EntreLeadership - Can My Business Survive This Crazy Economy?

Episode Date: October 28, 2024

Today we’ll hear about:  A business owner trying to navigate a difficult economy   A son deciding who to sell his late father's business to  A new business owner celebrating her team and their success   A leader facing a logistical bottleneck for growth in a specialty sales role    Next Steps  📞 Have a question for the show? Call 844-944-1070 or send us a message: https://ter.li/ask-us  📚 Learn about the EntreLeadership System: https://ter.li/system-p  💻 Get EntreLeadership Elite for your business: https://ter.li/elite-p  ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/enl  🏢 Attend EntreLeadership Summit: https://ter.li/summit   🎤 Attend EntreLeadership Master Series: https://ter.li/masterseries     Offers From Today's Sponsors  NetSuite: https://netsuite.com/ramsey  BELAY: https://www.belaysolutions.com/entreleadership  Payority: https://www.payority.com/entreleadership  Trainual: https://trainual.com/entre  Found: https://found.com/entre    Listen to More From Ramsey Network  🎙️ The Ramsey Show    💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💰 George Kamel  💼 The Ken Coleman Show    Learn More About Your Ad Choices   Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host, with over 30 years of experience leading in the trenches, running and growing a business right alongside you just like you. If you've got a question and you want to talk small business, you want to talk leadership, you've got a question, we'll try to help you in this whole process. The phone number here is 844-944-1070, or you can fill out the form at entreleadership.com slash ask. Again, call 844-944-1070. Leave us a voicemail. We'll get back to you. We'll make you one of the callers here on this show. We'd love to have you.

To start this hour off is going to be Penny in Austin, Texas. Hi, Penny. How are you? Hi, Dave. I'm doing great. It's an honor to speak with you. You too. What's up? So my question, well, I'll start with my business. So my husband and I own a small branding agency that specializes in luxury hotels and multifamily.

We'll start our 15th year in November. We have 15 employees. Last year we did about 2 million in revenue. We're forecasted to be down about 1.75 this year. Down to 1.75 or down 1.75? To 1.75. Okay. So you're talking about a 10% crop.

Okay. I feel better. I was about to lay everybody off. Okay. All right. Exactly. So my question is about just weathering this economy. And, you know, right now I have basically no margin because employees now cost more,

but my client's budgets have an increase. So I'm kind of losing my margin. and how long do we kind of settle with weathering this economy before we start to make larger business moves to get the margin back in place? Well, I think what you have to ascertain is is what you're working with, something that snaps back,

or is this a permanent shift when you say, in quotes, this economy? So you're dealing with multifamily and boutique. hotels, correct? Yes, not just boutique. Some of them are larger brands as well. And you're helping them with their branding? Yes, so the brand strategy, how to get their ROI up, how to get a higher, you know, room costs, and then multifamily is basically apartments, so developing the strategy behind leasing apartments. And you've been doing this for how long? 15 years. Okay. So which of the

these two areas are down. Both of them? Multi-family is definitely down, I would say, larger than hotels. Multi-family is just right now, you know, they've had the increase in rents and people are not leasing like they once did. They're kind of combining households in a way. So we're seeing kind of the apartment developments really go down on their marketing budget. Okay.

What percentage of your client base, or of your revenue is an apartment? versus hotel? There's an ebb and flow to it right now. I would say it's probably 30%, but it can go up and completely reverse and be opposite on different years. Okay. So if the increase in rents

or driving people out of the multifamilies is your supposition, thus their rent bases down and because they increased rents and now their rent bases down, the rents, revenues are down, and so they're cutting their budget. So that is what you said, right? Correct. Okay. So if the real estate market starts booming again next spring,

which is far from that right now, does that correct this? It does. Why? Because the rents don't come down. Yeah, but their budgets come up. Why? And I do think, well, they'll do, what they'll do is they'll do promotional to fill their occupancy, and they'll bring their costs down, even though it doesn't look like it on a month-to-month basis. They'll do, you know, two months free with a new lease signing and that kind of stuff. So when they're... Why are they not doing that now?

They are. They are starting to do that now. Okay. So this is a temporary downturn? I hope so. Okay. All right. Well, Henry Cloud, my buddy, in his book, Necessary ending,

and I have to look at this with business units here, product lines, actual individual products and things like that is when you lose hope in something getting better is when you end it. That's what I'm asking these questions, okay? And I haven't lost hope in this getting better based on the description you gave to me. I'm not an expert, you are, but the way you described it to me, this probably heals itself in the next 12. months. Okay. Am I wrong?

Well, I've just been saying that for six to nine months. Yeah, me too. Yeah, I agree with you. Because, I mean, like, for instance, we've got the real estate, Ramsey trusted real estate agents, right? We've got two or three thousand. I'm around the nation. And we send them leads.

That business unit is down because the number of people going through to buy houses right now is down. Right. And so, and we keep going, well, you know, next quarter, this is probably going to turn. We've got an election year. maybe it's going to turn. Oh, we got to, you know, and then maybe spring it'll turn and win these interest rates and, you know,

we keep looking at it going, but I do know. I'm not going to end that business unit just because profits are down and revenues are down in that business unit over three years ago because I have not lost hope in it coming back. Because as soon as a real estate market comes back, Ramsey trusted is a huge, it booms like crazy, right? Correct. So I'm looking at it too through that lens.

but yeah, I've kind of missed my real estate predictions, like consecutively two years in a row. I thought, I didn't think this was going to run this long. I can't believe this economy is just screwed up. But it is. It's sitting in the doldrums, the real estate market anyway. But it's good if you're an individual out there. It's a good time to buy. If you're an individual out there, it's a great time to sell.

I got a property for sale right now, and it's going to go great. I mean, it's, but it's just, there's not 83 people looking. now there's eight, you know, that kind of thing. So what we're discussing here is when this is going to bounce back. And I don't think it's five years. I think it may not be five days. I think it's going to be five months or more, don't you? I would, I mean, I keep hearing everything about, you know, Q1, 2025.

We'll see it open up. And the way things run from our business cycle is all the budgeting is kind of done right now, especially for our hotels. And so we're seeing a little bit more traction than normal. Yeah, but let me tell you, if those hotels stack full and those apartments start renting like crazy because the market picks back up, you can go back to them and they're going to have an influx of cash that wasn't in their budget. Right.

And they can sign up mid-year. They don't have to have, they don't only have one time a year. They can sign up for your program. Right. If they're sitting on cash, you go, hey, guys, the sun is back. out let's make some hay i can show you how to do that make hey while the sun shines you know the saying right and so we're gonna you know you can reactivate that if you haven't run out of emotional steam to do it and yeah the thing those of us fight is we get weary as we wait on some of these things that are

outside of our control and don't let that weariness confuse you with um let's pretend instead that you were brand new And you said, I'm going to start a branding company in Austin, freaking Texas, which is on fire. And I'm going to do this, and I'm going to do that. Oh, that's great. And you have this excitement right now, in spite of the fact that there's kind of some black clouds over those two particular areas at the moment. But black clouds are followed by sunshine. I think you're hanging on. But you need to manage your attitude in the process.

I have to do that, too, by the way. I get mad. You know what I mean? It's like, dad, gum it. So, yeah, you've got to manage your attitude in the process of fighting through these things. It's like fighting through the pandemic or fighting through this doldrums of the market. Now, I will tell you this. The other thing that is bouncing around in my head since I got on the phone with you is,

if I'm you, I'm probably also using this to say, I need to be in some complementary businesses, meaning that are inverse of this, that are booming right now, and that might be down when this is booming. you have two product lines that ride the same axis. And so you're always going to ride the up axis and the down axis on this one thing because your product line isn't well diversified. So if I'm you, I'm trying to try to have some things that are, that are, you know, recession proof, whatever.

What are the types of branding you can do? Maybe it's individuals with Airbnb. What is it? What is it? I don't have any idea. but I mean, obviously you've got to do something to do with rooms. You're good at room, filling up rooms and pieces of real estate. So what can I get into that maybe banks need to move their real estate-owned portfolio off the books and down times?

And you can help them with the brand strategy on that. Banks have never been known to be good at brand anything or marketing anything except selling debt. So, yeah, you know, I don't know. If I'm you, I'm looking to use this ouchy moment as a reason to have some other product lines that utilize our same talents and skills that are a little bit off the same axis. That's the only thing I'm seeing. That's not a huge criticism. That's 10% of this phone call. 90% of this phone call is, I think you're okay.

Hang on. I'm okay. I'm hanging on. And I've got to watch my attitude in the process. That's 90% of this. That's how I'm going with this. Hey, you're a stud. Way to go, Penny.

proud of you. Two million dollar business, Austin, Texas, self-employed, 15 team members. You are living the dream. Remember that. This is the Entry Leadership podcast. Hey, do you feel like you're running on empty? Kind of like Penny? She's running out of fuel a little bit, wasn't she? I've been there. I've been there on certain elements of this business in the last 20 minutes. If you're leading a business, it's no wonder. Business is hard. It's not for cissies, okay? It doesn't mean you should let yourself get burned out. Join me in the thousands of small business leaders in Denver next spring to refuel your leadership tank with life-changing insight from all of our speakers.

Best-selling author of the world-famous book Good to Great. My friend Jim Collins is going to be with us, boys and girls. Wow. You know what the chances are you get to hear Jim Collins live? Almost zero. Jim does not come out of his cave often. And if he sees his shadow, he doesn't come out for six years. more years. I love Jim. He is definitely an academic and an introvert. He tells me personally all the time.

He does not like leaving his room. But we got him to come, and he's really good. He's brilliant. Argument expert Jefferson Fisher and leadership expert John Maxwell, the grandpa of leadership, my buddy John. World Heavyweight Champion George Foreman. I never met George yet. I'm looking forward to this. the CEO of Seco Designs, Liz Bo Hannan and Seth Dillon. Ah, Seth from the Babylon Bee. He has the trademark on sarcasm font. It's fabulous. I'm kidding.

By the end of the conference, you're going to be refreshed and equipped with new vision for your business. Mark your calendar. It's May 18 through 21 of 2025. Denver, baby. Get your tickets. Go to Entreleadership.com slash summit. Reserve your seats right now. They are almost gone, believe it or not.

And if you're listening on YouTube or a podcast, click the link in the show notes, and you can reserve your seats. Colby is with us in Louisiana. Hi, Colby, how are you? I'm doing well, Dave. Thank you for taking my call. My pleasure. How can we help?

So I am the interim manager for my dad's business after he's passed away recently. Oh, I'm sorry. What happened? Cancer. Thank you. How old was he? Almost 65. Wow.

What kind of business? Specialty electrical contracting. Were you already working there? I used to work for him years ago. I worked for him for a little over five years. But kind of part of my question, you know, we decided that wasn't best for us to stay there long term. But since he's passed, I've had to step in and try to handle the affairs to take care of what's going on. How long ago did he pass?

July this year, so really a few months ago. Oh, man, I'm so sorry. How old are you, Kobe? I am 35. Okay. All right, cool. Did you just quit your full-time job and jump over there? What are you doing? So I did take a little bit of time off about a month and a half, almost two months to, of course, take care of some of other things going on and to kind of step into the business to learn and kind of reacquaint myself. But I actually do have another full-time position, and I'm only managing the business part-time as now. Okay. How many team members in the business?

Not including myself or my mother. We have five. Your mom's down at the office. She's down at the office? She's actually not actively in the business. No, she's the current shareholder, but she's not actively working in the business. So she doesn't know any idea what's going on down there. You've had to go down there and figure it out. She does have some idea because, I mean, my dad was very vocal about what he did and I was very proud of what he did. But, yes, currently it's just me. And we have a really good office manager. That does great. Okay. I'm sorry. So again, how many team members? We have five, not including myself.

Okay, cool. And what's the revenue on this? Last year was about $1.4 million, and it can bounce around depending upon the projects that they've had. And the, any specialty electrical contracting? Yep. So there's kind of two sides. Home standby generators is a big part of the business. So the selling of new units and maintenance contracts for the ones that are in there in place.

And then he's also very established in, or was in the telecom industry. So cellular, tower, work. and a few special projects around that. Okay. But most of the 1.4 is the generators. It's actually almost half and half. Oh, is it? Probably 70-30, yeah.

Okay. Okay, I kind of got the picture. I kind of got the picture now, yeah. Thank you. Thank you for filling me in. What is your question, yeah? So one of my dad's request prior to his passing was asking you for my help to sell the business.

As you can imagine, to help take care of my mother in her future. And actually, this is what I do professionally. I work for a business broker as a consultant, but I don't necessarily specialize or have experience in contractors. I'll work in a different industry. And so I'm trying to get someone else's opinion on what I should do with the current scenarios that I'm looking at. I've got a key employee that has been with the business for 20 plus years. I think it's a good candidate in terms of a relationship with clients and knowing the business, but I'm not fully confident in their leadership skills or being able to manage the business in the day-to-day affairs. Or option number two is

working with another business broker or someone else to help me prepare and sell to an outside party. This is very emotional for me, as you can imagine. So I'm trying to get some other professional opinions on, you know, other people's thoughts on what I can maybe do. Yeah. So the net profits are what? Another kind of problem. My dad managed it okay, but from what I was able to figure out, he managed it well enough to pay his own salary and a little bit of discretionary earnings. So after you take out his salary and then probably,

a little bit of margin. There was maybe 150,000 in that profit. But his salary was more than you would pay a manager to manage it. It was right about what I'd pay a manager. Oh, okay. Okay. So you got 150,000. So you valued it at what, 600? 600 plus the assets, yes. What are the assets? The business owns the building and the property. Yeah, that's a separate part. That's a piece of real estate, yeah.

Yeah, so the real estate, and then there's the schedule of vehicles and trailers and equipment. Yeah, they would go with the 600. Probably. All right. Yeah, the real estate carved that off and go, we're going to sell the real estate. Just get a real estate agent. The business, I mean, if the business wants to stay as a tenant, that's fine. You may want the business to stay as a tenant and your mom keep the real estate. But I would keep those separate. What is the real estate? Is it specialty real estate? Is it weird? It's not, it's actually also distressed. It's not a great part of town. It's in a flood zone. So that's another consideration. So there, as some market, at value, but it's not also not very great. Yeah, but it's not, I would keep the real estate separate from the business, okay? Either if you want, it means evaluation-wise, all right? So we got a $600,000 business and we got a piece of real estate.

And you can either buy the real estate or not buy the real estate or we'll have an auction and sell it. Or if you want to, you know, lease it back from mom, she could take the lease payment on the real estate, whatever. I don't care. That's fine. But that's the first thing I would tell you to do. You got a good valuation on it.

I'm not questioning that. So when you say plus the assets, I would separate the assets, in other words. Not the cars and trucks. You've got to have those to run the business. They're part of the business, but the real estate's a separate transaction. Now, you're a business broker. You already know this. The best luck we've had with Entree leadership clients selling a business is horizontal or vertical,

meaning a customer or a supplier or a competitor. Horizontal is a competitor. A customer or a supplier is vertical. And so if there's a customer that's big in cell phone towers that would like to own this and could absorb it into their operation, they may be a player, maybe one of your current customers or a former customer. Suppliers, in what you're describing to me, I doubt it,

but there might be a local distributor of generators that would put this on the side and go, well, not only can we be a local distributor, but we're also going to do the install and the maintenance and take these contracts on. And so whoever you're buying the generators from might be a player, that kind of a thing. And then, of course, if there's a competitor, which is probably not a big line of those in this,

but even if they're in a different city, you're in Lafayette, Louisiana. And so if you go to Monroe or you go to Baton Rouge or something like that and go, is there somebody up there that's a competitor that would want to have a branch office in Lafayette, right? That kind of thing. You already know how to do all that as a business broker, right? Yeah, yeah, that's not really my concern. I think my main question is, because I have a key employee who I think is eager to have the conversation and we've had a few conversations to date just not in real silly terms

versus going external what's the key employee make a year right now uh they have a salary i want to say between 1670 and then there's usually over time he's currently a foreman okay all right and um so it sounds like um i'm reading into this so you correct me okay um it sounds like you don't think he has the chops i think he has some skills. He's good at what he does, but he's not well-rounded enough to run the whole operation. Correct. That's what I meant.

Yeah. Okay. Yeah. And even in the interim, I've actually brought in a consultant like myself that does no contracting businesses in this industry to kind of help me get my hands on things for a few months. And so it's possible they could stay on to help him through a transition or maybe learn some of those skills. Yeah. But, yeah, just signing papers and what does the, what's the consultant make?

He charges about between 2,000 and 3,000 a month. Okay. All right. Well, what you could propose is this. Like, you have to keep the consultant on, and you have to give us 100% of the profits until we get to, you keep 70,000 a year. Plus, you keep the consultant on as an expense. And after those two bills are paid, you give us all the profits, which was your dad's old salary plus 150, until we get to 600. And you would get that.

The 150 actually included my dad's salary. So it's about 100 plus 50 to 60. Oh, okay. All right. So it's going to take you four years to pay us out, and then you can get rid of the consultant. Or you can get rid of the consultant when you're able to take the turning wheels off,

whatever we want to do there. But at least for a year you've got to keep them on until you can get your operational guidance, and you have to agree to pay us 100% of profits above 70,000 and above the consultant until we get to 600. Well, I think that's one of my fears, and you could maybe talk me through the, this too, but I'm not sure I or my mother's willing to take the risk for four or five years for him to manage it, even with the consultant.

Okay. Then the only reason you would take that risk is if you don't have a better option. Right. If you have a buyer that's offering you $200 cash on the barrelhead, do you want to trade that for $600, you know, bird in the hand versus three in the nest? I don't know. You've got to decide that. And that's really looking at that guy and going, what's his probability of, you know,

success. Right. If he has a low probability of success, the more I talk to you, the more I think he does, you don't think he does. You don't think he's got a high probability of success, the way you've talked about two or three times now. So I'm starting to worry about him. But if you wanted to bet on him because the only other offers you've got are low

ball cash, then that's the way you could structure it. And that would bring him into the fold. The other problem is if you bring in a, well, it's nothing to affect you. Yeah, but you got to decide, okay, versus what we think we could get from him, can he run it? And, you know, you could put a trigger clause in there and go, if the profits drop below X, the business reverts back to us. Well, that's another, I guess, factor, too, is, again, the emotional part of it. But my father was very proud. He did very good things and made a good living for us, but also I think we're looking for a clean Blake in part of this process.

us. And so, you know, the sooner we could, as a family, move on. So you're ready to take 200 instead of 600 if it's on the barrelhead, right? If that's the only option, then that's possibly, it could be in it, yeah. Yeah, okay. Because you're probably, I don't know where you're going to find, you're now in the business brokerage business and you're already there, so you know what you're dealing with. I don't know what you can get. Yeah. But I'm confident we could get other extra offers, but, again, we're just trying to figure out, does it make sense to give the employee the consideration to

see if he'll, you know. sound like it. Doesn't sound like you believe in it. Right. He doesn't have the ability to go, we get 600 grand, does he? Um, that's, we haven't engaged with the bank yet or if he's thought about getting a partner or an investor, but we haven't had that conversation yet. If he scrapes together a good offer, cash, he certainly could do it. Sure. But, but what you're saying is, I don't want, I don't believe him in enough to finance this. Not seller finance, no, sir. Yeah, that's what I mean. Yeah. And so I, I think, How long you've been doing business brokerage?

Intentionally for about two years, but I've been similar space for close to 10. Yeah. Well, you check me if I'm wrong, but I think a banker might look at him the exact same way you're looking at him. That's the reason I'm trying to get other people to help talk. I mean, isn't that your experience in the business brokerage world? It is. The guy has to go in and sell himself to the banker as being competent to make the payments. Correct.

Yeah, it's not just about the numbers in the P&O. Yeah, I doubt he's got a 600,000. or $500 or $400,000 asset he can pledge either. Oh, well. Yeah. And if the real estate's not worth much, if you want to roll it in, give them a mortgage on the, let the bank take a loan on that real estate,

that might help him get the financing. Right. Since the real estate's kind of weird and flood plainy and low end of town and all that kind of junk. So, yeah, you've got a lot going on, dude. I'm sorry. I don't have a magic wand for you, but I think you're down to,

I think we have analyzed in this phone call that you don't want to carry seller financing with this guy. period. So now we're down to can he bring in an investor? I'll give him a shot, but we're also putting it on the market. First guy here with the money, when's the deal? And I'm not waiting around for two years while you run this thing and you lose your whole business brokerage career. And of course, the other thing you can do is just sell off the assets and try to find somebody by the client list. Sell off the inventory, collect the receivables, pay the payables, close it. And that's book valuing the business and you again as a business broker know you can do that that's your worst case scenario

i'm putting it on the market or i'll give him 30 days and after that i'm putting it on the market and say hey you need to go get an investor or a bank we can't sell her mom wants a clean break sorry sorry man and so if you can get a bank loan or you can get an investor or you can scrape the money together from your mama i don't care where you get it but you know his mama not yours and so um you know that just go and tell him you got 30 days to hook or crook put this together and if you I'm putting it on the market. And it's not that I hate you or something. I've just got to clean this up for mom.

And I'm trying to take care of her, dude. And, you know, I just have real clean, kind, clear conversations with him. Hey, good question. You're a good man for stepping in helping your mama. Way you go. Good, good job, Colville. Good job. This is the Entree Leadership podcast.

54% of the American economy as measured by the gross domestic product, the GDP, the total of all goods and services produced in the United States of America, 54% of it is produced by small business. People with 500 or fewer team members. Largely, mostly, almost totally, family-owned. These are families that get up every week, leave the cave, kill something, drag it home, and make payroll. Most Americans work for a small business. they don't work for Ford, they don't work for Amazon, name whatever big conglomerate you want to name, put all of them together, they don't equal small business.

Small business is the backbone, literally, mathematically, economically of the United States economy. And Congress continues to just piss on us with every possible way with their tax changes and tax laws. We love small business. Yeah. none of us that pay your taxes believe it because we watch how you do us how you treat us but in spite of that small business keeps on doing it the free enterprise system is one of the best measures of actual liberty actual freedom in america today if you want to become a success you can just decide you are open your computer or your garage door and go do something these are the kind of people i talk to every day

These are the kind of people that I love and the kind of people that listen to this podcast. Thank you. The other thing that happens to us is we get some people running their own businesses. Don't keep enough other warriors in their lives, and it gets a little lonely. You're the only guy out there fighting by yourself, it feels like. And I'm here to remind you you're not.

That's why I'm giving you these numbers. But also, there's nobody to really talk to when things are going good. Because if you brag to your broke relatives, they think that, you know, you're just, you know, you're just a bragger. And all you did is you just wanted somebody to be proud of the work you've done, proud of the fact you were successful. So we decided when we started this podcast, we're going to have some people on and brag. So if you run a small business, you want to call in here and brag, we want you to do it

because we're proud of you. We're one of you. And we like when people win. We like when people make money. We like when people take care of their employees and their team members. We like when they love their customers well, which is what small business does. So this is your place to brag. Whitney's going to do that in Dallas.

Hey, Whitney brag a little for me. Hi, Dave. I'm the president of an electrical contractor here in the Dallas-Fort Worth area. We purchased this business about a year ago. After listening to you 10 years ago, tell us we needed to get out of my husband's family business. So we finally did it and have a business of our own. This year we're on track for 1.2 million in revenue. Wow.

What was it last year? Well, last year, we, for the last three months, I think it was 300. Oh, you opened. And one year later, you're doing a million? Yep. Way to go! We are working hard. The business, it was a pre-existing business, but it came with 17 members.

and only one of them has traded out, replaced one. But they are fantastic. Dave, I've got to tell you, they are the best people. They are easy to train. They are responsive. They do. They love people. They love serving.

Sounds like they got a good leader to me. Well, I just inherited them, but they are fantastic. And I am, you know, trying to do our best not to screw them up. Way to go. Way to go. So cool. So cool. So two years ago, you decided to leave the family business and then you step into this one and a year later it's at a million two. Right. Wow. Good for you. What do you attribute that to? Well, like I said, we started listening to you decades ago and we came to the master series

event a decade ago with my brother-in-law. And we got our why straight and the way we want to treat people straight. And then we learned that we can use, I don't know much about electricity at all. That's my husband. He's the product, right? But my job is the people. And if you raise a team and treat them right and make sure. sure I have the best place to work, then I'm going to have a great team who serves our customers

well. Yeah. Yeah, it changes everything. That's called culture, right? And, yeah, you change the whole world when you change your culture. I'm proud of y'all. Way to go. Way to go.

So basically, you reached a point that you guys didn't have the same values as the brother-in-law. And Entree leadership kind of gave you that clarity. And you said, okay, we want to do it. it that way, and so we're going to have to go off on our own to be able to do it that way to do it that way to go. Terrifying move, but it's been fantastic. Yeah, I mean, John Johnson, the editor of Ebony Magazine used to say the entrepreneur is the only person can go from sheer terror to sheer exhilaration and back every 24 hours.

Right, several times. Like a freaking roller coaster. It makes Disney World look tame. Yeah, that's just today. Right. Since lunch, I think. But how fun! How fun!

It's fun. I mean, you're sitting there in Dallas, Texas. Life is good. Cashing a million dollars worth of checks. Yeah, baby. Yep. We took a vacation. We went away for a week.

Whoa, listen to that. She was still rolling, you know. Yeah, that's called delegation. Man, you're amazing. Well done, well done, well done. I am so proud of you. Thank you for calling to brag. Hey, listen, I got to tell you, she did a couple of things that were terrifying, three things that were terrifying.

One, stepping away from family. That can be, oh, that can be sticky. Then she opened a new business or bought into a new business that she'd never done, oh, that's sticky. Then she took over seven team members, and you don't know if they're don'ties or thoroughbreds. turns out she got six thoroughbreds out of seven that's pretty good stable pretty good only one donkey ejection not bad hit the eject button there he goes right that's he's gone then yeah that's how this works man way to go Whitney so proud of you very very very well done guys call up here and brag anytime the numbers 844-944 1070 I don't know by you but people like Whitney inspire

me, this is the Entree Leadership Podcast. I'm Dave Ramsey, your host. This is the Entree Leadership Podcast. If you like what you hear, you can help me. I would appreciate it a lot. If you'll do the old internet thing there and follow the show or subscribe to the show, you know that stuff, right? That internet stuff.

Yeah, click the subscribe button, the follow button. There might be a share button or you might like paste and copy the link and send it to somebody if you don't know how to do it either way whatever it is let people know we're here you're our only marketing plan so you're the only hope we got help us by following subscribing leaving a five-star review if you want to leave a one-star review you can that's just dumb don't take up your energy to do that go piss somebody else off I don't care so but I do need the help with the algorithm so leave a nice five-star review I'll smile and be nice and and and And, you know, be sure you share the show.

Thank you. Thank you for doing that. Mike's in Denver. Hey, Mike, how are you? I'm doing well, Dave. How are you? Better than I deserve. What's up?

So I am an engineer. I'm not a small business owner, but I wanted to let you know I've still gotten a ton of value out of listening to this podcast. So thank you for that. Thank you. I've been working with the same company for almost 15 years. I started with them right out of college, actually. and I am a consultant. So my role includes a combination of technical project execution,

business development and sales, quality control, leadership, mentoring, that sort of thing. So over the past, say, five or so years, I've been managing a service line. I kind of think of that as my own little small business. And we've been successful. We're definitely growing. This year, we're going to end up doing around three to three and a half million. I've got four other team members that I work with. So as we continue to grow,

I'm observing that we're kind of reaching the capacity of how much business I personally am capable of bringing in. I am right now pretty much the only one bringing in work to the group. So I am able to successfully delegate the project execution to my teammates, but I'm starting to struggle with delegating the business development responsibility.

to my team. If you doubled the amount of work coming in, can your team execute it? Yeah, to a point. Maybe not. So I said right now, I've got four other team members. We've kind of seen the writing on the wall and the growth, and my team is expanding. So, yeah, if we double the amount of work that comes in, yes. You'd have to staff up a little, maybe, but you could pull it off.

Yes, definitely. Okay. So this is what you're calling development. month marketing sales, right? Yeah, yeah. You're going to the out, leaving the cave, killing them, killing it, bringing it home. Exactly. Yeah, I'm, I work, I spend a lot of time working with our clients, developing those

relationships, talking with them, understanding what their problems are and coming up with. How many clients do you all have to do three and a half? Oh, I'd say a handful, maybe 15 to 20 ballpark. Okay. And what type of business are the client? This is a B-to-B operation. Yeah, so I work in the oil and gas industry, dealing with helping them maintain their equipment integrity.

So how do you find a new client? Well, a lot of it comes through existing relationships within my larger organization. So, you know, I work, I've been working with a company that's relatively large. They're about, you know, they do about 150 million in revenue a year, about 500, 600 employees. And then we even have a larger parent company that's gigantic. They're 20 billion, 45,000 employees. If you hired someone to come along and learn what you do to bring more business in, what would they do? Yeah, so that's a good question. I mean,

I'm kind of indirectly answering your question, but, you know, hire, an external hire in the past, we've struggled with it. So, you know, we haven't had a lot of success with, like, hiring, like, a full-time salesperson. Or, you know, when we have people come in, it takes them time to kind of understand the business and the work that we do. Our work is very technical. You know, our clients, our other engineers. A technical sales needs an expert salesman. It doesn't need a salesman.

Yes, I agree. Yeah. And that's a problem. So, and if you're going to sell laser-guided metal lathes, You need to hire somebody that knows something about laser-guided metal a. It's not somebody sold cars last week. Exactly. Yeah.

And so finding those people externally is difficult. I'm not saying it's impossible. Oh, and gas business is huge. Yeah. I mean, it's a pretty tight-knit kind of area within oil and gas, you know, integrity. So where would you source the person? Because you've got to staff it up because you're logistically bottlenecked, you told me. Yes. So we've got to staff it. How are we going to staff it then?

Well, I mean, in my mind, the solution is either to look externally like we've been talking about a little bit or internally. So, you know, the people who I'm working with my team members are great, bright, smart, good engineers. But it takes, you know, I'm trying to kind of go down the road of, you know, leadership, mentorship, kind of developing them into supporting more of that role. But that takes time. you know that's but that I mean that that's that's kind of what I'm calling about is maybe there's something I'm missing here because I can see you know it's an external hire there's challenges when you started doing this what was the size of the revenue how many years ago um so when I took over this specific kind of service line it was just me and you know maybe one other direct report

and we're just coming out of COVID I mean we know it was less than a million we were you know During COVID, it was just... Okay, so you tripled it in three years. Had you ever been selling before? Not in as large of a capacity. The selling is kind of what put me into this role. As an engineer, I'm not naturally, you know, somebody wants to sell, but I found out I'm pretty good at it.

No, this is not selling. It's serving, and you're a good server. A good salesman is a good salesman is a good. good server. And so what you need is a junior version of you, Mike, and don't look down on them because just 36 months ago you were them. Yeah, so it sounds, I mean, I think long-term... Is that guy on your team, and you're just not giving him enough credit? I don't want him to start making $3 million. I want him to make a million. So I have a person on my team who I'm kind of eyeing for that role, and he's, you know, we're working.

towards getting into the point where he can talk and interact with clients more directly, more often. And he's getting there. And you've got to walk with him for 12 to 14 months, which you didn't have anybody. You just got thrown in the fire. Yeah. But at least you got you to help him give him some people skills, give him some reading to do. You know, here's how we handle this.

And, you know, yes, you have to have the technical skills. Absolutely. That is 85% of this role. But 15% is people's skills still. he's still got to be able to get along with others. He can't, you know, he's actually got a smile and, you know, that kind of stuff. And so, you know, it's not glad-handing or some kind of checkered coat sales or something, but it is a thing where you're making, you're building trust in our expertise

and in the quality of humans that we are. And that's what gets you the business. And so, yeah, you've got to get that guy in and start mentoring him and bring him up. the thing I have struggled with, and I've had this discussion not long ago with a couple of our leaders here, is I was having to, we've got some positions they needed to roll some people up into, and they're like, well, he's not ready, and I don't know. And I'm like, dude, he's so much more ready than you were when I put you in the role. So quit being such a snot, you know, and that was me talking to my guys.

I'm not telling you that, Mike, but I might. No, I think you got a guy on the team that, is probably more ready than you think, but I don't want you to turn him loose. We'll keep the training wheels on for a while. You walk along beside him, hold the back seat until he gets his balance if you do take the training wheels off. But you can, you know, and you have a reasonable expectation.

The first year you didn't bring in three and a half, it took you three, four years to do that in a business development or sales or whatever we want to call this or serving. So, yeah, get them in the saddle, man. And be excited about it. I think it's an opportunity. You have found great, listening to you talk,

you are confident and competent at what you do, and you've found great satisfaction in delivering the product, a high-quality product to these customers, and you serve them well. And you just want to make sure somebody else does it the way you do it. And the only thing you can do there is just walk with them. and when you trust their competence to the extent you trust their competency and their integrity both of which take a little time is the extent that you can let go of the back seat and let the let the bicycle take off on its own but until then we're out of breath we're run along beside them trying to get the four-year-old to get his balance and but that's okay everybody's a four-year-old once you were 36 months ago i was 36 years ago so there you go and yeah it's serve them. Serve the person that you're moving up and trust them more than you think you can

and they'll live up to it. They'll step into those shoes. You're a good guy. You really are. You're really doing good work. I can hear it. I can tell by the way you're forming your sentences, putting this together, the quality of person you are. Serve the people you're leading. Serve your customers. If you do that, you'll find a way to move this guy up and he does need to move up. He's ready. Folks, remember better or weary warrior than a quivering critic. This world needs more high-quality leaders, so take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entry Leadership Podcast.