EntreLeadership - How to Confront Business Nightmares

Episode Date: February 27, 2023

Today, we hear from: A business leader who is in the middle of a family business nightmare from inheritance A business owner who wants Dave to talk him out of financing a vehicle for the tax break An inventor who is wondering if he should work with a venture capitalist A journeyman carpenter who wants to know the difference between greed and profit Links mentioned in this episode: The EntreLeadership Podcast: https://bit.ly/TheEntreLeadershipPodcast Start your free trial of EntreLeadership Elite: https://bit.ly/3tI2fN8 Learn more about the EntreLeadership system: https://bit.ly/3J2BCJ0 Thou Shall Prosper by Rabbi Daniel Lapin: https://bit.ly/3xqo5Gz Get your ticket for EntreLeadership Summit 2023: https://bit.ly/3LRiZJH Have a question for The EntreLeadership Podcast? Leave a voicemail at 844.944.1070 or submit your question for your 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 to your inbox every week: https://bit.ly/3IRWnsL Support our sponsors: Hite Digital: https://bit.ly/HiteDigital NetSuite: https://bit.ly/NetSuiteEntre BELAY: https://bit.ly/351P9AE Payority: https://bit.ly/3IaA5SK Staples: https://staplesbusinessadvantage.com/ramsey Learn more about EntreLeadership Events: EntreLeadership Summit: https://bit.ly/EntreLeadershipSummit EntreLeadership Master Series: https://bit.ly/EntreLeadershipMasterSeries   Learn more about EntreLeadership Coaching: Elite: https://bit.ly/3tI2fN8 Advisory Groups: https://bit.ly/EntreLeadershipAdvisoryGroups Executive Coaching: https://bit.ly/EntreLeadershipExecutiveCoaching Workshops: https://bit.ly/EntreLeadershipWorkshops Listen to all the Ramsey Network podcasts anytime, anywhere in our app. Download the 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. I'm your host with over 30 years of experience leading Ramsey Solutions, running businesses before that. I've done a lot of stupid things in my life, so I can tell you what stupid looks like, and I've done enough smart that we ended up with about a $300 million revenue around here. So if you want to talk to a practitioner about how to run and grow your business from a

card table in my living room to where it is today, I'm your guy. If you want theories, you're probably have to go somewhere else. The phone number here is 844-944-1070. If you want to participate, call that number. Let me give it to you again. You're running a business. You've got a question. Tell me your nightmares. Tell me your struggles. Tell me how I can help because I want you to win. Gosh, man. When small business wins, America wins. If you're really struggling with something, 844-9-44-1070. Maybe you have a technical question. I'll try to answer it.

I'm an expert on my opinion. Entreeleadership.com slash ask. You can also put your question in there, and we'll get back to you, get you on the air and make you part of this podcast. Entreeleadership. com slash ask or the phone number again, 844-944-1070. Mike's in San Francisco. Hey, Mike, how can we help? Hi, Dave.

Thank you for taking the call. I'm really excited to chat with you. You too. Dave, I'm in the middle of like a family business nightmare from inheritance. Oh, God. And what we've got is we've got a company where my dad was partners with his brother. And my side of the family owns 47% of the business. And my uncle owns 51 or 52% at the other side.

And there's no shareholder agreement, right? every one of the kids got dished out their individual portion. But, you know, there's no way to get the money out, Dave, and there's a lot of funny business in the business right now. And I'm trying to figure out what do I need to do to, like, navigate this problem inexpensively, or is there a way to make this all work for us? You know, and there's no profit sharing or anything like that. And so I'm just looking for some help, and I'm open to answer any of your questions.

Okay. So you and your brother and sister's on 47 percent that was your dad's share before? Yes, sir. Okay. And your uncle's running the business? Yeah. Any of you in the business? I'm in the business.

My brother is no longer in the business. He didn't want to have anything to do with it because it was so challenging. What's your position? I'm the second vice president of the company, and I sit on the board of direct. with my mother. Okay. Is the, so is this a, an LLC or sub-S or what?

It's an S-Corp, but used to be a publicly traded company that was taken private in the 80s. Okay. What's the top line? Top line. Revenue. We do about, we do about $1.8 million, but we've got a lot of commercial business assets in the form of real estate. Okay. All right.

So what is your desired future? If everything went right, what would it be? Liquidity of that. Everybody gets a bag of money pre-tax somewhere in the neighborhood of $9 million for the people that own 13.5%. They can take their 52% of the money and go do whatever they want to go do. I think that's probably the easiest way to do it. I mean, the kids don't know anything about the company outside of my brother. The uncle wants to sell or doesn't want to sell?

I think he's just going to hold forever, Dave. We've had some opportunities to sell some of the assets, but the deals did not materialize, and we were not involved in the business discussions of those deals in terms of negotiation. And you don't have to be. You're a minor shareholder. He's got the power.

Yes, sir. Okay, you guys need to get some legal advice before you sit down with your uncle. So you know what your worst case scenario is, and then you're going to have an ultimatum. It sounds like, doesn't it? That's kind of where I think it's going, Dave. I mean, there's... Because we've tried to talk to him, and he just stonewalls everybody and goes, screw you.

I'm going to do what I want to do, which he technically can do. Yes. But as if everybody's going to stand around. So if this were a general partnership in most states, now I'm not an attorney, and I certainly don't know California law, which is weirder than crap in most cases. But a normal way of looking at this, if this were a general partnership, you could simply sue for it to be disillusioned, for it to be liquidated. Even as a minor shareholder, you could sue and have a judge rule that since he's not maintaining his fiduciary role for the minor shareholders, meaning you guys got no say, you got nothing, you get no distributions off of the profits, you get nothing out of this. and so the judge is going to say, liquidate this.

Now, that's with a general partnership. A sub-s is more complicated, especially one that's come back private after having been public, so I have no idea what's in your charter and in all of that. The board of directors, I assume you don't have enough votes on the board of directors to force this either, right? With people that what the uncle would like to do. So you're going to have to get some legal advice because, honestly, I don't know what you're going to be able to do.

But let's pretend for a second that my thing. theory could be right, and I have no idea if it is, that you could sue for disillusionment. And you know, you could go to circuit court and the judge drops the gavel and says, I am ruling that this business has to be sold by the state. And these assets have to be liquidated and the shareholders have to be paid out their pro rata amount. Okay. That would be a normal ending to an adversarial situation like this in most methods of ownership. But again, you've got to get legal advice.

If you have the, let's pretend for a second, because I don't know any other way to get you out of this. Let's pretend for a second that the judge will, that that is a way, that that can happen in California with the sub-ass with the way yours is structured after they review your charter and everything. Okay. If you can pull that off, then you've got something to put in front of your uncle to move him. So we need to, uncle, we need to work together, maintain all of our relationships. We want to love you. Dad loved you. He worked with you.

You all grew this thing. I'm in here working trying to help you make it work, but the way it's going is not going to continue. Either you and I are going to develop a game plan with some deadlines that some of these assets are going to be liquidated, and the business is going to be liquidated, and the shareholders paid out, and you can go get the money and buy us out. You can, we can sell the thing off, or we can sell all pieces of it at a time, and book value it. don't really care, but we're not going to sit here and get nothing and you do whatever you want. Those days are over. Please, let's figure out a way that we can work with this and do it together.

And, you know, very kind voice, but very solid and saying, you know, and so doing nothing is no longer an option. You're either going to volunteer, and we're going to do this together as friends and family and maintain, or we're going to have a judge make you do it. that's assuming you can have a judgment you do it. Or you could just say, we're going to drag you into court, and it's going to cost everybody everything because we're not going to sit here and watch you just run this thing in the dirt.

And that's even if you couldn't win. You can still make it so painful that he will get out. Yeah, yeah, really. I would much rather just do this on a relationship basis, but it sounds like you all have given that a shot. Well, you know, Dave, I don't know if the relationship route is exhausted. But, you know, like, I do find myself hovering my hand over a nuclear button, right?

That's exactly what I'm talking about. So sometimes it helps to have these conversations from a position of, because sometimes what we have to do with your uncle, people in your uncle's situation, in any kind of negotiation, I often find myself having to explain to them repeatedly in the conversation. We're not staying where we are. That's not an option anymore. We're either going to go this way or I'm going to take us this way. I'm going to push the button. Okay? And so, you know, but, but, well, we're, you know, everything's no.

No, no, no, no. You don't understand. We're not staying where we are. And you just got to, there's like something has to be pierced in their, through their brain to get them to hear that. You know what I'm saying? Yeah. You have to use a primar to really get some leverage.

Yeah, he's just not used to people telling him that he can't do something. They're right, Dave. And so we are going to change this. You don't have an option in that anymore. The only option you have is whether you're going to participate willingly, and we're going to do this on a friendly basis, and we're going to walk this out, or whether it's going to get nuclear. Yeah.

I don't really want to go nuclear snow fun, but we're not going. No, it's not going. Yeah, we're not going the way we've been going for the last three years. You're driving everybody nuts. Yeah, you know, and I think, Dave, I think that's really good advice. And those two options were top of mind for me, just for me doing my own due diligence as an owner. And I've spent the last three years after inheriting this thing trying to learn as much as possible about it, right? to try and figure out, well, what's a risk, what isn't a risk, how do I get rid of a risk, you know, that kind of thing.

And this stuff keeps me up at night, Dave. And I kind of, you know, I've got a little more clarity. Thank goodness you talked to me because I knew you had a lot of experience to draw upon. And all the lawyers wanted was a boatload of money. Yeah. Yeah. But they need to give me something to, that's a crowbar. because honestly, unless in, well, in California, I don't know, but in most states, you can cause a lawyer, I mean, a judge and you can put it before a judge in a circuit court and him or she, he or she dropped the gavel on it for 25,000, 30,000 bucks on a disillusionment of a general partnership that has crummy documentation, which is almost all of them.

They have crummy documents. They don't have exit strategies. And your, your, your shareholders agreement and your charter sucks because it did not, it did not account for a situation like this. And that needs to be addressed in the documents when you're doing a succession plan. And that's the problem you get into. So, hey, man, that's, I'm sorry. Sorry you're facing that. Folks, the legacy builder stage of business is the last stage of business.

That's where they are or that's where they were when his dad was alive. your job is to create a succession plan in that situation. And that includes the legal transfer, the financial transfer. What happens when the old man dies? We have that meeting around here ever so often. What happens? If Dave dies this year, we always have one of those once a year. I call it the Monty Python meeting.

I'm feeling much better. It's just a flesh wound. But every year we do a meeting that's if Dave dies, here's how this is going to go around Ramsey Solutions. And then we know what's going on. And everybody knows. leaders know, the family knows, everybody knows. This is Entre Leadership Podcast. Welcome back to the Entree Leadership Podcast. Let me finish that thought. When you're at the

Legacy Builder stage, that is the fifth stage of business. Your primary problem at that point is to figure out how the business is going to exist without you and how it's going to be transferred. That's called a succession plan. If you've been running the business more than about 45 minutes and you've not started thinking about your succession plan, you're already late, I started working on mine 14 years ago. Now, wait a minute, 15 years ago now. And it's, I got to tell you, those of you that own a business, it's devastating. Because it's like doing your will, it makes you think, I'm going to die any minute, right? But it's number one. But number two, you're planning either due to retirement or death to become less important.

And the problem is if your plan works, you become less important, which kind of pisses you off. I'm just speaking from experience, okay? And so, like I've got all these Ramsey personalities now, so I'm less important. But it's my fault. But it's the only way this place survives. Otherwise, it dies with me, which would be kind of dumb after spending all this effort to build it up. And so if you want your family all to be pissed off at each other, generationally, leave a business and a mess like that last guy's in. Because now we got cousins and uncles and brothers and everybody's stressed and there's millions of dollars on the line.

And so they're really stressed and they're really unhappy. It's just bad business to not develop a detailed estate plan and succession plan. who's going to handle the operations, how are decisions going to be made, how do we decide exit strategies for shareholders that want out? How are we going to, do we need a buy-sell agreement funded by life insurance, which is usually what happens when there's two brothers doing something like that? One of them dies, a chunk of life insurance is left to the other one to buy out his kids, the one that dies kids. That's called a buy-sell agreement. And we see that. typically with a partnership, a two brother or two sister or whatever, two sibling operation.

Because usually the uncle doesn't want to be left with the kids of the other one. And, you know, running around going, I want my money like that last one, which is reasonable. So I don't care what your plan is, but have one. And when you're at the legacy builder, the last stage of business, after you've worked so hard to get your business up and running, have a way that the revenue sources transfer, have a way that the buyouts are financed with insurance or something, have a way that there's a will and a detailed document, shareholders agreement, LLC agreement, whatever it is, partnership agreement, have everything detailed out. And it's stuff we don't like to work on when we're trying to

run a business because we're busy running the business. But here's what's weird is. The very everything that you've loved and poured your life into, you're destroying by not doing it. Because that business and that last call is not going to survive the fact that they didn't do this. The business is going to get liquidated in some form and it's going to be nasty because the old, two old men didn't do their jobs in this area. And so it haunts me. And so I spend an inordinate amount of time and an order an amount of money on making sure our brands transfer, making sure our ownership. transfers, our leadership transfers, and there's a detailed succession plan. That goes with the territory. And if you're running a business that, you know, is of any size, you need to do that.

Really, you need to do a period. If it's two old boys in a plumbing truck, for God's sakes, figure out who gets the tools, you know, just work it out, lay it out. And that way, because, I mean, people will not speak to each other over a wrench, for God's sakes. Generations. So particularly people like hillbillies like me or some of you Cajuns out there, you Italians. I mean, we carry grudges generationally, right? And so you've got to do this stuff. You've got to lay it out in detail, folks. All right.

Up next is going to be Wes in Myrtle Beach. Hey, Wes, welcome to the Entry Leadership podcast. What up? Dave, how you doing? I appreciate you having me. It's an honor. Honor to be with you, sir. How can we help?

I am personally. debt-free except for my house. I own a small insurance agency here in Myrtle Beach, and the only debt I have is my vehicle, which I've $179 expense in the first year. That was two years ago, and I need you to talk me out of doing that again in a couple of years. You can $179 it without debt. Why would I talk you out of it? Well, then I get to keep, you know, 80% of that cash across the few years that I pay it off. Oh, you're talking about financing it to $179. I'm sorry, yes, sir.

Oh, but if you're $179 it, you're writing the whole thing off in one year. That's right. You got your cash all back. You've got the full deduction in one year. But I've spent the cash up front. Yeah. Yeah. Listen, I have never met a multimillionaire who financed their way into tax breaks.

I had a feeling that's what you were going to say. Never met one. And so you're just playing with games here trying, you know, trying to find some way to get, as another caller on the podcast a couple weeks ago said drunk Uncle Steve, Uncle Sam, right? Drunk Uncle Steve, I think I'm going to use that forever. But you're trying to keep drunk Uncle Steve. You're spending too much of your brain power keeping drunk Uncle Steve out of your life. We won 79 max out around here every year, but it's for stuff we paid for. Right.

And of course, you're not getting at all back. And when you're just getting the deduction, but at least we're getting it. in the deduction. But it's a business expense that gives me an ROI. And I'm not, now, if your vehicle is not giving you an ROI, then it's actually a personal expense. Got it. So as an insurance agent, I do use my vehicle.

Okay. You know, every day. But does the purchase of it? Does the purchase of the upgrade give you a return on investment? Probably not. It would not. It gives me an excuse to have a nicer car. really how the CPA kind of outlined it.

Yeah, that's exactly what it is. So, I mean, if you were doing this for an employee, you wouldn't be upgrading the car. That's a good point. If you're furnishing a company car. I should treat myself as an employee and not. Well, I mean, just think about it that way, because what you're doing here is creating overhead.

But I would do the upgrade and take the 179. If you're using the car enough to justify it in an audit to where you're going to survive the audit to 179, the thing, I would do it. But I'm just going to pay cash for it. Life's just too short to be deep, to be in debt, man. I'm just not doing that crap. It doesn't work.

Hey, man, thanks for the call. Sorry, I don't know if I talked you out of it because I think you and your accountant are kind of into this stuff. But I'm not. I'm into not having any payments regardless, even if it helps me beat up. Listen, I hate drunk Uncle Steve, but the only thing I hate worse is banks. So, and debt. So I'm not going to go in debt just to punish drunk Uncle Steve. That's what it amounts to.

It's just that simple. for me. So, hey, running a business is really hard. You spend all day putting out fires as the chief everything officer. End of the day, you get home, you flop back on the couch, your spouse says, what's you today? I have no freaking idea. I'm just exhausted because I'm a fireman, and I'm not even in the fireman business. You can change this. That's the sense that you're on a treadmill. You're just a rat in a wheel. Your business is running you. You're not running yet.

It's exhausting. It's lonely. It's anxiety inducing. It's stress inducing. Can you tell I've been there? It takes a lot of the fun out of this. I mean, when you're not getting traction in something, you don't know what you're doing. Hey, you need a plan and the tools that fits into your day that breaks through the exhaustion,

gives you a plan to where you're not, where you got the sense of traction. Around here, we call that entree leadership elite. Now, Entre leadership gives you the tools, gives you a detail plan, gives you teaching lessons by me and other people here on the Entree leadership team, showing you how to level up through the different stages of business, how to work the drivers of the business so that you're moving forward and getting more and more and more sophisticated, more and more and more peace in the business, more and more and more traction in the business. And it's free for the first 30 days. Did I mention it's free? Hello. It's free. for the first 30 days.

And you can get in there and figure out if it's worth any money or not. The weekly report tool alone is worth more than we charge for Entree Elite. Entree Leadership Elite. Check it out for free. Entreeleadership.com slash elite. Entreeleadership.com slash elite. Now there's six drivers in business. And they are in order and they do feed off of each other.

and they give you momentum. My friend Jim Collins calls the concept of flywheel. This is not exactly a Jim Collins flywheel, but it does have some of the sense of that. The first driver in business is the personal driver. You thought it was profit. You thought is I got to get a product out there. No.

It starts with you. You will discover soon in business that almost all the problems in business or problems you caused. I've discovered that. I figured out that I had some bad people in the building, and I figured out that that was my fault. I let them in the building,

and worse than that, I kept them. That's my fault. I've got to grow as a hiring leader. Got to grow as a boss, as a manager, whatever title you want to put on this. I like leader because I want to be in front showing the way. But it starts with personal and personal growth. I'm the problem, and I'm the solution.

I've got to get better. why you're on this podcast. It's why you're listening. Starts with personal. We're going to be covering all these drivers over the weeks and all these stages over the weeks and how this process works to level up and grow your business and get better and better and better as you go. So I want you to be sure you're listening as we do that because it goes from personal next to purpose and then to people, then to plan, then the product, and then the profit. And as you go around through those drivers and you get better at each one of them, you're driving the business, driving the momentum of the business is spinning up and leveling up for you. I'm going to keep showing you that over and over and over

and over until we get you where you need to go. This is Entree Leadership Podcast. Thanks for listening to the Entree Leadership podcast. Justin's with us. Justin's in Boston. Hey, Justin, what's up, man? Hey, Dave, thanks for taking the time to speak with me. My honor. So I have a full-time job and a side hustle, and as part of that, hustle I have an idea for an invention, for lack of a better term, that's been engineered and designed, and I have a prototype that is in the process of being made now. And as I look ahead to

potentially bringing it to market, one thing that keeps coming up is venture capital. And I follow your principles. I run my life, my business debt-free. And I haven't heard you speak about venture capital. I'm wondering what your take was on it if it ever works, if it never works. and so I would just like to ask you what do you think of it? It works if it takes you where you want to go and where you want to go has to be a liquidity event that you put enough money in your pocket that if they take your baby and don't rocket,

you're still okay and you walk away. But if you think you're going to have friendly partners who are just going to lift you up and cause all of your dreams to come true, no, a friend of mine's in that business, he says a venture capitalist is like picking up a hitchhiker and then they carjack you. So, I mean, that's what I'm afraid of because.

Yeah, it's kind of the way it ends up being. Because basically, think about it. If you change shoes for a minute, the venture capitalists aren't evil. I've got several friends that do it. And they do it with a good heart. But if I'm going to drop, let's just say we drop 15 million bucks into your deal. Okay. And all you've got is the idea.

So what I'm going to have, then, is control. Right. It's the old, you know, he's got the gold, makes sure. the rules or whatever, the golden rule. But, I mean, I don't like that because it sounds greedy. But here's the thing. As if I were doing venture capital, and venture capital is the same way, they're going to have 80% of the ownership and 100% of the control.

Now, they'll probably leave you in the driver's seat, but they're going to give you the GPS to follow, and you're going to follow exactly and do exactly what they say. And if you don't like where they're going, tuffies, because they now own it. Yeah. And that's the problem is people think that it's like a method of financing, but basically what you've done is you've sold 80% of your business for a number. And they're going to dump money into it, and they're going to use that money to try to accomplish the dream that you thought could happen and that you sold them, which is to get this

thing up into production, get it into distribution, and it become the widget of the year. And everybody wants one of your widgets, and it's on Amazon Prime and landing on front porches, right? And that's the dream. but if I bought the dream and I'm the venture capitalist, I drop 15 mil into this thing, then I'm going to own the results. And if it goes bad, I'm the ones got the biggest loss if I'm the venture capitalist. So of course I'm going to take control. It's very unusual for them to not have complete control of your business from then on

and the majority, the lion's share of the profits are going to go to them. But you're getting a bunch of cash influx to cause your dream to happen that you did not think it happen otherwise. That's how it works. So as long as you're willing to accept that, that in a sense, you have sold your business. The problem comes when small business people or people inventors think that this is just, oh, I've got some money now to go do it however I was wanted to do it. And then they discover they no longer own the car and they're in the passenger seat as to the driver's seat. And it's very emotional. And it's, you know, it hurts your feelings. I'm saying, because you went into it of the wrong expectations. But if your expectation is

whatever happens, they're going to own it and run it, and I'm going to be okay with that. I sold it, but I'm going to hang around and work it with them, and I'm going to reap something more than I would have if I didn't do this deal, and maybe I get some cash up front as a part of the thing, too. Maybe there's a liquidity event on the buy-in. Sometimes you can get that. If you're okay with all that, but most of the time someone that's got their heart and soul into something like you do, that hurts your feelings. It would hurt my feelings. Yeah, plus I'm a control freak, and I mean, I don't think I would be able to, I would digest that too well. Yeah. I mean, you have, you have actually, I wouldn't suggest this either,

but you have actually more control to just go get an SBA loan. Because then you're in control as long as you pay the payments. Right. And you own 100% as long as you pay the payments. But I'm not going to tell you to do that either. Obviously, I'm Dave Ramsey. I'll tell people do that. So what can we do in your situation? Well, what we've seen people do several times? What type of product is this without getting too deep into it and blowing up your secret? It would be a part for an AR-15 rifle. Oh, very cool. Okay, I'm your venture capitalist. No, I'm kidding. I don't even do that, but that's fun. Okay, this is that the good news is here.

Okay, so Ronnie Barrett's a good friend of mine that started Barrett rifles. hundreds of millions of dollars of Barrett rifles all over the world. And the famous 50-Cal, right? It's a beast. And so he started this in his living room. He was a photographer. But he's like you. He's an inventor and a bit of a spatial genius.

And he built that first gun by going to the local machine shop and showing them how he wanted the barrel made, how he wanted the plate made. and then he would bolt it together, and then they would fix it, take it apart, and put it back to me, and do more machining on it, put it back together. He would take it and shoot it, and they would blow up and you have to do it again. And he, you know, he didn't even have a machine shop. He just paid the machine shop to make the first prototype, which is kind of where you are, right? And then, of course, he got the actual first one made and got some orders off of the prototype

and never did bring in venture capital. Orders paid his upgrades. orders paid is his thing. So what you can do here is how expensive is it to make a unit for this item per per item? I mean, in the beginning it'll be really expensive because I got to pay for the mold. No, no, no, no. I mean, once you've got that done, what are you going to have in it if you made a thousand of them?

I mean, they'd probably be like, guessing, like $10 to $20 a piece. Okay, do you have any money at all? I just been cash flowing everything as I go. Do you have any money? I have money, but it's mainly for the household, like the emergency fund and that kind of thing. Okay. I don't have, do you have $5,000 to throw at this? Not currently, but I mean, I could.

Okay. So let's scrape up $3,000 and make a few of these. Okay. And put it on the Internet and sell it. It's not a firearm. It's not an FFL item, right? Correct. It's an accessory.

Like a strap or a scope or a scope. It's not something that has to be regulated as a gun control issue, correct? Correct. Yeah. So it's something I bolt on to my AR. So all I got to do is get gun people talking about it and have it on the internet. And you'll get enough orders that then all you've got to do is you've got to fulfill the orders because the orders came in.

Now we've got to go make them right quick. Right. You don't need to sell this out. You need to let organic cash grow your business. By that, I mean, incoming cash gives you the money to do the next order. This is what I did with the financial piecebook. I sprung for the first thousand of them as $4,200. That was 1994.

Okay? And I had them in the trunk of my car. You may have heard that story. And when I sold all of those, I had orders for more, and I used the money from the sales to buy the next order. I didn't take any money out of the deal. I used every, because the sales were great. greater than the inventory all the time.

So I took 100% of my sales income, poured it back into new inventory every time. New orders, new orders, new orders, because they were selling like hotcakes. And so that's what's going to happen for you. All you got to do is get a couple of gun guys talking about this thing and get, you know, Daniel, firearms or whoever's making your favorite AR, your favorite AR, somebody to jump on the thing. I mean, Barrett's got an AR. but there's, you know, several great companies making those things. And, but yeah, if you get a couple of gun guys on a blog talking about her, you jump on a couple of podcasts and tell them what it is,

or especially if it's YouTube and you can show it, then boom, the orders come in and you use the cash from, and you got a little website built. It doesn't take much. Set up Shopify or something, right? And you get, you bring the cash in, and then we get the thing rolling. You organically do it. Please don't sell this to a stupid venture capitalist. No, I really don't want to.

I would just, you know, something that keeps popping up whenever I discuss it with somebody. Yeah, but there's people don't know what the hell they're doing. With the businesses you work with, have you seen any trouble with, like, for example, if you do a pre-buy and maybe offers them, you know, some kind of bonus or something, but then you have, like, a long lead time. With the businesses you work with, have you seen any issues selling things when you have, like, a longer lead time, not that we live in like an Amazon, two-day society of getting what you want,

You know, you can do stuff. Just tell people what you're doing. That's all you got to do. You have to deliver it as agreed, or you'll get into a federal trade commission problem, okay? And so if they push a button and they think it's shipping the next morning going to be on their Amazon patio, right, 24 hours later, and you're getting ready to start the manufacturing process.

It's going to take nine weeks. You're going to get a bunch of complaints, and you don't need that. So just tell them. I'm a small operator. I'm just coming out of the gate. When you place this order, we're going to build it and sell it and get it to you. It's going to take about nine weeks. Expect that.

Put that in the order. Put that in the cart when you load the cart. Now, you're a gun guy, and this is a unique item. And I don't, I can, my AR was working fine before it. And it's just something I kind of thinks cool and I want to bolt it on there. And I get in there and I go, oh, this guy's doing this out of his stinking garage, man. This is cool. I'll wait on it.

It's not going to, it's not like my gun's not working. Right. And you're not holding me up on operation, right? You're just, you're just my little, my little thingy I want to get's not come in yet. That's all it is, right? You're not killing anybody here. So the, probably bad metaphor, but the, but you see the point. You know, you just, it's, since it's a trinket, they'll run with you, especially kind of get them involved in the story.

You can do this. What's the retail on this? What do you think you're selling it for? I'm thinking somewhere in the neighborhood of $100. Okay. So what you could do is go, hey, you're one of the first 1,000 orders, and we're going to make them as they come. And so thank you for signing up for the $100. I'm going to give you an immediate $25 discount because you are funding our business.

You're my GoFund me, and it's going to be nine weeks before you get it. Congratulations on the $25 discount. Thank you for your patience and supporting small business in garages. Mm-hmm. And if you got that when you went to buy something like this, would you be mad? No. No, I wouldn't. Especially if you could turn around and cancel the order.

Yeah. I wouldn't. Wouldn't bother me a bit. I think that's cool, man. I get to, because, I mean, most gun guys are really entrepreneurial, a lot of them anyway. They're like independent thinker, you know, libertarian kind of mindset, right? Yeah. Yeah, that's true.

The tribe you're selling to has got a certain psychographic to it that you can use to say, you're my go fund me. You're causing this thing to happen. Thank you for supporting small business in America. Thanks for the free enterprise. So this is cool, do it, man. But God's sakes, don't sell it. Don't bring in venture capital. No, no, no, no, don't do that at all. That's so cool, man. Hey, send me one up, man. I want one of them. I'll pay you for it. That's cool. Put me down. I've got guys in the booth. All right, I got you four orders, Justin. Four orders right now, 100 bucks a piece. And we don't even know what it is. We just got ARs that need one of these things apparently.

Oh, my God, it's a gadgum armory around here. This is where you want to be for small business talk. I'm Dave Ramsey, your host. This is entirely too much fun. Thank you for joining us. I'm Dave Ramsey. This is the Entree Leadership podcast where we believe in the free enterprise system. We believe in small business.

We think you guys that run small businesses like me, kick butt and take names. You're what makes this economy great. You're awesome, and we want you to win at a level you have never won before. When small business is booming, politics becomes irrelevant. And politicians have to admit their irrelevance. Well, that'll never happen, but it was a wish. All right. So here we go, guys.

Jump in and talk. We want to hear from you. The phone number is 844-9-4-1070. If you've got a question, 844-9-4-1070 about running a business, hey, I got great ideas and I'm an expert on my opinion. Jump in. Also, you can leave us a note and we'll call you and make you part of it. Entreeleadership.com slash ask.

Entreeleadership.com slash ask. Now, I basically have one promotional marketing angle for this podcast, and if it doesn't work, we're not going to make it. Probably not true because we've been doing this for 15 years. But we only have one angle to get the word out. it's you. We're not spending a bunch of money. We're not going to buy a stadium and call it Entry Leadership or some kind of crap. So there's only one way that the word gets out on this, and that's if you do it. So I need you to share this show that you tell people about it.

You can do it with your mouth. You can do it with your little clicky thing on Spotify, do however you do that stuff, but you share it. I need you to review it because apparently that messes with the internet thing and the algorithm stuff, right? So you need to You need to rate the show. And listen, five stars is all we want. We don't need anything else. Mama said if you ain't got nothing nice to say, don't say nothing at all. All right.

So leave a five star review, share it, and then click the subscribe button because that's a big deal. And if you get mad at me or you get sick of hearing this smart, sassy stuff or whatever it is, then just click the unsubscribe later. But right now, you're going to share, you're going to subscribe, and you're going to review it. And that's going to help us with the marketing and get the word out because that's the way we get to help. more and more small businesses. Thank you for doing that. Matt is with us in Colorado Springs. Hey, Matt, what's up?

What up, Dave? Good to hear you, man. You're doing okay? Better than I deserve. How can I help? All right. Let's do this, man. I'm excited to be here.

I'm excited to be in the U.S. of A. This is the time to be here. Amen. Anyways. How can I help? Me and my wife recently got back in the country in April. We moved here from Switzerland and made it up to Colorado in July. And for the last two years, I've had my journeyman as a carpenter, and it's been something that has just burned inside of me to get out of the hourly game and get into more of the sell and install a product.

And as doing freelance carpentry for the last couple of years has been good and paid the bills. I've been experimenting with different combinations of products and ideas, and the one we've come up with so far is showing up to someone's home, designing custom interest. doors and patio doors. And with that comes a new territory. I don't quite, you know, I haven't really experienced, which is having a product, marking it up, making a sale, and getting paid for the install. So my question comes into play moving forward. What is profit and what is greed? When are we being profitable serving a customer, getting stuff done, you know, amplifying the community? But when are we at some point being greedy and saying, you know, like, man, I just took that person's clock, you know.

Where's the balance point? Does that make sense? Yeah, it's a great question. And my friend Rabbi Lappin wrote a wonderful book. He's an Orthodox Jewish rabbi called Thou Shall Prosper. And in it, he says there are the basis of the book, there's ten chapters, the ten reasons that Jewish people have had a tendency to inordinately prosper at any time in history and almost any community.

They seem to have an economic advantage. and it's not because of breeding or DNA or anything else, it's because of belief systems. And one of the items in that book is he says, you cannot win at something. You cannot become successful at something. There's too much cognitive dissonance if you believe what you're doing to be morally wrong. In other words, someone who says, I am a crook, I am ripping people off, I am greedy, will not become successful at that. You can only do that to a certain extent before your brain starts to fry,

and you're working across purposes to yourself. And the advantage that the Jewish communities had, according to the rabbi, is that they see business as a godly act of service, as a high calling. And the way he describes it is, if you have two, do you have children, Matt? Yes, sir, I have one. He's 17 months old. Okay.

If you had, do you have siblings? I got three sisters, yeah. Okay. So if you see one of your children, when you have two children, do something nice for the other child, as a dad makes you happy. You see what I'm saying? Yeah. God is the same way, Rabbi says. It makes God happy when one of us do something nice for the other.

Now, something nice is not screwing. somebody. It's not stealing from them. It's the guy wanted an artisan door put in his $14 million house, and you created this amazing experience of the creation of the door, the installation of the door, and the door, even though it's a lot of money to Matt, is a small percentage of the $14 million house, and a really small percentage of the billionaire's life that ordered the door. So while it feels like a lot of money to you, it is not like buying a biscuit for that guy. So you served him. He's in love with the door, the experience of working with you, because you showed up when you said you would.

The door works. It's beautiful. His wife likes it. Even the freaking decorator likes it. Oh, my God, we got everybody's happy here. And at that point, the dollars or the market. margin of profit does not enter into the discussion anymore. So it's not about amount. It's about intent. Another way of looking at it is this. Larry Burkett, who used to teach biblical finance,

used to say there's only one difference between saving and hoarding. It's not the amount of money. It's the intent. What are you doing? I'm saving. Why are you saving? I'm saving to change my family tree. I'm saving so I have more to be generous with. I'm saving. I'm saving to stabilize my family. I'm saving because I worship money. That's hoarding. The other three were saving. You follow me?

It's not an amount. So your amount of profit does not dictate greed. Your intent dictates greed. Am I here to take advantage of someone? That's greed. Am I here to take them to the cleaners? That's greed. Am I here to get all I can get out of them?

That's greed. No. I'm here to serve them. And then as rabbi says, he's got another great saying. He said, they're going to give you certificates of appreciation for the service with president's faces on them. So what's the most money you guys have ever made in your life in one year? It was right before we moved, and we were both working. I think in U.S. dollars, it came out to around 115.

Cool. Where were you in Switzerland? We were just south of Burn. So, you know where interlocking is? Yep. There's two lakes. It's in between the two lakes. We're at the top of the first lake.

It's called Tune. Yep. That's where we're at. I've been there. Yeah. Okay. So right between those two, if I recall, there's a five-star dining experience. Okay.

Yeah. Keep going. And it's like, if I remember Sharon and I dropped like a thousand bucks for the two of us in there one night. Okay. And there's a lot of fine dining in Switzerland, by the way. Unbelievable food experience. And so when I went in or dropped a thousand bucks, my wife and I on a special trip we were doing, enjoying that wonderful country of Switzerland. It's a fabulous trip, by the way.

And then the waiter came and made the experience super special by the way she took care of the table. Her knowledge of the wines, her knowledge of every plate that was brought in front of us. it was as much an experience as it was a feeding. You know what I'm saying? And so at the end of that, do you think I thought she was greedy when I gave her a huge tip? No, I was honored to leave her a large tip.

A, I'm in an expensive dinner, and that's appropriate. B, her service was world-class. So much so I'm talking about it. That was like six years ago. But, you know, so when you go to a nice restaurant, you want to leave a tip because they did a good job, right? And that's not, that's not greed. That's appreciation. It's been tough because I did a Swiss apprenticeship as a carpenter.

And Carpenter there is very highly esteemed. Yes. And they're like, you're doing what? And they think it's awesome, you know? You know, they think it's coming to the States. people are very budget-minded, very stingy. You're the wrong neighborhood. Exactly, and I'm trying to get out of it, man.

I've been kind of holding myself back. Yeah, you're doing a plan. The way you describe this, you're doing artists and stuff, and you need to get in the high end. Yeah, and I'm trying to figure out a way to create a plan and get out of it because I'm in with the wrong people right now. You need to start talking to some custom builders and just go show up on some of these sites

and start buying some of coffee and bring a donuts around and meeting some of the guys are doing this stuff. Yeah. Yeah. Just make some connection, build yourself a little network. You can get your foot in the door with somebody like I was talking about a while ago where you're installing an artisan door. Dude, I mean, if you're going to put in cheap stuff, then every little penny is a big deal, and you're going to get accused of being greedy.

So I'm accused all the time of being greedy. You take advantage of Ramsey takes advantage of poor people, okay? You sell books to people who are broke on how to not be broke, right? And so I get trashed by the trolls and all that stuff all the time. That's part of my life. So it's the price of admission to be me and I'm willing to pay it. Life goes on, right? But here's the thing.

What's interesting was when I was selling those little $12 books out of the back of my car and I helped 10 people and I made a dollar apiece and I made $10 and 10 people got help, nobody was bitching. Yeah. When I sold 10 million of them, now I'm greedy because I help 10 million people. Yeah. But that's those people. I can't control idiots and how they perceive greed.

You and I are not discussing them and their criticism. and we're discussing whether we're actually greedy. Actually being greedy is really dangerous. But that's when it's all about you instead of all about the act of service. So if you've got your eyes on serving the customer, causing them to have a high experience, and they're willing to pay for all of that process, there's not greed anywhere in that conversation. But it's not an amount. No one should ever pay $24,000 for a pair of front doors.

Yeah, they should, and they do all the time. Hey, man, I can get you one for 50 if you want. I mean, let's do it. You see what I'm saying? Yeah, but people, that's just greed. No, that's a guy that's got a billion dollars, and he'll give a crap about the $24,000. He wanted the doors because his wife said, get him. He knows the deal.

He got them. Yeah. That's nothing greed in that. You serve the guy. It just happens to be a high-end. customer with a lot of money and so people get confused on the outside looking in because everybody in this country's got a real problem figuring out everybody else's business these days instead of minding their own. So if you'll just mind your heart and do it with good

intent, you don't have to worry about greed. Is that fair? That's fair. Hey man, get after it. I love you. Get it done. Get her done. I love what you're doing. Now go do it. But get on those high insights and make this stuff work. You can do this. Hey guys, we appreciate you guys listening out there. for joining us. Please share this show. Please leave us a five-star review. Please call us at 844-9-4-1070. If you're running a business, you can be on the next one. This is the Entree Leadership Podcast.