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Episode 141: How Much Profit Should Your Business Make?
How Much Profit Should Your Business Make?

This week, Shawn Busse, Paul Downs, and Jay Goltz go right to the bottom line. Shawn points out how easy it is for businesses to fool themselves into thinking they’re more profitable than they really are. Paul talks about how margins can vary from year to year, especially if an owner decides to invest in improving the business—as Paul’s doing right now. Jay says he’s long sought a 10-percent profit margin, but so far, he hasn’t managed to get there. Plus: Shawn explains how he solved his accounts receivable problem. And have you looked at the 401(k) accounts of your employees lately? If not, there’s a good chance you’re going to find that they’re not saving a whole lot. Is that just the employee’s problem, or is it also the owner’s problem?

Why Isn’t This Product Selling?

This week, Shawn Busse, Liz Picarazzi, and Sarah Segal talk about how long to keep trying when a product isn’t selling the way you expected. For Liz, the problem product is her package locker, which is designed to defeat porch pirates but hasn’t really taken off—especially considering how widespread the concern is. Could the glitter-bomb guy be the answer to Liz’s marketing challenge? Or is it time for her to back off? Plus: In the age of Zoom and remote workers, what have the owners figured out about running effective meetings? And if you're pricing a range of services in a proposal, do you price your offering a la carte? Do you always charge the same prices? And is there a way to ease a client into a monthly retainer?

Bonus Episode: A New Way to Sell Your Business

This week, in a special bonus episode, Michael Brown, co-founder of an innovative company called Teamshares, explains how he and his co-founders are bringing a fresh approach to a big challenge. Teamshares is buying the businesses of Boomer owners who are ready to retire but, in many cases, struggling to sell. Once the business is bought, Teamshares is turning the employees of those businesses into employee-owners, which is intended to strengthen the businesses while also addressing income inequality. So far, starting in 2020 and flying largely under the radar, Teamshares has already bought more than 60 businesses in more than 40 industries, most ranging between $1 million and $5 million in revenue. Along the way they’re learning some intriguing lessons about what it takes to build a business.

I’ve Always Been Afraid to Raise Prices

This week, Jay Goltz, Dana White, and Laura Zander have a wide-ranging conversation that starts with the challenge of pricing. Do you set prices based on what you think the market will bear? Or do you set prices based on your own rising costs and what you need to charge to make a profit? And how much profit should a business expect to make? Along the way, the owners also discuss why Laura wants to keep buying businesses (don’t tell her husband, Doug), what Dana needs to do to get her new salon open at Fort Bragg, and why both Dana and Laura are going all-in on influencer marketing. Jay, on the other hand, isn’t entirely convinced that social media marketing works for his picture-framing business. Plus: Should a business owner know every employee’s name? What if you have 130 employees?

How’s Your Compensation Plan Holding Up?

This week, Shawn Busse, Liz Picarazzi, and William Vanderbloemen discuss what it’s been like trying to make sense of employee compensation in a time of COVID, the Great Resignation, inflation, and a looming recession. Shawn’s business model is evolving, and he’s trying to adjust his mix of employees to fit the new model with as little disruption as possible. Liz is expecting a year of big growth and is assessing how that will affect her staffing needs—especially as she introduces new benefits, including health care. And William is trying to create a more sustainable compensation structure while also breaking his employees’ expectation that they will always get a year-end bonus. Plus a listener asks: What tasks are the owners still doing, even though they know it’s not worthy of their time? (Aside from participating in this podcast, of course.)

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The Hard-Nosed Business Case for Employee Ownership

This week, Jay Goltz explains how he got interested in selling a percentage of his business to his employees and why he quickly lost interest once he started reading books, attending seminars, and talking to accountants and lawyers who specialize in employee stock ownership plans. To Jay’s ear, they all made ESOPs sound expensive, complicated, and risky. This was not something he needed to do. So why go to the trouble? Why take the risk? But he kept asking questions, and over time, he sensed that many of the problems he was being warned about didn’t have to be problems. As of now, he’s pretty much concluded that an ESOP could help him secure retirement for his employees while generating more profit for his business. In fact, he says, “I'm confident I can make more owning 70 percent of the company than I am now owning 100 percent.” But he still has a few lingering questions, which is why we invited Corey Rosen to join the conversation. Corey helped draft the legislation that created ESOPs, he's the founder of the National Center for Employee Ownership, and he literally wrote the book on how the plans work. All of which led to an inevitable question for both Jay and Corey: If ESOPs are so great, why are there so few of them?

Jay Goltz’s 12-Step Business Check-Up

This week, Shawn Busse, Jay Goltz, and Sarah Segal talk about what they hope to accomplish in 2023. Sarah’s moving into new offices, aiming for 20-percent growth, and hoping to land a chocolate company as a client. Shawn’s looking for new space, too, and attempting to reposition his business to shake the corrosive effects of the pandemic. And Jay’s employing a methodical 12-step process to assess how his business is performing: Hiring? Check. Pricing? Needs work. Inventory levels? Way out of line. Office technology? Major problems. And then there are his ongoing efforts to mentor his two sons in the business and prepare for the inevitable. These days, Jay tells us, he’s especially careful when getting in front of buses. If you’ve been listening to this podcast, you know our business owners discuss their journeys with unusual candor. But in some episodes we go especially deep. This is one of those episodes.

I Want to Double Sales Again Next Year

This week, Shawn Busse, Paul Downs, and Liz Picarazzi talk about their plans and goals for 2023. Shawn, whose marketing efforts still haven’t recovered from the pandemic, is hoping to build on the success of a recent event. Paul, coming off his best year ever, is investing $150,000 in a marketing campaign, including a new website targeting a different set of customers. And Liz, too, is attempting to shift her customer base, in her case from residential to municipal work. More immediately, however, Liz, who does not relish dealing with legal issues, has to decide how to confront a copycat competitor.

Should We Tell the Employees?

This week, Shawn Busse, Jay Goltz, and Laura Zander talk about the buying and selling of businesses. Laura thinks her recent purchase of a small distribution business could change the trajectory of her whole company, helping her finesse the challenge of selling wholesale products to her retail competitors. Jay, meanwhile, has been trying to help an aging business owner sell the kind of business that too often just fades away. Underlying both discussions is an intriguing question: While it’s common practice for owners trying to sell their business to keep the potential sale a secret, fearing employees might otherwise flee, is that really the best approach? Or is it actually a betrayal? Plus: We answer a listener's question about finding the right balance between being a kind boss and being a pushover. And we play a quick game of Who Said It: Elon Musk or Mr. Burns?

Are You a Good Negotiator?

This week, Paul Downs and Sarah Segal talk about their experiences negotiating, what they’ve learned and where they’ve struggled. One key factor, of course, is defining what constitutes a successful negotiation. As Paul points out, one definition is squeezing every last penny out of the other side. That is not Paul’s definition, especially when negotiating salary with a new employee. Sarah, meanwhile, discusses the tactics she uses to try to guide potential clients to the price and options she hopes they will accept. Plus: Sarah explains how she picked her new office space, and Paul explains why his experience with a Vistage peer group has been life-changing.

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