EntreLeadership - Should I Sell My Multimillion-Dollar Business at 43?

Episode Date: February 13, 2023

Today, we hear from: ·      A business owner who is considering selling his business for $21 million ·      A leader whose top performer hates his job but won’t leave ·      A solopreneur who wants to start scaling her business by hiring her first team member ·      A farmer who wants to avoid paying unnecessary taxes to the IRS Links mentioned in this episode: •      The EntreLeadership Podcast: https://bit.ly/TheEntreLeadershipPodcast •      Start your free trial of EntreLeadership Elite: https://bit.ly/3tI2fN8 •      NetSuite for small businesses: https://bit.ly/3jvH3YU •      Have a question for The EntreLeadership Podcast? Leave a voicemail at 844.944.1070 or submit your question for your chance to be on the show with Dave Ramsey: https://www.entreleadership.com/ask Support our sponsors: •      Hite Digital: https://bit.ly/HiteDigital •      NetSuite: https://bit.ly/NetSuiteEntre •      BELAY: https://bit.ly/351P9AE •      Payority: https://bit.ly/3IaA5SK •      Staples: https://staplesbusinessadvantage.com/ramsey Learn more about EntreLeadership Events: •      EntreLeadership Summit: https://bit.ly/EntreLeadershipSummit •      EntreLeadership Master Series: https://bit.ly/EntreLeadershipMasterSeries   Learn more about EntreLeadership Coaching: •      Elite: https://bit.ly/3tI2fN8 •      Advisory Groups: https://bit.ly/EntreLeadershipAdvisoryGroups •      Executive Coaching: https://bit.ly/EntreLeadershipExecutiveCoaching •      Workshops: https://bit.ly/EntreLeadershipWorkshops Listen to all the Ramsey Network podcasts anytime, anywhere in our app. Download the Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast, where we 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 boys and girls. If you got a question, you want to talk about your business, you want to talk about any aspect of your business? Give me a call. The phone number is 844-9-4-9-4. for 1070. So if you're looking for theory from a business professor who has never made payroll, you've got the wrong show. I'm not a business professor, and I do make payroll every two weeks for 30 plus years. And I know what a pain in the butt that is. If you're looking for theory

about personnel issues from someone who has never hired anybody, or God help you, never fired anybody, then you got the wrong show. I did that today. Every day, every day, every day for 30 freaking years. We're practitioners here. The principles that we use and teach you people at Entree leadership are from a practitioner, from a leadership team,

at Ramsey Solutions and Entree leadership. This is stuff we have done to grow this business we have from a card table in my living room to over a thousand team members and owe $300 million in revenue this year. So we're real people. We screw up, just like you screw up. I've done more of the dumb things than you have done yet, so I can tell you where it is before you step in it.

Don't step there. It's not going to smell. good. You're not going to like that. Don't put your foot over there. It's not going to be fun. So maybe I've got the answers. Maybe I don't. But if you're looking for them from academics, I've got a little of that. I've got several letters and licenses after my name, but mostly I've just got a PhD and DUMB. Hard knocks, baby. I did it. And if that's who you want to learn from, somebody who really does it every week, then that's what you're in the right place. This is what we're for.

Call me. I'd love to help you because, by the way, one of my favorite things in America today, I love America. One of my favorite things are small business people. You people that have two to 200 team members, you are the freaking economy. you are the free enterprise system. I love you. I am one of you. You are manifest destiny for this country.

And as you go, so goes this whole place. So it is my duty to make sure you freaking win out there because it makes this country great when you're great. And it's not coming out of Washington, D.C. It's coming out of every little burg and every little corner. As long as there are garages, there will be new businesses. Because some dupers out there inventing something right now

that's going to be the next thing. And I'm so proud of you. And I'm so honored to lead you and help you. Maybe I'm a little further along in the journey than you. And I can look back and say, I remember exactly how that was. Don't do that. Or do that.

Do more of that. So call me right now. The number is 844-9-44-1070. Let's go to Jason in Huntsville, Alabama. Hi, Jason. Welcome to the Entree Leadership Podcast. Hey, Dave, how are you doing? Better than I deserve, brother. What's up? Amen.

Actually, I've been following you for, I don't know, 10, 12 years, you know, despite everybody saying you can't get rich doing the Dave Ramsey Planned with some of the, you know, you know, the guys stand in front of a jet saying, you should do this and that. I have done what you said and ended up debt-free at 33, 34, bought the company I was working for, you know, paid it off debt-free. sitting here with a company we grew from three to ten million in a matter of about eight years. Nice, slow growth. Man, you're a rock star. Way to go, dude. What kind of business is this? Hey.

Say it again? Heating and air conditioning. I love it. Way to go, Jason. Well done, sir. No college education, just high school, barely met it through high school. And, you know, a lot of the teachers tell me I probably wouldn't make much of myself because I turned down some free rides to college that I had available. And anyway, long story.

short, I'm sitting here with actually two HVAC companies. I bought one last year, small company, the guy ready to retire, and a baldy mound, and we've grown it, you know, showing 30 to 40% profit margins there. And then my larger company is about 10 million, and we're doing about a 20% margin with it. And I've got a team. I don't have to go into work about one hour a year. They take care of me like family, and I take care of them. And I don't go in. I spend time with my kids. I made us work 90 hours a week to get here. And now I'm giving my little girls their daddy back. And so have a good life. And these equity firms have offered me some crazy money, like 11 times ebidot number, which is unheard of in our industry. And I'm sitting here thinking,

do I cash out at 43 or do I stick with it and just keep building this empire? So they're offering you like, what, 20 million bucks? 21 million to walk away. And most equity firms want you to work two years. You know how that works. And this one, because I have it set up so well, and like I said, the team I have is, I mean, absolutely strong, strong team, and they just take on any challenge. These guys see that, and they're willing to just pay me walk away and then pay me rent on my building and just, you know, write me off. But the catch is the previous owner that I bought out was a really good guy, and he knew that I was a Dave Ramsey fanatic.

And so instead of, you know, going into the bank and borrowing multi-billions of dollars, he worked with me and allowed me to pay him 3% of the gross yearly. and I owe him four more years of that. So his payout would be about $1.3 million of that. So, you know, I would be somewhere around 19-7, you know, 19 and some change. You know, those teachers were right. You didn't make much of yourself. I didn't.

I didn't. And, you know, I'm not. There's one book author that says I'm, I'm 42. You killed it, man. I'm so proud of you. Thank you, man. I've been doing the envelopes, and my wife and I got on board. and, you know, we didn't even do rice and beans.

We didn't go that crazy with it. Could have got there a little quicker, but we still did some vacations. We didn't do loans on the vacations. And I follow, I listen to a lot of these entrepreneurs, these motivational people stand in front of these jets and saying, you know, and you know what I'm talking about, you know, listen to the, if you're broke, listen to Susie Ormond, if you're middle class living Dave Ramsey.

Well, I've been listening, Dave Ramsey, and I feel like it was not that hard. I mean, it was hard, but it was not that hard. And I did not. Your teachers were wrong, and apparently those folk were wrong. So it's okay. We got that in common. So do I want $2 million a year and continue to own and operate this thing, which is what you're making, right? Yes.

A million and a half two million. Or do I want $20 million in the bank? Yep. That's the question on the table. And really what the question around that then is, is what do you want to do with your life? You're only $42. I don't do, I do what I want now. I don't go to, I know.

I mean, if you make $2 million a year, you already do what you want to. Yeah. And you've got the management team, the leadership team dialed up where they're running the freaking thing. And you're just, you know, you're running the, you're checking your metrics and making sure they're hitting their numbers. And you're handling crises. But other than that, they're running the day-to-day ops, right? Yes, sir. So you don't have a bad life.

It's not like you're, you know, overworked or stressed or something here. So it's just what do you want to do with your? your life. Now, I will tell you that, and you can, and there's no wrong answer. If you go, I've got this thing I want to work on, I'm going to take the $20 million, I'm going to take the $20 million and do this and this. I'm going to take the $20 million and do nothing is a stupid idea. That's not going to work for you because you're not a guy who does nothing. Yeah. It won't work. I had a buddy of mine sold out a whole series of stores he had built at 32 years old.

He put almost as much as you're talking about in investments at 32. And he was a big bass fisherman. He went bass fishing and got fat. And figured out, figured out that bass weren't that much fun. Yeah. They don't get in a boat often enough, apparently. But the, so, I mean, he, so he lasted about five years and he went back out there and started buying stuff again and went back in business.

And then he closed that business and opened another business. he's a serial entrepreneur is what he is. But the point of the story is that doing nothing is a bad plan. If that's, if end game is I get to do nothing with this money, then that's a bad plan. If you got something you really, really, really want to go do with it, that's fine. But you are a doer and you're going to be unhappy with doing nothing, no matter how much money's involved. Because if you eat enough lobster, it tastes like soap. No, you're 100% right because the first four years of kind of retiring, once I've got a team,

I hired my high school buddies, a lot of them, just my friends. I brought them in, trained them, and said, hey, guys, run this. I'm going to pay you six figures and enjoy your life. All the guys that I know that have sold their businesses without a game plan to go on to the next thing, have regretted it. And I've got about five of them popping into my mind right now, anywhere from 15 million to 400 million. I actually know one guy sold his for 11 billion. and all, and it was 30 years ago, and he's still when I'm with him. I played golf with him not long ago, and he was telling me, you know,

all he could talk about is the old days when he was doing something, because he's a doing. I know, just, you know, so no, you need to, you need to, if you're going to sell it, sell it so that you can do X, and you need to be able to tell me what X is. You make a lot of sense because I turned them down on the, you know, I signed the LOI, met with them, and after some further consideration, I backed out of the deal. It's been past 90 days. They've come back with a new LLI, and I just, I've decided, and I kind of made them decision to not sell in the, you know, and it's nice for the pretty girl to want to go on a date with you, but not if you don't intend to marry her, so it doesn't matter.

Yeah, you're right. You know? And you're right about the lobster tasting like soap. I mean, there's only so much of this crap you can do. Yeah. Oh, tell me about it. After four years of hunting, fishing, doing that stuff, and depending on my kids, you're just like, I mean, even, and, you know, if you spend every day and I love my family, but 24 hours a day, you know, eventually you're like, okay, I got to get a break. You know, you've got to have something that pushes you because the most depressing time of my life has been with me sitting there with money in the bank and nothing to drive me.

So I've had to find other things to drive me because when I come into work and everybody looks at me, like, what are you doing? What are you doing here? Well, and you need to work on what you can expand and what you can do with the business and grow it from here. Because the thing is, it won't, you have to find some things to break before they're broken because your leadership team is probably not doing that at this stage of the game. And so you need to go in there and break some eggs if you're going to keep it. And not bust the whole thing up, but you need to look around the edges of this and go, eh, and you know, I don't know. I'm so proud of you, Jason. You're a rock star, man.

and you need to send that LOI to your old teacher and just right across the top of it. Nah, nan, na, nah. You know, I want to. I'm kidding. Don't really do it. But you know you want to. They actually called me for sponsorship and for the school and I did some things. Yeah, yeah, sponsored.

Just buy the school. It's okay. Well, I just, anyway. Y'all ought to, man. I mean, y'all have some fun with it. That's the whole idea. I'm so proud of you. Well done.

I don't think you're going to sell it because I don't think you know what you're going to do. So I'm probably keeping it. And the only reason you run an end game like this, I have a liquidity moment. And that's your end game. We're going to take our money out and go, is if you're going somewhere. Building something for a builder is why we're put on the planet. Doing something for a doer is why we're here. and you get joy out of your entrepreneurship.

And so you better find another outlet for that. Otherwise, this money is just going to be a big old stack of green bills. And it's really not going to be that fun. And it's not like, oh, the heating and air business is going to go away. And so you should take your money while you can. I think people are probably still going to be warm and cool 10, 15 years from now. And they're going to need you to do it. So I'm going to keep it and run it.

We did have a radio guy ask us one time at one of these radio conventions. Dr. Laura had just sold her radio show for $78 million to premiere, which is now called IHeart. And the guy, everybody was going around, Dr. Laura, Dr. Laura, because we're about the same size as she was. And they're like, okay, Ramsey, you know, what's your end game? Translation is when you're going to sell? And I'm like, uh, my end game.

is keep doing this forever. And he's like, no, no, I know, but man, but no, he couldn't get his head around the idea that I was going to like keep working because I like what I do. I get great joy from it. And so does Jason. Way to go, Jason. You're a rock star, man. You're why we're here.

Hey, the phone number here is 844-9-4-1070. You want to talk business? We'll celebrate with you. We'll cry with you. We'll get mad with you. We'll kick you if you're stupid and tell you because we love you and we want you to win. This is the Entree Leadership Podcast. Thanks for joining us, America.

This is the Entree Leadership Podcast. I'm Dave Ramsey, your host. This is the Business and Leadership podcast where people who really do lead for a living actually talk to you. This is not theory, baby. These are people that do it, me right now, and I'm here to help you. The phone number if you want to talk is 844-944-1070. Get in touch with the team, and they'll arrange to make sure you're a part of this podcast. Griffin is next up.

Griffin is in Seattle, Washington. Hey, Griffin, what's going on, man? Hey, Dave, thanks for taking my call, man. It's an honor to talk to you. And because of the work you do, as of last month, my wife and I were debt-free, house and everything. And, man, we're looking forward to seeing all down at Summit this year. Oh, great.

Yeah, May Summit's going to be a big one. It's going to be great. Hey, how can we help today? All right, so here's my question. I have a team member. He's a high performer. He's done with my family's business for 15 years. He's got a great work ethic, been a faithful employee.

But recently, he told me that he, you know, he doesn't like the work that he does, and he feels like he wasted the last 15 years of his life. I'm not going to lie that, you know, felt like a gut punch when we said that. When something like that comes from something you care about, you know, I told him, I told him that it's time that I think he needs to move on and look for something else and chase his passion and his purpose. And, you know, I told him I'd work with him with being flexible with his schedule and, you know, I even given him ideas of what I believe he could slide into that would be a good transition.

But, you know, he feels stuck and, you know, he's... afraid and I really don't know what else to do. Bottom line, I guess my question is, what do I do? And, you know, do I just push him out of the nest and help you flies? Yeah, it just sucks because, you know, I want what's best for him. I truly care about him. But I also don't want to fall victim to just quiet firing and, you know, just kind of holding my breath and waiting for something to happen. Yeah. You know what, guys like you are why we know that, we know that corporate America sucks. Because corporate America doesn't even have a context for what you're talking about,

nor would they even say something like, because they don't believe it. Like you just said, I actually love this guy. He's been a part of our family business for 15 years. I care about him. These are words that never leave corporate America's lips. So this is some of you dubs that don't want to, that think you want to work for corporate America. You want to work for Griffin is who you want to work for.

You want to work for an entree leader that actually loves his team. You're a stud, man. Way to go. I'm so proud of you. Yeah. He's got to go, man. Yeah. It hurts.

And, you know, one thing about leadership, there are days that leadership just straight up sucks. And the day he leaves is going to be one of them. You're going to cry. Your stomach's going to be in your throat all morning. And you're going to wonder if you're doing the right thing by being that tough. but this is the family pet that has cancer, and you're going to try to let it just hurt,

or you're going to put it down, and you're the daddy, so you get to go take it to the vet, man. I mean, you've got to make the call here. You've got to pull the trigger. It hurts, though. Every time I put down one of our dogs,

I just cry like a 13-year-old girl, man. I mean, but I cry at Applebee's commercials, so it's, you know, but anyway. So, but yeah, I mean, it's just, it's, I have been through these situations and delaying it doesn't make it better. It makes it worse. Does that make sense? Yes.

Putting it off, kicking the can down the road, hoping this is all going to just work out, it doesn't fix it. And you don't want to be rash and sudden or violent or, I mean by violent, I don't mean physically violent, but you don't want to be so out of control. It can be gentle, kind, and gradual, but it needs to be definite. Right. So like, have you got a selling season that this guy, he's top performer?

I took that to mean sales. Is that what he does? Yeah. Have you got a selling season? Is there a... No, it's pretty much you're wrong. Okay, so there's no difference in January versus March. Correct.

Or March versus April? Correct. Okay. Okay. All right. Then I'm going to sit down with him and say, I love you too much to let you just sit here and deteriorate. So you and I need to discuss the date that is your last day.

What do you think? What do you think it's going to be? And ask him. And I'd let him set his own poison. And if he says six years, then that's not, you know, that's off the table, right? But he knows what you mean. Yeah. He may say Friday.

But he might say, you know, I'm thinking the end of next month. Well, that's okay. That's fine. As long as we have a definite thing, because as soon as the date is set, all of the tension between your shoulder blades and in your stomach will leave and his too. Yeah. Because it's the uncertainty of this floating problem that is causing all the stress and all the sadness. Right. What would you say would be too long of a time?

Like, say if it was like a month, sure, but, you know, what would be? What do you think? I mean, I would guess maybe 90 days is the most I'd want to go with this. Yeah, yeah, I was going to say, yeah. You have to give me a reason for it to be otherwise. Right, right. Because that's the thing is, you know, I've been as flexible as I can be with, you know, hey, if you want to go kind of part-time.

But that's all to try to get him to stay and make him happy. Right, but it's like I want him to feel the freedom and kind of take the fear away of stepping into something else. So I've been trying to work with him. He's, he's, I'm miserable, but I'm not willing to do anything about it. He's not willing to lead his own life, so you have to lead it. Yes, sir, yeah. Yeah, you get, he's not going to have backbone here.

He's already told you that. So you've got to help him. And it's, this is an act of love, by the way. This is not an act of harshness or anything. You're, you know, any day he is there being miserable is a day he's not somewhere else being happy. Mm-hmm. So that's just hard. That's hard.

I'm hard. I'm sorry for you. And you said family. So did he work for your dad? Is he older than you? Yeah. Yeah, I'm a second generation business owner. Yeah.

So yeah, he's my age. And we, you know, he's been here. He's like family, man. Yeah. That's just stop. Well, that's, it's kind of a, I don't know, y'all are in the same graduating class or something. And it's, so it's different than the ones that were there a long time ago.

Right. are the difference in the ones you hired six, you know, but, I mean, he's part of your graduating class. And so that's, or part of the class of whatever. And so, yeah, that's really, really, that adds some layers to it. And it's, oh, you know, one thing I do is if something's awkward like that, I just say it out loud. This is super hard because, dude, you know, you've been with our family. You're like one of our family.

But because of that, I'm going to be a strong leader and I'm going to love you well. And that means we're going to set a date. Mm-hmm. What do you think? Yeah. Yeah. No, I love it. And that's what my gut was telling me.

I just wanted to hear from me because, yeah, outside of my dad, and I obviously picked his brain and he agrees 100%. So outside of my dad, you're my next person that I lean on for wisdom. And I appreciate your advice and input. Well, hey, thanks for hanging out with us, brother. I'm proud of you. You're a good man. You're the kind of reason that America.

American small businesses matter because they actually care about their people. And that when you're hiring, you need to, you people out there when you're doing new hires, that's your brand differentiator. When you're recruiting, you know, well, what are your benefits package? We'll actually love our people. That's our benefits package. Our payroll check will clear Friday and we won't lay you off to increase profits. and corporate America will lay you off to increase profits because they don't give a crap about you.

Now, there's big businesses out there that aren't corporate America, by the way. When I say corporate America, I'm not saying this place is a corporation, so it's not a legal entity. It's a concept of people that are running businesses with no real leadership acumen, no real caring about the human beings that are their customers, no real caring about the human beings that are their team members. Instead, they look at their people as units of production, and as soon as I can increase stock price in Q1, I'll do layoffs

because that increases the bottom line and falsely increases stock price. But people like Griffin, people like Griffin and me, we don't think that way. We actually love our people. They frustrate the crap out of us sometimes. sometimes they betray us. Sometimes they say nasty things about us. Sometimes they're the best friends we've ever had for 15 years. And sometimes we get the joy of fighting through a battle and winning together.

But we love our people. That's the difference in small business. And that's the difference in who we are at Entree leadership, who you are that we serve in Entree leadership, you businesses that are two to 200 folks out there. It's a pretty, pretty cool. thing. So thank you. Hey, if you are a business owner, you probably know what it means to be the CEO, the chief everything officer. Yeah, just getting started, kind of stuck on the old treadmill.

I know how that feels. I felt that way. You spend all your day putting out fires instead of focusing on growing your business. At the end of the day, you're exhausted and wondering where your day went. But running a business doesn't have to be that way. The Entree Leadership, elite membership teaches you how to manage your time, delegate without guilt by giving you the tools and resources designed to fit in your day, not add more to it, so you can stay focused on the work that matters. Plus, Elite is free for the first 30 days.

You gotta try this, folks. It's a free, that's a good price trial at Entreeleadership.com slash elite. Plug into it, because I know, man. I mean, when you're doing this all by yourself, it's a little bit lonely, not in a like crying in my pillow lonely way, but it's just like I don't know who to talk to

because I don't know who has these same problems I've got. But other business people do, and that's why this works, this Entre Leadership Elite. And did I mention that the 30-day trial is free? If you want to beat that price, we'll cut it in half for you, okay? Half a free, and I will make it even better. So just check us out. You don't want to miss this at all. Entreeleadership.com slash elite.

We're honored. You're with us. This is the Entree Leadership Podcast. This is the Entree Leadership Podcast. It's by and for people who know how to get up, leave the cave, kill something, and drag it home. We get her done. Somebody comes into your office and says, I want to raise. We always tell them around here, your raise is effective when you are.

Get her done, man. Get her done. That's how this works. And we're here to help you do that. You got questions about business, particularly small business. You want somebody to just talking through with you? Well, that's what I'm here for. I love you enough to tell you the truth, even if it sounds a little bit like I'm mad at you.

But I'm not. I'm just going to bust you and coach you up, get you going, because I want you to win. We're not in this to lose. And a business that does not make a profit is called a hobby. So let's fix this. Let's get her going, boys and girls. The phone number here is 8. 4-44-9-4-1070. Emily is with us in Casper, Wyoming. Hi, Emily. How are you?

I'm good. Dave. Thanks so much for your wisdom and inspiration over the years. Well, thank you. How can we help today? I've had a consulting company that's just me, myself, and I for the last 15 years, but recently have added a new business unit and for employees. And for my business in the past, an Excel spreadsheet has been sufficient for a budget. But what I'm finding now is I'm getting stuck in the weeds and it's not efficient. And I'm wondering if there's something like every dollar for small businesses. Well, every dollar is our consumer budgeting app that helps you build a budget for your home, as you know, Emily, but for those listening that don't know what she's referring to,

it's probably the best consumer budgeting app in the world. It's very robust, very, very strong. For business, what we are currently using for an accounting system is NetSuite by Oracle. And we just switched to that, did a conversion to that, gosh, 18 months ago or so. And we outsource our payroll. We don't do our payroll because it's a complete pain in the butt. and so we've got a payroll company that we download to and processes that, but NetSuite gives us all the numbers to send to the payroll company on commissions

and on everything else. So it produces the full accounting package that we need to do. I don't think it's overkill for you. It might be when you get into it. You could also investigate. There was one that we've advertised for, but I never used them. But I understand they're really good called Fresh Books. and that's a

I have heard that advertised over the years yeah that's a cloud-based system as well and it's not nearly as robust as NetSuite but I think that NetSuite probably has a product line that's small enough that would work for you guys

I'm not positive of that you'd have to check with them but what you're looking for is going to make your life so much better because you've been you've been running this with bailing wire and duct tape with seven spreadsheets tied together talking to each other

sort of. And you're not getting good metrics showing you where your sales are, showing you where your profit centers are, showing you where your problems are. You could run into cash flow binds with that pretty easily in an operation your size. So the more, every time we've upgraded our accounting system over the years and have changed to a better and more robust system, every time we did it, we did it too late. We should have done it a year or two before. Because we always go, Dadgum it, that, I shouldn't.

You look back on, you go, I didn't know what I didn't know. I missed that because I didn't have those numbers. I didn't have that metric pointing at it. I didn't have this, you know, I didn't have the info coming off the dadgum. The numbers weren't talking to me. I had them. I was pulling them out of my ear. And so, yeah, you need to go ahead and do that.

You'll get an ROI on doing the, the work, the bandwidth of your team that it takes up that feels like it's not productive to get converted into that and get rid of the spreadsheets, it takes some time, some downtime. They would have been doing like real work, and instead they're doing this crap, but you'll get an ROI on that, and you'll get an ROI on the actual investment to pull the trigger and write the check for the software. Okay, because I have been using QuickBooks, and so I can do a P&L and all that kind of thing, But that's where I'm struggling with the planning because we have, we're a consulting company,

so we have an irregular income based on the services we provide. Exactly. Well, what you'd need to do is lay out budgets, projections, and then update them. You've got to do updated budget projections because you don't know three quarters out, four quarters out, what your income's going to be. Correct. Unless you've got some annual contracts, right? Yeah, we have some annual fees and memberships.

We have to pay for our trading accreditation. No, but I'm talking about your contracts coming in, money coming in, your revenue. Yeah. Do you have, do you have, are they one-time hits, are they one-offs, or are you put them on annual payment where you keep them, you got a customer for a year? No, it's one-offs. We're an oil and gas training company, so we provide certifications to employees that are renewable every three years. years. So we just have the same customers or new customers, but they come to us as needed. So you can't really project four quarters out accurately. So when you lay a fourth quarter budget down,

your confidence factor on that's not real high. Correct. Yeah, that's what I was getting at. I've currently just been working on kind of a monthly budget based on accounts receivable. Yeah, I would tell you to go ahead and lay out 12 months, even though you're admitting four quarters out, you don't have a high confidence factor in, go ahead and lay out 12 months and then just every month or every quarter update as you roll towards it and just run a rolling 12 budget. Don't run a calendar budget, run a rolling 12 budget. Okay. And that's, we roll a roll, we run a rolling 18 now.

But we are, but we say out loud that 18 months out, it is what's called a guess. You know, but we write it down anyway. It's an educated guess, but we write it down anyway and work our way towards that. So very, very cool. Well done, Emily. Well done. It's going to be worth the investment. And this is one of those things that small business people, me included, are perpetually

underinvested in. So whatever you think you need to do, do a little bit more than what you think you need to do. go one step up in sophistication, one step up in expense, one step up in trouble, and hassle to get it done. You'll get the reward. Plus, you're building out a template that you can flex into as you scale rather than having to do this again because you under did it the first time. And that's from the guy who's underdone it a bunch of times. So every time I've done it, I waited too long, and every time I've done it until recently, this last one we did right. but we because we got the top mamma jama in there right now you know i mean we went all the way

we got the whole puppy so um but that that because i told them this is a 300 million dollar company i wanted a accounting system that run a billion dollar company and so that that's what i'm saying step up to get ready for the next move and that keeps you from having to do it again in 18 months because you under did it in the first place so there you go cala's with us Kayla is in Evansville, Indiana. Hi, Kayla. How are you? Good.

Hi, Dave. It's really great to talk to you today. You too. What's up? So I'm calling because my business is growing and I'm thinking about adding employees and I'm wondering what the correct way to do that is. What do you mean? Like, what is it like, you know, because you have payroll and all that.

I don't know how to correctly add people and know what to pay them and all that good stuff. Okay. you don't have any employees? No, it's just me right now. What's the first one you need to hire? Probably somebody to do like advertising and things like that and run people like that. I think that would really help me grow. You're doing advertising now?

Honestly, mainly it's just through like Facebook and stuff like that, but I'm not, I've not actually ran any ads and I've continued to go through word of mouth and stuff. It's been really great, but I think that if I had somebody who could actually put out actual ads and, you know, it would help me. Okay, so what you need is an entry-level marketer, and you're thinking they're going to be more valuable than they probably are. So what you need to do, step back and really define exactly what you need them to do, not like, I think they need to do advertising that I've never done and I've never heard of yet. No, that's a good way to get nothing done or get somebody in there that doesn't know what the flip they're doing and the only sale they made was you. So now let's clearly define exactly what you need to do. Lay out the job description.

And you may want to like meet with some friends or if you're in Entree Leadership Elite, you may want to jump in with the coaching group and ask them, ask some of the guys and gals in the small group. if you're in a small group in there, the mastermind group with them, what they're doing, how they're doing their advertising. So, because it may be that you just need a social media specialist because that's so far all you've done. Yeah. You may just need somebody to help you with Facebook buys and Google AdWord buys or whatever

it is you're going to do if you're going to do SEO stuff in there. Because traditional advertising, I mean, you're not going to buy television ads. You're not going to buy radio ads, are you? No. So I think, so we added a web, I say we, it's me. I added a website this year, and I was thinking more, directing people more towards that also wouldn't be helpful. I obviously don't know how to do that. Okay, yeah, you need a marketing person with some, a digital marketing person with some social media skills.

Okay. Okay. And entry level is fine, but what you want to say is I'm doing these five things well. I'm doing these five things. I think I need to do them better and more. And you want someone to do that, not bring you some kind of silver bullet that you've never seen before, which is kind of what you started the call with.

You sounded like somebody at the start of the call that was going to get conned. I don't know what I'm, you know, when I started this, I thought a side hustle and it really turned into this huge blessing, and I honestly don't know what I'm doing. Congratulations. Thank you.

The best entrepreneurs are the accidental entrepreneur. I have been blown away. You completely backed into it and you're winning. I love it. Good for you. Now it's time to get a little bit more sophisticated and get some help. But one of the things you don't want to do with any hire or any process or system is think that it is the magic sauce.

Because you kind of had that thing when we first start talking. I just need like someone to come in and do all this stuff. that I don't know how to do. Oh, yeah, you do. You are already successful. So you probably need to tell them what to do instead of them telling you what to do. There is no magic fairy dust out there that someone has kept secret from you. You are the sauce.

You're the sauce. You're the special sauce. You're the answer to the equation. When I quit looking for someone to discover me and make this all easy, it got easier. Because I kept waiting on, if I get the perfect, person to do this radio thing, then they'll do all this hard work, and I, that I don't know, I get, they'll go get all these radio stations. And it turns out nobody really knew how to do that. So we just went and did it one at a time and scratched and clawed our way through,

building the largest freaking talk radio network in America that's not corporate own. And so, but it's just, we backed into it just like you did. I had no idea. I couldn't spell radio when I started. Exactly. But I kept thinking there was some kind of a special media radio person. person that I could hire who knew all this stuff and had the fairy dust in their pocket. And it turns out there's not any. And that business, consultant just means unemployed. Yeah.

And so in your case, I do want you to get a good marketer in there, but I want you to be really leaning in and trusting your instinct and your gut because that's what got you where you are. And so I still walk through this building and have very sophisticated people who are way smarter than me that use initials for things and projects that I don't even know what the flip they're talking about. And I still walk through this building and have a gut instinct and go, you know, we're doing something over there that sucks. I can smell it. I just know what that smells like. And I walk over there and walk in it. I find the mud on my boots. And I'm going, uh-oh, we got a problem.

Even though there's a bunch of smart people over there where they wandered over into a ditch. Okay. And you trust your instincts. I have to trust mine and I have to remind myself, not in an arrogant way or prideful way, but just confidence. You need to be confident in Kayla because Kayla rocks. Yeah, yeah, I do. So don't look for fairy dust, but look for somebody that can bring some lift and help. That's what you help do what you already know needs to be done. If you do that, you're going to get a good job description, a good KRA key results area laid out for that hire.

and then when you're interviewing them, you can tell if they actually know what the flip they're talking about because they're dialed in. Because they're going to tell you something and you go, oh, that's pretty cool. And they're going to say something that you already know and they know it too. And that tells you that, oh, we're on the right track. You know, that person actually does know what they're doing. They've done this before. This isn't their first ride on the cabbage truck. And you'll get that in the interview process.

It'll come up. So this business thing, hey, guys, you people, running small businesses, take a lesson from Kayla right now. Take a lesson from me. These calls when they come in on this show, every one of them are teaching you something. And that's why you're going to keep listening to Entree Leadership Podcast, and that's why you're going to share it, and that's why you're going to subscribe, and that's why you're going to tell every freaking person you know, and you're not going to leave any reviews on this thing except five stars. I don't want you one stars. Mama said if you can't say something nice, don't say nothing at all. So five-star reviews, Dadgummit.

And every one of you subscribe and every one of you share this because the people out there like me and Kayla, we do know what we're doing. Sometimes more than we think. And if you're one of us, you do know what you're doing. Sometimes more than it feels like. Because you get the snot beat out of you out here in the marketplace. You get, I mean, you get people saying nasty things. You get customers that are crazier in a dadgum bean.

And they take your confidence away, man. And you can't let that happen. You've got to lean in, push through, leave the cave, kill something, and drag it home. You do have the right stuff out there. You are what drives the economy in America. And we at Entree leadership were your biggest cheerleaders. And, man, I'm the tip of the spear on that cheerleading stuff. I'm all for you.

I'm all for you. I love you. I love what you do. I'm thankful for you. And we're here for you. You got a question? You want to talk about this business stuff on the online? Ontario Leadership Podcast. My name's Dave Ramsey. The phone number is 844-944-1070. Thank you for being

with us. Hey, guys, you want to get in a group of people that are just like you? We call them mastermind groups around here. You want to get in a group of people. You want to get a coach on your team. You want to have access to the tools and access to the information to do the stuff that you and I love doing called business, check out Entree Leadership Elite. It's a free trial, a free 30-day trial at Entreeleadership.com slash elite. Entreeleadership.com slash elite. I don't know if I mentioned that it's a free trial, but you should try it since it's freaking free to get in there and figure it out.

So get in there and figure it out, boys and girls, and it'll help you. And if it doesn't, then you don't have to re-up after the free part. it's over. So we'll learn your business or we want. We want to help you. And this is our best shot at it. So jump in there and help us figure it out. Grady's with us in Vermont.

Welcome to the Entry Leadership podcast, Grady. What's up? My father and I are co-owners in a medium-sized dairy farm up here in Vermont. We've been in operation for 234 years. Good Lord. That's a little. Some of them. But I was wondering how in the ag industry where we have no control over our price or any of the prices that any purchases were able to make, fuel, grain, or the milk price we received, how do we save for future capital purchases without paying drunk Uncle Steve, which is what I call the IRS or Congress, any extra tax?

You're going to pay tax on money that you save. in a small business. Sub S, LLC, 100% of your profits are passed through, and 100% of your profits are taxable on a calendar year basis. You don't get out of that. Because drunk uncle Steve wants to support small business, bull crap. The tax law is written for big business. It is not written for you and me.

So you're right. It's aggravating this crud. So when I save around here, I have a retained earnings account that I save for future large capital purchases, and I save for future emergencies, and I save for all the things we save money for in business called retained earnings, I get taxed on it. And so it is reduced by 39% at the end of the year. So if I save a million dollars, it costs me $390 grand.

Great. Sorry. But guess what? There's no avoiding it. I mean, if you buy the item during the calendar year, that, you know, obviously some items are expensed on a one year and some are put on a depreciation schedule depending on what type of capital asset it is. Now, the only alternative is to stay in debt the whole time, which destabilizes the whole operation. Because every time there's a downturn and you got big old payments, well, Warren Buffett said it, you know, when you can tell he was skinny dipping when the tide goes out. So every time there's a problem, your stupid is exposed, called debt.

And so these farmers that borrow because, well, it's just the way farming operations work, Ramsey, you don't understand. By God, I do understand. I run an operation bigger than your farming operations. And I'm sitting in a building that costs, you know, I've got about $400 million worth of real estate over here. I paid cash for. It wasn't easy after I paid drunk Uncle Steve, right? So I love that, by the way. I'm going to steal that.

So anyway, all that to say what we have done for years, Grady, is we put in our budgeting process, in our P&L, when we get to the profit line before we take home excess profits. Now, we pay ourselves a reasonable fee, a reasonable salary, but before we take home excess profits, we set aside a percentage of that every single month. when we close the books monthly, and a percentage of our net profit goes into retained earnings for future large capital purchases. Now, I've been doing these, we've got a 60-acre campus here, and we've been doing construction on this campus for the past six years or so. So like 100% of my freaking money has gone into these buildings. After we ate and we have, Sharon and I have a good life.

We're not like starving to death or something. You know, so all we've done is these large capital assets, and I'm about to finish our, you know, we're getting ready to open up our Ramsey Events Center. And that means I don't have anything under the construction for the first time in a long time. It's kind of like when you had the last kid and you get the finally out, the last one out of diapers, you know. It's like we're finally going to have some dadgum money again to do some stuff with because we've been pouring it all into concrete. And you're going to pour, you're going to have some years like that or some seasons like that where, all of your excess profits is plowed back into upgrades milking machines or a, you know, a redone barn or whatever it is, however it translates in your world.

But that's how we've done it. And by God, during COVID, when they told us that we weren't essential, didn't you love that crap? And it turns out we're by God all essential. Shut up, Fauci. But the, anyway, so, you know, so during that time, I was real thankful. I didn't have any payments. Yeah, and we're in the same boat.

Farms work 30 years and the farm's completely debt-free. We own all the land. So I didn't think you were asking about debt, but I get a lot of crap from farmers about, you don't understand, a combine, you know, $500 million or whatever they are, right? Mm-hmm. So, you know, but it's, it is expensive, but guess what? Big business is expensive. The bigger you are, the bigger your expenses.

Right. So I would take- Is there any way of restructuring LLCs if we were to break? up land and machinery and move money between LLCs or does that just take the bigger headache for ourselves? I don't think it'll keep drunk Uncle Steve out of it, probably. I will tell you one thing we have done that you can check out, and I don't know exactly how it apply, but we brought in an outside consulting firm that takes our buildings and our tenant improvements and breaks them down by component so that we can expense more of it and we can put shorter depreciation schedules on more

of it and it's much more tax efficient that way because we're you know we're shortening up the amount of time that that we're writing the stuff off so we had some stuff you know we're you know we're dumping a whole bunch of it like in a 30 year depreciation schedule and some of it some components of that we could put on a one year or a five year and so this company came in and broke that out for us. They did all the back leg work, and they, you know, they charged us a fee and saved us a whole lot more. So we bring them in every time we put a new asset, like when we launched this new building, we'll bring them in and go, okay, what parts of this can we write off this year? You know, and they'll take out the seats and they'll take out the electrical,

and they'll take pieces out that we can do. And you may have some of that with some of your equipment that you're not, you know, you're not expensing that you could be, or you're not putting on as short a depreciation schedule as you can. But the bottom line answer to your situation, man, is that you have to start setting aside systematically retained earnings out of your P&L. Continually grow your cash position because 100% of the time you're going to need it. You're going to need cash to expand. You're going to need cash to replace worn-out equipment.

And it is part of the operation. I mean, you know, like around here, we've got 1,100 people, and every one of them has a stupid computer. And you know what a computer is. As soon as you get it out of the box, it's already out of date. You already need another one. It's like your phone, right? And so, you know, we just have to budget. We're just continually trashing three-year-old computers.

We're throwing them away or donating them to somebody, right? Because we're turning them over. keep our people efficient and the computer is a cost to doing business, the upgrades. And so stinking screens and the audiovisual world has changes up by the minute. Same thing. Same thing. You got it in the dairy world. I got it in this world.

So in business, we've just got to systematically know that crap is going to break and crap is going to become obsolete and we have to constantly have the money for that by setting it aside systematically out of the P&L. Man, Grady, dairy work is hard work. That's a hard gig you got. 200 years old. What a legacy. That's a pretty cool business, man.

Well done. We're proud of you. You're a rock star. I had a friend grew up on a dairy farm. She said her dad convinced them that Labor Day was the day you worked the hardest. It's hard work, man. Because those cows, they don't care if it's Christmas. They still want to be milked.

They don't really care if it's cold. They still want to be milk. You got a demand. manding balls, some cows. It's real. So thank you. Thank you. Those of us that drink milk and eat butter, we love you. Thank you, man. We appreciate what you do, and we can help you anymore. You call us any time. That's what we're here for. Hey, this is the Entree Leadership podcast. We broadcast from the headquarters of Ramsey Solutions. My name is Dave Ramsey. I've been running Ramsey Solutions since I started on a card table 30 years ago. And what that means is that I've done a lot of

stupid butt stuff and survived it. And so I can recognize stupid a mile away because I looked at it in the mirror. We'll help you with that. You call us anytime. We're here to help. The phone number is 844-944-1070. Thank you for being with us, America. Thank you for running a small business. You're what it's all about.