We were meeting with the owner of a blue collar business recently and he was curious if he did a deal with us, what types of things might change. For example, he’d heard that a lot of private equity firms like to identify and cut unnecessary costs post-close in order to increase profits and pay down debts. He said he probably had some of those, but if that was us and we did a deal together one thing we most assuredly couldn’t get rid of were his boots.

Curious, we asked what he meant by that. 

Well, he said, every year the company buys each employee a nice new pair of boots and outfits them with new branded shirts and jackets to wear in the field. Further, the employees had some say over the brands and styles purchased for them provided what they wanted was up to safety specifications. The program, he went on, cost about $10K per year.

Before we could interject, he held up his hand and said hold on. Sure, he could make his employees buy their own gear (in fact, his competitors mostly did) and sure, boots and swag could last more than a year, but he thought the investment more than paid for itself. 

He held up his hand again…

Because of all this great stuff, he went on, his employees happily complied with his uniform policy. This meant they had uncompromised steel-toed boots, had reflective material where they needed it, and were always dressed appropriately for the weather. This, he thought, meant they were always able to take their time and do a good job regardless of conditions, which also contributed to his company’s pristine safety record. 

Second, it was great for morale and culture. These were not items these employees might splurge on for themselves so that meant they were not only happy to receive them, but also that they proudly wore them outside of work. This, he knew, helped with customer acquisition and retention as well as with hiring.

So, he concluded, no matter what happens, we are keeping the boots.

Finally given the chance to speak, we wholeheartedly agreed. In fact, we told him, we do the same thing at Permanent Equity. See, our founder and CEO Brent had an insight a couple of years ago that while we had purchased a lot of swag, people didn’t seem to be wearing it. So we brainstormed about what we might do about that (throwing away ideas like forcing people to wear it or making them get PE tattoos) since what good is swag if it just sits in a drawer? What we finally hit on is that we’d give each person a generous budget to buy whatever swag he or she wanted to wear and then have a PE logo put on it.

Within months no one was not wearing PE-branded apparel, and we’ve continued upping our swag game (shoutout James) from there, spreading the love to spouses, investors, portfolio companies, friends of the firm, etc. Now if you come to our office today, not only will you see almost everyone in PE-branded something or others, but you are likely to go home with a PE-branded something or other yourself for all of the reasons the owner of that blue collar business cited. Or as the great Deion Sanders says, “Look good, feel good. Feel good, play good. Play good, the pay good.”

-Tim

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