21 Hats Podcast

This week, in episode 192, special guest Jenelle Etzel, who majored in weaving, tells Shawn Busse, who majored in ceramics, why she believes attending art school and managing a punk rock band were perfect preparation for building a thriving real estate business. Her agency, Living Room Realty, has 130 brokers, roughly $5 million in revenue, and a market position that stands out among the big boys. While she once considered business a dirty word, she has embraced entrepreneurship and learned lots of important lessons, mostly through trial and error. For one, she figured out that there was a segment of the housing market—or the potential housing market—that more traditional brokers were ignoring. She also figured out, somewhat counterintuitively, that her real customers aren’t the people who buy and sell homes. Her real customers, she says, are her brokers, who happen to be independent contractors: “I can't tell anybody what to do,” Jenelle tells us. “So it's like being a politician, in a way. I've got a lot of responsibility with very little authority, and that's an interesting leadership challenge.”

This week, Shawn Busse talks about how much harder marketing keeps getting, especially for do-it-yourselfers. The cost of everything keeps going up, and the likely returns keep going down. As Shawn points out, it’s even getting expensive to advertise on podcasts. Wait! People pay to advertise on podcasts!!!!????

This week, in episode 191, Liz Picarazzi, Jaci Russo, and Laura Zander talk about what it’s been like building a business in partnership with a spouse, and they all agree on some important things. For one, they all say that, had their husband been just another employee, he probably would have been fired. All three say that in their relationships, they are the gas that drives the business, and their husband is the brake that sometimes keeps them out of trouble and sometimes frustrates their entrepreneurial instincts. And all three agree that some things are best left undiscussed. For example, says Jaci: “Michael doesn’t even know what we make. He also doesn't know what any of the employees make.” But the three CEOs also agree on this: In the final cost-benefit analysis, they wouldn’t want to build a business any other way.

This week, in episode 190, Jay Goltz tells Shawn Busse and Jaci Russo that, while he’s always been good with numbers, he’s never really enjoyed tracking his finances. It’s not what drove him to start a business, and over time, he stopped paying close attention. But now, after seeing his inventory levels and some big expenses get out of control, he’s diving back into the numbers and pretty much serving as his own chief financial officer, something he says he should have been doing all along. Plus: Shawn explains how one book and a specialized accounting firm and a monthly routine have gotten him comfortable with his numbers. And Jaci says it took years for her to learn to ignore the accountants who always gave her the same advice: Cut expenses. Instead, she tells us, “We've spent the past probably eight years really right-sizing what we charge. And now I feel like I can breathe.”

Gene addresses the big legal settlement in which Visa and MasterCard have agreed to cap the fees they charge merchants for five years. He explains both why many merchants are disappointed in the settlement and why he’s perfectly happy to pay those swipe fees when his big-ticket clients pay with a credit card. Plus: Gene discusses the new IRS tax rules you should know about and how the bankruptcy code has made Chapter 11 less of a defeat and more of a strategic tool for small businesses.

This week, in episode 189, Paul Downs, Jennifer Kerhin, and Liz Picarazzi discuss the challenges couples face when one spouse is building a business. Liz says it was important to let her husband know that she spent years working on a business plan before leaving her corporate job to start her first business. Paul explains why, when times have been tough, he hasn’t always shared the bad news with his wife. And Jennifer says too many couples planning for one spouse to start a business focus on best-case scenarios rather than the more likely worst-case scenarios. She also suggests some important questions for couples to ask themselves, including this one: “Will she still have faith in him if the business fails?” Plus: Businesses fail all the time, of course, and Paul explains why he thinks it’s usually for one of three reasons. And four years after the pandemic arrived, we take a look back: What was each owner’s toughest moment? What was their best decision? How have their business models changed?

Obviously, there’s no one-size-fits all answer to that question, but this week Shawn Busse offers up a slew of smart considerations and guidelines to help business owners come up with an answer that makes sense for them. A couple of Shawn’s points: If you haven’t done so already, spend the money getting to know your customers better. Plus: it’s important to understand why digital marketing works for some but not for others.

This week, in episode 188, we offer you a taste of the 21 Hats Live event we held in Fort Worth two weeks ago. It’s a different kind of event where there are no speakers, only participants. It’s pretty much a three-day, peer-group session for business owners, where we share challenges and insights and make connections. There were 25 of us, including most of our podcast regulars.For me, the highlight was an exercise that Chris Hutchinson of the Trebuchet Group facilitates. He calls it a “Fish Bowl” because the idea is to have an owner stand up and expose everything about a specific challenge that he or she is confronting. Fortunately, we had one owner who was gracious enough to agree to reveal all, to answer any question. And that owner was, well, it was me, actually. The truth is, this was a priceless opportunity for me to get some feedback from a focus group of smart entrepreneurs who were already familiar with 21 Hats.It even got a little emotional, mostly because a couple of the owners were kind enough to say that, had it not been for 21 Hats, their businesses might not have survived the pandemic. That was moving to hear, to say the least, but of course, that alone doesn’t mean 21 Hats has a sustainable business model. We recorded the whole thing, and if you have any thoughts after listening to it, please send them my way.Sound engineer: Blake Sessions, Content Capital.

This week, Gene Marks tells us it’s time to update your clunky old technology. There was a time when he understood why owners said they were sticking with the old stuff because it wasn’t broken and they didn’t want to endure the pain of transitioning it. But those days are over, says Gene. If you have any hope of selling your business or passing it on to the next generation, it’s time to act. Plus: Why Gene thinks most owners need to get out of their offices more. And why he opposes a ban of TikTok.

This week, in episode 187, Matt Hoying, president of Choice One Engineering, explains to Shawn Busse and Jay Goltz how he created a DIY employee-ownership plan for his firm. Some 10 years ago, Matt’s predecessor as president tasked him with selecting an ownership structure that would engage employees and help Choice One be as successful as possible. That sent Matt on a mission of discovery in which he researched the pluses and minuses of every structure he could find—including employee stock ownership plans—before ultimately creating his own structure. Matt’s plan doesn’t enjoy the tax advantages of an ESOP, but it’s open even to part-timers, and it requires employees who want to be owners to make a financial investment in the business. In other words, they aren’t given ownership; they have to buy into it. Shawn and Jay quiz Matt on the choices he made and how the plan has worked out.

This week, the founder and CEO of Small Business Majority talks about whether he heard what he wanted to hear in Joe Biden’s State of the Union address, what he makes of recent court rulings asserting that the Minority Business Development Agency must support owners of all races, and what he makes of the growing demand from businesses for more immigration.

This week, in episode 186, Shawn Busse and Laura Zander discuss what exactly Laura’s job should be. She’s CEO, of course, and she’s been focused on acquisitions and growing the business, but she’s never really found someone to take over the big role she used to play, which leads to these questions: Should she go back to being her own chief marketing officer? Or does she need to go out and spend real money to hire one? And then, toward the end of the conversation, Laura actually devises a plan on the spot to sell yarn in a surprising and creative way, which perhaps answers the very question we’d been discussing. Plus: Shawn explains how having the right partner can make or break a business as he celebrates having made his final payout to his own former partner.

This week, Gene Marks offers to boldly go where no business owner has gone before. Few of us need to be convinced that artificial intelligence will be transformational, but even fewer of us have the time, energy, and capability to keep checking on which AI apps and platforms are worth using right now. Which is why Gene Marks has given himself precisely that assignment. This week, Gene reports back on what he found when he explored OpenAI’s GPT store for business owners. Did he find lots of useful stuff? Actually, what he saw reminded him of the iPhone app store (circa 2007). Plus: Gene also explains why divorce can be especially nightmarish for business owners and what they can do to prepare for and ease the pain.

This week, in episode 185, Jay Goltz, Jaci Russo, and Sarah Segal talk about whether it’s finally time for Jay to enter the brave new world of task-management software. That’s, in fact, what his two kids in the business are encouraging him to do. As it happens, Jaci and Sarah have tried most of the project-management tools out there—Monday, Basecamp, Asana—and they kind of love them, but with one caveat: They can be a lot of work. Which is all Jay needed to hear. After that, we talk about the challenges of managing credit cards and points, and Jay explains why, after 40 years, American Express is no longer what’s in his wallet. Plus: the owners tackle a question posed by an entrepreneur with a very new startup: “When does the anxiety of a new business subside?” asks the newbie, which prompts some laughter and this answer: The anxiety subsides in the 42nd year, says Jay, who’s been running his business for 42 years.

All businesses have ups and downs. This week, Tracy Bech, CEO of Starboard Collectives and co-author of the “60 Minute CFO,” offers some guidance on when to ride out a slow period and when to take action. Plus, she also talks about how she’s building an AI tool to help with financial analysis and when it makes sense to hire a fractional CFO.

This week, in episode 184, Mel Gravely, Liz Picarazzi, and Jaci Russo talk about how they set prices. Jaci explains why she refuses to respond to requests for proposals. “We have not participated in a single RFP in 15 years,” she says, “and we won’t under my watch.” Mel explains how his construction company manages to get work despite always being among the highest-priced bidders (which is why he never gets government jobs). And Liz tells us what happened when she was forced to raise prices because of the tariffs placed on goods manufactured in China. But first, she tells us what she’s thinking now that there’s a possibility those tariffs could go to 60 percent. Plus: We review how the three owners handle employee reviews.

This week, Gene tells Loren Feldman about a little experiment he ran recently in which he boosted a post on X, formerly known as Twitter, that was designed to send people interested in his book on customer relations software to a landing page on his website. X reported that the post was a big success. But was it? Gene offers a slightly profane rebuttal. Plus: He also talks about three Jeff Bezos quotes that he believes can change how you run your business, and he explains how companies can commit wage theft without even realizing it.

This week, in episode 183, Paul Downs, Jay Goltz, and Sarah Segal talk about sexual harassment and where you draw the line with employees. Is it sexual harassment for one employee to ask another for a date? Is it sexual harassment to ask twice? Does it make sense to have a policy of zero tolerance? Or is it better to leave room for discretion and judgment? The conversation was sparked by a recent situation Jay experienced with an employee who had been with the company for almost three decades, having started at the age of 17. “It was a very sad thing,” Jay tells us.Plus: Sarah Segal asks whether it’s better to build her business on a bunch of small clients or a smaller number of large clients. And is being CEO a health risk? We begin the episode by talking about an eye-catching story the Wall Street Journal recently published noting that an increasing number of CEOs have been dying on the job, presumably because of the heightened levels of stress. I asked the three CEOs on the episode if they’ve been taking care of themselves—but they weren’t having it. Instead of thanking me for my concern, they chided me for highlighting an article they consider complete BS. Which, of course, is what we love about these guys. They call ‘em the way they see ‘em.

This week, Shawn Busse, who soon will be boarding an Alaska Airlines plane made by the Boeing Company to attend the 21 Hats Live event in Fort Worth, finds lessons for smaller businesses in Boeing’s struggles. For one thing, there’s always danger when combining the cultures of two different companies. Plus: Shawn, whose company, Kinesis, has been a certified B corp since 2016, talks about whether the certification is losing its luster.

This week, in episode 182, Shawn Busse, Jay Goltz, and Jennifer Kerhin respond to a somewhat depressing view of business ownership offered by an investor who buys businesses for a living. That view, essentially, is that for most owners, building a business is a daily knife fight of long hours, unexpected risks, slow growth, and meager returns. In this episode, I read most of the investor’s observations to Shawn, Jay, and Jennifer, and get their reactions, which hit upon a bunch of issues that are not widely understood—including how fast growth can destroy a business, how even a profitable company can go bust, and why a good metric to assess the health of a small business might be how many people have been crying in the bathroom this year. While Shawn, Jay, and Jennifer disagree vehemently with a few of the investor’s assertions—”Kiss my ass!” says Jay in response to one—they do acknowledge that he makes a lot of good points, which leads to an obvious question: Why would anyone do this? Why would anyone subject themselves to this kind of life? As you might expect, Shawn, Jennifer, and Jay have a response to that as well.