21 Hats Podcast

Earlier this year, Ted Wolf suggested that Paul Downs should take a serious look at how artificial intelligence might improve his custom woodworking business. Paul was skeptical—but he invited Ted and his team to come visit the shop and see for themselves. This week, Ted reports back. He came away impressed by the business Paul has built but also convinced that Paul has a problem: As Ted sees it, too much of what makes the company work still resides in Paul’s head. Ted believes AI could help capture some of that knowledge, improve everything from estimating to production, and, perhaps most important, prepare the company to run one day without Paul.Paul remains unconvinced. He agrees that AI will find its way into the business eventually, but he questions whether it can capture the judgment, experience, and nuance required to build one-of-a-kind products. His inclination is to let the next owners figure that out. “So Paul,” Ted responds, “if they’re going to have to deal with it, you just lowered the value of your company.” Which raises a question that goes well beyond AI: If you hope someday to sell or transfer your business, how much of what you know has to be captured before you leave?Plus: In our latest Beyond Small segment, sponsored by Grasshopper Bank, I ask Paul, Ted, and Lena McGuire what would happen if their businesses suddenly doubled. Would they be thrilled—or terrified? Could they handle the growth? And would they even want it? That leads to a discussion that comes up here fairly often: How big do you really want your business to be?

Kevin Donnelly was 44 when an unsolicited offer set in motion the sale of the telecommunications company he had spent nearly 20 years building. The business had grown to more than 600 people in 38 cities and about $50 million in revenue, and Kevin says the deal itself worked out well for him financially. But that doesn’t mean he looks back on the experience without regret.What bothers him most is what happened to the people who helped him build the company. After the sale, employees started getting let go, and Kevin came to believe he should have done more—through bonuses, transition planning, or simply by thinking more carefully beforehand about his obligations to the people who had helped create the value he was selling. As he puts it, the way you treat those people can “come back to haunt you.”That experience, along with a brief post-sale detour into the restaurant business, eventually led Kevin to become an exit-planning advisor and to launch Inside Exits. His focus now is on owners who may not have an easy path to a conventional sale—often because of customer concentration, owner dependence, limited scale, or other issues that make a business less attractive to strategic buyers or private equity.His answer is not that every owner should pursue an ESOP or any other single structure. In fact, Kevin is explicitly agnostic. He talks about ESOPs, employee ownership trusts, worker co-ops, management buyouts, sales to existing employee-owned companies, and other creative arrangements. His goal is to help owners find a path that works financially, gives the business a chance to continue, takes care of the people who helped build it—and, ideally, leaves the owner with fewer reasons to look back with regret. The episode is brought to you by Grasshopper Bank.

This week, Jaci Russo, Liz Picarazzi, and David C. Barnett talk about something entrepreneurs are always being told they have to do: innovate. But how do you know which ideas are worth pursuing, how much time and money to put into them, and when an experiment starts to become something much bigger? Jaci Russo may be finding out. What started as a prospecting system she built for herself—with AI, verified data, and a simple CRM—has turned into ProspectDaily, a subscription product that attracted more than 100 customers before she even announced it. That has Jaci thinking the tool could do more than generate a little extra revenue. As AI makes it easier for clients to do more of their own marketing, she sees ProspectDaily deepening client relationships and ultimately changing the nature of her business. So far, she says, the hard costs of creating the tool amount to $185. (Try ProspectDaily for free.)Liz, meanwhile, is spending $10,000 this year testing whether old New York City trash cans and other recycled plastics can be turned into a new cladding material for Citibin. And she’s itching to spend another $30,000 on the equipment to manufacture the material once she determines whether customers actually want it. Both Liz and Jaci kept their projects quiet early on. As Liz explains, “I have so many ideas all the time. I didn't want there to be eye-rolling, ‘Oh, here's another of her things.’"Plus: In our latest Beyond Small segment, brought to you by Grasshopper Bank, the owners compare how closely they watch their numbers, which metrics matter most, and whether spending time on financials gets in the way of doing the work they really want to do—like coming up with new products.

When Nathan Miller started Rentec Direct almost 20 years ago, he wasn’t trying to disrupt an industry. He was a small landlord who couldn’t find affordable software that did what he needed, so he built his own. Other landlords started using it, then paying for it, and over time Rentec carved out a meaningful place in what became an increasingly crowded and well-funded market.Nathan says the company has managed to keep growing not by trying to match its venture-backed competitors dollar for dollar, but by sticking to a fairly simple formula: understand the customer, keep prices reasonable, provide unusually knowledgeable support, and build the kind of reputation that generates referrals. Today, Rentec has 16,000 property-management customers, 20 employees, and about $16 million in annual revenue.That formula is being tested again by artificial intelligence. AI has already wiped out much of the organic search traffic that once brought Rentec new customers, and Nathan acknowledges that it has also made it possible for almost anyone to build competing software. But he doesn’t sound especially worried. As he sees it, writing the code is only one small part of building a business. The harder things to reproduce are trust, reputation, industry knowledge, and customer service—which happen to be the things Rentec has been investing in all along.This week, Nathan explains how Rentec bootstrapped its way into a crowded market, why he continues to turn down investors, how AI is changing both his product development and his marketing, and what nearly 20 years of working with landlords has taught him about managing rental properties. The episode is brought to you by Grasshopper Bank.

This week, Sarah Segal tells David C. Barnett and Jay Goltz that she has decided it’s time to pay more attention to something that can occasionally get lost amid the other demands of running a business: making money. Sarah’s agency is having a very good year, with revenue growing 40 to 50 percent. But she’s realized that growth alone isn’t enough. She wants to know exactly what it costs to hire each employee, what it costs to service each client, whether her fees are covering those costs—and what has to change if she’s going to hit a 20 percent profit margin. She’s also confronting something a lot of owners struggle with: how much to pay herself. For years, Sarah says, she’s been inclined to put the money back into the business rather than pay herself a market rate salary. Now she’s trying to do both—raise her own compensation while making the business more profitable.Along the way, Sarah, Dave, and Jay weigh in on how owners can fool themselves about profitability, why growing businesses eventually require real budgets, and what owners should actually expect from their banks. Is a bank merely a safe place to park your cash, or can you expect it to help you finance and build your business?Plus: When should a new business start paying its owner a salary? Dave argues that until a business can pay the owner for the work he or she is doing, it’s more of a hobby than a business. He also explains how entrepreneurs can get trapped in money-losing businesses—not necessarily because they still believe in the business, but because loans, leases, and personal guarantees can make shutting down even more expensive than continuing to operate. The episode is brought to you by Grasshopper Bank.

Business owners are being told constantly that they need to figure out how to use AI. Deb Weidenhamer thinks that may be the wrong place to start. Instead, she says, owners should look for the places where their businesses are already struggling: Where are you wasting time? Where are you losing money? Where are customers getting frustrated? Then ask whether AI can help.In this week’s Dashboard, Deb, author of AI for Real Companies: A Practical Guide to Smarter Systems and Stronger Profits, walks us through several examples of businesses that have done exactly that. A pizza shop uses AI to answer calls it had been missing during busy periods. A machine shop uses it to take on jobs that previously weren’t worth the time it took to quote them. And a real-estate team uses it to respond to leads that arrive while everyone is asleep.We also talk about the harder questions: whether AI really will eliminate jobs, why automating a bad process can make things worse, and why Deb believes the owner—not the IT person or some newly appointed “AI expert”—needs to take responsibility for deciding what gets automated and why. The encouraging part is that none of this necessarily requires becoming an AI expert. It requires understanding your business well enough to know what needs fixing. The episode is brought to you by Grasshopper Bank.

This week, we revisit a conversation with Laura Zander that we first published last year, shortly after she and her husband Doug sold Jimmy Beans Wool, the business they had spent more than two decades building. Laura had been preparing to sell for years. She had kept the company’s books clean, built systems that could survive without her, and cultivated relationships with potential buyers. In other words, she had done many of the things owners are told they should do to prepare for an eventual exit. And still, when the right buyer finally came along, Laura says the process nearly broke her.There were 155 due diligence requests, endless rounds of legal negotiations, mountains of paperwork, and months when Laura and Doug were so consumed by the transaction that the business itself suffered. Meanwhile, life kept happening: a major website migration, tariffs, industry turmoil, family issues, and the constant fear that some unexpected development would cause the buyer to walk away. Even after the papers were signed, the work—and the stress—continued. Laura did ultimately get a deal she was happy with. But the more useful lesson may be what it took just to get there.

I met Lamar Tyler, founder of Traffic Sales & Profit, a couple of years ago at a Zone of Genius conference, where I interviewed him on the main stage. It quickly became clear that Lamar, who helps business owners grow, had a lot of smart, practical advice to offer, and I’ve been following him ever since. He recently posted something on LinkedIn that stopped me: “Staying small as a Black business owner is selfish.” Lamar, obviously, was speaking primarily to Black entrepreneurs, but his challenge applies more broadly. His argument is that owners who have the ability to build larger companies—and create more jobs, wealth, and opportunity—should not use “protecting their peace” or “staying lean” as an excuse to remain comfortable.I understand and appreciate what Lamar is trying to accomplish. But “selfish” is a heavy word. Isn’t an owner entitled to say, “I built this business to create a good life for myself and my family. Isn’t that enough?” Entrepreneurship is already hard. Most businesses fail. How much more risk should we encourage owners to take—and how much responsibility should they be expected to carry? That’s where Lamar and I begin this week’s Dashboard conversation. The episode is brought to you by Grasshopper Bank.

This week, we start with a business owner who’s just learned his rent is jumping 40 percent and who sees three options: accept the new rent and essentially work for free, move and start over, or shut down and get a job. But when Paul Downs, Jay Goltz, and Ted Wolf do the math, they see another option—one the owner doesn’t seem to have considered.From there, the conversation turns to the choices owners make when the answer isn’t obvious. Paul, as it happens, is wrestling with two of those himself. Before the year began, he developed a plan to start selling his custom conference tables in the Middle East. Then the missiles started flying. Does he still spend $30,000 to see whether the opportunity is real, or should he put that money to work closer to home? And then there’s a potentially lucrative R&D tax credit that Paul thinks could be “a gift from heaven.” He believes his company qualifies for the credit, but he also wonders whether claiming it could invite unwanted scrutiny from the IRS.Different decisions, different stakes, but the same question: As Paul puts it, “What is your appetite for risk?”

Conventional wisdom about selling a business is pretty clear: If at all possible, get your money at closing. Don’t leave a big chunk of the purchase price dependent on the future performance of a business you no longer control. David C. Barnett, who helps people buy and sell businesses, has challenged that conventional wisdom, arguing that earnouts and other forms of deferred payment can sometimes help buyers and sellers get better deals done. Josh Patrick, who has owned and sold businesses himself and advised many other owners through transactions, is more skeptical. Which is why I was kind of hoping for a fight.Instead, Dave and Josh end up agreeing on quite a lot—including that once a seller decides to leave money in a deal, choosing the right buyer becomes every bit as important as negotiating the right price. Can the buyer actually run the business? What happens if things go wrong? What information should the seller continue to receive? And how can the deal be structured so that both sides have an incentive to make the transition work? So no, this isn’t quite the earnout cage match of my dreams. It’s actually far more insightful than that. The episode is brought to you by Grasshopper Bank.

Jaci Russo has had quite a summer. First, her husband and business partner, Michael, underwent an unexpected quadruple bypass. Fortunately, Michael's recovering well, and their branding agency passed an important test: With both founders largely out of commission, the team kept the business running and the clients happy. But that wasn't the only surprise Jaci had to deal with. For the past several years, she and Michael thought they knew exactly how they would eventually leave the business. They had a succession plan. They had a timetable. And they had already begun putting the pieces in place. Now, they're back to figuring it out.This week, Jaci tells Jay Goltz what happened and how she's thinking about her options now. It's a reminder that succession planning isn't just about choosing among selling to family, employees, investors, or some other buyer. It's also about recognizing that circumstances change, people change, and even a plan that once seemed settled can suddenly become anything but.Plus: We check in with Jay to see whether he's received the hundreds of thousands of dollars he's expecting in tariff refunds. And with Wayfair reporting improved sales, I ask Jay whether that's a sign the furniture business is finally recovering—or whether Wayfair's gains might actually be bad news for independent home stores like his. This episode is brought to you by Grasshopper Bank.

If you've built a successful business, you've likely been told the path to more success is obvious: hire employees, land bigger clients, lock in recurring revenue with retainers. But what if those aren't signs of progress? What if they're traps?This week, I talk with Pia Silva, author of Scale Solo, who argues that many of the traditional rules of entrepreneurship simply don't apply to solopreneurs. She explains why hiring too soon can derail a business, why retainers often aren't nearly as profitable as they appear, and why she'd rather do 10 $3,000 projects than one $30,000 engagement. Along the way, Pia also tells us why she and her husband named their branding agency Worstofalldesign, why she isn't afraid to tell clients, "You don't get a say," and how she's learned to sell clients on paying higher prices. This episode is brought to you by Grasshopper Bank.

This week, we begin with the story of Paloma Corona, the owner of a thriving preschool in Los Angeles who needed money to expand to a second location. She thought she was borrowing at an annual percentage rate of 13 percent. In reality, the effective APR was 170 percent. She also thought she was taking out a loan. Instead, she was placed in a merchant cash advance—an increasingly common form of financing that can sidestep many of the laws governing traditional loans. The daily payments quickly began draining not only the profits from her business, but also her personal savings. Her business survived, but only because a nonprofit lender stepped in to refinance the debt. Paloma’s story is especially troubling because she wasn’t reckless, uninformed, or running a failing business. She was trying to build a good business. But she was up against a financing industry that has become remarkably skilled at making extraordinarily expensive money look fast, easy, and affordable.My guests today have all been fighting this problem from different vantage points. Jay Goltz owns a picture framing business and a home furnishings store in Chicago. Ami Kassar helps business owners secure SBA and other responsible financing. And Louis Caditz-Peck, who helped build LendingClub’s small business operation, is now executive director of the Responsible Business Lending Coalition.In our conversation, we talk about why good businesses get steered into bad financing, how brokers can earn more by recommending the most expensive products, why offers embedded in platforms such as QuickBooks, PayPal, and DoorDash can be especially tempting, and what business owners should do before accepting fast money. We also ask what seems like a remarkably simple question: What could possibly be the argument against requiring every small business financing company to disclose, clearly and prominently, the true annual percentage rate it is charging? This episode is brought to you by Grasshopper Bank.

ESOPs are often presented as one of the best ways for a business owner to exit. You preserve your company's independence, reward the employees who helped build it, and create a retirement benefit that can be life-changing for the people who stay with the business. What gets less attention is that ESOPs are still businesses. They can lose customers. They can hit hard times. And because employees' retirement savings are often tied to the company, the stakes can be even higher than they are at a conventionally owned business.This week, Roland Burdett tells the story of Miklos Systems, a Virginia defense contractor that became an ESOP in 2006 and spent nearly two decades building an ownership culture in which employees truly thought and acted like owners. Then came the pandemic, the Great Resignation, and, most recently, the uncertainty created by DOGE and deep cuts to federal contracting. Suddenly, Roland found himself worrying not only about his employees' jobs, but about their retirement savings as well.Rather than continue rolling the dice, Miklos made the difficult decision to sell itself to a larger defense contractor. Roland takes us inside that process—from explaining the decision to employee-owners, to working with an outside trustee who ultimately had the authority to approve the deal, to the surprising complexity of unwinding an ESOP after 20 years. Along the way, he offers a refreshingly candid look at both the strengths and the limitations of employee ownership, and why, in the end, protecting the people who had helped build the company meant giving up the independence they had worked so hard to preserve. This episode is brought to you by Grasshopper Bank.

Side hustles have gone mainstream. More employees than ever are starting businesses of their own—sometimes to earn extra income, sometimes as insurance against layoffs, and sometimes because they dream of becoming entrepreneurs themselves. But what does that mean for the businesses they already work for? If you invest months in training an employee, isn’t it fair to expect that person to devote their best energy to helping your company grow? That's not an immediate concern for Lena McGuire, who's still a solopreneur. But as she prepares to hire and train her first employees, she worries about investing in people who ultimately may see her business as a stepping stone. Sarah Segal isn’t as concerned, but she does want her employees to view their jobs as careers, not placeholders. And then there's Channon Kennedy. While working full time at Silicon Valley Bank, Channon invented a woodworking tool, got it manufactured, landed national distribution, and traveled the country to trade shows—all, she says, without letting her day job suffer. And that’s what she expects from her employees with side hustles.Meanwhile, both Lena and Sarah are wrestling with another challenge: finding the right home for their growing businesses. Lena needs a showroom but doesn't want to sink money into leased space—and she can't find a building to buy. "I'm missing out on growth," she says. "I feel like I'm stalled." Sarah has opened a second office in Silicon Valley, but she's wondering whether it's time to leave her quirky “starter” office in San Francisco for something that better reflects where her business is headed. Buying would be ideal, but that's easier said than done in San Francisco these days.Plus: Sarah recently did something she hadn't done in almost a decade as a business owner—she turned on an out-of-office message and actually unplugged for a vacation. Spoiler alert: there was only one real crisis.

One thing I've noticed over the years is that business owners love talking about employees who think like owners, who take initiative, solve problems, and don't wait to be told what to do. The harder question, of course, is: How do you actually build a company that encourages people to behave that way? My guest this week thinks most businesses actually encourage people to do the opposite.Dean Meyer is an executive coach who specializes in organizational transformation, and he believes that employee engagement has a lot less to do with perks, personalities, or motivational speeches than it does with the way a business is designed. His core idea is deceptively simple: Every manager should run a business within the business—with customers, responsibilities, and the freedom to figure out how to deliver results. It's a different way of thinking about organizational structure, and as you'll hear, it challenges some widely accepted ideas, including what employee ownership and open-book management can—and can't—accomplish on their own.Along the way, Dean explains why he says he can predict where conflict exists just by looking at an organization chart, why he believes founders become the biggest obstacle to growth once a company reaches a certain size, and how one entrepreneur used these ideas to build a company that became better at innovating, integrating acquisitions, and attracting talent. Whether you agree with Dean or not, I think you'll find that he offers a fresh perspective on a question every growing business eventually confronts: How do you build an organization that doesn't depend on the founder to make everything happen? This episode is brought to you by Grasshopper Bank.

Nearly 10 years ago, Simon Bedding, who owns a manufacturing company in England, picked up a copy of Boss Life, Paul Downs' memoir about running (and almost losing) a manufacturing company in Pennsylvania. Simon liked the book enough to email Paul. Paul wrote back. And over the years, they've kind of stayed in touch. This year, as we mark the 250th anniversary of the United States spinning off from the United Kingdom, we thought it would be illuminating to get these two business owners together to compare notes. After all, their countries started with the same language and much of the same legal tradition, but two and a half centuries later, running a business on opposite sides of the Atlantic can feel very different.In this conversation, Paul and Simon compare taxes, regulation, hiring, health care, government support, and what it's like to build a manufacturing business in their respective countries. Along the way, there are plenty of moments when one of them can't quite believe how the other has to operate. Wait—you can't fire an employee without going before a tribunal? Wait—you have to spend a week every year figuring out health insurance? Wait—your employees don’t have employment contracts?And yet, for all of their differences, Paul and Simon also discover something else: Whether your factory is in Pennsylvania or southeast England, some challenges are universal. It's hard to find great people. It’s hard to fight city hall. In short, it's hard to build a successful business. And, as Paul puts it, "You're always going to learn something by talking to other business owners." This episode is brought to you by Grasshopper Bank.

Small business owners have plenty to worry about these days. According to John Arensmeyer, founder and CEO of Small Business Majority, his organization's surveys show optimism is slipping as owners grapple with soaring health insurance premiums, rising energy costs, and the higher price of imported goods. And yet, the wave of entrepreneurship that began during the pandemic hasn't faded. In fact, it's still growing. So what's going on? Why are so many people choosing this moment to start businesses? What do they think they're seeing? And perhaps the more important question: What can we do to improve their odds of success? Along the way, John also makes the case that one of today's politicians understands the needs of small businesses better than most. You may be surprised by who he names. This episode is brought to you by Grasshopper Bank.

If you’ve owned a business for any length of time, you’ve probably told yourself some version of this: I'll deal with succession as soon as I solve whatever crisis my business is confronting right now. The problem, of course, is that there's always another crisis to solve or opportunity to pursue, and time has a way of passing.Jay Goltz has spent decades building a collection of successful businesses in Chicago. He knows he needs a succession plan. He knows that if something happened to him tomorrow, there’d be chaos. And he'd very much like to leave the business in the hands of the employees who helped build it. Over the years, he's considered the usual options—selling to a bigger company, to a few key employees, to an ESOP, even to an Employee Ownership Trust. But every option comes with compromises. And so, year after year, it’s been easier to focus on challenges that seem more urgent—until this past April, when Jay turned 70. "I realized," he says, "I can't kick this down the road much further."This week, Jay sits down with David C. Barnett and Mel Gravely for an unusually candid conversation about what makes succession planning so difficult—even when you understand how important it is. Jay explains why he has no interest in selling, why money isn't really the issue, and why he still loves going to work every day. Mel, meanwhile, offers some tough love, suggesting that if protecting Jay's family and employees really are his priorities, then something else must be holding him back.Mel also shares an unexpected twist in his own succession journey. After stepping away from the CEO role two and a half years ago to become executive chairman, Mel found himself pulled back into operations this spring—a reminder that even well-designed succession plans don't always unfold as expected. And along the way, David offers a blunt explanation for why many aging business owners overestimate what their companies are actually worth. The episode is brought to you by Grasshopper Bank.

There have been a lot of stories lately about companies getting hit with surprisingly large AI bills. They start using platforms like ChatGPT or Claude, usage grows faster than expected, and suddenly they're spending far more than they ever imagined. Should small businesses be worried? I invited AI consultant and longtime business owner Alan Pentz back on the podcast to find out. His answer may surprise you: for most small businesses, he says, runaway AI costs aren't the problem. If anything, he thinks they're spending too little.That led us into a wide-ranging conversation about why Alan has changed his thinking on how owners should approach AI, why today's pricing is effectively subsidized for smaller businesses, when it does—and doesn't—matter which model you're using, why mastering prompt writing is becoming less valuable than many people assume, and what happens when the companies behind the large language models finally have to start making real money.

Most business owners hope to reach the day when someone offers to buy their business. If that day comes, the payoff isn't just financial. It's validation for years of risk-taking, sleepless nights, personal guarantees, and sacrifices that most employees never see. But that success can raise an uncomfortable question: What exactly do owners owe the people who helped them get there? Should employees share in the proceeds when a business is sold? Does an owner have an obligation to find a buyer who will protect the culture and the jobs that have been built over the years? Or is the owner's responsibility fulfilled by paying people well, treating them fairly, and creating a great place to work so long as the business is theirs to run?This week, Jay Goltz, Liz Picarazzi, and Ted Wolf wrestle with those questions—and not always from the same perspective. They agree that employees deserve respect and appreciation. But they also point out that employees weren't the ones who pledged their homes as collateral, absorbed the losses, or spent years wondering whether the business would survive. In other words, where should owners draw the line between gratitude and obligation?Plus: As Liz expands Citibin beyond New York City, should her marketing reflect that shift? Or should she lean into her hometown roots and emphasize that if her trash bins can make it there, they can make it anywhere? Liz also explains her plan to capture some recurring revenue.

Business owners spend a lot of time preparing for things that could threaten their companies. They buy insurance, build cash reserves, create succession plans, and they worry about recessions, lawsuits, and key employees leaving. But there's one potentially devastating risk that many owners would rather not think about: What happens if the owner's marriage falls apart? This week, David Barnett explains how careful planning—including a prenuptial agreement—helped him avoid the worst-case scenarios when he got divorced. Jaci Russo offers almost the opposite perspective. She says building a business with her husband hasn't strained their marriage—in fact, it may actually have strengthened it by making the cost of walking away so high. Paul Downs, meanwhile, says the subject has barely crossed his mind, and has never come up in decades of discussing business issues with fellow entrepreneurs.Along the way, we explore how divorce can leave a business frozen in place, unable to make important decisions or investments; whether owners should plan for the possibility just in case; and the remarkable challenge of couples who divorce but continue running a business together. Plus: Jaci reports back on what she learned at a Claude Cowork seminar.

Jared Bell never planned to own a fencing business. He took a summer job at Butte Fence in 1994, liked the work, and decided to skip college and stay. Thirteen years later, he bought out a partner and took over day-to-day operations—just in time for the Great Recession. The company survived that challenge and has gone on to thrive, but not by following a conventional growth playbook. Bell has expanded the business by repeatedly asking a simple question: Why buy from a supplier when we can do it better ourselves? Over the years, Butte Fence has developed new products, configured more efficient processes, and steadily moved upstream, turning vendors into competitors and creating entirely new businesses along the way. In our conversation, Bell explains how that strategy evolved, what it takes to pull it off, and how a small business can identify opportunities hiding in its own supply chain.

The new pay transparency laws were designed to help job applicants and narrow pay disparities. But they've also had an unintended consequence: Employees now have far more information about what other people are making—and that can raise some uncomfortable questions for business owners. How do you decide what a job is worth? How much should you pay compared to the market? How much should employees know about what their co-workers earn? This week, Jay Goltz, Jennifer Kerhin, and Ted Wolf compare notes on compensation. Jennifer explains how her philosophy has evolved from offering below-market pay and maximum flexibility to providing competitive salaries, benefits, and career paths. Jay discusses the challenges of determining what employees are truly worth—and why a bad bonus plan can be worse than no bonus plan at all. Ted makes the case for paying above market—not because he wants superstars, but because he believes well-paid employees become more committed, more flexible, and ultimately, more productive.Along the way, they discuss paying for health insurance, contractors versus employees, hiring mistakes, and the sometimes overlooked reality that while employees crave stability, business owners are the ones taking the financial risks. The result is a candid conversation about one of the hardest questions business owners face: What is the right way to compensate the people who help build your company? Plus: How concerned would you be if your employees found out how much money you, as the owner, are taking out of the business?

A health scare in 2015 prompted Julia Beardwood to confront a question many business owners prefer to postpone: What happens when it's time to leave the business? Over the next several years, the founder of the New York City branding agency Beardwood explored a range of possibilities, including selling to an ESOP and pursuing a strategic acquisition. But when the time came, the solution turned out to be much closer to home. Years earlier, Julia had implemented a compensation strategy that gave key employees a meaningful stake in the company's success. What began as a way to motivate and retain talent ultimately created a pathway for ownership transition.

The promise is seductive: Implement the right operating system and your frustrations disappear. Your employees become more accountable. Communication improves. Growth follows. Your business finally runs the way you always hoped it would. That's the promise behind EOS, the Entrepreneurial Operating System popularized by Gino Wickman's book Traction. Plenty of business owners swear by it. Plenty have spent tens of thousands of dollars hiring EOS implementers to help put it in place. But does it work?This week, we’re republishing one of our favorite conversations, one in which Shawn Busse, Paul Downs, and Laura Zander compare notes on their own experiences with EOS. Laura hired an implementer and spent years trying to make the system work. Paul took a more selective, do-it-yourself approach. Shawn has watched EOS play out inside numerous client companies. What emerges is a much more nuanced picture than the one promised in the book. The three owners discuss when EOS can be genuinely valuable, when it's the wrong tool for the job, and why no operating system can compensate for having the wrong people in key roles. As Laura puts it, EOS can be incredibly helpful "for people like me 10 years ago, who just don't know what they're doing." The question is whether that's enough to justify the investment.

For years, Kim Robinson worked on the brand side, helping major companies connect with artists and creatives. Eventually, he decided he’d rather be working for the artists themselves. So he launched 3pts, a company that helps creatives handle the business side of their careers—everything from pricing and marketing to partnerships and strategy—so they can spend more time focused on the work they love.The first challenge, Kim says, is convincing artists that thinking about money and business doesn’t somehow compromise their creativity. The second is helping them understand that even the most gifted creatives still need a framework for pricing, positioning, and building sustainable careers. In our conversation, Kim explains why so many artists struggle with the entrepreneurial side of their work, what brands often misunderstand about creative talent, and why he eventually realized he had more in common with his clients than he expected.

This week, Sarah Segal, Jaci Russo, and Lena McGuire tackle a question many service business owners face: Which is the bigger risk—an employee who feels overburdened or a client who feels neglected? The discussion begins with Sarah explaining why she's had to reestablish boundaries with some clients who were texting and calling her employees after hours and bypassing the systems her agency has put in place. Sarah wants her team to be able to disconnect at the end of the day, and she wants clients communicating with the entire team assigned to their account—not developing overly close relationships with individual employees. In her view, protecting employees from burnout ultimately leads to better service for clients.Jaci approaches the challenge very differently. Her creative staff rarely communicate directly with clients. Instead, account managers serve as the sole point of contact, much like restaurant servers relaying orders between diners and the kitchen. The goal is to protect specialists from interruptions, keep them focused on their work, and ensure that client communication remains clear and consistent. The result is a lively conversation about competing priorities, client expectations, employee well-being, and the hidden risks that can emerge when clients become too dependent on individual employees. Plus: Have you ever had an employee leave and take clients with them?

Sean Joy is head of M&A at Chenmark, a Portland, Maine-based holding company that acquires a handful of small businesses each year. At first glance, Chenmark may sound like a traditional private equity firm, but it isn't. The company is family- and employee-owned, and when it buys a business, the goal isn't to improve it and sell it a few years later. The goal is to own it indefinitely.In our conversation, Sean explains what Chenmark looks for in an acquisition, how it finds businesses to buy, what it's willing to pay, and how it approaches management after a deal closes. For owners thinking about succession, Chenmark offers a different path—one that sits somewhere between selling to private equity, selling to employees, or passing the business on to the next generation.

This week, we explore some contrasting opinions about artificial intelligence. Paul Downs has serious doubts that AI will ever have a significant impact on his business. Paul, who builds custom conference tables, says his business depends on something AI still lacks: real world experience. While AI can generate impressive images and concepts, he argues that it has no understanding of manufacturing constraints, material properties, production processes, or the capabilities of the people and machines that have to bring an idea to life. “An image of a thing that looks cool is not a design,” Paul says. “A design is a set of information that's informed by intelligence and experience.”Ted Wolf, who helps companies implement AI, agrees that AI can't replace the collective creativity and judgment of skilled people. But he believes Paul may be looking at the problem too broadly. Instead of asking whether AI can design and build custom furniture, Ted suggests breaking the workflow into smaller pieces and experimenting with targeted applications. “You know your business better than anybody else,” Ted tells Paul. “But don't look at the big picture and think that's the entire thing. There are many small pieces that people can start doing today.”The result is a thoughtful debate about one of the biggest questions facing small business owners: Is AI going to change everything, or are there businesses where human expertise will remain irreplaceable?Plus: Channon Kennedy shares what she learned from participating in a Goldman Sachs program for Black women entrepreneurs. And the owners discuss what debt can—and cannot—do for a business: “Funding does not fix a broken business model. It makes it die faster.”

When Bryan Clayton graduated from college, he discovered he had two options: take an entry-level job and a pay cut—or go back to mowing lawns, which was already making him more money. He chose the lawns. Over time, he built a commercial landscaping business that grew to $10 million in annual revenue before eventually selling it. But even while running that business, Clayton had been thinking about another problem: why was it still so hard for homeowners to hire a reliable lawn service?Despite having no background in technology, Clayton bootstrapped a platform called GreenPal, which connects homeowners with lawn-care specialists—essentially an Uber for landscapers. Today, still entirely self-funded by Clayton and his partners, GreenPal serves more than 300,000 users nationwide. In our conversation, Clayton talks about the operational mistakes that trip up many small businesses, how GreenPal uses both incentives and penalties to improve landscaper performance, and how the company is using AI to identify contractors whose businesses may be headed for trouble.

Twenty years ago, Bo Burlingham gave a name to a feeling a lot of business owners had struggled to articulate. In his book Small Giants, Bo profiled companies that had chosen not to chase growth at all costs. Most were bootstrapped, owner-operated businesses that cared less about getting big than about building something enduring, meaningful, and excellent. They weren’t anti-growth. They just wanted growth to be intentional. And for many owners who read the book, the reaction was immediate: “I thought I was the only one who felt this way.” Out of that recognition grew a community—and eventually an organization—led in large part by Paul Spiegelman, whose own company embodied the Small Giants philosophy. With Bo’s encouragement, Paul launched the Small Giants organization 15 years ago to connect owners trying to build great companies without sacrificing culture, independence, or quality of life.At our recent 21 Hats Live gathering in Cincinnati, we explored where that movement goes next in a Brainstorm session with Jean Moncrieff, who took over leadership of the Small Giants organization last year. Jean—who’s from South Africa, lives in Zurich, but is moving to the U.S.—brings both momentum and candor to the role. He recently led his first Small Giants Summit in Detroit, which attendees—including me—praised for its renewed energy and sense of purpose. He’s also the author of a terrific new book, Finding Freedom: The Business Owner’s Guide to Building a Valuable Company and a Meaningful Life. But as you’ll hear, Jean recognizes there are challenges ahead.What exactly is Small Giants today? Who is it for? What makes it different from the many other organizations competing for the attention of business owners? Does it need a more formal set of principles—or even an operating system—to help companies put its philosophy into practice? Can it stay true to its founding mission while also attracting businesses large enough to support its events and programs? Ultimately, the conversation arrives at a tension at the heart of the enterprise: Can the Small Giants organization itself become a sustainable, profitable business without losing the values it was created to protect? In other words, can Small Giants become a true small giant?Show Notes:The organizations discussed in this episode include: The Great Game of Business, the Tugboat Institute, and EOS Worldwide.The books discussed in this episode include: Finding Freedom by Jean Moncrieff, Small Giants by Bo Burlingham, Another Way by Dave Whorton with Bo Burlingham, The Great Game of Business by Jack Stack and Bo Burlingham, The Power of Mattering by Zach Mercurio, and Profit First by Mike Michalowicz.The businesses discussed in this episode include: Smiley Technologies, ITR Economics, Zingerman’s Community of Businesses, Text-Em-All, Tasty Catering, Venturity, ImageOne, and Atomic Object. 

When Eugene Khayman first got involved with Million Dollar Sellers, it was essentially a support group for entrepreneurs building businesses on Amazon. Back then, the opportunity seemed almost limitless. Today, ecommerce feels a lot more complicated. Competition is tougher. Customer acquisition is more expensive. And sellers have many options beyond Amazon. At the same time, Khayman believes Amazon itself has changed—and not for the better. In a recent post on X, he argued that Amazon’s growing fees are “destroying the marketplace it created.” He’s now leading a campaign called Save Our Sellers, aimed at pushing back on policies that many third-party sellers believe are squeezing the businesses that helped make Amazon dominant in the first place.In this conversation, Khayman explains what sophisticated ecommerce operators understand that many traditional small businesses still don’t, how AI is beginning to reshape online selling, and why building a business on someone else’s platform can feel both irresistible and dangerous. We also talk about the tradeoffs between selling through your own website versus chasing visibility on giant platforms—and whether Amazon is still worth it.

Michelle Wyatt has replayed the events in her mind countless times, looking for warning signs she might have missed. But even now, she can’t find any. Both employees had passed background checks and drug tests. Both were considered trusted, valued members of the team. And yet, within a span of months, two violent incidents involving employees left Michelle and her company reeling. In this week’s conversation, Michelle joins Jay Goltz, who has dealt with employee violence in his own business, and special guest Sandy Kapell, who’s made a career leading human resources, to wrestle with a question that haunts a lot of business owners: How much responsibility can you reasonably bear for the actions of your employees?The discussion goes beyond hiring practices and background checks. Michelle talks candidly about the grief her team experienced, the guilt of wondering whether she should have seen something sooner, the relief that the violence didn’t occur aboard her riverboat cruise ship, and the unsettling realization that no amount of experience truly prepares you for something like this. “Please stop torturing yourself,” Jay tells Michelle. “From what you've said, there's just nothing you could have done about this. It's part of business, unfortunately.”

Hannah Sandmeyer spent years acquiring ecommerce businesses for an Amazon aggregator, giving her a front-row seat to how deals get done—and what often gets lost in the process. Too many owners, she came to believe, are forced to choose between shutting down their businesses or selling to buyers whose priorities may have little to do with preserving the company, the culture, or the people who built it. So she decided to build an alternative. Hannah is now founder and CEO of Steward Market, which she describes as “the first marketplace for ethical exits.”In this week’s Dashboard, she explains what makes an exit “ethical,” why some owners are actively looking for alternatives to private equity, and how Steward Market hopes to connect values-driven sellers with buyers who want to continue what those owners have built—not simply maximize short-term returns. She also explains why the company chose a business model that doesn’t rely on taking commissions from deals.

When Kate Morgan started thinking seriously about selling her business, she assumed the big payoff would come at closing. But as she tells David C. Barnett and Paul Downs this week, she’s come to understand that the smarter move might be not selling—at least not yet. Why? Because if the business keeps performing and she can gradually remove herself from the day-to-day operations, she may ultimately make more money by continuing to own it. That’s partly because, as David explains, small businesses often sell for lower multiples than owners expect. Which means the real value may not be in a clean exit, but in continuing to collect profits while slowly transitioning ownership to key employees. “So you'll be selling the business,” says David, “and you'll be collecting dividends or distributions on top of that. This is one of the most lucrative exits there can be.”Of course, delaying a sale comes with its own risks. Markets change. Businesses cool off. Buyers get nervous. “You have to make the decision and make the sale happen while you've got a full head of steam,” David warns. Wait too long, and the numbers can start sliding in ways that dramatically reduce what buyers are willing to pay.Plus: A Reddit post raises a brutal management challenge: What’s the best way to lay off a relative? “It really can't affect your decision,” says Paul. “Because if it needs to be done, it needs to be done.” That doesn’t make it easier. It just means you may have to live with both the business consequences and the family consequences at the same time.

Most business owners know they need marketing. What many don’t know is what they should be paying for it—or what they should expect in return. So when an SEO agency proposes a $3,500-a-month plan, how do you assess whether it’s a smart investment or an expensive gamble? Do you know how many new customers it would take to make that spend worthwhile? Do you even have the data to answer that question? This week, Shawn Busse says too many owners are making those decisions in the dark. He offers a practical framework to help you do the math to evaluate marketing proposals, set realistic expectations, and decide what’s worth spending—and what isn’t.

Every business owner looks forward to that big break—the moment that you land a big client or a major retailer, or do something that puts you on a national stage. But those opportunities don’t just reward you. They can also expose you—especially if you have to take on debt or ramp up production or do things you haven’t done before. Four years ago, when Liz Picarazzi won a high-profile installation for her trash enclosures in Times Square, it was exactly that kind of opportunity. Her enclosures were put to the test in as public and as challenging an environment as she could imagine. And, by any reasonable measure, they failed. In pursuing that opportunity, Liz took a risk that led to what she calls the worst day of her professional life. It also turned out to be, as she tells Lena McGuire, the best thing that could have happened to her business. That moment forced changes she might never have made otherwise, pushing her to innovate faster and sending her business on a very different trajectory.Meanwhile, Lena is dealing with a quieter version of the same problem: what it really takes to move your business forward. She knows her systems need an upgrade. She’s bought the software. But like a lot of owners, she’s stuck in the messy middle—paying for the future while still trapped in the past, with no time to bridge the gap. How do you choose between tasks that generate revenue immediately and those that will improve operations over time?

For years, the Wine School of Philadelphia and PhillyWine LLC coexisted in the genteel world of wine education. Then a trademark dispute turned that quiet coexistence into a legal battle—complete with accusations, lawsuits, and mounting costs.This week, Keith Wallace, founder of the Wine School of Philadelphia, joins me to talk about what happens when a business owner who’s tried to avoid litigation at all costs suddenly finds himself in the thick of it. He shares what the fight has actually required—financially, emotionally, and strategically—and what he wishes he had done differently before things escalated. Because one of the hardest lessons for any owner is this: you don’t have to want a legal fight to end up in one.

For Lena McGuire, scope creep really can show up around every corner. She’s in the home remodeling business. But for most owners, including Jaci Russo and Ted Wolf, projects that expand out of control can be less visible but just as hard to contain. It’s baked into the job, because every assignment comes with a built-in tradeoff: Protect your margins or protect the relationship. And especially in the early days of a business, when reputation feels like everything, that’s not much of a choice. “I was afraid to have tough conversations with people,” Ted says. “I just wanted everybody to like us.”Over time, systems help and boundaries get clearer. But the pressure never fully disappears. There’s always one more request, one more detail to tweak—especially when you’re thinking about the reviews and testimonials. “You want to get those nice photos at the end,” says remodeler Lena. “You want to get a referral.” This week, Lena, Jaci, and Ted talk about how their thinking on scope creep has evolved—and why it never stops being an issue.Plus: On the small business subreddit, an owner recently posted that he finds chasing accounts receivable so distasteful—it feels like begging—that he often puts it off and hopes for the best. “Is this just me?” he wants to know. “Or is this a common thing for small business owners?” We discuss. And Jaci explains why, even if she could get it, she wouldn’t even consider accepting a $500 million account promoting a big deal consumer brand.