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This week, we welcome Tanya Ferguson, founder of ClearBrook AI Solutions, who helps small-business owners identify and fix operational problems they may not even realize they have. Tanya works primarily with businesses that have fewer than 20 employees and less than $5 million in revenue. Many of their owners have spent years figuring out how to make their businesses work, but they're so caught up in the day-to-day that they haven't had time to figure out how to make them work better. And when they finally delegate responsibilities to employees, they may just be shifting the burden to someone else.Tanya's approach starts not with technology but with questions. She talks to owners and employees to find out how work really gets done, where time and money are being wasted, and which problems can be solved through better processes, automation, or AI. As she puts it, applying AI to a messy process just gives you a faster mess.Perhaps most interestingly, Tanya has developed a specialty in helping owners whose businesses are so dependent on them that they can be difficult to sell. She explains how she identifies those dependencies, how she helps buyers and sellers address them, and why fixing those problems might even persuade an exhausted owner that it's worth hanging on to the business after all. This episode is brought to you by Grasshopper Bank.

This week, David C. Barnett, Jennifer Kerhin, and Rob Levin compare notes on three very different approaches to growth. Dave, convinced that people are craving more personal connection in an increasingly digital world, is experimenting with an in-person conference. He's hoping the event will at least break even and, more importantly, help him attract consulting clients. Jennifer, meanwhile, is investing in leadership training to increase her company's capacity, but she's also wary of growing too quickly. A few years ago, her company grew 145 percent in a single year. “That almost killed all of us,” she says. And Rob has hired a consultant to develop a marketing strategy that he hopes will help him quintuple his business in just three years. “The market is ready for what we do,” he says. Along the way, the owners also discuss why charging more can make an event more attractive, what makes a business partnership work, why Jennifer is still reluctant to launch her next big idea, and where they turn for support when facing high-stakes decisions. “Well, I make my decisions with ChatGPT now,” says Dave. “Does that count?” The episode is brought to you by Grasshopper Bank. Show Notes: Here's more information about Dave's conference, SmallBizRIOT. Get a free trial of the 21 Hats Morning Report.

I don't know any traditional business owner who has devoted more time and energy to figuring out what AI can do for small businesses than Alan Pentz. He's built his own AI agents, experimented with the latest models, and even started a business to help other owners put the technology to work. But here's the thing: Even Alan is struggling to keep up with how quickly AI is evolving. And when I ask him what other business owners should be doing, he doesn't have a great answer.The problem, as Alan sees it, is that most owners don't have the time—or the inclination—to learn how to build sophisticated AI tools themselves. And there aren't many qualified firms available to build those tools for them. For a while, Alan thought he could help fill that gap by consulting with individual owners. But he soon realized that developing custom solutions for every business wasn't a model he could scale. Now he's pursuing a different strategy with his latest venture, Rustproof.aI. But what if the real solution is already taking shape?In this episode, Alan and I discuss the emerging generation of personal AI agents, including Muse, that can take actions on our behalf. They're still limited, but could we be approaching a time when business owners can simply tell an AI agent what they want to accomplish and let the agent figure out how to make it happen? This episode is brought to you by Grasshopper Bank.

This week, Jay Goltz, Lena McGuire, and Jaci Russo tackle three challenges that business owners face, starting with a question that can be especially painful: How do you know when it’s time to give up? The question is prompted by an article written by the founder of an online pillowcase business who has concluded that Big Tech, soaring advertising costs, and changes to privacy rules have made it all but impossible to build a profitable brand online. Jay, Lena, and Jaci agree that the obstacles are real, but they’re not convinced that they fully explain the entrepreneur’s failure to get traction. Nor are they sure she should throw in the towel. In fact, they think she may have a promising product and offer some suggestions, but, says Jay, “It doesn't sound like she's got the big tenacity gene that is necessary to be in business.” Next we turn to a Boston-area ice cream shop that got fed up with customers abusing its mostly teenage employees and posted a blistering Facebook message telling customers, in all caps, “STOP YELLING AT MY [FREAKIN’] EMPLOYEES”—except it didn’t say freakin’. The post went viral, winning more than 230,000 likes and widespread praise. But was it smart business? Jay, Lena, and Jaci are all in favor of standing up for employees, but they have serious doubts about this particular approach. Plus: Are family and medical leave programs a burden on small businesses—or a benefit that helps them compete for employees? And if our three owners could permanently take off one of the 21 hats business owners have to wear, which hat would it be? The episode is brought to you by Grasshopper Bank. Show notes: Here’s more information about Jaci’s Women’s Summit at Sea. Get a free trial of the 21 Hats Morning Report. If you like what you hear on the 21 Hats Podcast, please consider joining our Founding Member mastermind.

This week, we talk to Leisa Peterson, who has spent much of her career thinking about money, risk, and the ways our emotions can interfere with financial decisions. So when Peterson and her family decided to launch The Gear Project, a peer-to-peer marketplace for used outdoor equipment, you might have expected her to proceed with unusual discipline and caution. And she did—right up to the point where the numbers started telling her that maybe they shouldn’t launch at all.As Peterson built out her financial projections, she kept discovering costs she hadn’t anticipated. The margins got thinner. The transaction volume required to make the business work got higher. She was ready to walk away. Her husband, daughter, and son-in-law wanted to keep going. So they did. Now, just weeks after launching, Peterson is deep in the part of entrepreneurship no spreadsheet can fully anticipate: fixing shipping problems, refunding incorrectly collected sales taxes, changing developers, manually approving thousands of listings, and discovering which of the warnings she heard before launch were right—and which weren’t.Along the way, she’s also confronting something more personal: whether a lifetime spent protecting herself from financial risk may have kept her from taking some risks worth taking. This episode is brought to you by Grasshopper Bank.

This week, we welcome a new regular to the podcast team, Rob Levin, co-founder of WorkBetterNow. I first met Rob more than 20 years ago, when we were both experiencing the decline of print media. I was an editor at Inc. magazine, and Rob had started a regional publication for business owners called The New York Enterprise Report. “Starting a print publication in 2003 was not one of the smartest things I've done,” Rob says. But he learned from that experience. In 2018, Rob and a partner started WorkBetterNow, which helps American businesses hire Latin American talent. The business took off during the pandemic and has continued to grow rapidly. But in recent years, Rob began to see another disruption looming. If artificial intelligence can increasingly perform the kinds of tasks his company supplies people to do, what happens to WorkBetterNow? Rob tells Sarah Segal and Jaci Russo how seriously he took that question, what he decided his company needed to become, and how he’s trying to position WorkBetterNow for whatever comes next. We also talk about why referrals are no longer enough to sustain the company’s growth, what went wrong when Rob tried to build an outside sales force, and what he’s learned about managing remote workers. Plus, in another Beyond Small segment brought to you by Grasshopper Bank, Sarah, Jaci, and Rob compare how they manage the cash they keep on hand—and Jaci explains why she’s sleeping better since adopting Profit First earlier this year. Rob Levin’s book is called The New Talent Playbook. Get a free trial of the 21 Hats Morning Report. There is one seat left for the 21 Hats Succession Solutions Workshop.

Most business owners know the usual ways to finance a startup or acquisition: savings, investors, bank loans, SBA loans. But there’s another option that many owners have never considered—even though Jeremy Ames says his company, Guidant Financial, has helped arrange more than 35,000 of these transactions. It’s called ROBS financing—Rollovers for Business Startups—and it allows entrepreneurs to use money they’ve accumulated in retirement accounts to start or buy a business without taking a taxable distribution and, perhaps most notably, without taking out a loan. There’s no debt and no monthly loan payment. Instead, the owner’s retirement plan buys stock in the business.In this 21 Hats Dashboard, Ames explains how the structure works, why some owners use it to avoid debt while others combine it with SBA financing to buy a larger business, and what it costs to set up and maintain. He also addresses the tradeoffs: The money is no longer invested in stocks or mutual funds; it’s invested in your company, which means you’re betting some of your retirement savings on your ability to build a successful business.We discuss the questions owners should ask before making that bet, including how ROBS compares with conventional financing, what happens if the business fails, why the IRS has scrutinized these transactions, and why Ames believes anyone considering one should consult an independent adviser. The episode is brought to you by Grasshopper Bank.

This week, Paul Downs, Jaci Russo, and Sarah Segal revisit a question that came up on the podcast more than a year ago: Is artificial intelligence going to doom professional service firms like Jaci’s branding agency and Sarah’s PR firm? So far, both Jaci and Sarah are feeling pretty good about their prospects. In fact, they’re seeing changes in the market that suggest AI may be helping rather than undermining their businesses. Paul, meanwhile, has encountered a different kind of AI mystery. For years, his custom conference table business has depended heavily on people finding him through Google. Recently, he discovered that his organic search traffic has fallen about 35 percent. That sounds alarming—except that his business is doing great. Paul says his tables are selling like “hotcakes,” and he’s backlogged into February. So what exactly is happening when traffic falls but sales keep growing? Plus: In our latest Beyond Small segment, sponsored by Grasshopper Bank, Paul, Jaci, and Sarah talk about the financial processes they still insist on doing manually—even when technology could probably do more of the work for them. In each case, part of the reason is that doing the work themselves gives them a view into their operations that they don’t want to lose. As Sarah puts it, while she already knows how to handle public relations, “I am learning how to be a business owner every day.” Show Notes: Here’s the episode where Alan Pentz predicted that professional service agencies are doomed. Get a free trial of the 21 Hats Morning Report. There are three seats left for the 21 Hats Succession Solutions Workshop.

This week, Lou Mosca raises a question that business owners may not spend enough time thinking about before they sell the business: Once you’ve gotten the price you want, how much do you care what happens to the business? Lou, who owns the consulting firm American Management Services, has spent decades working with owner-operated businesses. More recently, he’s also been trying to work with private equity firms whose portfolio companies need help improving their performance. And that has given him an increasingly close look at what can happen when an owner sells to private equity.As Lou sees it, private equity can absolutely be the right exit for some owners. But he also thinks owners need to understand that getting a great price doesn’t necessarily mean they’ll be happy with what comes next. Lou shares some cautionary stories and offers practical advice for owners considering a PE offer—especially those who do care about what happens to their employees, their culture, and the business they built. The episode is brought to you by Grasshopper Bank.

This week, Jay Goltz and William Vanderbloemen tackle a problem that business owners may associate with big companies: What happens when an employee becomes convinced that his or her manager is making bad decisions, but going through normal channels just isn’t working? Jay says he absolutely wants employees to speak up, even if that means going over a manager’s head. William agrees that there are times when an employee has to escalate a problem. But as the conversation unfolds, both acknowledge something that can be easy for an owner to underestimate: Speaking up can feel extraordinarily risky to employees. And how is that information going to surface then? And in our latest Beyond Small segment, Jay and William discuss what, if anything, another bank could offer that would persuade them to move their business—and why both have grown wary of what happens when smaller banks get swallowed by bigger banks. Plus: How should owners think about the forecast of a prominent economics group that a severe downturn is likely to hit in 2030? And William talks about how his wife’s cancer diagnosis has changed the way he thinks about time, work, and succession. As one of his older golf partners put it, life is like a roll of toilet paper: “It goes really fast at the end.” Show Notes: Read more about ITR Economics’ Great Depression forecast for 2030. Get a free trial of the 21 Hats Morning Report. Learn more about the 21 Hats Succession Solutions Workshop.

For a lot of business owners, there comes a point when the obvious choices seem to be: keep running the business or sell it. But Tighe Burke says there’s a third option that owners often overlook: keep the business, hire someone else to run it, and let that person take it places you may not be equipped—or inclined—to take it yourself. Burke, who runs the executive recruiting firm Srch, specializes in finding operators for founder-led businesses. He says one of the hardest things for entrepreneurs to accept is that someone else may actually be better at running their company than they are.In our conversation, he explains how owners can tell when it’s time to step aside, what it costs to hire a professional operator, why owners have to be prepared to give that operator real authority, and what tends to happen when they don’t. He also explains why, for an owner contemplating an exit, hiring the right CEO can sometimes be a better financial move than selling—allowing the owner to keep collecting profits, grow the company's value, and perhaps sell it later for considerably more. The episode is brought to you by Grasshopper Bank.

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.