EntreLeadership - The Easiest Place to Find Top Leaders for Your Business

Episode Date: April 1, 2024

Today we’ll hear about: How to not overlook your next best leader When to know if it’s okay to sell your business so you can retire 12 proven ways to make the best hiring choices How to avoid getting screwed over when buying property for your business Next Steps ✅ Download the EntreLeadership 12 Components to a Good Hire: https://ter.li/5b2keb 📊 DISC Assessment: https://ter.li/DISC 🗳️ Submit your question for a chance to be on the show with Dave Ramsey: https://bit.ly/3HUgAgi 👣 Find out what Stage of Business You’re In:  https://ter.li/axd39b ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/y8qdo7   🏢 Attend EntreLeadership Summit: https://ter.li/fcazl2   🎤 Attend EntreLeadership Master Series: https://ter.li/wcjhpu ☎️ Learn more about EntreLeadership Coaching: https://ter.li/ycznhl 💵 Learn more about Ramsey SmartDollar: https://ter.li/4imot0   🏅 Help us make the show better! Please fill out the quick survey form. https://bit.ly/3O8fRvh   Offers from Today's Sponsors NetSuite: https://ter.li/x1t20q BELAY:  https://ter.li/yohiu6 Payority:  https://ter.li/fh2oau Trainual:  https://ter.li/a8zexl Listen to more from Ramsey Network 🎙️ The Ramsey Show   🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💼 The Ken Coleman Show Ramsey Solutions Privacy Policy https://www.ramseysolutions.com/compa… Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast, where I take calls from leaders like you about what it takes to win in any stage of business. I'm Dave Ramsey with over 30 years of experience in the trenches. I have a PhD in D-U-M-B. I've done all the stupid stuff in business you can do, and I've survived in spite of it. I've done enough smart to offset it. And so I'm like a practitioner. This is not a theory. show. This is not a show that's a think tank about what someone has an opinion about leadership on and

has never made payroll. We made payroll last week and we'll make it again next week. And that's how it works around here. So we're here to help you if you got a question about business, about leadership. This is your show. We love small business people. We love the leadership space. I love working in it. I love speaking into it, and I've learned a lot in the 30 years of mistakes I've made. So come in and join us. You can go to entrellatorship.com slash ask and leave your question, and we'll make you a caller on the show, or you can call us at 844-944-1070. Troy starts this hour in Louisville, Kentucky.

Troy, welcome to the Entree Leadership podcast. Thank you, sir. How are you doing today, Dave? Better than I deserve. How can I help? Just a little bit about me. I own a towing service in Louisville. We have 20 team members. Last year's revenue was 1.7 million. We grossed our profit was our net was about 255. Not too bad, but we are just looking and I need some advice on how do I find leadership that cares about the vision and value of my company to help me grow it to the next level and to also challenge me to help me grow. grow. Okay. Well, I mean, leadership working on your team's job is not to challenge you and make you grow.

It's you're already challenged or you wouldn't even ask that question. I want leaders on my team that aren't afraid to bring something to me in an area that they see that I can work on. But for their job as overall to challenge me and make me grow is that's on me. that's my job now as far as how do you find them to get the people to actually care and align with the mission mission of the organization now that that's a different issue and that's that is something you want to do because you don't want leaders that are not aligned with that because what you've got then is a leader working at J-O-B and they're not a leader at that point they're a boss so leaders are leading they're showing the way and if

If they don't know the way is the mission, the calling of the organization, here's what we do, here's what we believe, here's our core values, here's our mission where we're going. And if they can't restate that, live that, lead the way in that, then by definition, they're not a leader. So how do you find those? It's harder outside the organization. If you've got people, if you've got people inside the organization that are showing themselves to have potential, because by actually caring about the place, actually caring about the job,

they're not just there to see how little work they can do and how much they can get paid. They're not cutting corners. They're leaning in. They want to make the place better. They're doing stuff that's really beyond what you've asked them to do just because they care. That's someone you can tap on the shoulder

and start to move in a leadership direction. And I've had more luck doing that, promoting from within, is the idea, than I have bringing in outside people and plugging them in. Now, we've done both, but I've had more luck

having somebody that's a fired up, wired up, and for the first time someone took the bridle off of them and let them run a little bit, and then they go, I look over, and they're over here doing this thing, and I'm like, what is he doing over there? Because he just, he can't keep him, she can't keep herself from doing better.

They just scratching and clawing. And if you got one of those on the, team now, that's probably your best next leader. Okay. So try to promote internally as the best. Did anybody's face pop into your mind when I was saying all that? There's actually a couple. Yeah, I have a couple of folks that work for me that do more than just come in there for a job.

Yeah. I really do have a couple that. Now that you pointed out, I have a couple. And you think they got the gray matter to do more? I got enough brains. I think so. Yes. I think so.

They got upper potential. Correct. Yes. Sometimes when you hire them in, you don't think about promoting them that way. I just say, I hired you for this, and this is kind of what you do. That's what I did. But after trying to bring someone in from the outside and get them to get it, when I got somebody internally that already gets it, it was easier to deal with the guy that's already got it, but he just needed some polish.

Yes, yes. And so what you could do real easily is start a – a book club and say, hey guys, I've been working on this entree leadership stuff. I want you two to meet with me at an hour before work, hour after work on Tuesday or whatever, make up a time. And here's two books. And we're going to go through these a chapter at a time because this is how I'm running this business. And both of you guys are showing that you've got real potential in leadership someday down the road.

here. And I want to start to talk about that and show you what leadership looks like. I'll have the team ship you three copies of Entree Leadership. So you've got a fresh copy for you and they've got two fresh copies. And then y'all just take that and start it or get somebody else's book. I don't care. But I'll send you those three. And here's what'll happen. As you're going through 12 weeks of 12 chapters, it's going to start to be really clear if either one of them can do it. Yeah. Okay. And your job is to open up the conversation in this book club, and I want them to talk about

what they're learning in that chapter and what it means, what we could do differently or better around the company, and you need to shut up and let them talk. because they will, that you'll look at them and go, oh, he's a long way off. Or, man, he's really close. This is the ultimate interview process. Okay. Yeah. That's the angle I would take.

You're a sharp guy, man. You've got a good business going. You're thinking about what the next stages are. I mean, it sounds like that these days you're probably at the pathfinder level and you're trying to add that layer of leadership to get you on up to Trailblazer. And you may be in the last stage as a treadmill, but I don't think you are. So I think you're really doing good with your stages here. And the good news is you're thinking about what we've got to do to make this company run more

efficiently from a leadership perspective and an operations perspective. And you're really doing good, Troy. You're a stud, man. Keep it up. Keep it up. You call us any time. We'll try to help you, man. We appreciate you being here.

I'm Dave Ramsey. All right, guys, this is it. Entree Leadership Summit, just a couple of weeks away. You got FOMO if you didn't get your tickets. Well, I can help you with that. You can still get a live stream pass, but you're almost out of time to do that. See, you pushed it out, pushed it out, didn't get your ticket. Now if you're going to push it out, you're going to miss the live stream.

Don't do that. Get out your phone right this second, right now. Get it out. You got it? Now, I'm talking to you. Get your phone out. You got it? Okay.

Entreeleadership.com slash live stream and reserve your spot on the live stream. You can tune in with 3,000 other leaders from across the globe and hear world-class speakers like best-selling author of Atomic Habits, James Clear. Coach K, Hall of Fame Cat Basketball Coach is going to be with us. First female F-14 Tomcat fighter pilot, Carrie Lorenz, amazing. Me, Dave Ramsey, a bunch of other people are going to be there. You do not want to meet this. With one live stream pass, you and your whole,

whole team can stream in the conference center without worrying about travel expenses, time away from the office. You're going to get access to the replays for all your favorite talks for 60 days. Don't wait. Go to Entreeleadership.com slash live stream. Lock in your live stream pass today. David is with us. David is in Chicago. Hi, David. Welcome to the Entree podcast. What's up? Hey, David. How you doing today? Better than I deserve, sir. What's up in your world? Well, we are a, this little backstory. We're a small family business based around a brand that I created in 2008. It's in the golf industry. We're kind of an interesting accessory in the golf business. And we did around about 850 gross last year and netted about 200 actually. Wow. And we've actually grown 200% since 20%. 2017 when we nearly crashed and burned through mistakes.

And we've kind of pulled ourselves up. And we have, this myself, my wife, and two employees. And we're kind of a scrappy, unique little company in a, you know, large golf industry. And it's kind of a lot of fun. But that's what we do, you know. Okay. How can I help? My question, yeah, my question is, because I'm at the stage of life now, even though I feel like I'm 27,

I'm actually 62, and my wife has been with me, like I say, of the sense. So the entrepreneurial journey is tough. And so my question really is, how can we retire from our business? And can we actually afford to retire? Or is there another way we could perhaps do something in between? Because it's not a legacy business. And so I hate to see the brand die. But at the same time, I don't want to die doing the brand at 80 years old.

That's my dilemma when we do everything, you know, it's 24-7. Is there not someone in that industry that would buy it? Actually, I've got an NDA in place with somebody that was interested, but it's one of these things where I don't know if, you know, our own personal situation financially is actually thanks to you, debt-free in our life and debt-free in the business. And so that said, I was very late to the retirement party because I kind of put everything into my business

and sometimes when it looked like it was going to go down, it was, you know, okay, we're going to sell this, do this, just to survive. And so... If we're not a million dollars for this, you'd be okay, wouldn't you? Do you think that that's a possibility? I don't know. Is it a million dollars...

Did it net $2.50 after you were paid to... a basic salary or that you got paid zero? No, that's kind of like net. That's kind of like net. And because it's really, you know, very small, like, you know, of our gross profits, you know, so we. Okay. Out of the 250, you hadn't paid rent yet. Oh, no, that's, that's everything.

So we net. So we, we, we, okay. Did you have, do you a salary in that? Yes. How much? Um, well, within, within the gross, you mean? I'd add that. No, I'm sorry to.

Did you get paid before you netted 250? No. Okay. No. So at 250, you have so far been paid zero. Yes. Okay. So we kind of, you know.

So basically, though, so the thing is probably worth somewhere between $800 and a million. My strategy, and I wanted your opinion on this, Dave, is if I was to keep going for another five years, obviously, and then grow it. I think we can grow, you know, over the next five years. Okay. Obviously, it's going to be hard work. I've got no problem with that. Then, yes, I would like to sell it. However, we've got one idea.

There's a vendor that we work with, who I think might be a great target to buy it. Yeah. But I don't think they can afford it right now. I'd love to know your... Who's the NDA with? The NDA is another company in the Gulf industry, but it's gone quiet now because I think,

you know, so obviously either they've completely lost interest or they're just waiting for the whole interest rate economy to sort of settle down a bit and then we can revisit. You know, we haven't broken off the discussion, but I haven't really pursued it because I've grown like 30% since I was talking to them. So I'm quite happy to not, you know, move on that at the moment. Okay. So it sounds to me like on the one hand, you're worried about how you're going to retire. but on the other hand, you want to work this three more years. Yeah, I mean, I'm... So let's just have a plan to sell it at 65.

You know, I mean, I just wonder, though, because we don't have any... I have about 120,000 in a 401k. We've only just really started to... Well, if you make $250,000 a year for three years, you should be able to bank some money, shouldn't you? Oh, yeah. So you have some money in investments. You ought to have $300,000 and investments at that.

point, and then if the thing grows and it's worth over a million and you get a million dollar check from some golf company that once your accessory that you're building and selling, if you find somebody that does that, because here's the thing, if they roll this into an existing product line, they're not going to treat the purchase like a standalone business. They're going to treat the purchase like this product line is going to be ex-profitable, which is better for you. If you treat this as a standalone business, we have to take your 250 right now minus what it would take to hire somebody to run this company.

Instead, if I roll it up into an existing product line, like they've got 10 other golf accessories, and they add this golf accessory to it, and they can make $250,000 profit, then they're going to be willing to pay you probably a million dollars on that. right what do you think about my idea to perhaps you know go if we kept a different route so we actually kept part of the business and perhaps sold it over five in a five year period to people that we you know we like and we know and it's a really good fit even though they

may not come up with a lump sum to start off with do you think that's that's kind of overcomplicating things and yes is open to things okay yeah okay yeah i think i think you're going to have You're going to spend more time screwing with that than you are selling your product. And selling your product you're really good at, David. Right. You've taken it from almost broke to a million, to a million dollar business now. Right, right. That's pretty cool.

And I've got to give you a shout out, though, because seriously, we discovered you just before COVID. Thank goodness, because I was doing so many things wrong, made so many stupid mistakes. And you slapped a lot of sense into me over the hours and hours that were. that we've been listening to you. Right through the microphone. Yeah. Oh, seriously. Including driving six hours, listening to how stupid I was,

and I drove my new car, straight onto the used car lot and said, I want to get rid of this thing, get me. And I sold it the next day. I'm not joking. And my wife was completely in on it. And without her help, you know, we definitely couldn't have done what we've done.

And so we kind of want to have that work-life balance. and we enjoy doing what we're doing, but we just don't want to be doing it. The sooner you want to retire, the sooner you've got to sell it. But you're being pulled in two different directions. You feel like you can maximize it and get more for it if you wait three years. And on the other hand, you're tired of working all the time. Right, right. And so you just got to decide which one you want to do and embrace it.

But here's an interesting thing. You will lighten up the weight. of all of this once you make a decision. Okay, and so if you just write it on a whiteboard, at 64 years old, April the 1st, I'm going to put this on the market, or whatever it is, I don't care. You come up, but you put a date certain.

It's just between you and God and your wife, right? And you just put that down there. Then the work between now and then is just to get more for it because you're blowing it up. It makes that work, that last run easier because it's got a date certain that it's going to end. It's going to feel lighter. I like that.

Yeah, and that'll give you some release. And I don't care where you put that date. It can be next year or it can be two years. It can be three years. You decide all of that. But you and your wife need to sit down and prayerfully talk about this and say, all right, God, what do you want done with your business?

Honey, what do you want to do with this business? You're tired. I'm tired. But I think if we can get it up a little more, we might get a million and a half instead of a million. If we push it on a little bit, let's push, push, push, how much longer you want to push. And then the two of you can sit and talk about that.

She may go, I'm done now. And you may go, I kind of am too. But do you really want to, let's go one more year. You want to do a year? Okay, let's do a year. I don't care, but do you talk about it like that? And then you can find the energy to make that last push through. And it's all just for maximization of this.

the good news is the golfing world is um is exploding oh man it if if one sport got the benefit of the fouchy pandemic it was golf it's blowing up big time this is the entree leadership podcast as we've worked with 10 to 20,000 small businesses across america we have clearly identified how you go through the evolution of a small business. The first thing we've identified is there are five distinct stages of business. The treadmill operator, where too much of the business relies on you, the pathfinder, where your lack of clear direction is what's holding you back. Then you move on to Trailblazer.

You lack the leaders and the plan to scale the business. One of the sweet spots is the fourth one, peak performer, and that's where your business can become too comfortable because you've become very successful. And the last of the five stages is the legacy builder stage. And that is where you start to do what our last caller is doing. You're trying to figure out your exit. And are we selling it? Are we passing it to family?

What's the plan? Now, while you're going through these five stages, you have six different areas that drive the business, some more so than others in different stages, but they're all present all the time. The six different stages are personal because you're the lid on your business. John Maxwell talks about that.

The leadership lid, he calls it. And you're the problem. You're holding it back, but you're also the solution because you can fix this problem. Personal growth. The second driver is purpose. The business is bigger than the bottom line. What is driving this?

What's our mission? what's our purpose. The third driver of business that causes business to grow and succeed is people. Building a unified team, a team you can delegate to, a strong culture.

Then when you got the right people, you can actually start executing the plan. And that's strategic thought, budgets, executing a plan, detail. Winning is an intentional act. It doesn't occur on accident. Then and only then can you really work

on the actual problem. product, delivering the excellence of the profits will take care of themselves. And the last of the six drivers is profit, and profit does occur. It's a natural byproduct of personal growth, having a clear mission and purpose, having the right people, the right plan, which leads you to the correct product, and profit will be a byproduct of that. And then you'll go through it again, and you'll get better at each, and then you get better at each, and then you get better at each, and then you get better at each.

probably one of the of those six drivers one of the areas that gives people in particularly small business the biggest fit is the people driver business is easy until people get involved and then you've got a deal with crazy and drama and sadness and betrayal and thieves and whatever else all the negatives, but you also get the great blessing of getting to work alongside warriors who will also paint their face blue with you and fight the king until he goes down, fight the enemy, fight the dragon, and you get this great band of brothers and sisters with you, and it's worth it. So I determined several years ago in writing entree leadership and then in teaching this material for many years that this hiring thing is a big deal. You can't do. You can't

delegate the Kentucky Derby to a donkey. You have to delegate the Kentucky Derby to a thoroughbred. And so you can hire the wrong people and you can't do delegation. You can hire the wrong people and you'll have crazy in your building and you can't get nothing done with crazy. Crazy takes up a lot of air. You can hire the wrong people and they simply don't have the gray matter to execute the job. They don't have enough brains to do it. You can hire the wrong people and spend all your life messing with issues and problems and lawsuits and idiots. They're everywhere.

It's crazy, y'all. And you can hire the right people and you get a band of brothers, a band of sisters, a band of warriors that will fight any dragon. And they can do things you never dreamed that could be done. They know things that you don't know. I've never written a line of code. I have 400 people on our web and tech team, and I don't know what any of them do. It's wonderful.

They're so talented and so smart. The only thing I know is it works when they do it. I like that. That's a good thing. I hired the right people. We, at Ramsey, I'm very good at hiring. So we look at 12 different things, the 12 steps to a good hire.

They're not actually steps. they're just things we do. Steps would mean they would be progressive. We call them the 12 steps to a good hire, but we're not 12-stepers. That's not what we're talking about. And there's no addiction here, except I'm addicted to donkey avoidance.

That's it. That's the whole thing. So the 12 steps to a good hire, if you want a copy of this sheet, just hit the show notes, and we're going to put it in there. It's free to you. But I'm going to walk through it for a second

just because it's such a big deal. This people driver in the different five stages has different issues with it. But man, you can't delegate until you get the right people. You can't create culture until you get the right people. You can't get production at the level you want it until you got the right people. It's everything. So we're Christians. So our first step is prayer.

Lord, you ask us to do this work. Please send us the right people. And Lord, keep your crazy children around. way because Lord, some of your children are nuts. And he knows that. And he knows who belongs here and who doesn't. So I'm asking him for help. The second thing we do is we get referrals.

Internal referrals. If you have people on your team that are thoroughbreds, at this stage of my life, I've got 1,100 people on this team and somewhere around 1,100 of them are thoroughbreds. So it's all there. So guess who thoroughbreds run around with and they're off time? Guess who they go to church with? Guess who they know in the industry that they're in? Other thoroughbreds.

They also can identify a donkey and avoid them because they don't want to work with donkeys. They're a thoroughbred. So they're not going to refer donkeys into the organization because they'll have to work with them. And they like working with thoroughbreds. Thuribreds and donkeys in the same barn creates a mess. You frustrate the donkeys because a thoroughbreds

very presence will reveal a donkey's donkiness. And just by being in the barn with them, you go, oh, that's a donkey. And you might not have noticed it if it wasn't standing beside a thoroughbred. But now the thoroughbred's there, so they don't mix well. And don't like thoroughbreds because, you know, they expose their don't kinkyness. Thurrobreads don't like don'ties because don'ties are don't do nothing. They don't care. They sit around going, go, well, the boss is an idiot, and I'm going to not work much.

and I'm a quiet quitter and all this other bull crap. All right? And so you just don't want to deal with that. So you want your thoroughbreds to bring you other thoroughbreds. We pay $500 cash to a team member that refers someone who goes through the interview process, gets hired, and stays 90 days. And I stand up in staff meeting and count off $500 cash. And I have everyone that's getting it stand up,

and they've got $500 cash in their hand, and all 1,100 people count one, two, three, four, five, while I peel off those Uncle Benjamin's so that we make a visual, emotional representation that referrals matter. And your opinion, if you work here on someone else coming to work here is a $500 opinion. We think it's awesome. We get some of our best people from our best people. That's how you hire. Number three, the 30-minute drive-by interview. Quit doing two-hour initial interviews.

It's a waste of time. Because you know in the first six minutes on some of these people, you're not going to hire them. You know when you walk up to them at the front desk and they hadn't even opened their mouth yet, you're not going to hire them. You just looked at them and went, you're kidding. You dressed like that for an interview?

No. What, you fall in a tackle box? I mean, what's wrong with you? You come in here, this is not a coffee shop. This is a business. Have you got no sense? You know, I mean, this is crazy, y'all. So, you know, don't spend two hours interviewing with this.

There's no need, okay? Spend 30 minutes. And besides that, they're not going to get hired. You're not going to make a good decision in the first interview anyway. You're going to do more than one interview. and my old HR director, because I'm horrible at this, I would spend two hours selling you on how wonderful this place was because I'm so fired up about this place,

knowing the whole time I wasn't going to hire you, but I just can't keep you, I got to make you want it anyway. It's just a salesman in me. I'm awful at it. So my first HR director taught me this, and it really helped me. 30 minutes. You have two ears and one mouth. That's your ratio.

You should listen 20 of the men. minutes and talk no more than 10 minutes and do not let this interview go 31 minutes. Have a little ding goes off on your phone and end it. Oh, I'm done. I got to quit. It's over. Gong. Right.

And they may walk out going these people, but listen, you're going to know a whole lot in the first 30 minutes and you haven't wasted so dadgum much time. So that's your first one. You're just trying to figure out are they going to fit in around here? are they how are they you know you they may tell you something you go you've got to be kidding why would no or they may tell you something that go hey that's very interesting i do want to talk to this person further and you know just close it up politely and ask would you like to come in and talk some more if we decide to go forward absolutely or no i think i'm good we had one lady we were explaining our

core values and uh she hung up on them she just hung up in the middle of the interview. It was a Zoom interview, and she just quit right then. That's perfect. That's exactly what we want. She decided we're nuts, and we're like, oh, that must have been an accident. No, I want an accident. She's just done, and she didn't even have the common courtesy to say, you know, it's not for me.

I'm going to go ahead and cut off now, but thanks. I mean, 10 seconds would have added a whole lot to her class, but she didn't have that class. So I thought it's pretty funny. It's great. But that's exactly what you're looking for. Number four is resume and references. Complete waste of time. People lie on resumes.

And if you're not smart enough to set up your references to say good things about you, your parents are cousins. Seriously. I mean, that's ridiculous. So, of course, references are set up. And we check them anyway, because occasionally somebody's too dumb to tell the people to say nice things about them.

And if they're that dumb, you don't want to hire them. So we check the references anyway, but, you know, But if you'd say, you know, my high school teacher, if I call your high school teacher and they go, guys, he's still a drug addict? Well, we don't need to hire you because you don't even tell them to say nice things about you, right? Number five, we do some testing tools. We like to look at those things.

We love the disc profile. We sell the disc profile. We use it here. It's on everyone's workspace. So when I walk up to talk to Austin, our producer, I can look at it. I can see what his disc profile is. And that tells me how to communicate with him. It also helps me figure out if you're going to be in the right seat somewhat, not necessarily, but somewhat.

Like an example is on the D-I-S-C, the C is a high-detail person, that's a good fit for an accounting position, an engineering position, a dev position. High-C is a good, high-detail people. Okay, they're a good fit for that. and so, you know, high eye, eye is a party looking for a place to happen. They're big people, pleasers. They like to, they love humans. They run around in circles and are distracted by squirrels, and they're wonderful people. I'm an eye a lot.

I do that a lot. I love being entertaining and fun and hanging out with people. It's one of my favorite things. But you don't want an eye doing your accounting. That'd be a disaster because, you know, it'd be bad. So you want to kind of think about that. So run the disc profile on, and you can buy it in bulk from us. It's very inexpensive to do.

Number six, do you like the person? This is a small business. You are under no obligation to spend close quarters time five days a week, 40 hours a week with somebody you don't like. You're not under any obligation to do that. and if they come in and they've got some political agenda that's the opposite of yours and, you know, they're going to be a loud mouth about it, you don't want to have, you don't put up with that as an example, okay? Or they're just an abrasive personality or they're, you know, if you just really don't, don't hire them.

You're under no op, well, they're really good at their job, yeah, but you don't like them. And you're going to spend all your time with somebody you don't like. That's dumb. Don't do that. Number seven, do they light up when they talk about the position? Are they fired up and passionate about it? That's a big deal. Number eight, we have them do a personal budget, not because we're Dave Ramsey,

but because we want to make sure they can live on what we're paying. Because as soon as you hire someone who can't live on what you're paying, regardless of what you're paying, you can be paying $200,000,000, they need $250,000. You could be paying $90,000, and they need $120,000. If they can't live on what you're paying, $100,000, $100,000,000, percent of the time within 120 days, you're going to be a greedy jerk boss who underpays people because they're financially stressed because they took a job they can't live on.

And it's going to be your fault. It is your fault. You shouldn't have hired them because they can't live on what you're paying. You have a responsibility to pay people what they can live on and not hire people who can't live on what you're paying because you're putting them in an untenable position. They're going to be unhappy and they're going to gripe about you. And then you're going to be shocked. Well, don't be shocked.

I predicted it right here just now. Number nine, compensation calculation, benefits, policy reviews. We go over all that stuff in the interview process, of course. And people need to know that. But let me tell you, if they lead in the 30-minute interview, the first question out of their mouth is, how much y'all pay? How's your benefits? How much time I get off?

They're there for what they can take, not what they can give. They're a taker, not a giver. don't continue the interview. So if the first thing out of their mouth is what they're going to get, it's a valid question. But if the first thing out of their mouth is what they're going to get, you're never going to make these people happy. Because they're there for what they can get from you.

They're not there to add value. Number 10, have a clear job description. We call it a KRA, a key results area. If you do these three things, you're winning. If you don't do these three things, you're not winning in this job. Is this a job that sounds fun to you? number 11 famous for this get a lot of criticism for this

don't really care spouse all interview everyone that's hired here the final interview is you go to dinner with the leader of that area and their spouse and you and your spouse and you just have dinner and you just talk no big test the spouse is not being tested

nothing like that but your spouse in my case in the early days my wife Sharon is probably not going to talk a lot she doesn't talk a lot of these things she just sits there but she takes everything in and then when we're driving away I ask her not what she thinks

but I ask her how do you feel because Sharon's from the hills of East Tennessee and the word feeling is a seven-syllable word she has a failing If Sharon has a bad feeling, we don't hire you. Because her bad feelings are 100% accurate. She never misses. And she almost never plays that card.

One time out of 100, she'll say, I don't feel good about this guy. I don't feel good about that girl. I don't know what it is. I can't put my finger on it. Maybe they're just supposed to be somewhere else. Maybe they're a bad person, but I can't tell you what it is, but I don't feel. Every time I violate that, I get crazy in my building.

And I got to deal with a donkey because I didn't listen to my wife. Who can find a virtuous wife? For her worth is far above rubies. The heart of her husband safely trusts her, and he will have no lack of gain. I would submit to you that Dave Ramsey in the last 30 years has had no lack of gain. my gains have been mind-blowing it blows my mind when I look at it and if you were looking in from the outside it should blow your mind it my gains are amazing because I've got a virtuous wife and I

actually want to know how she feels about a higher or any other major decision before we make it and I've made some really good decisions because of that and I used to do everything without talking to her. A huge mistake. Because see, the preacher said, and now you are one. So now you have one brain. And when you do it without talking to your spouse, you're only using half your brain. See, that screws up the whole formula. The last thing is, when you do get hired, we, the company, are on a 90-day probation. I just, we're onboarding six new team members this week. I talked to them this morning. They were in the onboarding and sat down and talked to them. I will talk to them on Monday morning when they came in, introduced myself. And I went and sat in their first hour of

onboarding this morning. And the company is on probation. You're asking yourself in the first 90 days, do I fit in here? Is this a good decision? Did I do the right thing? And you're on probation. We're asking ourselves, did we make a mistake bringing you in here? Is this a right hire? And we have had people in the first three weeks working here go, I made a mistake. And they hit eject. And that's, you know what, that's better than putting me putting two years of investment into you. I don't like hiring you and then you eject. That means we made a bad hire. Somebody didn't do a good job in the interview process,

but I would rather have you eject in the first 90 days than in the first nine months. It costs us less. It's less, less, because you don't really do anything that's of value in the first 90 days. The first 90 days, the amount of good you do versus what you're being paid is out of balance. Your value actually comes later

when you learn what the flip is going on. You've got to figure out where the bathroom is before you can do anything. I mean, you know, it's just, you've got to figure out how things work around here before you can do anything. It takes a little while. So a 90-day probation. That's the 12 elements or steps of a good hire in the people driver of the six drivers

that lead you through the five stages of business. If you go to Entreeleadership.com or if you click on the show notes, you'll be able to download this. And it'll give you kind of an outline of what I just. just talked about, let you get an idea what's going on. You can develop your own, but these are the ones we use. These are some of the things we do. We do a few more things nowadays, but that's kind of hardcore around here, most of those things.

That's what we do. This is the Entree Leadership podcast. Thanks for being with us, America. I'm Dave Ramsey, your host. Up next is Melissa in Grand Rapids, Michigan. Hey, Melissa, how can I help? Hi, Dave. Thanks for chatting with me.

Sure. How can I help? So I own two hair salons. I have 17 employees and four contractors with a revenue of 1.2 million last year. Good for you. Thanks. It's fun. My husband and I are debt-free, including our house, and we are ready to invest in the next step of our business.

So my question is, I am wondering if you think it is wise to purchase a building with a mortgage for your business, or is it more wise to lease? So with one of our locations, we are looking at moving it to a new location and just wondering your advice on, yeah, whether you think it's wise to purchase the building or to lease. Well, I would not go in debt and take out a mortgage to buy a building. Now, if you can afford to pay cash for the building versus leasing,

we can start to talk about what to do there. but in your case with where you're sitting you don't have the money about the building is what you're saying not yet not outright yeah that's what i mean so how expensive a building would something you're thinking about be um we've been looking and in the area a building could be anywhere from 500,000 to 750,000 okay all right cool so what i would recommend you do is uh lease it with an option to purchase. Oh, that's a great idea. And that gives you two things to do are two things that are safeguarding. One is, if the location doesn't work, you just exit the lease when the lease is up. No harm, no foul, right? And you're not stuck. If you buy it right now and then the location

doesn't work, you've got to sell a building. That's a problem. Okay. And you've got to sell a building you got payments on if you did it with a mortgage. Oh, my gosh, that's really a problem. Because you're not sitting, you know, it's like this isn't working. It makes it harder to make the decision to move when you own the building and you made a bad choice, you know?

Okay, so if you're leasing, it safeguards you on that. The second thing, a lease with an option does, it gives you time to save with money. I did that several years ago. I've got to think back now, it's probably, probably 15 more years ago, more than 15 years ago. It was probably closer to 20.

So I found a building that was largely empty, and they needed a tenant, and I was going to take about half of it, and I did two options on it. One is I had the first ride of refusal if somebody moved out, or before he could rent any of the empty space, he had to ask me if I wanted it,

because we were growing hand over fist, and I wanted to be able to expand and didn't want someone to freeze me out by renting the other space. You follow me? So I had the option to, or the first route of refusal to empty space or option to take the new space.

And we had about $300,000 that we used to fix up the building, and we did the tenant improvement, and that gave us cheaper rent. And that was all my money. I was out of money until I had made some, until I made some more. So my option to purchase the building was for the market value of the building at that time.

And I think this guy looked at me and thought, there's no way he'll ever be able to do it. Because that would have been a valid assumption, actually. And so it was a $5 million building. We had the right to buy the building for $5 million for five years, and we had the right to grow into the building. So during the five years, we filled up the whole building. Our business over doubled, almost tripled, and I saved up $5 million.

And I bought the building. By the time I bought it, I had it tied up at $5 million. It was worth $13 million. Sweet. Sweet! Made $8 million that day. Sweet! I like it, yeah.

But if it had not worked out, I wouldn't have been in debt. I wasn't stuck. It was not a problem. And here's what's weird. right after that, we continued to rent other places in the neighborhood because we outgrew the building. And then I was faced with what I'm trying to keep you from being faced with. It's like, I don't want to move out of my building. It'll be empty. I've got this $13 million asset, and I'm getting ready to screw the landlord, and I'm him.

You know? But we're scattered all over hell's half acre, and we've got to get under one room. And so I've got to go rent another building or build another building that's huge. And I'm going to have an empty building. And so if you're not careful, the real estate starts telling the business what to do and the business is the cash cow, it needs to tell the real estate what to do. That's what I'm trying to keep you from doing. So if you buy this place on a mortgage and it doesn't work, you're not going to want to move

because you don't want to screw the landlord because you're the landlord. And you need to move because it's not working. That's what the lease is. That's why you lease and you have the opportunity to exit then, honorably and per contract and not exercise the option and let it go. Or you could exercise the option to move and still buy it because the building went up in value and you just have it as an investment. By the way, I filled that building up.

It's full of tenants. It makes me a lot of money now. So it worked out. really good in the end. But I learned the lesson of don't let the real estate shape the business, make the business shape the real estate. And if you're not careful, these things will start telling you what to do. So a lease with an option would be my suggestion. It's been a huge blessing to me to use that process in our business and in what we're doing. So it sounds like you've got a wonderful business, Melissa. I'm so proud of you. Keep it up. Keep going. Go, go, go, go, go.

That's how it's done, man. Hey, remember better a weary warrior than a quivering critic. This world needs more high-quality leaders. Take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.