EntreLeadership - How to Lead High Performers and Scale Your Business

Episode Date: March 20, 2023

Today, we hear from: •      A leader of an HVAC contractor who has a high performer whose heart isn’t in his work •      A store manager who wants advice on how to talk to his father-in-law about passing the business down to him •      Dave Ramsey on why corporate America sucks •      A sole proprietor electrician who wants to know what to do with his business’s savings Links mentioned in this episode: •      The EntreLeadership Podcast: https://bit.ly/TheEntreLeadershipPodcast •      Learn more about EntreLeadership’s Stages of Business: http://bit.ly/3yvdavv •      Take the DISC assessment: http://bit.ly/3yvkiIA •      Get your tickets for EntreLeadership Summit: https://bit.ly/3LRiZJH •      A comprehensive list of 2023 tech layoffs from TechCrunch: http://bit.ly/3yvqeRK •      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   Let us know what you think about the new caller-driven EntreLeadership Podcast and be entered to win a $100 gift card when you take our listener survey: http://bit.ly/40dV9hf 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: •      Hite Digital: https://bit.ly/HiteDigital •      NetSuite: https://bit.ly/NetSuiteEntre •      BELAY: https://bit.ly/351P9AE •      Payority: https://bit.ly/3IaA5SK •      Staples: https://staplesbusinessadvantage.com/ramsey Learn more about EntreLeadership Events: •      EntreLeadership Summit: https://bit.ly/EntreLeadershipSummit •      EntreLeadership Master Series: https://bit.ly/EntreLeadershipMasterSeries   Learn more about EntreLeadership Coaching: •      Elite: https://bit.ly/3tI2fN8 •      Advisory Groups: https://bit.ly/EntreLeadershipAdvisoryGroups •      Executive Coaching: https://bit.ly/EntreLeadershipExecutiveCoaching •      Workshops: https://bit.ly/EntreLeadershipWorkshops Listen to all the Ramsey Network podcasts anytime, anywhere in our app. Download the Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Andre Leadership podcast, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host. We built this thing called Ramsey Solutions from a card table in my living room over the last 30 plus years. So we've done a whole lot of stupid butt stuff, and we've done a lot of smart stuff. And the smart stuff was bigger than the stupid stuff, so we're still here. That's what we're going to help you with. You want to talk about your business? You want to talk to a practitioner, somebody who does it every day?

I made decisions today in this building. It's what we do. This is not theory. It's not a think tank. And we're not going from only research. We're going from this neat thing called experience. So give me a call at 844-9-4-1070. We'll try to help you, whether you're a treadmill operator just getting started.

And too much of the business relies on you. maybe you're all the way up to being a legacy builder, the last stage of our five stages of business, where you're planning your succession plan and you're planning how to leave a legacy, but you haven't got that done yet, but you're in the legacy builder stage. Pathfinder, trailblazer, treadmill operator, peak performer. We want to talk to you. The number is 844-944-1070. Nathan's going to start us up in Peoria, Illinois. away. Hi, Nathan. Welcome to the Entree Leadership Podcast. Hey, Dave, how you doing today?

Better than I deserve. What's up, man? Awesome. So we're an HVAC contractor, mechanical contractor. My question is, how would you deal with a high performer, somebody who goes out and kills it every day, or 60% of the days? And if I can just color it in a little bit, like their best or their on time is, you know, better than most people's 100% if that makes sense. Their 60% is better than most people's 100%. And they're industry leading when they're on. But then it just seemed disinterested, you know, the other 40% of the time. So would you offer them flexibility?

How would you deal with that employee? I just have a low tolerance for lack of ambition and motivation. So personally, so it would be hard for me. But let me think through how to, how, how to push this. Is this person a tech or in sales? They're in sales. Sales and estimating. Okay. And so they, what is it that does excite them when they're on? Why are they on? Well, the estimate day is what excites them. You know, we call it the war room. So we're gathering subcontractor bids and supplier bids and putting them together for an estimate.

he's negotiations going on that excites him and then you know the the tactile part of it maybe is what doesn't excite him um which involves what well doing takeoffs like um so we're mechanical so you know hvac equipment counting the number of x that makes sense yeah yeah yeah so won't you have somebody else do that yeah it's a good solution let's just let's just let's just split the job into one of the things we did around here and we didn't do it very for the same reason as this, but we did it because we were broke. But we would hire somebody, because there were like five of us in the office, and everybody had like four jobs until one of the jobs got big enough, or let's say you had four jobs,

and two of your jobs got big enough that they were now a full-time job. So we would hire somebody, and we would kind of do this division, a cell division, like a four, you know, split it off, and now you've got two. And then finally you'd end up with four people doing the four jobs because they had the job. The volume had grown enough that those four jobs were full-time each. But when we were starting, you know, none of them were full-time jobs. And what you've got is two different jobs here tacked together. Got it.

Makes sense. Or maybe not at the size where we could bring another person on to do the smaller portion of the job. Yeah. Or have you got other guys in the same position? We do, yes, we do. How many people in doing this sales and estimating and takeoffs? So four people. Okay.

You might have one that likes the takeoff part more than the other part. Hates the war room. I mean, it's like the inverse of this guy. And so you might split it off that way if you've got somebody. Because I'm guessing the takeoff thing is more of a detail thing, detail person, and the other guy's more of a people person. That's 100% accurate. Yep, that's 100%.

Yeah, so have you run disc profiles on these guys? No, we have not. Okay, I would do that. I'd run disc profiles on all four of them. Let me give you four disc profiles as a gift. I'm going to give them to you. We sell them for like 30 bucks or whatever on the website. It's not much.

But I'm going to give you four of them. Run four of them. And I think you're going to find your high performer guy is a D.I. Or an ID. He's an I is the otter. It's the party looking for a place to happen. the people person, the D is the disc, is the driver, the dominant. I'm an ID, D, I am.

Okay. And the C is the detail person, the accounting, the engineer, that kind of thing, right? And then the S is the stable person, the loyal person, the golden retriever. They want everybody to be happy. They don't like conflict. So I'm guessing your guy it likes the art of the deal. He likes the action

and he likes the people interaction, the one we're talking about. It's 100% accurate. Okay. And so if you've got one of the other texts then that is the detail guy and he really kind of cringes when he has to screw around with the contractors,

they intimidate him a little bit, but he likes the details. He likes the counting of the stuff. Then I would just bifurcate the thing and, you know, and figure out a way to pay them both a little bit more than they were making. But I think what, because I think what's going to happen is they're going to make you more by getting them in their sweet spot, getting them in their zone that way. And so it may just be a redesign of your org chart in terms of duties and stuff may get you there. Let's, let's try that and see if that works.

And hang on, and Austin and the team in the booth will pick up. We'll get you those disc reports out. And folks, everybody that comes to work at Ramsey for, gosh, for 20 years now, we run that disc on them. It's one of our hiring steps. And the reason we do that is not because we would not hire someone based on the disc, but we get two things out of the disk profile in the interview. By knowing how you tick, how you process information, the D and the I make decisions

quickly, the D is very task-oriented, the C is very task-oriented, the C is very, very task-oriented but makes decisions very slowly based on details. So are you task-oriented? Are you people-oriented? Are you a fast decision-maker? Slow decision-maker? Are you a D-I-S-R-C? There's a lot of different personality things out there. There's strength finders. That's a good one. There's lots of others out there that Myers, my friend Pat Lynch, he only uses Myers-Briggs all the time. All of these are fine. And Pat's got some really good stuff on just the, you know, we've had him on the podcast here talking about your working genius. He's got the six working geniuses or eight working geniuses or whatever it is. And I got to be part of the test. He had me

run the test when he was running the thing out on it, which was hilarious because it nailed me exactly. So you can run these different profiles. And the reason for running them is, again, not to say I would never hire a salesperson who is a high C, a high detail person. I wouldn't, I wouldn't say that. I would tell you not that. Actually, you do want to hire salespeople that are high Cs. A lot of them are the best salespeople you ever have. But we always think of the loud, gregarious eye person being the salesperson. So one thing is you're kind of looking at the position you're putting them in, but again, it's not a deal breaker.

It's just you're asking yourself, if you have someone who hates details and makes decisions very, very fast, you really don't want them doing your accounting. Okay, so that is one where you would rule it out. But most of the time, we're just looking for how this person functions. then the second thing we're looking at is how they're going to interact with their leader and their team. Now, the way the D-I-S-C is laid out, it's laid out on a quadrant, okay, and the cross-quadrants, the angles, are where conflict is. So D makes decisions fast and based on task orientation. S makes decisions slow and doesn't like conflict and makes decisions based on people orientation.

They're polar opposites. And so if you're a high D and you hire a high S as your personal assistant, she's going to cry every day. You're going to hurt her feelings every morning before you start. So you kind of need to know this going in because I'm a high D when I'm at work. I'm getting crap done. My personal assistant Patty has been with me for 21 years, and she nor I, neither one have a feeling. We have no feelings whatsoever. We just get stuff done. And so, but if she was all feels and all worried about how everybody feels, I mean, while I'm getting crap done, it would be horrible, right? Or vice versa. If you're all about feels and someone's bulldozing through,

then it's going to be a very difficult chemistry. So you want to think about the chemistry that you're plugging the team into. Let's say you've got a, you're working with a bunch of engineers and a whole bunch of them are high Cs, high detail people. And you put a high eye in the middle of that. That's, again, a cross-perpendicular. And you put a high eye in the middle of that. Well, what that's going to end up being then is conflict because those engineers that are slow to make decisions and make their decisions based on detail. And the eye makes decisions fast and based on people, the polar opposite. The eye is. is going to seem like they are a person lacking in integrity to that sea.

That sea becomes a ferrisi in that situation. And you've got to be very, very careful. And the eye doesn't, the eyes just, they're just having fun getting life done, and life's a party wherever they go. So we run these disks to see what we're plugging the team into and what the potential downfalls are of the chemistry in the team. And then we run the disc also to just say, okay, how is this person, given their style, going to accomplish the job that we're plugging them into?

That's why that model will work really well for Nathan's situation for him to figure this out. That's going to be the best way to go. So good stuff, guys, good stuff. So you can check out the disc, and we teach about it all the time, Entree Leadership Elite. We teach about it in our Entree Master Series fairly often. And, hey, guys, you're listening to the Entry Leadership Podcast. with me, Aver Ramsey. Hey, business leaders,

Contrae Leadership Summit, possibly America's greatest leadership event is almost completely sold out. This is the event that if it wasn't mine, I would still go to it. It's that freaking good. Yeah, you're going to be challenged and inspired by world-class business and thought leaders.

Malcolm Gladwell, Jordan Peterson, Willie Robinson, me. I'll be hanging out. with my smart, I like sarcastic self. It's happening in Nashville this May through June 2nd, and maybe you can still get a ticket, but you better do it right now. We're down to the last couple.

Entreeleadership.com slash summit. Get your tickets before they're gone. And believe me, they're going to be gone. You want to participate in this podcast. Give me a call 844-944-1070. If you got a question, you want to ask on the show. Fill out the form at entreleadership.com slash ask, or call and leave a voice.

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All right. Ones that are getting it done and helping people and loving our customers and loving our team and loving our families and being great Americans. We can all do this together. We really can. David is with us in Canada. Hi, David. Welcome to the Entree Leadership podcast. Hello, David.

It's a pleasure to be speaking with you today. You too. How can I help? So I work for my father-in-law. He owns three tire shops. We've got about 13 employees spread out among the three. And so I manage one of the shops full time for him. Gross, we do about three to three and a half million sales every annually.

And so he's been wanting to start transitioning some of the leaders. so that he's not so much involved in the day-to-day operation of the business. He says he doesn't want to actually retire and leave the business, but to be able to take a step back. So we're not quite sure how to go about that transition. And he doesn't really have a clear plan in place as far as he doesn't even know if he wants me to take over full management of the entire operation or what exactly you want to do. So there's not a lot of clarity there. And yeah, I guess we don't really know

even how to go about starting that process. Okay. Well, it starts with starting, of course, and that's what you guys haven't done. So on the one hand, you're calling up saying, hey, we're ready to this transition. On the other hand, he's saying, I don't know if I want to do it or not. So I guess he needs to decide what he wants to do. What does the end game look like? When the smoke clears on this plan, what's standing? We got a new owner and you work for the new owner or you don't work there at all and you go somewhere else and have a career or how's he going to get out? How's he going to get bought out? I mean, what's the, what does he want from his business after this transition's over? And he

needs to decide that now. Yesterday. He's late. He's really late. It's frustrating you, and he's just kind of wandering around listless. I kind of like to get out of here, but I don't know how to do it, and I don't know what to do, and I don't know if I'm going to do it. I don't want to do it. I don't want to retire, but I sort of want to retire.

Good Lord. Mm-hmm. Yeah. Yeah, I think that's a big problem, love. Yeah. Yeah, for sure. He says what he wants to do. He wants the business to stay in the family because it's always been his family business.

And that's what he would like. He doesn't want it to just be sold off to somebody else. So he wants you to take it or not? Is there another family member in it? Well, not right now. No, it doesn't seem like any of the other kids are really interested in being part of the business. So that's another thing. I'm the only one that's really here.

So you want to stay in the family, you want it to stay in the business. You want to stay in the family. There's one or two things happens. Someone else gets involved or we work with you. So I mean, nobody else wants to get involved. So it's me. Or it doesn't stay in the family. So now we've established I am the family.

I mean, you guys need to sit down. How old is he? He's turning 53 this year, I believe, or 54. When does he want out? Do you know? no i don't know exactly okay so what i would say is this i would say hey

i don't care what you do with your business i do care that we continue to stumble along with a lack of clarity i'm not okay with that and so what i what i would like to do is to sit down somewhere and go you know go to a a bed and breakfast or something

and rent it for a day and just go sit on the back porch and, you know, where it's pretty weather and we're going to just sit here and we're going to talk. Okay, what is it you want to do and how can we get there? What does you, what is, Henry Cloud says, what is your desired future, right? What is your desired future? Okay, let's just pretend. I'm going to make this up. And if he doesn't start with something in that conversation, you can start and say,

okay, if this doesn't sound good, tell me, but here's an idea. We could say at 65, you are 100% retired, and you've been bought out by me. If that's our desired future, then how can we work over the next 12 years to accomplish those two goals? One is we've got to have an escalating thing for your leadership positions, and you've got to start building up some kind of a way to buy him out or him give it to you or whatever he's going to do. And you've got 12 years to incrementally do that. You don't have to do anything the first two years.

But if the plan is in place that after two years, we're going to take step one, and after two more years, we're going to take step two. and step one might be that you move as over two of the stores. Step three might be you move over all three of the stores. And then what does his job look like, his daily job if you're doing that? And so you're increasing, he's diminishing in his duties, and we're figuring out the ownership transfer concept and how we're going to pull that off. And how can we incrementally do that? In 12 years, you could do this very gradually. And that way he won't freak out. But you need

to get, but you're, but you're going to get increasingly frustrated if there's no freaking plan. Agreed? Yeah, it's already happening. I can feel it creeping in. Yeah. Yeah. Because it's so disrespectful to you. Yeah. To expect you

to just hang on, run. I'm sorry? I'm just saying that's my main concern because at the end of the day, I have to look up for me and my family. And if I don't have any clarity about my future in this process, then I don't know what I'm doing. And here's what I would tell him. I'd say, listen, I love you as my father-in-law. As my boss, I'm going to be looking for a job if we can't figure this out because I've got to take care of my future.

And I don't want to do that. I'd rather work something out here. And I'm not threatening you. I don't have to take over tomorrow. But we'd have to lay out a plan that over the next, however many years, we incrementally by five or ten steps make the move. to cause this transition to occur. And let me tell you, David, there's a couple things to keep in mind here.

One is the founder, him, he founded these stores, right? Mm-hmm. And I founded this business. The founder, all the data, all the data we have on family business says the transfer from the founder, Gen 1 to Generation 2, is the most difficult emotionally. because the founder oftentimes has a lot of their identity tied up in the business, and they're also a hardhead.

They're stubborn. I am. Yeah. And they're real opinionated, and they're always right. That's me. I'm really good at talk radio, okay? Because I'm always right. And I'm an expert on my opinion, right?

So, yeah, that's who you're dealing with. And so he's going to have all these emotions go through because it's very, difficult for him to let go of this, even in his mind. And he knows when he lays off this exit plan, that this, you know, here's the exit ramp and the car has got to get off over here to get off the exit ramp, or you're going to miss the turn. He knows intellect, I mean, we all know intellectually intuitively that when we lay out the plan that the freaking thing's going to happen, and it scares the pejesus out of you. As soon as I started laying out my succession plan, the ground started moving under my feet.

It was weird. It was emotional. So that's thing one. You need to know about succession planning. And this is for legacy builders, people that are in a stage where you're ready to do a succession plan. And you can learn all about this at Entreeleadership.com and look at our elite stuff and get with some of our coaches. They can walk you through that too. But the second thing is, the more gradual the succession plan, the higher the probability that

it's successful. And so, you know, if you do this in 1.2 years, your probability of success is very low. If you do it in 12 years, it's much higher. Does that make sense? Yes, it does. Because it doesn't shake everybody to their bones. It doesn't shake your whole nervous system up in everything that you're doing and all that. And it doesn't shock the customer and it doesn't shock the vendors and it doesn't shock the employees. But too oftentimes a founder's succession plan is, as they're dying, they grab their chest, and as they fall back into the grave, they toss the keys out. And that's their only plan. That's dumb.

You have a real high probability of that thing going down the tubes when you do that. Yeah, that worries me, too. Yeah. So, you know, I would just sit and say, listen, I don't want to steal this from you. If you want to keep it until you die, that's fine. I don't want to force you to do anything. I'm just, I, as a team member, have to know. what the future looks like in order for this to be okay long term.

So let's figure out our future. And if it's a 20-year plan, if it's a 10-year plan, if it's a five, I don't care. But I need a plan. I need a plan because just staying exactly where I am with no plan sets my family up for failure. And you love your daughter more than that. This is your father-in-law, right? Yes. This is you talking to him.

You love your daughter more than to set her provider up for failure. And so let's figure this out where you get out of this, what you want to get out of it, and you get out when you want to get out. But let's lay out a timeline that as long as I'm proving that I can handle the job, my competency, then we're going to accelerate along that timeline. And then you've got to figure out, of course, how to, you know, if you're going to be buying him out or how you're going to do that,

You're going to share profits the rest of his life. What's the plan there? What is you going to do from there? So that's what we're after. So amen. We appreciate you calling in. Family business. One of the other rules about family business,

your family business is going to be no more functional than your family. If your family's cray cray, your business is going to be craye, cray. This is the Entree Leadership podcast. Number one small business podcast in America today. It's called Entree Leadership. I'm your host, Dave Ramsey. We take calls from actual business people running small businesses,

which, by the way, account to the larger bulk of the gross domestic product. Over 54% of our GDP in America, the all goods and services are created by businesses 2 to 500 team members. Small business. You are the backbone of the economy. for that matter, you are the freaking economy. So that's the way this works. We love you.

We're one of you. This place, Ramsey grew up that way. We think that way. It's who we are. We start these businesses because we like our independence. And many people start a business because corporate America pooped on them. And they used all of that manure as fertilizer to start the next business. They used all of that anger and rejection to start their next businesses that I'll show you.

Not unusual at all for somebody that's had a negative experience with corporate America. Now, let me define for you when we say corporate America around Ramsey and around Entree leadership, what we mean. It has nothing to do with size. It has to do with you're concerned only about stock price, and you piss on your employees and your customers, and you're everywhere out there. You can do that, by the way, when you've got 10 people, but you can do it when you've got 100,000 people, too. And corporate America is concerned about one thing, and that's their own deal. There's a certain level of greed to it, and I've got no love for corporate America.

The other thing we see with corporate America is that if they want to increase profits, and you've got a huge workforce, an easy way to short-term, and it is a short-term play, to increase profits is cut your biggest line item, which is payroll. Next quarter, your profits will go up and your stock price will go up. So basically, you're trading when you fire people, you lay people off, you put them on the street, their dreams are crushed, their houses in foreclosure, they're panicking, they're scared, but you got your profits up. You suck.

That's absolutely unethical. And it's also very short-sighted because as soon as you want to grow your little business, again, you've got to rehire those people that you sacrificed on the altar of stock price or somebody like them and somebody dumb enough to walk in your doors and work for you again after you pissed on the last bunch. It's out of control. It's going on out there big time right now. Yahoo announced February 9th, 20% of its staff, 1,600 employees laid off. Affirm. If you don't know who that is, it's one of those stupid buy-now pay-nown. now later, like you can finance your t-shirt when you buy it on Amazon for a firm,

is reducing its staff by 19%, 500 employees shutting down its crypto unit. Zoom. How the crap is Zoom losing money? I mean, that's like during COVID, Zoom was like being in the Plexiglass business. How did these people mess that up? 1,300 people laid off February 7th, 15% of his staff. Dell, 6,650 people laid off. SoFi.

Oh, I love these people. Oh, aren't there the sweetest people that screw you with their financial products? SoFi technology is announced on, I guess that's part of SoFi. I guess it's part of SoFi. It has to be, right? On January 31st, it's cutting 65 jobs, 5% of its 1,300-person workforce. Good old PayPal. not your pal 2,000 full-time team members laid off

7% of its workforce January 30th January 23rd, Spotify 6% of its global workforce around 600 team members Alphabet, Google, in other words 12,000 employees how is Google losing money? That's impossible.

Microsoft, 10,000 employees laid off January 18th. Amazon, January 5th, 18,000 employees. Sales Force. Oh, there's another one. 10% of its workforce. More than 7,000 employees laid off. Big Tech.

Coming to the rescue for you, America, putting you on the street. So let me tell you how small business does this. Small business loves their team. The good ones, anyway. And let me tell you when COVID hit, we did it ran. And I am bragging because it's called having values. It's called having principles. And the principles aren't I'm going to increase my profits.

Now, if you're actually losing money and you can't pay the bill, yeah, you've got to lay people off. That happens in the real world. But this idea I'm going to increase my profits by dumping 6,000 people in the street. Guys, that's just unethical. So COVID hit. We lost like tens of millions of dollars of revenue instantaneously. The entire business segments evaporated here. We, of course, had, like everybody else, our team goes home for about 60 days, not long enough to suit some of you lefties.

But our team went home for 60 days. And then by God, we came back to work because we wanted to keep our jobs, me included. I didn't go home. I had my leadership team was here, 30 of us, every. day trying to replace the lost revenues with new ideas temporarily during the quarantine garbage. And during this time, we weren't sure if our revenues were going to, if we're going to keep enough revenues to make payroll without hitting our, without hitting our cash position. And we told the team very clearly, as soon as we sent them home, here's what's going to happen.

We've got this level of, this, all of our live events just stopped, of course, right? other stuff just stopped of course and we said look we're going to try to replace that revenue we're all going to work together you guys are working from home we're all going to be more the leadership team is going to be in a war room in the office every day trying to figure this out and what we're going to do is we're going to keep revenues up and as long as we can keep enough revenue coming in and pay everybody ought to pay everybody we're going to do that if we can't then we've got a pile of cash here and we're going to start burning that cash when the cash gets down to where there's almost none of it left. The first people to not get paid is going to be leadership. Then if that doesn't

work and we don't turn it and somebody doesn't get paid, we're going to offer you guys the chance to not get paid for a while until we can turn this. But we will not be announcing layoffs today. And if we're going to announce a layoff, you're going to see it coming from eight miles away because we simply do not have the money to pay the bill. That will be the only reason we do layoffs. We do not do layoffs here to increase our profits. We increase our profits by selling more stuff and helping more people. That's how you increase profits, you goobers. But instead, the bean counters are running these companies, and when the bean counter starts running a company, when the bean counters and the lawyers are running a company, that is the beginning of the end, baby.

Because now all we're trying to do is keep Wall Street happy. We're trying to keep stock price up or artificially drive stock price up when our sales are down and we suck at running our business. And when you do that, it's an artificial thing. It's a temporary thing. And it's a band-aid on a leaking ship. And you are doing it on the backs of families. And small businesses run right doesn't do that. I mean, small business has got 10-10 members, 50-team members.

We know the husbands. We know the wives. We know their dog's name. We know their kids' name. we're not going to put those people on the street. We're going to take a hit first personally. I'm not going to make an extra million dollars at Ramsey that I take home and I got to, and I lay people off so I can make an extra million dollars.

That's just asinine, and it's wrong. And I don't know if anybody said this lately, but I just said it right out there on podcast land. So somebody needs to say it. So here's the thing. Those of you that got screwed by corporate America, here's a plan. Go talk to small business people. Most of them are going to treat you right.

Most of them are going to treat you like family. And I don't know if they have the benefits package. Let me give you a benefit. They're not going to screw you for profit. That's a benefit. You just got your benefit. Your dad gum check's going to clear and you're not going to get laid off

so they can line their pockets. That's a benefit. Now, again, if you're running a business large or small, I am not talking about you if you don't have the money. to pay the bill. I'm not talking, but that's different than I'm going to increase profits by slicing the heads off my team.

That's just, it's appalling that we walk around and no one says, and it's standard practice. I mean, the names I just read off are all household names. This is standard freaking practice in the corporate America crap. But so, guys, if you're listening to this and you're looking for a job,

This is the reason you ought to go to small business. The small business will take care of you. Not 100% of small business people are good people, but more of them than these corporate jubes. For sure. I mean, because we in small business do not have a track record of doing this crap right here. We don't have a track record of making our money off the backs of layoffs. We have a track record of making our money off of doing our job. If it's heat and air, we're going to put in some more heat and air.

That's where we get money. It's not from laying off the techs. and then wonder why we can't get the tech work done. Oh my God! It's so stupid. It's so short-sighted. And it's so unethical. So, guys, that's how it works.

If you're looking for a position... Oh, and by the way, if you're a small business guy and you're trying to recruit, don't be intimidated by like, oh, they're looking over at Google. Google offers... They have a skittle ball in their playroom. Kiss my... That's just ridiculous. That's absolutely ridiculous.

That's crazy, y'all. you're going to go play. And then the first thing that comes up, they're going to cut your dadgum head off, man, and you're going to be looking for a job. So don't be intimidated if you're trying to hire a good, talented person and corporate America wants to steal them. Just tell them, don't trade skittle ball for real people that care about you. You have the opportunity, your brand differentiation when you're hiring as a small business

person, your brand differentiator is you care. and the first sign of trouble, you're not going to cut their throat, you're going to take the hit because you brought them in because you needed them. You wouldn't have hired somebody if you didn't need them. But corporate America just takes bodies in and bodies out, bodies in and bodies out, as if there's not people's lives attached to those things. Those people have children. They've got house payments.

They're going to be scared to death. You've been fired. You've been laid off. It's not easy. And these people treat that like it's just nothing, like your dadgum commodities. You're not a commodity. You're a team member when you work for a small business. That's how this stuff works.

This is an ethics question, America. And it's one we need to be asking more and more often. And again, I've got a friend whose business is way down, way down. And he didn't have a choice. He couldn't pay everybody. He had to put some people out. And there's no way he could get around it. Even if he had taken zero pay, he was, the thing is, it's just off.

He didn't have a choice. That's not what I'm talking about here. I'm talking about when you just simply, I need an extra million dollars, an extra $10 million, so I'm going to cut payroll. Unbelievable. This is the Entree Leadership podcast. Thank you for joining us, America. I'm Dave Ramsey, your host. This is the Entree Leadership podcast, real people talking about real business problems and questions.

If you want to join us, we would love to have you do that. Just call me anytime leave a voicemail. We'll get you set up to do this 844-944-1070. Or fell out the form at entreleadership.com slash ask, and we'll make you one of the team members here for a minute. You can be a caller, and that'd be pretty cool. I'll get to talk to you like I'm going to talk to Joe right now in Boston. Hey, Joe, what's up?

Hi, Dave. You're all fired up today. I'm glad I called in. It's pretty much every day, man. I'm over-caffeinated. What's up? I like it. Dave, a little background. I am a sole proprietor. I am one man in a van doing electrical work. My question is regarding paying myself. I currently pay myself a monthly salary. I pay myself a bare minimum to cover my expenses, my personal expenses.

And then what's left over from that, I throw into a savings account and I pay my taxes, my quarterly estimated taxes and things like that. And then I'm not sure what to do with the rest of the money that's left. over, it just sits in the savings account. So I thought I'd give you a call and see what you had to say about that. How much is in there? Right now I have about $60,000. Wow. Okay.

Do you have aspirations of growing the business from a one-man shop? I do. I'd like to grow it and actually run the business and not just work in it. Yeah, that's a good plan. Well, I think that's what I would use the money to. Let's talk about how that can work. Number one, I want you to keep your quarterly estimates separate. I want you to calculate them each month.

Calculate your profits and calculate your taxes as a result of that profit that month. Set that money aside. Withhold on yourself, in other words, which is what you're doing, but you're slopping it into that other account. You're slopping it together. I want to keep it separate because I don't want the tax money mixed in with my retained earnings. This is money that your savings called retained earnings in business. Okay. Now, retained earnings can be used for buying things to increase the business, tools, trucks, whatever.

Retained earnings can be used to invest in people, adding payroll, and retained earnings can be used for emergencies. And that's what we use ours for, is those three things. So when we've got excess profits like that, of course, you could take them home. That's another option. But in your case, you're thinking about, I need to get another man in another truck. I need to go to the man first on my truck until I get him trained, and then I can put him on his own truck. And then the next step might be to hire a third one, train him on your truck, and put him out in his own truck. Or however the model works. I don't know if you're putting two guys in a truck or one, but you see what I'm doing.

Something like that, you can bring them into your truck and mentor them for a little while and then buy a truck and add it. You got the money to do both right now. You do not have to buy brand new trucks. You know that. Right. So, I mean, you could, you got, if you want to bring on a, an apprentice, so to speak, maybe not technically an apprentice. I'm not talking like a union apprentice. I'm just saying you bring on someone that says they know how to do this stuff, and then you teach them how you do your business, and you ride with them for six months,

and they can finish your sentences, and they know how you interact with customers, and they know how you do the work, technical parts of the work. Then they're set up to you can release them into a truck by themselves and trust them because you've been watching them do it for six months or a year, right? Right. And you can say, and I'm going to pay you X while you're in the first six months in my truck, but when I put you in your own, I'm going to pay you a little more,

but you're also going to have to produce more because that ought to raise your income substantially when you put that second worker out there. Probably won't quite double it, but it ought to raise it way up, right? Right, yeah, definitely. Minus the cost of the operations of the truck, the supplies on the truck, and the person driving the truck, right? So that kind of things. You start to run those calculations out a little bit.

If you want to get real technical, we'd just call that a pro forma on your expansion. But it's just your business model. I mean, okay, what have I got to pay a guy? And what's he going to be doing and what can he produce? And what's this material cost on the truck? And, you know, so what's your top line now as a single guy? So I did about $175,000 worth of work. And out of that, I paid myself $70,000.

What can you hire somebody to do what you do for? 70 or 80? Probably about 70, 60 or 70. Yeah. I'd start them at 60 in your truck, bump them to 70 when you put them out, and then give them a small percentage of whatever they produce out in that other truck. So they kind of have their own little business within your business a little bit, just an incentive plan is all, right?

Where they might make 80 if they went crazy, but they're going to have a 70 base or something like. I mean, you can change. You can be 65, 75. I don't care what it is, but something like that. And then if they can produce 150, 160, maybe they're not as good as you. Maybe they're not going to do 175, right? But if they can add 150 to 160 to the top line, they cost you 75 or 80. You've got truck costs, operational costs, insurance, taxes, tags, fuel.

You've got to put, I assume that top line didn't include your materials. expenses did it? That's the money I brought in and after I pay my taxes, my material, all my expenses was left over I gave to myself, which was 70. Yeah. Okay. So that's the thing. I mean, can you make a profit on that person running that separate truck?

That's what I'm trying to figure out. And you just got to run that out, Joe. And I think you know what I'm talking about. I think you can do this. But I think that's how I'm going to use that money. I'm going to use that money as the water to prime. the pump to get this pump going, which is this second truck, and then you go from there. And then, you know, you get three, four of these things running out there.

Then maybe you step back in the office and you run, you know, you run the call center, so to speak. You run the customer interface. You run some of the operational side from the office and let those guys do the actual hands-on work. But you're not going to do that at two trucks. You're probably not going to do that at three trucks. but you might do it at three, but it's probably going to be four before you get economies of scale

to make that happen. But you start thinking through how I'm going to get there, how I'm going to get there, how I'm going to get there. You've done a great job. You're not afraid of hard work. You're managing the business well.

You're profitable. Man, you're impressive. How long have you been doing this? I've been on my own about eight, nine years. Okay. So you're ready to make it to take the next step. Right. I just don't know what that first step is,

and I know you say to eat an elephant, fit and you do it one bite at a time. Yeah, that's what I was doing, just breaking it down. First step's a higher guy put him in your truck. And when you can see, when you can see he can do the work and be profitable and you can make a profit on the second truck, then you invest in that truck and you write a check for it because you're going to have the money to do that. Right.

But you're not going to make money on this guy for six months because he's not bringing in the extra revenue because he's hanging around. Well, he could because you could do more work with two of you. You could increase your revenues, little. but you're not in two different locations. You're just doing the work faster because there's two of you, right? Right, and I do a lot of small jobs, a lot of service calls, and so I do a lot of small stuff I get paid that day type of work.

I'm not doing large construction jobs. That's good. That's the best kind of work because it gets paid, you know, cash on the barrel head. You don't have to, every time the economy turns upside down, you make more. Yeah. Guy getting paid by the contractor doesn't get paid. Right. So you got a good, you got a good gig here.

You just got to figure out a way to work it up. How can I scale this up using this money to prime the pump and do it gradually? And as you said, a bite at a time on the elephant. And that'll actually make this work. That's a good plan. Very, very, very, very well done, sir. Proud of you. You're what makes America great out there.

Man, guy in his truck. I love it. Love it, love it, love it. This is where it is. Hey guys, I'm your host Dave Ramsey. remember becoming a better leader is a choice. Leaders aren't born. They're formed.

You get to make the decisions. We're here to help you do it. You decide, though. So go be a great leader. This is the Entree Leadership podcast.