What It Is
A traditional CMS manages your content and also builds the pages visitors see. A headless CMS does only the first job. It stores your text, images and data, then sends that content through an API (a structured way for software to exchange information) to whatever front end needs it, such as a custom-built website, a mobile app or a display screen. The "head" that has been removed is the presentation layer.
Why It Matters for Your Business
For most small businesses, headless is more than they need. It usually requires developers to build and maintain the front end separately, which raises cost and makes simple changes less do-it-yourself. It makes sense when the same content must appear in several places, for example a fitness studio whose class schedule feeds both its website and its own app.
Good to Know
If an agency recommends going headless, ask what problem it solves for you specifically, who will maintain the front end and what a simple change like adding a page will involve. A well-built traditional WordPress site is often faster to launch and easier to manage. Note that WordPress itself can also be used in a headless way if your needs grow.