21 Hats Podcast

This week, in episode 161, Shawn Busse tells Jay Goltz and Jennifer Kerhin that he’s realized that his business, too—like Jennifer’s—is stuck in the valley of death that we first discussed a couple of episodes ago. Shawn’s realization prompts a discussion of what it takes to cross the desert and get out of the valley. We also have a surprisingly entertaining and enlightening conversation about insurance that makes clear why you should occasionally review what policies you have and why you have them. “I have something called directors insurance,” says Jennifer, “and I don't really even know what that is.” Shawn notes that he found a company that helped him reassess several of his insurance lines. “What I like about that,” he told us, “is that while insurance brokers are incentivized to oversell you, because they make commissions,” this company sells its expertise and not policies. Plus: we start the episode with Jay explaining why binge-watching HBO’s Succession brought back all of his worst nightmares about owning a family business.

This week, Gene Marks tells Loren Feldman that it’s hard enough trying to run a small business in 2023, but just try running one in a blue state, where he says businesses have been subjected to a tsunami of regulation mandating things like paid time off and safe working conditions. Gene also talks about what’s going to happen to all of that unused commercial office space and whether there’s any reason for businesses to try out the new Twitter clone, Threads.

If you’ve been listening to this podcast, you know that we’ve been taking periodic dives into the world of employee stock ownership plans. We started down this path because Jay Goltz was thinking about his own succession issues. In a series of podcast episodes and conversations and seminars over the course of more than a year, Jay progressed through the three stages of ESOP discovery: First, he had his eyes opened. (“Wait a second. If you’re an ESOP, you don’t pay taxes?”) Then he got a little euphoric. (“I think I can make more money owning 70 percent of the business than I do now owning 100 percent.”) And then he confronted what I’ve been calling the ESOP industrial complex—the big firm lawyers and consultants who sometimes seem inclined to make ESOPs as complicated and expensive as possible. (“They want to charge me a ‘success fee’ for finding a buyer even though they didn’t find the buyer.”)

That introduction to Big ESOP occurred at a conference that Jay and Shawn Busse attended in Portland and that left Jay convinced that ESOPs are probably right for a lot of people but not for him. And yet, it was also at the conference in Portland that Shawn and Jay met Phillip Hayes, who takes a decidedly different approach than the industrial complex gang. What immediately stood out about Phil, who calls himself The ESOP Guy and who has his own podcast, Journey to an ESOP, is that he doesn’t view his mission as selling owners on ESOPs. His goal is to help owners figure out which solution is best for them, whether that’s an ESOP or something else. Which is why Shawn and I decided to sit down with Phil and have a conversation—brought to you by our sponsor, the Great Game of Business—about his approach.

This week, in episode 160, Shawn Busse, Paul Downs, and Jennifer Kerhin talk about the challenges of communicating with employees, especially in the post-pandemic world. It’s hard enough to get aligned on mission and vision, but how do you connect with an employee you’ve never actually met in person? Is that even possible? We also discuss Jennifer’s realization that she has over-performed on sales but under-performed on marketing, which is part of the reason she’s re-doing her website. “I need a higher level of prestige,” she tells us, “so, better copy, better photographs, an all-around more sophisticated look. What we had was mom and pop. You know, Wix.” Plus: the panel tackles a question posted on the small business subreddit: “How large can my margins become before I'm ripping off my clients?”

This week, Gene Marks gives Loren Feldman a preview of what Microsoft is cooking up with a product called Copilot that Gene expects to be released before the end of year and that he promises will “rock your world.” Like ChatGPT, Copilot will access data on the internet but it will also be incorporated into all of Microsoft’s existing products so that it will also be able to access data in, say, your customer relations management software. That means you’ll be able to do things like ask Copilot to identify which of your customers you’re actually losing money on. For those of you already experimenting with ChatGPT, here’s a pro tip from Gene. To use ChatGPT well, you need to master the art of asking it prompts. Gene suggests consulting a helpful library of prompts for small businesses compiled by GoDaddy.

This week, in episode 159, Shawn Busse, Jay Goltz, and Jennifer Kerhin talk about that difficult transition most growing businesses endure when the owner can no longer handle all of the most important tasks herself but also can’t quite afford to hire the people she needs to lighten her load. It’s part of the reason Jennifer, as she’s told us in previous episodes, has been working 12-hour days, six days a week. It’s a challenging transition, and it has a name: It’s the “valley of death,” says Shawn, who compares it to crossing a desert. We also discuss how big the owners want their businesses to get, why important tools and processes seem to break with every $500,000 of revenue growth, and what constitutes the proper care and feeding of salespeople. Plus: Jay has an idea for owners who are having a hard time selling their businesses. The idea involves selling the business to a key employee in a transaction Jay is calling a WE-SOP. Get it? It’s kind of like an ESOP, but it’s a lease-to-own version of an ESOP. A WE-SOP.

This week, Gene Marks tells Loren Feldman about what he calls the “TWATS,” which is shorthand for hybrid workers who choose to work in the office only on Tuesdays, Wednesdays, and Thursdays. Gene doesn’t think it’s a coincidence that they’ve chosen to work from home on Mondays and Fridays. Plus: Gene also points to what he considers the Achilles heel of artificial intelligence and says that business owners should think twice about listening to the Supreme Court when it comes to discriminating against groups of people.

This week, in episode 158, Paul Downs, Jay Goltz, and Sarah Segal talk about where the dust has settled after years of turmoil in the labor market. As you know all too well, we’ve been through COVID, supply-chain issues, inflation, labor shortages, the Great Resignation, minimum-wage hikes, new pay-transparency regulations, and countless rumors of recessions that have yet to come—all of which has had an impact on wages. And that’s why I decided to ask Paul, Jay, and Sarah where their thinking has landed. The consensus here is that leverage is shifting back to employers, but Paul, for one, remains committed to paying his people more than they can find elsewhere. “It's worth it to me to have the team I want,” he says. “And sure, it affects profitability, but turnover affects profitability, too. And I'd rather not have that.” Plus: We also talk about whether Lululemon was right to fire two retail employees who tried to stop a robbery, and we answer the following listener question: If something’s not working, how do you know when it’s time to walk away?

This week, in episode 157, Liz Picarazzi, Sarah Segal, and Laura Zander wind up talking about artificial intelligence. They conclude that the time has come for business owners to take AI seriously. Laura says she’s already experimented with using ChatGPT to create lists, to write product descriptions, and to write a marketing plan for a new product. She even used ChatGPT to prepare a presentation for her staff about how to use ChatGPT. She did this in part to reassure them that they don’t have to fear losing their jobs. “What I told the team is, ‘It's a nail gun,’” says Laura. “‘Sometimes you need to use a hammer, because it needs to be perfect, and it needs to be exact. Sometimes you just need a damn nail gun, and you just want to pop it through. And that becomes the skill. The skill becomes: When do I use the hammer and when do I use the nail gun?’” On their way to the conversation about ChatGPT, Liz, Sarah, and Laura consider the various ways business owners can tap expertise, including through advisory boards, through business groups, and with strategic weekly lunches. Plus: Laura explains why she likes to hire people even when she doesn’t have an opening.

This week, Lou Mosca, who runs American Management Services, a consulting firm that helps businesses improve their performance, tells Loren Feldman why he doesn’t accept excuses from his clients. Whatever the economy or the labor market throws at them, Lou says, the owners control what happens within their own four walls. We also talk about why he always comes back to encouraging his clients to get in their cars and visit customers, why he thinks your best prospects just may be former customers, what he’s learned recently about digital marketing, and what every business owner should be tracking in these unusual times.