The Tariff Bill Arrives

[Music] Hello everyone. Welcome to the 21 Hats podcast. I'm your host, Lauren Feldman. This week, in a conversation recorded on March 27th, shortly before Liberation Day, the day Donald Trump announced his so-called reciprocal tariffs, Liz Picarazzi told Sha Busy and Jackie Russo what it was like to get her most recent tariff bill for a shipment of trash enclosures from China. I knew what it was going to be because I calculated it, she says. But to actually see it on paper was terrifying. And of course, it's only going to get worse. Now, in our conversation, we discuss a couple of points that bear emphasis. One, Liz tried everything she could think of to find a way to manufacture her products in the US. It hasn't been economically viable in the past, and it's unlikely to become viable anytime soon. and two, Liz wonders, if these tariffs really are intended to bring manufacturing back to the US, why isn't some of the tariff money being directed towards supporting that transition? Plus, it's been widely reported that only a tiny percentage of women business owners surpass a million dollars in annual revenue. As it happens, Jackie and Liz have both done it. But why is it so rare? Even in good times, owning and running a business can be a lonely pursuit. Our hope is that these weekly conversations will let owners know they are not alone in facing challenges. In fact, that's the whole idea behind the 21 Hats community, engaging with other owners to get the kinds of insights only another owner can offer. If you're interested in learning more, step one is to sign up for a free trial of the morning report, which highlights the most important news of the day for business owners, so you don't have to go looking for it. Step two is to get on our Slack channel where you can ask questions, get vendor recommendations, and tap the wisdom of a very impressive crowd. Just search for the 21 Hats Morning Report to sign up for a free trial. Joining me this week on the podcast are regulars Shaun Busy, CEO of Kinesis, which is based in Portland, Oregon, and works with small businesses on marketing, culture, and strategy. Jackie Russo, CEO of Brand Russo, a marketing agency based in Lafayette, Louisiana, and Liz Picarazzi, CEO of City Bin, which makes trash enclosures and package bins and is based in Brooklyn, New York. The episode is titled The Tariff Bill Arrives. Welcome Sean, Liz, and Jackie. It's great to have you here. Liz Picarazzi, one of these days we are going to talk to you about something other than tariffs, but I'm sorry to say that today is not that day. You recently posted a photo on the 21 Hats Slack channel that showed your tariff bill for a shipment of trash enclosures uh that you'd ordered from your manufacturer in China before you knew where the tariffs were going. Can you tell us about that? Sure. So, I dreaded that moment of getting my first tariff bill for actually over a year. Um, had really been dodging it. Um, the day I received it, you know, I knew what it was going to be because I had calculated it, but to actually see it on paper was um it it was terrifying. Honestly, there's no other word than that. It was a bill for two containers that should have been 11,000 and it was 61,000. From 11,000 to 61,000. $50,000 delta that had those two containers come in on January 19th, I would have paid $11,000 for that. How was the money taken from you? So, we have a customs broker um that brokers the transaction and u they have our AC and we wire them the money. That's it. I can't delay it. I can't get an extension like you do with income taxes. Um you just have to pay it, you know. So, my containers came in. They're in the warehouse. They're all stocked there. At least I have my stuff. But, you know, uh receiving containers used to be something that we really really looked forward to. It's sort of like you anticipate get it. But this whole round of receiving these containers from China felt very different. And the other reason is that if this tariff situation remains as it is with China, that may have been my last two containers um from a factory that I've done business with for 8 years because you'll have to move to Vietnam where you're set up. So yes, so we began the process in 2024 of moving production from China to Vietnam. by around November we had moved approximately 30% over and the plan was during 2025 to sort of gradually move over the rest. Um that was my assumption which was wrong of course that Harris was going to win. So what was going to be sort of a a slower process over 2025 just to really derisk or mitigate some of the risk became an absolute race to move everything like literally I had to quit China and move everything over to Vietnam. So, the Vietnam situation unfortunately is also not good for me. And I thought I had gotten an A on my China plus one strategy. like being in Vietnam in December and really making things move faster. I really patted myself on the back thinking we've really worked hard to move this over, not knowing that the whole world would be hit with a 25% tariff on imports of aluminum and steel, which hit me. So now I have uh I'm going to be having three more containers coming from Vietnam. The first one, which isn't the first one, I should say it's the third one, is coming next week, but it will be the first Vietnam container to be hit with the 25% tariff. And if that's not bad enough, the announcement on reciprocal tariffs is happening on April 2nd. And Vietnam has the third highest trade imbalance with the US behind Mexico and Canada. Oh no. So my Vietnam plan, I mean, I guess it wasn't very well thought through, but back then I wasn't thinking about reciprocal tariffs. I was thinking about Trump putting a 60% tariff on China. I just wasn't thinking about the whole world. So with China, with the bill that you got, uh, correct me if I'm wrong, but you had started the year with a 7.5% tariff and then there were two additional 25% uh, tariffs on top of that. Is that right? So we started at 7.5 and shortly after Trump took office, it was an additional 10, and then there was the 25% on aluminum and steel, and then there was another 10% added. And I don't remember what the reason for that was, but it ended up being 7.5 + 10 + 10 + 25 that which got me to 52.5. And what is it now in Vietnam? 25%. Okay. Uh but waiting and I should say we are recording this on March 27th. By the time this comes out, you could have found out what that reciprocal tariff will be uh in Vietnam. uh which would obviously be on top of the 25%. Yes. Lauren, how much uh inventory do you have? Um Liz, in terms of like what's your runway here before you have to start making hard decisions? So, because we had ordered five containers from both countries prior to things really going south, we actually are almost flushed with inventory. We got two containers last week, we're getting one next week, and then we're getting two more in April. So my warehouse, I love it when it's full. As long as we're selling, that is, you know, during the pandemic and I had a full warehouse and that didn't feel very good. But um some of that inventory, I would say 25% has already been sold. And so in our pricing trying to figure out how do we recover from the amount that we sold at the current price without the tariffs applied sort of recovering that in our pricing for the rest of the year because these huge tariff bills they have to be covered. You know I'm not just going to take it from savings like yes I am right now but we have to recover that throughout the rest of the year which is going to require price increases. Can you tell us what a 52.5% tariff does to your cost of goods sold? Do you know what the percentage is on a on a unit? So, I would say that we're losing between 10 and 12 points of margin. O yeah, it's a lot. That is crazy. Now, you announced uh that you are going to raise prices. You sent uh an email out, I know, to your email list and you gave people kind of a window of opportunity to purchase before you raise prices. Uh that seems smart to me. Was it effective? It was. Um we have gotten a good number of orders since sending that communication. We're going to send a couple more. I think we originally had the date as April 4th. We've extended it to April 7th just to give people a little bit more time. for us even in our systems and Shopify to adjust. The thing that's complicated is when we get like let's say it's a municipal order and it's a really big one and we're not going to get paid until like a few months after installation. That's the one where we need to look at is the volume discount too high. New York City parks we've given until May 31st, which I feel pretty uncomfortable about. However, we're playing the long game and we know we're going to have a good volume with that because we already do. Um, and I think we're just at the beginning of rolling out to to to public parks. So, that when it's a large order, knowing that you're going to be applying a current price to it is very worrisome. Do you actually lose money at that current price with the additional tariffs? Um, no, but pretty close. Yeah, it's interesting. I was talking to a client the other day and he was talking about the roll down effects of the tariffs on his business, which unfortunately now are rolling onto me. He helps build big manufacturing facilities. So, we're talking hundreds of millions of dollars in terms of investment size. and he was talking to a customer of his who is like,"Well, you know, this project I'm going to do will pencil out, you know, at this at this $280 million price, but it doesn't pencil out at $300 million." And like that's not a big difference, you know, at that scale as a percentage. And essentially, that's the difference between tariffs of different sizes. You know, it's like at a 10% tariff, the customer thinks he could probably absorb it, but at a 25% tariff, there's no way, no how, and then that uncertainty is is driving paralysis. And so, my customer would normally be just humming along with new projects and so forth, but things have just really slowed down for him into the future. So, he's got a backlog and he's working through just like you, you have a backlog of inventory, right? But then there's this like cliff up ahead that makes it really difficult to plan and make decisions and I just see a lot of that happening in spaces that are dramatically affected by tariffs. Liz, how have your customers responded? Are they understanding? Are they like, "Let me give you more money?" Um, no. Shocking. Yeah. But I will say that we definitely have a more affluent client. Um, particularly among the residential market. So, you know, someone could have a, you know, a Walmart or a Home Depot trash enclosure plastic, and there's a lot of people that do, but my customer is basically the opposite of that person. and they are looking for something that is really nice, that's going to be a longterm piece of furniture that they put in front of their house and one that adds rather than subtracts um value. So, most of my customers have that mindset. um as well as customers who have rat problems um and they're getting citations from the sanitation department for the rat issues, the health department as well. They're very motivated to get a trash enclosure that is reputable and is known to keep rats out. So, they're also less price um sensitive because the alternatives on the market rats can get into. Liz, this might be a really stupid question. Since you make your enclosures in China, have you ever looked into selling them in China? I'm I'm sure they have trash and rats there. Um, what what would keep you from doing that? Well, I don't mean this in a negative way, but I would say culture. Just to try to do business and to develop a business and sell into a culture that I am learning about, but don't fully understand. Um, every time I have sort of a big interaction with my factory, I'm really glad that I have an intermediary that can bridge the gap and it can go on everything from just etiquette to the style of negotiation. I think I'm a pretty good negotiator in the US, but I don't think I am over there. But I actually don't really try. That's why I have an agent who does that. So, if I had someone totally representing me to expand my brand into China, I would consider it. But I don't know enough about the residential market in China. Um, I've only been to like five cities and I guess to answer your question, the thought had never crossed my mind, but the immediate answer I would say is no. Um, and it has to do with me as a marketer wanting to know my market. And I know that I don't know that market as well as I would need to in order to be successful with my product there. That would be such a complicated, expensive, high-risk endeavor. I would never recommend doing that. Y like in a million years. I think Liz's concerns are like the topmost concern. Um, but there's also just just the issue of a very different ideology in China about intellectual property, an idea not really being sacred to a a company. You know, if if she proves that there's a market for this, they have all the manufacturing capability to basically copy it and make it for far less money and put her out of business overnight. I I just think it would be an insane idea. No disrespect, Lauren, but yeah. Let me ask you this, Liz. You've uh you've gotten uh some publicity of late. Has that been helpful? Um I'm sure you would prefer that the publicity talk about things other than the tariffs. Um but it does spread awareness. How do you think about that? So, I believe that small businesses need to have a louder voice in this debate. We are very affected by what's going on and there is a little bit of a feeling of should I really speak about this because maybe people are thinking okay well you outsourced this to China you know you laid your bed you know they don't have any compassion that I've been backed in or walled in in the situation and I feel like it's important for more businesses like me to explain how this impacts us and at the most basic level to illustrate that China does not pay our tariffs. If that point and nothing else gets across in any of the media I've gotten, I will have done my job because it is scary how many Americans think that these tariffs are hurting China and they're not hurting their fellow Americans. And I say I am an American in a way that I am proudly an American. I do not like some of what's going on here. But the American government should not be giving American businesses $61,000 tariff bills when 2 months previous it should have been 11,000. So I want to scream that out. I want people to hear that because it's deeper than what you're going to see in the news. And I take a risk by doing that. I probably take a risk by saying how I tried to escape China and went to Vietnam. I mean, who knows? Maybe in the state we're in now, people are looking out to, I don't know, single out people like me. But that paranoia I push to the side for the larger good of putting my small business voice out there. I mean, it's very courageous because the risk you bear is not only are you running the risk of upsetting people who are really pro Trump and his tariff policy. So, you've got that group who thinks it's going to be awesome for America and you're saying, "No, this is really hard for us. It's bad for small business." Then now you're running the risk of people who are like, "You should be making these things in America. What are you doing making? I admire what you're doing, Liz, because I think that very smart people do not realize how this system works. I I had no I had no idea for many many years until, you know, I had the unfortunate experience of having a client in the first Trump administration that was basically destroyed by the first round of tariffs. And those are deemed as relatively minor, you know, in comparison. baby tariffs. Those are baby tariffs. I've just been calling it a circular firing squad because it is true that tariffs are harmful to China. It's it's very harmful to them in the same way they're harmful to Canada and they're harmful to Mexico, but the other side of the story that people are not hearing enough of, I think, are the are the very real businesses that are being harmed. And that client I was talking about earlier that that is talking to his customers, these are very conservative businesses. I mean, deep red state businesses. And so I just think it's important for people to understand that. Sean, quick question. Do you think it's marketing because we call it a tariff instead of a tax? That's a good question. That's a really good question, Jackie. I I think a tariff sounds very technical and obscure and kind of bureaucratic whereas a tax we have an emotional reaction associated with it, right? Yeah. But it's just a tax, right? Yeah. It's a tax. Yeah. If you look up like in a dictionary or what what is a tariff, they will say a tariff is a tax. Yeah. It's like synonymous but a flavor of a tax that people associate more with, you know, global trade. Yeah. Yeah. That's a really good insight. Defines it as a tax on imports. It doesn't specify who actually pays it, right? Yeah. But in this case, it's our friend Liz who's paying apparently all the taxes. That's a big bill. Yeah. Yeah. Well, one other thing I can say about this, and I may have said it on the podcast before, is that I would feel just a little bit better if that $61,000 went to a local high school for some sort of trade education or went to some sort of New York state government entity that helps reshore companies like me. Wow. Wouldn't that be powerful if all of the manufacturers like me in New York were able to direct their tariff dollars towards something that would help this state with manufacturing and with trade education that would make me feel like wow I'm actually helping to not only reshore but to help people find jobs right and you know to actually hire people that are trained in those high schools. Like there's a high school right across the street from my office that has a little bit of trade education. And I always think, man, what if I gave them $50,000 right now? How powerful would that be instead of having it just being tossed into the treasury and no one knows where it will go and likely it will go towards tax cuts. Is there any conversation about where these dollars are going? Because I know in the first administration some dollars from tariffs were redirected back to farmers cuz they were dramatically impacted by the tariffs. But in your research and you know discovery, do you know what happens to this money? I've never been able to find it out and everyone I've asked says it just goes into the treasury period, right? It just goes into the general fund. I mean, if the if the idea uh behind these tariffs really is to drive more domestic manufacturing, why isn't some of the money going into, you know, really low interest loans to somebody who wants to open a factory or something like that? You'd think even from just a PR standpoint, that would have been a smart thing for the government to do, right? Or even the government being able to say, "We helped reshore 200 American companies this year." They could do that and they could take credit for it, but instead they're doing this and no one knows where the money is going. Liz, you haven't thought about this, I assume. So maybe you don't have an answer off the top of your head, but can you imagine is there something the government could do that would make it worth your while to actually open a plant, open a factory, and build your enclosures here? I would like the government to help someone else create a factory and then have like 10 of us in metal fabrication produce there. Like I wouldn't take the risk. My my competency is not manufacturing. It's product design and marketing. So I would love it if I mean I guess this is somewhat of a Chinese model or any sort of a socialist model where the government actually creates the assets the plants that then different enterprises can use together. I don't see that going anywhere. But that would be sort of a beautiful thing because then all of us manufacturing at that particular facility would know that we all reshort our companies to the US because the US helped us do it. There's nothing like that being discussed. And I I mean I'll pat myself on the back. Only an entrepreneur would think of that as an idea. It's true. No one in government is thinking about stuff like that. Well, yeah, because you actually care about small businesses. I mean, let's just be candid here, you know? I mean, the politicians of both stripes have paid a lot of lip service to small business over the years. But the truth is the where the money actually goes isn't there. And I mean there even, you know, talk of cutting the SBA and reducing its staff by 20%. And you know, if you truly are a believer in small business, um, we would have very different policies. You're just seeing this in action. You know, you're probably right. These are going to go to tax cuts to a very wealthy group of people and corporations. Um, so it's pretty frustrating. Let's talk about another frustrating topic. Jackie, I know you've been thinking a lot uh lately about why there are so few businesses owned by women who pass a million dollars a year in revenue. What got you thinking about that? Uh, you know, I just I came across the article um and I really thought that the statistic was skewed. you know, you can look at data from a lot of different perspectives and kind of make it fit your agenda or your worldview. And so I thought, well, surely the number 1.9% so less than 2% of womenowned, women led businesses ever get to a million dollars. Surely that's wrong. Obviously that must be a bunch of LLC's that aren't really businesses. is they're just, you know, some sort of line item somewhere someone created. Maybe it owns a rent house, you know, liability issues. And so I dug into it and kept pulling the thread and following it and lo and behold, it's pretty darn true and it's astonishing. And so then I thought, well, why? What are we doing? And there's been discussion about it. Sarah posted it on LinkedIn and some people have chimed in there. you know, we were in an an email thread with some people asking some questions about it, and I I've got some suspicions as to why I think it is, but I don't think that I am surprised by it, but I am shocked by it. Correct me if I'm wrong, but I think the statistic might be even more shocking than you just portrayed it. I think it's it's not 1.9% of all womenowned businesses, which would include a lot of very very small businesses. It's 1.9% of uh womenowned businesses with more than $100,000 in revenue. So, um it's a it's kind of an even more daunting statistic. Thanks, Lauren. Way to make it better. I just I want us to understand the magnitude of the issue. We're going to we're going to title this episode the downer episode. Sad and shatter. Um but no, you're right. According to the data, these entities have employees. These are not side hustle, you know, just a woman who's maybe selling cosmetics or jewelry or weight loss or something else. This isn't that. These are real companies that have gotten up to six figures but cannot get to seven. So, what are some of those ideas you've kicked around? What are your theories? Yeah. I mean, I I think it's a couple of things. I think that um and I'm going to do my best not to make this a a sexist, misogynistic, or generalization, but I don't know how to not hit all of those three things at some point just based on the topic. But I think I am a feminist. So I come to this from a place of love. Uh but I think that the women business owners that I know, so let me make it personal. For the majority of them, they significantly undercharge compared to the men that I know in the same industry, same geography, same general job. So, that's part of it. Um, the women that I know who have been in business for a while have spent so much time in a lot of cases raising kids, focusing on their families, taking time off to have the kids that they have not over the history of their careers put as much time into the workplace as their male counterparts. So, I think that's an impact. I think that women network differently than men. I think that women in a generalized don't come at me on LinkedIn. I think overall for the most part most women are not as aggressive, assertive, competitive as men. We are the caregivers and the caretakers for the majority. And you raised that issue because of the impact it has on sales or raising money or all the above. Needing to win. I think when you need to win, you are uh very competitively motivated towards reaching that next rung on the ladder, reaching that next sales goal. That competition kicks in and that's a driver. There's there's some testosterone at play on the man's side that maybe isn't as predominantly displayed on the women's side. I think sometimes we're a softer touch, we're nicer, we try to um help more. And these are our strengths, too. So, I hate listing them in a in a a area where we're talking about them almost as a weakness or as a barrier because I think these are our greatest strengths as a gender, but I think when it comes to this particular topic, it can be something that holds a lot of women back. I I will say with all of the ego this is going to sound like, I was also surprised by the statistic because we did that in our second year and so I thought, well, I didn't know that was hard. And I and I know it sounds like way worse than I mean it to. I didn't know because I also didn't know that women owning ad agencies was rare. I had no idea how small a percentage that was across the country because in my hometown it's 50%. So here in Lafayette, Louisiana where I grew up and I went to college and I interned at that agency half the agencies are owned founded and owned by women. I just thought that was normal. I thought this was like a chick industry. I had no idea that we were a minority until I, you know, became an adult and looked around and said, "Why are all of the women in this meeting? Why aren't there other women here?" Jackie, I'm sure a lot of other owners of agencies have asked you how you went to uh past a million dollars so quickly. What do you tell them? Well, Lauren, not many have asked. Um, if they had, cuz again, I'm I'm the only woman in these meetings sometimes, and none of us knew it was a big thing. I look around at the other womenowned agencies in this town and they all did some to eight and nine figures. So again, didn't know it was a rarity. Is Lafayette some kind of center of the marketing world? What what what am I missing here? What's going on there? Actually, it was for a while. Um there was a gentleman named Dutch Kepler who ran the advertising arts program at the University of Louisiana for like two decades. And at its height of his program and his successful graduates, most of the top art directors and creative directors at some of the biggest and best agencies in the country were all University of Louisiana graduates. And so the ones who either chose not to leave home or who came back to Lafayette came from a basis of this is what we do and this is how we do it and they were taught how to do things really well. I wasn't in that program. I'm not a graphic designer. Uh, but Michael was and all of the agency owners that I know came from that because they were all really strong designers and they came through Duchess program. It was very much like the freshman class had 50 and by senior year you were down to five. Was the gender distribution in in those classes fairly even or even maybe skewed female? It was. It was the majority female. Yeah. that mirrors something I've observed when um you know I joined the entrepreneurs organization accelerator program back in 20 2009 and it was for businesses over 250 but under a million and the goal of the program was to get you to a million dollars and when I joined and I looked around a lot of people that look like me a lot I mean it was probably you know skewed if I'm generous 6040 but probably more like 7030 maybe even 8020 money. And if I were to look at that group now, uh, that accelerator organization, I bet it's at least 50/50, if not more women to men, right? And so the parent organization, the the entrepreneurs organization for businesses over a million dollars in Portland also was very males skewed back then. And it's one of the reasons I left is I was just like, this is just a bro club. If you were to go back now, it's tremendous female representation, you know, some of the best in the country. And the reason that changed, you know, honestly, is that the chapter decided to change it, right? They just they said, "We need to recruit more women both at the at the million-dollar level, we need to recruit more women in the accelerator level." And so they they decided to change it and they changed it. Um, but I I think that idea of the university being the upstream funnel, you know, to success and how equitable that is directly informs what happens in the industry, right? At least that was my observation here in Portland. Yeah. I've got a few thoughts as a woman. So, I made the decision actually with Frank, my husband, that we wanted just one child. And it was very deliberate. It was that I knew I was an entrepreneur trapped in a corporate job and he knew that he was a musician trapped in a corporate job and we wanted to be entrepreneur and musician and realized that it would be easier if we only had one child and that you know we wouldn't have to pay for the child care and we wouldn't have to just everything is very expensive in New York City and it wasn't something that was a very popular decision with certain family members, but we really realized like as people, this is this is our lives. Like, are we going to have more children because it's expected of us if it means that we can't be an entrepreneur and a musician? And um I'm really glad with that choice. And I'm not usually very honest about it because I think people think it's sort of crude to say I only had one kid because I wanted to be an entrepreneur. But that was actually what it was for me. And I I actually don't I shouldn't feel ashamed of saying that. No, not at all. And I know you guys wouldn't say that, but you know, I'm in a world where there are a lot of men because I'm in waste, the waste management field. And you know, when I go to certain trade shows, they assume that I'm the booth girl. Um particularly if I'm dressed really nicely and even more so if I'm wearing heels. So, you know, we had a trade show recently where a fellow came by and I talked to him for a little while and he said, um, like basically, who are you? And I said, I'm the founder. And he said, did you inherit the business? Ouch. And I said, no. I said the word founder, meaning I'm the founder, not my father, not my grandfather. And um I was really bothered for several days after that because no one had ever assumed that I wouldn't have had my business unless I inherited it. Um and Frank was with me when that happened. And we also on that same trade show, it was just me and him working it. He introduced me as the founder to someone that was at the booth. And then he said, "Oh, and she's also my wife." And the guy said, "Yeah, you probably make the money and she spends it." Ow. Oh my god. Wait, what year was this? This was literally 3 weeks ago, Lauren. I could not believe it. And it was within like a 15minute span, the first and the second remark. And um I I don't normally feel like there's such a concentration of chauvinism, but I felt it that day and it made me realize like I don't know if people feel more comfortable seeing things like that. That's what was really what left me is like would a year ago someone have told me to my face that they assumed I inherited my business cuz I'm a woman is awful. It's awful. It is awful. So terrible. But on the other hand, I'm a very determined, competitive, as you would say, maybe have a little bit more testosterone in me. And when I hear things like that, it makes me more determined sort of a I will show you um an attitude. And also, you can go a little bit too far with that. But for me, it's a healthy way of saying I am not going to get knocked down by those belief systems. And maybe what happens in these statistics is women hear that too much and they think, you know what, this is uphill. I don't have peers in the space. Liz, how long did it take you to get to a million dollars in sales? I think here. It took me seven, actually, no less. It took me six years. And were you very conscious of that? Was that a big deal for you when you hit it? So, yes, it was. But on the day it happened, um it was during like pandemic and it was I think even during lockdown and I was home alone the day it happened. And I remember realizing wow I should be celebrating this. This is a huge deal and feeling really alone like wow I just hit this milestone. Like who do I tell? I didn't want to like announce it on Facebook. That would have been sort of obnoxious. But the other reason I was excited is when I worked at American Express, I worked in the marketing division that did a program called Make Mine a Million-Dollar Business. And we ran seminars around the country for small business owners to help get them to a million. And once they did, we had a huge celebration for them. And that was festive. And I remember back then thinking, if I ever have a business, I want to be celebrated like all of these like very inspiring women who um had hit the million-dollar mark and American Express recognized. I'll have a throw a party for you because I think it's a feat worth celebrating. It is. I'm just kind of curious here. You know, I I've met men who are not super aggressive and women who are aggressive and all these personality questions. I just want to set that aside. I think the child care issue and the cost of raising a kid is really germanine and I'm curious if our country were to provide insane level of benefit for children meaning they paid for all you know all the all your health care for kids was paid for all the daycare was paid for like functionally we agreed as a society we're going to raise great children and we're going to pay for that and not put the burden on Well, really women. Um, would do you think you would have had a second child or do you think how do you think that would change the ecosystem of entrepreneurship? So, I think I'm the the one with uh the one child here. Yeah, Jackie. Jackie, I think you may have three or four. I can't remember. You have no idea how expensive they were. I would have maybe done something differently. Yeah, that was a lot. Yeah, I think there would be much more balance in sort of the proportion to male and female businesses. The other dynamic that I think happens with women is that when you leave the workforce for a few years to raise a family, it's really hard to get back in um because there's going to be people that you're competing with who have fresher resumes and it's pretty intimidating. And I think that's part of why some women don't go back or then they decide that they want to switch careers cuz maybe they didn't like the one they were in prior to starting a family and they find then that's difficult to break into. So taking a a break from work for five or so years that is putting you at a disadvantage whether you're a man or a woman. Um it just so happens that more of the people taking that fiveyear break are women. Yeah. You know, the other thing I had hadn't really thought about this until just now. You know, I've had some amazing I've employed a disproportionate number of women over the years. And I would say that one of the things that I've observed is that when women choose to start to have kids, sometimes what they do is they opt out of the entrepreneurial and small business space and opt into the corporate and government space. And I I think part of that has to do with just how little support there is for them and how hard it is for a small business to support that. And if you think about kind of the downstream consequence of that, if you have somebody who's involved in a small business and they're, you know, really important to the organization and then they shift over to the corporate space because it's just more supportive of having children because it's bigger, you're kind of losing a talent uh funnel there, right? because now they're no longer part of that e that small business ecosystem. They're not building a network within that space. They're sort of becoming subsumed by the corporate world. I wonder if that's also part of this phenomenon because, you know, so many of us who are small business owners, we start our business because we work for a jerk. Correct. Right. Like myself included. you know, I worked for just like the most sexist, just terrible bullying type of boss ever. And I was like, well, I can do better than this, you know, and and I think the more people you have in that ecosystem that are women, the more people that are going to say, you know what, I can do better. I can do better than this. But if you have to go into corporate America because it's the only way to kind of make a family work, we're going to have a this this this skewed situation continue. Uh so it I just keep getting back to this idea of like we really need to support women and their uh desires to have a family, you know, as a country. Like you can't expect that burden to be borne by the by small businesses. Well, Sean, I I kind of want to jump in because your idea about government providing that health care. I'm not as fond of that um as the culture shifting so that it's a shared parent responsibility, not just a mom job. Huh. I don't know. I I mean, cultural change is pretty hard. Yeah, I hear you. Uh, I mean, I just I don't know. Liz, what do you think about that? Would you rather have piles of money to support you as a kid, you know, or would you rather try to change attitudes? I would like to have the piles of money. Yeah. Yeah. Ideally, you'd like both, of course. Yeah. Both would be great. Both would be great. You know, the cultural thing is is interesting to me and and not just as it applies to parenting. I I wonder if a bigger factor here is just kind of the cultural expectation of what people do for a living. There's been a cultural shift in what it means to be an entrepreneur, even as it affects men for many years. I mean, Jay Goul has talked often about how he got looked at funny when he decided to start a business after getting a college degree. Like, this was an outrageous thing to do. I wonder if it's just become more of a socially acceptable thing, more of an internally acceptable thing for women to start businesses these days than it was 10 or 20 years ago. And that it it might have been something that just didn't cross the mind of a lot of people who could have done it. Uh whereas these days maybe it will. What do you think? Yeah, I mean for sure. I mean, it's been become more culturally acceptable to be an entrepreneur in general. Um, you know, there's college programs now for it. It's it's celebrated in lots of ways. I think it's become more culturally acceptable for women to choose that than to, you know, be mothers and so forth. Well, it doesn't even have to be just that there was something wrong with being an entrepreneur. It's just if you're looking at the two paths, if your choice is whether to start a business or go into corporate America, going into corporate America probably seemed like an easier path or a more lucrative path back then. And in fact, correct me if I'm wrong, I think both Jackie and Liz chose that path initially. Yeah, I was all corporate all the way. It never occurred to me. I'm accidental entrepreneur for sure. Oh, I didn't know that, Jackie. Oh my gosh. No, I went to LA and got a big nice fat paycheck and big title and bought a house and was on corporate lane and um came home for family, went to work for a small ad agency run by a woman and uh competed against other local agencies almost all run by women and then um had a great boss there uh but got fired by her husband um and went to work in-house somewhere and that was where I ran into my boss challenges and left because I could do a be a freelance media buyer because I needed time for the kid that I was getting ready to have. And then freelance media buyer turned into I looked up three years later and I had 12 employees in 900 square feet and thought, "What have I done?" And bought a building and thought, "Oh my gosh, what have I done?" And now here we are 25 years later. And and so your journey there, you know, how many kids did you have at that time, that first three years or so? Oh, well, I had four kids in the first four years. Okay. So, just to give you the quick recap, Sean. Yeah. Oh, boy. First date in January, engaged in April, married in October of the same year. Mhm. Yeah. Then 10 months later, our honeymoon surprise arrived. So, we had our first kid. And then 17 months later, and then 15 months later. So, on our fifth anniversary, we had known each other for five and a half years, had been married for 5 years, and had four kids. Oh my gosh. I married a real good Catholic during that window of time. What was the cost of living like for you? You know, it's hard to tell, but I can tell you diapers were real expensive. I nursed, so we didn't really do a lot of formula, but uh What about housing? Well, I had this house in LA that I kept and uh then I bought a house here. Again, good job in LA. bought a house here and then when Michael and I um we were already married and pregnant when we bought the house that we still live in today. So we bought that house in 1999 and that's still the house we live in. Right. Okay. Okay. So cheap cheap housing. Yeah. Yeah. Cheap housing. So I think this is kind of getting to where you know one of the things I see is that I think the middle class has struggled so much because it used to be you could afford to have a family on one salary. Correct. And especially in urban centers, you know, New York with you, Liz, I mean, it's like extreme. But porcelain's now become extreme, too. You literally can't do it. You literally cannot raise a you can't even be a couple on one salary anymore. So, I think that's another force that you that we're witnessing here is the extreme cost of living, making some of these choices an impossibility. It's not even a matter of like, well, let's get the the dude to stay home and raise the kids. It's like, well, no, the dude's got to work, too. You know, they both have to work. Well, and also with with housing, to your point, if you want to buy a house and you need a mortgage, they're basically going to be expecting pay very two solid paychecks. Yeah. And you know, for us, we made sure we bought our house before I went out and became an entrepreneur because we knew that without that second paycheck, we wouldn't get a mortgage. Yeah, that's another force at work, you know, preventing entrepreneurship is, you know, you are treated so differently. Almost like a pariah. Uh if you're an entrepreneur, when you go looking for finance, they're like, "Are you an employee?" "No, you're selfmployed. Oh my gosh, you're a leper." I mean, yeah, you're just not acceptable. We'll give you a loan, but we're just going to take your house as collateral. Yeah. But, and the issue there isn't just getting housing. It's having collateral that you can use to get a loan to build your business, which is obviously a factor, right? They're not going to give you a loan to buy a house because you're self-employed. They're not going to give you a business loan without a house. How do you get the house? you know, like it's a really tough road to hoe, you know, and then layer on top, you know, child care, cost of child care, cost of housing. It makes a lot of sense. I mean, I I like your happy world view, uh, Jackie, of men actually bearing 50% of the burden, if not more, right? That doesn't seem like that's what's happening. And maybe it's not even possible, you know, in terms of cost of living. I still think on top of that, awareness is an issue. You know, I still know a lot of people who for whom it just would never occur to them that they could start a business. Um, and they probably shouldn't. You know, most businesses don't succeed. Yeah. It's very hard to do. Um, but the awareness is growing that it is an option for a certain number of people and I would like to think that that will help over time. Yeah, for sure. I mean really what what we've talked about here a little bit at least is you know Jackie talked about what made that successful in Lafayette was mentorship coaching a a a a space where people were supported in those early days of how how to run a business right an example to follow like you you see someone you think well I can do that yes an example to follow yeah so that's I think that's the one thing that is in our control in a lot of ways, you know, that we're we're not going to get government policy to shift overnight. We're not going to get ideology about who should raise children to change overnight. But I do believe we can do things like become better mentors. You know, we can join organizations like EO and then, you know, volunteer at the accelerator program. You know, we can go to SBDC's and and be guests, presenters. you know, I'm I'm just sort of citing things that I've done to try to help, you know, that younger generation. Um, I I think that is our most powerful tool to create more entrepreneurs is to just help show people the way cuz it's a really hard path and and very very difficult. Um, but I was only successful once people kind of gave me a bit of a playbook. Right. Absolutely. All right. On that note, my thanks to Sean Busy, Liz Picarazzi, and Jackie Russo. Thanks for sharing [Music] everybody. One thing before you go, everything we do at 21 Hats is created by entrepreneurs for entrepreneurs to help us all learn together. If you get something out of listening to these podcast episodes, consider joining the conversation. You can do that by joining the 21 Hats sounding board, a Slack channel where you can tap the wisdom of a very smart crowd or by becoming a founding member and joining our monthly Zoom forum where you can be part of conversations much like the ones we have on the podcast. You can sign up for both by subscribing to the Morning Report. If you have any questions, you can email me at lauren21hats.com. And if you get something out of this podcast or out of the morning report, please tell a friend, tell an enemy, tell every business owner you know. Your word of mouth owner to owner will always be the most effective way to build this community for all of us. Thank you. It means a lot. This episode was produced by another entrepreneur, Jess Stubberon, founder of Blank Word Productions. Thanks for listening, everyone. [Music]