EntreLeadership - How to Handle Profits and People Problems

Episode Date: May 22, 2023

Today, we hear from: •      A business owner wanting to scale and expand his auto-detailing company •      A business owner sharing how he doubled his revenue in two years •    �� An Instagram follower asking what it means to work on your business and not just in it •      A son wondering the best ways to invest back into the family business •      A family-business leader wondering how to handle a sexual harassment issue 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 EntreLeadership’s Stages of Business: http://bit.ly/3yvdavv •      Register for EntreLeadership Summit: https://bit.ly/3LRiZJH •      The E-Myth Revisited by Michael E. Gerber: https://bit.ly/45559fS •      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: 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 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 your business and leadership. I'm Dave Ramsey, your host, with over 30 years of leadership experience in the trenches. When I started, I sucked, and I'm much better today. That's good news for you, since I'm advising you on how to win and how to go to a different level. I'm certainly not the leader I was, and I hope I'm not the leader that I become in the coming years. I hope we all continue to grow and get better. So 30 years in the trenches is not linear, is my point. It didn't start at this level, and it won't end at this level.

What got us here won't take us there. Hey, we're here to help you if you want to talk about your money and your leadership. You call in with a question. If you're looking for a finance professor or a college business policy professor, you're on the wrong show. I'm actually a guy who does this crap every day. I deal with people that we've got 1,000 folks plus on this team, 1,100 folks on this team, and we get to deal with that stuff every day.

We deal with the legalities. We deal with the business opportunities. We deal with the exciting profits and the colossal failures. So we're here to help you. If you want to be on the show, you can call and leave a voicemail. We'll schedule you at 844-9-4-1070, or fill out the form at Entree Leaders. We'd love to have you.

Jaden is with us in Bentonville, Arkansas. Hey, Jaden. Welcome to the Entry Leadership Podcast. Hey, Dave, how you doing? Great, man. What's up? So I am 21 years old, and I have a auto detailing business that I started after I left high school three years ago.

We gross about 240,000 to 300,000 a year in revenue. And I've found myself. in the last 30 days, I've kind of transitioned away from a treadmill operator to a pathfinder. And I'm trying to figure out the best way I can optimize my business as finances to effectively scale and expand. Wow. Impressive. Thank you, sir. I've worked very, very hard for it.

Oh, auto detailing is very hard work. I mean, it's, it's, wow, amazing. Good for you. So how many crews are you running? Right now just one. They're doing $200 grand off of one crew? Yes, sir. There's four of us total.

My three team members, absolutely awesome. They run what we call the mobile side of the business. So they take a truck and trailer. They go to people's home. They go about to six cars a day. And I am in our physical location in our shop doing the big ticket items, like streaming coatings and window tent and paint protection. Ah, okay.

All right. So you started with a trailer, though. Yes, sir. And then you've added the shop and you sent them out on the road with the trailer. So in a sense, you're a crew and their crew. Correct. Okay, very cool. And so you're starting to learn to delegate and make the move.

Well, good for you. We're moving into Pathfinder. Look at you. So how to effectively optimize your business. Now, what do you mean by that? So right now they do about six cars a day. I do about two big ticket items every single week. Those big ticket items range between 1,000 to 2,000.

It just depends. But right now, my numbers are they do about $220 per car. The mobile crew does. There's about six cars a day. So the weekly income, weekly revenue from them is just under $8,000, about $7,900. But I'm finding I pay one of them $18 an hour. He's the lead detailer. He kind of leads the team, and the other two are $16 an hour.

So I'm right around $50 an hour in labor. So I find my margin is about 45 to 50 percent, and I just feel like it could be a lot better. And I just, I think maybe my expenses are too high. My prices aren't high enough. My monthly operating expenses are just above $12,000. So what, where is it you feel like you can cut? Well, my rent is $3,400 for a $2,400. That's not sure guys on the, you're talking about the guys in the field,

like you don't have enough margin on them is what you were saying. Correct. So what expenses could you cut there, run a three-man crew instead of four? Possibly, yeah. We found that three guys doing one car is the sweet spot, kind of getting it done. But you got four. Yes, sir. We have three on a mobile team and then me.

Oh, oh, the three on the, so you do have three. Okay, so if you drop it down to two, you get inefficiencies. So that doesn't make sense. Right. Okay. And so I don't know where your expenses are high then, unless you're spending too much product on the car, which I doubt. No, not at all. You're using the customer's water.

We're using our water, but it's like $120 a month. Yeah, it's not a big. It's very, very small. Yeah. Interesting. I feel like maybe we could, I could be having them do more cars in a day. If they're running slow, that's one thing. And then the other thing is your pricing could, you maybe could jump your pricing.

I don't know, it sounds pretty rich to me though. We are in our area. Our pricing is kind of mid-tier. We're not as high as other people, but we're definitely not the low. This is a full detail. It's not a simple wash. Yes, sir. Okay. Wow.

All right. Yeah, that's not bad price. All right. Hmm. Well, I think you could try a couple of things. It doesn't sound like there's anything glaring to me. If you adjust your prices, I would adjust them gradually and just see what occurs. I mean, bump it 20 bucks or something.

Go to 240 and see if anybody notices, you know, and just start to play with that stuff a little bit incrementally. The other thing you might try for fun is some spiff's. for the crew that if they increase their speed. Mm-hmm. And so, you know, they're doing how many cars a day right now? Six. Okay.

And so for every car a day, over six that you do, I'll throw another hundred bucks in. Mm-hmm. Or whatever. I don't care. Let's just see if they got any lost motion, if they're, if they're screwing around. When you were running the crew, could you do more than six? honestly no it was probably about when i when i was doing it there were it's just me and one other person i know but if you were running a three-person crew and you're standing there and everybody's

stepping and fetching all day long can you knock out more than six you think they you think they're goofing off 10% of the time i would say probably 10 20% okay yeah so maybe a a spiff meaning a bonus for every car over six that you get in a week. So, all right, if we work five days a week, it's 30 cars, and so every car over 30, you're going to get something extra. And, or maybe you pay them $20 an hour instead of 18 on that car. That wouldn't be right, because it's not an hourly thing.

It just be, just come up with some kind of a number that fits that is not, you know, where you're not spending more and you're getting. I mean, you're getting another $240 if we raise your price to $2.40 by adding a car a week. Okay? So if you got another 240 and you want to experiment with this, you could spend the entire extra 240 on the crew just to see if they can pull it off. Gotcha.

And learn something because you can always change it later and just go, hey, for this month, we're going to run a special with you guys. Every car you get over 30 in a week, I'm going to pay you an extra. There's three guys, an extra $75 a piece. That's $225. Okay? So you're just making this up here. But what I'm always doing here is I'm always tinkering with compensation as incentives,

and I'm tinkering with pricing model, and I'm tinkering with efficiencies and expense levels. I don't hear any efficiencies or expense levels unless they could just produce more. If we can increase productivity and the way to do that, just get everybody fired up about it and have like a contest. Then the next thing you've got to look at doing, once you get that dialed in, is another crew. It's got to add the second crew. And you've got some capital investment to do that because you've got to get another trailer and set of equipment on the road. and that's probably more upside there than it is screwing around in the shop because I think you're finding that in our world today,

one of the biggest upsides is there's two ends of the spectrum where people are making money. They're not making money in the middle. Serving the middle class, there's not as much money in that as there used to be. It's serving very wealthy people with unusual, huge levels of specialized butler-type service. And it's serving people that don't have any money, but doing it with massive scale and low margins. And this is where every business right now is exploding, is those two ends of the spectrum. Because stuff like a digital app is serving people that doesn't cost a lot of money, and you're getting massive scale, stuff like very intense labor things, Butler-type service, concierge type service,

docs are going to that, lots of people are going to that, to where you're taking care of the people that have the platinum. experience and there's serious money there as well on their business model jaden you're a rock star man you're getting it done i love it very very very well done fabulously handled man that kid 300 000 a year already you can't beat it i love america oh this is the entree leadership podcast thanks for joining us here on the entree leadership podcast i'm your host dave Ramsey. Building a business is freaking hard. Every day you experience wins and you get tough new challenges. In fact, we built Ramsey solutions. As we've done this, we found that those challenges happen in specific stages of business and around six specific drivers of business as you go through those stages.

We call the combination of those two things, the entree leadership system. If you want to learn the system and how to level up and how to move on through the different things, so you're not having the same problem over and over and over. you need to get in Entree Leadership Elite, our digital membership for business owners. When you sign up for Elite, not only will you get customized action plans for you on your particular stage of business, but you're going to get access to our unique set of tools and our training videos, lots of stuff from me and the team here at Ramsey. We're here to help you out. And here's the cool part. Entree Leadership Elite is free for the first 30 days. Free!

So you need to like, look at this. It's free for 30 days. Get in there and jump in. You've got a business with five team members up to about 200. We can show you stuff you're not thinking about because we've been there, done that, and we have all the T-shirts. And the first 30 days is free. Entryleadership.com slash elite.

Clinton is with us in Decatur, Alabama. Hi, Clinton. Welcome to the Entree Leadership podcast. Hey, Dave. How are you today? It's an honor. Honor to talk to you. What's up? Well, I just calling in to, I'd like to share a little bit of how Summit has completely changed my life.

It's been an amazing journey. And I just wanted to share a little bit with you. I'm 58 employees. We do tiny homes and building components. Last year's revenue was around just over 16 million. And it's just, Summit has the Entry Leadership platform. has completely changed my life. I just just share that with you.

Well, I'm honored. Thanks. That's pretty cool. So when did you, how many of the summits have you been to? Actually, last May was my first one down in Orlando. Oh, yeah. That was my first one.

I've been to a few other events since then, but that was where it started. Yeah. So that was a good event. Absolutely. It was wonderful. We had a great time. What was your biggest takeaway that made such a difference? I realized that you,

you do not have to sacrifice your family, sacrifice your relationship with the good Lord to run a business as long as you do it right, as long as you learn to delegate, as long as you're purpose driven, as long as you follow the principles of what Entre leadership teaches, there's a way to find relief and a balance through it all and still run a great organization and a smooth organization. So two years ago, what was your top line? Top line was about, two years ago. Two years ago, we would have been about just over $8 million.

So you've doubled in two years? We have doubled in two years, yes, sir. Man, you're a stud. Way to go, Rockstar. It's been an amazing journey. So really what we gave you was just a framework, a way of looking at it, so you can view business through the right set of eyes and give you some options, some ways of thinking about.

and may have been already saying things you were already thinking, and you went home and just did them. That's correct, yes. It's first of all about being intentional, about making sure that you do follow it. What you put into it is what you get. And my team bought in. That was another key aspect of it. I took a few of my leaders to Summit, and they have bought in, and it's just been an amazing journey. It's been amazing way to – I look at business so differently, and just want to thank you all

for what you've done in my life. What you've, you know, the platform you've given me that I can be able to have that solid business that can be a generational thing. Yeah. Well, you've done an incredible job, man. 16 million is no slouch. Very, very cool. And doubling, it's no slouch. Way to go, man.

Excellent, excellent stuff. Very cool. You coming back to Summit this year? We are. Yes, sir. Awesome. Well, I hope I get to meet you when you're there, man. Make sure you find somebody and I'll get introduced.

I'm proud of you. That's beautifully done. Thank you for sharing and appreciate you bragging on our guys. They work really hard and that I often say, and sometimes people think I'm hyping, that Entree Leadership Summit is very possibly the best leadership event in North America right now. And I'm almost positive it actually is. I don't think there's even a close second. That's not just hype.

I mean, if it wasn't my event, I still would go. It's the type of speakers, you know, like a Jordan Peterson's going to be there this year. Willie Robertson, my friend from Duck Dynasty, he's going to be there. He's a CEO of a pretty dead-gum, big operation, you know, and we're going to talk to him about that. Malcolm Gladwell, who's written more great business books than just about anybody out there is going to be speaking. Lots of other people. Brian Buffini, my friend from the real estate world, will be there. Lots and lots of good stuff.

Now, it is completely sold out, so there's no reason for me to be selling it to you. So you can't come. It's sold out. I mean, Nashville sold out. It's sorry. We do have a live stream. If you want to watch it on live stream with your team, you can do that. But you can't come.

You missed your ticket. You should have gotten one. But the live stream is going to be great. So you can do that too. And then next year you can come to the real one, you know, instead of the fake one on the computer, right? But the fake one on the computer will do. You can watch it there and put it up on the screen for your team and all that.

It'll work fine. It'll work good. And that'll at least get your feet in the water and you can start learning this stuff. Just go to Entreeleadership.com and click on events and summit, and we'll be able to get you that live event or that live stream ticket. And you can watch at least not miss out on what he saw last year. So thank you, Clinton. We really, really appreciate you, man. That was very, very kind of you to call and share that.

Hey, you don't get better unless you get new information. Be not conformed to this world, but be transformed by the renewing of your mind. Romans 12, too. Put new stuff in your brain, you get new results. Me too. This is the Ontario Leadership Podcast. If you guys haven't heard the story, a few months ago, George Camel, who was the host of the Ontario Leadership podcast for quite a while and did an absolutely incredible job. He's been doing such an incredible job on The Ramsey Show, our other podcasts. He started his own YouTube channel, and he's so, busy that I fired him from this show. And so the problem is I get to do the show now, so you're stuck with me. But it's working. Some of you are liking that, and I'm stirring up a ruckus, but that's about all I'm good for. It's like a spiritual gift. Apple Podcast is saying,

always learn something. Look forward to a new episode each week. I learn something every time. This podcast pushes me to be a better leader with my team. The principles discussed apply any type of business you're in. Another review says, I've been searching for high and low for a new entrepreneurial podcast to listen to. I should have known all roads lead to Dave. I'm so excited. Dave's on the mic flying solo for this Q&A podcast, created just for business leaders,

everything I've been looking for. Thank you, guys. YouTube comments, Day 11 Dave on the show, it's a perfect match. Great way for us to see more wisdom he's built over the years. And glad Dave's shedding light. Another one says on this and how they approached lean times during the COVID peak. a layoff is one of those things that you never forget. You can't help but feel worthless for a week or more like any of the devastation.

You grow from it. You get stronger. Spotify, love the new show format, extremely relatable information that's geared towards business, fantastic stuff. Well, thank you guys for saying nice things. We appreciate you. And by the way, if you want to help us expand the show, do that. Leave a nice review.

Five star, one star doesn't help. Mama said if you hadn't got anything nice to say, don't say anything at all. and of course share the show click the share button click the link share it with a friend say check this new show out or this new format where ramsie fired george and took over like he owned the place or something and um that's what's going on here it's actually what happened okay i didn't fire him from ramsie i just got him off here because he's too stinking busy but i'm having a lot of fun saying i fired him though all right today's questions from mohammed on instagram he says they say you should be working on your business not in your business what does that mean

Well, they is Michael Gerber. Michael Gerber wrote a book called The E-My Myth that I read probably 30 years ago. It's a little tiny book. There's not much to it. And Michael's point of the E-Myth that stands for the entrepreneurial myth is this. The example he uses is a lady that she's really good at baking pies. So she gets in the pie baking business. And she's a baker, and she makes pies.

And that's all she does. That's working in your business. You're doing the technical work. If you own a massage therapy organization and you do the massages, then you're working in your business. If you own a lawn care business and you're mowing the grass, you're working in your business. Gerber says when you're doing that,

you're never going to grow and you're always going to experience frustration. because anytime you're not working, the business comes to a screeching halt. That is, though, the first stage of business. We call it the treadmill operator because you run, run, run, run, run, run, run, run, on treadmill. And it feels like you're getting nowhere. And you can't take a day off because you take a day off. The income stops because you're the only producer of income. If you want to level up and start moving through the five stages of business,

the next one is Pathfinder, the first thing you've got to do is create a model where income is created without you, creating it. If you're the only one making the pies, if you're the only one cut in the grass, you're a treadmill operator until you stop that. That's working in the business, Muhammad. So working on the business means we get up above it. We start hiring someone else to cut the grass, and we manage the customers, and we manage the repairs on the machines, and we manage the pricing structure, and we manage the guy who's, or gal who's writing the code that creates the website so we can sell the pies or book the lawn reservations or whatever it is we're doing.

But you start working on the business and basically you're creating staff and you're delegating some of the tasks that create the revenue. Now you can stay in it a little bit as a player coach, but mainly you are handing off the revenue production to someone else so that now you're not unemployed. Because technically speaking, when you are the only one, creating revenue, you don't even own a business, you just own your job. Because your job is, when you don't work, they don't pay you. That's your job. And when you own your job, you don't work, you don't make any money. It's the same thing. Now, when I'm gone from Ramsey, it sometimes devastatingly makes more money than when I'm here, because I'm not here to screw stuff up. So I've got

that much of a delegation running, that much of a thing happening. So, you know, it's all delegated. So I've got these other people, these other processes, these other business systems, these other products that turn into an ongoing flow of revenue that I don't physically have to be there. If Rachel Cruz and George Camel are on the stage somewhere getting paid, I don't have to be there on the stage to get paid. Ramsey's making money. So that's working on your business rather than just in your business. And I highly recommend Michael's book.

I think Michael's still alive. I haven't talked to him in probably five or six years, but he's a great guy. He lives over in California and actually had him at an entree leadership event one time many, many years ago. And so, but it's a great book. Highly recommended. It's called the E-myth. We didn't invent it. We just read it in the book and tell people about it.

We'll work on the business, not in the business. Pedro is with us. Pedro is in Tampa, Florida. Pedro, welcome to the Entry Leadership Podcast. Better than I deserve. How can I help? Well, first off, I just wanted to thank you for everything you're doing. I think you're doing a really fantastic thing, helping people out.

I know it helps my parents for sure. They followed your baby steps, you know, became debt-free, bought their first house cash earlier this year. They provided me the opportunity to become debt-free or live debt-free. Wow. I never entered to debt. Cool. And here I am at 18 years old. I opened up my first restaurant with my father.

We have five employees right now. We are projecting to make about 800K in revenue this year. And he's moving on to another restaurant. We are expanding. And I'm going to be in charge of this one that we are right now. My question is, how do I reinvest into the business with a profit that it's making? And what percentage should I use of that into the new place? My guess is the setting up of the new place is going to be pretty capital.

So probably for a little while, it's going to suck you dry, isn't it? Yeah. It's not going to be too bad. We are looking at around 15K. Okay. But until you get that 15K done, it's going to take a lot of everything. And then it'll stand on its own two feet. Is that the idea?

Yeah, that is the idea. Wow, that went. That's a lot cheaper than I thought to set up. I mean, you must have found a place to rent that had a bunch of equipment in it. We actually bought used equipment. We're starting out with the use because we did not want to. go into debt. Good. I like that. Okay. All right. So then after you do all that and you get it set up, do you need to support the other place or would it stand on its own? No. No. The other place will stand at

his own after we get everything situated. Okay. So what reinvestment would there be then in the each, in each of the branches? It would be to expand this one that we have now because right now we are running a barbecue joint, a barbecue restaurant. And then my father's niche is more of a a fine dining French place. He's opening that probably in the next three, four months. So the new location has nothing to do with the old location in terms of format? In terms of format, not at all. He's doing fine dining with $15,000 with equipment.

Yes, sir. That's impressive. Okay. And you got a barbecue joint. Yes, sir. Now what's the next one? Well, the next one that, I mean, my plan is to branch out and kind of have a local chain where we have several different locations.

A barbecue or fine dineat? Barbecue. Okay, so you want to expand the one you got by having another one just like it. Okay, so lay out a budget of what it takes to open another location and then start saving out of your profits towards that. And obviously, the more you save out of your profits towards that, the faster you're going to open the second location. Make sense?

Okay. Yes, sir. I mean, it's so, I mean, what do you make, you bring in 800K? What's your net profit? This pays both my father and I, because we are co-owners of this. It pays us both a salary yearly. How much? But I'm getting paid 56K, and he's getting paid around 70.

Okay. Is he going to keep getting paid out of the barbecue joint when he's running the fine dining restaurant? He owns this. He put all the investment in, and I only think it's fair as day. He does get paid because I kind of, he kind of just gave this to me. I didn't put too much money into it. So I would think it's fair that he does that because, like I said, you're running this together.

Not forever. I'm probably going to buy him out when he retires. You don't own it. I don't own it right now. I'm going. You don't own it. You can't control in opening up another branch. Okay.

All these questions you were asking me, I thought you owned it the way you were asking the questions, and you're not the owner of this restaurant. So y'all need to settle that. because you're not going to go expand out of profits from your dad's restaurant, expand his restaurant for him to other locations. No, no. No, yeah. That's not how you're thinking about it.

And yet that's what you're doing because you don't own it. So, yeah, you need to say, I'm buying you. You guys need to come with it to terms of what the current thing is worth. And he gets $70,000 a year towards that until he gets his money. So if it's worth, you know, I'll make up a number, $140,000 to buy him out, then he gets two years of 70, and then he makes his own way with his fine dining, or five years. I don't care. Whatever it is, he gets 70 until he gets to the number that you two agree to. And now that's basically the financing, without it being financing,

of your buyout, and now all the net profit is yours beyond that number, and you can then save the net profit towards your new locations because now you're the owner and that's how i would lay it out and do it that that makes more sense and that is the way i would go there folks when you're doing a family business deal like this this is where you get messed up and sideways you've got to have lots of clarity as to who the owner is he deserves 70,000 dollars because he helped me start it for how long not forever he doesn't yes we honor him for helping give and handing me the keys to this place and definitely want to do that. And I'm not trying to steal something from him.

But I'm also not going to sit here and work and just honor him for 25 years because he once opened a barbecue joint. No, that doesn't work either. So somewhere in there is some real life stuff and let's tie that in together. This is the Entree Leadership Podcast. Thank you for joining us, America. This is the Entree Leadership Podcast, a podcast by small business people for business people.

We're talking real leadership issues. talking real business issues and the mechanics, the nuts and bolts sometimes are how to how to move the thing to the next level, which is why we're doing this. It's not a freaking hobby, you know. We're here to make a profit, and we're here to serve our customers and grow this puppy. So you jump in, make this a part of your daily, your weekly routine. If you want to leave a voicemail and be a caller, you do that at 844-944-1070, or you can submit questions online at entreleadership.com slash ask in Mexico. Jason is calling. Hi, Jason. Welcome to the Entry Leadership Podcast.

Hey, Dave. It's going pretty good and you. How about yourself? Sorry, I'm a little bit nervous. No troubles. How can we help? What's up? So a little bit of context before I ask my question. I work in the family business, which is a chain of gas stations owned by my dad, my grandpa, and my uncle located in Mexico. And I work in old IT, and I'm also in charge of our cash flow. So I'm not directly involved in this next question, but my dad and I do usually talk about decisions before either of us make any final decisions. Yeah, like I said, we work in a gas station chain. We have about, in the gas station that I work at, we have 35 employees. And last year, our revenue was at $12 million, just about. And so we have an employee who has a wife and four kids, one of them being a two-week-old baby.

My question is, this employee has been sexually harassing other employees, and we need to fire him. I'm struggling because he lives in an employer-provided housing and will probably be homeless when we fire him. So what would be the right thing to do? Okay. Well, I mean, we've got to work both sides of the equation because this is a human equation, and we're always set out to be as kind and generous to folks as we possibly can. And you have the bandwidth financially, to be kind. The first thing that comes to mind is how long has this been going on

and why did y'all put up with us so long without confronting the guy? We've only noticed this about two weeks ago, and since the holidays came up with Easter and so on, and we've been extremely busy. We haven't really been able to get around to really talk with the guy, but we have been keeping a close eye. So you noticed that someone didn't complain? Um, no, some, somebody came to us.

Some, uh, one of our other employees came and came to us about this. Okay. So is this a one-off thing that he could be reprimanded for and keep his job? Or is this a pattern where he's been going on and on and on and on and has got to be fired? No, it's a pattern. But you just discovered the pattern. You didn't know it was there before this week. Before about two weeks ago.

That's right. Yeah. Okay. Well, we always laughingly say there's not going to be sexual harassment at, Ramsey. My daughters work here. There might be a murder, but there's not going to be sexual harassment here. So we don't put up with it either. I got no tolerance for creepers. The ladies in the building, they have to be safe and feel safe and actually be safe. There's just nothing. So I agree. The guy has got to go. Okay, so he's fired. Now he's got a baby and a house problem. Okay. Now, how quickly does he get

re-employed and find new housing. Okay, so Mexico renting is not quite the option and they are not financially equipped enough to buy themselves a house. Where were they living before they moved into your property? They lived all the way in Belize, a different country, and they came here and they found our job and we were living on the street before they moved on your job? No, they lived in Belize a different country. country.

I understand. You mean, you hired someone to work in a gas station from another country, and they moved to your, to you, they never, never lived in your area prior to working for you. Exactly. Well, I don't know enough about your particular part of Mexico. I'm not an expert on it. You are. So I don't know exactly how to address it. But what I'm going to do if I'm the employer, he's fired.

Now, how can I help them financially a little bit until they make a new arrangement for their life? How can I give them some bridge help? Now, obviously, they don't need to be in company housing six months from now. But if they stay there a month or two, as a part of a plan to go somewhere else, and we help them feed the baby as part of a plan to go somewhere else, Maybe that's part of a severance package to make sure the child is taking care of and their housing is taken care of as a bridge to the next part of their life that they find that is sustainable. But your obligation to them past a certain point is not, is zero. It's his obligation to his family.

Okay. I mean, in other words, it's not ethical, it's not proper ethics to say five years from today, he's still on your payroll. and living in your house doing nothing because he had a baby and didn't have a place to live. That's ridiculous, isn't it? Yes, absolutely. So if five years is ridiculous, I think one year is ridiculous, do you? Yes, definitely. Okay, so I'm dialing back to what's not ridiculous,

but also I'm not putting them in the street in the morning with no money and a baby and no place to live. So that's ridiculous on my part. I'm not willing to be that inhumane. So not his baby's fault, that he's a creeper. And so that he's engaging in sexual harassment with the ladies that work in the organization and they're complaining and you can't have it. So he's got to go. But on the other hand, so we're going to say some number of months,

we're going to take care of your food and we're going to take care of your housing for you to make a transition. and in order for that to happen, you have to show us that you have a plan to leave. Because people like this will sit there until the last minute and then two months from now have done nothing, and then you're the bad guy for throwing the baby in the street, right? Right. So we can't just toss them, oh, we're going to give you two months, and we're going to give you two months of food, and we're going to give you two months of pay or whatever it is.

And at the end of that, hope they have figured it out. I don't think this guy is that sharp, do you? Absolutely not. Okay. So I got to help him, help him. I got to make sure he finds another plan because after the two-month mark or the three-month mark or whatever it is you and your family come up with that is fair for him to live in your housing because you're being merciful and gracious and generous, considering he's a freaking creeper.

And still, we're going to take care of his family anyway because that says something about us, not about him, and we're going to do the right thing, but we're also going to require that he take the steps to reach a sustainable situation for his family, a new job and new housing. Okay. And here's what I would do. I'm going to, I mean, the way I answer, I tell my leaders this all the time. It's a good, I love your question because the, the best way to answer a good business ethics question is, what would you want someone to do if the roles were reversed? Okay. Walk a mile and the other guys' moccasins for a minute. The Bible says, do unto others, as you'd have them do unto you.

That's my HR manual. And then I tell my team when we're wrestling with these things, and we wrestle with them. I mean, these are struggles when you get in these situations. It's not cut and dried. We're not corporate America. We don't just cut people's throat and see if they bleed out like corporate America does. Small business people don't do that. We wrestle with these decisions.

We love these people. We love that little baby. And that guy living in our house. We know his wife. We've had dinner with them probably, that kind of stuff. So we wrestle with this stuff. People like you, Jason, people like me. So when we're wrestling with it, one of the ways I answer the question is we always end up erring on the side of too much grace.

Because the way I always say is when I'm 92 and I'm on my deathbed, I'm not going to miss that extra $10,000. But I will feel horrible if I mistreated a family. I'll remember it when I'm 92. I won't remember the $10,000. Screw it. It's just $10,000. Okay? So again, I'm not saying you'd be crazy and opulent in your generosity or something,

but if you're going to make an error, make it on being too nice. And so if I get to the end of this two months, and I said two months, and he's about to run out of money and he's about to run out of house, and he goes, hey, man, I got a job, but it doesn't start for two weeks. I'm going to give him another two weeks because he's got a way out. and I'm not going to cut him off right there at the end when he almost made it out. Do you follow me? So even though the guy's a twerp, even though he's a creeper,

we're still going to take care of him and his family because of what it says about us, not what it says about him. And then I'll even give him a little bit more as long as it's part of a clean exit. If he's just sitting there giving me the finger after two months, I'm putting him out. I'm done. My patience is up. and I'm making up the two months.

I'm not saying two months as magical. You might decide it's four months. You might decide it's one month. I don't know the situation. You've got to ascertain can he get housing and can he get employment and does he go back to Belize? Do we pay him $5,000 to go back to Belize? I don't care. Whatever it is, you're going to love this family well as you get this creeper out of your business

because you're taking care of the ladies in your business because he's not going to be around. them anymore. And so it's just expensive to do the right thing. And the good news is you guys are making some money, so you've got a little bit of margin. And here's the interesting thing. When you take care of people, they're not the only ones that know it. The rest of the team is watching. And so when somebody has cancer and you keep them on the payroll for a year while they fight cancer, it's not just for them. Everyone else is watching while you do that. It's an investment in who you are in the DNA of your organization.

You're making a statement, we're not corporate freaking cutthroat America. These are people, they're humans with families, and we take care of them. That's our brand differentiation when we're hiring. we might not have the glorious bull crap that some of these people have in their buildings and their dadgum stupid but benefits packages and all this stuff but you're not going to get loved in corporate America like you are when you work for a family-owned small business they're not going to cut your throat most of the time they're going to be just like jason they're going to be wrestling with. How do I fire a guy, even though he really needs a good firing, when it's going to

make him homeless and he's got a brand new baby? Corporate America doesn't ask a question like that. They put you in a street. Small business does. That's why I love small business. It's why it's been the backbone of America and why it always will. Thank you, Jason. You're good people, man. Hey, remember, better a weary warrior than a quivering critic. Leaders serve. Leaders are active, not passive. Leaders act on principle, not appearances. This world needs more high-quality leaders, so choose to lead. I'm Dave Ramsey, your host.

Thanks for listening to the Entree Leadership Podcast.