EntreLeadership - I’m Scared to Approach My Boss With Business Ideas

Episode Date: August 26, 2024

Today we’ll hear about:  A project manager who has ideas to save his boss money but is hesitant to share them  A husband wondering if selling a business will reduce stress at home  Dave Ramsey sharing how the Havdalah service has impacted his view on generosity  A business owner unsure of how to prioritize his debt    Next Steps  📞 Have a question for the show? Call 844-944-1070 or send us a message:  https://bit.ly/3HUgAgi    👣 Find out what Stage of Business you’re in: https://ter.li/axd39b  ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/y8qdo7     🏢 Attend EntreLeadership Summit: https://ter.li/fcazl2     🎤 Attend EntreLeadership Master Series: https://ter.li/wcjhpu     ☎️ Learn more about EntreLeadership Executive Coaching: https://ter.li/ycznhl    💵 Learn more about Ramsey SmartDollar: https://ter.li/4imot0    🏅 Help us make the show better! Please fill out this quick survey form. https://ramsey.qualtrics.com/jfe/form/SV_01hjJ6UN8mnQPNI    Offers From Today's Sponsors  NetSuite: https://ter.li/x1t20q   BELAY: https://ter.li/yohiu6  Payority: https://ter.li/fh2oau  Trainual: https://ter.li/a8zexl  Found: https://ter.li/ggwmrv    Listen to More From Ramsey Network  🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💰 George Kamel  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💼 The Ken Coleman Show    Ramsey Solutions Privacy Policy  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. That's what I do every day. I run a thing called Ramsey Solutions. I'm a CEO. This is a practitioner's show, not a show about theory or think tanks. I'm not a guy who never made a payroll. made one last Friday. So we're here to help you. If you want to participate, give us a call at 844-944-1070.

If you got a question about business and about leadership, I'm here. If you also want to leave a message, we'll at the website, we'll get back to you and make you a caller here. Entreeleadership.com slash ask. We'll get your own. Valdosta, Georgia, starts today off. James is with us. Hi, James. How are you? Good, Dave. How are you? Better than I deserve. What's up in your world? Oh, not a whole lot. My question is, I'm a project manager for a specialty roofing company. I'm the only technical employee, but we have about 18 contractors or so that work for us every day. We did $8 million in revenue last year, and I am the younger of the team members, so the owner of the company older than me. So how do I go about approaching him?

the owner of the company with changes that need to be made on jobs where we're losing money. How old are you? I'm 27. How long have you been there? I've been with him a year and a half, and I've been in the construction business since I was 18. Okay. All right. If I had a 27-year-old project manager working on our team that saw that we were losing money

on something and they had some ideas on how we might not lose money. How could they affect change? Well, number one, their ideas, I want them to understand, number one, their idea might not be right. You might not be right, but you've got an idea, okay? And anyone who's an owner who's losing money probably wants to hear an idea. That's reasonable, okay? How the idea is presented means everything.

waltz in there like your God's gift to project management, you're going to get booted out of that office. All right. So you walk in there with a lot of humility and say, you know, you've been doing this a lot longer than I have, and I've just been here a hot minute, like a year and a half, which is nothing compared to the hours and days you put into this thing.

And so I may not know what I'm doing, but I think I see something here where we might make some more money or might not lose money if we change this one thing. Would you want to talk about that? Or could I present that to you? And that's the way you approach it. You people are all stupid and I've got this figured out.

I know you weren't saying that. But you just have to be real careful that that tone doesn't come across to an old, crusty founder who's got socks older than you. Right? So you go in with humility and you go, look, I admire everything you've done here, what you've done. You're the goat. You're the original, man.

You're the OG. And I'm learning so much while I'm here. I think I see where we could not lose money on a job like this. Would you want to hear what I'm seeing there? And I would, if that was in, somebody worked here, walked to my office, I'd say, yeah. But if you come strolling in like you've got it all figured out, I'll probably not. It's going to be a short meeting. Yeah.

Yeah, I just, just because you may not have it all figured out, James. I mean, you may, you may have an idea. I'm not saying you don't. But the experience you got from 18 to 21, that three years doesn't even count. You were still growing up. So you don't have 10 years of experience like you think you do. Not compared to your owner, not compared to the guy who gutted this out while you were in diapers. And so you go in there and say, I think I'm seeing something.

something, I would be honored if you would let me show you and then you tell me what's wrong with my ideas if I'm missing something. But I think we could not lose money on this type of job. But if I'm wrong, I want to learn something from you. Boy, I love having those meetings. And then we can argue about it if you want to. I don't care. That's fine. But it's all about the approach and it's all about respect. honoring those that paved the road while you were in short pants. And, you know, that's the thing. And if you do that, then you're going to be all right.

And I think you're going to be fine. And I'm not saying the old guys as arrogant or mean as I am. He may not be. He may be a sweetheart. But that's the way you approach a founder, someone who's been doing something a long time, is you just going, I don't know for sure, but I think I see something. would you look at this idea with me and do you have time? Because I think we could not lose money on this type of thing.

And you put me in here as project manager, so I really want to help you. I want to manage the project. I want to do a good job. So show me if I'm thinking wrong or right here. And he may go, dad gum. I was in a meeting about five years ago and a guy that is on our team today, he's now one of our top leaders in the organization. At that time, he was fairly new.

and he was not a top leader. He was way down the food chain. We're sitting in a meeting about 10 of us, and he approached that whole group of leaders the way I'm talking about and said, I remember it distinctly. He said, look, I think if we did this, this, and this, that it's a million dollar delta, a change of million dollars. And we're all looking at it, and we went, okay, do it.

I mean, it was like a 30-second decision. and then the next comment was, can you do that again? And that's like, for him and me, every time I see him, we talk about, is like, can you do that again? Your job now, see, now you've already done it once. So I want you to do it again. I want you to go find me another million dollars where I'm screwing up. That's pretty cool.

But he approached that whole meeting. And some of the people in that meeting were, like me, they're kind of crusty old farts. And, you know, and he, he, approach that says, guys, I may be missing something. I'm the new kid on the block. But I think if we flipped this switch and dialed that dial and did this, that I think I think I'm seeing this. And we went, yeah, I think you did see it. And I think we didn't see it. And you got it. Ding, ding, ding, ding. You get the brownie points. Well done, sure. Now go do it again. I love it. I love it.

That's so fun. Get after it, James. You may be that guy. You may be that guy right there. God, man, bless you if you are. bless you and keep you my son. I love it. This is the Entree Leadership Podcast. Are you done waiting for things to improve on their own yet? Well, your business won't grow faster or become healthier if all you do is listen to Leadership Podcasts. You've got to take action.

The Entree Leadership System is the roadmap that will help you do exactly that. You're going to finally scale your processes and systems, unify your team, build a business you love to run. This system is how we built Ramsey, and it's how we've taught thousands of small business owners to transform their lives and their businesses. It works. Now it's your turn to drive your business forward with the Entree Leadership system. Go to Entreeleadership.com slash get started to download your free, oddly enough called Getting Started Guide.

It's free. You can get started with a getting started guide. Wow, who knew? This guide will walk you step by step through the practical steps. took to build Ramsey Solutions from a card table in my living room to a $300 million business. That's Entreeleadership.com slash get started to download the free getting started guide. Did I mention it's free? Mm-hmm. I did. Scott's with us in St. Louis. Hey, Scott, how are you? Hi, Dave. Thanks so much for taking my call. It's such an honor to talk to you.

You too, man. What's up? So my wife and I have been married for 26 years. We have three kids. And between us, We own two businesses and my wife is a full-time teacher. We are suffering from being blessed too much and blessed on all fronts and paralyzed with all the options we have. My wife thinks something needs to change. We're too busy. She's stressed out. It says something needs to change. And we've got so many different ways we can go and we can't figure it out.

Business One is a treadmill operator web business that I do out of my home. I've been doing for 20 years. It brings in between 150 and 200,000 a year, almost all of that net profit. That's your job. That's my job. That's what I do four days a week. So you're like a freelance web guy? Pretty much, yeah.

Okay. All right, I got it. And I've been doing that. And I have a small team. Sometimes I have a programmer too working for me. That's all contract. Correct. Yeah.

hourly. Yeah, yeah, yeah, exactly. All right. Business 2 is a peak performer retail store. It's been around for 17 years. Pays us very little, about 50,000 a year we make. Its revenue is close to a million dollars a year, but I work there literally one day a week, about six hours.

My wife works maybe eight hours a month there. It's sort of set it and forget it, just auto run. We've got a fantastic team of about 20 employees that run it all part-timers, and the customers love us. The store runs great. everything is perfectly fine there. But all this accumulates distress in our lives. And my wife's a full-time teacher, as I mentioned.

So we have some options. For example, selling the store is one of the options. One of them is my wife keeps saying, why don't you go get a real job? And so you can get the health insurance. Exactly. So you can get the health insurance. I can quit my job and go work at the store.

we've got lots of different ways we could go what more can I tell you how long have you been making 150 to 200 a year at your job probably almost the whole 20 years it's been our primary source of income for 20 years okay well I mean if she if the if she wants to go work at the store and quit her job go buy some health insurance you make 200 a year yeah there's one other thing that helps us which is we have a tuition reduction for our kids who go to private school also where she teaches. So that's saving us about $20,000. Yeah, but she's not going to have that if she quits her school.

Exactly. And she wants to quit. She kind of wants to quit, yeah. You can't have both things. You can't quit and keep the tuition reimbursement. And you want to quit. So that's a problem. Yeah.

Yeah. Although she says shut down the store, if we sell the store, take bank that money, and then she'll work and it'll be less stressful for her. at school? Correct. So why is it stressful? She doesn't do anything over there. I think it's one of those things, and you know as a business owner, it's always on the back

of your mind. You're always, you know, every time we go to dinner, that's what we talk about. Every time we're sitting around together, that's what we're talking about. There's always little decisions that need to be made. She is the president of the store. So she does get the final say-so and everything. So there are oftentimes we're consulting with her saying. So she's running the store, essentially, and she doesn't want the responsibility

and the emotional stress that goes of that responsibility. I think that's pretty accurate. Because I'm guessing with her pay and the tuition reduction and the health insurance that her teaching job makes more than $50K. Oh, yeah, yeah. Yeah, her pay is over $50,000. So why would she go to work for $50K and take a pay cut doing something she doesn't love? Well, we're getting $50K now from the store.

In theory, she would get a little more. Well, but not much. Some employees, yeah, but I mean, they're, yeah. You're just replacing some hourly's is all you're doing with your time there. That's it. You put your own butt on the floor, and that's not, that's back into a treadmill situation. That's right. That's exactly right.

I don't know. Okay. Here's another way you can back into it. Sometimes we do this with our decisions around our house is, okay, 10 years from today, we are doing X. All right. What's that look like? What's your life look like?

Yeah. One way is you're running the store and you're, you know, you getting a real job is a ridiculous, insulting statement. You have a real job. You just happen to be self-employed and you make a lot of money more than she makes that are two things combined. So that's insulting, okay? That's just her stress coming out.

But, you know, just because you're self-employed doesn't mean you don't have a real job. job. That's silly. So anyway, put that aside. So your job stays in place because you didn't tell me anything that you just like it. And it's the cash cow of the three things. So, yeah, I love it. Ten years from today, you're still doing this or some version of it. Okay. Ten years from today, is she a teacher or a retail president? Hmm. I asked her that question because you had a similar question on this podcast a couple weeks ago. And I said, I bet Dave's going to ask me, what are you going to do? What do you want to do for 10 years from today?

And she said, I want to be sitting on the beach in Florida, retired. How old are you? 50. She's not even 50. She's mid-40s. Okay. Okay. That was not one of the two options.

Yeah. No. One of the two options is you're either a teacher or your third option is you're working doing something else. But that's, again, a facetious answer. That's, I'm stressed out. I'm just going to put my feet in the sand. Well, that's not really what, you know, you want to quit work completely. That's the job. Okay. Which means you're not going to be a teacher and you're not going to be, well, I mean, how old are your kids? My youngest has seven more years at this tuition rate. He's 13. I'm sorry, yeah, he's 13.

Okay, so then 10 years from now she could quit her job, that's true. Easily, yep. Maybe it's not a facetious answer. Maybe it's a real answer. I'll shut up. Okay. Aye, aye, aye, yeah, yeah. Okay, so she works 10 more years as a teacher and then quits.

Sure. And you sell the store now, that's one option. Or we quit teaching and we buy some health insurance and we buy our own tuition. And she goes and accentuates and grows this store. And 10 years from now you sell the store. Sounds great. Either one. Which one you want to do, honey?

I'm asking you. I'm asking you what you do. No, I don't care. It doesn't matter to me. This is you talking to your wife. Which one of these do you want to do? Yeah. Because you're telling me both of them are not cool.

So somebody's leaving. Let's choose who's leaving. Teaching or store. And let's do that based on, I want to retire from this 10 years from today. which one do I want to retire from? Teaching. I want to spend the last 10 years of my career teaching or the last 10 years of my career before I retire on the beach

and my husband works as a web designer, you know, and I retire on the beach from selling the store. I'm okay with either one. If you take on the store, your job is to not do 50,000 because 50,000 on a million sucks. Yeah, yeah. That's really tight margins. Well, yeah.

You blink and you're losing money on that. So we got to, if we're going to take on the store, the store's got to start doing better. It's kind of cute and cuddly now, but it's not, it's not, it's not a killer operation. And it needs to become a killer operation if we're going to keep it. I like that. So if we're going to go all in on store, let's go all in and let's go make 150 on this puppy and get sales up and get margins up and tighten this thing up and get it going. And let's get some, the right kind of people on the floor. And it's no longer we're just a service to the community.

actually going to try to make some money here and, you know, all that stuff. So yeah, I don't care which one you all do. But I think you just, the way we, the way Sharon and I would sit down and talk this through, or one of my leaders, if we were doing strategic plannings with a certain segment of Ramsey, what do we want this to be in 10 years? Closed? And we grow it and sell it off? This piece of Ramsey? What do we want, what do we want publishing to look like 10 years from now? We want live events to look like, or podcasting to look like 10 years from now. And then let's get about the business of doing that. That's our desired future.

What must be true that's not true now. And so, and I think as soon as you make a decision to cut one of the other loose, her stress level is going to drop way down. Even though she still has to do some of the work until it's gone, it may take a year to sell the store. But knowing that it's going away is going to be, like this huge burden relieved from her. So, yeah, this, as a couple, which one gives you the most peace, which one gives you the most

fulfillment, which one gives you the most money, where you look at it and you go, well, that was worth it. Let's do it. Game on. This is the Entree Leadership podcast. Sometimes we have callers, sometimes we have folks who send us a video submission, and that's what we're going to go to now. Ryan Kahn. So I'm in accounting and consulting, kind of tax strategy, planning, and advisory.

We have 17 team members right now. Top line, one company's 3 million, the other's about 5.5, so usually between 7.5, 8 and a half. How do I inspire other business owners to get the Cup Overflows model truly wrapped around their head and create a network around those same like-minded individuals? Hmm. What a wonderful question. What a great idea. idea because you're coaching on tax strategy and planning other businesses and you can introduce this to them. The cup over flow model that he's talking about is referring to the Havdala service that

Orthodox Jewish folks do on Saturday evening. I found it from my friend Rabbi Daniel Lapin in his book, Thou Shall Prosper, which I highly recommend and wrote the forward to, by the way. So the Havdala model is this, is that on Saturday, evening a Jewish family will gather and they have a cup sitting a wine chalice sitting in a saucer and they pour wine into the cup until it overflows into the saucer symbolizing that during the work week ahead you are to first fill your own cup take care of your own family and then men have overflow to be used for generosity for the good of others.

And that's what he's talking about. How do I encourage businesses to have a small enough lifestyle at home with the money that's coming into the business to where there is some overflow for generosity? Because no matter what you make, you can expand the size of your lifestyle, your cup, and there'll never be any overflow. If you keep growing the size of the cup, it just keeps eating all the wine.

There's never any overflow. So you have to limit the size of the cup to be less than your income so that there's overflow for the good of others. The only principle is not how much you spend on yourself. The only principle is that you spend less on yourself than is coming in so that there's overflow to be used for the good of others. That generosity principle causes, people to prosper because it creates self-discipline, it creates frugality, and it creates an eye on

others, not just an eye on self, self-ishness versus selflessness. And so we're become more self-less when we're more generous. And it is a muscle that you build over time by doing it. Now, when you are a startup business and you're making two nickels, you're probably not going to have any overflow. The first year we opened this, the year before we opened it, I was doing real estate after having gone broke in real estate, but I still got back up to in the late 1980s, early 1990,000, I was making $120,000 a year. The first year we opened Ramsey and started teaching Financial Peace University and speaking and selling a little self-published book out of the trunk of my car and doing a radio show that I lost money on every month, but was my lead magnet.

the first year we did that my income went from 120 to 60 and actually it's what we projected we projected we would make 60 but we made the decision that god's call was on our life to teach this material on what the bible says about leadership what the bible says about handling money to other people because it had saved our lives and we were willing to take a pay cut and plus we were willing to take a pay cut because we thought it was temporary. We thought we'd make a lot more because there's so many people need help with money and leadership. And turns out we were right about that because we've made a bazillion more dollars since then over 35 years ago. That was.

So we took a step back. Now the year we took a step back was our generosity when our income went in half of what it was the year before. Was our generosity through the roof? No. we tithed because we're evangelical Christians and that's all we did we gave a tenth of our income there was no additional overflow for the good of others other than our tithe to our local church but we did do that so there's a baseline there of what we did as a as a part of our faith walk that's what our calling is so we did that but you know the idea being to answer your question ryan

is to teach businesses as they make more don't just spend money more. Spend more and give more. Spend more and give more. Spend more and give more. And let that overflow. Always keep your business and personal lifestyle combined to be the total of which to be less than the gross revenues. So that there's overflow to be used for generosity for the good of others. If you do that, it's a really good practice because it doesn't matter what you can make, you can spend it. You guys all know that. I mean, you know, the year I went from 60 to a million that dollar income, you can spend a million as easy as you can spend 60. And it doesn't take long, believe me, because they take half of it in taxes before you start, by the way. But anyway,

that's what you're facing. So you've got to develop this natural rhythm of discipline of no matter what I make I live on less than that. My business overhead and my personal overhead in total is less than my total income, my revenues. So that there is money left over to be used for the good of others. That's the Haftala principle from the Orthodox Jewish community, probably other parts of the Jewish community as well. But that's the Haftala principle anyway, as I learned it from the rabbi. this is the Entree Leadership Podcast. Thanks for joining us, America.

I'm Dave Ramsey, your host. This is the Entree Leadership podcast. About the only thing I can promise you around here is it's real. There is no fake around here. I don't have time for it. Life's too short. We're not making anything up. This is what we do.

Every day. We chew it up and spit it out, man. That's what we're here for. Canada's on the line. Trevor's calling. Hey, Trevor, what's up in your word? Earl. Hey Dave, how you doing? Better than I deserve. How can I help? Of course you are. Hey, so me and my wife just recently purchased a business and we kind of put

Baby Step 2 on pause. We paid some stuff off, but we put Baby Step 2 on pause to put a down payment on the business. And we're just trying to prioritize paying off debt either between our business or personal. So we kind of have some student loans left over, or her student loan anyways. and then the business has a small owner's finance and the building. Okay. So what do you owe the owner? It's $130,000. Okay.

What do you owe on the building? That's $680. It's appraised at $8.10. And that is a, with a bank loan? Yeah, that's correct, yeah. And you bought that at the time you bought the business? Yeah. Okay.

Top line is like 700,000. I got it. We net about 10, 15% or so. So you're making a whole 80 grand? Yeah, so that's with paying myself kind of, I've been in the business for, you know, 10 years. So that's paying myself the same wages. And then that's, that's so 60,000 is what I've been paid. And then that's what the old owner, too, as well, taking money out.

So, you know, there's a lot more meat on the table for sure. I'm sorry, the old owner is taking money out? Why are they taking money out? No, so, no. So I just bought this business. We take possession in August in like two weeks here. Okay, so what will you make in the coming 12 months, net profit on this business? If you make 60, what's the net profit?

Making 60, our projected net income is about 80,000. Okay. You're not making nothing. Holy crap. What did you pay for? Well, you didn't pay a lot because you only owe $130. I hope. I don't know what you do. Okay. All right. And her student loan is what? That's $40,000. Okay. And what other debt do you have? Just $130,000 on my house mortgage. Okay. All right. It's worth it.

Okay. We teach a process in the personal finance realm called the Baby Steps. You're aware of that, I sounds like. Right, right. And real estate all goes in Baby Step 6. And that, includes your building. Okay, which leaves me $170,000 worth of debt, a student loan and $130,000 to this owner, of which you've got $80,000 and a $60,000 income to work on this, plus your wife's income. What does she make? Yes, that's the thing. She's a teacher, so she makes about $60,000, but to throw another monkey wrench in,

we're also on stork mode, so she's going to be due in January. so we're not exactly sure how soon she's going to be going back to work. But in the meantime, you know, she's got a year or so. Not quite. Okay, so that income's gone. Basically, yeah. Okay. Congratulations on the baby.

I'm trying to figure out how y'all plan to do all this on $140,000 a year. Yeah. This is tough. did you personally sign the note for the owner, or is it only leaned against the business on the 130? On the 130. What can you live on at home? We're pretty frugal, so, you know,

I actually don't know if we've ever done like a yearly. We just were using every dollar for our monthly expense. What's your monthly? Right around like 2,000 a month. Okay. Let's call it four and make that $50,000 just for fun, okay? Because you've got a baby on the way. All right.

If you got $50,000 and you make $60 minus taxes, so basically you're going to clear the $80, give or take. And if you throw $80 at $170, you'd be done, that's $130 plus $40, okay? If you throw 80 at that for two years, you'd almost be done. And that's with no retained earnings in the business. True. And I don't want to do that. I don't want to do that.

You've obviously studied what we teach, so I'm backing up. Yeah. I would set aside 15 to 20% of your net profits in retained earnings. And I would throw the rest either, I would throw the rest of the student loan or split it between the student loan and the owner. But either way, you're going to be, you need to be done in three years here. Another possibility is that you take this business and make it more profitable, which I think was probably your reason for buying it.

Right. So, you need if you made 120 instead of 80. Right. So, yeah, the building is actually quite large, and we only have five employees right now, and it's, you know, five thousand square feet. It's a body shop, and things have just been kind of, run on a skeleton crew lately.

His build owner's son actually committed suicide, and it's been a kind of a sad situation. So things have been just kind of on autopilot for a while. So, I mean, the market is there definitely to improve, but I'm just trying to go off of what we've been doing, right? Yeah, you've got to get out there and work it. But you could, you know, double your income here. That's the hope. Which solves the whole thing in a year and a half, right?

You pay off the street loan and the owner in a year and a half. Yeah. but yeah I'm going to retain 10 to 20 percent of net profits after you make your 60 you can live on your 60 is what we're saying with your wife quitting with a baby and um and anything that's profit then we're going to set 10 to 20 percent aside you figure out the number whichever you want to be for retained earnings to invest back in the business and grow it and then get after get out there and hustle and grow hustle and grow let's get this thing shiny again again, get it all cleaned up inside. Customer walks in, they get a whole different feel,

everything, the whole marketing look, the look-tone feel of the whole business shifts. And you get out there and scratch around with the insurance companies, let's get the business lined up, get it flowing back in, if it's a body shop. And, you know, yeah, you go double your income from 80 to 160, you only got 170 in debt, then you're done in a little over a year. And now that starts to make a whole lot of sense. Yeah, that's the route I would go. something along those lines. If it stays at 80, I'm going to do some combination of about half of that going towards student loans

and about half of it going towards the owner because one's down at the office and one's at home. And I do need to clean that owner up fairly quick because you do have a five-year note on that. And I don't want that balloon coming and popping in my face here. That doesn't make any sense at all. So good question, man. Good job.

Keep it up. Keep up the fight. Remember better or weary warrior than a quivering critic. This world needs more high-quality leaders. Take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.