EntreLeadership - How to Crush Your Insecurities as a Business Owner

Episode Date: September 11, 2023

Today we’ll hear about: •       How to stop being a wuss and become a strong, relational leader •       What actually adds value to your business when preparing to sell it •  ��    How not to take losing clients personally •       How to pick the best retirement benefits for your team Links mentioned in this episode: •       The EntreLeadership Podcast •       EntreLeadership Master Series •       Have a question for The EntreLeadership Podcast? Leave a voicemail at 844.944.1070 or submit your question for a chance to be on the show with Dave Ramsey: https://www.entreleadership.com/ask Start growing in business and leadership with the EntreLeadership Newsletter. Sign up to receive tactical tools, advice and resources in your inbox every week: https://bit.ly/3IRWnsL   Support our sponsors: •       NetSuite •       BELAY •       Payority •       Trainual Learn more about EntreLeadership Events: •       EntreLeadership Summit •       EntreLeadership Master Series Learn more about EntreLeadership Coaching: •       Elite •       Advisory Groups •       Executive Coaching •       Workshops Listen to all the Ramsey Network podcasts anytime, anywhere in our Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast, where I take calls from leaders and business owners and managers of 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 in the trenches, and I was in the trench today. Almost got stuck there. It could happen. You could be stuck in the trench. That'd be like a ditch. Yeah. Hey, say, hey, man, I'm in there fighting with you.

I understand what it's like to run one of these deals. and we're here to help you. If you want to be part of it, just leave us a voicemail at 844-944-1070. We'll call you back and you can ask your question here on the air. Or you can go to the website at entreleadership.com slash ask. Entreeleadership.com slash ask. Matt is in Dallas.

Hey, Matt, welcome to the Entree Leadership podcast. Warrior getting my butt kicked as a second-year business owner. Super thankful for your show. Thank you for what you do. Thank you, brother. Sorry about that, but I understand where you are. How can I help? So my wife and I own a staffing and recruiting franchise with eight team members.

Last year, we did $1.2 million in top line revenue. And my question is centered around accountability and building specifically my character of accountability. I'm a high IS and I can be a wuss when it comes to accountability. And so I admire your high D and I aspire to be more direct. What mindsets would you encourage an IS leader like myself? The weird thing is the highest, the most relational thing you can do is to be clear. And I, you know, I'm pretty crazy and boisterous and outgoing, whatever, on the microphone. If I'm sitting with someone in person on a high conflict or an accountability situation,

I'm exactly the opposite. Everything slows way down and the voice volume drops way down and all of that. So that might, you know, in other words, I'm not, I'm not going to confront someone the way I would carry on here on the radio, right, or here on the microphone, that kind of thing. Or hold somebody accountable, even if I'm not confronting them. And so there's this, in other words, I've got a big heart for people. I love people. and early on in my career, I confused being nice. I thought I was being nice by not bringing up things.

You relate to that? Yes, and I'm afraid of hurting feelings if I bring it up. And in the South, it's like an art form to be passive-aggressive, right? You know, we could, bless your heart can mean I'm going to slit your throat, right? So, I mean, it's, so we're in the name of being nice or being Christian or being sweet or whatever you want to call it, I would avoid early on the, you know, the confrontation or the accountability. And what I discovered was that over time, two things that were negative came out of that. One was that the person had no idea that they were doing something wrong, and so they kept doing it wrong. Well, duh, you know?

And the second thing that happened was I got increasingly frustrated with them for something that they didn't even know they were doing. And it would finally reach a boiling point, and I would be going, well, I just wish they would leave. I think I just need to fire them. And they're just walking around oblivious because I never. bothered to give them the information. And so we developed a saying around Ramsey about that time, and it was mainly for me, but I've spread it all through our leadership training and through our leadership team, and that is to be unclear is to be unkind. It's not kind to someone. It's unkind to someone to not give them the opportunity to improve. You're not being nice to them.

it's the paradox is you're actually doing the opposite of what you're trying to do and that that's what i finally realized and when i realized that one the nicest thing i can do the most loving and kind thing i can do is to tell someone the truth now i don't again we don't have to do that in a mean tone we don't have to do that in a bombastic crazy man way like you hear me carrying on sometimes on a microphone that's just me having fun and entertaining and all that kind of stuff but i'm talking about one-on-one me sitting with someone I care about, the most loving thing I can do is help them improve. Because, A, I don't get frustrated with them. B, they improve.

Hello. Everybody's happier. And that's on me to then stiffen my... It's kind of like, you know, it's almost the same riff in the intellect in your mind as dealing with an enabler. Okay. When someone is an enabler, the person who gives a drunk a drink, the person who gives a drunk a drink, the person who, the helicopter parent who comes in and saves their kid all the time, every time they misbehave, whatever.

If you're an enabler, enablers, if you sit and talk to them, are the nicest people. But the paradox is that they're actually being incredibly unkind. They're being not nice because they're causing the drunk to get a drink. They're causing the lazy to never get a job. They're causing the, you know, they're not helping by covering and glosses. over these shortcomings, but they feel like they are. And honestly, they are very sweet people. And they think they're being nice. And the irony is they're some of the meanest people on the planet, but they don't intend to be because they don't love people enough to help them on their

journey. And once I got that mindset for me, I became a con, I mean, I became an accountable fiend. I'm like, okay, let's both agree. number one, we both need to have a real clear agreement with a KRA, a key results area, and if you're in Entry Leadership Elite, they'll show you how to put those together. Okay, that's like a job description. Okay, this is what winning looks like. If you do these three things in your job, you are by definition winning. Okay, now we've got something to hold accountable too.

It's not vague. It's very specific and very precise. And then you sit down with them at the day they start at the business. This is what you may help, may develop the KRA with them. or you may have developed it and hand it to them. I don't care. I prefer to do it with them so that they've got some input. This is what winning looks like at your job.

If you do these three things, we're going to say touchdown. You're winning the Super Bowl, right? If you do this stuff, you're on track. If you don't do this stuff, by definition, you're not winning. Whatever the reason you didn't do it, you're not winning, because this is why we hired you to do this stuff. And so once you lay that out in day one or two, then when they're not doing the stuff,

you just sit down in the private office, not in front of a bunch of people, and say, hey, wait a minute, you remember when we talked about this? This is the stuff you do to win. You're not doing this stuff. What's up? How can I help?

Why are you not doing this stuff? You're a salesperson. You're supposed to make 60 calls a week. You're making five. What are you doing? Playing on Facebook? I mean, come on. Your kids are going to be skinny, dude.

You're on commission. It's not going to work for you. and you just lovingly have a conversation with it but you got to have a real clear target of what winning is and then have and then the last thing i'll tell you a first thing is it's not nice to not it's not a loving act if you really love your people you you lead them and you tell them and you lift them the second thing is have a very clear target and the third thing is increase the frequency of these conversations don't wait until the thing is don't wait until they're all way 200 miles off target, wait until they're 20 feet off target. And it's easier to course

correct 20 feet than it is 200 miles. So increase the frequency of this discussion until the people I don't have discussions with or people I've worked with for 10 years. But in the early days, I cram a whole lot of discussions in the early parts of the process and go, no, we're not doing that. No, we're not doing that. No, we're not doing that. Okay, let's do this. Let's do this. And we kind of get all in the same rhythm and on the same page with lots of little micro-course corrections rather than this over steering the car and flipping it thing because that's what happened to me before. I would wait until I was frustrated and going, what are you lost your mind? And they're going, I don't know what was wrong. I'm going, you're out of your, you're just saying, and they're going,

what is wrong? Because they had no idea. All of these conversations have been building up in my head, but not in theirs. They still didn't know anything was wrong because I was so, nice that I never told them. And it wasn't nice at all. I love this discussion, Matt. I love your question. You're a great leader to ask the question, and you've got to write the right-sized team to do this with with eight people.

You get the rhythm of this going and make it part of your culture going forward as you move from, you're probably sitting at the Pathfinder stage. It sounds like, and as you move up to the next level to Trailblazer stage, I think you're going to see that this becomes part of the rhythm, and people are going to repeat some of the things we talk about. talked about through the culture for the rest of the time. Ours is to be unclear, is to be unkind.

And that's the thing you've got to look at there. So very cool stuff. Hey, I did it too. And I'm the guy. Tells everybody the truth really loud on the radio, you know? But in person, it's a completely different thing. Most of them. This is the Entree Leadership podcast.

Thanks for joining us on the On Trade Leadership Podcast, I'm your host, Dave Ramsey, real business leaders taking calls from real business leaders about real business situations. If you want to have a think tank and discuss theory, you should choose a different podcast. This is practical. We teach you how to get up, leave the cave, kill something, and drag it home because we do it every day. Got to make payroll Friday, boys and girls. That requires revenue. This is how it works.

The number if you want to participate is 844940. 41070. And leave a voicemail there. We'll make you a caller here, and you can be part of this program. Cynthia is in Denver. Hey, Cynthia. Welcome to the Entry Leadership Podcast. Thanks, Dave.

I appreciate you taking my call. I am the CFO and COO of a SaaS tech company in the commercial airline space. We have three executives and 11 full-time and part-time employees. This is more clear about $1.5 million in gross revenue. and next year we're about going to double that. Wow. We're starting to have, yeah, we're starting to have, yeah, thank you. We're starting to have conversations about selling this business.

So I've started formalizing our forecasting and budgeting process so that we can communicate our numbers really clearly to brokers and potential buyers. But I'm not sure if I should be keeping the forecast, because usually what I'm doing is I have a spreadsheet where I have the forecast and then I do the budget to actuals every month in that same sheet. and it occurred to me, should I be keeping the forecast? Like, is there some value in that to show, like, how good are we at forecasting potential buyer? Yeah, I would think.

I mean, if you're hitting your forecast, they're valuable. If they're not, they're not, if you're not, they're probably not part of the package you're handing out. You're handing out the actual numbers. Yeah. But we look at it for different reasons, but we keep all of ours and say, okay, and the question we're asking is much more primitive. We're just going, how bad do we suck at budgeting? You know, it's like, it's like, yeah, we never hit that. You're always over, we're always under.

That department's always sandbagging. that one's always overly optimistic. And we look at it from that to try to gauge the confidence factor of next year's budget. You know, that kind of a thing. But that's a little different motivation. But in this case, you would show that, okay, yeah, we're on this hockey stick ride up and to the right with the revenues. And we knew it was going to happen.

And so you can reasonably project because we have. That's a good selling point, I would think. to a buyer. Yeah. Yeah, that totally makes sense. If you're missing the stuff by double, though, I mean, if you're in a real heavy growth thing and you're missing your expenses or something by double, that's going to indicate lack of competence and lack of confidence in your numbers.

Yeah, yeah, yeah, yeah. That totally makes sense. Okay. Yeah, most of the time we end up way above our projections, like, you know, our expense margin has gone from when we started the business about 25% to right now our expenses are like 12% of the total business. I mean, it's kind of ridiculous. Yeah, but you've got some fixed costs that are just being amateurized across a lot larger

number of trips. Correct. Yeah. Correct. Exactly. Exactly. And so my thought about, the reason I start thinking about this is I was like, for the point you just made, does it make it more valuable if I can show you when we onboard a new airline,

this is what the growth looks like. and this is the resulting growth and, you know, like increase in expenses to support that business. I wouldn't personally, if I were buying it, I wouldn't give you value for that, but it would make it more attractive. Okay. Because I can see that I might be able to do that, but I wouldn't be willing to pay you a multiple of money you've not yet made. Right. Right, right, right, right.

Yeah, that totally makes sense. I guess to your point, it's more like, we need. know our business really well and this is what you can expect from a growth rate. We've proven it over time. We've proven that this is what this looks like. Yeah. And we have those historical Yeah, the marketplace, our market share can increase at this for not, not add, not to infinity, but, you know, there's a lot more room for this brand penetration to continue at this level and the resulting revenue. Yeah, I think that's all, that's all stuff you could talk about. But that just makes me want to buy it versus I'm buying a business in an industry that's that's kind of going,

whoa, wah, you know. Yeah. You know, but I also don't want to buy somebody's numbers that sold Plexiglass during COVID. Right. Those are artificial. That's an anomaly. Those are artificial numbers. Yeah, that totally makes sense.

So I'm trying to, that's what I'm trying to ascertain. But I think if you can show, A, that there's room in the marketplace for this, there's room for this brand to expand further. and here's what we've been able to do, and that's an indicator of that, then that makes it more attractive. But again, some people will pay for that. I was looking at a deal the other day that some friends of mine were looking at, and these Coopers, you know, they ran a present value out 15, I mean, net present value out 15 years. And I'm like, I'm not paying you out 15 years of growth.

That's why I'm buying it. I'm paying you on what you've done so far, a multiple of what you've actually done. None, not what you're dreaming about. But these guys were looking at it. They were willing to do that. And I'm not in that deal. I was just looking at it, kind of rolling my eyes at them. But, yeah, but, you know, I don't know what business you can project out 15 years with a rate of change in the business world today.

I mean, and claim accuracy. That's absurd. But I do think it makes it more attractive, and I like what you're doing there. You've got a really good mind. And the way you're viewing this, your critical thinking skills, I think. are incredible on it. And I think they're lucky to have you sitting in that numbers crunch or roll right there. They need you.

Yeah, you're amazing. Good job. Very good job. Thank you. Thank you. Thank you for being part of the Entree Leadership podcast. Well, as a business owner, do you ever feel like you're hurting cats? Like your team is great, but everybody's running around doing their own thing and nothing

feels aligned? Well, that could put you at the Pathfinder stage of the Entree Leadership five stages of business. where chaos is winning and you want a systems solution. At digital membership and Entree Leadership Elite, you will get customized action plans to help you solve the key challenges you face at any stage, including this Pathfinder stage. So once and for all, you can get all the ducks in a row,

all the cats lined up, whatever mixed metaphor we're going to use here, right? So everybody's on the same page. We've got all these metaphors, all these liners we use. But yeah, don't worry. if you're not in the Pathfinder stage, we can help you in whatever stage of business you're in with unique tools, video courses, live coaching webinars,

all designed to help you grow the business, the Ramsey Way, the way we've done this with Entree Leadership Elite. Hey, it's $250 a month, which is a deal. Now, listen, if you've got no employees and you wish you had a business,

this is probably not for you. If you got five or ten employees up to about 200, we can show you how to go, better and go faster. This is for you. And you can buy it if you want to. We'll take your money. But honestly, I'm telling you, what's in there is for companies of five to 200. That's what's in there. You've got 10,000 employees. I've never had 10,000 employees. I'm not sure I got anything to tell you. I got ideas, but I'm promising, but I can tell you how to run a 200-person company. I've done it for 30 years. So I got 1100 now. So anyway, Ike is next. Ike is in Houston, Texas.

Hey, Ike, how can we help? Hey, Dave, it's so great to talk with you. I look up to you so much in Arche leadership and in personal finance and, you know, with debt free on our personal side and our business side. My name is Ike. I have a flower farm in Houston. We have eight employees last year. We did a top line of a little over a million.

And we're a B2B business. And, you know, I'm the owner. I started this business up on the ground up. My role is to get sales to deliver and to do some production, and then my team does the rest of the production on the back end. And my question is a... Tell me again what you said. You have a what farm?

A flower farm. Flowers. Okay. Yes. Cool. We supply restaurants and hotels. And you did a million, too? We did.

In flowers. Wow. Yes. It's a lot of flowers. Yes. Okay. Thank you very much. I go out and get new accounts.

I love sales, you know, because it's my business. and I love the sale process. I have a heart, when I lose an account, and it happens, I take it really personally. And it's mainly because I know it affects my bottom line and there's so much at stake with making sure to make payroll and bills. And, you know, we have no debt and we save a lot of money. I just take it so personally, psychologically. And, I mean, I know I can just turn on the faucet and get more accounts, but I'm trying to figure out how to deal. with the emotional loss.

And I wanted to know in your experience, how you've dealt with that. The more of it I've done, the more I realize that single account doesn't matter as much as I thought it did. Okay. And so it gets better with time. The more of them you lose, the tougher you get. But it's not really just toughness. It's more of a recognition that,

because part of what you went like I remember the first time some that we had like 10 people and the first guy ever quit and that was like why don't you want to work here you don't like me here you know and he wasn't even that good on an employee but it just it's just it it's just the I would have been a lot better off out of fired him but but it just you know but he he it really hurt my feelings you know what I'm saying yeah and and now you know I mean we got to let 1,700 people. We might have 10 quit in one day. I don't know. And I'm like, I don't, okay, like we're not, like I'm not going to quit, so I guess we're going to keep going. You know, it's like, whatever. And, you know, and I figured out that each time someone left, even if it was

someone I loved, and I usually, and it had a close personal relationship with, each time they left, I thought that was going to be the end of the world. It turned out not to be the end of the world. And I can still love them when they are friends and they work somewhere else. I ran into some people other night that used to work here. And I just love them. Gave him big hug and bought their dinner. And, you know, I still like them. You know, I'm not mad at them.

But the same is true with the customer is, you analyze the loss? Yeah, definitely. I definitely, CSI it. I analyze it today if someone that I'm close to quits here or if we lose a customer here. You know, we got 680 radio stations. when we had 50 and one of them quit, I was ready to go burn down their station. You know, I mean, I was like, you know, it hurt, you know,

I was like personally mad. And, but now that I got 680, I don't even know that all, I used to know all the call letters. I used to know the wattage, you know, everything on every single radio station. I don't know any of them anymore hardly because I've been, like in certain cities, I mean, your city, Houston, I've been on five different radio stations there.

So in 30 years. So I don't even know if I'm on right now. I couldn't tell you. So, you know, that's kind of what it comes down to. But the reason is I got 680. I don't have 6. Sure. And I don't have 10 employees, and I lost one.

I got 1100. And I've got 30 years of that person left, and it hurt my feelings. And I thought it was scared. And it scared me a little bit. And I was kind of at the, and I thought it was the end of the world. And it turned out to not even be a memory. don't even remember it now years later do you do analyze if you lose an account to a competitor do you analyze the competitor I find if I analyze the competitor it it spins me in this negative mode um and

and it's not a good feeling and I how do you deal with that when you lose to a competitor versus inflation versus you know uh yeah I mean it's I I wanted but I want to do it more passionately than you're doing. I don't want to spin out over. You're spinning out is what you're telling me. But, you know, it's okay, if you get beat in a football game, you should watch the game film. Yeah.

You know, hey, George, you missed the block over there, man. And the quarterback got creamed because you were mailing it in. You know, and that's what a coach says, right? And George was like, yeah. And all the guys were hitting George making fun of him. Hey, George, you mailed it in on that one, you know. And next time, George ain't going to mail it in, right?

So, you know, that's what you watch game film for is to do course correction, but you don't watch game film to discover, we're a bunch of losers, we're never going to win a game, we suck, and they're so good, and that's not, that's spinning out. But we watch game film to figure out what we can do better, and then we move on to the next game, and we don't camp on it, and we don't spin out on it, and it's not an identity. We're not changing our identity.

We're still who we are. We're still a flower shop that does a flower farm that does incredible volume. We're still excellent to what we do. And we got beat on that account, but I'll never get beat that way again. I'll get beat another way, but I won't lose one because of that again. Or sometimes you go, hey, we lost that account for good reasons because of who we are. And we were standing on principle. And we wouldn't acquiesce to some of their bull crap.

and so they went over to somebody who would put up with their stuff. And, hey, that's a good loss. I'll take that one. Do you ever analyze or emotionally analyze losing an account due to the competitor having much lower prices? Oh, sure. Sure. That's an example of I'm proud to let them go. Because, I mean, hey, Costco sells flowers cheaper than you do.

Yeah. And if the stupid, if the stupid restaurant wants to go over at Costco, then they're not your customer. That's not who you serve. If you're trying to compete with Costco, you're out of business, Tyler. Yeah. You're not.

The Costco customer needs to go to Costco. That's what they're for. And I like Costco. They're a customer of mine, and I'm a customer of theirs. I'm not mad at them. I'm just saying, you know, that if that's what,

if that's the market you're in, but you're fine French wine, you're not box wine. You're going to get beat on price. good, but you're not going to beat me on quality, and you're sure not going to beat me on the quality of the people that work in our organization, and you're sure not going to beat me on integrity, and you're sure not going to beat me on customer service.

I'll kick your butt on all of those. But if you want to race to the bottom on price, hey, I'll see you down. I'll just stand back here and watch you hit the manure pile. Yeah, we believe in that, too, not to lower our prices, the same amount of work. No, I'm not. I'm very proud of what we charge because everyone makes a multiple on what we teach them. It's true.

You always signed up for elite. We just signed up for coaching. Yeah. And the coaching starts this week. And the elite, the employee surveys have been so beneficial for us. Yeah. They really have. Oh, yeah.

And you haven't even paid anything yet. I know. So I'm definitely worth that, dude. Hey, man, you're going to be fine. Here's the thing. You never want to reach the point. Only a psychopath or somebody that doesn't care reaches the point that a loss doesn't affect them. It means you don't care or you're psychologically ill.

It's the only way that it wouldn't affect you. Of course it affects me. Today, when I read the report of who has quit, when I read a report that we've lost a radio station, it still affects me. But it does not affect me at the same level that it did hundreds and hundreds and thousands of events ago, decades ago. you know and all it is is I just realized I'm not going to die from it and so I'm going to be okay and I'm just going to keep being who I is and and Ramsey's going to keep being who we is and that's how this is going to work but yeah you if you quit feeling pain from loss that's weird

I mean you wouldn't want that I mean the only people that don't feel pain from loss are socialists I mean you know what you get a you get a trophy whether you win or lose What's the point of the trophy? You know what I mean? It's not, I want, you know, we had, Daniel and I were, my son and I were talking the day about this guy was telling us that the kids, he was coaching, the 13-year-old kids on something, they lost the state championship, and they were crying. And in the locker room, these guys, these young boys, young men were crying.

And the guy was all upset. He goes, those kids were crying. And I'm like, well, they lost. They cared. Of course, they worked all year. They've been practicing in the hot sun. They've been kicking butt and taking names. They wanted the gold ring, baby.

And they got, they missed it by one game being the state champions. Of course they're upset. That's a good thing. I don't want them psychologically scarred for life. But, you know, if you're not upset by that, by putting in a huge amount of effort and then still losing, you're weird. You know, that's just dumb. That's where these, you know, these socialists, these communists, these communists,

us there everybody gets a trophy and everyone should feel no pain and everyone needs a safe place and if you disagree with me you're a narcissist who gaslights me oh crud you know grow some thick skin you know really and not you but the rest of those people but anyway yeah i mean gosh that's the thing so that that that's the deal yeah you're gonna feel pain when you lose if you care and you're gonna want to know how not to have that happen again that's watching the game films if you care. So very good question. I'm honored to have you in the coaching system, honored to have you in the Entree Leadership podcast audience. You run a very cool business. I like the sound of it. You got a big old heart and that big old heart's going to take you a long

way. By the way, Thuripreds all have big hearts. Donkeys got little hearts. This is the Entree Leadership podcast. Hey, this is the Entree Leadership podcast. I'm your host, Dave Ramsey. If you want to help us out, and we could definitely use your help, by the way. You could do that by subscribing or following this show. Yeah, become someone who automatically gets this thing delivered. That helps with the old algorithms on the internet, pushes us forward, lets people know we're out there. If you like it and you subscribe, it helps us.

Thank you. If you like it and you review it and leave five stars, thank you. Leaving one star means you should have been spending your time listening to something else. What's wrong with you? you. So don't do that. And sharing the show, share a link, push the share button if your particular methodology allows you to do that. Let people know we're here. And we appreciate that too. It helps us. It helps us. It helps us. Tyler is in Nashville. Hey, Tyler, welcome to the Entry Leadership podcast. Great to speak with you, Dave. You too, man. What's up? Yeah, so I'm CFO of a tiny home

community developer here in Tennessee, to about 13 million in sales last year. And we are looking at starting a 401K program for our employees and just trying to figure out how to roll that out in a way that kind of makes sense for us and isn't going to be something we end up having to pull back later if sales decline or whatever. Okay. Well, there's kind of three layers to this, and I'll give you the one I would do in your situation. Number one, when we're done, jump online at Ramsey Solutions.com, click on SmartVestor and find a SmartVestor pro in your area that, and it might even be the one I personally

used since we live in the same neighborhood, that will sit down with you guys and help you put this together, okay? There's a SEP IRA, which is a simplified employee pension plan. I would not recommend it. It is best for solopreneurs or people with just a couple of employees. because whatever percentage the owner puts in of their income, you have to put in the same percentage match for all, or you have to put it in whether they put it in or not,

for all employees that have been with you more than two of the last five years. Bad plan for you all, okay? So it's too constricting, it's too generous, and it's really not designed for a 13-person company. The other end of the spectrum is a 401K for a big company, which will cost you several thousand dollars a year to have an administrator run it to keep it legal and ever so often you get to do a $10,000 audit on it. That's what I have with 1100 team members.

I would not recommend that. That's a traditional 401K plan. In that type of a plan, you can decide whether to match or not, how much to match. You can decide if you want to have loans. You can decide all kinds of things and customize the plan. we don't do loans, we do do a match. You can decide how long they have to work there before you do the match, all of that. So you can very much fine-tune it, but the expenses of operating it make it prohibitive for a 13-person company, okay?

Yeah. Now, the Goldilocks, the one that's in the middle, just right, is the simple IRA plan, is what it's called. It is a 401K plan for small business. it costs probably $150 a year to operate it and you can put 20, 30 mutual funds, 10 mutual funds in there for them to select from. And the only downside is it's locked in, it's very precise, you have to match 3%, the first 3% of what someone puts in. If they put in nothing, you don't have to put anything. But if they put in 3% or more, you have to match the first 3%. That is mandatory.

You don't get to customize all of that. All of that's set for you. But it's very inexpensive to operate. We had one here until we got to, we probably kept that until we got 100 employees. Because we couldn't justify the expense of the full-blown program until then. But this is, it's basically like 13 little IRAs is what, amounts to, but you get to offer it as a payroll deduct as a 401K, and that's why they call it a simple IRA, but it really is 401K for small business.

Yeah, that's what we've been looking at. I think our fear with it, it's just I know in previous plans we've had to hold on that if the employee doesn't roll it over, we're still having to pay the administration fees. And that's what kind of made us nervous. There's a way to kind of, given that we're in construction, all that, we've got a lot of turnover of guys that will be here for, you know, nine months a year, 18 months, and get out of there. I don't know. I don't think you are allowed to require them to withdraw it, but you might be able to put that in the charter.

I don't know. You'd have to ask a smart vestor pro that helps you put the administrative parts together. I get that concern, but that's really the only one I would know to tell you to do. Okay. Yeah. I'm kind of stuck. I don't know that there's another option. I would not do a defined benefit plan in any circumstances.

Doctors, some doctor's offices do those things, and you get it. It's an old-fashioned pension plan, and basically it's the rich guy running the things trying to line his pockets and has to throw off some crumbs to the peasants is generally how those things are set up. But there's so much regulation on them and so much BS on the investment portfolio, I don't want anything to do with them. I've chosen to stay completely away from them. but so I'm a big fan in your situation of that.

Yes, it has some problems, has some constraints. And of course, the other options do nothing. Honestly, you're not competing with big company 401K plans for hiring anyway. If someone's looking for a huge benefits package, they're not working for you. They don't go to work for you. You've got to offer them other reasons to work for you other than corporate benefits that are coming out your ears. don't have, with 13 people, it makes no sense to have a massive benefits package that costs you a ton of money for a 1K being one of the elements. I really would not worry about that. Your brand

differentiation for hiring is the quality of the relationships in the organization, the opportunity for growth in the organization, the fact that we actually know your freaking name and stuff like that, you know, it's not your benefits package. You can't compare apples to apples with big company benefits packages. I don't want to, and I got 1100 team members. I don't want to if you want to come here because of the benefits package only, I don't want you. It's not who I want to hire. But you've got to decide if you want to offer it at all. If you do, and you might talk to a smart investor pro. They might tell you something better. They might give you a good idea that I hadn't thought of. Hey man, thank you for calling in. We appreciate you being out there.

Hey, guys, remember better a weary warrior than a quivering critic. Leaders serve. Leaders are active, passive leaders act on principle not appearances this world needs more high quality high courage leaders choose to lead i'm dave ramsi your host thanks for listening to the entree leadership podcast