EntreLeadership - The Best Calls of 2025

Episode Date: December 29, 2025

Today, we’ll hear about: • A man dealing with the consequences of bad financial decisions • A manager whose team is upset they didn’t receive profit sharing • A young business owner considering leaving his full-time job for a profitable side hustle • A father seeking advice on how to divide his estate between his children Next Steps: • 📞 Have a question for the show? Call 844-944-1070 or send us a message: https://ter.li/ask-us • 📚 Learn about the EntreLeadership System™: https://ter.li/system-p • 💻 Get EntreLeadership Elite™ for your business: https://ter.li/elite-p • ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/enl • 🏢 Attend EntreLeadership Summit: https://ter.li/summit • 🎤 Attend EntreLeadership Master Series: https://ter.li/masterseries • 📖 Order Dave’s new book, Build a Business You Love: https://ter.li/b4kru2   Connect With Our Sponsors: • 💼 Go to Belay Solutions or text ENTRE to 55123 for their free resource! • 💻 Visit NetSuite today to learn more. • 🧾 Visit Payority for a free consultation! • 📈 Grab Sales Gravy’s free resource to help you hire and lead better. Listen to More From Ramsey Network: 🪑 Front Row Seat with Ken Coleman 🎙️ The Ramsey Show 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show💰 George Kamel   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Happy New Year from the headquarters of Ramsey Solutions. This is Entree Leadership, the show where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm your host Dave Ramsey with over 30 years of experience leading in the trenches right alongside you. And today, we've got a treat for you. Our team has pulled together the best moments from 2025. The real stories and hard-won lessons to help you lead better.

grow your business on purpose and build a legacy. First up, a call from Matt in Lansing, Michigan, who needed help saving his remodeling business after racking up $260,000 in debt. Let's take a listen. So I am 24 years old. I own a remodeling business doing about $750,000 a year with six full-time employees.

But I have $260,000 in, super crappy debt and I don't have enough cash to get the projects done that we've got on the schedule right now that we've taken deposit for so I'm trying to figure out a way to kind of get out of this without filing bankruptcy or taking on more debt just to survive okay so um wow have you been losing money on these projects we have so you're estimating sucks estimating, estimating did suck. We've, in the past three months, since I started diving into this, we've increased our gross profit from an average of 18% to like 35.5% and a half percent.

We're still going up from there. But we're kind of drowning in the past mistakes. Okay. What is the, what kind of debt is the $260,000 in debt? Yeah, so we've got about $185,000 in debt to bank, so that's going to be credit cards, merchant cash advance, term loans, lines of credits, a couple of trucks, that we've got about $72,000 and a half thousand dollars in vendor debts. Okay.

So how many jobs are underway right now? We have five jobs underway as we speak. Okay. And they've all given you a deposit and you've begun work. They've all given a deposit. We've begun work, but I made some super silly decisions and didn't have a lot of financial clarity when I took these deposits. And so a lot of those deposits went towards kind of cash flowing to business

and making up for losses on past projects. We're starting these ones from behind the eight ball. Okay, so you don't have the money coming in unless you add a new project to pay payroll, right? Yeah, we've taken between 30. to 50% up front for all the projects we're working on now we've got a few more in the pipeline you know after we learn the lesson to stop taking deposits up front and using them for other stuff but we'd have to we'd have to rearrange a schedule to push those projects ahead to actually

make any money to really get to the other projects wow what a mess um all right so unless you take other projects you can't make payroll and you can't buy supplies to do the current stuff under way? Yep, yep. Because I'd be fine with not paying the bank, and I'd be fine working the vendors. So the 260, I can just stiff-arm that if I can get these jobs completed.

What do the six people do? So they are, we've got five that are field labor, installers, carpenters, and then I've got one project manager. Okay. Do you have access to any micro four-day projects that you could put one of these guys on that turns some cash rack quick? Yeah, we've actually got a couple on the schedule.

We just pushed one up last week that we got knocked out. So that helped us, you know, make payroll for this week. So we're trying to secure some more of those. But a couple of these projects we're going to be probably $60,000 short on as far as far as labor material goes. after those deposits were gone. So we'd have to do quite a few small projects in a short time period. Yeah, you're going to have to, and or you're going to have to take supplies on credit. Yeah, yeah.

Which is the struggle with that is, you know, we've already done that, and, you know, we've got these big vendor bills that we can't pay. So they're not likely to let you go pick up a bunch more stuff, yeah. They're going to put you on COD pretty quick. Oh, yeah. Okay, so one of the five projects, the smallest of the five projects, how much was the deposit and what's the total size of the project? Yeah, so that project, we're going to wrap that one up to date. That one was an $18,000, $18,000 project.

We took half up front about four months ago. So you're going to get the other nine. Right. Today. Right. Hopefully. Okay. All right.

And that's going to help you make payroll. Yeah. So now we're down to four projects. Yep. Okay. Because my, the way we turn this is we survive the stuff that's on the books that you screwed up the deposits on, the remaining four. And the way we survive those is we generate enough cash from micro projects and side projects to make payroll and complete the existing projects. What's the largest of the four?

The largest of the four, and this one is absolutely ridiculous, that I did this, but it's a $256,000 home edition. We took half up front for that and used that to float the business for the past six months. If we take that one off the table, that leaves three. So what I'm trying to do is choose my pain, okay? Because those people are probably going to sue you before this is over. Because I don't think you're going to finish that one, on time anyway. They're going to go ballistic at some point.

And rightly so, actually. But, okay, the other three projects, what size are they? Because I'm going from 18 to 256. You're all over the map. Yeah, so then we had another, we had a kitchen remodel that was 90,000. We took half up front for that. Same thing. Use it to make up for losses on past projects.

That one we're going to wrap up. Next week, we've taken progress draws throughout that project, so we're going to get that one knocked out. But that one comes with a vendor bill of $45,000 for the cabinets. My fear with that one is if I don't pay this vendor, they're going to go ahead and put a mechanic's lien on the client's house. And you don't have 45 more coming because you've already taken other draws against the second half. Right.

Okay. All right. So how much do you have coming on that one? So that one, we've got 9,000 outstanding, which will cover the remaining payroll to get it knocked out. Yeah, probably not. You're probably going to give a lot of that 9,000 to the vendor and work a payment plan with them on the balance, telling them what's going on. You got any more cabinets you're buying from them? Well, we're supposed to buy cabinets from them for this home edition that we've got also.

Yeah. But we actually found the same cabinet at a different vendor for about $8,000 less. we're going to switch over to a different vendor anyways. Yeah, okay. But I'm just saying, you're probably not going to get any more business out of them. No. Once you put them on a payment plan and give them $5,000 towards their 40, and go, I'm trying to save this, and I'm trying to keep from filing bankruptcy,

so work with me here. And I'm going to send you money as quick as I can. I know I've got to get this cleared, and you add them to your 72 vendor list, basically. But you work out a deal with them so they don't file the mechanics lien. All right. So that gets us down to 256 plus two other projects. Oh my gosh. What are the other two?

The other two is one of them is a bathroom. We just started that one this week. That's going to be another four weeks left. That one, we should actually have enough coming in from the project. We only took 30% up for that one. You started this week and you spent the deposits this week? No, we spent the deposit. We took the deposit for this one about two months ago so that deposit was gone.

just started it this week. Why did you wait two months to start? We were just booked up that far with bad projects. Okay. Okay, so that one's how much again? So that was a $45,000 bathroom. We took 30% up front on that one, but the remaining draws on that will cover all of the costs for materials and labor. So you can run that one out. You can run that one out. So then that only leaves one more? Yep. Because the 18's done, the kitchen's done, the bath you can run out. You got the big 256. What's the number four one? The last one, that one's a whole house remodel. It's a $186,000 project. She's mostly paid up. She owes us about six, and it's going to cost us about nine to finish it over the next week. She's almost done? Yep, this one's almost done. So you're out except for the

256. Right. and some cabinets. Right, and a few other vendors. Yeah, I mean, you got the 72,000 worth of vendors. You told me that, but I'm talking about, we're adding cabinets to that, or we're adding a portion of that $40,000 cabinet bill to that, and then you got the 256, which is a freaking disaster,

and the rest of them you're done with. Yeah. And you're finishing all of these projects. They're all coming to a head. Yep, we're going to finish all those. So why not take new projects and run them properly. Right.

Yeah, I mean, once we clear these last few and we've just got the big one. No big ones. I want you to take, I want you to, oh, rabbits, not elephants. Sure. I want you to turn stuff in two-week turns. And let's just start generating cash at 40% margin. Two-week turns. Don't take anything else big and long.

You can't afford it right now. You can't handle it. You can't handle to sit on the deposit, and you need to take a, deposit, but you don't need to take a deposit, but in your business you should take a deposit. But, yeah, so you're out. You've made it through, except for the 256, is what we're saying, and some cabinets. So, yeah, go take a bunch of short-term projects and then prioritize where the, as you finish those and you clear, you know, you take a $20,000 thing and you clear six grand, eight grand, what are we doing with that? What are our priorities? Well, our priorities are

payroll and truck payments and then vendors and bank is last right credit cards can jump in the creek i don't care if your credit goes bad screw it you need to clean up that mess but and and then you you know so if you do a million dollars that's going to make you 400k in the coming 12 you could clear all of this in 12 months but you're going to have to learn to do short-term stuff and you're never going to manage cash the way you did because this is way stressful i'm stressed out and it's not me Absolutely. There's no fun, man. I mean, really, you're not having any fun, Matt.

Whew. Yeah, so you have learned your lesson. You'll never do the misuse of the deposit again, right? Absolutely not. Absolutely not. Yeah, you run these jobs as separate standalone businesses. There are separate P&Ls. Your job cost everything back to the job,

and you keep all the money in the job that's on the job until the job is done. And only then, if there's money laying there, do we clear it and move it under general fund? Yeah, that makes perfect sense. Yeah, you've already learned that lesson, though, I think, haven't you? I did. I did.

We did start job costing and treat the funds as separate. Yeah, yeah. And so, yeah, you got to run. You got to run. Yeah, I think you're in the quick turn, small ankle biter stuff where you make 40%, and you just do a whole bunch of them. And if you can't get enough of those really fast, you may not be able to keep. all six people.

Right. You'll have to look at and force rank those guys. But if you can get enough to keep them busy and you're making 40% on everything they're doing, you're not only making the payroll

because that's part of the cost of the job, your job costing their hours, but you're making a 40% profit. And so, yeah, if you go make half a million dollars, that's 200 grand. 200 grand gets you out of this mess. because you could clear your vendors and you can finish the 256.

The bank is still going to be sitting there looking at you, but you're going to have to work through them, but that's a longer-term issue. Yeah, and they're kind of aware of the situation, actually, and they've been super cooperative at the bank already. Yeah, because they're screwed. They don't have a choice. They don't have a choice, yeah.

The only thing they act proactive they could do is pick up your trucks. Right. But other than that, they're just screwed. And so, yeah, and don't. don't factor any more of your receivables to them. They don't get any more liens on your stuff. Yeah. They're sitting on the sidelines.

They get paid after we stay open and move our way through this 256 job. And then after we start clearing those vendors up, cabinet people included. And then bank is last on the list. Credit cards are last on the whole list. Trucks would be at the top of the bank list. Follow on me? Yes, sir. Yeah, because it's going to take them longer to.

get to you and screw up things than the other people we're talking about. So, yeah, can you line up $500,000 in the coming 12 months, $5 to $800,000 in the coming 12 months of small jobs that are two to three week turns? Yeah, and the next 12, yes. Yeah. You know, obviously we learned that I'm not good at managing the large projects and we lose money on them every time, so. Well, you can manage them.

You can learn how to manage them, but I don't want any more, I don't want any projects of any size I lose money on. This ain't a hobby. So, but you need the quick cash turn that the large job even managed well does not give you. Right. I don't need you taking draws on that large job in addition to the deposit and redeploying those draws. That's what got us here. So instead, I just want completion, profit in pocket, and profit then applies to mess.

Is that working? Yeah, makes sense. One more time. You think you can get five. to 800K of two, three-week jobs? Yeah, and the next 12, yes. Yeah. And then if you want to go stick your toe in the water on larger jobs 18 months from now,

you can pick one up maybe. But there's a lot of money to be made in those small bathroom jobs and the three-week turns on a paint job or, you know, whatever, without taking on a complete rebuild. Yeah, absolutely. Historically, they're highest gross profit projects anyways. We should have been focusing on them from the start. Yeah, I agree. I agree. Well, it's okay to have a product mixed five years from now that includes one department or area of the company that does the large stuff, while we've got the other thing over here making bank on these small turns.

The small turns are also a lot more front office work per dollar. So, I mean, it takes as much effort to sell a small job as it does a large job, for instance, almost. So, yeah, that's what I'm going to do. I think you can turn this. You've got to prioritize where every dollar goes and you've got to start generating some cash. And so what we did while you and I were talking was we just said, okay, this is an elephant. It's a mess. How do you eat an elephant? A bite at a time. And I started going through, I started going through every detail and said, okay, here's a bite. Oh, that job's done. Oh, that job's done. Oh, that job's done. Oh, and we can get there. And we got this one problem with the kitchen. Oh, okay. And now we've got the 256 is the only thing left outstanding plus the 72 and the cabinets and the 260 or the 185 bank stuff. So you can get

there, dude. But that's how you've got to approach it. Because if you look at the overarching thing like I was doing at the beginning of our conversation, it's overwhelming. It was overwhelming. It was overwhelming me. I couldn't figure out how you were going to make it. I just about told you to punt. But you're not punting. You're going to make it. You can turn this. But you're going to work your butt off and pay for your sins by having no life for the next eight months. You're going to just, and you're working for everybody else. You ain't working for you. You're working for the mess you made. And you can clean it up, though, and you'll be glad you did. And it's going to take you, this is a very profitable business when run right.

Second remodel call in this show. One highly successful, one almost bankrupt. There you go. but right remodels got both of them had the potential to make a 40% margin don't you just wish in some of your worlds you could do a 40% margin hello so there we go yeah so you can do this matt but it's going to be a lot of work and you're going to be very focused on every little detail and not um let someone else reset your priorities once you put them in place you force rank who gets money when and if somebody doesn't like that toughies. They're going to get their money when they get their money. Maybe you'd lose a relationship with a vendor permanently, but that's different. You're going to lose it when you file bankruptcy

anyway. So you might as well pick your, pick out who's going to be mad. Decide who's going to be mad and why and what power they have. And, you know, mechanics lean or take the trucks or what, you know, what's the downsides? Wow, very, very interesting, dude. Very interesting. I think you can do it. Hey, holler at one of our coaches, and if you need some help as you're weeding through this, I bet one of them can walk with you through this. Man, that's a hard one. But Matt's doing what real leaders do, facing it head on and learning as he goes. We'll be back in just a minute.

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Don't head into the new year running on empty. Text Entree to 55123 to get 10 bonus hours in your first month. Take the quick quiz and get started down the path toward more with Belay. That's E-N-T-R-E to 55123. Next up is Mike in Philadelphia, Pennsylvania, who decided to scale back his company's profit sharing but was facing pushback from longtime employees. I run a $15 million a year in the industrial distribution company, have about 16 employees,

and kind of a split between a lot of 30-plus year veterans, and then kind of the new crowd that is 10 years or less. I stepped in the management about four years ago where family owned. I've been for a few generations, and a practice that we've always had that I kind of got passed down is that at the end of the year we distribute our profits. So profit sharing is something we've always done. But it has always been that all profits are distributed between ownership and employee.

And in some ways that distribution was a way to bonus an employee more so than it was framed as profit sharing. But in their experience, it's always been an ever-increasing every so often payment that comes every year to them. And so as we've grown and kind of our market shifted, it's harder and harder to make that work. Plus, it allows us to not have anything retained for our own, you know, operating in case of a rainy day or for growth initiatives that we might want to undertake. So sort of had to step that down due to kind of a tough year and realize that ultimately that's not the best way to do a profit sharing model. It's not very typical to do it that way, but obviously I've gotten a lot of rough feedback and kind of bad attitude from the long-time employees.

We pay market wages, we pay full health care. I think we compensate pretty fairly, but I'm just kind of wondering what your experience has been, where you've had to kind of adjust the payment, not in an upward way, but maybe in a downward way, or give out less than what someone's used to because of an operating, you know, the environment, the economy, whatever it would be. Just wanted to see your feedback on that, maybe your perspective, how you do that in a way as a leader that's, you know, I care for my people, but I also have to run a bottom line. So kind of that. So you just didn't have as much profit to distribute. It's that simple.

It's that simple. I'm sharing profits, but the profits aren't as big. Yeah, and we've always given away $100. 100% and that's not something we should probably keep doing. We need to retain profit for operations a little more frequently, I think, for a general price. So you need some retained earnings before you do profit sharing? Yes, yeah. And that cut into it, but also profits are down. They were down last year. This year we're back, but we're recovering from a bad year. So it's really a two-year's journey to get healthy again where we want to be. So that's been a fun stretch for less.

six months, but yeah, we're, we're helping to pay. What's the cash being used to recover? I don't understand. If your profits are up, why are you needing cash to recover? Well, we, we had a, overall, we had a lot. So we're recovering. We, we operate a business with payables because customers pay us on terms. We pay vendors on terms. So the payables got expanded a bit, and we're using the profits to recover, kind of extended payment balances with vendors. So we'll clean it up over time. Yeah, does that make sense? Like what's happening there? Profitable this year, we're paying, we're cleaning up. Okay, so you're only profitable because you didn't

pay your bills. So last year we didn't, we didn't have a profit, and we paid a much smaller bonus, almost nothing. So what did they say then? We sat down and they were, if you ever do that again, I'll walk out, things like that. And I said, it's okay. I don't, it's profit sharing guys. it's not a promise to you. It's not a guaranteed part of your pay. If you ever do that again, I'll walk out. It's the last conversation I have with that person. Okay.

You don't freaking threaten me. I own this. You are confused. I think part of the difficulty is that I am, these are people who have been there longer than me. I've only been there. I don't care. I only have been there.

They're fired that day. Okay. You don't threaten the person that owns the business. Right. Right. I don't do threats, okay? The profits are down. This was sharing of profits.

I can't share something I don't have. If you ever do that again, I'll leave. You're gone, don't worry about it. Gotcha. Over. End of story. You entitled little twerp. This is entitlement.

It's arrogance. Now, let me go back and fix that now that I've already fired that guy. Okay. He's gone. If I'm you, I'm firing him today. You go back to the office and find him. I'm so over this guy right now. Okay. Now, because that's somebody that didn't understand. Now, then that means that you and your family have done a horrible job of framing what profit sharing is.

We made that mistake one time at Ramsey and we fixed it. Okay. We started doing our profit sharing monthly and we stand on the stage in front of everyone. You only got 15 people though, right? Yeah. Yeah. So you stand up in front of. front of everybody and go, okay, guys, here's our profits. They are up 10% over last month. They are down 4% over same month last year. Year to date, we're up 7%. And what all of that means is that your profit sharing this month is going to be a little better than it was last month. By the way, we've got some expenses coming in next month, and I don't think they're going to be that great, just to let you know. But here's how profits work.

work. We are sharing what our family owns with you. We are not obligated to give it to you, but we have chosen as an act of kindness to share with the people that run the business with us. So we're sharing the profits, but you're not entitled. And everybody, everybody, the whole company says this out loud. Profits happen when revenues go and everybody says up. and when expenses go and everybody says down, remember everybody you're self-employed. If profits are here, we'll share them, if they're up, we'll share them,

if they're down, we'll share the pain with you. And we tell everybody that every month, we have removed all entitlement to profit sharing. You are not due this. It's not part of your comp package. It's an act of mercy by the owners that we are giving you some of our money. to say thank you for being on the team.

And we're real blunt like that about it. Because we don't want any little snowflake thinking that they're entitled to this money because it changes the thing. And then you get the crap like, if you ever do that again, I'll walk out. Because y'all hadn't framed it right. And these guys, they took it as your integrity was breached

because you had promised them money regardless of what happened because you hadn't communicated well how profit sharing were. So you guys got to start being very clear about where profits come from. When profits are up, bonuses will be up. When profits are down, bonuses will be down. When profits are non-existent, we all did that together, people, and no one gets anything.

Because there's no profits. We can't even pay our bills, and that includes giving you extra money. So when sales are down, we don't have an ice cream party. We only celebrate when sales are up. This is like adult stuff. It's not a freaking kindergarten. It's a business. So you guys reestablish that.

And I've got a feeling, though, Mike, that you're in, you're not at the top of the leadership team enough to pull what I just claimed off. I mean, yeah, I was given, I'd run the day to day. That was kind of a. You don't have the power to fire that guy, do you? you? No, I did. I fire people. You fire that guy on the spot? I didn't fire him because I had a hard time with their tenure. You have the power to. I could. Yeah, I do. All right. Do you have the power

to communicate to the whole team what I just talked about? And I did that. I set him down. I said, this is where we're at this year. This is what you're going to expect. But I want to reframe whether they're due money or not. You're not due a thing. This is a gift. I am sharing some of my money with you. It's not your money. I want to reframe who owns it. Because that guy, when he said that, what he was saying was, you promised me this no matter what happened. That's what his brain was telling him. Right? Right. Well, and he got used to it over the 30 years. Yeah, yeah. But he also felt entitled to it. Right. And that's my fault as a leader. When I allow somebody become entitled to something that they're not entitled to, I have done a poor job of

communicating this. And the problem where this crap is, you have to say it over and over and over and over and over. And about the time you get sick of hearing it, that's about time they hear it. You just got to do it over and over. You have the chief repeating officer. We literally, our CFO wore a T-shirt on stage last Monday that said, profits happen when revenues go up and expenses go down. It was a black T-shirt with white letters. That's how ridiculous we are about repeating this over and over. So we don't want anyone to think that, you know, but I, you know, if we make a big old pile of money, I'll share it with my folk. And you will too, right? But if we're not making any money, we did this together, boys and girls. We'd either went up together or we went down together. So, but we're not going to have

anybody threaten us here. We don't do that. We don't have, we're not, I don't threaten them. And, you know, I'll explain to you. You can't. do this and work here. That's not a threat. That's just an observation. Okay. But you don't, you don't give me a threat like, wow, I do this again and I'll just walk out. Well, I can help you with that. Let's walk out now. I can handle that. Beligerent. Man. Yeah, that's the tail wagging the dog. And I don't, you haven't been here long enough to be a smart ankle like that. So you need to rethink what you just said, because those are firing words. So you got about 30 seconds to rethink that. or just fire me the ones, good with me.

That kind of crap, I got no use for it. And that's arrogance and belligerence, and it's subversive in your culture. Yeah, that's not easy, but Mike's learning how to make the hard calls. Stay with us, we'll be right back. Next, we have a call from Isaac in Sacramento, California, who wanted to know if he should quit his full-time job and go all in on his fast-growing construction.

business after it exploded from 300,000 to over 3 million of revenue in one year. I own a small residential construction company in the Sacramento area. Last year was our first year in business. It was more of a side hustle. We did about 70,000 in gross sales with about 10,000 in gross profit. This year, we're going to do about 300, 330 in gross sales with 70,000 in gross profit. And next year, we have a little over $3 million in signed contracts. with a projected 350,000 in gross profit? How the crap did you grow from 300K to 3 million in one year? Clients, clients, I mean, honestly, just bigger jobs.

Word got out that you weren't ripping people off, huh? Word got out that were reliable. Yeah, you do what you said on the time frame that you said, and you can't beat them off with a stick. Right. Good for you. It's piling up. The question I have is, this is my side job.

I work a full-time salary position remotely for a, I'm a project manager for a company. You make 70 on 300. Are you going to make 700 on 3 million? No, so that's kind of where I'm playing with the numbers. We're going to make about 350 on the 3 million. What do you make at your day job? Make 110 roughly. Sounds like a waste of time. There's a few factors that are kind of playing in that's having me a little scared.

So number one, we have a newborn baby, their first baby. So just the security is kind of scaring me a little bit. Number two, we lose our health insurance. And number three, my wife doesn't work. She's a full-time mom and student that we're cash flowing her education. So just kind of scared to make the leap and really the question. One 50 divided into 350 is two and a half years. Right.

In next year, you're going to make what you would make in two and a half years at your other job. You can buy health insurance with that. Right. Easy. You can feed a little baby with that. Easy. The only risk is if the next year you make 70. Right.

Oh, wait a minute. You made two and a half years. So the next year, if you make 70, it's now going to take you three and a half years to get back. to even. You're going to get so far ahead next year that if you, like, took two years off, you'd still be ahead. Does that make sense? Yeah, yeah, it does.

So what do you not believe that, okay, if in 2025 you make $3 million net, or gross, and you net $3.50. So you run about a 10, 11% margin. Why do you not believe that the following year in 2026 you will do at least that well? Well, the contracts I have for the job starting this year, this next year for the $3 million, I've been working with these clients for a year in the planning stages. Are you not working with clients now to fill up back when those are done? Exactly.

We don't have anything for 2026. And that's what it takes about a year. We'll get something in the pipeline, man. Where'd you get these customers? referrals from architects. I only market to architects and designers. Then you need to be working architects and go, where's my referrals for 26?

Okay. You can't just work on the projects and not keep the pipeline full. Part of your job as a business owner is fill the back of the pipeline as you finish these other projects, you've got new ones to replace them. Right. Okay. It's not just executing the project. It's keeping the pipeline full.

That's the marketing. Okay. Yeah. I think the whole thing. thing is growing so fast, it's scary, and you don't feel like it's sustainable. You don't have confidence in yourself to sustain it. And that's part of it. The other thing is, like I said, it's mostly been a side hustle to pay off our debt.

If you make 350K, it's officially not a side hustle. It doesn't matter where it came from. But all that matters is whether you believe in the future. And I listen to, the guy I'm talking to, I don't know how you could screw this up. if you, unless you just don't keep the pipeline full. But if you'll go fill up the pipeline, I think you'll have at least $3 million the next year, don't you? Hopefully.

Not hopefully, I think you can do it. You've proven you can do it. Unless these contracts were just a fluke, and it was a one-time thing, and people like that don't exist anymore. You've got the only ones, and you're done. That's just not true, right? Right. There's other people just like them in 2026 that need your help.

maybe it's $4 million. Right. So health insurance is bull crap. Go buy some health insurance. You're making $250,000 more. Of course you can afford health insurance for a quarter million dollars. And little babies can eat on a quarter million dollars more better than they can eat on a quarter million dollars less. So new baby doesn't cause it.

You're making more money. If you're making less money, those would be valid concerns. If you said, I'm making $150 and when I go full time, I'm only going to make $100. Okay, now we can talk about I got a baby and health insurance, and that makes me nervous. But you can't talk about that when you're making two and a half times more, right? Right. You're a stud, man. Act like it.

Oh, thank you. You got this. You can do it. You can do it, man. Go into the game and knock something over. You can do this. You are better than you feel like you are. And you know how I know that?

$3 million worth of people bet on. on Isaac. I don't even know you, but I know people don't give dofuses $3 million. Not much anyway. And so, you know, you're obviously doing a lot right. There's a lot to be proud of here. A lot. Can you do some things better?

Yeah, I'm glad you're listening to this podcast. I'm glad you're engaged in Entree leadership. We'll help you do better. But, man, you're a stud. You got this. You're killing it. I'm so proud of you. Well done, sir.

quit your stinking job and go to work and be a business guy, man. You're that guy. Get her done. Man, you are on fire. Way to go, Isaac. Sometimes the hardest part is just taking that first step. Stick around. We'll be right back. If you're working 60 to 70 hours a week just to keep your business running, you're headed for burnout. The only way to grow without running on empty is to stop working in your business and start working on your business, and that takes advice and accountability from people who actually make payroll. That's why you need to join an advisory group. You'll get a coach and a circle of business owners like you who will help you stay focused and grow without sacrificing your nights and weekends. Find out if advisory groups are right for you at entreleadership.com slash advisory groups.

Or click the link in the show notes if you're listening on YouTube or podcast. And lastly, it's a call from Todd in Portsmouth, New Hampshire, wondering how to pass down his $20 million family company to his daughter, while also treating his other children fairly in the process. We got into succession planning, tax strategy, and transition of leadership. I am the founder and CEO of an entertainment lighting and installation company that's been in business for 40 years with a top line revenue of 20 million. and 42 full-time employees. My question is, how can I successfully transfer my business to my daughter while preserving my estate and considering my other two children who are not involved in the business? Hmm.

A lot of different variables there, brother. So is she operating with you now? Yep, she's been here about two years, and she's doing fantastic. Okay, so we got leadership and succession plan kind of in mind and heading off. What are the other two kids doing, and what's their status relationally? Great. I mean, just, they're just in different fields. You know, one of them is an IT and the other one has her own jewelry business and they're both doing great and very happy. Okay. And do you have other assets? We do. Our whole estate, I think, including our business is $22 million, and I think it's $10 million. The business is estimated at about $10 million and $12 million and a mix of real estate and cash.

Okay. Okay. So the business is estimated at $10 million, and then there's $12 million of other stuff. Yep. Okay. Well, if you do, are you married? Yep. My wife is part owner. We share the ownership. Yeah. Okay. Have you been working on estate planning from a tax perspective with a state planner yet? So not really. We've talked to some estate planners. They've suggested things like Idits, and we looked at that. You don't need any of that.

Okay. Your estate's not big enough. Yeah, okay. I mean, today you have 14 million, 13.99, and your wife has 13.99. So you've got 28 million you can transfer with zero federal estate tax between the two of you. With a simple A, B, marital trust, it's called. It's a very simple, very simple transaction. Now, when you get above today 28 million, then you've got a problem.

So is your business growing? Yes. How old are you? I'm 63. Are you healthy? Yes. Okay. So we're going to get into a whole bunch of weeds here.

You're ready for the weed eater? Okay. Before you go to the weed eater, I think I'm out of misspoke. We do have a revocable trust set up. That's pretty current right now. Okay. Have you moved the business into the trust yet? Yes.

Okay. So you've- The real estate and the business is in the trust. Oh, okay. All right. So you've already frozen that from an estate planning. standpoint. So you're not going to have an estate tax issue. Right. We have the cash in there, too, like any extra cash. You're not going to have an estate tax issue because you've already moved it,

and if it grows beyond $28 million, it doesn't matter the value of the real estate or the value of the other. The only thing that you'll pay taxes on is on the basis, and there's no taxes on the basis because it's under $28 million, assuming you've done a simple marital trust to go with your revocable trust. So the marital trust is that your $14 million, if you're $14 million, if you're $18 million, if you die before your wife is left to her in trust upon your death, her 14 million, she can leave to the kids, and then she can leave your 14 million to the kids upon her death. In the meantime, she can live off of the 14 million that was in your trust. So that's in simple A, B, trust. That's how that works. Okay. Does that make any sense? Yes. Okay. Then on top of that, if the stock of

the LLC and the ownership of the real estate has moved into a trust, The value at the time you moved it into the trust is frozen in time forever on the irrevocable trust, which keeps, in the words, if the real estate goes up in value or the business goes up in value to breach that $28 million, it doesn't matter because it doesn't count. It's not in your estate anymore. You've already moved it out of your estate. I moved 99% of Ramsey out of my name 16 years ago for that reason. Okay.

See, I'm in a revocable trust right now. You have an irrevocal trust? Well, I have a children's trust set up that owns Ramsey. Okay. 99%. I own 1%. I own the voting stock. Yeah, one of the, that's smart.

One of the lawyers told me to split off four voting shares, and then I can set that to my daughter that's in the business, and then she could control it when the time comes. Yeah. Then that brings you to the other question that you guys have to answer as a family, and you can answer this one of two ways. I have a friend who is Gen 2. He's in his late 50s, and the company's probably worth $50 million or maybe $100, somewhere in there. I don't know exactly, but it's doing really well. And his dad dictated that unless you work in the business,

you don't inherit any of the business. Hmm, okay. So his brother, who's not in the business, has no ownership in it after his dad passed. Okay. I, on the other hand, did it the other way. I left it to my three kids to own it regardless of whether they work here. And then to the grandkids to own it regardless of whether they work here. So there's two different hats they wear.

They wear an owner hat. And then there's the leadership team hat that takes direction from the three owners. And so when I'm gone, the gen two of the three Gen 2 Ramses will, dictate to the leadership team how Ramsey is run. And at this stage of the game, one of them is Daniel, and he's the president. So he works for his two sisters and him as an entity. Does that make sense? Yes.

And then they can, and as there are profits, they'll be distributed to the owners of the business beyond the compensation packages for the people that work here. So for instance, your daughter could get a percentage of profits, in the future as the CEO when you're gone, and then the profits that are left over after she gets compensated for her CEO package could be distributed to the three ways. Right. Yeah, we have it set up third, third, and a third right now in the trust.

Or you could leave the business to her and the real estate and other stuff to the other two. Right. You happen to have numbers that allow that. Okay. Do you think it would be safer as far as? as just relationally between the kids if we kept them separate from, you know, my daughter just owning the business and the other two, just owning other or inheriting other parts of

the estate so it's not. I mean, I'm just concerned that possibly, you know, my daughter might want to. I'm going to sit and talk to them about it and go, listen, here's the thing. I mean, because the two that don't work there could gang up on the one that owns it and works there. Right. That's what I was concerned about. Like if they have different thoughts about, oh, I'd like to get, you know, like to do different things with business or the... Well, now the operation of the business is not up to the owners. The owners are picking up only major decisions of the business, including giving, you know, direction to the CEO.

Right. But the CEO doesn't have to come and ask them whether they're going to hire somebody or whether they're going to buy a piece of equipment. They run the business. Right. But I was just thinking more if they wanted to get their share out just for whatever reason, and they're putting pressure on it. You can't, yeah.

You've got to dictate exit strategies on that and part of the trust. if you're going to, ours aren't allowed to take theirs, period. You can't take it. The only thing you could do is get thrown out. That's it. But you can't liquidate your share at Ramsey because we don't own it. We manage it for God.

It's not ours. And so that's the way we're looking at it. So that's, that's the, but if you're going to allow them to sell their share, then you need to put terms on it under which you could, one of them could buy the other one out, or can an outsider buy or not, all that kind of stuff you've got to get into. but you happen to have $10 million worth of business and $12 million worth of the other,

if your daughter that got the business and the other two got $6 million or some change each, that's not unfair. Right. If you wanted to go that way, it happens to be with your numbers. Or you could adopt my friend's thing and go, if you don't work inside the business,

you don't get to own it. That's not unfair. It's not unethical. It's just a different way of looking at it. I chose not to do it that way just because of the way I've, you know, worked it through, but I don't have a big problem with that. That's not a bad idea because at least they, you know, they're not sitting. And if you, the other thing you can do is extrapolate this out $60 million and 25 years

and another generation and try to anticipate who's going to misbehave then. Right. And then that kind of tells you what your weak spots are. if you magnify this thing, it kind of points out what the weaknesses of your system are. Because if you got it, the only way it works is if the three get along perfectly, well, that doesn't work for the next gen, because there might be 19. Right. In my case, there's eight in gen three already.

And that's supposedly all that we're getting. Yeah. So, but anyway, you follow. So, I mean, it's a great discussion, and you're very wise to have it ahead of time. There's not a right or a right. wrong, the only wrong is not dealing with it now. Right. I have all the other thoughts.

Like, if I was to, how do you set out a timeline, like for me to transfer it over to, like, her running the business, like being the GM in my seat and then me being out of it? Like, do you go by your energy level and like, you know, am I? I go by her energy and competence level. A stage skated off of their competence. Okay. And as long as they are competent, we can move them up and put more weight. on their shoulders, but they have to have the muscles and the shoulders to hold it.

And then I'll put a little more weight on, and then we'll put a little more weight on, a little more weight on. So three and a half years ago, we moved Daniel in the president's office, and he and I are co-running the business 50-50. But I've dialed back during that three years, and it's no longer 50-50. I'm not as day-to-day in the operations as I was three and a half years ago. But so it's gradually, gradually, and as long as he carries it, I'm going to continue to gradually click it off. Not because I don't want to do it, but because I've got to be. able to turn it over to him. I've got to be able to turn it over to them to the next gen. And I've got to build in them the character and the intellectual strength and spiritual

strength to carry a load this heavy. Right. Yeah. So you kind of go by their readiness, you know, to give out the responsibility as they are able to take it. Exactly. Because there's two things that don't bless your kids or the business. Thing one is if you give them something to run before they're competent, well, that hurts everybody. And including them. And thing two is, when they are competent, you don't give it to them. Mm-hmm. Right.

That hurts everybody involved. Because you end up with a guy I talked to the other day. He's 85. His son's 65. And the old man's still running the freaking place. Yeah. He's basically neutered his own kid. Gotcha, yeah.

You know, he's 65 years old. He's never run anything. My God. You know? That's pitiful. And so all that is ego. And so he should have turned that stink. thing over 20 years ago is what he should have done when the kid was in his 40s and the old man was

in his 60s and then they had a good steady flow of conversation and now what you've got is all this weird nepotism garbage going on and i don't think that i don't think the business is going to make it i think they're going to fail because of their personal weaknesses but yeah that's what you're facing is those kinds of decisions and but you're brilliant todd for uh being proactive in this and making the decisions there's not really a wrong decision there's not really a wrong decision, except giving it to them too soon or too late by not being proactive. There's not a wrong decision whether you give it, make them run it together, or you split it off and let her have it and you split the other assets off to the other way.

In our case, Sharon got nothing out of the business when I die. The kids get it that day. The next gen 2 gets it. Sharon's got other assets to live on while she's alive, plenty of them. So, you know, and she's not, she doesn't continue to run this. and so that sets her up. And since all of my estate planning is presupposed on I die first, I am watching over my shoulder.

I can just tell you that. So that's fun stuff. Hey, guys, this is great. Great discussion, Todd. Man, what a year. We covered a lot of ground in 2025. In 2026, wow, going to be even bigger. Hey, thank you to everyone who called in with your questions and stories.

You're the real heroes out there doing the hard work every single day. and a big thanks to our interview guests and to all of you who tune in every week. The show wouldn't be what it is without you. We can't wait to see what 2026 brings. We've got more conversations, lessons, and leadership content coming your way to help you grow your business. Until then, remember, better a weary warrior than a quivering critic. This world needs more high-quality leaders. So take courage and lead.

Thanks again for listening to Antra. leadership.