EntreLeadership - Exploring the Major Pitfalls (and Wins) in Business

Episode Date: June 26, 2023

Today, we’ll hear about: •       The best way to transition leadership in family business •       Vic Keller’s tactics to his entrepreneurial success •       A caller with an enormous amount of risky business debt •       The questions you need to ask yourself when deciding between specializing or diversifying your business  Links mentioned in this episode: •       The EntreLeadership Podcast •       Vic Keller’s website: https://vickeller.com •       Vic Keller’s Instagram: https://www.instagram.com/vickeller/ •       EntreLeadership Elite •       The Advantage: Why Organizational Health Trumps Everything Else In Business by Patrick Lencioni •       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 •       Staples Learn more about EntreLeadership Events: •       EntreLeadership Summit •       EntreLeadership Master Series Learn more about EntreLeadership Coaching: •       Elite •       Advisory Groups •       Executive Coaching •       Workshops 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 experience leading in the trenches right alongside you. I've done my work as a leader today before I sat down at this microphone. So we are practitioners around here. This is not theory to us. we understand leaving the cave, kill something, and drag it home. If you've got a question about leadership and you'd like to be a part of this program, give me a call at 844-9-4-1070.

Our team will work that out if you leave a voicemail. We'll try to figure out what to get you on here. 844-944-1070. Entreeleadership.com slash ask if you want to fill out the form and tell us. And the gang will get with you on that as well. Now, coming up in the next segment, my friend Vic Keller is going to be with us. Vic is a serial entrepreneur, speaker, business coach. He has started many, many companies, sold several of them to Warren Buffett at Berkshire Hathaway.

So something I've not done. I like to get to talk to guys like that that do things like that and expose their knowledge and experience to you guys so that you can dream about doing things like that as well. to start off this segment is adam in louisville kentucky hi adam welcome to the entree leadership podcast hey dave how are you better than i deserve sir how can i help so uh i am uh working uh working over uh my inlaw's property management company uh working side by side with them for about another two to three years and then eventually it'll be me and my wife running the company full time And in this transition period, I'm just trying to find out the best way for me to be respectful, but at the same time make sure that, you know, my opinion is heard and that, you know,

some, the business decisions are, you know, flows through everybody and just, but at the same time, not come off like a, like a prick. Yeah, yeah, I hear you. Oh, that's a good concern and it's a good way of thinking about it. So they started the business? Originally, yeah, they had two partners. And now it's down to just 22 years. Okay.

And how old are you? Yep. I am 31. Okay. So when they started this, you were running around in short pants. That's right. Yeah. Keep that in mind.

Right. Yeah. Just pay honor. Pay lots of honor. and not honor to the point that you're enabling or not honored to the point that you're violating ethics because you're going along with something you truly don't believe. But most of the things that you are, it's really easy because you're getting excited about becoming the owner,

about being in charge someday soon. And because of all of those things, then, you know, you're going to, you know, if you're not careful, what I do when I'm in those situations is I do become a jerk because I'm concentrating on, I'm making little things into big things. So most of the little things, you can correct later, like almost all of them after they're gone. So just forget it. And just pay honor, pay honor.

Anytime you're addressing them in front of the other team members, anytime you're addressing them, even in private, just like you said, just unbelievable respect for the price that they have paid, the things that they have learned to get to where they are. And then you can say, and I don't understand, because if it was me, I would want to do it this way, help me understand why I'm wrong. That kind of an approach, Adam. Does that make sense? Yeah, you know, the things that, and I'm definitely trying to do that at the same time,

I feel like I've come in really 100% eager to lead and, you know, run the business and make sure that we're doing things the right way and, you know, treating our customers right. And maybe they don't have to be right, right. They don't want to treat the customer wrong. Right. All we're arguing about is how we do it. We both don't treat the customer right. It's just how we treat them right, right? Yeah, definitely.

Yeah. So, I mean, and if you will pay honor and push us out of the little things and then ask questions about how, help me understand this, because I would do it another way, and I must be missing something. Rather than, if I'm going to take this over, I would do it this way. You see the difference. It accomplishes the exact same discussion. So one of the things that my friend Pat Lincione talks about in his book, The Advantage, he says, companies that can. do conflict well have an unbelievable advantage over all other companies, regardless of talent, regardless of patents, regardless of trademarks, regardless of genius. None of those things trump the ability to do conflict well. And so what you're doing here is you're learning how to do conflict well. So we can add one other element to the discussion that'll help. And you might even talk to them about this and tell them you talk to me about it one of the things we learned to do around here we learned this from henry cloud is uh to to wear what we call hat or what he calls hats

and so when you're at work you're not his son-in-law he's your boss right and so when i'm at work i wear the ceo hat rachel cruise is a ramsie personality and Daniel Ramsey is the president, and I'm the CEO of Ramsey Solutions, and so on. Okay. And so in a meeting, they can disagree with me as the CEO from a Ramsey personality's position. Okay. And so if I'm sitting with all the Ramsey personalities, Dr. John Deloney, Ken Coleman, they can disagree with me as the CEO. and we can have a good spirited discussion about which played a call to win the Super Bowl. But they cannot disrespect their CEO. I mean, I'm not a jerk about it, but they're not going to be belligerent with me and work here, right?

That makes sense. And so, but, and the problem is when it's family, sometimes you feel like you've got the right because of family that you can be disrespectful and get away with it. because you probably could actually get away with it. It's just not profitable. So treat him with the dignity of the founder with 22 years of experience who fought through and bought out two partners, who's run this thing and who with great nobility is trying to set up a succession plan. There's a lot of reasons to pay honor to this man and woman.

As your CEO and as the owner of a company that you want to buy. and now when you leave work and you're having Thanksgiving dinner, you need to take your hat off and be son-in-law then. And so what that does is, and if he does that too, it keeps him, it keeps me from using my dad voice on grown kids, you know, at work. You know what I'm saying? It doesn't even work at home to use my dad voice on grown kids.

But, you know, if I'm looking at Rachel's husband Winston runs all of our real estate. I treat him like our property manager. The guy owns a property management firm that manages my property. And this is the, these are the discussions we have. And I hold him to the accountability that I would if I had a non-family property manager. Does that make sense? Yeah, definitely. So if you'll do that and just keep those hats on that you, okay, this is your CEO that you're buying it from. There's only so far you can push it until you're the owner. And he still owns it. And as long as he owns it, he owns a Trump card. So the only power you have until you become the owner is persuasion.

Gotcha. And just use that and persuade and persuade and one excellent persuasion methodology is just to ask questions. And I'll tell you, my son Daniel does it to me all time. We're sitting in a meeting on a digital product, and he's much smarter on digital products than I am, because he's native to it with his age group, right? And we're having this argument about this thing. I'm like, this thing sucks. It's horrible.

And he's like, yeah, but you know, he goes, okay, tell me what I'm not seeing. Because the way I see it is this, rather than, no, you're an idiot. You're an old boomer and you don't know what the flips going on in the digital world, which is probably actually true. But saying that would not be profitable. Does you see what I'm saying? Yeah, definitely. So, yeah, that's what we're talking.

That's how we started this conversation. And so it's going to be good. You're a wise young man to ask the question. I do want you to have hats in the discussion, and I want you to have a detailed timeline as to when you're going to become the owner or under what circumstances you're going to become the owner so that he's not thinking five years and you're not thinking one year. We want to make sure everything's aligned on that. Date certain.

This is what we're doing. This is date certain. This is how we're doing this. Or circumstances certain. When you reach a certain level of this, then I'm going to hand it over, whatever that is. And you just keep watching through those things. But I think you guys need some clear definitions on roles and some clearer timelines. And then you just back up and pay honor and ask a lot of questions and use persuasion.

And you'll go a long, long, long way. Very, very cool. Good stuff. Very good stuff. Love it. All right. Very cool. Coming up in this next break, Vic Keller.

You don't want to miss him. next segment. This is the Entree Leadership Podcast. Welcome back to the Entree Leadership Podcast. Real business people actually do things. This is not theory. If you want a professor in a college who's never made payroll, you need a different podcast. We're people who leave the cave, kill something, and drag it home. And in that light, I got my friend Vic Keller joining us, serial entrepreneur, speaker, and business coach. Vic, how are you?

I'm doing great, Dave. How are you, sir? Doing great. He has launched over 10 companies, 18 companies you own currently in various sectors, launched 10 that were, some of them were acquired by Berkshire Hathaway, part of the transaction. He was working with Mr. Buffett. I want to learn more about that as we go, and he's on several boards, and I've run into him a couple of different places, and I had just enjoyed getting to know him. I thought you guys would as well. Thanks again for joining us. So you started your first business, a landscaping business,

in 02, and then that leads you into just launch after launch after launch. How does that work? I mean, why can't you just stick with one thing? Well, I think maybe I have entrepreneurial ADD. It's a good question. So I think the landscaping business started because I had a lawnmower and a couple hands, and I was ready to just go do something, didn't have a lot of money to invest and wanted some free cash flow. So I started that company and had a ton of fun and then I found my way. I was a young man there and found my way into McDonald's and Burger King and Dave got my driver's license and ended up delivering pizza for Domino's and had a ton of fun. But I think I figured out starting a company wasn't too hard.

You just had to, I went online and formed an LLC and hired a couple of my best friends to join me and kind of sold them the dream. And there I went and started my first business and really my last business, not a whole lot differently than each other. But I've always been drawn to freedom and being creative and I've not been a good rule follower. And so being an entrepreneur was a place that I always felt safe. I did spend a little time to J.P. Morgan when I got out of college and loved banking, loved everything I learned at J.P. Morgan. But I knew that I was on the wrong side of the table. I wasn't going to be a good banker. I needed to go be an entrepreneur.

Amen. Amen. Okay. So I am enthralled with this Warren. Buffett connection. And he's a guy that obviously many of us have admired from afar, not only his wit and wisdom, but obviously his business acumen. But some of his one-liners, the annual meetings and the annual reports are just chocked full of fabulous Warren Buffettisms. But what's it like to hang out with him? Well, I have to say, I was part of a unique scenario where several of companies that I acquired, that I started were acquired by Mr. Buffett's Berkshire Hathaway. And I did get to spend some time with him. He's got hundreds of CEOs and a lot of companies. And, you know, he's got a pretty full plate. But, you know, I would say that a lot of

the lessons I learned from Mr. Buffett really came from, in 1994, I read a book called the Warren Buffett Way. And there were a lot of things that I learned in that book. And, you know, you kind of are able to trust those things, but when you get Mr. Buffett as a business partner, now you get to verify him. And I learned a lot from him. The thing that was most fascinating, Dave, is that his vision is really driven by his knowledge. Rather you're in the inside or the outside, one of the things that you learn about Mr. Buffett is he loves to read, he loves to study. And, you know, a lot of people are driven by passion and kind of blind passion. And passion is amazing energy, but it's really not what it takes to be successful in business. It's knowledge.

So, you know, I always just think back to what is the most fascinating trait that I've learned about him and from him and seen him do. And he's a guy that is all about being educated and learning and transitioning that into really what is vision and passion. So that was a big part of it. Early in my career, I think I started a few companies pretty blindly with a bunch of adrenaline and passion. I wish I knew a little bit more, but definitely learned a lot about, you know, what the value is of studying and in reading. So Warren spends like, from what I understand, seven, eight hours a day reading. And we all don't have the luxury to do that. But it's very clear that he makes good decisions because he's a knowledgeable guy. But he's not reading, just anything. A lot of

times he's actually learning about the company that he's running or is about to acquire how they do what they do, understanding it. He doesn't go in blindly just looking at the accounting sheets or just looking at the financial. He actually wants to understand the business and the essence of it. Is that right? A hundred percent. And he doesn't stop. So, I mean, he's reading about the business and learning about the essence of the business, as you said, in the industry and what's really the tail wins and the trade wins of the industry and what's going on. And then once he's in the business, it was pretty fascinating to see how quickly he becomes very educated about an industry or space. But he's a consummate student, definitely a curious intellect.

But that was the most fascinating. And then, you know, Mr. Buffett, you know, as he says publicly, every time he talks, is the management team is ultimately what he's buying in these business. He's buying good people that know how to run businesses. And, you know, he seems to trust in them the most. but he's definitely up to speed on the details of what's going on. It's quite fascinating. So all these different companies that you have started and run,

what was the average size number of team members? Yeah, typical one I would say was, you know, several hundred million dollars in revenue. And definitely companies that had all the way from 10 employees up to hundreds of employees at the end of my formal career in the automotive industry where I spent a lot of time, I had several thousand people under my leadership and several billion dollars under my leadership as well.

So some of them were small, some of them were large. I'll tell you, the most fun that I've ever had in business has been really the smaller businesses, the ones where started out with two and grew to five and ten and 15 and 20 people and really able to recognize how much revenue the company generated in comparison to how many employees we had. That was a number that we always celebrated of, you know, keeping the 10. team lean and small, but trying to grow the top line number. Absolutely. Keeping that ratio there. Yeah. So when you're looking for and finding in a small business, that's all of our viewers just

about our listeners on this. What are you looking for when you're hiring these team members and retaining them? How are you going about the collecting of the thoroughbreds? Well, you bring up a good point, right? I mean, it's a lot better to have thorough breads than mules or donkeys. And so we folks, on that. I think the biggest, the biggest transformation when it comes to people that I've had my career really happened probably 15 years ago. And I moved from the concept of a job description to more of a journey description. And I really, you know, think, thought about bringing talent on the teams the same way that I thought about probably courting my wife when I was a young man. And that is really thinking about what is the journey that you want these people to go on with you?

what is the journey that they want to have. So instead of it being what's the task, what's the job, what's the immediate accomplishment that needs to happen in the business, really what's the journey for their life? What do they want to accomplish? What do they want to do? And by the way, sometimes there's not good alignment with the business task and the business objective. And it's just not a good fit.

And we move on. But I think most of the success around getting high capacity, high quality talent has been understanding how you could retain those people for a long time by understanding what their own goals and journeys are. And by the way, when people don't know what the heck they want to do and they don't have goals and they don't really have a plan and a strategy, a lot of times those aren't people that are a good fit for our team. And we have to wait for people that really know what they want to do because it's important for us to have that characteristic in the business. So when you're, you know, you talk about a strong company culture is achieved through balance of

aligning good people, clear vision and strategy. One of the things I've noticed, and I'm trying to teach these guys this in the entree leadership world as they move up through the stages of business from, you know, a treadmill operator where you're by yourself on the treadmill, then you start to add team, and then you start to lay out strategy and try to align people with it, is it becomes like the leader's almost full-time job to say, this is who we are, this is where the culture, This is where we are going, the strategy or vision. And if you want to be a we, this is how you align. And then give them the option of opting out.

If they're not smart enough to figure out that they need to opt out, we have to help them opt out. Or they're just too, I don't know, stuck or something. You know, you're not aligned with where we're going and who we are. And, you know, I love that you put that in that, use that, use that, phraseology on this. But I think sometimes, and you've experienced a lot because you've done a bunch of different deals, but to get the, to get these, you know, get the ducks lined up, so to speak, all of us are ducks in that sense. But to get us lined up, there's some heartache involved because people that you love, some of them don't want to get on the train. That's right.

That's right. It's, you know, one of my very best friends in the world was one of my first employees, and it was really painful, but I figured out he just was not a cultural fit, didn't have the right alignment for where we needed to go. And I had to walk in his office one day and high-fiving him, and he moved on. But, you know, I think the best way to align culture with really vision is through professional development and training. And I remember early out of my career, I'd bring people in my office, and I would sit him down and lecture them and maybe raised my voice and get frustrated, but I figured out that if I was able to gain cultural alignment in the company, it was primarily through training and development. So I'd sit out with these,

I moved from, it was a policy, it was a memo, it was something we needed to do, to let's create a training program around what our objectives are. And then it becomes required. I mean, you're almost certifying people to follow the rules instead of giving them a directive, you're getting them on board. And I'll tell you, the bigger the company's got with more people, you know, I think I was a control freak early in my career. And I just wanted to tell everyone what to do. And as I got older, I figured out that I could sell people on what to do if it truly was professional development and training. And I wanted their input and I wanted their feedback. Hey, sometimes, you know, I was making bad decisions and I needed people to be able to tell me.

And it was a lot easier to understand where I needed to make adjustments as a leader if we were doing development and training. versus just giving people directives. No one wants a directive. Absolutely. We're talking about Vic Keller, serial entrepreneur, speaker, business coach. You can learn more about him at his website at Vic Keller.com and check him out at Vic Keller on all the socials and pick it up there. So I read in your bio that you build businesses without using debt,

which, of course, is one of the reasons you and I connected up in the process because we bumped into each other at an event and you said, hey, man, I do your stuff and I don't borrow money. And that's how we became friends was in that process. So talk about that because, you know, I'm pretty much considered a freak, as you know, for not using debt. And yet the truth is a lot of people go debt free in their business operations. Yeah. So, look, I like to dance, Dave. And in debt, you know, I feel like you're having to dance in a straight jacket.

You know, you really can't be creative. You can't do all the fun things that you want to do. I'm involved in some businesses, definitely, that have debt. And I'm, you know, a participant in those businesses. But businesses that I own outright, that are ones that, you know, I'm really focused on don't have debt. And it allows you to be more creative. There are so many days that I'm, you know, frustrated with limitations around growth and opportunity that that would potentially advance. if there was debt.

But the reality is it would restrict us and we wouldn't be able to be as creative and we wouldn't be able to ultimately have as much fun. So I think patience is a big part of the process. But for me, when I started my first business, you know, I didn't have any credit. I didn't have any money. I really didn't have anywhere to go.

I didn't have any wealthy family members. I was just trying to get by and ultimately provide for my family. And so I figured out the best way to generate capital was to go out and sell. And fortunately, I love to sell. And so anytime I needed funding, that just told me I had to sell more. And maybe one other piece of that, I've always enjoyed businesses that are high margin.

You know, and I know that that you- And debt destroys the margin. Yeah, debt destroys the margin. And I love to protect the margin because I like the free cash flow because I like to be able to reinvest in the business. And you can't reinvest in the business with just effort. You need capital to reinvest in the business so you can scale and grow. So it's been a fundamental practice for me.

I think I started out, Dave, out of necessity. I mean, I just didn't have anywhere to go borrow money. And so you learn how to build businesses without borrowing money. And it's a pretty fun thing. And, you know, at the end of the day, when you sell a company and you don't have any debt or you don't have much debt, it makes for a lot bigger payday. And that's a lot of fun. That's true. It changes the whole liquidity moment, doesn't it?

For sure. It does. Hey, Vicks. Thanks for hanging out with us, man. Vic Keller, serial entrepreneur, and you can find him at Vickeller.com. Appreciate your friendship, my friend. Thank you, buddy. Appreciate you.

This is the Entree Leadership Podcast. Welcome back to the Entree Leadership Podcast. I'm your host, Dave Ramsey. If you want to be on the show, leave us a voicemail at 844-944-1070, or go to Entreeleadership.com slash ask, and you can fill out the form and we'll make you a caller here on the show. Hey, if you're a business owner who's feeling trapped by your business, feels like you're always running on a treadmill, and if you stop the business stops, well, that probably means you're at the first of the five stages of business of business. The entree leadership system helps you identify the stages of business you're in. That first stage is the treadmill operator, and will help you level up and move on up the process to Pathfinder, then to Trailblazer, to Peak Performer, and to Legacy Builder. With a digital membership to Elite, you'll get a custom. action plan to help you solve the key challenges at your stage of business, including the treadmill operator, including how to get control of your time, how to delegate, how to hire,

how to hire great people. It includes video courses, all kinds of tools and live webinars. The tools are amazing. You do not want to miss out on these things. Sign up for a free 30-day trial to Entry Leadership Elite. Did I mention it's free? No hassle. We've got to feeling that once you try it, you're going to want to stay. Go to ontaryleadership.com slash elite. It's a free trial for 30 days. Debs in Milwaukee. Hi, Deb, welcome to the Entry Leadership podcast.

Oh, hi, Dave. It's so great to talk to you. So, hey, I have eight employees. I am the owner of a beautiful little coffee shop. We bring in, we're just a few years old. We opened two years before COVID, survived COVID, and we're pretty much bounced back. So we're at about 300,000 annual revenue. That was from 2022.

And this is actually less of a business question and more just a plain old debt question, which I know you're great at. We have three debts that are technically, I guess, business debt, but they're not because it's all personal, so I understand that. But because they are, if we do the baby steps and pay the smallest to largest, the largest is the mortgage on our building. And we live in this mixed-use commercial building. We live above our coffee shop. And so there's a balloon payment on this commercial mortgage in four years.

So what we would like to do is to just put all of our efforts into paying down that $230,000. mortgage because of the balloon payment and then, you know, hit the other ones after that, well, they'll actually be kind of disappearing simultaneously. What are the other two? There is a $30,000 business loan and an $80,000 business loan. Okay. And what are they, are they secured by anything? They're unsecured, and yet really everything is going to be secured by the building

because what we owe has to pay, what we own has to pay for, what we owe. Well, ultimately, your assets could be taken if you're sued, but I'm asking if they have a lien on something. They do not. Okay, those are unsecured loans. Okay. Yes.

And they're just signature loans that you used for the business. Now, what are you netting on this business? Well, last year we ended up with $76,000. Again, still, I think that was kind of the end of our recovery stage after bouncing back from COVID. I'm expecting things this year. I think we're going to hit 400,000 as our top line. You know, and if I can keep my expenses at the good margins that I have now, I think will probably be at maybe 12, 1.20, 130. Yeah, you're not going to knock out 2.30 in three years, though. Not an eat. Well, it's, well, it's four years. And then the other thing is that my, you know,

my husband also has an income, too. So our whole income is. you know, higher than that. Oh, what is your, what is your household income? Our household income is 145. With the 76. Okay. Um, yeah, and actually, with less than that, because we took some of the 76 and reinvested into our, into our building, but.

Okay. All right. Does that make sense? Yeah, it does. What's the building worth? It's worth $750. Okay. I would go get a new fully amateurizing mortgage.

and wrap them all three together. Okay. This balloon is scaring the crap out of me. That four years is going to go by in an eye blink, and they're going to come at you with machetes. I don't like this at all. Yeah. I mean, I would just wrap it all into one, so 260, 4, or 340.

It's a 50% loan to value. You should be able to get a 10 or a 50% loan to value. should be able to get a 10 or a 15-year fully amitrizing mortgage and then still try to get it paid off as soon as possible. But let's put it on 180 months or 120 months fully amitrizing with your local commercial bank. Is this with a local bank? It is.

It's with our great local small-town bank, which has really been helpful. No, they're not been helpful yet because they got you standing on a trap door. This is not helpful at all yet. But if they'll be helpful if they'll put this on 120 months and just fully amitized it, it's going to make your payments go up, but your payments are going to go up anyway because you're getting ready to heavily hammer this thing to get rid of it. So, yeah, I want a $350,000 mortgage on this thing and no other loans. That helps them, by the – are these other two loans with them, too?

No, they're not. Oh, okay. Well, that would be bringing – it'd be bringing it into their bank. Yeah, it would bring some, and they would be fully secured by the property instead of unsecured loans. It gets these unsecured loans off the books for you. And, you know, this bank's smart. It sounds like you've got a good solid operation. They'll make this loan because you've got the equity position in the building.

And then basically what we're saying is, okay, now we have a commercial mortgage on a commercial building of 120 months or 180 months, and we're going to try to pay it off instead of 10 years. We're going to try to pay it off in six or seven or whatever, or three. I don't care. Yeah, we're hoping five. Yeah, that'd be great. But I just don't like this thing. I feel like your heads laying across the, stuck in the guillotine,

and these nice people have the rope. That scares the crap out of me when they're bankers. You know, oh, God, they could be nice people, or they could sell that thing to Bank of America tomorrow and you're screwed. you know, no, I just, that, yeah, I want to get rid of that balloon. And while I'm at it, let's roll these other two in. That stabilizes and brings peace to the situation because you've got a very predictable environment.

And then accelerating the payoff is your choice based on wisdom. And you're going to want to do that. You're going to want to pay it off as fast as you can. So I still put it on a five-year schedule at that point. But, yeah, that's exactly how I'd handle this. Balloons, man. they cause you to make wrong decisions because they're coming at you like a train. And you just got to go, I got to get out of the way, I got to get out of the way, I've got to get out of the way.

I know it's four years, but I got to get out of the way. Your body is just, as Dr. John Deloney said, your body is reacting to this. My body's reacting to it. It's not even my balloon. Wow. Hey, thank you for calling in, Deb. Sounds like you got a great operation. I'm proud of you.

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Again, 844-944-1070. Thanks for hanging out. Nate is in Vermont. Hi, Nate. Welcome to the Entree Leadership podcast. Hi, how you doing today? Better than I deserve. What's up? So I'm a small dairy farmer.

We gross a little bit over $300,000, and it's myself and two part-time employees. My question is, is it better for us to keep specializing and growing in our current field of dairy farming or try and diversify and branch out as a way to further build profit? Okay, so the question is whether to diversify or whether to go, explain to me an example of what you're talking about. Let me make sure I get my head around this. Well, the idea is there's several different opportunities that are in front of us right now to do custom, some extra custom cropping and get into that pretty substantially. and there's also some opportunities for us to get into agritourism. And we're trying to grow the overall farm business.

And, you know, trying to grow the dairy is something that we can do. And we're kind of looking at. But we're kind of caught between, well, is growing the herd. and growing the whole dairy farm, the best way to use are what little capital that I have. Or is it a better use of my own time and money to try and, you know, diversify the operation, I guess, and go into that and a little bit of that direction. Okay. I've got a friend that's a neighbor of mine that has several hundred acres, and he runs a

Dairy situation and makes some of the best farm to table quality stuff. Very high end, they charge for it proudly, and they should. It's very good. So high end, like their chocolate milk will just light your life up. It's amazing, right? That kind of stuff. It sounds like that's a type of thing you're doing. And then the question is, do you just want to have more cows and more volume?

or do you want to create a tourist stop to let human beings see where milk comes from? And that kind of stuff, right? Yeah, I think that's a good way to summing it up. Okay, I'm just making sure I got my head around the concept. Because he's doing a little of both. I actually got a documentary done on him and stuff like that. He's a brilliant business guy. And so I've gotten to watch him from a distance.

Never, you know, they, again, just real high quality. products, a little storefront, and all the little suburban yuppies or whatever we call them go by and think they're cool because they get like real milk instead of grocery store milk. And you know what I'm talking about. And double the price or whatever. And I don't know what it is, but it's more expensive, but it's really good stuff. So, but the storefront has become a thing. And now they've got a bed and breakfast next door.

And so they're kind of getting in the tourist. the tourist idea of people coming around seeing a farm, staying on the farm in a log cabin, and that kind of stuff is that. That's the type of way you're talking about going or just make the herd bigger. Which one do you want to do? Well, we like the idea of, you know, offering this expanded service to the community and diversifying. And, you know, I love my cows and I love what I do. And doing more of it.

is, you know, economy, in agriculture, economy of the scale is a very real thing. And, yeah, I mean, don't you kind of reach a tipping point, though, that you've got to go, like, you know, 200 is not double what 100 is. You've got to go all the way to a thousand to really get, head of cattle to really get in a dairy to really get some movement, don't you? Oh, yeah, there's definitely, there's definitely inflection points where, yeah, that's what I was thinking. Once you cross the line, like robotics and all of that, right? Exactly. And there's one problem, you know, I'm only 33, but I've been around enough to see other operations, not just in dairy, but, you know, other farming enterprises where they try and do a whole suite of a whole bunch of different things. And they end up falling flat on their face. Yeah. You don't need to get in the jelly and the honey business. You're in the milk business, yeah. Right.

Yeah. Unless you're distributing someone else's. I mean, but yeah, it's a whole different manufacturing operation. The whole thing. I've watched that happen, too. I know what you're talking about. Well, the whole farm to table movement, and certainly Vermont, you guys have a vibe for all of this. And the whole boutique farming operation that I've been describing and that you're doing as well makes sense.

I don't know much about it other than I think I've just told you everything in the last 10 minutes I know about it. So I'm pretty ignorant about it. But the other thing I am sure of, you know, just observing is that those cows don't take a vacation. And farming is hard work and dairy farming is particularly hard work every morning, every night. Doesn't care if it's Christmas. Doesn't care if your wife wants to go to the Bahamas. Doesn't matter. Those cows got to be milked.

And it's a thing. And more of that sounds like more hard work. and I kind of hear in your voice, you would rather diversify the exposures, like with the tourist agrituro or whatever you call it, tourist, agro tourist, or whatever you call that stuff. But just, you know, giving people access to this and seeing it and paying and doing the bed and breakfast or doing the whatever and let them participate in the milking.

I don't know, whatever it is, but that you do there, but your version of a dude ranch or whatever. but that all of that stuff, it sounds like you, just listening to your voice when you're talking about, it sounds like I don't want 200 head versus 100 head. That sounds like a lot, double the work or triple the work. I think I'd rather go the other way. I think I hear diversification in your voice. Am I missing something?

I think you are hearing that, yeah. I guess the biggest concern that we have is how do you add enterprises to your existing operation without having your head explode. Well, you've got to bring on talent in those areas. For instance, if you did some of the stuff we're talking about, you're bringing on not farm hands, but people from the hospitality world that have run, you know, if you're going to put in a little thing

and serve, you know, biscuits in the morning with your milk products or whatever. I don't know what it is, but I mean, a little country store type of a restaurant type thing, then you need restaurant people and hospitality people, not farmhands, because your head will explode trying to do all these different things. But you can bring on people that can do the lifting

and bring knowledge base to you on stuff you don't know how to do and still be the owner and still lead them successfully in these different product lines as you diversify out, whatever, different cash flow sources as you diversify, for diversify out. And in a sense, that's what we've done at Ramsey. I mean, this started as selling books and Financial Peace University. And later on, the radio show got profitable or got big enough that we could actually sell ads

because somebody cared. And so then we had three streams of revenue. And then we started doing more events. We had four streams of revenue. And then we did a high school curriculum. And then we did Entree leadership. And so, you know, right now we've diversified into about 14 different streams of revenue. but they all come back to the core of providing biblically based common sense and education,

which provides hope. Then we all come back to that core mission statement. And as long as you've got a core that you're attached to, you can bring the talent in, lead into them, through them, and you'll have some false starts. You're starting little miniature businesses, and some of them will suck. And they all look good at first, but later on they get ugly. some cases, and you've got to, you know, all that didn't work. And I've, you know, I've got more stories, by the way, that didn't work than did work. But all you guys know me for the ones that

did work, because we survived the ones that didn't work because we didn't do them with debt. We didn't over hire. We were slow, plodding, not racehorse. We're not, we're not going to be on the cover of Fast Company magazine. We're going to be on the cover of Slow Company magazine. And just just plod your way through that. But that's your nature. Anyway, you're in agriculture. So you're not ever looking for the quick win. There's no such thing as a quick win in agriculture. It's always a grind, but it's always much more predictable and steady.

So, man, you're a hard-working dude, Nate. I like it. You got great imagination. And I think you got your head in the right space on this. I would go forward if I were you. I think this absolutely works. Good stuff. Hey, that puts this episode of Entree Leadership in the books.

Remember better a weary warrior than a quivering critic. leaders serve leaders are active not passive leaders act on principle not appearances this world needs more high quality leaders so choose to lead i'm dvramsey your host thanks for listening to the entree leadership podcast