EntreLeadership - Can You Care for Your People and Protect Your Profits?

Episode Date: November 6, 2023

Today we’ll hear about: •       What to do when transferring ownership in a high-risk business •       Why small businesses should stop trying to compete with Corporate America with employee benefits •       The best way to handle an employee who consistently misses work because of a child that’s continually sick •       How to fairly set compensation and salary for your team Links mentioned in this episode: •       The EntreLeadership Podcast •       Stages of Business Assessment •       Have a question for The EntreLeadership Podcast? Leave a voicemail at 844.944.1070 or submit your question for a chance to be on the show with Dave Ramsey: https://www.entreleadership.com/ask Start growing in business and leadership with the EntreLeadership Newsletter. Sign up to receive tactical tools, advice and resources in your inbox every week: https://bit.ly/3IRWnsL   Support our sponsors: •       NetSuite •       BELAY •       Payority •       Trainual Learn more about EntreLeadership Events: •       EntreLeadership Summit •       EntreLeadership Master Series Learn more about EntreLeadership Coaching: •       Elite •       Advisory Groups •       Executive Coaching •       Workshops Find out what Stage of Business your in with our new Stages of Business Assessment Listen to all the Ramsey Network podcasts anytime, anywhere in our Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/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 leading in the trenches right alongside you. This is a common sense show about running a business. Most of the folks we coach and help with Entree leadership have five to about 250 team members. and if you're running something with 10,000 people, I can help you with leadership in general, but I've never done that. Our team is about 1,100,

and Ramsey Solutions does about $300 million a year. So that's the size we are. We started on a card table in my living room 30 years ago, and God and a whole lot of people have caused this to happen, and I'm one of them, so we're here to help you. So you jump in if you want to be a caller on this podcast at 844-9-4-1070 or go to Entreeleadership.com slash ask, and we'll try to help you out. Eric's going to start this episode off and Sheridan, Wyoming.

Hi, Eric, how are you? I'm doing far better than I deserve. How about yourself? Just the same, sir. How can I help? Well, I am the owner-operator of a small commercial roofing company. I have 11 team members, and this year we're on track to do a little over 4 million in top line sales, which is about 25% up from last year.

Good for you. Thank you. I bought this company from my dad nine years ago. He founded it almost 40 years ago. And I'm just trying to think ahead of my own exit and transition. And I've heard your advice a number of times of kind of owner financing the sell of a business. where the new owner takes a minimal salary and gives all profits to the old owner to buy out. But my business is somewhat of a high liability business.

Yeah, there's a lot of liability involved. We do bonded jobs and things like that. I was just looking for some more tactical advice of how to actually go through that process of, you know, when actual ownership would transfer at what point in that process and maybe how to mitigate some of those liabilities for both the exiting owner and the new owner. Well, I mean, you've got to maintain the bonds or you don't get the jobs. And so, you know, I would probably put in the documentation that if the new owner did not maintain the bonds that they're in default, so that you could come back in and take it over.

because they're going to run it in the dirt, it's going to be worth nothing in 20 minutes, right? Yeah. So, I mean, you've got a pretty short fuse on that puppy. So, you know, in order to not be in default, and if they're in default, the default mechanism, and, you know, you'd basically be, in a sense, foreclosing on the business, although there's probably no real estate that you're foreclosing on, but you would be taking the business back over if they let, if they, you know, failed to keep bonds in place.

So they need to give you proof of bond until they paid you. out. And then the second thing is that they need to give you proof of liability insurance. And you probably carry some pretty decent limits on that, don't you? Yes. Yeah. Mainly injury, right? Well, your workers' comp stuff is got to be rowdy. Yeah. And then liability for buildings, you know, we roof a lot of schools. You know, we're over the top of computer labs, data centers, or water intrusion on something like that can be pretty costly. So what do you, do you carry insurance to do that, cover that now? I do, yes.

We have some pretty significant liability insurance. Yeah, I would think you would. That would make sense. And that's what I would do. And so I think maintaining that insurance as well is a mechanism. If they don't maintain it, it's a mechanism for default. because those are key elements to the destruction of the value of the business, the business itself, if you don't have those things in place.

And so if you're going to cut corners and you're the new owner, those aren't two you can cut. Otherwise, I foreclose and take the business back. Okay. And that's, you know, also, you know, what you and I are discussing here, I mean, I'm not, I've never been in the roofing business, but just observing from the outside looking in, I've been around building my whole life and built large commercial buildings and homes and so forth. And just observing all of that tells me that those two things are, they're permission to play.

It's table stakes to have those two things in place, right? Bonding and insurance, liability insurance. You don't get to play at, you know, I mean, you can play small time out of the back of your truck. But I mean, if you want to, if you want to contract a good-sized job, you're going to have to have these two things, the liability to protect you and the bonding to protect the, it's a performance bond, basically. And so, yeah, and so that's table stakes. And so if anybody's going to buy your thing and they don't have enough sophistication to understand that that's permission to play, then you probably don't want them as a buyer. Yeah. You know, so it's,

It's a precursor to have a sophisticated enough buyer in the mix as well. So, yeah, I'm just, anything like that that's essential to the running of the business itself would be a mechanism for default, and you can come back in and take it over. But if you're passing this to family and you've been mentoring them for years, it's kind of a no-brainer. They should understand it, but you can put it in the documents if you want then as well. This is the Entree Leadership podcast. If you've been listening to this podcast for just a little while, you've probably heard me talk to other callers, and we talk about the stages of business, everything from treadmill operator all the way through the legacy builder stage of business.

The Ontario Leadership team just released our new and improved stage of business assessment. It'll help you easily and accurately identify exactly where your business is, and then, you know, what to work on to level up, and, move on through the stages. The speed at which you move through the stages, you know, it doesn't matter. It's taken me 30 years to move through all five stages. Our hope is, is that by teaching you that you can move and grow your business and move through the stages quicker and more efficiently, but it helps to know where you are and then what the items are that help you to move to the next level of sophistication, the next level of productivity. And you'll know what you need to work on. So that's simple. So click the link in the show notes or go to Entreeleadership.com.

to find out which stage of business you're in. Steve is with us in Oklahoma City. Hi, Steve. Welcome to the Entry Leadership Podcast. Hey, Dave. It's an honor to talk to you. Thanks for having me on. Absolutely, sir.

How can we help? So I am a new leader in a real estate business here in Oklahoma City, and I've been with the company for just about a year. And one of the things that we don't provide to our employees, where, you know, a small company in that I have a goal of in the future is to provide employee benefits like 401K and medical insurance and that sort of thing. And so my question is, at what point in your stages do you start offering formal benefits to your employees?

I don't know that it would be necessarily a stage issue. Most people on treadmill operator stage don't have the margin to do it. Right. How many team members did you say you have? We have six. Six. Okay. And what kind of business?

It's real estate property management. We do flip houses and rental properties as well. Okay. Well, in your world, there's a lot of independent subcontractors as well. And so they're more used to providing their own benefits because they're self-employed if you're an independent subcontractor. So that, you know, around the real estate world, that's fairly standard. Like if you own a real estate brokerage operation, you might have 40 agents, but 100% of them are independent subcontractors. There's not a benefits package typically in those settings.

So it's not, in other words, the marketplace isn't demanding it. Now, in terms of when did we start doing it, the first thing we looked at was, did we have the money? Do we have enough margin? Do we have actual profits that we could then turn? and invest back into the team. Then the second thing we looked at is, was that something that we've morally felt good about providing that to the team? And then the third thing was, I mean, do we feel like we should be doing that if we could?

And then the third thing is, is there a measurable ROI? I'll give me an example, okay? Health insurance is uber expensive. It's just crazy. It's every year I have to deal with it. And since Obamacare came in, it's just, God, almighty, it's a mess for small business. It's horrible, okay? Yeah.

And then on the other side, there's disability insurance, long-term disability insurance. Now, long-term disability insurance costs compared to health insurance almost nothing. And so that's something I believe strongly in having long-term disability insurance. and it costs almost nothing. And when I had the money, it was one of the first things I bought because it was a lot easier decision because it didn't cost anything compared to health insurance. Now, health insurance has been a fiasco since day one. And to start with, we, you know, we came up with a plan.

This was before Obamacare where we, you know, because we've been in business a long time. And, you know, we would pay part of it. You pay part of it. And when it increased, well, we both picked up. some of the increase. So you knew what your health insurance was costing because people that have 100% of their health care insurance furnished, they don't measure the cost of it at all as a benefit. It could cost a business a bazillion dollars, and the employee of the team member doesn't even care because they haven't noticed. So we're more on that end of the spectrum today where we

furnish all, I think we furnish all of it or almost all of it. And so, and certainly meet all the guidelines of the federal requirements today that we have to do. So not as thrilled with health insurance as you can tell, but I'm glad we have it, and we've got some wonderful stories of children in the NICU, babies being born here and they're in the NICU, and health insurance, you know, kept them alive a million dollars worth. And we've got wonderful stories of stuff like that. So we've been glad we've had it over the years, but it was a harder one to write the check for because it's much bigger than simple, long-term disability. which is a much better bang for your buck on the benefits side.

The third thing I would say, or fourth thing or whatever it is I would say about this is, we never, and I would never suggest any of you that are running small businesses, get in the mindset that you have to compete with corporate America on the benefits package in order to get a team member. I want team members here who benefits is one of the last motivators for them. instead they're motivated by work that matters, a quality environment. They're motivated by working for a family business who actually knows about them, loves them, loves their family, cares about them.

Corporate America does none of that. And if all you're worried about is a benefits package, then I'm suspect of you when I'm interviewing you in a small business setting that you're just here to collect a check. You want a J-O-B and where can I get the most money and do the least work? and that's not who I want on my team anyway. So if you're chasing benefits packages, you're probably not a future team member. And so that released me from this need to keep up and provide all these benefits that that corporate America provides.

Now, I believe strongly, morally, in a 401K and using it at the proper time in baby step four that we teach in our personal finance curriculum and have for 30 years. So we have a strong matching program, and we're not allowed by law, nor do we tell people they can or can't get into it. But we strongly suggest you follow the freaking baby steps. We can't make you do that. But, you know, so consequently our people that are in the 401K, you know, they're putting a full 15% in. They're getting a good company match. They've got a Roth option. They've got good mutual fund options because I'm freaking managing the 401K.

I mean, I know what I'm doing. So this is one of the best 401 cases in the dead. But it's not because I'm trying to keep up with corporate America. It's because it's a very cool thing I can provide. And I can make a few extra millionaires out of the people that work here, just doing that if they stay here and do the stuff I teach all the time. So that's kind of the moral component, and it's got a great ROI. By moral component, I don't mean that they're morally entitled to it.

I mean that I morally believe in it. I ethically believe in it. And if I teach 401K on the street, like as a must, as one of the seven baby steps, then I ought to have a robust 401k program. And I do. We do at Ramsey. So that's the kind of thing I'm looking at. I'm looking for ROI, meaning bang for the buck.

If I put in a million dollars, do I feel like I'm getting a million dollars worth of credit, street credit, with the team and with the right kind of potential team member? But I never want someone to join our company because, oh, they've got a great 401K. That should be way down the list of the reason they join Ramsey. Or, oh, they've got great health insurance. That's someone who's figuring out what they can get rather than what they can give. And we want people coming in here that add value, not are trying to be parasites on the organization. So I'm fine running off.

I went to work for so-and-so because they had a better benefits package. You know what? That's perfect because we didn't want you anyway. that's not what that you're not the type uh you know you come to work here and you love our benefits not because of our benefits so uh that that's a different mindset and really a small business you know corporate of america the first thing they do when there's a downturn in the economy is they pee on their team members and they turn around and fire a bunch of them and they call it layoffs right and they they just piss all over them and it's just treat them awful and so you're

You know you're expendable. You know you're just a unit of production, and they'll put your little butt on the street at the first turn of a hat. Small business doesn't do that. Small business people, I talking to a friend of mine the other day is getting hammered in this downturn right now, and he had to lay off some of the people that he loved. He was crying.

He had tears run down his face talking about laying off people because their company's in trouble. I mean, it's a horrible time for them right now. That's small business. They got a huge heart. they love you you're the the last thing they want to do is put you on the street they work too hard to get you in there so that's the kind of people that steve is and and that we are at ramsie and so you know keep that in mind all of your small business don't try to philosophically

compete for people that are just looking for a benefits package with your benefits package but align your benefits package with stuff you really believe in and you really like I'll give you an example. Here's another thing you can do. You know, guess what? If you work here, financial peace university is mandatory, and you get a whole truckload of our products every year free as an employee benefit. Why?

So you can give them to your friends and relatives because you believe in what we do here and you're proud of what we do here. So you can give away, you know, a Dr. John Deloney new book for Christmas presents this year. That's pretty stinking cool. that's the equivalent of if you work at a heating and air company, the receptionist at the heating and air company should have a really fine air conditioner. Hello? I mean, she ought to have the best one in the world, right?

And if you work in a dentist's office, I mean, for God's sakes, everybody ought to have great teeth, right? And it ought to be on the dentist, it ought to be just given, because these are the products that you ought to be bragging about it to your team. Your team ought to be proud to work there and all that whole process. So, you know, there's a lot of things you can do in small business just sharing what you do with your team. And, you know, there's all kinds of wonderful things that you can plug into that way that where you're not trying to compete philosophically head to head. And, you know, that makes a big difference. So that's a really, really good question, Steve. Thank you.

And congratulations on making your successful business happen, man. Real estate's slowed down. You're one of them slowed down right now. And the one, you know, the beautiful thing is those that have got their crap together and that survive the downturn are really going to be ready when this thing comes roaring back. And, man, I'm ready for it to come roaring back. This is the Entree Leadership Podcast. This is the Entree Leadership Podcast. I'm your host, Dave Ramsey.

Thank you for joining us. Hey, listen around Ramsey. We believe in small business. We know that statistics. statistically and factually and actually you are the backbone of the American economy. 54% of the gross domestic product in America is by businesses that have less than 500 team members. By definition, small business is the backbone of the economy. And they survive and thrive and come up with the best and brightest and new ideas, in spite of the fact Washington

peas on them every chance it gets. they survive and thrive and spy the fact that nobody gives them any respect and they can't but you know they turn themselves into millionaires and they do it by serving and taking care of their customers and serving and taking care of their team i mean the brightest spot in the cultural landscape of america today is small business they're the best people doing the best work and work they work their butts off man so if you're small business your family business your family business, man, I'm in your camp. You're heroes.

And you deserve to win. And we're here to help you and make sure that you do. Chad is with us. Chad is in Winston-Salem, North Carolina. Hi, Chad. How are you? I'm doing great, Dave. I'm a longtime listener of yours, so it's an honor to talk to you.

You too, sir. What's up? So we have nine full-time employees, most of which are in their 20s or early 30s. So most of them either have small, children or planning to start family soon. We have one employee who's been with us almost the whole time we've been in business, but has just missed countless days with either the child being sick or her caregivers being sick. We have kids ourselves. We understand that and we are always accommodating to her needing to be out. But it puts a big strain on our other employees because we're

taking the same amount of work and just splitting it amongst the rest of the employees. And there are periods where she doesn't even make enough to meet the full-time requirements for the benefits that we're paying. So my question is twofold. We want to be bosses that are empathetic and accommodating and we want to promote families. Our family is very important to us. So my question is, one, what is your advice on finding the balance between being that accommodating empathetic boss while having enough to run a business that relies very heavily on these employees day-to-day? and the second part is when it comes time for raises or bonuses, would you recommend it's based off of hours worked?

And does that seem like a fair system to reward the people that are there working harder to make up for this? Okay. Second question first, because it's easier. No, raises are just merit-based. They're not based on anything else. And so that can be hours worked. That would enter into it.

But, I mean, you have people that work the same. number of hours, no getting done. That's true. Comparatively. I mean, if one guy works 40 hours and brings a company a million dollars and one works 40 hours and, you know, brings a company 100,000, then, you know, it's not hours worked then, right? So it is merit-based, and that is, you know, is what you're doing, you know, cost-saving or revenue-producing, that justifies your existence, and it's, you know, it's pretty stinking incredible. The second thing we look at on races is we want to be at least at market.

So we do comp studies all the time of different categories and say, okay, in Nashville or in Tennessee or in the southeast, what does, you know, this programmer make, a dev one or a dev two, or, you know, our software engineer, a platform architect, what do they make? and we're studying that and going, okay, I'm really not trying to compete with Seattle. Right. You know, I got very, I mean, it might get somebody from Seattle, but I'm trying to say, in Middle Tennessee, what is the market for this? I might, we might look at the national numbers, but it doesn't actually on software people,

we do bring them in from all over. But, you know, what does the typical person in this category make? So that, and that's the minimum we want to be at. We want to be, you know, competitive there. But then if I've got someone that is, like, like the best of the best of the best in that, then, yeah, we're going to be merit-based races. Now, back to the other question. So is the person you mentioned this lady, I think, that her child is ill, is there's a chronic

situation or the kid, the kid's just getting a cold at daycare, or what are we talking about? Yeah, it's a general run-of-the-mill, you know, respiratory or GI issues. No chronic illnesses have been diagnosed, but it just seems like there's a lot, a lot more than you would expect. Okay. I mean, do you suspect something else? I mean, it is, because, again, okay, two or three things of how we achieve the balance. All right.

Number one, how would I want to be treated or how would I want my daughter treated if this was my daughter and her grandson, my grandson, okay? And this was going on. How would I want them treated? Okay. Now, we're hardworking family of the Ramses. and so if the kids getting ill and, you know, they constantly are getting ill, then, you know, what are we got a daycare that's a germ factory?

We need to change daycares. What's going on? I mean, we got at the bottom of this just because you know what the kid ill all the time. Why is the kid ill all the time? There's something wrong. And so I'd want to get, you know, treat other people like you want to be treated. So I just switch shoes. I say, gosh, if that was my daughter, my son, and they were working somewhere and they got cancer,

how would you want them to be treated? Okay. That's the first thing we look at. And that also means that we could get involved and go, you know, what the flip's going on here? We don't have to just stand back and accept this, all this stuff. I mean, we can go, hey, that's not okay. You know, I'm not, because I wouldn't want my, I wouldn't expect an employer to just go forever on, you know, a whim, you know, not on facts and without investigating and sourcing the actual problem and fixing it. Okay. So the second thing is then the question we always ask ourselves, okay, when I'm 80, 99, 99 years old and I'm on my deathbed, what will I be proud that I did?

Right. And that always leads us to the third thing. And that is when in doubt, I overdo grace. Okay. I go too long because I'd rather make mistakes going too long than too short. short. And our team knows that. So sometimes they're looking around going, hey, this dober doesn't work much. But Chad, he always gives them every chance. He's not a pushover. He's not, he's not, he's not a guy that's going to be taking advantage of, but he's very kind and graceful and strong. And he's always going to give you every chance. So if this ever comes up, so the other employees are, here's what's

running through their mind, whether they say it or not. If this ever comes up with me, he's going to treat me that way. Because really, you're telegraphing to the rest of the team how you're going to treat them if they get in a pinch. Right. I hope they're mature enough to interpret it like that. They can't help it. They can't keep from it. They just, you know, unless they're just, you know, really infantile.

Because they have to be watching and they go, that's how that's how that's how that company takes care of that. And so I can assume that they're probably going to do that with me. I can't be 100% sure, but I can't. assume they're probably going to do that with me, where if the first time something comes up, you're just chop, chop, chop, and they're gone, then they go, well, first time I screw up, it's going to be chop, chop, I'm gone, and it's harder to keep people then because they're not going to be loyal because they don't see loyalty from you. So corporate America always talks about, why aren't employees loyal?

Well, it's simple because you dobers aren't loyal to your employees. And Chad is loyal to his employees, walking with this lady while she's going through with a sick kid. And so he's extending loyalty. Well, what you will get back is increased, not perfect, but increased loyalty from her and from the team as well. Okay. And so we've got a lady on our team who, gosh, it's almost 20 years ago, had a toddler that got cancer. And we just shut down her job and sent her home and paid her and took care of her job. Oh, and a bunch of people got together and kept her yard cut,

and a bunch of people got together and kept meals on their table while they went through the chemo with a toddler. And for a little while then we were real happy when there was a little ball-headed kid running around the office that lived. And we were all celebrating and jumping up and down because we had participated in the whole process with them. And it wasn't that long ago that that toddler was 16 years old and walked into my office and, you know, it made me cry because she still works here.

And so that's, you know, that's when you know you did it right. But then there's other times you treat people right. And then 20 seconds later, they're going, oh, well, they're paying me more matching on the 401K. And so I have no memory of you being different. And so I'm out of here. And you still get, you get, you know, it's not always returned one for one. So, but you do have those cases where you go, you know, and I can tell you this, if you want to talk about Dave Ramsey, don't do it in front of that girl's mom. Because she will take you out and they'll never find the body.

I mean, it's like, you know, she is not, because you talk about loyal, but we were loyal to her. So we earned that. And we're, you know, we're family. We care about each other. So that's what you're going to do. And, you know, the other thing you could do is if you can get. I think what would help here was some good communication from the lady. You need to find out more about what's going on and how you can help.

And then you need to ask her permission to share that with her coworkers and say, hey, listen, so-and-so is out. And here's what's going on with her kid. And she said, I could tell you. Because, I mean, we're all having to pick up her slack right now. But it's not because we're weak. And it's not because she's taking advantage of us. And she just doesn't want to work.

It's because this is what's going on. And the coworkers then will go, yeah, I'm in, I'll help. Because it's temporary. There's going to be an end to it. It can't, you know, it can't be something we're doing forever and ever. But yeah, you just got to, you got to take care of people when they're down. You don't shoot your wounded. And, you know, and then you just, sometimes you look up and you go, you know, I've reached the end of this.

And I've gone as far as we can go. And you can't always, I mean, you can't, okay, there's an end of this. Like at the end of this thing you're talking about, Chad, is a few more months. Okay? You're not going to do this for five years. Okay? So that's not reasonable. So you wouldn't ask someone to do it for you for five years.

Treat other people like you'd want to be treated. So you're going to do this for a reasonable number of days or months that, according to your particular situation, and you're going to have good, clear communication with the team and with the team member that's in there so they know what's going to on and so it doesn't sneak up on them where you go okay today's the last day no that's not we're going to do we're going to say okay hon look we've been going with this for seven months now we got about 60 more days to turn this around or we're going to have to make other arrangements and so i'm trying to walk with you i love you i love the baby we're trying to help you but we've really

reached about as far as we can go on this and just good clear communication don't sneak up on people and then that way you're not but but even then you're like at that By the time you say 30 more days or 90 more days, you're already emotionally at the end of your rope. So you're already going that mile plus another mile. And you won't ever regret that 10 years later. The only part of it you'll regret is when that person leaves and says something nasty about you after you did something good for them. That's the only part of it you'll regret. And that will happen to.

That will happen to. It's part of it. It's just part of leadership. It sucks. But it's part of it. So you, but that doesn't mean, you know, just because somebody makes fun of you when you dance doesn't mean you quit dancing. Dance, baby. Dance.

That's what, you know, bring it. Just let's have some fun here. Let's do this. This is the Entree Leadership Podcast. I'm Dave Ramsey. This is the Entree Leadership Podcast. Mayor is in Brooklyn, New York. Hi, Mayor.

Welcome to the podcast. Hi, Dave. Glad to talk to you. You too. How can we help? So I have a low voltage business. We do fire alarm and camera security in the last six years. We have currently 15 employees.

My question was, how do I determine when to give a raise and how much to give it as a raise? I treat my employees very well. But I started out, I had a vision how much I think they should make weekly. Well, I raised them very quickly, and I came to a point that I felt I can't raise them anymore. Like, they don't produce as much as I give them. But it comes up as, like, every year, end of the year, they say, when do I get for a raise. Okay. Are you overpaying, like, a technician, what the rest of the industry pays them?

I mean, low voltage is everywhere, so there ought to be a standard for, like, let's say the person that installs the alarms, okay, a technician, right? Yes. Okay. I mean, other alarm companies, other low voltage companies, what do they pay that technician, and what do you pay them? Good question. I'll have to check that in the industry.

Okay. One of the things we do, and I was talking about that in an earlier segment on this particular episode, is that we do a comp study, which you can jump on like Monster.com or LinkedIn or different places and do it fairly easily. it doesn't require a ton of money to be spent, or you can just call around and ask, okay, what does this particular position pay in the Brooklyn, New York area? Okay, what does a typical person pulling wire in a low voltage pay? Or what's someone who's certified to do alarm installations?

What do they get paid on average? And you want to be at or slightly above that amount, but you don't want to be double that amount. Mm-hmm. That, instead, I would be providing them other things, even some cash bonuses and things out of profits before I would just say that's your pay. Okay? Mm-hmm. So, in other words, let's say you called around, let's use you, I'll just make up it.

What do you pay an alarm tech right now? I've started out with, it depends his experience, if he's coming from a different or he's a beginner. Okay. But I've thought it in the range right now, week and $1,500 a week. Okay. All right. And so they're making like $70 a year? Yes.

Okay. So you've got Alarm Tech making $70 a year mid-range. And if you've got one that's been with you 10 years and 100% of the time or 98% of the time, you know that when they're doing something, A, they're doing it right and B, they're doing it the way you would want it done, both things. because right is okay but the way I want it done and right is really important does that make sense yes like how they treat the customer how they dress do they bathe uh do they follow up and check on the you know what's going on uh if it's a builder they're working with on new construction you know are they dependable uh all those kind of things you know these are the things that come

into it but if you've got that for 10 years that person um is worth more than someone that has the exact same skill and knowledge and work ethic that starts tomorrow that doesn't have the experience with you. Okay. So for instance, my personal assistant Patty has been with me 21 years. Patty knows more about Dave Ramsey than Dave Ramsey does. Okay. She and my wife together could write a book that would destroy me.

Okay. So Patty's value versus a personal assistant to the the CEO of a company this size coming in brand new next week where Patty to retire. Her value is light years more. So she gets paid a lot more than a personal assistant would get paid at this level. Okay. But she has, but it's, it's not just because we love Patty, it's because 21 years of knowledge base of who gets to see Dave, what Dave does, what Dave doesn't do. She's got a sign outside her office.

She says no one gets to see the wizard, no way, no how. All this kind of stuff, it's a big joke, you know. We have a lot of fun with it. But the point is her experience is valuable inside of this company. So if you've got a bookkeeper that's been with you for 15 years, they're a lot more valuable than a new bookkeeper coming in to do just the exact same job. So if 70 is the number that it takes to hire somebody in in the marketplace, Let's say you do a survey of your competitors

and you discover that 70 is about what the average rate going rate is. Then you would look around among your team and say, okay, this guy over here has been here for 10 years. He's worth more than 70 if he does his job properly. If he doesn't do his job, we've got other issues. You don't fix that with a raise or a cut. We fix that with talking him through how to do the job. But if he's a great team member, great alarm tech,

and, you know, and he's worth more than 70 to you. Because you could, you replace him with a brand new person. You've got to start over on how mayor runs the business. And so, and that has a value. So I'm going to give that guy raises based on tenure, but not because of tenure, but because of what tenure represents that he's been doing excellent work for a long period of time. It is dependable. Okay.

Then the second thing is, I've got to compete in the marketplace. or he will leave. If 70 is the going rate and I'm paying my guys 50, they're going to leave. You're not going to keep them. So you've got to be competitive in the marketplace in terms of, you know, what it takes to hire an alarm tech in your area. And so you need to be doing a little bit of an informal or formal comp study on what these different positions are and then pay them competitively.

And then sometimes a competitor still willing to overpay them. We had a guy in here not long ago that we felt like we were overpaying him. And some moron gave him a $50,000 more than we're paying him. And we're like, oh, yeah, both of you, you deserve each other. So you need to, you know, no way, no way is worth that. And but they're just, you know, somebody got stars in their eyes. So you're still going to lose some of them sometimes. But that's, um, so.

A, we need to find out what it costs to fill the position and not have the competitors stealing our people, poaching our people, right? And then B, the longer they've been with you and have been competent, the more they are actually worth to you. And then C, if you want to pay them more than those rates that we're talking about, like that 10-year guy might be making 80 or 85 in a $70,000 world. that's fine because again he or she would be worth that and then beyond that if you've got extra profits and you want to start doing okay hey guys you know there's 15 of us in here we're making good money in this place i'm just going to share some of it i'm going to and you can come up with some kind of a plan and you don't have to explain to them what the percentages are we have a profit sharing plan at ramsie for a portion of our team members and uh it is based on a

formula that no one knows except me and, you know, my CFO and a few others. And because we change the formula sometimes to make it more generous or less generous, depending on what's going on. But overall, we're going to share our profits. It's one of our core values. But that has not, that's not compensation. That's sharing. Compensation is you're getting paid for what you do and what you know. Sharing is, we all did a bunch of work together, made some money, I'm going to share some of it. that's different than the comp plan. Corporate America gets those two things confused periodically. Hey, guys, we could use your help.

Mayor, thanks for calling in, by the way. We appreciate the help. Appreciate you being part of the program. If you want to help us out out there, guys, we'd love the help. We appreciate it. If you'd consider clicking the follow button or the subscribe button, it makes a big difference in the algorithm. Hit click the like button, all that kind of stuff.

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