EntreLeadership - How to Control Your Largest Business Expense

Episode Date: March 11, 2024

Today we’ll hear about: How delegation is the key to scaling your business The best way to establish bonus structures that don’t rob you of your profits How Dave Ramsey pays his executive board How there’s no way around being taxed on retained earnings Next Steps 🗳️ Submit your question for a chance to be on the show with Dave Ramsey: https://bit.ly/3HUgAgi 👣 Find out what stage of business you’re in: https://ter.li/axd39b ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/y8qdo7   🏢 Attend EntreLeadership Summit: https://ter.li/fcazl2   🎤 Attend EntreLeadership Master Series: https://ter.li/wcjhpu ☎️ Learn more about EntreLeadership Coaching: https://ter.li/ycznhl 💵 Learn more about Ramsey SmartDollar: https://ter.li/4imot0   🗳️ Help us make the show better! Please fill out this quick survey form: https://bit.ly/3O8fRvh   Offers From Today's Sponsors NetSuite: https://ter.li/x1t20q BELAY: https://ter.li/yohiu6 Payority: https://ter.li/fh2oau Trainual: https://ter.li/a8zexl Listen to More From Ramsey Network 🎙️ The Ramsey Show   🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💼 The Ken Coleman Show Ramsey Solutions Privacy Policy https://www.ramseysolutions.com/compa… 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 or leadership. I'm Dave Ramsey, your host, with over 30 years of experience in the trenches here, just like you. Today I've made some of the decisions you've made. Today I made some of the mistakes you made. And today I made some mistakes that you haven't gotten to yet, and that's why we're here to help you. The phone number, if you want to be a caller on this show, is 844. 944, 1070.

Or if you want to just leave a message at the website, we'll make you a caller by having Christian or Ibu or one of them get in touch with you and having you on the air. The email or the website rather is entrellorship.com slash ask. Dustin is in Los Angeles. Hi, Dustin. Welcome to the Entry Leadership podcast. What's up?

Hey, Dave. Thanks for taking my call. Sure, man. How can we help? Well, I'm 35 years old. I'm going into my 15th year in business. I started a small business when I was 20. And the main reason for my call,

I've just been kind of thinking about how I want to navigate this next 15 years as they're going to look a lot different, you know, now married. We got our first kid on the way. And the main thing that's kind of been dumping me a little bit and wanted to get your advice is, when is the right time to put in like a management team, like say a GM or an operations manager. Currently, I'm kind of a one-man band as far as management staff.

I've got 11 employees. I'm the HR. I'm the payroll. I'm the, you know, my car didn't start this morning. They count's pay on the whole thing. And I'm just kind of trying to figure out, is my business big enough for it? Can I afford it? And I love what I do.

I don't, you know what I mean? It's just, I think the time is now. I'm just having a hard time kind of wrapping my mind around giving up, giving up some control. Yeah. Well, when you hired the other people, you gave up control, not of leadership or management, but of actual tasks. You delegated tasks to them. And so you've got someone that does X or does Y out of those 10 or 11 people, right? Correct. And what you do there is you don't assume from the first day they come on the job that they automatically know how to do it. So you spend some time with them, training. making sure they know how to do the thing that you're asking them to do, and making sure they know how to do it the way Dustin does it,

not just the way they learned to do it at the last place they worked. Yeah, and that's kind of been my challenge with some in-house staff. I've got some people that have been with me for quite some time, and I've slowly given them some higher-level responsibilities here and there, and I'm not a micromanager per se, but, you know, I see stuff, and I'm like, gosh, darn it, I would have done it so much different, Is it, I mean, is that something where you just kind of let them learn on their own and make... No, that's basic delegation.

Delegation is if they're not doing them doing it the way that you want them to do it, that is your fault. Now, you've got two options. One is you just bals them around and tell them what to do, or two is you teach them how to do it that way. That way the next time you don't have to teach them, they'll do it automatically your way. And so they need to be able to finish the sentence at the level you're at today. the first thing is basic delegation, finish the sentence, how would Dustin do this? How would Dustin handle this customer who's angry? How would Dustin handle this bill that needs to be paid?

How would Dustin handle this vendor that didn't turn in stuff, didn't turn in, didn't deliver when they said they were going to, whatever it is? And so that's your first level of delegation, and you've got to complete that with this team. The first stage of business is the treadmill operator where you do it. everything yourself and if you're not working, you're unemployed. You've passed that. You've moved on to Pathfinder. And now you're at the stage where you're trying to transfer to the existing team how to do their stuff. And the reason I brought that up is to move to the next stage, which is Trailblazer, you've got to put leadership in place and train the leadership. Now, the way you train

leadership is similar in concept to how you train the other folks who are just doing their jobs in that you walk with them and you talk with them and you spend a lot of time mentoring because, you know, just because they were a manager before doesn't mean they know how to do stuff your way. When we have someone join our team that, you know, into a leadership role, maybe they'd been in a leadership role somewhere else, then they have to learn how we want leadership done at Ramsey because we're different than other people. You're different than other people. So, you know, how would you treat a person that you are leading that works on your payroll in this situation, in that situation, A situation, Z, X situation. And so I've had to train people how to treat the other people here the way I want them treat it, how to have a difficult conversation when someone's not doing their job, how to encourage and recognize people when they are doing their job. All of those kinds of things are leadership. functions. You do not want to hire someone who's simply a boss. Bosses push, leaders pull. So you do

want to hire someone who you move into a leadership position, but it's not as simple as plug and play. You don't just hire them, start writing them checks and walk away and they instantly know how to do it. You're going to spend a year of your life mentoring, disciplining, teaching them, especially your first person in leadership. The easiest way to find that first person is find someone within your team that's doing an excellent job and seems to have great people skills. And you can move them then into a role where they're helping you with the leadership over a portion of your business and a portion of the other team members.

By the way, the other team members won't resent them coming into leadership if they've been excellent at their job. But if they're a half butt at their current job and you make them a leader, then they think, oh, God, this is going to be awful. And now I have a half butt that's a leader. Oh, and that means Dustin doesn't know what he's doing. Oh, God, I'm in a mess. And that's what the team will start thinking. So if you've got a team member that's really doing a great job and has good people skills, you want to talk, talking about moving them up, then you move them up. But again, when you delegate leadership, it's just like delegating tasks. Only the task is leading people.

And how are they going to do that? You're going to teach them what you've done. You're going to teach them what you've learned in entree leadership and put them in entree leadership elite. And you guys can start going through this together with some coaching. And this is a real pivotal time. Because if you can learn how to do this, Dustin, you can scale your business 10, of what it is. But you're now bottlenecked because right now you're the only one that can make a

decision. No one else has been trained to make a decision. So you're stuck until you start developing another layer of leadership within your organization. This is your first big breakthrough in the ability to take your business to double what it is today. So you're in really, you're in a really cool place. Hey man, I'm proud of you. You recognized what you needed. You've grown a business from 20 years old. Way to go, man. That is absolutely incredible. Very, very well done. This is the Entry Leadership podcast. I'm Dave Ramsey, your host. If you're looking for a professor who has theories on leadership, you're in the wrong place. There aren't any here. We are practitioners. We get up, leave the cave, kill something, and drag it home every day

and have for 30 plus years. We have calluses on our Calysis, shut up. This is what we do here. We work. And if you want somebody to teach you how to do that and how to run a business from that paradigm, oh, we're here to help. Thank you for joining us. There's thousands of you, tens of thousands of you out there. We really appreciate it. By the way, I can use your help. If you want to help me, I would appreciate it. Spread the word on this show by sharing the show. Click the share button or cut a link out and send it to a friend and say, join us on the Entree Leadership Podcast. You might learn something because they might and share it.

And click the subscribe button, the follow button. And if you're a follower or subscriber, it changes the algorithm. It helps the show be pushed out there. More people learn about it in white space. So thank you for doing that. And of course, the five-star reviews are always welcome. If you don't like the show, go somewhere else. No reason to leave one-star review.

Your mama said, don't get anything nice to say. Don't say nothing at all. Joel is with us. Joel is in Saginaw, Michigan. Hey, Joel, what's up? Hey, Dave. Thanks for taking my call. Sure. So, to work for an agriculture dealer, we have about 160 employees. I think we did about $130 million in revenue last year. A couple of years ago, we started a different division to handle a new product that we were pushing. And I don't know how much you know about the ag industry,

but precision agriculture is really coming in, all the GPS guidance stuff. And we have a team member that he decided to take that up, and so he's kind of doing a dual role. He was a parts person and helping with sales, installation, and parts for this. product line. And they gave him a pretty good deal to get that going.

He was getting a percentage of the gross revenue, not the margin, the actual gross revenue. So he was getting off the top dollar line. And last year his sales skyrocketed. And so I kind of threw up some red flags with our accounting department. and they said, oh, wow, there's a lot of money getting paid out to this guy and his bonuses. And his contract was up or his agreement was up for the year. And so they said, hey, Joel, would you negotiate a new deal with this guy?

And so, and I'm a manager, the parts director for the company. And he was under me in the parts department, so I went to talk to him. And just trying to find a way to communicate our company goals as far as what we're trying to earn revenue-wise and what he was getting paid out of that revenue. So was the product line losing money because of the bonus structure? No, no, we just weren't. I'd say we're probably like breaking even on it in a way. I mean, if you look at the gross numbers, yeah, they looked pretty good, but I think if you looked at the total overall,

he was taking home about 60% of the profits. So not a lot to go back to the company to pay for advertising and, you know, all the other departments. Of the gross margin, he was taking home 60%. not profit. Yeah. The gross margin. And out of that, you had overhead and everything else.

Yeah. Yeah. So you were breaking even. Okay. Yeah. So who's the dumb butt put this in place? Well, he no longer works with the company. Yeah.

So. Well, you know, how old is this kid? Um, mid 30s. Okay. He's a rock star. I mean, he's going after. He was kind of, like I said, he was doing two things. So have you already talked to him or not?

I have. What did he say? Well, he said he didn't want to make any less money than he made last year. Yeah. Who would? Which I, right. But so we put together a deal where he was going to go to full-time sales service, inflation of this product.

And the goal is still there. I think he's a rock star. I think he can still make. the same amount of money. But I just don't know, like you said, who would want to make less money? Okay. So, did we think about this the wrong way? Is it?

I mean, did we, do we have to continue to make a bad deal? No. No. No, you sit down with him and you say, the guy that put this in place can't add, and he doesn't work here anymore. And so here's the problem. Look at this from a business perspective. here's what is coming in, here's what you get paid, here's the gross margin, and the gross margin's all being eat up by overhead and marketing.

And so the company is losing money or not making money on this. You are. They're not going to continue that. It's not logical. It's not corporate America screwing him. They screwed up when they put the bonus plan in place. And what he used to make is irrelevant. He's not going to get paid this commission anymore on this basis because it's so.

stupid. Right. Tell him that. It's not because, look, they made a mistake at the home office when they let this go through, man. And, you know, and when you look at it, it's logical. You and I are looking at it, two comments, this is you talking to him, two guys with common sense. We look at this and we're going, who would lose money on purpose on this? Nobody.

Or who would break even? Break even's a hobby. It's not a business. So we're not doing this anymore. Now, I'd like to try to figure out something because you're incredible. You're a rock star. And I'd like to figure out something where the company makes a profit and you get to make as much as you used to make. And that's what you started working on.

And, you know, but he's got to sell more units because he is going to make less per unit. He has to. Or they're going to get out of the business and he's not going to have a job. Yeah. So, I mean, he can't kill the. He has to look at this, not as some employee that says, oh, I want to. I want to at least make what I made last year. You know, accounting is screwing me.

No, honey, math is screwing you. We're losing money on this. And we're not doing it anymore. You know, I looked up the other day and we have two of our skews going out the door that by the time we pay the personalities, their royalty on it, we're losing money on these products. Well, let me just tell you what's going to happen around Ramsey. Either we're changing the pricing or sales are going to stop. I'm not writing checks to send stuff out the door.

That's wrong. That's just dumb. So we screwed up, but it's not the personality's fault. It's not even the guy who designed the product's fault. It's our merchandising team. It didn't have sense enough to price it high enough to make a dead gum profit on it. And that's exactly what's going on here. Now, can you raise the prices on this, or is it, are there competitors holding you to the pricing?

Yeah, competitors are holding us to the pricing. We looked at some other areas. I mean, yeah, we can work with the vendors to see if we can get lower, you know, pricing on the purchase price. Yeah. So we can make more margin there. Get your cost to good sold down, yeah. But then we can raise our labor price on the installation, and we can make more on that. So there's more room for margin.

You're asking, you're asking this 32-year-old to be mature enough to look at the whole situation and realize they're not making a profit. Yeah. If it's just home office trying to screw him so they can make a little more money, I'd have a different reaction. But that's not what you're explaining to me. What you're explaining to me is they are breaking even or losing money after you account for overhead and marketing, which is reasonable to change that. It was a bad deal from day one.

And so, honey, you know, you get to be mature and look at this through the eyes of a business owner instead of a little boy who wants to make more money. And so how are we going to work on this? Okay, we're going to make less per unit. How can I help you sell more units? And I'll work with you to try to get the cost of good sold down, so there's more margin in it. And maybe we can get you a little better commission rate

than they're offering you if we do that. But the old rate, the old deal is gone because it was a bad deal. It didn't work. You're the only one that won. you know and if he can't grasp that and bugs out the door then the idiot that put this together that's no longer working there cost you a good employee uh well a decent employee a good employee would be able to actually understand the logic of what we're going and go we can't keep doing this yeah is there and this is probably too general a question but is there a general rule to

putting together a compensation plan or how much more? Yeah, make it where the thing makes a profit after the compensation plan. Yeah, understand your gross margins and your nets when you're doing this and the salesman doesn't make more than the company when you're done. I mean, I want the salesman to make a lot of money if the company's making a lot of money in the process. But, you know, the goal of here is not raised, you know, a salesman with. fat kids, that's not the idea.

You know, we're trying to, everybody have a good time. Everybody makes some money, you know, that's what we're trying to do. You know, if one guy's getting skinny kids out of it and one's not, that's not working. So this has to be a win all the way around. The customer wins, the company wins, the salesman wins, everybody prospers. That's what we want. That's a compensation plan that everybody likes. But, man, I tell you what, we spend a lot of time around Ramsey looking at comp plans

trying to not get stuff on our shoe like your guy did here. That was a, man, that's horrible. It's horrible for you to have to sit there and look at this guy who's a great guy and tell him we're cutting his pay if we don't up the number of units because we're cutting the commission because it doesn't work. That's awful to have to explain. But again, if he's mature, he's going to look at it and go, this is not sustainable.

They're not going to keep doing this losing money. Amen. Good question. Interesting. Interesting discussion. Thank you so much for joining us here on the Entry Leadership Podcast. If you regularly listen to this podcast, you probably heard me or any of our callers mentioned the stages of business, the five stages of business. How do you find out what stage you're in and how you level up to the next one, how you keep your business growing and progressing through this, the easiest way to figure out where your business is.

And for you to start understanding is use the Entree Leadership Stages of Business. assessment. It's completely free. Helps you easily and accurately identify exactly where you are in your business today. And you no longer than have to wonder what stage of business you're in. And you'll start to learn what you do to level up to move to the next stage. Entreeleadership.com to find out what stage of business you're in or click the show notes. Either one will get you there. Entreeleadership.com and be sure you get lined up because this stage is process. It's what we went through. Ramsey and you can go through it a lot easier and faster than I did because I didn't even know they were there. I was just stumbling along looking confused and got through it. But we're going to

show you exactly what, okay, if you level up here, you're going to move to that stage. If you level up there, you're going to move to that stage. We're going to walk you through the whole process. And so check it out. Click the show notes or go to ontarioleadership.com. Robert is in Indiana. Hey, Robert, welcome to the Entry Leadership podcast. Hey, Dave, thanks for having me on. Sure. So I work for a commercial general contractor. We did about $3.5 million in revenue last year, and we're a little late in the game,

but we're working on our succession plan right now. So my boss wants to retire in two to three years, and there's another carpenter and myself. We're both late 30s, and we're planning to take over the company. So we're originally talking about doing a 50, partnership, joint ownership, but we're seeing the pitfalls in that. And I was just looking for advice on how we can set up some sort of partnership, avoid the difficulties with, you know, death and disability in those things. And then also within that figure out just compensation for the two of us,

if one of us is the actual owner and the other's highly paid employee. Okay. That's what I have. Yeah. I'm the owner and we have operating board members who, there are 14 of them now, including family, that are all paid off of the bottom line. They make a percentage of the profits as if they were an owner, and that's their entire income. And they get paid very, very well off that bottom line.

As long as the bottom line's good and has been all along. So you easily could put in place today, hey, thank you. where, you know, you share the P&L with him. If you're the owner, or if the way around, it doesn't matter, but if you become the owner and he's the highly compensated employee, he would be, you know, paid off the bottom line as if he were a partner. And you could, you know, make that whatever percentage of the bottom line you wanted it to be. And, you know, then you just lay out the, you know, the promises,

that you want to make to him that he gets to stay there, and under what circumstances he doesn't get to stay there. And so, you know, but you're the owner. Anything with two heads is a monster. So you're the owner, and then he gets paid 40% of the net profits for this next period of time. If you're putting money into this and he's not, then, you know, it wouldn't be that much.

It wouldn't be 40%. but but if so you can make it whatever percentage you want or you could say your pay is going to be X plus a percentage of the net profits and you're participating in the bottom line of the company as if you were a partner in the LLC and but but no actual ownership and so I've had operating board since 2012 and I've had operating board members leave I've had operating board members leave I've had operating board members that we let go because they weren't able to do their job for one reason or another. They could, you know, the business evolved and they couldn't take care of that area anymore. It was heartbreaking, heartrending, but the, but we still went through it and I was really glad that they didn't own part of this place when they were no longer able to adequately operate an area of the business anymore to earn their keep, to, you know, earn their keep, so to speak.

So let's say this thing grows from $3 million to $30 million, and he's still doing only what he's doing today in terms of his daily work. Yeah. Then he wouldn't be due the same percentage that he's due today. Does that make sense? Yeah, that does. If, however, he grows and he is running half of the organization. you're running the other half of the organization, or roughly, you know, and it grows to 30 million,

then you should be willing to share that with him. Yeah. And so one thing, like I, you know, part of one of the things I was thinking about is, and it probably would be me owning last we had a conversation about it. So, you know, as long as the company doesn't have any debt. and, you know, we set it up so we're protected, you know, from lawsuits and stuff like that. My, you know, my personal assets, is there, I'm just trying to think of, like, what is the greater risk that the owner would be taking on? And then, you know, how would that translate into, you know, just compensation within that?

Does that question make sense? Yeah, it does. You're taking on the entire burden of the thing. And he's taking it. he's going to carry part of the weight with you. And so it's whatever you come up with. The thing I would do is I'd be very, very clear that we're going to communicate regularly about this because when I first set this up, I thought it was going to be in stone and it'd be

that way forever. And we've changed it almost every year. You know, it's crazy. And so I had board members that were paid four different amounts based on when they came on the board. some of have been on the board for a while, some I've been on the board, you know, a year or two. Some have been on the board 10 years.

Well, the ones have been on 10 years were at a much greater percentage. And then over time, they really weren't carrying a greater percentage of the weight. They had only just been here longer. And so as a group, the whole board sat and talked and said they didn't think that was fair. And so we've evened it out over time. But when I started it, I didn't think that's how it was going to work.

So, you know, leave yourself. some room in the conversation for the percentages to change as things go along. Today, if it's, you know, 30 or 40 percent, that doesn't scare me unless you feel like it has to stay there when he's not carrying 30 or 40 percent of the load anymore, and that would be a mistake. Yeah, sure. It sounds like you guys think you're going to carry the weight about 50-50 today of the operations. Yeah, and that's basically what we have been talking about.

So just, you know, in relation to kind of what each of us have a knack for and more experience, I'd probably start out doing most of the office side of things, and he'd do most of the, you know, job site management and employee training and things like that. Exactly. So it really, I mean, I think probably on both sides, I don't think either of us could do it by ourselves. You need each other today, bad, yeah. Yeah. But, I mean, someday, if, again, if this thing grows 10x, you might have four people doing what he's doing.

Yeah. And he might be leading all four of those, in which case he's still carrying a similar percentage of the weight, right? But if he becomes one of those and you have to hire somebody to run all four of the others, then you don't want to be stuck with that for sure. So it's just, you know, we're constantly going to re-look at this and rethink it. And but the only thing you're from experience, the only thing you're guaranteed is change. So just prepare the conversation, prepare your hearts for that. Because that's been hard for me because I felt like when we went in and changed some of these things based on new realities, that I had been disloyal to the people that had, you know, disloyal to,

you dance with a girl that brought you to the dance. You don't go, you know, that's, I felt like I had been disloyal to the people that were there before when we brought these new people on, but the, but the situation was different. And so, but the good news is we had a very mature group of people that would sit and argue through it together and not be selfish, but instead say, what's the right thing? and we change the percentages. And, man, just have yourself ready to do that, and it'll help you because otherwise you'll do what I did and really strain and your heart will hurt too much when you actually do need to pull that off. So, yeah, just, but I think you're on to something.

I think you're on to the way to pull it off. And just don't lock yourself into 44% for the rest of your life or whatever, 34% or whatever you come up with. with. That's what it is now based on the way the company's configured today. As the configuration changes, you and I'll sit and talk about it. And then we'll make a decision together that's fair and right based on the new configurations. This is the Entree Leadership podcast. Thank you for joining us, America. I'm Dave Ramsey. Your host, Judd is with us in Salt Lake City. Hi, Judd, how are you? Good. How are you, Dave? Better than I deserve. What's up? I had a question.

So I'm a general contractor here in Salt Lake. I've been north of Salt Lake. Last year I did about 950,000. Good for you. And I have anywhere between 2 and 20 employees, depending on the jobs that I'm doing. My question revolves around being able to strategically keep cash as I plan for growth this year,

not having a huge tax liability without taking on debt to write off the profit, if that makes sense, and how to keep a hold of cash to plan for bigger purchases? Well, if you are an LLC or a sub-s or a sole proprietorship, which you should be one of those, when you hold cash past the year end, it's taxable because it's profit. And there is not a way to hide it. and so if I save a million dollars, my million dollars ends up looking like 600,000 because the stinking IRS takes 40% out of my butt. And that's just the way it is.

There's nothing you can do about it. And there's no tricks to get around it. Borrowing money doesn't fix it. Giving money away to charities, the money's gone. I mean, you can create write-offs, but there's still the money's gone. and so we just save money in spite of the stinking IRS. You know, when people say, when idiots in Congress say they're pro-small business, I always laugh in their face because they've never passed a single thing in the tax law that's good for small business.

Because they would fix that right there for one thing. We should be able to hold cash to grow our business and protect our employees in the business without stinking government taking 40 cents on the dollar just for us to have a retained earnings account. But you can't. You can't. You're going to get hammered. And if you try to do something fancy to avoid it, Judd, you're going to get hammered even harder. So I just, I have millions of dollars in retained earnings in spite of the fact that I have to give those bozos 40 cents on the dollar at the end of the year. And, you know, it's this time of year that I'm always particularly pissed about that. Yeah.

But I wish I had a great answer, but there's just not. And I've seen people come in with all kinds of gyrations and these, man, it's just get you in a bigger mess. Just save the money and go, that's it. So how much can you put aside every year out of your $950,000? Last year was my first full-time, full year in business. And so I'm putting a lot more steps in place to be able to track everything. I don't have a good grasp on my numbers right now, but I will this year.

And so I'm just trying to be strategic about all the steps I make as I go through this year. So I couldn't tell you. Well, you're very smart to set aside a percentage every single month of your profits to grow your retained earnings. And because retained earnings are the lifeblood of you being able to survive in spite of me cussing and carrying on about the IRS taking a part of. You still got to do it. But, you know, borrowing the money just puts you into a bigger risk. You got a whole, now you've got a whole other bunch of people after you call bankers. And so, now, you're much better off to do that.

But, yeah, I would set aside as bigger percentage as you can this early in your business career here because you just, you had a fabulous first year out of the gate. You're killing it, man. Way to go. I mean, a million dollars out of that first year. Wow, that's amazing. And then, you know, you go from there, you'll be a two for, you know it. And then something will turn sideways on you with some stinking vendor and you'll get

a cash flow crunch if you're not sitting on some money. So I, you know, in spite of all the grousing and the grouchiness about the IRS, I'm still going to tell you to save money. I'm still going to tell you to build that retained earnings. So, and what I learned to do was take a percentage of my net profits every single month, take it out of operating, and set it aside in a separate account so that retained earnings actually does build. Because if you leave it laying around in the operating, but in the operating account, it'll get used up for something that you felt like you, end quotes, needed. But you didn't really need it.

You just got, you know, you didn't figure out some creative way. Money hadn't been there. You'd have figured it out. So keep your stinking hands off of it. And then, by the way, the money's there for the government at the end of the year when you've got to pay it or quarterly, when you're doing your quarterly estimates, either one. And you're just reducing your retained earnings by the tax. And that's what we do at Ramsey. It's what we've done for 30 years.

Doesn't keep me from being mad about it all the time, though. and want to vote every one of those people out of office up there. If I had somebody working for me that ran a business the way those people run that thing, they'd have been fired by Friday. Oh my gosh. But now we keep reelecting them. We keep sending them back up there to be incompetent over and over and over until they're so old that now they have a reason to be incompetent because they can't

string a sentence together. Oh, God. It's just disgusting. But anyway, you still got to save money, man. You still got to do it. and you've got to keep being a stud. Way to go, Judd. I'm so proud of you, man.

Absolutely very, very, very well done. Remember, better a weary warrior than a quivering credit. This world needs more high-quality leaders. So take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.