EntreLeadership - Proven Strategies to Grow Your Business

Episode Date: July 24, 2023

Today, we hear about: •       How to recognize if you’re the cap on your company’s earning potential and what to do about it •       Potential issues you need to watch out for when getting into business with venture capitalists •       The best ways to grow your business debt-free •       How to launch a new product line without having a negative impact on your current business Links mentioned in this episode: •       The EntreLeadership Podcast •       The Infinite Game by Simon Sinek •       EntreLeadership Elite •       Have a question for The EntreLeadership Podcast? Leave a voicemail at 844.944.1070 or submit your question for a chance to be on the show with Dave Ramsey: https://www.entreleadership.com/ask Start growing in business and leadership with the EntreLeadership Newsletter. Sign up to receive tactical tools, advice and resources in your inbox every week: https://bit.ly/3IRWnsL   Support our sponsors: •       NetSuite •       BELAY •       Payority •       Staples Learn more about EntreLeadership Events: •       EntreLeadership Summit •       EntreLeadership Master Series Learn more about EntreLeadership Coaching: •       Elite •       Advisory Groups •       Executive Coaching •       Workshops Listen to all the Ramsey Network podcasts anytime, anywhere in our Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership Podcast, where I take calls from real business leaders like you. I'm Dave Ramsey, your host with over 30 years of experience in the trenches right alongside you. If you got a question and you want to call in on this show and talk business with a guy who really actually does business every day, the phone number is 844-9-4-1070, or you can leave a message and you can leave a message and and entreeleadership.com slash ask, and we'll line you up in order to help you become a caller. The entree leadership system is what the Ramsey Solutions Group has used. It is the playbook for our Super Bowl playbook for getting us from a card table in my living room

to where we are today with over 1,000 team members and a major national brand 32 years later. How did we do that? One thing we did was we went through the five stages of business. Most businesses do, by the way. And that's how we were able to identify the five stages of business. Your first stage is you're a treadmill operator. Feel like you're on a treadmill, right? You're all by yourself.

You're the CEO, the chief everything officer. And the problem that you've got to overcome there is too much of the business relies on you. You kind of own your job rather than on a business. and usually it's a pretty small company, usually it's at the beginning, but it's very often it's a one or a two-person show, that kind of deal. And so if you get the business to where with delegation and time management, proper hiring and budgeting, to where it doesn't all rely on you, then you move up to the next stage, which is the Pathfinder stage.

The thing holding you back at the Pathfinder stage is a lack of clear direction. You've just been stepping and fetching and throwing. and you just, it's a lot of chaos. And that lack of direction, it means you need to put in place some mission, vision, some core values, some role clarity, lots of communication. You'd start doing things like weekly team meetings, you develop KRAs, and you, you, everybody starts to realize, oh, this train is going in this direction. When you get that happening, then you move to the third stage of business, the trailblazer stage. and Trailblazer stage is where you've got other people helping you get stuff done, but you're the only leader in the place.

This is where you start developing your first layer of real leadership. You lack the leaders and the plan to scale your business. Because here's the deal. There's all kinds of indications. Moses, when he was managing the children of Israel, after the party of the Red Sea, they're wandering in the desert, his brother-in-law Jethro comes to him, and there's a whole org chart that comes out of this, because Moses is trying to do, the whole thing by himself or is a million people to a million to. Org chart comes out of that on how to govern people that size, and it ends up

with about a one-to-five, one-to-seven ratio on management. By the way, the military will tell you, it's very difficult to manage more than one-to-five or one-to-seven. And so when you got 40 people and you're the only leader in the place, you are definitely in the trailblazer stage. You'd be stuck, baby. You need to raise up some other leaders, hire in some other leaders, get some other people that are doing things with the other teams while you're not there. And that enables you to level up and move to the fourth stage. The peak performer stage. Now this stage is really fun because there's usually a lot of money involved here. You hit the peak performer stage, it's peak. And you're making bank usually. I mean, you can make good money at the other, but this starts to be like serious scale

money. This is fun. But the problem here is, you're, you're making bank. You're making bank usually. You're making it. I mean, you can make good money at the other, but this is fun. But the problem here is you get really good at scale you start developing your mission your vision your team's humming and the whole place can become a little complacent and you can do a little too comfortable so how do we light the place up how do we stick a cattle prod and get people moving again how do you get them moving again you recommit to mission you reflect and respond you inspire team you make proactive disruptions you break things before they're broken and you do helpful exercise and implement learnings. You're constantly adding new and vocabulary and books to read to the place.

All of this. So we disrupt the comfort. And then you'll move to the fifth stage, which is where we are today at Ramsey, the legacy builder stage. And the legacy builder is where you need a succession plan, but you probably don't have one. By the way, if you are a family business and you don't have your succession plan fully developed or you haven't started it, you're too late. You should start right now. It's never too early to start working on succession. Will Jr. was just born. I don't care. It's time for you to start

thinking about how this is going to function without you someday. What's the legacy? So building out that succession plan, leadership transfer, reputation transfer, legal transfer, financial transfer, how are we going to transfer? How does this business survive when you're not there? You're going to sell it. You're going to hand it off to family. You're going to sell it to family. I don't care what you do. It's yours, but you do need a freaking plan. Those are the five stages of business and what it takes to level up as you go along. We'll talk about those for the rest of the time you listen to this show, because that's how the process works. There's not a set amount of time, but there are set things that have to happen for you to level up. Annie is in Cincinnati. Hi, Annie. Welcome to the

Entry Leadership Podcast. What's up? Thank you. Thank you for taking my call. I'm so excited to talk to you. I'm excited to talk to you. How can we help? Yeah. That's cool. So I am the owner of a kitchen and bath design business in Cincinnati, Ohio, and we have a team of three, including myself. And I'm the lead designer and provide about 96% of the sales revenue, which is currently at $3 million. Wow. So my question is, how do I begin transitioning from working in my business because I'm still doing the majority of the sales? So it's hard for me to find the time to work on my business.

And we continue to grow every year. So I know I have to do something. And I'm just not sure how to transition that with me producing the amount of sales that I produce for the company. me. Well, you are definitely a treadmill operator, and you're amazing. Congratulations. This is very, very cool. I mean, if you're going to own your own job, you ought to make $3 million. That's great. I mean, that's pretty stinking, incredible. So very, very well done. So here's the problem you're going to run into. And you have already run into it. That's why you're asking the question. You have realized intellectually that there's a logistical end to this. There's only so much. production you can do. Yeah. And so, I mean, you know, you either are going to keep doing what you're doing, or you're going to sacrifice some of your production time to train two more designers.

Right. With the belief that, as I train them to do it the way I demand it be done in excellence because it's got my freaking name on it, and I'm not going to let stuff go out of here that's crap. We didn't get here doing that. We got here being excellent and we're going to be excellent. Well, all of that's got to be in there, right? I'm not asking you to hand it down to somebody who's half butt, in other words. But you've got to train them and they got to know, be able to finish your sentences and they got to think like you think and they got to be able to bring the freaking water. I mean, we got to put the ball in the end zone score the touchdowns boys and girls. This is how

this is real. Okay. So you, I'm not, in other words, I'm fine of high expectations on these designers and don't delegate to them until they have proven to you with you looking over their shoulder. And you're a micromanager. No, I'm a trainer until you know what the flip you're doing, you're not worthy of delegation. And so you can bring in excellent designers, but they don't do it your way. They got to be able to do it the Annie way. It's got to have the Annie look to it because that's the secret sauce that brought us here.

And so that's the way it is around here. Okay. In other words, we're not going to have Ramsey personalities that don't have a certain amount of sass. Because a sass and humor and, you know, fun and putting the cookies on the shelf where everybody can reach them, that's what got us here. That's what Dave did. And so if you're going to be on stage, being the next version of Dave around here, that's what you're going to do. It's not optional. Now, you can do it within your own personality style.

Rachel's a different personality style. George's a different personality style from Dave. but still, I'm not turning this over to you, and you don't connect with the audience the way we have connected to audiences for 30 years. So you're the same thing with you. You're not going to turn it over to them without them delivering.

And you do need to be a control freak, and it is going to temporarily lower your production in an effort to be able to triple your production later. Because you need to put two of them in the stable now, not one. Okay. Because one of them's not going to make it two years from now. They might not make it two weeks from now. Yeah.

I hear you. Yeah, because you're not looking for, you know, mass production half but work. You're a highly specialized, highly excellent. You're doing high-end deals, I bet, aren't you? Yes. Yeah, you're not doing like mass production crap. You're doing like $5 million, $10 million houses. Not always quite that high-end, but we do, yeah.

But you're not on the cheap end of the market. No. And so I'm a potential customer of yours, and you know I'm not going to put up with crap if you come in design a house for my wife, design a kitchen for my wife, right? That's who you're dealing with. Right. Don't hesitate, go do it. And just count on the fact that it's not going to, they're not, that 10 years from now, probably neither one of the first two hires will be with you.

Okay. It's frustrating as crap. It's the hardest thing in the world. It's the hardest and most rewarding thing you'll ever do in business to hire and get the right people on the team and train them to do things the way they're supposed to be done with your brand. It's hard and it's frustrating because they come and they go. it's part of life. Different things happen.

You know, I had one other days. She got married and her husband lives in Oklahoma. And for some reason, she thinks she needs to live in Oklahoma with him. I don't know why. So we lost a good one. You know,

I mean, it's just, you can't make this up, right? And so, you know, that's just, there's disappointment. After we poured all this into her,

and she's great. And she'll be great for somebody else in Oklahoma. Dadgummit. But, you know, that's it. But, I mean, that's the thing. So this is what you're dealing with.

And, you know, so be really, ready that because the mistake I made Annie is I thought if I hired two, I'm done. No, one of those two isn't going to make it a year. Because you're, because you're very sweet, but you're not going to tolerate a lack of excellence. No, we won't. But I do like how you said that I do need to expect a loss of production a little bit because

that's my fear. You have to stop working on kitchen design to do a hire. Then you've got to stop working. on kitchen design to make sure the kitchen design that they're doing is not screwing up your brand. Right. It's called training, mentoring. And that's going to take some of your time. So you're pouring time in growing at your business instead of into production.

It's the only way to break the log jam, though. Okay. Because otherwise you are stuck where you are and you're going to spin out eventually because at some point you're going on vacation. Yeah, right. For real. Yeah, and when you own your own job, you're unemployed when you ain't at work. You know, I mean, this is a problem. So, hey, you're amazing.

I love your business. I love where you are. In the business that you're in, it's highly emotional. I've been around residential building and residential real estate my whole life and kitchens. People buy kitchens and houses just happen to go with them. So this is a big deal, man. I mean, what you're doing really, Zoom, Zoom. I love it.

This is the. Entree Leadership Podcast. Hey, if you're a business owner like Annie who's feeling trapped in your business, does it feel like you're always running on a treadmill? Well, how do we do that? We've got to stop that. Well, some of the stuff I just talked to her about is the way to do it. We were looking at a very custom thing in her particular situation.

But regardless of where you are in those five stages of business, we were talking about a few minutes ago, Antre Leadership Elite will teach you exactly the things you need to to level up and go the next level. And so that treadmill operator, you've got to get a delegation, time management, hiring, and budgeting. Those are the only things you can do. You got to do a time audit. You've got to create a delegation process for selected tasks. You create monthly financials.

And all this stuff is covered in Entry Leadership Elite. And by the way, you can go into Entry Leadership Elite and see the lessons and look at the tools. The tools are, the weekly report tool is probably one of the best tools on the planet for small business communication with their team. It's all free for 30 days. Did I mention it's freaking free? Shut up. It's free for 30 days. Entryleadership.com slash elite.

Brian is with us. Hey, Brian, welcome to the podcast. What's up? Hey, I appreciate you taking my call. Sure, man. How can I help? Well, I'll try to be as brief as possible, and then you can let me know what more information you need.

I run a business. We have about 45 employees to about 9 million in sales, and then EBITA this year should be about 1.2 million. It's owned by a larger company, and that larger company is actually going through a buy-sell and partnering with private equity. And part of that is I've been kind of offered ownership in the subsidiary that I run.

for an equity grant and then the ability to actually buy into it as well. So I was just trying to get way out the pros and cons. I have a handful of mentors, but they're all too close to the situation to really give me an unbiased opinion or it wouldn't be appropriate for me to talk to them. So I decided to call some random guy on the internet. I'm about as random as you get, and I'm definitely on the internet. So I totally qualify.

Yeah, I work. Okay, so Brian, I grew this from a card table in my living room with organic cash flow. I own 100% of it. I've not had equity partners. I've not dealt with venture capitalists. I'm not dealt with angel investors. I've not dealt with any kind of partnerships. Every time I did that in my past lives, it brought hell into my life and it wasn't fun.

I have a friend of mine that says bringing a venture capitalist in the business is like picking up a hitchhiker and then they hijack your car. they take over the freaking business. Okay. And so the world that I live in and function in and the people that I walk with and work with are solo owners. Sometimes it's two people that own a business together, but most of them don't play in the venture capital world

that you're playing in because it takes the fun out of their life. So that's who you're talking to randomly. You need to know that as we get into it. But let me see if I can walk you through it anyway. I'm giving you my biases before we even start. So what are they offering you? So initially it would be, there's kind of two agreements. One would be an employment agreement that kind of lays out, and I can choose whether

I'm a WT or K1, but an employment agreement for five years. And then separately it would be an operating agreement for the business itself that would kind of outline really what I can do in the day-to-day, what dollar amount I I need board approval for kind of all those things. It puts rights, things like that, so when I can actually sell my equity, initially, I'd be given a 10% grant just for signing the employment contract. And then I'd be able to purchase an additional 10% at a $2 million valuation. Okay. So you're a minority shareholder.

Yep. the board is your boss. Yes. The venture capital group is their boss, because if they don't like what's going on, they'll reseat a new board. You know that. Correct. Yeah. And so your ownership position is, from a control or governance standpoint, is worth nothing because you're a minority shareholder.

If you don't have 51%, you don't get to decide. squat. As you said, you report to the board. Your ownership position only represents potential upside if you resell it later or if they flip it out or something and you go with them when your equity shares go out and let's say they double the thing. You would double your money, right? And in the meantime, it represents potential cash flow if they distribute any cash at all to equity partners. In a situation like this, they usually plow all the cash back in, don't they? So there is just so I don't get hit with a tax burden. There is quarterly tax distributions kind of laid out at the, you know,

top income bracket, you know, coming out of that. So I won't be stuck with that. The taxes on the, the path of income. And then you had distributions. The profits, though, they're not distributing profits to shareholders at this point. It depends on cash flow of the business. But more than likely not. You're not making enough money.

Yeah. I mean, you just got a tiny little 10% margin here. I mean, not even, oh, I don't know, it's about 12%, yeah. So, 14. But, yeah, it's, you know, you're not, I'm like, it's razor thin. So all that money is going back in to keep this thing growing. And because their goal is in, their end game is not cash flow. Their end game is sell.

Correct, yeah. Yeah. Yeah. So, you know, you just got to ask yourself for that, if that's a ride you want to take. So I wouldn't put too much value on this equity. because you have no control over it. The board could dictate to you that you do something against your, what you believe to be wise business principles,

not unethical, but you believe it just to be unwise. I think we're doing the wrong stupid thing, but this board is making me go do this because the venture capitalist guys are leaning on them because they're trying to jack this thing up, put some mist on it so we can throw it out there and flip it. And, you know, they're short-term thinking. So, and it could be really, really frustrating to you.

And it adds to your, as a CEO, it could, or the C-O-O or whatever your title is going to be. But it could be super frustrating if you're also an owner and you've got no control over your ownership position. They could, they could screw up and make your equity position worth zero and you have no power to stop them. Correct. Yeah, and I do have some put rights where I can sell after three years and all that money. Three years it could be worth zero. Yeah. Sure.

I mean, this thing's a high role. So I'm not, I don't like not having more control over my destiny than what you're outlining. But the world that you're in, people are used to doing that. But again, I told you up front, my bias is I'm not going to play in a situation like that. I'm not going to play in any situation where I can't control to keep them from doing things that I believe are going to cost me the valuation of my position. and they can do that to you here, and you can't do squat about it. You've got no ground to stand on. From a governance standpoint, your only power in this whole situation is persuasion or threatening to leave.

Yeah. That's your only power. And that scares me. You talk about putting a million bucks in something of your own money. My gosh. Or $2 million valuation, 10%, so 200,000 of your own money. Right? Yep.

Yeah. And, I mean, $2 million valuation on a 1.2 EBITDA's a fairly low valuation. That sounds like a bargain. That's where it does. I know it's a bargain because normally in my industry you're going for like eight or nine times. Yeah, I don't think that's right either. I would have said four. And they're going too.

So I think that's a bargain, but it's not a bargain because you don't have any control. If you can buy the whole stinking thing out at that and just become the owner of it, well that's something to think about but that's not happening here because they're playing that so here's a book for you to go read and it'll help you process through the lens of the paradigm I'm doing and then you can decide what you want to do from there I gave you the warnings okay the book is simon cynics infinite game and what they're playing here is a finite game and they've given you the rules of the finite game the different When you play for an infinite game, you're playing long ball.

And it changes your strategies. And you invest heavily because you're going to be there forever. And so, you know, Ramsey, we're playing for the next generation. And the generation after that right now, we make decisions right now that affect this company 50 years from now, not five months from now. Five months from now is irrelevant other than we just need to stay open. but I mean, just to live, to keep fighting. So we're playing long ball. And it changes the decision-making paradigm.

It also changes the valuation that you put on something like this. So, you know, if you want to play in that world, this doesn't sound like a horrible deal. You just got to know you've got no power. And don't, you know, I'm an owner. No, you're not. You're just, you have an equity position. It's like you bought stock in Home Depot. You got, you don't get to tell Home Depot how to run it.

they're going to go run it and the stock's going to do what the stock's going to do. The only difference is that you actually have liquidity there and you can get out if you want to because it's big board traded and this is not big board traded. It's privately held very difficult to move in and out of this. So that's what you're facing, my man. Very cool. Thanks for calling in. I wish I had better direct conclusions for you.

But guys like me don't do deals like you're going to do because I would not be fun when they started doing the wrong things. And I don't have any power to stop them. That would not be fun for them or me. And that's why I don't serve on boards, why I don't have partners, because I'm right. This is the Entree Leadership Podcast.

Thanks for joining us on the Entree Leadership Podcast. I'm your host, Dave Ramsey. Hey, if you like what you hear, you could help us. out and we would appreciate it. We would salute you. Would you please follow the show, subscribe to the show on YouTube or podcast or however it is you're consuming it? The following and the subscribing is a big deal because it pushes us forward in the algorithm and people see us and the show gets more popular simply because you voted for us by following and subscribing. Also share the show. If you got a share button on yours, use that, share it with somebody or hit a link or

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All right. Adams's with us in Modesto, California. What's up, Adam? Hey, Dave. Thank you for taking my call. Sure, man. How can I help? First of all, you have been a huge impact in my personal finances for my wife and I. And, of course, a big, a big wisdom for the family company that I work with or work for.

Thank you. My question is, looking into the future, how do you grow a family, electrical company, debt fruit? A family. What company? Electrical. Oh, electrical. Okay. Yeah.

So you guys are electrical contract. Exactly, yeah, correct. Now, how many team members have you got? 45. Cool. Roughly 45. It's fluctuages. We don't pretty about that.

Gotcha. And what's your top line? What's your gross reps? I think we're projected at 6.8. Okay. And where are you in this pecking order? What do you do? I'm the purchasing admin is my title.

Typically, we're small. So we're a small office. I handle all of the. material purchases. Gotcha. And you're a son, a nephew, a what?

I am a child. I am a son. So your dad started this? Correct. Okay, he still works there. He does, yes.

And you got brothers and sisters in there? No, my brother was in Virginia, and he's a, he's a PM for a large local company there. Gotcha. And how long has your dad been operating this? This one,

I think close to 15 years. And he grew it from the ground up. No, Yeah, we used to work for a family electric company in the area, and he left that one about 15 or three years ago. He started his own. Yeah. So I grew this from the ground up.

Yeah. He started with nothing in one truck, and now he's got 45 people and doing a 6.8 million. Yep. Well, I like your dad. He's cool. How old is your dad? My dad is 60-something.

He's been to the entre leaders several times. Yeah, he's what? He's how old. He's old. How old? Is he? He's 60. He's 49. He's 63. He'll be 63 this year. 6-3. 6-3. 6-3.

Oh, yeah. Okay. He's just ancient. I don't know how the guy's getting around. Okay. And you're how old? I'm 33. Okay, cool. All right. And your question is, how do we grow this debt-free? Well, yeah, you've been a big, again, you've been a big portion of mine and my wife's personal finances. We had, you know, student loans, et cetera, and changed. my life and how to handle money and understand money. And I am in a...

How much debt does the company have now? I doubt I'm not sure. I know they run on several lines of credit. I do know that. Well, so the question right now is hypothetical then, because you absolutely have no say in this. I have for now. Yeah, for now you don't, because you don't even know.

For now, I know the revenue. correct. I know, but you don't even know if there's debt. So obviously you're not involved in making the decision if there's debt. I do know there's debt. I just don't know what the amount is. Yeah. Okay. All right. So if we were talking to your dad and you and said, okay, we got to get this thing debt free and then we got to keep it debt free, how do we do that? Well, what we suggest to entre leaders and have for a decade or two is that you take a person, everyone take a basic living wage salary, a basic salary. How much do you get paid? I am 27, I think,

an hour. I'm a salary. I think my, I'm 50, I think is what it is. Yeah, okay. And your dad, what does your dad make? Do you know? I do not know. Do you know if he takes all the profits home? I do know. I know a lot of it's reinvested in the company. I'm not sure what the profits are, but I know that they do take a salary, both them. Okay, so I would recommend that he put a base salary on himself and not take any home beyond the base salary and every and then that creates actual profit on the

bottom line and I want him to take a percentage of that profit a large percentage of that profit and pay down debt until the debt is cleared so like like 80 or 70% or something like that of the profit I want the other percentage of the profit to go into retained earnings to grow and maintain the company okay and so if you made let's say you made It should make up a number. Let's say you made a million dollars profit. Cool.

Yeah. Okay. After your dad was paid $120,000 to live on, okay? Sure. So your dad takes a salary, and net of that, the company makes a million dollars. And you said, okay, we're going to take, we're going to throw 80% of that, $800 grand, at the debt. The debt. Okay.

And 20% into retain earnings until the debt's gone. When the debt is gone, I would up the amount going to retain earnings because he's using a line of credit to cover seasonal flux. I bet. Yes, yeah, correct. And the construction business is not unusual. And so I don't want him living off that. I want him living out of cash when there's a seasonal adjustment out of retained, a large retained earnings, a big fat pile of cash and your own line of credit.

And then also out of that big old fat pile of cash, you can use the business. You can use that cash to grow the business. So this is what we've done at Ramsey. I took very little home. I've built wonderful office buildings. I have had a big fat pile of cash to invest in new initiatives, new hires, into new technologies, into other things, because I've never had the portion of the big fat polycash they had to go to debt because we never borrowed money once.

But first you've got to clear the debt to get to that, and then you say, you know, how much do we want to take home? And you can increase what you take home when there's no debt and still have a very sweet cash flow to organically grow the company. But there's always a limiting factor. We don't borrow money, and we only have so much cash. So if you got a million dollars

in your retained earnings and a company down the street says, hey, we want to sell to you for $2 million, can't do it. Don't have two million. I've had to walk away from some deals because I don't borrow money and only had so much cash.

It doesn't matter how much cash you got. There's always something out there that's bigger. there always is a bigger problem, a bigger opportunity, and you've got to walk from them. Otherwise, you're back in debt and you're doing it again. Oh, my God. This is a dog chasing its tail, and that's what most people do, and then they can't figure out why they got greedy and bought a company they couldn't afford and they couldn't absorb that company, and then they go broke, trying to cash flow the debt associated with that. So the next step is for you and your dad to start working on some succession planning, which involves you having more knowledge about this stuff, Because at 63, you guys are really late with him.

You know, you should be moving further up in leadership and have a lot more knowledge and a lot more say-so at this stage of the game. So that over the next 10 years, you are gradually moving into the head dog position because the other dog's getting old. And so the Daniel Ramsey is your age. I'm your dad's age, and Daniel Ramsey's the president of Ramsey, and I'm the CEO, and we're running it together for the next five to ten years. So we're that far ahead of you all, and he has had, for an extended period of time, deep insights into every number in this organization, and knows them better not do sometimes. so and that enables him to be in a saddle to take this tomorrow if I die on the way home or 89 tomorrow's or 189 whatever that hour that works up 10 years later he can take it either one either one because he's he's there so you guys are behind on that your dad you know you you need to

earn the chops to be worthy of moving up a little quicker in this process because You don't want to take over and been partially blinded on everything that's going on, and then suddenly you have to take this because something happens to him two years from now. You just don't want to do that. And so there's not a certain chronological thing, but, I mean, there is so many days on a person's calendar. And I don't know how many you got at 63. I'm the same exact age. So you've got to decide that.

It's not something we like to talk about, but I call it the Monty Python meeting. when we have it. I'm feeling much better. It's just a flesh wound. But, you know, that's where we are, gosh. So, you know, this is an example of, if you haven't already started, your succession planning, you might be late. You guys are going a little late at them. We're on that legacy builder mentality. This is the Entree Leadership podcast. Thanks for joining us in the Entree Leadership podcast. I'm your host, Dave Ramsey. I've been running Ramsey for 30 plus years. made a lot of stupid butt mistakes and a lot of genius moves and both of them have offset and we're still open. So if you want practical, real tactical and strategic answers that fit with real small businesses that have people, five people to 200 people working on them, you got the right place. If you want theory and you want to talk to a professor about college theory, I'm not your guy.

Can't help you. my grammar is just bad i mean it's just you know i'm not your guy so we're here to help real people with i mean i make payroll this week you know you know what some professor at some stupid but college who'd never made payroll thinks about business is humorous to me if you never made payroll shut up i mean you got you got to sweat and collect the dadgum receivables you know stuff's got to happen it's a pain y'all if you think business is easy it's not for cissies man i mean you got to get it done This is hard. It's just fun, though.

It's so fun. So, hey, if you want to ask a question, call us at 844-9-4-1070. We'll put you on this podcast, and you and all have a good time together. I'll be your biggest cheerleader. Entreeleadership.com slash ask is also where you can leave a little bit about your question, and we'll get back to you and get you on here and try to help you. Over in Oklahoma, Darren is calling. Hi, Darren.

Welcome to the Entree Leadership podcast. How can I help? Hey Dave, thank you for taking my call. My honor. So I own a small digital marketing agency, and last year we did about 200K. This year we'll probably do about 300K. I have about four employees, and we mainly serve the home services industry like HVAC, plumbing, electrical contractors. But we're developing a new product that's going to serve a different and kind of much broader client base.

And I'm curious, how do we keep those products separate kind of in the eyes of the consumer without causing too much division in our company and having to run two separate businesses? Because running one is hard enough, and I really don't want to run too. I hear you. Good question. So you're doing marketing, your marketing services for HVAC plumbing the trades? That's correct, yeah. In the digital setting. Okay. Yeah. Good. They need it. They need your help. Okay, good. Good. Good. It's good product. And the other product, who is the customer?

It's really any kind of busy business owner or busy executive, so it's going to be a virtual assistant product. Okay. And so that's much broader than the trade. I mean, they could benefit from it, too, but our concern is, you know, we don't want a HVAC company owner to land on our website, and they're like, bluff up these guys did marketing, and here they're talking about virtual assistance. and vice versa. Huh. Okay. Yeah. I'm trying to think through. All right.

One of the things that we, you know, you're familiar in marketing, I'm sure, whether you're a branded house or a house of brands. Correct, yes. Yeah. And that's what you're dealing with. And we went through a very specific exercise about seven years ago on that and decided between the spectrum of those two ends of the spectrum,

where we were going to land because we had, we had, we were both in a sense. I mean, in individual markets, we were a branded house, and yet the whole thing was a house of brands, because we've got like entree leadership sitting over here, and then on the other side over there, we've got Financial Peace University. I mean, those are two very, you know, completely different product lines serving two completely different markets. One's direct to consumer, one's business to business, right? and so but they both exist under the heading and with the with the platform and the brand lift of

ramsie and all things ramsie so how are we going to reconcile all that one of the things we discovered was not that we had to very clearly state that they were married but not the same thing we wanted everybody to know it was ramsie that the mothership it was tied to but then with very with lots of uh clear narrative and enough graphics breakaway and yet graphic tie-in that you could tell you could enough tie-in that you could tell it was a Ramsey thing but enough breakaway that you could tell it was a different thing inside of Ramsey does that make any sense yeah it does so you've got to watch your look-tone feel on your graphics uh-huh and on your branding and you've got to set

your narrative up to where you say because you want the benefit of the success of the mother's to help lift this. You don't want this thing to stand alone and start a new business. You said that. And yet you don't want the confusion. And so what you're doing is a dance between the two.

We want enough tie in that we get the lift and we don't have to start a whole new business. And again, that's graphics and look, tone, feel to where you can say, oh, that is an Apple product. Oh, that's a Google product.

Oh, that's a Ramsey product. Entry leadership, you know, when I look at the graphics and the fonts and the color schemes, they are standalone and yet you can recognize them as being very, yeah, they're in the same family as the Financial Peace University Group over in the B2C or the publishing arm with Ramsey Publishing or whatever. So that's what we've been, the dance we've been doing. And then, and so, and then we did the same thing with the copy. The copy had to fall in that same governance. And so we had to write copy that the narrative is, yeah, Antre, leadership is proudly Ramsey, and Ramsey is proudly Entree leadership.

And, you know, if you go through Financial Peace University, you don't need to be confused that Entree leadership is a small business brand. And we help and lift and work with the same people you work with, small business people, right? And it's not Financial Peace University. It's not. It's not the same thing. And yet it's the same people at the core with the same kind of belief system, same kind a sass and sarcasm and attitude and love and compassion and truth-telling, you're still going to get

all of that in both of these brands and level of service and demand of excellence by the team and so forth. So you go to a B to C building wealth event. It needs to be a high-quality, well-produced event, just like if you go to an Ontario leadership event, it's got to be a high-quality, well-produced event. We're not, you know, you have a sense that you're at a Ramsey event because we're one of the best event production companies in the nation right now. And so that's the kind of stuff you're looking for. But there is a dance here, and we found that we were violating that wholesale in that we had some areas.

We had it completely separate to where no one even knew it was Ramsey. And other areas, it was so intertwined that we were confused that it was actually a separate thing. So some of them we had too close on the, the, the, house of brands. We had them so close that it looked like a branded house. And then some of the others we had too far apart. And so we had this constant rhythm where we're pushing them, pushing some together and some apart to where we get them all about the same distance. And we do that with look, tone feel, with narrative, with copy, with even marketplace approach, the sense of what's in the air when you're around. What do you smell when you're around?

I mean, you know, we really want, we really go all in on this to make sure that, yes, this is a Ramsey thing, but this specifically serves small business. It is not financial peace university. They're different, two different product lines. And we've got 10 or 15 different product lines inside the building that had to all conform to this new set of governance to keep that from happening. So smart dollar is to corporate America, right? That's the, you know, HR people all over America from Costco to U. Hall down to business. is your size are buying the equivalent of financial peace university, but for corporate America, for their employees.

We've got a high school curriculum, so Ramsey Education. But the teacher teaching Ramsey Education needs to know that the foundations for personal finance class she's teaching to her kids is developed by the same people that develop Entree leadership and that run Financial Peace University. So we want to tie in to the mother brand, but we don't want any confusion that this is a standalone education, and it's well done with the benchmarks to meet the guidelines of the local school board. And so it's complicated as crut, but it's worth it to set it up right because you're smart

to do this on the front end because we were limping along, couldn't figure out why we were limping. And we figured out that we were confusing our customer by not having governance over these things and pushing them together or pulling them further apart to create this exact dance the way we wanted it to go. So that's very cool. Very well done, Darren. I hope that helps you, but I don't know if I got there or not. But yeah, you're finding out what it is to have more than one product. And when you have more than one product, you're going to be doing this dance. Hey, remember, better a weary warrior than a quivering critic. Leaders serve. Leaders are active, not passive. Leaders act on principle, not appearances. This world needs more high-quality leaders. So choose to lead. I'm Dave Ramsey,

your host. Thanks for listening to the Entree Leadership Podcast.