EntreLeadership - Can Your Family Business Survive Your Family Problems? With John Delony

Episode Date: September 30, 2024

Today we’ll hear about:  A business owner who wants to be a good husband, father and leader  A woman whose sister doesn’t treat her well at the office  A man paralyzed by fear that he’ll destroy his business  A son looking for advice to buy his dad’s business while still grieving his loss    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 and the ditches just like you. We do it every day here. I know what it feels like to really be excited one minute and 20 minutes later be really pissed off. That's part of running a business, so we're glad you're with us. If you want to call in, you can. today's show, Dr. John Deloney. Ramsey Personality is my co-host, PhD in counseling,

and he's going to be here answering questions about family business and all the associated drama about that. We'll get into that in a minute. Phone number here if you want to call and leave a voicemail. Be part of this show 844-944-1070 or go to entreleadership.com slash ask. We would love to hear from you. This Friday, Dr. John Deloney,

we'll be doing a live training Q&A and Q&A with all of our elite members about running a drama-free family business. You'll be doing it on e-coaching with our elite members. E-coaching is a training and coaching session we do with elite members twice a month.

If you're not an elite member yet, you can be by Friday. Be sure to join at ontraryleadership.com slash elite. And you can hang out with John for that particular e-coaching session and a couple of others a month. We do to a month, like I said. So, John, you're going to be talking about running a drama-free family business

and not to spoil the answer to the callers this particular hour and taking a Q&A and so forth. But what does that involve this drama-free family business idea? Well, it's probably best to say it's about not furthering drama because I think drama business is hard, man, and relationship issues come up and trying to figure out what hat to be wearing, when, and how and how do you keep the thing that happened in the office out of your house and vice versa. So, man, running a drama-free business is about how to address the elephant in the room, how to tell the truth, how to wear the right hat in the right moment,

and how to solve problems together so that we can continue in the relationships that actually matter. It's all of it all at the same time. Very cool. Good stuff. Lee's in Cleveland, Ohio. Lee, your question about family business drama. Hi, Dave and John. honor to speak to both of you. You too. I am the founder and CEO of an IT managed services company Northeast Ohio. So we do about $1.1 million revenue with a team of four, including myself. And I've

actually had the privilege of going through the Entree Master Series twice. Wow. I'm in 2008 and again in 2013. And it was an amazing experience. Thank you. I do appreciate that. So I jump into my question here. So I think the overarching thing I'm trying to figure out here is how to be fully present. And what John was talking about here is spot on here. Trying to be fully present both at work and at home without causing friction in the marriage while still being an effective business leader. So I want to give you a little bit of background before we dive into that. So I started this business 21 years ago when I was 17.

And right out of high school, I went full time. and through my 20s, I very routinely worked 12, 14-hour days to keep things moving. But when I was 31, I got married. We adopted a 7-year-old daughter, and that's a whole new dimension out of life. So now I'm 38. Daughter's 14. We've got a 4-year-old son, and I've got a baby girl do in about two and a half weeks. Yay!

Well, thank you. We're just trying to, again, what I'm trying to do is I want to be the best business leader I can be, but more importantly, I want to be the best husband and father I can be. And I'm just, I'm struggling to find that balance, if you know what I mean. I think the word that would guide every minute of every day is intentionality. And I think we try to do it all at the same time. And we try to do it as best we can at the same time. And you can't.

And so it's about being intentional. And I think the fallacy here is you can't work. 20 hour days during certain seasons and be a good dad. That's simply not true. But you have to have talked about it with your wife. You have to have set it up to where on the other end of that wild season, it's got a payoff, right? It's not just never-ending treadmill.

Dave and his team, I've watched it in real life. I tell the story, this is a real story. Dave had left a meeting. We had all the personalities right when I got it. here. And, you know, his daughter, Rachel Cruz is a personality. Well, Dave left. And it was, I don't remember what you were talking about. It was something. But it was, it wasn't hot, but definitely was, we knew where Dave stood on an issue. Dave left. And Rachel said, can you believe Dave, fill in the blank? And I looked at her and I was like, I'm new here. She set me up. Like,

don't, don't respond, John. Right? Because I didn't want to be like, yeah. I didn't know what to do, right? And she's like, I'm going to tell Dave at our next meeting that this and this. Well, then, you know, a few months later, fast forward, we're all out at Dave's home. And it was a very, it was a friend, everyone was hanging out. It wasn't work.

It was everyone was laughing, carrying on. And she called him dad. And that's when I started getting, oh, there is Dave at work and there is dad at home. We are intentional about this relationship here and intentional about this relationship here. In my life, the first book I wrote here for Ramsey's Solutions, number one bestseller did great.

I was not intentional about it. I tried to do my day job and be a parent and be a husband and write a book on top of that. The second book was way bigger, way busier, but my marriage ended up stronger on the back end because we were so intentional about what that looked like on the front. Yeah, so be where you is. There you go.

When you're at work, be at work 100%. and you're unless your 14-year-old has an emergency, she doesn't interrupt work. And you have to have that conversation. By the way, the number of times in 35 years that Sharon Ramsey called me on the telephone during the day, I can count on my hands in 30 years. Now, she might send me an email knowing I can respond whenever I want because she didn't want to forget about it or to let me know to bring something home

or something like that. But if Sharon Ramsey calls here, it's an emergency. There you go. Because it doesn't happen because when I'm at work, I work. Oh, and by the way, when I'm at home, don't call me at home. There you go. I'm working. I'm not, you know, don't bother me at home. The only people that can bother me at home are the publicity people

because I've got to be down here at 4 o'clock in the morning to do some media hit and they're sending me notes the night before. Right. But that's by email. The only time they call me by phone is if it's 3 o'clock in the morning and they can't, didn't want me to come down here. You know, that kind of stuff, right? But I mean, this is how we don't, it's not, it's not,

it's just assumed that when I'm at home, I'm at home. Right. And when I'm at home, I'm dad. And when I'm here, I'm Dave. But there's also a fallacy that if I get home, that I can still be effective at work and I can be effective. You have to be willing to draw that line. Put the stupid phone down.

There you go. Close the computer. Yeah. And by the way, if you want to be present with your family, Netflix is not involved. There you go. Turn off your television. Be present with the 14-year-old.

Look in her eyes. She's adopted. She really needs you to look in her eyes and remind her that she's the center of your universe. There's a new little sister coming. She needs to be reminded that she's still valued in this family. There you go. And that's physical touch and eyes and none of that happens

while you're looking at your phone. Throw your stupid phone in a basket and throw a brick through your TV and be present when you're home, entrepreneurs, and that'll go a long, long way towards that. Today, Dr. John Deloney, Ph.D., and counseling, is helping us with family business questions. This is the Entree Leadership podcast.

Dr. John Deloney this Friday will be doing a live training in Q&A with all of our elite members about running a drama-free family business on e-coaching. If you want to be part of that, go to Entreleadership.com and join Elite. between now and Friday, you can hang out with John for that Q&A and that coaching as well. Also, I want to remind you that as a small business owner, it is your job to set expectations for each role in your company to make sure those expectations are met. You cannot hold your team accountable to something you didn't communicate. They're not mind readers.

This is a discussion I've had at home, too. Our free key results area template will help you set expectations and create role clarity for every team member on your team. You feel confident everybody's working on the right things. Go to Entreeleadership.com slash clarity slash role clarity to download the template for free and start setting some clear expectations for your team. Did I mention it's free?

Chelsea's in Austin, Texas. Hey, Chelsea, your question for Dr. John. Yes, yes, thank you guys. I am the owner of a medical spa, have about 63 staff. We do $8 million in revenue each year. My older sister works for me, and the vast majority of the time, things are really just wonderful. But every once in a while, she will get upset with me typically regarding something in our personal lives, and it's not something that's addressed.

I don't even know she's upset with me, and she doesn't communicate about it. And then she will treat me passively aggressive, passive aggressively at work. It could go on a week. It could go on three months. And then at some point, she decides to drop it and then acts totally normal. and we just move on like nothing happened. And I'm just would love to break this cycle, and I'm curious how I could possibly address this with her.

Does she work for you? Yes. I think you have to have this conversation direct, because here's the deal. The rest of the other 62 of your staff members are watching this interaction as a cue for how to treat you. I do hear you, but let me just add one piece. She kind of runs her own little,

it's very unique in our business, her own little operation over here under me, and we don't have to interact a ton. And when we do interact... No, that's an escape. That's your sister, you're being a coward. It's your sister. You think people see this. Oh, they all see it.

Yes. Are you kidding? It has a stink on it. Yeah. And there's nothing worse. Listen, I can handle aggressive, aggressive, passive aggressive. Oh, that one pisses me off. No. So, yeah, I find myself.

If anybody else in the building was doing this, you wouldn't put up with it. No. Okay. Yes. It means it's not okay. And Dave, just so you know, I've seen Dave and his other family members who are co-workers here, they're aggressive, aggressive. It's awesome.

There is no passive aggressive. I would love that. I would love to deal with whatever the issue is at that moment. Okay, then you have to lead. You have to lead. And you made the decision. to hire a family member, which means the stakes are higher

and the conversations are richer and harder, but that's your job. When he says we're aggressive, aggressive, what we're doing is we're arguing about which play to call to win the Super Bowl. We are not mad at each other from something at home and brought that to the office. Absolutely.

That's not tolerated here. We don't do that. We set that boundary a long time ago. And so while everything's cool, you need to sit down and have a discussion and set some new guidelines of how our working relationship will be. When we're at the office, I'm the CEO, and this is how the CEO gets treated. Right, John? A hundred percent. Yes, sir.

And you're handsome, sir. It's so interesting because we've worked together 13 years, and she has never, ever questioned anything business-wise. she totally respects me never like usurps by authority or you know tries to manipulate it's incredible but when it comes to this personal side she gets something frustrated about it's it's really it's really wild and it would be it would be it would probably cost me half a million a year in profit if if i have to hey chelsea i'm i'm gonna challenge you i don't i don't think you're correct okay i guarantee you with 99.999% certainty that she has

gone around your back and your leadership at work. Because somebody that's going to do something on this side of the fence is going to also do it on that side of the fence. That's the way character integrity works. And so you somehow have become so

avoidant of this interaction that you know is coming with your sister. That you believe in your guts. You're not even pretending. for us. You believe that you have this isolated and contained. You do not. It is all over your business. I guess probably the reason why I feel like it's somewhat isolated and contained is it happens about once every three to four years. But when it happens, it's painful. But it's not all the time. Okay, forget the business section. Forget the business.

Right. Pretend you all didn't work together. Would you call your sister and say, hey, what's the deal? Oh, well, that's the problem is our entire lives. You can't. not address anything with her. What kind of relationship is that? I know. There's four girls. And one of us, that's other three, we can address everything. And with this one, like, she just, she will literally physically leave the conversation if it gets hard. Yeah, she's getting ready to physically leave the building if she works for me. And by the way, you just put a dollar amount on the, on your relationship with your sister.

You said it's about 500,000 bucks. That's, yeah, that's what I would lose. That should cause you significant pause. You just put a dollar amount on the relationship with your sister. There should be no dollar amount on that relationship, period. So what should she do? She said to say, hey, can we go out and have a sister-sister conversation? And I would frame it this way.

In the past, I have not had this conversation right, so you're going first. I haven't addressed this right. And I need to say some hard things that I'm afraid you're going to leave. Would you please promise to stay with me here? Mm-hmm. Yeah. And then say, the last three months have been hell here. I did something in our personal life and you won't talk to me. It comes here.

The employees notice it. Can we talk about this? And then she gets to decide whether she wants to be an adult or not. So do I wait until there's an issue? No, no, no, no, no. You don't wait to start your weight loss program until you got the flu. You go and you're healthy. Okay.

So go now, and I would basically bring in that something that happened like eight or, it was probably over a year ago now. That's fine. That's fine. Just say, this has been bothering me. Yeah. And I feel, here's what I would say, okay? And I'll put words in what John's saying if I, if I was taking his advice.

I would say, he said for you to go first. So I would say something like, okay, as the leader of this company, I should have addressed this a year ago. and it's been bothering me ever since, and that's my fault. I'm sorry that I didn't bring this to you earlier. I apologize for that, but I am bringing it to you now,

and you and I as team members and as sisters, have to set some new guidelines on how we're going to walk forward at the office. If you want to be mad at me at home and be passive-aggressive, we can deal with that as sisters. When you're working for me at the office, office, you cannot be passive aggressive. If you're mad at me from something personal, you can, it cannot show at the office and it does show. And the other team sees it and I see it

and there's a chill in the air and we're not going to do that anymore. I can't live like that. That's how it would sound at my place. Okay. And then she gets to decide. But I can tell you this, here's what will be strange. If she stays, you've increased. You've increased. the quality of her mental health and her emotional maturity and the quality of your life and the quality of the team and you'll see an uptick in revenues long term as a result if she goes you will not lose a half a million dollars you will probably four months later not even know she was there before I'm amazed at when people have left here that I thought our world was going to come to an end and it's really sad that we hardly even noticed.

Yeah, I had to do this with a position I felt like that about, and it was crazy in 60 days. It was not a, I was glad I did it. Yep. And that's what you'll be here. I hope she stays, and I hope you all both grow. But not addressing this, it's no longer an issue. It's cowardice.

You've got to address it. And Dave, you said something so important. Start the conversation with I, not with you. Exactly. I messed this up. we're going to go from there. That was the advice you just gave. I was following it. And you're handsome, too. This is the Entree Leadership Podcast. We ought to do this more often. It's two handsome devils. Well, the devil part was right. Dr. John Deloney, Ph.D. in Counseling, Ramsey Personality.

My co-host on the Ramsey Show is now my co-host on the Entree Leadership Podcast today, answering your questions about family business and family business drama. I'll chime in because I am the cause of a lot of the family business drama around here, so I'm an expert on it. Amen. And we'll do all that. This Friday, Dr. John Deloney, you'll be doing a live training in Q&A with all of our elite members about running a drama-free family business on e-coaching.

We do two e-coaching sessions a month with our elite members. If you want to join elite, it's not that much to it. We'd love to have you. Not that expensive anyway. Go to Ontario Leadership. dot com slash elite and you can hang out with John this coming Friday as well. Ethan is in El Paso, Texas. Ethan, your question for Dr. John Deloney. Hi, Dave. Hi, John. My question for today, I'm an owner of a manufacturing company that's focused in plastics manufacturing or a third

generation family-owned business. We've been doing business for 70 years. So we have close to 100 employees. Our top line revenue is around the $20 million range. And on one hand, things are going very, very well. We are debt-free, and I feel more in control of our business today than I did 10 years ago. However, when I look at the statistics of family-owned companies like ours, it feels like the odds are stacked against the third generation. You know, I've heard upwards of 90% of third-generation family on businesses fail. That has nothing to do with three generations. Okay.

That has to do with the people. That's a good point. That's a good point. So my question is about that lingering fear that's in the back of my mind. I'm afraid that we will be the generation that curse it up. Yeah, it screws it up. And that fear paralyzes me at times. So get that fear out of the back of your mind and put it right in the front.

Put on a piece of paper and be very specific. What are you scared of, period? What is it? Or a question mark. What are you scared of? I mean, I'm scared of everything that we build and everything that... No, no, no, no. You're going back to the back of your head.

Put it on the front of it. Do you have a child that is not acting right? Uh, are you saying like for a, uh, like an employee in the business? No, I'm trying to, I'm trying to ask what... I want you to get this, this fear out of the ether. put it on paper. What are you scared of that you are going to do? That's a fact.

Or that one of your kids is going to do. I want you to be specific. Because here's what you're doing. You're walking through the woods and you're thinking, I think there's bears. I think there's bears everywhere. I think there's bears everywhere. And I want you to stop and demand evidence from that fear.

What am I actually afraid of? Running out of money? Nope. We don't owe anybody any money. And I've got this much reserve in the bank. The world not eating plastic? Nope. because if we're there, then we've got bigger issues, right?

Like, what are your actual fears? Because right now, it sounds like you're anxious and what you're doing is you put on a lens that says the third generation fails and screws up the whole family lineage. And so everything you see is fulfilling that narrative. And so I want you to take those glasses off and begin to demand evidence from these fears.

Be specific. What are you scared of? I mean, Again, I don't know if this is back mind thinking, but I'm scared of what I can't control. I'm scared of, you know, economic fears, new technology. Competitors that are larger than us that, you know, we hear that they are down to working three days a week. We're not. We're working five days a week and we're working on overtime. And, you know, we've not seen the pressures and the negative things that they're seeing.

And I agree with you. I feel like I'm in the woods. Okay, sure. Keep going. Keep going. You're right on it. Keep going. You're getting more specific. I love it. Yeah. So to recap, the new technology, man, the 3D printers that are out there, the different equipment that can give people the ability to do what we're doing, that makes me afraid. The economic pressure. Okay. The competitors. Outstanding. So you just took it from this very personal, existential end of the family tree. I'm going to be the one that kills the family tree to a lack of understanding about a new technology

and how it may alter our business. Because that's something you can go take a course on. That's something you can get on an airplane and go sit with the best manufacturers in the country who are using 3D printing and learn about and find out, hey, we've got to make a major business pivot ASAP, or we're going to start teaching courses on three. I don't know, but now you've identified the thing. And Ethan, would you agree with me that anyone that is in your business,

first generation, second generation, third generation, eighth generation is facing exactly the same thing? Yeah. Has nothing to do with the magic third generation of failure. It's just the marketplace that you're in. has absolutely nothing to do with this. So my point earlier was the thing that if, okay, my grandfather passed away of a heart attack.

And so when I do a life insurance exam, they say, who died in your family of a heart attack, who died of cancer, who died of whatever, because they want to try to figure out if I'm going to be susceptible to the same thing, right? Yeah. Now, if I know that, that I'm susceptible to any of those things, it doesn't guarantee that I'm going to die of a heart attack.

I could die of a car accident. The way I drive, it's actually more likely. I could die, you know. But if I sit around and obsess about heart attacks because that's my destiny based on the statistics, then all of a sudden I have a heart attack. So that's my problem with this data. because the data that says that the third generation fails has very little to do with,

okay, here's why the data is giving you a false narrative. We actually did a study on this because I got so pissed off about it. So family businesses last on average 20 years longer than any other kind of business. So normal business cycles take out businesses in about two generations. Family businesses seem to be able to survive because new technology and competitors and foreign trade and whatever comes on the scene. Something cycles through and family businesses, on average, last about one generation longer, about 20 years longer than non-family businesses. So normal business cycles take people out on business. And it's not based on the generation, and it's not based on the gene pool just got some.

so thin by the time it got to you that you're pitiful. And that's what that narrative says, and that narrative's false. You're actually probably stronger and have a better chance of going forward. And some of the longest lasting businesses in history are four, five, six-generation family businesses, not publicly traded businesses, not some other magic form of ownership or something else. So it is not your destiny to fail based on a generation. It is your destiny to fail if you don't respond to marketplace indicators, which is what you were talking about.

And anybody will fail. First, second, third, publicly traded, anybody will fail if you don't respond to those things. So don't believe the narrative that there's something inherently wrong with the third generation. Believe the narrative that family business is inherently stronger than any other form of business. I think the irony here for this company, what you and I are doing, Dave, is you started what you do in radio. And radio is dying. Radio is transitioning out.

And we're on a podcast now that didn't exist. This technology that we're doing didn't exist. The word didn't exist. That's right, much less the medium. And we got YouTube, right? We got these different things, but underneath it, what are we actually doing for our customer? And so I think this could be a moment where maybe your business,

it literally is. They're going to, in a year, everyone's going to have a 3D printer in their house, like they do a microwave. And suddenly, so you've got a year of an on-ramp to figure out how we're going to pivot this thing out. What are we going to do next? And maybe you're not making plastics in a year. You're doing something else.

But that's the reality that's before you. Let's jump right into that. Let's don't sit and get paralyzed by this fear in the forest. Yeah. There is nothing that says that third generations fail more often than anybody else. 80% of small businesses fail in the first five years. That's first generation. that's SBA statistics.

So this narrative that's out there, and also the same narratives out there on wealth that the third generation squanders it, you know? And that's just simply not true. That's one of those old wives' tales that was running around out there in the culture that somebody just made up and a bunch of poor people believed it.

And so they go around telling each other, well, wealth doesn't, you know, it ruins a family. It doesn't ruin a family. Family has already ruined. Wealth exposed it. There's a bunch of times. doofuses and they got some money and they exposed it because they do doofus in a reality show then. You know, I mean, it's like that's what happens. And the same thing's true in business.

So, Ethan, you got some bad numbers and you bought off on a narrative. I think you're probably a better business guy than your grandpa was and then your dad was and you're already addressing the variables that are giving you real fear and they should give you fear. Those are the things you need to go after and face head on, like John said, front of mind. But this vague thing that somehow the gene pool thinned out by the time it got to you is just bull crap. The numbers don't back it up. And so you're a hero. Go get them, man.

Go get it, dude. Face the fear and run right at it. About as good as it gets. That was eye-opening to me when I found out that family businesses, on average, last 20 years longer than non-family businesses. Yeah, I've never heard that. That's fantastic. Isn't that interesting data?

It kind of just puts that whole wives' tale bull crap notion to bed. this is the Entree Leadership Podcast. I don't get to have a co-host very often, and I kind of like this, especially when he's a smart one. Dr. John Deloney, Ph.D. in counseling, lots of good answers and lots of good questions as we talk about family business today here on the Entree Leadership podcast. So, John, one of my theories, and expand on this because it's right. I was going to say this ought to be good. is that kind of like with money, business, family business,

the family business can only be as functional as the family is functional. Correct. If they're dysfunctional, boundaryless, disrespectful, emotional impulse, out of control, immature, at home they're going to be in the business. They don't come to the work and magically become whole people. Yeah, your meal can only be as good as the ingredients. That's exactly right.

You got to do the hard stuff at home so that you can show up and do it at work. That's it. And so sometimes we have folks asking about, I want to raise my kids to be in the business. Okay, raise your kids to be great adults. Raise great humans. Yeah, raise kids to be great adults

that know how to function and work well with other, be respectful. And that goes back to a thing that Dr. Michael, Michael Gomez told me, you can tell your kids whatever you want, but they're going to watch you. They don't listen, they watch you. So you want to raise great adults? You and your spouse, you all live right,

and you'll tip well, and you be extra generous, and you teach your kids about budgeting, and you fight with dignity and treat each other with dignity and respect when you all get sideways with each other. You will raise great humans, and they will end up becoming great people out into the world, right? That's how that works. Yeah.

I think the Ramsey kids do conflict so well because we did a lot of it. They're amazing at conflict. The best. Because we did so much of it at home. Man, I had to go grad school for the learning I got. They're great. They're great.

They're great. But hey, here's the thing, though. I have got to work in different capacities with all three of them. I get to work with Rachel pretty close. I work with Daniel a lot more now. Denise and I, when she partnered with Haywood Elementary School here and started that, what's really amazing is as people, they call things up very fast. They're very different, though.

They're very different. But each one of them heads right into a problem. There's not, like, hey, we have this issue. And Denise, she'll smile more than the other two. She's kinder. But she'll head right into it. And I got an email from Daniel on a project there's several of us working on. And at the very bottom of the email, very clear, I do not support this direction.

We need to go another different direction. I think I've ever had a president that clear, and it was refreshing. And Rachel, and I like, ah, Rachel, I think you should do this. No, John, I'll tell you what I think we're going to do. Right? So, but here's the deal.

They both have it modeled. Let's deal with whatever the thing is when it's teeny tiny right now. So it never, what does that conflict deferred becomes conflict amplified? We're going to deal with it right now. And then we're going to be back to laughing and having fun and support each other moving on

with what we're actually trying to do. And to be very truthful, they got there from their mother. You like to let it simmer until it explodes. She's the youngest child of a hillbilly family. She does not manage conflict. She just does it. She just gets it. She gets it.

Eric is in Akron, Ohio. Eric, your question for Dr. John Deloney. Yes. So what I have here is I'm a C.E. of a small family construction business, and I was in the process of buying it out from my father. We just started talking about it, and in the meantime, my father passed away here in May.

I'm sorry, man. Oh, thank you. What happened? He had a congestive heart failure and an autoimmune disease. How old? Yeah. He's 59. Oh, my goodness, Eric.

I'm so sorry. Yep. Yeah. So in the meantime, with the way the will was set up, my mother currently owns the business. Sure. But how do I go about it to purchase it? I mean, we've been talking about it. We want to move on with it. But my number one thing is, how do I take care of mom? And also, how do you, what do you suggest? because dad and I, excuse me a little bit, dad and I had talked about a five-year plan. He retires at 65, and my mom is currently 58.

Do I still go ahead with a five-year plan, or do you wait until mom's 65? Or what's your thoughts on that? Well, you're right in the middle of a lot of emotion right now. And so the first thing I would do is try to buy yourself some time and buy your mom some time. Okay. If you can just run it for a little while, I don't think there's a rush for you to buy it. I would just keep her on payroll.

What was he being paid? So he just took a salary of $75,000 a year and then whatever was remaining in the business. Okay. Can she live on $75,000 a year for a little? little while. Yeah, she's totally fine on that. Okay. What I'm trying to do is just get something where we can just park the sale for a minute and give us room to cry. Okay. All right. My general rule of thumb is six to nine months, six months to a year. I'm not doing anything major. Okay. All right. That would be different if mom couldn't pay her bills. And me and dad already

had a plan. Yeah. So I'll tell you how to talk to mom. Do you have any siblings? I do. I have one brother and two sisters. How are they involved in this business? So my sister works there as a part-time secretary, but we've already sat down.

This was before dad passed, and we discussed about who gets the business and all that. And their siblings, they're totally okay with it, and they're, that's, um, that's, um, That's what the plan is moving forward that I would buy it from mom eventually. Okay. So have you all talked since your dad passed away? Yes, we have. Okay. All right.

Often plans made before somebody passes can radically change once somebody's passed. But assuming y'all have talked about it, I would slow the roll. And if mom is okay on 75 grand, I'd be very clear with her and say, mom, you know dad and I had talked about some of this. I'm going to continue to make sure you get dad's salary and we'll circle back in a few months and we'll sit down and do this stuff. But right now, I just want to be sad about dad if that's okay with you.

And she might tell you, I'd need to get this thing sold. I don't want it. It makes me uncomfortable. And if that's the case, then y'all can go down that road. And yeah, I think whatever arrangement you had with your dad, if that works for your mom, then I figure that out financially. And I would add to it. I've just found that people physically in the same room

we get agreement that is remembered. They don't remember texts. They don't remember whatever. And so if I were you, if you guys can have a family dinner where your brother or your sister and your mom are there and say, okay, I can do whatever you all want. Dad and I had talked about buying this. I can move forward with that.

it might be good for us to just sit a little bit in our grief and let's park this for four months and our five months and let's revisit this the end of January. In the meantime, I'm just going to pay mom a $75,000 salary, dad's old salary. Mom, is that okay with you if we revisit this the end of January? Brother and sister, is that okay if we start the discussion again of I'm going to buy this from mom beginning the end of January. And between now and then, let's just remember Dad and Cry. Okay. Would that work?

That's kind of, yeah, that would work on us. So we had this discussion already, and we all, we sat around many evenings around the living room and just talked about that already. That's kind of a road we want to go on. Good. But then, okay, so in January, would you, I'm thinking forward, would you, would you, would you wait five years or a house? No, no, I would close the deal now.

You would close it, okay, and whenever we feel the time's right. Yeah, and I'm going to structure the deal in such a way that mom is always going to have something to eat, okay? And that could involve sending a bunch of money home for the purchase as soon as the business is able and then helping her manage that pile of money at home so she has money to eat, okay, rather than her constantly being on the salary for life out of the business. that one makes me less comfortable. So, for instance, if you bought her out for, what do you think the value of the business is?

So we never put a purchase price together, but we were thinking roughly a million to a million and a quarter. What's it net? Net, net's around 200 to 250 per year. Okay, it's not worth one and a quarter. It might be worth one. It might be worth eight, somewhere in there. Okay. Okay.

But let's call it a million dollars, all right? Okay. And you're making $200,000 a year profit, right? Yep. Okay. Mom, I'm going to live on a salary, and I'm going to give you 90% of the profits towards that million dollar number until you've gotten a million dollars.

Okay. That means you'll probably get it in somewhere between three and five years. If we grow faster, it might be three years. if things slow down, it might be five or six years. But I'm going to give you 90% of the profits every month out of the business until we hit a million dollars, and that's my purchase price, and that's how you're going to get paid. Now, when I send you $200,000 home,

then I'm going to take my purchaser hat off and put on my son hat, and we're going to meet with a financial planner and invest that money so that you can live off of the interest and the income that it creates, not you live off the $200,000, because the $200,000 are going to end in about five years. And I want you to have a million dollars in the bank when that happens. Correct, yeah. Does your mom work outside the home?

No, she does not. Okay. All right. No. Yeah, and she's honestly, I mean, he's 58 years old. She's well taken care of. When we discussed this already, that she's, she can live off what they have without the business.

So that's the blessing, I guess. Then the money that you save goes into a nest egg, or the money you pay for the business, you walk over to her house, take that business hat off, put the son hat on, and make sure she puts it in a nest egg. Okay. And that's your gift to your mom,

not your purchase from the owner. Okay. And there's one more important gift here. And this may be the most awkward part of this whole interaction. All right. And I would tell her, mom, I have a habit of forgetting stuff. or things get moving real fast.

I'm going to put all this done in writing, so everybody stays on the same page forever. And we're going to show it to brother and sister. Okay. And when that million dollars is done, you're going to send her a certificate that says the sale of this business is complete. Okay. All right.

Because I don't want her calling you in seven years and saying, hey, where's my money? Okay. All right. Yeah. And so, yeah, that answers my question. You know, just a lot of challenges right now. Can you do one thing for me? Yeah.

What's your dad's name? Larry. Larry? What's a hilarious thing Larry was known for? Probably he had a fishing boat. Well, my dad was a minister as well, so he had a fishing boat. And anytime someone calls and he was fishing, he'd just say too busy. He's on visitation right now.

Was he a good fisherman or was he terrible? We had many good memories of good fishing, so I think it's really great. All right. I'm going to challenge you with something, okay? All right. When we lose somebody we love, often, especially somebody that was surprising like this, right? He was playing in his retirement. Yes.

And it went pretty fast, right? Yep, it went really fast. So often when we think about dad, the thing we think about is, like the funeral. We think about the funeral home. We think about that first phone call. That's what pops into our head. That's our body's just trying to take care of us.

And if we have at the ready that other memory, at that time you and him were fishing and he caught a big fish and he almost fell out of the boat because he's a little bit goofy. Or the time he hung up the phone and told somebody, I'm on visitation. He looked at you and winked. You get to pick which one of those. memories of your dad you think about.

And so I want you to hold one ready to insert, and I want you to smile and say, not today, and I want you to think of that funny one, the one that brings you joy, and you're going to smile and you're going to light up at those fun memories of your dad. And that's going to become that legacy that carries with you. And he's going to have a reputation of the community,

how he talks to people, how he honored people, and you're going to keep that thing going, and you're going to take this business from where it is, and you're going to double it and triple it quadruple. You're going to make it something special. That's pretty amazing. I appreciate it. Cool.

Thanks for letting us honor Larry today, man. All righty. I appreciate it. Eric, thank you for calling, brother. Wow, what a story. Now, this is why we write it all out. This is why we have a plan. This is why we think ahead on all the steps of family business,

especially in the legacy stage, and that's certainly where they were, where I am. In this legacy stage, you've got to be very, very intentional. You have to be at every stage, but this one is really, really important. The good news, with that, family is it sounds like all four of them are solid people so good and they can just have that conversation there was not a turkey in the mix yeah those were all eagles and it's it's real challenging

dave it feels like we're violating family sometimes when we write stuff down it's the greatest way to honor each other yeah i can i can tell you story after story of story of big businesses even where uh you know it took uh an attorney and three years to deal with your own mother and uh and that That's just, you know, because she, you know, in the middle of the grief, they did not remember things the way they were actually done. That's right. And it's a problem. It's a serious problem.

Dr. John Deloney, you can join him this Friday as we do an elite member e-coaching session on and live training and Q&A about small business and family business drama. So you could do that by becoming an elite member. If you're not already, go to entreleadership.com. John, thanks for joining me. Thanks for having me, man. Handsome as always. Remember, better a 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 Entree Leadership Podcast.