EntreLeadership - “I Love You Enough to Tell You the Truth”

Episode Date: November 18, 2024

Today, we’ll hear about:  A son who doesn’t think he’s being treated fairly by his father  An owner struggling to get his business back on track after the pandemic  Founder of Sseko Designs; Liz Bohannon’s journey to creating a global fashion brand  A business owner looking for ways to incentivize his sales team to build stronger relationships with clients    Next Steps  📞 Have a question for the show? Call 844-944-1070 or send us a message: https://ter.li/ask-us  Speak with our team about the show: https://ter.li/q31gmx 📚Learn about The EntreLeadership System: https://ter.li/system-p  💻 Get EntreLeadership Elite for your business: https://ter.li/elite-p  ✉️Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/enl  🏢 Attend EntreLeadership Summit: https://ter.li/summit   🎤 Attend EntreLeadership Master Series: https://ter.li/masterseries     Offers From Today's Sponsors  NetSuite: https://netsuite.com/Ramsey  BELAY: https://www.belaysolutions.com/entreleadership  Payority: https://www.payority.com/entreleadership  Trainual: https://trainual.com/entre  Found: https://found.com/entre    Listen to More From Ramsey Network  🎙️ The Ramsey Show    💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💰 George Kamel  💼 The Ken Coleman Show    Learn More About Your Ad Choices   Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host, with over 30 years of experience leading in the trenches right alongside you. If you've got a question you want to ask on the show, well, fill out the form on Entreeleadership.com slash ask or call and leave a voicemail at 844-944-1070. That's 844-9-4-4-10-70. John is in Columbia, South Carolina. Hi, John. Welcome to the Entree podcast. What's up?

How you doing, Dave? Better than I deserve. How can I help? Man, I kind of, it's kind of a long question. My main question is I feel stuck in my father's business. I'm 23 years old. We got 17 members, including. myself and me and my wife about a year ago just opened up our own small business. Can I kind of

tell you the backstory and you give, you shed some guidance on, you know, moving forward? Sure. So like I said, it's kind of a long story, but anyways, I've been working for my father for two to three years now. The biggest thing with it is part of my pay depends on how the store performs, even though I have no say-so on what the employees do or the day-to-day operations of the store. I'm technically a project, the title on me as a project manager. But my position at the store, I'm doing two to three people's jobs at the one-man show. I've been doing it for the past two to three years.

And every conversation me and my father have had regarding this issue is that his payroll is just too dang expensive and that, you know, if we had more work, then he could hire somebody on to help me out. So I kind of feel overworked in that aspect, but kind of going back to the small business that me and my wife have started, that revenue is only, I mean, we kind of got it out to the masses at the beginning of this year, and the revenue has only been about $40,000 this year. I think it's pretty good for, you know, word to word to word, word to mouth. What is the new business? It's dealing with the marine industry. And the whole reason we got into it is because my father has a machine in his store to get started in it.

Or else we wouldn't be doing that. And he's okay with you using it to do this. He's okay with me using it. So what is the machine? What are you doing? It's a CNC machine. We do custom. It's called an EBA phone.

I don't know if you ever heard of like C-DEC and stuff like that on, you know, it's marine decking. Marine flooring. It takes away the hockey. eat of the floor anyways. So, yeah, it's a CNC machine. So you're making a, you're manufacturing a product. Exactly. We're manufactured a product.

You needed $40,000 as your side gig. What's your profit on that? Probably, I would say, close to $30,000. Is that if you, that's before you paid yourself anything for doing all the work? Exactly. Are you doing that work during the time you're supposed to be working for him? And that's kind of the thing. It's his business.

No, I'm asking your side hustle, are you doing that during the time that he's paying you to work for him? Yes, and he's... That's weird. Okay. Yeah, and that's what he kind of invested into it. He bought, you know, a machine to do it. I mean, we already had that CNC, but there's a different machine that goes and measure the boats, and he kind of, he invested into that machine. So he looks at all the profit coming in as that is his money.

And I have no say-so on, you know, where to... to move forward with that business. Wait, wait, wait, wait, wait. I thought you had a side hustle. Yes, that is my side hustle, but I'm using his machine to do the side hustle. And he's taking the money. Kind of, kind of.

Well, there's not a kind of. Who got the $40,000? You or him. It's just sitting there. Well, what's the agreement? There is no written agreement. Well, I mean, there's at least a discussion. Does he think it's his money and you think it's yours?

Well, I would like to invest it back into the business, but a conversation... Back into the business means it's his. Exactly, and he told me before it's his money. So it's not a side hustle. It's his business. Yes, I get, yes. You expanded his business by taking his machine and adding $40,000 to the business in gross revenues that creates a profit of $30,000.

thousand dollars if it's his money and he's going to put it back into the business this is part of running the business has nothing to do with a side hustle i i do i agree with that i kind of we kind of look at it differently it set up as a completely different LLC um and me and my wife run the whole thing and i i you know i do everything he's just yeah but it's his LLC it's not yours correct correct so it's not a side hustle a side hustle is something you own i agree with that and you don't own this okay All right. So you said, hey, Dad, I think you ought to expand into this area, and I'm, as one of your employees, going to go do this, and you've helped him grow his business. Okay. I'm with you. Now, what's the problem? So the problem is going back to, like I said, that was, I'm going to call a side hustle, his business, the Marine thing. Back to my main problem is his my every day-to-day operation job. We do. We're kind of in.

In a contracting field, I'm technically an installer where I'm going out doing installs. Like I said, it's a two to three man job, most of them, but I'm doing it all by myself. I show up on a construction site, the GC says, how in the world you're going to get it done? And I just, I get it done because I was born and raised in this and just know how to do it in a timely manner. But the problem lies where I'm seeing the profit coming in from that. and kind of my wife's idea is if I was my own installer for this stuff, I could, I mean, I could basically pay my whole month's expenses for my family in one day to work, whereas now, since I'm working for my father, it's salary-based pay.

So how much are you making? Oh, right now, 65 plus bonus. And that bonus. And your bonus ends up being what? it's at the end of the year about 110, 115 on average for the past. That's total. You're 23 years old and you made $120,000, $15,000. Yes.

Okay. And that's, and I know, I know, I know, I know I'm young and I got a lot of growth here, but I just, I want better for my family. I'm not wanting to just sit back and, like you say, I would rather go kill something drag at home than just sit back on the sidelines because discussions I've had with him is he's not retiring anytime soon. And there's no upward trajectory in that business. Like I said, I have no say-so on how the store performs,

and that's part of my commission is based off of the percentages of the store for the month's price. How many stores do you all have? Just one. Okay. So he's in the store also. Mm-hmm. Mm-hmm. And he's running the store.

And basically he's sharing the profits of the company. with you is what it amounts to in order to have you operate and to do that. And you're functioning as a tradesman installing the physically installing the goods, correct? Correct. So a 23-year-old tradesman making $15,000 a year is not a good deal? I think I think I could do better if I was on my own. But it would be competing interest. And that's another thing, is it ethical for me to open up my own competing company within that same field

when we're the only ones in an 80-mile radius that do what we do? No. Yeah, I knew you were going to say that. And the reason is your function, what you're forgetting is you think you're only being paid for installing. Or you think your company's only being paid for installing. Part of what your company's being paid for is your father's name and reputation and reliability. that you had nothing to do with creating. You were running around in short pants while he was doing that.

That is true. I am third generation at the store, but a lot of are actually two of our main... Well, then your grandpa's reputation. That is correct. And yeah, I understand. So it's not as easy as you just walk out. If you move to another city with your tradesman expertise,

I don't think you can duplicate this. So two of our biggest clients right now, I'm actually the one that they came to first, and I've built that reputation up for the company. I give them a call. I show up on time. I get the work done that I say I'm going to get done. And, yeah, I'm the one doing it all,

even though they found us through his name, which I completely understand. I don't know. I kind of just wanted some guidance on it. I appreciate it, John. I'm going to love you enough to tell you the truth. I don't think you're giving enough credit to your father and your grandfather and the operations of this business,

you think you're all that more than you are. And you're an installer right now, and you're learning the trade from the old man that learned it from the old man. Give yourself a little time, hon. Let this stay in the oven and cook up a little more. I think the only way you can try to go on your own ethically is to go to another city and do this.

If you want to do that, because you're all hot and bothered, go do it. But I think it's going to be a lot harder than you and your sweet wife think it is. I don't think you have any... I think there's about 30% of this whole thing that you think you're doing that you're not doing. I think you're doing about 70%,

which is the actual work, and you built these two singular relationships because they walked in the door of a store that's third generation. And the kids standing there, this 23, took the order. So you're standing on the shoulders of giants and you don't know it. That's what I think. And I'm not being mean to you.

If I were in your shoes, I'd want somebody to love me enough to tell me to have some patience that this is harder than you think it is right now. And I think you go to your dad and say, all right, I've learned the install. I've learned a little bit about the customer relations. Now, teach me about reputation. Teach me about grit. teach me about the operations here and the details and making the payroll and the hires start to teach me how to run this business because that'll help me with my patience level

because right now I'm just all my feet are all hot and I don't want to and I need to learn something more but I think this is more than you think it is that's my opinion might be wrong been wrong before probably be wrong again this is the entree leadership podcast hey do you feel like running on empty, if you're leading a business, then it's no wonder. Business is freaking hard, but that doesn't mean you should let yourself get burned out. So join me and thousands of small business leaders in Denver next spring to refuel your leadership tank with life-changing insight from all of our speakers. Best-selling author of Good to Great, the one and only, Jim Collins, will be there. Argument expert, Jefferson Fisher, will be there. Leadership expert,

grandpa of them all, John Maxwell, love Mr. John. And we've even got the world heavyweight champion, George Foreman, and the CEO of Seiko designs, Liz Bohannon, and Seth Dillon from the Babylon B. By the end of the conference, you're going to be refreshed, equipped, and a new vision for your business. With this lineup, if it wasn't my conference, I would still go. There's something here to learn. I can tell you that. So, mark your calendar for May 18 through 21 of 2025, and get your tickets before they're gone. Go to Entreeleadership.com slash summit and reserve your seats right now. Or if you're listening on YouTube or a podcast, click the link in the show notes and get your seats.

Don't call me whining if you don't get your seats and we sell out. Don't do that. Get your seats. Michael's in Portland, Oregon. Hey, Michael, how are you? I'm good, Dave. How are you? Better than I deserve.

What's up? Dave, I'm a co-owner. of a small family-owned medical practice. Last year, we gross $2.2 million in revenue. We have 24 team members. This year, we have run out of cash reserves and pulled out of our own personal emergency fund recently to make payroll.

Why? Why? Why'd you run out of money? We had a cyber attack in healthcare and slowed down our revenues. Significantly, we've upped our amount of patients rallied our team. But our team is still only maxed out, and we're right at the verge of making our base expenses.

But we have nowhere else to pull from, Dave. Wait a minute, wait a minute. Why are you not profitable? The cyber attack? Yes, a major cyber attack slowed down all of our revenues. And so we... Slow down your receivables. Yes, yes, yes.

So you're running Medicare? No. No. We mainly just... Who owes you money that didn't pay you because of a cyber attack? All that money has now come back into the business. Okay. So that was a cash flow problem. That's not a profit problem, right?

No. Are you profitable if things are operating the way they're supposed to? You have margin? Barely. Why? We had to see more patients per week, which we've been doing, and we're having to renegotiate with some of our 1099 providers to make it more equitable for us to continue to do business. A 1099 provider. A contract provider.

I know. I know. So you've got a doctor in there on 1099? We have some nurse practitioners and naturopathic doctors that are on 1099. Okay. Which is a lot more expensive than if they were on payroll. Yes. Last year we started our first full-time nurse practitioner as a W-2 employee, which has been...

So if you did less business with less people on payroll and or contract, you could get your margins back. Is the fact that you went contract rather than employee for your expansion? is that where your profits went? Because I know our contract, when we have contract line items on our P&L, I start screaming. Because my call, my payroll costs just went way up. Last year, Dave, we started converting them over slowly to W2s to make it more profitable. Yeah. We're in negotiations.

I mean, if I hire a software engineer on 1099, it costs me considerably more than if I hire them full time. I agree. Okay, that's what I'm relating to. I'm not sure about your world. But, okay, so your profits, were you ever profitable? We did our debt-free screen in 2020. When was the last time that you were thrilled with your profit margin? Last year.

Okay. What changed? Because the cyber attack was a cash flow problem that has been rectified now. And so that wasn't where your profit went. Agreed? Agreed. Okay. So what's different from last year then?

We were getting the end of the pandemic stabilization money, and I didn't catch that. That was adding to our profits. So we had to increase the amount of patients we've seen per week. Okay. So you weren't actually as profitable as you thought. You had government subsidy. Right. Yep.

Okay. So the difference, is that where all? I mean, so basically you didn't really have a great. great profit, you just got a government check? Yes. So your business model was already broken back there, but it was masked by the government subsidy. Am I missing that?

You got it nailed, Dave. Okay. All right. So was there a point that the business model without government subsidy was working? Barely. That's a great question, Dave. Because what I'm trying to figure out is where your profits disappeared to, I get that they disappeared maybe a year before last, three years ago.

And then, but we covered that up with the pandemic. And then when that money went away, the pandemic money went away. Then now this year, we're even made it worse with 1099 people. I kind of getting that overall picture. So, you know, but what I'm always looking for is the why. I'm like that little 10-year-old boy, why, why, why, why, why, why, why, why, what is broken in the business model. and it sounds like that you're not getting enough revenue.

Your business model is you're not getting paid enough per patient to justify the payroll. That's what it sounds like. Yes, and we've been diving in. We have some coding issues that will help us increase the amount of profits. We're making our providers more profitable with the claims they submit. and these are things we've learned through this process. Yeah, it's kind of what I think they call practice management, right?

Yes. Okay. I'm not being sarcastic. I'm trying to learn with you, okay? That's what I heard it was called. I mean, I know docs and people that do these things, but we've got them in an Ontario leadership audience. I talk to them, but I don't, I've never run one of these things,

so I don't have hands-on experience, but I'm trying to get there with it. So here's the thing. If I've got a business that is not profitable, it has to do with anything. It's a basic thing. The business model, what is driving my expenses up and what can I do to raise my prices and manage the expense model better? Because if I can get the expenses down and get the price per unit, so to speak, up,

then I've got margin on every patient I see and my profits return. And, you know, maybe for the best ever they've ever. been without forgiving in your case without losing quality which we would call patient care i guess in your world but i don't want to put out crap in order to get there because that's ruining my future right i can't do bad work but crappy work but but i do in other words if you cut down your patient time seeing a patient to the point that the patient feels like they were cattle rushing through a shoot then they're not going to keep coming back back, you're going to lose the patient, right?

Absolutely. But you do have to manage the amount of time each of these providers see. That's part of practice management because if you don't, that's your widgets going off the conveyor belt, right? We have to go slow enough that the widget is as quality, but fast enough that we get enough of them off the belt each day. Is that how it works? Very insightful, Dave.

Yes. Okay. All right. And so is that what you're working on? Yes, it is. All right. So I'm not putting money in this unless I see how I have fixed it. Agreed.

Okay, so have you raised the price per unit, so to speak? I don't know what the proper terminology in your world is, but the price per unit enough that it justifies the expense, or have you lowered the expense per unit, your variable expenses versus your variable revenues in order to create profit, because that's where it's going to come from here, because your fixed expenses are probably just that.

They're probably fixed. Stuff like rent, that's probably set. But it sounds like your payroll's too high to me. It sounds like you've got two dead-gummy people in the building. Very likely. Possible. Yeah. I think you've got some people twiddling their thumbs,

checking their Facebook account, because they ain't got enough work. I don't know. but 24 people on 2 million bucks is pretty strong. That's true. Half of them are the providers that are doing the care. Okay, but still, what are the other half doing? A certain amount of op.

They're doing ops functions, right? Operational functions. Yeah. I get it. But, but, okay, let me back up. I'm going to, I've been diving on the, keep diving on the grenade here. I'm trying to, what exact, what's the best thing I can do to help you

now that I kind of got my arms around it a little bit. If they're at the break-even point, if anything else goes wrong, the only thing I don't do debt, I did my death free stream, I don't want to go into debt. So I'm thinking, I have an emergency fund personally.

That's my last of my cash reserves, and then we're really hurting. So we are adjusting our expenses, we're increased amount of patients. We've got a lot of things showing if we're headed in the right direction. But my question, I guess, is if,

Another thing went bad, another cyber tech, what would you do? Again, I don't like debt. I don't like that. That's not the answer. If I'm in your situation, I'm not using my emergency fund either. My personal emergency fund from my house, because my wife would leave. So it's not an option. We don't touch that.

It's sacred because it's not a business emergency fund. That's retained earnings. What would I do in your situation? I would be forced to address the number one expense item in your P&L, which is your payroll. I'd be forced to let some people go because I wouldn't be able to pay them, because I wouldn't be able to pay them. Okay. Now, before I did that, I would take no money coming home. That's an option we're looking at decreasing our salaries.

Yeah, it's not a permanent thing, but like, for instance, when pandemic hit and we had to shut down entire segments of our business, we told our team, we've got a certain amount of cash. And if the lines cross, meaning that we go from profitable to unprofitable, we're going to first use the cash to cover the difference. Secondly, leadership will take no pay. Thirdly, we will start having to furlough some of you. Fourthly, we'll start permanently laying off some of you. But we're going to take no pay long before we get there,

and you're going to get lots and lots and lots of communication before we get there. So, but I think you've probably got a five-person leadership team that needs to be in the know on this and say, guys, we've got to take, we've got to get costs down and revenues up. This is not working. It's not sustainable. We don't, this is not a hobby. It's a business.

We have to make a profit here. And if we can't do that, then we're there. So your next stage is, you're out of cash, you can't make payroll, and so you're going to have to start laying people off. That's where you would be. And those will probably be your ops people because your other providers are making you revenue.

They make you more than they cost you every time they show up, right? Pretty much. Yeah, so if it's not, it should be all the time, not pretty much, and I'll be 100%. I don't need them in a building unless they're making me money. They're freaking 1099. I do not need you here unless you make me more than you cost me. That's easy.

That's a permanent decision. Now then, but overall, conceptually, the pain that you're facing is, in order to try to stay open, we're going to cut payroll, and it's probably going to be some ops people, some of the non-provider people. It may be that you're not getting enough out of some of these providers and you cut them loose. They may be costing you more than they are making you.

And I would start looking at the individual production on that. I look at those providers almost as salespeople and that they need to make me more than they cost me. and if they don't, then I can't justify keeping them because I'm not creating enough revenue there. So these are hard questions, Michael. It's emotional. And it's very difficult. But yeah, that's, I would not use my personal emergency fund.

I'd gather my leadership team together. I would cut your pay temporarily down. Say the first step is I'm going to take a dollar or I'm going to take $10 or I'm going to take whatever number of dollars that you can get by on in order to get this thing moving. we have got to get our expenses down, and man, you probably need to lay two people off. You probably need to find two of your up, two of your 24. That'll give you some instantaneous margin next Friday when payroll comes out. I guess. I don't know, but you've got to look at that and make that decision.

Or you say, I'm going to give this 30 more days, and then I'm going to have to do that. And then I'm going to give it 60 more days, and I'm going to lay four more off. because your number one line item expense in almost all of you listening in your small business world is payroll. And we don't lay people off to try to make a profit on their back. That's not the point. We simply are not going to have the money to pay them. And so we've got to lay them off because we can't pay them. It's a matter of integrity. So that's different than corporate America laying people off just to increase stock price. That's not what we're going to tell you to do ever. and Michael what you're facing is painful but man get up above this and run right straight into the

fire and put it out run into the building don't run from the building don't sit back with your hands over your ears going la la la la la I didn't hear that by the way I heard you addressing it but I'm going to encourage you this is high stress high courage running a business is not for sissies and you're right in the middle of this. So get some good men and women in your life that are coaching you from the side, that are friends that are pushing you on, your wife pushing you on, pushing you through this, and then make the hard cause to see if you can turn the corner with this thing.

But you've got to get it moving, or you're making a big decision, which is to finish the thing off. And that's necessary endings when we lose hope in something completely. I don't think I can get this profitable no matter what I do. When you say that,

turn the key. Walk away. There's no magic beans. There's no magic beans, Jack. No beanstalk. Not happening. So you've got to look at it and go, this is the way it really is.

And that's a very, very difficult thing to do. But I don't think you're there yet. I think you've still got some analysis to do is where the freaking money going. It's a Jerry McGuire thing. Show me the money. I'm looking at the P&L. I'm looking at the cash flow statements. I'm looking at the deposits. I'm looking at each provider what they cost versus what's coming in per provider.

Show me the money, Jerry McGuire. That's where we're going with that. So good stuff, man. You're a good man. Keep pushing. Keep pushing. You got this. You can do it. But I think you've uncovered the weaknesses. Now we've got a backfill for them. This is the Entry Leadership podcast. Hey guys, welcome back to Entree Leadership, where we talk to real business leaders with real problems. I am not a theory guy. I do this from the trenches, and my guest to this segment is the same situation. Liz is the co-founder and CEO of the fashion brand Seiko Designs, and she's now the chief growth officer of Noonday Collection. And she's one of our speakers coming up at the Entree Leadership Summit that's going to be May 18th, through the 21st in Denver.

And so you're going to want to hear from her when you're there, but we wanted to give you guys a brief look at her for a few minutes here. And welcome, Liz. Good to have you. Thanks so much for having me, Dave. I'm excited to be here. You got great success at a pretty young age. Way to go.

Congratulations. Proud of you. And I think part of that was looking at your story. I'm reading into it, but you tell me if I'm wrong, that it's a little bit of a Simon Seneca thing. You knew your why. and so as a fairly young person, you're dialed in and you get on a plane

and you head to Uganda, one-way ticket. Tell me the story. You know, in some ways I was very dialed in. In some ways, I was very dialed out. The world was very unknown as far as what shape it would take, but you're right, what I was dialed in on was my why, which at the time,

I was 22 years old, I just graduated with a master's degree in journalism. I would have told you that I was very passionate about global gender inequality and specifically issues facing women and girls living in extreme poverty or in conflict and post-conflict zones. So I had this like thing that I said I cared about, but I graduated from college and I'm in my first corporate job and I'm kind of doing the thing and I'm looking at my life and I'm going, okay, you say you care about something. You have a lot of knowledge about it. You can sure run your mouth a lot about it. You have a lot of opinions. But I had this moment very early on where I realized

that having opinions about something is very different than being passionate about something. To be passionate about something, your life actually has to be impacted by it. Actually, the root word of passion is pati, which means to suffer for, actually. You have to sacrifice for it. And so I had this moment where I was like, you have opinions, not passion. And if you want to grow a life of passion, what you actually need are relationships and community and you need your actual life and world to be impacted by the things that you say that you care about. And when I looked at my world and the trajectory that I was on, I was like, oh, well, these two things are not impacted at all. And so I bought a one-way plane ticket, quit my corporate job in the height of the recession,

and I moved to Uganda. And this is where I become less laser-focused. I didn't have a plan. I didn't have a job. Really my only goal. My KPI, if you will, for that season of life, was to make one single friend was to say like start building a relationship and community with folks that you say you actually care about and then we'll see where things go from there. And out of that, the whole fashion thing is birthed? That's so cool.

That is where that is, that was the beginning of the tale. So I showed up in Uganda. I don't have a job. I don't have a plan. I don't have an invitation. I'm literally wandering around being like, do you want to be my friend? Hi, my name is Liz, and I start making friends. And I start building community and investing in

relationships. And through that process, I ended up meeting an incredible group of female scholars in between high school and university, top 5% of female scholars in the entire country, but all of them came from backgrounds of extreme poverty. So they're testing into the best schools in the country, but they can't afford to go. And so all of a sudden, this huge issue, right, that can be very overwhelming, like global gender inequality, becomes pretty small. It's like, okay, here's 25 of the brightest girls in the country. Now they're my friends. Surely there's something that we could do to bridge this gap between high school and university. And so I tried a bunch of different things. They all failed. I tried to start chicken farm. I went down a couple different paths. And then... I'm kind of glad the chicken farm thing

didn't work out. Dave, Dave, you and me both. You and me both. And honestly, the reason it didn't work, is because I dreaded chickens. Like it sparked no joy for me. I would wake up in the morning and be like, no, I am not the girl for the job. Even if this is the best way to solve the problem and I actually deeply believe in investing in agriculture, specifically in developing economies,

that's good for some people that didn't work for me. And so next up, I tinkered and was reminded of these pair of sandals that I had made when I was in college. And my friend from back home was like, I don't know, is that something that you could make or do and sell back home? And I was like, let's try that. Let's try that and spent months traveling around East Africa on the back of a motorcycle,

sourcing raw materials, trying to figure out how to manufacture footwear in a landlocked country, figured it out and then hired three young women, Mary, Mercy, and Rebecca, and made them a promise that changed the whole trajectory of all of our lives. I said, if you make these sandals for the next nine months, I promise I'll go home and sell them, and I promise that you'll go to college in the fall. Wow. And they were like, okay. And I was like, okay, let's do it.

And that's how it was all born. Wow. Liz Bohannon, she was the founder and CEO of the fashion brand Saco. She'll be one of our speakers at Entree leadership in the fall. So you take a, so we've got that in common. I sold books out of the trunk of my car, and you're selling sandals out of the trunk of your car when you got home, huh? Quite literally. One of my favorite pictures is one that my husband snapped of me in our first year of business. We were stuck in really, really bad stance till traffic acts outside of L.A.

and I had like 400 pairs of sandals I needed to sell at this event. And we are in gridlock traffic. And I'm getting real anxious that we're going to miss the event. I got to sell these sandals. And so I'm like, put the car in park, babe. He's like, what? And I was like, we have sandals. We have to sell.

And so I get out. I get out of the car on the side of the highway. It was quite door-to-door sales knocking car door to car door. People had nothing better to do. That's a captive audience. Managed to sell a handful of sandals there on the side of Highway 1. So yes, I was literally selling sandals. out of the back of my car.

Oh, you're working the intersection. I mean, that's the whole thing there. Wow. And that all blows up into becoming this massive fashion brand. Yeah, I mean, here's the thing. It might look like it blew up. We all know behind the scenes, there's no silver bullet. There was not a single day where I was like,

wow, this is just growing faster than I can handle. And it's all so easy. Every single bit of our growth came from, obviously, a lot of blood, sweat, tears, hard work. But yeah, we managed to grow a pretty significant company that ended up having a presence truly all across the globe. We started in East Africa, expanded to Asia, South and Central America, North Africa to really support and build a network of artisan suppliers who are doing incredible work in their community but need access to a market. So only about 2% of people in our global supply chain earn a living wage.

So if you are a consumer, you participate in that, right? And we all have choices. One of the things that I love to say is like we vote with our dollars. How we spend our money is a vote for how we want the world to work. And we want to make sustainable, ethical, fair trade fashion, accessible, on-trend, fun, and easy to shop. Questions that we always want to answer. I always want to answer when I'm looking at someone who's done something globally the way

you have is if you went back and you boiled it down to one, two, three, four principles, whatever it is that caused you to be able to pull this off, what's the first things that come to mind? You know, you kind of led with it, Dave. For me, being connected to my why was the driving force. Like, listen, you don't get out of your car on the side of Highway 1 and risk. Life and limb. Humiliation, doing door-to-door sales, unless you really believe in the work that you are doing.

And so I think for some entrepreneurs, just growing a profitable, successful company is enough of a why, right? Whether it's because they get to build a team or they have a product that they want to see exist in the world. For me, it really was business and specifically fashion was a means to an end. Like I had made a promise to these three young women. I wanted to do something. I wanted my life to in some way, shape, or form help contribute to closing that global gender equality gap. and running a company, as you know, it is so hard. It is one of, I mean, it is by far the most difficult thing that I've ever done.

And so for me, being incredibly in touch with my why and the reason that I'm doing it and continually reminding myself of that has been a huge factor in being able to stick at it and really maintain a sense of energy and passion for it. The next would be, I think I was really down on myself when I showed up in Uganda with only a goal of making a friend, right? That's like that doesn't sound very serious. That's not great strategic planning. It doesn't sound very fancy or impressive. In hindsight, I can actually see that not having my idea going into this new situation was one of the biggest gifts. Because I think oftentimes we can get really excited about these ideas. And they kind of stay in our head and we get

super attached to them and we start thinking like, this is a great idea and everybody's going to love it. and then we start sharing our idea, we take it to market, and we're so attached to the idea that we actually don't do a great job of listening to feedback and letting our idea kind of change and grow and evolve. It's kind of like, this is what I have to offer,

I'm going to force you to like it. I'm going to keep trying to sell you on this product that you may or may not actually be interested in. We get real clouded sometimes by our passion if we're passionate about the wrong part of our business. And so I think in hindsight, what was a huge asset to me was like, I don't care. Like chicken farms, sandals, fashion,

like the product to me didn't matter. The mission that I wanted to accomplish did. And what that led me to do is to be very open to feedback, receive it, and then pivot really quickly until I got to a place where I was like, oh, this is actually something that the market is interested in. I wasn't like super, super attached. The idea itself wasn't precious. And so I think I was able to iterate and evolve and land on a really good idea faster than a lot of people can because I was like, I don't care. I just want something that works. You know, that goes with something I heard you say that I really like. You've said before that dreaming small can be more impactful than dreaming big. And I completely agree with that, but I want to hear your take on it. Yeah. Listen, you cannot open up

Instagram or walk down the self-help aisle or go to an inspirational conference without somebody telling you to dream big, right? It's just ubiquitous kind of self-help culture. And if you've known me for like 10 seconds, you would know, I'm all about like doing big things and dreaming big. But here's my problem. There's two groups of people, people who are already dreaming big and don't need somebody to tell them to go out and dream big. They're like, I'm good. I'm like, I'm pursuing something big. Then there's another group of people who are not dreaming big. They are feeling stuck. They're feeling overwhelmed and they're feeling kind of like left behind because they haven't figured out their big dream.

I don't think it helps to tell those people just over and over again, like dream big, dream big. I think it actually leads to that sense of overwhelm. What I think is actually really powerful is when we give people permission or maybe even instruction to actually dream small. Because most people have some sort of dream. They might think it's small.

They might think it's insignificant. They might think it's something that nobody else cares about. But I'm convinced, we actually stop waiting for like the big, huge, impressive idea or opportunity to emerge. And instead we go like, what is it? What is the little thing that lights me up? That gets me excited.

And if I start treating that little dream like it's a big dream and it deserves to be invested in and committed to, that is what kind of unlocks us from this state of paralyzed like waiting and maybe big dreaming is something for somebody else out there. And it actually allows us to get into the process of creating. Well, I think sometimes people get, when they've got a dream that they can digest, they actually step into action. And sometimes if the dream is too big, it swallows them and they do nothing. They just, they're overwhelmed and they stand in the middle of their dream. And then we call them with derision a dreamer.

Like, I don't want you marrying my daughter. You're a dreamer. You know, that's not something you want to have. So that's the wrong kind of dreaming. And I love what you're saying there. Bob Hannon is our guest. She's the founder and CEO of the fashion brand, Seiko Designs, and now the chief growth officer of Noonday Collection. She'll be one of our speakers in Denver in May, May 18 through 21 in the spring here for our Entree Leadership Summit, along with a bunch of others.

One of the people on the stage in Denver will be our mutual friend, John Maxwell, who's described you as a transformational leader. You've said that the goal of a leader is to be someone who is constantly moving through the cycles of learning. Pretty much know that all leaders are readers. All leaders are coming to conferences like you and I are going to be at. We're all doing these things all the time. Talk about how important that is as you've watched it through your business growth. Yeah.

So my whole concept of beginners pluck is really this idea that no matter where we are in the leadership journey, we should be just as intentional about channeling our inner beginner as we are. about pursuing expertise or mastery. So throughout the leadership journey, the stakes become higher and higher, right? Assuming you have a level of success, you start to gain momentum, you have employees, you have people that are looking up to you, you have stakeholders, something that starts to happen is the more we kind of associate ourselves as like, we're getting further along, we're achieving, we're being successful, we're becoming experts, we also become less curious, less creative, less innovative. We start kind of acting out of this fear of preserving our image as somebody who's

really successful and knows what they're doing. And we have a lot of forces that are telling us that we should do that. Obviously, mastery and expertise and success are great things to pursue. In tandem, we need to be pursuing a spirit and a posture of an inner beginner, of going, I'm going to continue to step into spaces that I haven't figured out yet. We call that the stage of conscious incompetence where you're like, I am aware that I don't. don't know this field or this new technology that's developing or this new cultural shift that's happening that's impacting my customers or my employees. And I'm going to do it anyway.

And we're going to do it anyway. Right. We're going to do it anyway. The whole like adage of like, fake it till you make it, whatever. There's some, you can argue for it. But I think it is much more powerful to own being like, I'm a beginner. I am showing up truly with a beginner's mind with a sense of curiosity. if I am the person in the room who simply is willing to ask the best questions

versus has to have all of the answers and have it all figured out, I actually think long term I'm going to be more well-suited to create solutions that are more effective, innovative, and then ultimately bring other people along for the ride. Yeah, it keeps scrappy going. I mean, I'm a boomer that's 64 years old, and I own a company that has 600 of our 1100 people are building digital products that I can't spell.

and I'm sitting in the room with these people, and they're using acronyms like they're in the military or something. I have no idea what they're talking about, and they work for me. And so I have to be constantly inner beginner. I have to constantly be entrepreneurial, and I'm a little bit scared and scrappy all the time in my own place. But I tell you what, I think you've got to do that because things move too fast.

And I think that's an okay place to be. You don't have to be completely in control and know everything to be the leader. As a matter of fact, it can be quite the opposite. And I think when the leadership owns their inner beginner, what that actually does is signals to everybody else in the ecosystem or organization, it's okay not to have the answer. It's okay to try things.

It's okay to show up with a posture of curiosity, of learning, of being teachable, and that is what we want to model. Amen, amen. Liz Bohanan, the founder and CEO of the fashion brand Seiko Designs, one of our speakers at Denver, as I mentioned, May 28th, I can't get the date right. 18th through the 21st, 2025, Entree Leadership Summit. You can still get a ticket. There's not many left, but Entreeleadership.com slash summit. We'd love to have you. If you don't get your ticket soon, you will have what's called FOMO.

And you will not be, it won't be fear of missing out. You'll just be missing out. It'll be that simple. So I look forward to spending time with you. You're an amazing lady and an amazing leader, a powerful force in the entrepreneurial landscape. And we're on. honored to have you on our stage and look forward to getting to be good friends in the future. Can't wait. Thanks, Liz. This is the Entree Leadership Podcast. This is the Entree Leadership Podcast.

Thanks for hanging out with us. I'm your host, Dave Ramsey. Ryan is in Milwaukee. Hey, Ryan, how are you? Great, sir. It's a pleasure to speak with you. You too, man. How can I help?

I'm a partial business owner of a custom material manufacturer that has E5 members that $26 million in revenue last year. And my question is, I'm having a hard time getting my sales team to build lasting relationships with our customers. And I'm wondering how to incentivize that. What is it again, you produce? Overhead cranes. Wow.

So you own them and lease them out or you make them? We make them and put them into facilities. It's the ones that run in the... Oh, so a factory will be. place in order to put an overhead in there that works every day? Yes, sir. And never moves again. It's not a portable thing.

Okay. Wow. $26 million for the cranes. Okay, so your sales guy walks in. I'm trying to understand how this works. So walk with me here. Your sales guy walks into a new factory or finds out there's a new factory going in and it's being outfitted.

The building's being built by commercial. contractor and it's being outfitted by equipment people like you guys and you guys get word of that and the sales guy calls on, does he call on the contractor? Who's he call on? Sometimes it's direct to the end user. Sometimes it's the builders for the building. So there's a bunch of different ways that we're able to get to them. Okay. So sometimes it's the commercial contractor that's building the building and sometimes it's the actual manufacturing company. Correct. Okay. And then once that guy or gal makes that crane sale, the only opportunity for him to make another sale to that

customer is if they build another plant. Either that or if they add on to their existing facilities or even on the same. Okay. So, accessorize or expansion or brand new plants. Okay. So why is it important for the particular sales guy to have the relationship? Because he's supposed to be managing the accessorizing and the expansions too? Yes. Is there a maintenance contract that goes with us, too? We don't actually do maintenance contracts. In identifying what I think is the problem is that we've established a system that

incentivizes them to get the purchase order, but trying to build on past that is not something that we're actually doing unless there's another sale. So that's where I guess the basis of my question is. So for them to accessorize or expand, your sales guys kind of forget them because they've moved on to the next date. Yes. Is the profit margin on the accessorizing or the expansion better or worse than the initial crane? It's the same. So it's more about customer satisfaction because those extra orders are smaller orders, aren't they?

They can be It's about our philosophy is the idea of trying to be their provider for everything And it's just Putting in some of those If you don't do that You let a competitor in the door

Yes Danger, danger Yeah, I got you Hmm Okay Well I mean there's only two ways to do it Carrot or stick Right

Carrot is pay and or recognition and awards for customer satisfaction of existing customers. So John over here, he makes a sale. And of all the customers that he has ever sold, he has a 92% callback with all of his customers, and he wins that award and gets a $10,000 bonus this year or whatever. And we do it in front of everybody at the Christmas party. And or you pay a higher commission. rate after the big sale is made on the little sales and the add-ons in order to keep the

competitor out and keep your guy engaged. That's carrot. You can put carrots in front of them, right? I probably would do some of that, but I also would use stick. And stick is your job is to call back and make sure they're okay. You don't get to keep your job if you don't call back and make sure they're over. Okay, because that's the definition of your job. That is your job description, your key performance, you know, your key performance indicator,

your KPI, your key results area, we call them in job descriptions here. So your KRA is not only to make initial sales, it's to make sure that the customer is so happy after that, that every freaking screwdriver that they need for this thing they buy from us, ongoing for the rest of their lives and your life. That is your job. If someone else makes a sale inside that plant, by definition, you are not doing your job. And by definition, I'm going to hold you accountable to that. And by definition, holding you accountable means if you do it too many times, you don't get to work here anymore.

Because it is your job and you're not doing your job. And that's okay. There's nothing wrong with that. But we just have to be real clear. And you have to repeat that like, I don't know, every day. And then you actually have to follow up and hold them a little. accountable? Like, how long has it been? I want to see your call reports on old customers. I want to see that you've contacted them. Give me, file it in the, have you got a sales

system, I'm sure, using sales force or something else, right? No, we don't. How are you tracking your salespeople's activities? At this point, it's a manual system that I'm asking them to fill the information. Okay, I would pick up, how many salespeople you got? seven direct sales to customers but then we also do a lot of work with other cream companies to expand our reach yeah i think you guys need a sales system i think you need a piece of software sales force or somebody else where you where they enter every contact that they have with a customer and you can develop patterns then as to what results in a sale and it also helps you address this issue because we know whether they've contacted and followed up on existing customers for accessorizing and expansion or not.

And if you've not done that, I'm going to read a report. It's going to hit my desk. And I'm going to, I'm looking at John. John does a lot of first time sales really well. But John has never followed up with a customer in the last month and a half, existing customers. So me and John are going to have a talk one-on-one. It's not threatening. I'm not being mean or sarcastic. But I get the opportunity to hold him accountable. But you don't have the data to hold him accountable right now. That makes sense?

Yes, sir. So I think you start talking to them about it and go, guys, you've been doing a really good job on this, and we as a company have been doing a really good job on sale number one, but sale number two, three, four, and five we suck at, and I'm not okay with us sucking at that. So I'm going to help you. We're going to put this system in place where you can log in, and we can see who's doing that.

And by the way, you can show them how much money they are making from sale two, three, four, and five, even if you don't change the rate. You can make the sale to the salesman that this is a valuable activity to them. That makes sense? Yes, sir. But you've got to have data to do it. It can't just be this vague thing of we don't want the competitor in and this vague thing of we want to make sure we follow up.

No, I mean, if you're actually logging it and then over a period of a year or two, you say, hey, look, you know, we did $26 million total of that. Hey, look at this, $7 million is follow-up sales. and so your personal income is 15, 20% of it is based on follow-up sales. So it's worth doing, dude. And this is me talking to my salesman if I'm you. But I've got to be able to show them that that actually occurred in their paycheck. And that, I don't even have to change their commission rate to cause that to happen then.

So, yeah, I think your big thing is you need a system here to follow up and to push them through. Great business, man. I love that. Thank you for the call. Very fun talking to you. Hey folks, remember better or weary warrior than a quivering critic. This world needs more high-quality leaders, so take courage and lead. I'm Dave Ramsey, your host.

Thanks for listening to the Entree Leadership Podcast.