EntreLeadership - How to Accurately Forecast Business Growth

Episode Date: March 17, 2025

Today we’ll hear about:  A business owner wondering how to predict future revenue  A woman seeking advice after not paying herself for two years  Dave Ramsey’s advice on how to kill the five enemies of team unity  How bad hires cause stress for business leaders    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   📖 Preorder Dave’s new book, Build A Business You Love: https://ter.li/4zfr52  📄 The 5 Habits That Kill Team Unity: https://ter.li/uz9pkt    Offers From Today's Sponsors  💼 Go to Belay Solutions or text ENTRE to 55123 for their free resource!  💻 Visit NetSuite today to learn more.  🧾 Visit Payority for a free consultation!  📈 Grab ⁠Sales Gravy's⁠ free resource to help you hire and lead better. 📝 Use code ENTRE15 to get 15% off your first year of Trainual.    Listen to More From Ramsey Network  🪑 Front Row Seat with Ken Coleman  🎙️ The Ramsey Show    💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💰 George Kamel    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 Andre 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 folks like you. If you want to submit a question, well, you go to Entreeleadership.com slash ask or leave us a voicemail at 844-944-1070. That's 844-944-1070. Jacob is with us in Idaho. Hi, Jacob. Hi, Dave. Thanks for having me.

Sure. I'm the owner, CEO of a materials testing and inspection firm started it back in 2016. And this year, we have just over 20 employees, and we're on track to end up right at $4 million. Good for you. Well done. With a 25% bottom line on that, which is awesome. Wow, that's amazing. Good for you.

My question is, how do we more accurately plan and forecast for the upcoming season and year? Well, I mean, I think it's obvious that generally forecasting is based on the last few years as a trend line, right? and so if we go back, you know, what did you do in 2022, 2021, 2021, 2020 might be weird. But I mean, what's your trend line on that and what information can you gather from that that informs this year, right? And so we're always doing that. And so your next year is always like the year before. plus or minus the things that we are given. I mean, we know we've got increasing cost,

or we know we've got this customer is going away, or we know we've got a new customer coming online that we didn't have last year, so we can add that to the forecast. But you take last year's your baseline, and then whatever differences there are, we add and subtract those to try to come up with this coming year. And the longer you've been in business,

the more accurate you'll be able. to forecast. The longer you've had that product line or that service, the more accurate you'll be able to forecast. The first year you're doing it, your forecast is a guess. It's not even an estimate. It's just a guess. It's based on numbers, but it's, I guess we're going to sell this many units for this much revenue, and I guess we're going to have these expenses. But you're forecasting your first two years, is usually, should be the most in-house. accurate of your entire business career. After that, it should get better and better and better.

But you're probably already doing all of those things, aren't you? Yes, but my issue comes up of, so last year we did 1.6. Whoa. And then we jumped, yeah. So what caused it to more than double? Well, that's kind of the part of my issue is that we are, you know, so working in construction, right? I say that we're akin to a trade, but we work more on the engineering side.

Yeah. But I have, we're the last thought on whether it's a contractor hiring us or an owner developer. We're the last thought. Like I've had times they're breaking ground and then they call us, hey, we got this project for you. And it turns into much bigger than we ever anticipated. But I've also contacted some of our larger clients that are, you know, year after year. and I'm like, hey, what do you got coming up? And there's crickets because of their internal lack of communication.

And so that's where I'm just trying to get better ideas of how to communicate with some of these clients of ours. Out of $4 million, how many clients are you running? Oh, 60 to 80 a month. We had a month where we run 100 different projects. Well, that's a pipeline that's not that should, that you ought to be able to say, okay, what did I do to get 60 in the pipeline versus 30 in the pipeline? That's not based on their whim. You've done something that's caused you to get 30 in the, I mean, two years ago,

you had 30 and now you got 60, right? Yeah. If it was three, I could see the volatility because it was just, you know, it's on their whim and crap. I don't know what that one's going to do, and that's one third of the forecast, right? That makes it inaccurate. It's very difficult to put pen to paper on that one. but where you're going from 30 to 60 or 30 to 70,

you're doing something there. That's different projects, different customers, right? Some of it is, yes. And honestly, we don't do any advertising. It's all word of mouth, you know, which is amazing. And it does speak, and I do understand that speaks of volume. How wide is your geography footprint? How far out are you going from Pocatello?

We'll travel about two hours in any direction. sometimes more just depending. Okay. What's this market cap out at for you? Ooh. That I don't know, because right now we've got a lot of heavy highway projects from the infrastructure bill that are happening and will continue for the next couple of years.

But we've had just a lot of developers and development here in East Idaho happening. And, you know, I know some of my competition in the area, we've now kind of exceeded some of their offices, but I also think they're probably the $6 to $8 million range. So the idea that you could, you know, you've been taking some of their business here and there, you would end up taking more of it than there's plenty of market cap.

I mean, you could take this to $20 million, hypothetically, and not ever leave your geographical footprint, right? I wouldn't say quite that much, but there can be, you know, we could probably three to four X what we're at now with additional. Four would be 16, yeah, okay. Yeah, yeah. All right. That makes sense.

Well, I think what we've got to determine is where the customer base is coming from, and can we predict that that is replicatable? Can I continue that? or am I just totally going to be guessing for the rest of my life? I don't like guessing. That scares me. That's not forecasting. But basically we've got to say this revenue stream,

what have we got to do to feel good that when we say five, it's going to be five? And that represents 100 clients a month. And we know what it takes to get a client in the pipeline. And we've got to do, we've got a staff to make sure that that happens. and we've got to put resources and technology and marketing dollars or whatever to make sure that that happens. I think you've got to get under the hood here and not just say, okay, these clients are just generally, you know, they're just walking in, they're staggering in and dying in our lobby. We didn't kill anything.

No, you need to go, you need to figure out how this is occurring so that it's predictable, replicatable, sustainable. And then you've got a forecastable model, but where you don't have the sense, that you're controlling or contributing to the creation of a client directly, then it makes it very, very hard to forecast and very hard to do that. So I think you need to get under the hood and figure out where these clients are coming from, and then that'll help you lay your revenue model out. And, of course, you can back into expenses after you lay your revenue model out.

But I think you're doing something more than you realize you're doing, that the organization is doing something to put these things in a half. maybe you need to go back and survey. If you're doing 70 a month, you need to go back and survey a couple of hundred of these people and say, okay, how did you choose us? What was the process? How long is the pipeline? Where'd you hear about us?

What was the brand differentiation? What was the value proposition? Why did you choose us, in other words? And how did you hear about us? And then, you know, you start to put together a marketing plan based on that because then your customer starts to have a persona. They start to be that our general customer comes to us this way. It takes five months to develop them from initial contact.

And then I've got a predictable environment that I can create a forecast out of. And, you know, that's going to be the route I go if I'm in your situation. You've just got to get under the hood and figure out where the money's coming from and create a predictable model. And then you can forecast accurately. But it's, and it's worth doing because it's going to drive you nuts otherwise. because you're going to feel like you're at the whim of the wind blowing, and that'll drive you bananas.

This is the Entree Leadership Podcast. Have you given up on the freedom you dreamed of when you first started your business? Does it feel like your business owns you instead of you owning it? Well, get ready to transform your business because our latest book, Build a Business you love, mastering the five stages of business, is now available for pre-sale. In the book, we teach you how to implement the entree leadership system in your organization. This proven system is what we use to build Ramsey solutions from a card table in my living room to a $250 million company. You'll learn the five stages of business and the unique challenges you'll face in each stage.

Plus, I'll show you how to solve the right problems at the right time and the right way using the six drivers of business. Now is your chance to be one of the first people to get a copy. Build a business you love is the essential guide for a business owner like you who wants to grow yourself, lead your team, and scale your business. To place your pre-sale order, go to ontraryleadership.com slash build or click the link in the description if you're listening on YouTube or podcast. Jen is in Canada. Hey, Jen, welcome to Entree Leadership Podcast.

What's up? Well, that sounds like what I need because I'm looking at. at my business and going, should I stick with it or should I let it float over here at the side and I go back to my day job? That's where I'm currently at. I left my career of 20 years where I was always very successful and turned my side hustle got so big that it became my full-time job. And now I've since taken it out of my basement, I've got a bricks and mortar location. We're doing about $870,000 worth of sales a year, but I'm still not paying myself since getting the bricks and mortar location. And I have an opportunity to go back to work in my previous field, you know, make a hundred

grand again and get back to earning for my family instead of now having what feels like my business just drain me. You know, when I'm staring at the debt that the business has, I'm staring at, you know, all the expenses of having this overhead now and just thinking like every payroll, I go, oh, will I pay myself? No, no, no, no, no. Don't do it this week. How much debt did you take on for this?

Well, we bought the building, so we've got the mortgage on the building, and then we've got some renovations that we had to do and some startup inventory costs. So I would say we probably owe $450. What's the building worth? I'd say probably we paid, $390 for the building, and the place next door just sold in the sixes.

So I'm confident that if we sold it right now, we get at least probably $5.50 for it. So I think the building is an investment, I guess, but that doesn't help the mortgage payment every month. So if you didn't have the building, your business would be profitable? I think our expenses every month are about $20,000. That's payroll. You'd have rent if you didn't have the, if you didn't have the mortgage. That's it. I think it would be a wash.

I honestly think that the mortgage every month isn't what's bringing us down. I think that like overall sales are kind of tight or tighter than when we first, like 875 is what we did last year. I would say we're down to $5.50. we're on track to make $5.50 this year. And I think that's just, I think that's like economy and people doing just shopping less. That's what I'm seeing. I don't see us doing a whole lot different.

We used to do a lot, a lot, a lot of online courses. And now everybody wants to come in person. So COVID was great for us doing online. So we had a lot of online revenue. and now people are like, well, we'd rather come in person. And, well, you can only fit 10 people in a classroom where you could do the course before for 100 people. And so we try to now do online and in person, but people want in person. And you just can't do as many, it seems.

So my question really is, if I'm trying to adhere to the baby steps at home, which I am, but I'm never bringing in any income, should I allow my business to run as is. No. Without me here every day. It's not making money. It's not making money. There's no point in keeping it.

I'll just shut it down and sell the building. Or you've got to see a way to make it profitable, one of the two. If you configure a business model that gives you hope, a business model shift, a pricing shift, a delivery of product shift, whatever it is, the way you're doing the classroom thing, to where you actually are making a profit and you are paying yourself and you can see your way to that. If I try these three things and they don't work,

then I don't know what to do, then I need to close it. If you've tried everything and you don't know what to do and you're just waiting on lightning to strike, then it's time to close it. You close something, you end a relationship or you end a business, you end a job, you bring an ending to something when you lose hope that it's going to get any better.

What's your opinion on it making enough to pay the employees? No, thank you. It's not enough to pay me too. No, thank you. It's not a hobby. It's a business. It's not your job to do only create jobs. It's wonderful that you create jobs.

And that's a cool thing. But, you know, you're supposed to be making money owning a business. That's the point. It's not a hobby. And so you need to have a way to get this profitable, or you need to close it and sell the building and get out of the debt. And I don't know which one. I don't hear the idea floating in our conversation that saves this,

but it may be there. I just don't know what it is. I don't know what the idea is either. I think I would sit and spend some time in prayer, spend some time maybe even with your leadership team, if you're married with your husband and talking about this and saying, okay, before we close it, is there anything else we want to try? and if we try those things and we can't get it profitable we don't see a way to scale this we don't see a way

to break this log jam then um me working for free me owning a business and being 450,000 dollars in debt to make zero money is a bad idea yeah that needs to go away and the great news is it can go away and you can clear the debt and maybe put a little money in your pocket and restart your career. But I'm going to try to figure out a way to deliver this service in a way that I can get enough scale to it at enough price that it makes me money. You know, if the people want to come in, there's only room for 10, then maybe your pricing is too low per unit. If we raise prices where we have the same number of customers, I don't know. I'm amazed at what people will pay for small group engagement situation. versus being in an online setting.

And for the personal attention of, you know, it's almost like having a personal one-on-one coach because there's only 10 people in the room, you know. And so I'm amazed that that price point and what it will do in some areas, it might not do in your area. It might be the area of business you're in, what you're teaching or how you're doing it.

It might not work for you. But so I'm going to give myself, you've got a lot invested in this emotionally. financially and everything else. So I'm not going to close it today. I'm going to give myself 30, 45 days to come up with an idea. Or maybe to try a couple of things. And, you know, once I have exhausted all reasonable possibilities,

and then the conclusion is that I'm going to stay $450,000 in debt to break even. No, no, no, thank you. And make no, you know, no, I'll just close it, sell the building. and go get a job. And you'll make a lot more for your family, a lot more for your family in that whole process. And that's exactly the route I would go with that. Wow. I feel for you.

I wish I had the perfect thing I could just throw at you and go, just do that. But I don't understand enough of what you're doing to throw that at you. I'm sorry. This is the Entry Leadership Podcast. I'm Dave Ramsey, your host. This is the Entree Leadership Podcast. One thing I am sure of as a leader that when you have a team that is not unified,

not all dancing to the same sheet of music, not all aligned and heading in the same direction, it is almost impossible to create a productive, profitable environment that people love working in and that the customer loves doing business with. And yet very few teams are actually unified. People get a way. with it all the time. They seem to out-earn their stupidity on this subject. It's crazy.

And I have looked at unity and studied the power of unity for a very long time. The power of synergy, the power of when three people are agreed on something, when five or more are agreed on something, and we're all aimed at that direction, and we're all pulling out all the emotional and spiritual stops to cause it to happen. It's amazing what you can pull off with a team It's doing that. And I really don't know, after 30 years of doing this, what creates unity. But what I do know, and what I recognized a long time ago, is what destroys unity. And one of the things we teach in Entry leadership are the five enemies of team unity.

And what I have discovered at Ramsey, and many of you have discovered after I taught it to you, that when you fight back with everything that's within you against the five enemies of unity, when the enemies of unity are all put outside the walls of your building, then unity will occur. But these things will, they're poison, their acid in the system, and as long as it's in the system, you're going to struggle.

The first of the five enemies of unity is poor communication. When the right hand doesn't know what the left hand is doing, you can be guaranteed somebody's pissed off. It frustrates things, it's hard to move forward. And when people don't know what's going on, they will write a script in their head or with their mouth that makes the situation much worse than it really is. So communicate, communicate, communicate, communicate.

over, communicate, over, share. Share your story with your team, collect weekly reports from your team so you know what's going on with your team. You know, push, push, push, push, push through all of these things. Absolutely vital. Keep talking, keep talking, keep talking, keep pushing. Have staff meetings, have anything you can do to create wonderful, communication. communication. It's absolutely necessary. Have something like a vision statement. Have something like a mission statement. This is who we are. When we're not doing this, we're not a we. This is who we are. Communicate, communicate, communicate, communicate. If things are going bad, tell the truth. Tell people what's going on. Now, don't make them worse. Don't be super negative nanny about it.

Don't be Debbie Downer, but tell them, we're not profitable this month because we have this problem. you know, when things are going great, tell people. Tell them what's going on. Tell them about the future. Tell them what you believe about good, about what's going to happen and what's happened, you know, where we're going from here. Communicate, communicate, communicate, communicate, communicate, communicate. George Bernard Shaw said the biggest illusion of communication is that it has actually occurred.

And Andy Stanley used to say, you have to tell people something 21 times before they hear it. talk about everything over until you're sick of it, over and over and over and over again. The second enemy of unity is gossip. We have a core value at Ramsey that we have zero tolerance for gossip. It's not actually true. We actually will have a little tolerance. We'll warn you one time before we fire you. Hand your negatives up.

You're going to have negatives. If you weren't here pushing things, if you weren't here, moving things around. If there wasn't friction, you probably wouldn't have a job. So expect problems. Expect frustrations. Expect speed bumps.

And when you have a problem, not if you have a problem. Hand your negatives up to someone in leadership that can do something about it. Don't spread your negatives all around. If you hand your negatives down or spread them around, we will warn you one time

and then we will say, you know, you can't gossip and be here. And you can't talk negatively about other people. You can't do anything. You can talk to leadership about anything. You can vent there. You can't be belligerent, but you can bring in a concern. You can talk about this situation with this person. You can this relationship break down, anything you want to do.

And so we're going to fire you if you gossip at random. Ramsey. And by the way, if you were to take a poll or a survey, which we have done of the people at Ramsey, it is one of their favorite reasons for working here. They work in a non-gossipping environment, because gossip destroys the environment. And the worst form of gossip, in my mind, is where you're running the company down. You're running the leadership down. You're running the ownership down. and my friend Henry Cloud says, I don't understand people pee in their own cereal and then gripe because it tastes bad.

You work there. This is where your money that feeds your family comes from. Your children have food because of this place, and then you are tearing down the place? What kind of moron are you? I might not even warn you once for that one. I might just fire you for that one because that's not only gossip, it's disloyalty.

And it's a lack of integrity. but, you know, depending on the situation and how extreme and so forth, we're there. But, you know, well, I hate this or I hate that or whatever. That's fine. Talk to leadership about it in a non-belligerent way, and you're safe to do that here. But we have a zero gossip policy at Ramsey. That simple. The third enemy of unity is unresolved disagreements.

where you have a disagreement with someone, someone has a district, two people on your team have a disagreement, and they do not come to closure, healthy conflict, mental health closure on that disagreement. It just boils and festers inside and becomes a splinter in the organization and eventually infects everything

because it will spill out of their mouth as gossip eventually. They'll spill out of their mouth as some kind of negative situation. So teach the idea that good organizations, my friend Pat Lenzioni, talks about this, the best organizations learn how to do conflict well. It's mental health, it's organizational mental health to learn how to do conflict well. We do a lot of conflict at Ramsey, but we're not destroying the human beings that are involved. We're destroying bad ideas. We argue about which play to call.

to win the Super Bowl. We do not argue about whether so-and-so is capable or not. That's a different discussion, and that's not an argument. That's deciding whether somebody can stay or not based on competency. But this idea that you can just, everybody can disagree, everybody can not like each other, everybody can disrespect the value system of the other person and still have productivity and still have unity,

crazy. So you got to have difficult conversations. You've got to bring stuff out. You've got to talk about it. I had one person come in my office and say, well, I need to tell you this about so-and-so, but you can't tell them where it came from. You don't need to tell me anything then. If you can't stand behind your words, then you don't need to come in my office and tell me something. You're just whining. So if you don't feel strongly enough that this matters for the good of the person you're talking about the good of the company, the good of the organization, that you can stand by your own words,

then you don't need to utter those words. That's cowardly. Because I've got to go deal with it once you tell me, and I'm not going to go deal with it with an anonymous source. How cowardly is that? Anonymous source came to me and told me that you were doing, oh, bull, what a wuss.

So, you know, don't come in my office and tell me that. Just say, hey, you got a problem with so-and-so, I heard so-and-so. I don't know how to talk to them about that. Can you help me? What do we do? I'll talk to them about it. I'm going to tell them that you heard this,

and I may call you back in here, and we all may all sit here and talk about it. But we're going to have a resolved conflict, not an unresolved disagreement when we finish, 100% of the time. Had another lady came in and she said, well, I've got to talk to you about my leader. They're incompetent this way.

They're incompetent this way. They're incompetent this way. I said, yeah, I understand. And I appreciate you bringing that me and actually a couple of points you brought up are not right and I told her why and a couple points you brought up are right and we're working with your leader on that and we're you know no one in the building is perfect but we're working with them thank you for bringing it to me I appreciate that and know that this is a project that's underway well three weeks later she's in my office with the

exact same issues and I'm like I told you we're working on this and she's like well it's still there. And I'm like, well, I know it's still there. It was three weeks. It doesn't, you know, it's not like you're going to fix this in 20 minutes here. You know, ride with us on this ride. It's, this is a process where we don't shoot our wounded. We work with folks and bring them back to wholeness and move on to the next thing. And three weeks later, she'd back in my office again. And I said, look, now you're not questioning that person's competence. Now you're questioning my competence. bringing the same thing in here three times after I've explained it to you

is now you're saying I'm not competent because I haven't fixed it at the speed at which you think it should be fixed. So now you and I are starting to have a problem because you can't think I'm incompetent and work here. That won't be okay. I'm the owner. And she ended up leaving. Which is okay.

It's perfect. That was a resolved disagreement. The fourth one is lack of shes. shared purpose. The team needs to know what your desired future is. We help you with that in Entree leadership. The team needs to know what your defining objectives are. We help you with that in Entree leadership. We work you through all of these processes. The team needs to know what's going on and be aligned and this is where we're going and this is how we're going to get there. These are the processes. And this is what winning looks like. This is what the end of the year. We need this

many numbers on this revenue, on this sales units, whatever it is, and we're all aligned on that. We have a shared purpose. We're not running in 14 different directions. If you run in 14 different directions, all you do is destroy the wagon. You don't pull the wagon. You just tear it apart. So we have to pull the wagon up the hill and we have to be walking in the same direction and aligned in our steps and in our processes. And that comes. from communication. And that comes from having a shared purpose and then aligning everyone to it. So when the right end doesn't know what the left hand is doing because they don't know what

they're doing, because nobody knows what they're doing, there is not a shared purpose. You can't win. If we can all agree that we're trying to score touchdown and what a touchdown looks like, there's a line over there. We need to get the football across that line. Then the only thing we've got to fight through is what the most efficient is. way to get that ball across that line is that we have a shared purpose it's a clear goal that we're all aligned to and then the fifth enemy of unity is sanctioned incompetence this comes from my friend john maxwell

and it's a really nice phrase sanctioned incompetence what it means is when you are a weak leader and you allow people to continually not do their work for whatever reason you give everyone else permission to not do their work and to not be unified because they don't have respect for that person that's not doing their work and they don't have respect for you as a leader because you're weak you're not willing to step into the conflict and require excellence of the team and when you're not willing to do that when you're willing to go along to get along well so-and-so gets a pass because they're a friend well that you're screwed that you're not going to have team unity around that. Team unity comes when we expect excellence of ourselves and of everyone around us

consistently all the time. The only exception of that is if someone's going through a hard personal time, their child is ill. Well, they're not going to be excellent when their child is ill. And you're giving that person grace. And someone comes to you and says, well, you know, so-and-so is not pulling their weight. Yeah, I know. But they've got a personal issue at home and we're giving them some grace. So we've all got a cover for them right now until they, and then when they get past this thing, then they'll be back in the harness again with us.

But right now we're picking up their slack. That's not sanctioned incompetence. That's grace. Sanctioning incompetence is when I'm too weak-need, too wussified, to face the person that's not doing their job and call them out in a kind way, in a very clear way

and have the uncomfortable conversations and say you have got to get aligned to excellence again or you're not going to be here. And that's a process too. So those are the five enemies of unity. When you toss them over the wall outside your organization, well, then you're going to start to see unity occur.

When you've got good communication instead of poor communication, when you've got no gossip, when there aren't unresolved disagreements, when we learn how to do conflict well and come to a good mental health organizationally, we have a very clear shared purpose. And when the leadership is not wussified and they are actually addressing incompetence for whatever reason, other than a grace pass on something, when you do those five things, you're going to see the whole air change inside your organization.

That's how it works. The five enemies of unity must be removed. I'm Dave Ramsey, your host. This is the Entree Leadership Podcast. Thank you for joining us. We could use your help. If you will follow this show,

click the follow button, the subscribe button. It helps us a bunch. Leave a nice five-star review and share the show. Share the link with someone. Or click the share button, however it is, your particular platform, allows you to do that. It's a big help to us.

And we need it, please. It has made a lot of difference in the numbers since I came on the air with this a couple years ago. Taking over this old podcast that we've had a long time and took it to this caller-driven format, the numbers have gone way up, but they didn't go up because of me. They went up because you guys told people about it.

Thank you for doing that. David is with us in Virginia. Hi, David. Welcome to the Entree podcast. Hey, Dave, it's an honor to talk to you. A long-time listener, first-time caller. Thank you. How can we help? I am an owner of a deck building company. We did about 1.4 million this year, and we have about 12 members on our team. Okay.

We went to a summit this year, got all hooked up with a coach and advisory group, and we've been killing it this year. The question I have for you is, I want to keep. growing, but I'm struggling with feeling the burnout of having so much stress of having so many people on the team now. I know it's just 12, but it's 12 families that we're close with. They depend on our company for their livelihood. So how do I weigh wind is growing enough and how much do we keep growing? growing.

What's the stress from? Well, we, uh... How is the team causing you stress? Right. I've become the chief accountability officer, and that's not exactly my strength. Accountability for what? For their KRAs, they're hitting their numbers, profitability, training. And it's, uh, we, we hired up a lot of...

guys this year and then we had to let some go and now i think we're in a good place now but it's still we got a very young team what's the stress again where's the stress coming from really it's it's the payroll every couple weeks you know it's a heavy payroll every two weeks are you not profitable it's tight we're getting i think the last three months we've we've really got to the got to a good place have you hired too many people or did you lose jobs? Why would you

I mean at a given payroll at 1.4 million with 12 people you should be profitable. Yeah over the summer we hired too many and then we let some people go in the last three months and we actually saw our revenue increase and so it's kind of like relieving pressure

on like lower performing jobs taking too long callbacks okay so what i think i'm hearing is that the size of the team is not stressing you the payroll is not stressing you underperforming team members and underperforming jobs that you went through as a as a learning experience in the last 12 months brought you stress, but it's not the 12 people that are there now, and it's not the revenue that's there now. That's all running fine, I think. Right. I'm looking at, if I want to keep growing, doing that again next year is overwhelming.

Why would you do it the same? What you've got today is working, right? Right, right. So if you had double the number of people that you have today and they were all the same quality of the people you have today and you had three million in revenue there's no downside to that there's no stress to that the stress came from the underperforming projects and the underperforming people not the fact that you merely had payroll so your my point is you're assigning in your brain this stress or burnout or uncomfortable feeling to the wrong thing you've a

signed it to team size and to revenue size or payroll size, and that wasn't what was causing you stress. What you told me was causing you stress was crappy people and crappy jobs. Right. And if you keep doing the same crappy people and crappy jobs over and over, well, you would deserve the stress, but that's not a reason to downsize. You wouldn't do that. That'd be silly. Right. So why is it you would think that I have 1,000 people and I'm not stressed? You have awesome team members.

Uh-huh. Why else? They're great at what they do and they... Plenty of revenue to pay them. Right, right. We don't hire more people than we have revenue. Now, the stress that I do have, you know, can come from the exact same places you had last year. It can come when crappy people get in the building and removing crappy.

people's a stressful process, right? Removing the donkeys because I accidentally hired one, or we accidentally hired one, wouldn't be me, but we accidentally hired a donkey instead of a thoroughbred, which is what happened to you? Or we have a business unit that is not performing, and the revenue starts getting tight, and always the biggest line item in a business unit, expense-wise, is going to be payroll, just like you have. You know, when things are screwed up, it's the screwed up stuff that causes stress. It's not the scale. That's my point. Right, right. And that's manageable because I can do something about the screwed up stuff. And, okay, find out why crazy got in the building and close that door. Crazy can't use that door anymore. And so we, you know, we add an element to the interview process

to keep the nut burgers out of the building, or at least attempt to, right? Right, right. And because I got to tell you, man, you got 12 people, one or two bad ones out of 12 people can screw up the whole, I mean, it just takes all the fun out of the business. Yeah, yeah, we. Because they take up all your, they burn all your calories. And they're 10% of your people, and they burn all your calories because they're duffus. And it's just a pain, you know. That's the reality.

It's, you know, business is awesome until people get involved. The greatest blessings in your life are your great, team members, the greatest curses in your life, or the crappy ones that got in the door. And that's where it comes from. So, no, I wouldn't, I think you're calling out the downsizing for the wrong reason because you've assigned the stress to the wrong thing. You've said it's payroll size or revenue size. It's not.

If you could do 10 million, if you could do 10 million and you had 50 people, you'd have an incredible life. But they had to be the right, 50 people. Right. And if you've got 10 bad ones out of those 50, God, you got a nightmare. So, no, I think you need to scale the business. I think you need to continue to grow your business. But what you're learning is a hiring process that keeps problems away.

I'll bet you've even run into that. How long have you been doing this? We're just finished up our third year. Okay. Have you seen, have you noticed a pattern? with the customers that are crazy. Yeah, for sure. Yeah.

To where you can say, I see that one coming. I'm just not going to take that job. This is more trouble than it's worth. Oh, yeah. Yeah. So that lowers your stress. Uh-huh. When you identify a pattern with crazy customers,

you go, ah, the last time someone acted like that when we were signing them up, they were a pain. The last three times someone acted like that, and they signed up. They weren't worth the trouble. We ended up losing money on the job, and they still were pissed when we were done. I don't want them as a customer, and you just go, you just shut your notebook and go, you know, I'm sorry, we're not going to be able to do this particular deck for you. You're going to have to get someone else, and you leave that high-maintenance problem customer on the curb, and you go pick up four more good ones with less energy burned than

that one crazy one would have burned. Once you identify the pattern of how you acquire a crazy customer and how a crazy customer acts in the initial interviews, and we don't do business with them, they take up too many calories. Hiring a team is the same exact thing. You're going to get better at it. I'm a lot better at it than I was in the old days. I used to use a mirror, and if they fogged it up, we hired them. That's how bad I was. That was dumb. And man, you want to talk about getting some idiots in the building. That method right there will do it, and you've got a problem. And you're trying to heard cats and they're all crazy cats. You know, it's just a mess. So, David, I think you're better at this than you feel like you are and your lack of confidence. I think you've learned more in the last

18 months than you're giving yourself credit for. I don't think you're ever going to have the exact the same mistakes again. You'll have new ones, but you won't make the exact same mistakes in hiring or in crappy projects that aren't profitable that you did in the last 18 months. I don't think that cause of stress will reoccur. You'll have a different one later, but it is not associated with the size of your payroll. And it's not associated with the size of your business. That's not causing your stress.

That, the fact that you're assigning that is caused by, you. you've got some of your confidence stolen when you got your nose bloodied on those other two things. And now when I look up, I go, gosh, I don't know if I've got what it takes to do this. Well, you do have what it takes. I can tell by talking to you. You've got the right stuff to do this.

I think you've just framed it wrong. And once you reframe it and say, okay, I am not a guy that has a bad team. I have a good team. I had a couple of bad ones, but that's not who I'm. am. And now I've learned from those bad ones, and I may get other bad ones in the future, but I won't get them for the same reason. And I'm not a guy that has bad projects that take too

long and aren't profitable. I know exactly what caused that, and we won't do that process again to create that style of business again. That's no fun. I'm going to pass on that. You're a good man. You need to keep fighting, brother. Remember better a weary warrior than a quivering critic. This world needs more high-quality leaders. Take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.