer season of just people being tired of being at home you can go to Keystone and be fairly isolated. In your property and going and doing these things and not being in a big gathering. So,if they do loosen some restrictions, we might be able to have a summer season. But it's going into November.
It's amazing...a lot of the cancellations that we have had people just immediately: “Nope just move my reservation one year. I'm still coming for spring break next year. Thanks for being here. Appreciate it.” So, one thing we went through in the recession 10 years ago was that skiers will still ski. You still have a ski pass and you're gonna ski.
Steve Baker (0:40:33): Well, I, of course, we hope that some of the summer business will help you offset the Winter, or the Spring, losses here. Yeah, I know you’ve got a long way to go. Another question that came in, I think it's a good one, you've got a significant number of employees who English is a second language. Do you translate huddles into Spanish in real time?
Peter Reeburg (0:40:56): It is something where when you call out the numbers, we've all gotten really good at calling out the Spanish numbers as well. So that's something that's pretty universal now in our huddle. If there's an explanation about a line item, yeah, we do pause about that.
And you know, touch on that in English, and let one of our housekeepers or housekeeping managers translate that into Spanish. So, we do. Huddles don't take long, and they're sometimes up to 30 minutes. So they do take a little longer, but we want to make sure that everyone has a good understanding of what's going on. We're not trying to just rush through this.
Steve Baker (0:41:33): Right. So, do you still keep in touch with Kevin Walter on a regular basis?
Peter Reeburg (0:41:38): Kevin has actually been essential in this entire process. When first Tyson first reached out to him during this timeframe Kevin sent us just a whole bunch of ideas that he's working on with Tasty Catering, and one of his ideas was, and I didn't talk to him directly, but how can you remain essential? So if there's a shutdown, how can you remain essential? How can you serve your community, your healthcare workers in your business and for him, I'm probably gonna slaughter the story, but I believe that he was providing food to healthcare workers in some way, shape or form.
But that's, that's pretty out of the box thinking. And that's, so that's something where how well, “How can we remain essential during this timeframe?” And that's not just about me and our company and all that sort of thing. If we had to shut down, we'd shut down. But how can we help our community?
Summit County is a pretty small area—and I just saw a comment that said, “Kevin, love that man.” Yeah, we do too. Summit County is a small place and they've been trying to tell people to get out of the mountains and we just don't have the health capacity to handle any crowds. I'll feel great if they do take us up on that offer, to house a health care worker for sure.
Steve Baker (0:43:01): Yeah. Well, the story that you've told has been really inspiring for us. And I love the fact that you're not only leaning on your people, your management team, your coach, but also the community, you're sharing stories and, and you've got this courage to tell your story to help all of us.
I mean, at SRC, we're dealing with a lot of the same things: how do we remain essential? How do we keep people working? How do we distance them when really they need to work closely together? So all I can say, Peter, is thank you so much for having the generosity of spirit to come on and tell your story. And please send our very best to all of your team with your county, right? Thank you very much.
Peter Reeburg (0:43:45): Absolutely. Thank you for having me.
Steve Baker (0:43:47): So, next, what we've got up guys is, and by the way, each week, we'll try to bring you someone new from the community that is like Peter. That's a real champ getting out there and making things happen. Even when it’d be very easy to say, “Well, they shut us down, we give up.” He's not rolling over this is get up and fight. So what we want to do next is we we've collected a lot of questions on our site, again greatgame.com/crisis, we want to make sure that you know that's there. All the resources that we mentioned, another shameless plug.
The thing is, you can plug your questions in there, what we've done is Michele, and Brian and Rich and I and the team have tried to consolidate the questions that you have, and we'll try to answer those live. So, if I can Rich, I thought I'd throw these at you. And you can answer them, I might jump in here and there. We’ve broken them into categories and we're creating a Frequently Asked Questions section on the site, so that you aren’t looking at the same question over and over right? We're continuing to add to categories. So, let's start with a big one: cash. How do you walk the line between making cuts to stay afloat, but not cutting back so much that we're understaffed when things pick back up in a few months? This is what Jack was talking about: get ready for the upturn. Right? What is your opinion on that Rich?
Rich Armstrong (0:45:11): Well, I think, first of all, it’s a very, very appropriate question. And one that is a lesson learned we had from the 2009 recession. I remember Jack and our organization thinking about, and what Jack was sending the message is that there's probably a lot of fat in the organization to be able to cut. But what we saw with a lot of companies, they move so quickly, they started to cut some muscle and cut some bone. And they really got into areas that cuts so deep that when the upturn would come around, that they weren't prepared for that.
And I think the question kind of comes back to this idea of how do you balance that? I think it's really trying to understand what's essential to your business in terms of the upside. Was truly fat in the organization and looking at what opportunities, I think the best place to find that is going back to your people. You can look at it from up high, but your people really know where the fat is. And for them to really understand what kind of critical times we're in, I think they can open up their eyes and say, “Look, what's essential to the business and what's truly fat.
And no, we're not cutting into the muscle in the bone of our organization where it's going to penalize us once the upturn comes around.” In terms of the idea that there's a likelihood of the recession coming from this. What we're hearing and I think this is a time that we haven't experienced before. It's much different than the Black Swan was in 2009. But many of the economists like Alan Bolio and others that we look at are that they really feel like this is going to be a V shape recovery. And in other words, maybe there is a slight dent or a sharp downward to the economy, but it's going to quickly recover, and people need to be ready for that.
I think you use the words earlier, Steve, maybe Peter did too about the idea of pent up demand. I think that's something everybody needs to be aware of is that there's a lot of services people want right now but can't get those services. And when it comes around, we're going to be crushed. And that can hurt a lot of organizations.
So, thinking about how you're managing the business in the next 60 to 90 days, with an eye toward what if we get slammed with a 50% increase into our business? How are we going to manage that appropriately? In two ways is: one can we service it? But, in the other way, if we can't service it directly, how do we still help the customer in some way so that it doesn't reflect on us in terms of how we're servicing that customer?
Steve Baker (0:48:09): Now, thanks, Rich. Along those lines, we got a question live as well, that kind of ties in, I’d just like to answer it myself. And of course, Peter or Rich, if you have anything to add, please do. The question is: how do we explain to employees that the company needs to keep some cash in the bank, versus paying full salaries, or other cuts so we don't go broke in the process? I have spent this week talking to a lot of business owners around the country.
And it's amazing how many have have talked about people who've been volunteering. And so I'll go back to what Jack talked about last week is go to the end of the world. You know, figure out where you like, Peter, you talked about runway, where's the end?
Where do we where do we just have to shut down and walk back three or four steps and say, well, we're here now—we’re healthy enough. But what do we have to cut? And Rich you just hit it. What's fat? What's muscle? What's bone? I think that you've got to go to the end. That's something that Jack has taught me personally, is looking at that economic reality and going, “Oh my god, it makes me sick to my stomach.” But then walking back you go, “These are the things we can do to avoid it and never get there.” The next question comes about credit. I don't know if I'm talking to open book practitioners or drug running money launderers because check this one out: “If I draw on my credit and keep it in the same bank, they can just grab it from my account? Should I move cash to another bank?” What do you think?
4. Building good business relationships is key.
Rich Armstrong (0:49:40): Well, I guess my feeling is it's all the relationship with your bank, right? In your trust with your bank. But I think that that's the important thing is to make sure that you feel like you have a good relationship with your bank and you can get a decision based off of that.
I think the important thing right now is what we're hearing from practitioners and, really, is kind of the device we're looking at as small businesses of SRC is that if you have lines of credit to go out there and make sure you secure that line of credit, in fact, meaning borrow against that line of credit and secure those funds now as quick as you possibly can.
To your point, Steve is to really understand your debt capacity that you have, and then be able to communicate that to your employees about: this is where we're at and we have this much gap between where we are now and what our debt capacity is, that's where we need to operate. And being able to then break that down in terms of the levels, like you talked about well there's certainly some fat in the organization that we could take out. If it gets closer, maybe there's some benefits we're providing the employees that we can't provide.
All the way to the last measure is to, after making a decision in terms of layoffs, or cut hours or cut pay—that sort of thing. All those things can be lined out. But it all starts with what's my debt capacity?
Peter Reeburg (0:51:14): Kind of a quick thing to add in is you can talk to your vendors too. For us, we have a linen vendor that immediately when this happened and the ski slopes closed, I reached out to them. We have an amazing working relationship with them. It's Alsco, a worldwide textile company, and asked them like, “Hey what can we do to defer payments? We're happy to pay the full amount, but we just need extra time.”
And when you have that kind of relationship with a vendor, their response was: “Pay what you can right now and we'll figure that out.” So those kinds of relationships, whether with your bank, or vendors, or customers, anything like that are helpful. So if you're, if you're not on the phone with these folks, now, get on the phone with them right now.
Steve Baker (0:51:58): You have time, right? So that's, that's interesting, because now you're looking at it from all different ways as everyone on this call should. Which is, how much credit do I have available? How much should I get? How much cash should I have? Where's the end of the runway? You even went to your software folks and talked to them about an accommodation, didn't you, Peter?
Peter Reeburg (0:52:22): We sure did. I don't have an answer back from them yet, but I know that they are working on it. And it’s something that I just appreciate. We've already paid for this month, so they're working on next month. And that's TRACK Hospitality. But it's just those kind of relationships making big, big differences. Unfortunately, ones you probably can't negotiate with are if you're relying on Microsoft or Google for your subscriptions and all your cloud infrastructure.
I hope they're going to get flexible here at some point, but don't cancel and don’t not pay those critical infrastructure folks. But if you do have some relationship type vendors, definitely reach out to them. You can use that as very short term credit.
Steve Baker (0:53:03): Yeah it's good stuff. So, communication, that's the big message. Get in touch with people now. Be the first in line, make sure they know where not only your heart is, but where your wallet is. Let's talk about people for a little bit here. Let's talk about, there's been questions about the health of our employees about shelter in place orders, social distancing. How do you make the right decision, Rich, for any given organization? Keeping in mind that we all need to operate right now, but we also have to think about society at large. Thoughts about that?
Rich Armstrong (0:53:39): Yeah, again, a very good question. I don't have all the answers to this, we’re balancing ourselves. The essential businesses of SRC, right? I think, again, it comes back to just communicating and educating people on the fact that certainly as being designated as essential business provides us an opportunity to keep working. But at the same time, when they're working, they could be put at risk if you don’t do a good job of maintaining the workplace they're in. So it goes back to making sure that the employees do understand that we do have their health and safety in the forefront and just keep pounding that in. And I think Great Game of Business companies have a little bit of an advantage that they've already had a lot of communication about the need for money and the need for cash in this, they've already put that in. They bought into a mindset to the employees that that's needed, as well as a good solid job to keep their jobs. So to balance those two is a little easier conversation.
That's exactly how I would encourage you to do that through these times. In terms of practical ways, obviously a lot of resources that have been made available, how to keep the right safe workplaces, and I mentioned some of those earlier, we're incorporating at our own facilities. Including just the simple idea of making sure when they're coming into work, that they're not running a fever. It gives everybody else some calmness about who's good.
Steve Baker (0:55:25): Yeah, nobody wants to work with typhoid Mary. That's for sure. So, got another question that's very timely for today. If this stimulus bill gets through, do you think it'll impact everyone's ability to keep people? Do you think it's that sweeping? Well, you’re nodding.
Peter Reeburg (0:55:45): Yeah, I think it will. We're talking about the things on the runway and one of them is if you don't lay people off there's chances it could be forgivable. And that's huge. If I can use a loan or something like that, and not lay people off then it's forgivable, holy cow. Yes, that will absolutely make a giant difference for a company like mine. Without a doubt. And a lot of other companies I know, owners that I know.
Steve Baker (0:56:16): So we've had a ton of questions about the details, the bullet points, the subtext all about not just the legislation coming through, but also about CDC mandates and state issued warnings and stay at home orders, all this kind of stuff. I'm going to just say we can't answer all those questions in this format. We'd like to stay toward the Great Game of Business and open book kind of the people, the money, it's people, it's both kind of context, but I would encourage you to kind of follow Peter’s lead and Jack and Rich and all of us at SRC. Take action.
Go out there and find out who you need to talk to and learn about it. There are lots of great webinars going on on the technical aspects of it. But the big thing is, man, take some action. Action cures fear. And that's our biggest enemy right now. I think we have time for just one more question Rich, and I'm going to kind of put it in this context: people have been asking about what all are you doing now? Peter mentioned the huddles, that sort of thing.
- Keep MiniGames relevant.
Are people still doing MiniGames? Because that's a big deal right now. People ought to be doing MiniGames traditionally. You should never end one early, but in today's unprecedented times, what's your advice to people on mini games, Rich?
Rich Armstrong (0:57:40): Well, it's interesting. I see Peter laughing right now.
Peter Reeburg (0:57:46): I'm laughing because we had our maintenance crew is slaying our work orders. Our housekeeping team is trying to get better reviews and we had customer satisfaction type MiniGames since we had customers, and now we don't. So I think those have been kind of paused as far as work orders go, and those, we usually get caught up with those. But, yeah, we're going to have to redesign our MiniGames for sure. During this timeframe.
Rich Armstrong (0:58:17): Yeah Peter, it's really what the mini game has been put around, is it relevant today, and your people will tell you that if it's relevant, or it's not relevant, right? And I know that we always play the games through, play the games through, but you do have some different challenges and you want to put all the energy to those challenges right now. And so I wouldn't shy away from looking at those. What I would suggest is that the people who created that MiniGame and they did it for a reason is to make sure that that decision comes from them and not yourself. If A is scratching all the mini games, and B is to go back to your fun. That is this irrelevant game knowing what reality we have right now.
Steve Baker (0:59:02): Awesome. Well, we have come to the end of our time together. Again, Rich, thank you so much for joining. Peter, what a great guest you've been. I may have to have you every time because—
Peter Reeburg (0:59:14): Thank you very much.
Steve Baker (0:59:16): Thanks very much for that. I do want to throw this in guys, we have another question for the community. This is for you. There's two questions. One is, how are you huddling today? So share your photos. Are you doing it with Zoom? Are you doing with go to meeting, whatever, anything that's unique. Are you just six feet apart doing a distance Kumbaya? I don't know what you're doing, but we want to know. Secondly, how many of you have created your 13-week or 90-day plan? Remember Jack said last week, he said, we're making a 13-week plan. We're going to make sure you know we're alive for that period of time because a lot can change. Tell us your plan and tell us if you've done it. If you haven't done it. Here's a hint: you better do it. So it's been great. Rich, anything else to add?
Rich Armstrong (1:00:04): No, I just want to reiterate that you know that this web page greatgameofbusiness.com/crisis will have a lot of these resources. I know it's this once a week kind of get together here and Peter was awesome to come in and provide his take on the situation and what they've done. There's a lot of other practitioners that can share those stories in real time on the website webpage. And so everybody can have that resource. And because everything's so fluid.
Steve Baker (1:00:33): Absolutely. Well, keep in mind, as Rich said, greatgame.com/crisis. Get the audio book for free, get all the Great Guides for free and there's more coming. Thank you all so much. It's been great to spend an hour with you and we'll see you next week, same time. Take care. God bless.