EntreLeadership - My Team Isn’t Happy With Changes I’m Making (Why?)

Episode Date: February 10, 2025

Today we’ll hear about:  A business owner who’s changing his team’s roles, and they’re not happy  A young business owner struggling to retain employees  How Dave Ramsey handles firing team members  A man wondering if it’s a bad idea to sell his company    Next Steps  📞 Have a question for the show? Call 844-944-1070 or send us a message: https://ter.li/ask-us  To join the interest list for Build A Business You Love: https://ter.li/m4w06f 📚 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  💼 Go to BELAY Solutions or text ENTRE to 55123 for their free resource!  💻 Visit NetSuite today to learn more.  🧾 Visit Payority for a free consultation!  📝 Use code ENTRE15 to get 15% off your first year of Trainual.    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  🪑 Front Row Seat with Ken Coleman   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 in 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 and you want to be on the show, you can fill out the form at Entreeleadership.com slash ask or call us and leave a message and we'll put you on the show. The number is 844-9-4-1070. That's 844-9-44-1070. Kevin is with us in Nashville. Hi, Kevin. Welcome to the Entree Leadership Podcast.

What's up? Hey, Dave, thank you. So I have team members that I cannot get to move forward because they're afraid of change. What is the change that we're talking about? So when I first set the business up, we have salesmen that really focus on sales. The issue is, is when they're turning the job in, when it gets turned in operations, there's a disconnect. So the details and the stuff that we need to be successful is not there. so we've tried to put some checklist and stuff in place that they say they don't have time for

so we're wanting to just change the structure and do like sales teams which would turn them into field managers and those field managers they would focus on the customer from start to finish and they and they hate it how does that benefit the salesperson that you're making into a field manager? If I'm that guy, why would I be excited? Why is because we can serve the customer in a better way. As far as for that person personally, that's a good question, yes, sir. That's what your resistance is.

You feel like it's good for you and good for the company and good for the customer, but you haven't told them why it's good for them because you don't even know why it's good for them. Well, no wonder they don't want to do it. Okay. Is that right? I mean... Yes, sir, it is.

See, people don't fear change. What they fear is change that does not benefit them. Mm-hmm. So if the guy's driving a $3,000 beat-up pickup truck and you pull up $100,000 Raptor in front of the building and you hand him the keys, he does not fear change. He loves change.

So people don't fear change. What they fear is change that they don't understand or know why we're doing it and they don't see how it benefits me. All this guy sees is I used to be a salesman. Now you want me to be a project manager. I'm doing twice the work and my pay got cut effectively because I was just selling and I was making good money and I'm a good salesman, but I don't really want to be a project manager.

I think that's what I heard. I think. Okay. So we've done some of what you're talking about, but truthfully, most of the people that were high-quality salespeople, they were not transferable over into the system you're talking about, and we lost them.

Most of the time. And so we call it hunters or farmers. A salesman like you used to have is a hunter. All they do is kill it. They drag it up, but they don't process the meat. they just drag it to the front door and y'all take care of it from there then they go back out they load their gun and go back out in the woods again and that's a hunt that's a hunter type salesperson i've done a lot of that kind of work in my early days myself i i enjoyed that kind of thing but what

you're asking them to do is not only you know do the kill but now bring it into the building and process it and cook the dinner yes sir that's right and they're hunters they don't want to they don't want to be farmers. The farmer more puts in the crop, takes the crop out, cooks it, they do the whole thing. And so it may be that you're going to lose some of these people, or maybe you rethink this. Now, one of the things I have had to do with those hunter types is they'll sell anything. So you've got to put some guidelines on it because they were selling stuff around here in such a way that we couldn't keep up with the promises. were making.

Right. Because they'll say anything. Make the stinking sale if you're not careful with that type of person, right? Not lying, but exaggerating or over-promising and then we under-deliver. And that's part of what you all are experiencing now. I suspect that's why you're wanting them to get involved because once you see how the pizza's made, then maybe you would sell it differently is what you're wanting to have happen, right?

Right. I'm wanting some accountability to the job. Yes, sir. Yeah, I agree with that. And we've run into that here too. But the reason they've not jumped on it is you've not made the sale. And the only thing you can do is go back up and attempt to make that sale. And you can fix it with changing their comp to where they can make more money if they do this the way you want them to make it.

Because it should make you more money. If you fix it, you're trying to fix a problem. And if you fix it, your profit should go up. I agree with what you're doing. I'm just not sure that this group of people is going to be the one that leads it. It may be that you add a layer into the team and say, okay, we have a hunter on the team, and then we have a project manager on the team, but the hunter has to get everything they're doing approved before they close the sale

or they don't get paid. And so you've got to sell this in the way I need it sold, because I can't pay you for this stuff. You're creating all these problems by not bringing this in here in such a way where the customer is not prepared for this. So I'll give you an example in our case that we had to really change that on. In the early days, we were selling talk radio advertising. And the salesman would go out and say,

oh, it's the best thing since sliced bread. I mean, you buy ads on here, you're going to get rich. Everything Dave Ramsey says, buy, people just buy it like crazy. Well, that's just not so. Usually what happens with an ad campaign is you have to start it, and it's 30 days before you make any money. So we had to reset and almost negative sell the customer up front and say, yeah, buy the radio ads.

We want you on here and we'll make you money. But it's going to be 90 days before you're happy about it. Your first 90 days, you're going to wonder if you made a mistake or not. and if the salesman sold it that way, we would keep them because they weren't pissed off after two weeks and everything didn't happen. You know what I'm saying? Yes, sir. Is that the kind of thing you're running into? Yeah, that's the kind of thing I'm running into.

I am the owner of a fence company. Yeah. And so we're more of a service base, so we really have to focus on that customer service, getting the details in. So they're selling fences that you install? that we install. What's the service? After the install's done, what's the service? After the install is done, we do a final walkthrough.

That's it. A year later, though, you're done. We're done. It's not a maintenance contract monthly or something like that. No. So if they make the sale, what's the disconnect when you get over there to do the install? The disconnect is... the information on the contract.

So the details on the contract may be special requests from the customers, maybe material or install details that are important. And when we get there, we don't have all the information. Again, there's a disconnect, so it was sold up here. That person's seen the job. And now you're wanting them to manage the install. I'm wanting to turn them more into field management. where if the job fails, the customer would see that same person again.

And then they're seeing those problems. They're able to get better at those because right now the way that the sale, we have four. What kind of money are they making? They make around, they can make 70 to 80. Okay. All right. We're residential salesmen. You're up to your neck in this, and you probably know some things.

I know you know some things I don't know about it. I think that you might be better off instead of making them all the way field managers, just holding their pay until the installs complete and the customer's happy and creating some systems that says, in order for the customer to be happy, you have to fill these things out, and we have to know what the customer experiences. So here's the, you know, you need some better forms and better systems for them to gather the information for the special requests, the materials, the things you're talking about that are, there's a disconnect between them and the installer. And if you

create a better connection between them and the installer with better gathering up front and make their pay dependent upon it, your pay is, not just for making the sale, it's for making the sale properly. Okay. And properly making the sale means I need details on this line, this line, and this line where the installer knows exactly what's going on. And the day the job starts, you're on the job for that day, making sure that all the installers know all those details from your mouth. You spend one day on the job the day we started, and then you go back out and hunt again. Rather than make them manage, it's fencing, installs. So when I put those changes in place, Dave, do you feel like I need to change the pay?

No, I would just fire them if they don't do it. Okay. This is a condition of employment because you're pissing our customers off because you thought that the only thing you had to do is make the sale and walk away and then we're supposed to just guess at what we install over here. It's driving everybody nuts. So boys, you're going to write this stuff down and you're going to show up over there day of and you're going to be holding the customer's hand and holding the installer's hand and the three of us are going to have a little meeting we're going to say this is what we're putting in

all right break the huddle and if you don't do that you don't get paid and you don't get to keep your job because that's what selling here now means and if they can't start doing that change then the phrase we use around here is the centrifugal force when you go around the corner

when you hit the corner real hard sometimes people get thrown out of the car Yeah. And that's the ones that won't make the turn. So you're going to make this turn, or you're going to be laying on the pavement, and we're going to drive off. And you're not quite that blunt,

but that's how you have to set it in your spirit, because all these guys are doing is they're just promising the moon, and then they're going off hunting the stars, and the installers left to clean up the mess. Yes, sir. Have I got the picture? You do, yes. Okay.

Yeah, I think you can fix. that by making a better connection without turning your salespeople into a complete install manager. But we're going to come up and sit down together and go, this is what we're all agreeing to. And this is what we talked about when I sold them and the installer is going, okay, and we talked about putting wood there. And we talked about this is how this is going to look. And if you run into something else, call me and I'll come back over here. If there's some kind of disruption, I'll run back by.

But I'm going to spend an hour with you right here and let's get this job started and then you take back off. and that is the only way you get to keep your job because it's part of making the sale properly. There's making a sale and then there's making the sale properly. In our case, in some of our salespeople, making the sale properly includes collecting the money. We don't just take a contract then hope somebody else collects it.

You've got to get the money in the door or you don't get paid. Because no sale has occurred until the money is in my account until then it's a wish. It's a dream. It's a, I think I made a sale. Oh, I signed a contract. I don't care. When I see money, that's when it happened.

Money is how we measure success on this stuff. Not because we worship money, but because that's when we know it's not bull crap. So salespeople, your job is collect, you know, you got to get the check in here. I can't get the check. My job's not collections. Yeah, it is.

You made a sale to an unqualified customer, and they don't believe that they're going to do it, so they're not giving us the money. You didn't make the sale yet, Bubba. So these are the way it sounds around here. We're probably not quite that loud, but sometimes we are. So that's how we get after this thing. It's a good question, Kevin.

Thanks for let me walk through that with you. That's very interesting. And I'm not positive the way I'm saying as a way to do it, but I resist trying to get salespeople to manage projects. They're generally not good at it. So I kind of resist that. Good salespeople generally aren't good at detailed projects. management. It's highly unusual to find somebody's good at both. This is the Ontario Leadership

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Or just click the link in the description if you're listening on YouTube or on podcast. is with us in Nebraska. Hi, Shane. Welcome to the Entry Leadership Podcast. Hi, Dave. Hey, August was my 10-year anniversary, owning a garage store business that I started when I was 20 years old. Wow, good for you. We will hit a million dollars in sales this year.

Wow. So my question I have, I need to hire help, but I don't know how much. much help I can afford. Yeah, you do. Right now, well, right now it's me, and my dad helps me two days a week. Okay. And we've been doing that. So you made a million dollars top line.

What was your profit? Well, with my wage, we're going to make about $300,000. Okay. So what's it take to hire a tech? Well, I just, I, I, no, I mean, how much does that tech cost in North Platinum? Nebraska to put on a garage door? Well, I mean, most techs around here make between $18, $25 an hour. Okay.

Somewhere in there. So you need $40,000? Yeah. You got $300. Right. I just, I want to make it a career for them. Good. That makes sense.

You know, I want them to make a decent living. Okay. You're not trying to pay them $100. Right, right. And you're going to pay them about market rate with some cool bones. or something, that's another four or five grand that keep them really juicy and happy, right? Yeah, yeah. So we're talking 40, 45K out of your 300.

What's the problem? Well, I just want to make sure I'm not giving away too much of the profits, I guess. Well, you've got 250 left. Yeah, that's true. Because, you know, a lot of it is I'm getting to the point where I just, I can't do it all by myself. Right. That's not fun. You're a treadmill. You're stuck on the treadmill. Yeah. If you take a vacation, there's no money.

Right. You get hurt. There's no money. Yeah. And if I hire one, I basically need to hire two because I need to get out of the field. Well, let's start with one. So far behind. Right.

Well, see, we've had one and that lasts about two or three or four months and then they leave. Why? They get fired. And, well, we just, we can't find the help we need. Let's see. Just not because the idea was bad, but you just hire. the wrong people. Right.

Yeah, hiring people is a pain in the butt. Yeah. I'm learning that. Because most people, most people, you know, they're not worth it. You know, just because you hire somebody doesn't mean they get it. No, your hiring processes, the first few people you hire in business that stay, I mean, you build your first team of five people, that's the hardest hiring you'll ever do in your life. I've got $1,100 now, and our hiring is fairly easy.

But we still go through all kinds of hell just to get the right people. Because you're trying to figure out who's a donkey and who's a thoroughbred, and you don't want any don't don't any donkeys. You've had those and they leave. Or worse than that, they stay and don't do nothing. And so what you're looking, you're looking for somebody's a stud and that cares, and, you know, you can pay them some profit sharing or something that's worth $4,000 or $5,000 on top of what the typical tech makes.

And you keep talking about, hey, man, you're part of the family, and you take good care of them and you, you know, if there's something going on with their family, you help them. I mean, you know, you treat them like family, right? If you get a good one. Yeah.

But you can't just hire somebody just because they can turn a wrench. They got to turn a wrench and have some character. Yeah, be personal. Well, you've got to hang out with them. And plus, your customers that you've worked so hard to get are going to see them. Right.

You know, I mean, I had a heat and their guy come to our house the other day. and this guy made me want to do business with the heat and air company the rest of my life. He was such a great representation of that company. Well, that's what makes me so nervous. Yeah. And, you know, I've been doing this for 10 years now. That's always been my biggest fear is getting the job done the right way and keeping people happy.

So you've got to bring them on and you've got to talk about that while you're bringing them on, before you bring them on and after they're on. And you go over there and go, this is my, you've got my name. name on it and I'm concerned about this and you got to treat this like you own it and you got to care you're not an employee you're a team member you're not here to see it mail it in and see how little work you can do your job is make the customer smile make them glad they heard of Shane that's your job right that hate their guy I don't know his name but I know his company name and I'm really glad they came to my house yeah because this guy he ran into a problem him. He didn't know how to fix. He got on the phone, got online, searched around, found a manual,

figured it out, got it working, you know? And I'm like, this guy's a stud. Yeah. That's what you want, right? And, you know, but you're going to, listen, that's one or two out of ten people. So you're going to interview a lot of people and turn them away because you're going to hear, e-a, you're going to tell they're a donkey. You're going to hear it in the interview. All they're there is for what they can get. rather than what they can give. Want people that add value, not are parasites. So I have a question with that is,

so if I hire one and have them ride with me, you know, and we work like crazy, you know, the problem I've had in the past is that same employee hears me. You know, I'm terrible, but I talk about many a lot in the track. and, you know, we, I just, that's why I said before. If I hired a one, I want to hire. What is he hearing?

What is he hearing you talk about? Well, you know, we talk like, because I answer, I do everything. So we answer the phones, we take calls, we do everything. So customer, they hear me talk to customers. They hear me price things. They hear me. What's wrong with that? Well, they start to get that attitude.

And, uh, what attitude? Well, geez, he's charging that much, and I'm only getting paid this much, and you know what I'm saying. Let's cover that on the front end. Like when you're interviewing, you go, okay, I think we've got something going here. This might work, but you need to keep in mind when you come to work here that you're going to be hearing all the pricing and everything. And I own the business. You don't. Right.

You don't. And so if I make more than you, that's okay. Yeah. That's how this whole thing works. and if you're not okay with that, let's go ahead and settle that now before you start to work because I'd rather you not be here.

About it. Yeah. So I've got a lady that is our controller here and she's in her accounting department and she's been here almost 30 years. Yeah. She sees what everyone in the building makes because she used to run the payroll.

Right. A whole bunch of them make more than she does. That's a recipe for jealousy, isn't it? Absolutely, yeah. So guess what? Before I hired her, and actually she was an old friend before we hired her. She's still a family friend. But before we hired her, I said, hey, you're going to see some numbers here, and I'm making

really good money, and some of our other leaders are making really good money, and can you handle that emotionally and spiritually? Or are you going to kind of start to think that, you know, somehow you caused this? Yeah, that's just, that's what I'm. I don't want to cause any resentment. Exactly. So I just talk about it up front. You know what?

Yeah. I've had one discussion with her in almost 30 years about this. One, before I hired her. Yeah. And she said, I can handle it. And she's handled it. If she didn't handle it and started acting all jealous, I just fire her butt. Get another one.

I mean, I wouldn't be quite that way. But, I mean, that's the bottom line. I'm not going to keep someone that's looking at all of our payroll and mad about it all the time. Yeah. That'd be silly. That's exactly the same thing you're worried about, is they think they're that. So you're worried about a bunch of stuff that doesn't matter.

If this guy you're interviewing could run a million-dollar business doing garage doors, he already would be. Yeah. You're the one that knows how to do that, not him. Right. So his job is not to run the business. That's your job. His job is to put the garage door up.

Just tell him that. Yeah. And so you're going to hear what the pricing is on this stuff. and you're going to be filling out the tickets with me and all that stuff. But obviously we make more at the company than you do. That's how we're able to pay you. If that's going to be a problem for you, then we don't need to go forward. But really, it's not a problem for most people.

It's more in your head than it is their, Shane. Right. Most people know the company they work for makes more money than they do. Most people get that because they know that the company wouldn't be able to make payroll otherwise. It's kind of common sense. So I think you're fine. I think you just haven't had enough confidence yet to lead people in this thing. And if you want to get out of this ditch that you're in stuck on the treadmill,

you're going to have to add a tech, get them trained over six months, and then add another tech, get them trained over six months, and then you're going to go from a million to two million, and you're going to quit doing garage door work yourself. You're going to have techs doing it. And then you're going to add an office person to help you with the accounting and order taking and phone answering so you're not doing it in the truck. And then you're going to go to $3 million. And that's how this works.

But if you keep doing this by yourself, you're going to stay right where you are. You're going to be stuck because you have a logistical bottleneck. You can't go any faster than you're going right now. The way you've got this staffed. So you're a good dude, man. You've done a good job so far. Time to take the next step and level of. up. This is the Entry Leadership Podcast.

Thanks for joining us on the Entry Leadership Podcast. If you want to help us out, share the show, subscribe to the show, follow the show, and leave a five-star review. It's a big deal when you do those things. It helps us a bunch. Share the show, subscribe to the show, follow the show, leave a five-star review. It matters. Thank you. Here's a video question we got sent in. Zach Reinhard, I'm from Idaho, Twin Falls, Idaho. And what's the name of your business? Reinerd-Vedia.

How long have you all been in business? Eight years. How many team members? 20. And top-line revenue? Two million. Do you know what stage of business you're in? They say I'm a peak performer, but I don't know.

We'll see about that. Question for the podcast. I'd love to learn more about best practices on when you terminate a person and notices, for example. Or say they quit, do you want them to, like, you know, fulfill a two-week notice? do you want to just walk them out the door? I'm sure it kind of changes based on what the issue was, but I would love to see from people that have just done it a lot more than me. I'd love to know what best practice is for letting people turn in a notice or not.

Good question, Zach. Okay. Well, let's start with termination. Termination is a lengthy process. Several conversations, several opportunities to turn things around unless it's an extreme situation. and we don't go straight to termination. We never just walk in and fire someone unless they've done something horrendous. I mean, if they steal, we just fire them.

But most of the time it's a performance issue. It's an attitude issue. It's something like that. And so there's a lot of very direct, very kind conversations in private. Brendan, our CTO taught a wonderful lesson at Entree Master's series having difficult conversations. and sit down with the person to say this is going to be a difficult conversation. You're not measuring up here, and I've got to help you get there, and we're going to work together to get you there, and nobody's getting fired today.

But then later on, you can get down to where, we've been working on this for six months, and you're still not getting your job done. And so we're going to have to bring this to an end. Now, once you've done all that so that no one's surprised, and you've given them coaching, you've given them every opportunity to turn the situation around, and the last day is finally here. This is not a lengthy conversation. At no point in this company in 35 years have I had a one hour of firing.

It's about four minutes. And by the way, my stomach gets all upset because I love people, and it's a hard thing to do to let people go, even if they've, you know, because most of the time they've tried, they just couldn't turn it. or they don't give a crap and, you know, I'm the only one in the room that does give a crap or whatever, but I still don't. Being fired is hard.

It's a hard. I got fired. I know what it feels like. So you don't take that lightly. If you love firing people, you're a bully. You've got a problem. So all that to say, we've given all kinds of opportunity. There's no surprise.

We've had discussions and conversations to the point that they see it coming. And it's not unusual for me to hear people say, well, I told my wife this morning when I was coming in that this was probably my last day. And when they walk in to sit down the room for me to let them go, you know, they're, you know, we've telegraphed this. It's so obvious that this is where we're going towards because we've not been able to make the changes needed for you to stay. So we just sit down and say that and say, look, we gave it a shot and you worked real hard, but we couldn't get there.

And as we talked about in the last two times we met together, you know, the last six times we met together, whatever it is, This is what we had to fix this. We weren't able to fix it. And so the decision's been made that this is your last day. And I'm sorry, and we love you. And we're going to give you this package, the severance. And what we're going to do is I'm going to call the guy in from HR, and he's going to collect your keys and your laptops and any electronics you have

and all that kind of thing. And all your passwords have been shut down already. And he's going to collect all that stuff. And then you can just, he's, he's, going to walk you to the parking lot. And so they just leave. And you can come back and clean out your desk when, you know, when folks aren't here, you can meet an HR person so that there's no walk of shame. We don't want to walk you down to your desk in front of everybody with a box. That's not fair. So we'll walk you out and then you can call HR back and you got some paperwork to sign in order to get the severance.

And, you know, you need to collect your stuff and you can come back after hours later in the week and do that. because I know right now you just need to get home and let your spouse know what's going on. And so HR collects their stuff, walks into the parking lot, they come back, sign paperwork, and you're done. It's very, very kind, very low-key, there's no voices raised, there's no cussing, there's no mean spirit. It's just quick, surgical. Then, as far as handling someone giving notice, 90-something percent, 95, 98% of the time someone gives notice here. They give us a nice two-week notice, which they should.

That's classy. That's the right thing to do is to give a good notice. But we almost never have someone walk it out. We appreciate that gesture on their part. That's nice of them. They took another job. They're getting whatever. But my theory is when your spirit leaves the building,

your body should go with it. and so you left why let the zombie hang around it's a zombie employee and so no it doesn't work and by the way

very few people that stay during the two weeks have a lot of wonderful things to say they left for a reason some sort of dissatisfaction and it's very a very unusual person that can say only positive things during working out their notice.

So why let them stay in poison the other people that are here? Well, I left because they don't pay. I left because George is an idiot as a leader. And they can't keep from saying stuff. It's just very difficult. And so, you know, okay, I hate it. I don't want you to leave, but I understand. And so, and even if they're leaving for a good reason,

like they're getting married and they're moving to Oklahoma or something, you know. That's a good reason to leave. You know, it's not because they're upset with the company in any way. You still don't have two-week notice. The only time we keep someone longer than 12 hours after their notice is if they have particular knowledge of something that needs to get transferred before they leave. And that can almost always be done in two or three days. The number of times we've had someone actually sit in the seat and work out an entire notice

is almost zero, very close to zero. So we don't keep them around when, you know, they can't, most of the time they can't keep from saying something negative. There's no accountability anymore. They're unplugged and it shows. They're no longer part of the team. They've joined another team. And so it's in the spirit.

You can feel it in the air. So when you give notice, we pretty well generally make that your last day. because when your spirit leaves, your body should go with you. We're not mad about it, but there's a lot of reasons for it, and I just gave them to you. So, again, very surgical, very kind. You go, thank you for the notice. That's very nice. We'll pay you through the two weeks, by the way.

You gave the notice. We'll pay you through the two weeks, but there's no need for you to come back. We'll go ahead and collect your keys and your electronics and so forth today and shut down your passwords. And so, you know, you're not into our systems anymore. more in any way after that. And, you know, I've had very few times that that upsets someone. But honestly, if it upsets you, why are you leaving? I don't understand.

That's kind of dumb. So that tells me more about that person than it does about the idea. The idea is really clean. When things are done, they're done. It's season's over. I'm not leaving. So I got to get back to work. you know i mean that's how this works y'all so not any harder than that good question though zach good question

well done sir appreciate you joining us this is the entree leadership podcast thank you for joining us on the entree leadership podcast jays with us in atlanta hi jay welcome to the show how can i help good afternoon dave thanks for taking my call sure so i i run a 55 person services business um that i started all about seven years ago. And I'm the founder, the sole founder of the company. I'm in a position to where, so the way the business came about is, again, seven years ago, I took a $10,000 bonus check, quit my job, threw it into a bank account, and my awesome wife bankrolled us to really start this business. And over the years, I've managed to get us to, again, 10 million top line. We're running at about, I'd say, 15% EBIT total. We've generated

at about $47 million in the past seven years we've been in business. And so the challenge I have is 2023 kind of kicked me in the teeth. And it was good. I needed that because it helped uncover some deficits sort of in the company. But it also really just took the wind out of my sales, right? It put me in a position to where I was just down on myself and just generally in a bad mood. Luckily, I was able to pull through that with some mentors. But at the same time, it still sort of lingers.

and 24 has been better, much, much better. But at the same time, it's one of those things that I don't know, I'm trying to get past it. And so as of right now, what is it you're trying to get past? Just the feeling. I think maybe that's it, just getting kicked in the teeth and losing money for the first time and then walking into 24, which has gone pretty well. But where I'm at now is I have an offer on the table to buy the business. And so there's really two, two paths here that I can take.

and I'd love your perspective on it. One path is I continue to try and build this business and sort of dig myself out of it. And the other is to take the offer, which is about one-x revenue, which for me is more money than I would ever need to live on for the rest of my life. But the challenge there is now I'm going back into industry, right?

I now have a boss. I have people that I have to... Oh, you're going to have to remain on the job. Yeah. So it's a four-year payout, right? So I'd have an earnout over four years. And the earnouts really nice. Don't get me wrong.

But at the same time, I'm kind of going back into what I left to start. Wait a minute. They're not giving you $10 million up front. No. It would be four up front with EBIT payouts over the course of the remainder of the four years that I would be in those golden handcuffs. That sounds like hell. It does, to be completely frank.

But, you know, I mean, I grew up in a trailer in North Georgia. I don't care. I don't mean you need to go to hell. That's fair. So then the alternative then is just digging my heels in and trying to power through. No, alternatives negotiate a better deal. Okay, okay. How about eight and I walk away?

Okay. I think that sounds interesting. So then... What are you going to do with your life after you sell your company? That's a great question. I've thought about that. And at this point, I don't really know. I can't stop, right?

I've been a builder my whole life, so I left my previous job to build this business. So, I'm – Well, I mean, you've got $8 million in your pocket in my scenario, and you're free. Right. You walk away from the closing table. You go on a month-long cruise somewhere, and then you come back and go, okay, now, what am I going to do? How old are you? I am 42.

Yeah. Yeah, you need something to do. And then I take my $8 million. I put some of it in investments. I give some of it. I enjoy some of it. and I set two or three or four aside to start the next thing. Now, what's that going to, what are you going to do?

You're going to have a non-compete. You're not going to be able to go back into this industry. That's not fair. I wouldn't do that. But the things you've learned in this industry, what could you do? Probably be an independent consultant. I think rebuilding a business probably wouldn't work out, but certainly leaning into. Well, I guess I could do a SaaS business or something else.

So we're in software engineering, so pretty much I could do anything I wanted, right? I could go get a job at some random company just building software. Yeah, I don't think that's you either. You didn't even like that when you said it, did you? Not really. Okay. And that's kind of where I'm at. Like, I'm fighting through, I think in my heart of hearts, I really do want to just keep going, right?

But the challenge is there's a lot of opportunity on the other side, and I'm trying to weigh what are the pros and cons of taking the deal versus just continuing to build the business and I don't know. What you need to take off the table is there's no easy button. Right, for sure. Let's just choose which hard thing we're going to do. A new hard thing or the old hard thing

with the lessons we learned in 23. Because the, you now, once something has, someone is stretched to the level you've stretched to, you cannot return to the same shape again. I mean, you can bring up the trailer in North Georgia if you want, but you're not that guy anymore. Right. You're no longer him. I'm no longer the little redneck kid from Antioch, Tennessee. I've run a $300 million business, and so my brain and my emotions and my spirit are now stretched to that size. And if I was doing something that was $15 or $20 million, I would feel completely

bored out of my gourd. And so once you've stretched to that, you've stretched to that. And so unless you intentionally want to slow down or something, but that's different, but you're only 42. So, I mean, going fishing or golfing for the rest of your life is a long life. You don't want to do that. For sure. Let's start back there then.

Choose a hard thing, and the hard thing is which new thing I'm going to start or I'm going to take this thing and I'm going to go, I got some scars here. That year sucked. I got a couple of those years in this business. I've been doing this 35. If I never saw another year like 2020, I'd be real happy. I hate 2020. I hate anything having to do with the year 2020.

I've got PTSD from the year 2020, you know? So, you know, now what am I going to do with that? Well, it doesn't mean I quit. running Ramsey. It just means I take the stuff that was that much manure and I grow something with it, right? So I learned what I did learn a lot of positive lessons about me and about our organization during those whack-a-doodle times. And so now I know what we can do if whack-a-doodle shows up again. And also know what we can do when there's prosperity out there in the marketplace instead of weirdness and craziness. And so, you know, all that. So yeah, I mean, we all have those

things. It's just a matter, choose your hard, Deloney says, right? Dr. John Deloney that works on our team, choose which hard thing you're going to do. So I'm either going to sit down and say, all right, what is it that you did not, by the way, let me help you this, you took some blows, you got kicked in the face, but you did not lose your confidence. You just realized now you're not invincible, and before you thought you're invincible. People that lost their confidence don't carry themselves like you have on this call. I think that's fair because, I mean, man, it was a good, it was a bad year, but it was a good year because it uncovered all of the weaknesses, frankly, that I had as a leader.

It's like I was a peacetime. And now you're not that guy anymore. Right. Ever again. Yeah. It's like I try to, I've done so many stupid things. My only goal is to not do the same stupid things. Because if you don't do the same stupid things, if you put enough stupid things in the rear view mirror,

people start calling you wise. And that's kind of what you did. You know, you just had a year of, you went to, you paid tuition to the school of dead gum leadership. I'm sorry, I'm sorry, it's a hard year. But the things that you learned that year will take this to a $20 million business if you keep doing it. And you keep growing and keep learning

and keep getting bigger and better and don't be the lid on the business and so on. So you're either going to stay and take those things and say, all right, yes, that hurt, but the pain of that year does not, invalidate me and it does not invalidate this business system and this business that I've grown and it does not mean we can't take it to 20 million and then to 50 million because I actually think this is probably a 50 million dollar business just listening to you and I don't even know that much

about it I can just feel it talking to you okay so I think you can go do that but if you want to if you don't want to you can take 8 million and then take three of the 8 million and go start something do and take that to 50. But one of those two things is what you need to do. You don't need to go get a job. That's not you. Every time you said it, it sounded like you had a little throw-up in your mouth. For sure.

Okay. Am I incorrect? No, I think you are. And the wisdom really resonates on both sides, right? Taking the money and going and doing something else, even to a degree sounds like it might not be. That's still a courageous act. Right.

It's still an act of a stud that grew a $10 million company. That's not, you know, I'm just going to go work for somebody. I'm just going to go hide. Dude, you know, you're just better than that. And I'm afraid I would just get so bored. Well, you would. And you would look at them making dumber mistakes than you made in 23 going, why the crap am I working for that idiot?

That's what's going to happen about six months in. because you're working for some corporate goob who hadn't even got his, he can't find his butt from both hands, you know. So what experience, Go ahead. Sorry to interrupt you. What experience have you had with sort of, again, so stock options on a sale like that?

Because one of the things they put, and I'm sure you've seen this before, one of the things that they put in front of people when you're talking to PE or any sort of investment firm is, okay, so we're going to give you some amount of stock that in five years turns into $90 million. I understand that's funny money, right? it's not real unless I perform and the rest of the company performs.

What's your opinion on that? How have you seen that work out? It obviously can, and especially in the software world. But the only way it works out is if you want to work there in that environment. And I don't think you're that guy. I might be wrong. I've just talked to you for a few minutes. I've been wrong before, so maybe I'm wrong.

But I don't think you're that guy. I think, you know, while you're sitting there and waiting on this little bit of stock to go to 90 million, you're going to be, you're going to have a really hard four or five years emotionally. It sounds like, I don't know. If you think it's going to be fun to work with a new team and get in there and help them grow something and, you know, that funny money is extra money. You know, you got $8 million and then you got some funny money for the other $2 million or whatever. That's fine.

But I'm not doing a four-year payout and I'm trapped. that deal you got on the table, that's a walker. I'm walking on that one. No thanks. I'm definitely going to continue around this business before I take the deal that's on your table. But you can keep messing with it and fine-tune the deal to where it starts to be fun.

But here's your rule of thumb on this whole thing. There's not enough money to make you enjoy sitting neck deep in manure. That's the thing you've got to remember. and so because you can talk yourself into sitting in neck deep in manure if there's 90 million dollars on there but it won't be long before all you know is there's manure you forgot about the 90 million there's not enough money to do that and so in any deal money does not make a bad deal suddenly become fun or a bunch of goofballs suddenly become awesome people they're goofballs they're goofballs they're goofballs

that now you're having to hang around with to get your money. No. So only if the people and the process and the company culture and all those kinds of things are right, do those deals work out. But you're not going to be happy in a situation where you're done the deal where you just have to tolerate this to get my check. That's what golden handcuffs are. And nobody should sign up for golden handcuffs. They're one of the least fun things on the planet. Jay, I think you're a stud. I got a feeling you're going to take this company to 50 million. You might take 8 million and walk, though.

Either one's okay with me. I'll still be your friend. But don't sit there and wait on them to pay you later. You're worth more than that. Remember, better a 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.