EntreLeadership - The Mindset You Need to Scale Your Business with Brian Buffini

Episode Date: May 15, 2023

Today we hear from: •      A business owner who feels guilty when he takes time off •      Brian Buffini on what immigrants know about America that Americans don’t •      A business owner wondering how much he should pay himself •      A business leader seeking advice on scaling the business Links mentioned in this episode: •      The EntreLeadership Podcast: https://bit.ly/TheEntreLeadershipPodcast •      Take the Stages of Business Assessment: https://bit.ly/40r4sdJ •      Brian Buffini’s website: https://bit.ly/3c9m7iU •      The Emigrant Edge by Brian Buffini: https://bit.ly/3LFgydq •      Smart Money Smart Kids by Dave Ramsey and Rachel Cruze: https://bit.ly/3LZuX5B •      Sign up for a free trial of EntreLeadership Elite: https://bit.ly/3nqpwU4 •      Learn more about EntreLeadership’s Stages of Business: http://bit.ly/3yvdavv •      Have a question for The EntreLeadership Podcast? Leave a voicemail at 844.944.1070 or submit your question for a chance to be on the show with Dave Ramsey: https://www.entreleadership.com/ask   Take our listener survey and let us know what you think about The EntreLeadership Podcast being a caller-driven show. When you do, you’ll be entered to win a $100 gift card: http://bit.ly/40dV9hf Start growing in business and leadership with the EntreLeadership Newsletter. Sign up to receive tactical tools, advice and resources in your inbox every week: https://bit.ly/3IRWnsL Support our sponsors: •      NetSuite: https://bit.ly/NetSuiteEntre •      BELAY: https://bit.ly/351P9AE •      Payority: https://bit.ly/3IaA5SK •      Staples: https://staplesbusinessadvantage.com/ramsey Learn more about EntreLeadership Events: •      EntreLeadership Summit: https://bit.ly/EntreLeadershipSummit •      EntreLeadership Master Series: https://bit.ly/EntreLeadershipMasterSeries   Learn more about EntreLeadership Coaching: •      Elite: https://bit.ly/3tI2fN8 •      Advisory Groups: https://bit.ly/EntreLeadershipAdvisoryGroups •      Executive Coaching: https://bit.ly/EntreLeadershipExecutiveCoaching •      Workshops: https://bit.ly/EntreLeadershipWorkshops Listen to all the Ramsey Network podcasts anytime, anywhere in our Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Andre Leadership podcast, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host, with over 30 years of experience leading in the trenches right alongside you. If you've got a question and you want to participate in this show and talk small business, I love helping small business people. It is one of my favorite things to do because I think small business is the hero of the business. American economy, and I actually have data to prove it. Hey, if you got a question you want to ask the show, just fill out the form at Entreeleadership.com slash ask. Entreeleadership.com slash ask.

And we'll get back with you, make you a caller on the show, or you can leave a voicemail at the phone number 844-944-1070. 844-944-1070. Patty is first up in San Antonio. Hi, Patty. How are you? doing great, Dave. How are you? Better than I deserve. What's up? Well, I appreciate you taking my call. It's an honor to speak with you. You too. So my wife and I own and operate a full service

butcher shop, meat process and plant with about a team of 18 employees. We've had it for just over 10 years now. And our last year's revenue, we did 2.6 million. And my question is, after being and still am, I guess, a workaholic. I know you talk here, you talk about this a lot, we entrepreneurs are this, but how do you get past the guilt, the constant guilt and anxiety feeling of when I take off work? Because when I take off work, I'm constantly thinking I should be here. Well, I mean, there's two possibilities there.

One is you take off work and you should have been there, because the place starts falling apart when you're not there, or you take off work, they don't notice you're gone and you're worrying about nothing, which is it? Worried about nothing. So it runs fine when you're not there. Absolutely.

Okay. It's just a, I hired a manager two years ago, you know, a real manager about two years ago, and it's been phenomenal. It was the best business decision I've ever made. made and things run fantastic.

Well, I mean, we have a great leadership team. We have a good team. It's just, do you get that constant pull? And the wife makes me take off, which is a good thing.

We do family things together. But she has that constant, you know, you have the constant, feel like I need to be there, but it's running. I feel like sometimes I'd come back if we take a vacation or something like that,

and it's ran better than when I was there. Yeah, I've noticed that too. Okay. So there's the first skill that people have when they open a business, the first phase of business, is there a treadmill operator, and too much of the business relies upon them. And if you're not there, the income goes down, the place falls apart. If you want to level up and move to the next phase of business, the next stage of business, that's the Pathfinder stage. And that's where it no longer counts on you. But what you can run into there is a lack. of clear direction and that's square where you're sitting buddy there's no question that's exactly where you are you have learned you put people in place there were quality people that you can delegate to so you're no longer on the treadmill but your body your your mind your spirit still feels like it is yes sir and i did i did the business assessment and it's exactly right but

the the peak before that is right where here's i feel like i'm too comfortable but then yes, sir, exactly. So when I hit that, one of the things that happened to me was I was in prayer one morning, and just in my quiet time, and I felt like God was telling me I needed to do three things. I need to work on big things, broken things, and be the product. In my case, I am the product some of the time right now, for instance, okay? But working on big things and broken things rather than daily things. From that day forward, my goal from moving from Pathfinder to Trailblazer would be that I start working on the business rather than just in the business, as my friend Gerber says, who wrote the book E-Meth.

Okay. And so what that means is then that you transfer the energy that you had where you just run, run, run, go, go, go, go. You hold it all together with duct tape and balin wire. you transfer that energy to say, okay, I no longer work on that day-to-day stuff other than to look at the numbers and make sure the people that are doing it are doing it. But I work on big things, which is like opening a new store, a new product line for you, changing the pricing structure or starting to do more on the internet and less in the brick and mortar, whatever it is you're going to work on that's new or big.

And that's what I spent my start spending my time on. that was like 20 years ago. And that has paid off for me big time. To this day, as the CEO of Ramsey, I'm always walking around the building and all I'm looking for is something big that I can help with or something that's broken that I can help fix.

Because guys like you that start something from the ground up and like me, we know how to fix broken stuff. We can smell it a mile away and we know how to put our hands on it and start pushing stuff around and upset people and get crap done. know, and that's exactly who you are. I can smell it on you. And it's wonderful. You're going to, you're amazing. So it's just an act of your intellect to say, okay, I'm no longer on the treadmill.

I'm now at Pathfinder, so I've got to get clear direction for my own energies and for the energies of the team and point them in that direction. So working on, working on the business rather than in the business is the transfer, and eventually your body will say, oh, I'm not on the treadmill anymore, and it will allow you to step aside and rest. It was one, two, three years ago after, or four years ago, I might be right in there somewhere. It was before all the COVID garbage was the first time in my life I took three consecutive weeks off. I had never done that in my entire work life. So that's, you know, and we went to Africa and they couldn't find me. So they had to figure it out, right? It was just completely handed off. But by then, obviously, we had and still do

have incredible leadership in place at Ramsey to run day to day. And for that matter, solve big problems or anything to come up during a three week period of time. And you're already there. Your business is technically there. If you walk around and took and kept score, you're there. You could walk away for three weeks. It would not, you probably wouldn't lose a dime. Okay. But your business is there, but you're not there. You're still living four years ago when they needed you. And the way you felt needed was that if you weren't there, the thing fell apart. Then that makes us feel important when we're founders, when we're entrepreneurs. But now you need to get a different kind of importance is the way I had value to the organization now. The way you had value, Patty, the organization now is to work on

it, not in it. That's a big distinction. And you're doing great. Your brain and your body just have to catch up and learn a new rhythm. That's what it amounts to. And that's the only thing missing here. You'll get there. So you're, you're really, really, really, really doing good. Hey, coming up in the next segment, my friend Brian Buffini is joining me. He'll be speaking at the Entree Leadership Summit. He's a New York Times bestselling author, known Brian for decades. He's in the Real Estate Hall of Fame. Incredible success story as a business guy and you are going to love this guy. So hold on. Hey, come here. Welcome back to the Entree Leadership podcast. We'll be doing the Entree Leadership

Summit May 31st and June 2nd and if you don't have tickets, you're not coming. But you can watch it as a live stream. Yeah, we're going to be live streaming it. So check all of that out at Entreeleadership.com slash summit. You can get a live stream ticket and include your team. One of our speakers is my good friend for many decades now. Brian Buffini, who joins us now. He has a New York Times bestselling book called The Immigrant Edge, and he'll be talking about that. And it's one of my favorite stories. Brian is a great American success story from Ireland. There we go. Just like that. That's right. Welcome my brother. Straight off the boat. Straight off the boat, Dave. Glad to be here. So good to have you. So good to have you. Well, stop straight into it because you and I have talked about this

on air and off air on my back porch a couple of times, the edge that an immigrant has. Yeah, well, you know, the interesting part is there's huge stats to show that people, no matter what, their racial background, cultural background, that people who are not born in America are outperforming Americans almost two to one. In America. In America. 13% of the population is immigrants.

28% of the entrepreneurs. You're four times more likely to be a millionaire in America. Yeah. If you're an immigrant, than if you're a good old boy who takes it all for granted. Yeah, I mean, look, what happened for me, Dave, was I was at a conference, and some fella get up and they'd done three years

on this Harvard research study of millennials, and 51% of the millennials said the American dream was no longer even possible. And I almost choked. You know, and I come to America with 92 bucks in my wallet, get run over by a car, have $250,000 in medical bills, and I'm a millionaire by the time I'm 26. So, you know, I'm choking on this. And so I started out, you know, research and not only my own story, but then all of these stories of people who'd come to America. It was a fantastic

experience for me. And just over and over and over again, saw people who came here with nothing, sometimes didn't speak the language, had very few resources, no family in place, and built tremendous businesses. And sometimes big, like one out of every, five Fortune 500 companies was started by an immigrant. I mean, we're talking big companies, small companies, people come with a wide open perspective. They see the land of opportunity. It is the land of opportunity. And, you know, I tell my kids, you're born here.

You have the advantages of here. You know, these same principles apply to you. Now, go do them, you know? Exactly. Because the good news is even if you didn't immigrate from somewhere else, you can decide to use the exact same principles that causes that unusual probability. for success. Yeah, and here's the thing, Dave.

Like, where'd your people come from? You know, where do Ramses originate from? You didn't start in Tennessee. You'd think of your DNA. Where'd it come from? It'd be Scotch Irish, my friend. Right. We've had this discussion before.

I know. And so someone came and paid a price. And again, now in your case, you know, I ask, I'll ask the entree leadership audience to think about who came before, where they came from. And what price did they pay for the opportunity you have?

And what would those people, have done what your opportunity. Now, I'd have to say the Scots-Irish Ramsey's be pretty excited about what Dave Ramsey's done with his opportunity. But I don't think most people have fully optimized the opportunities that are here. They're complaining. They don't see the opportunity. You know, fish discovers water last. And we're in the land of opportunity. Fortunes are going to be made the next five, ten, fifteen years. And if people listening to you today want to do what they can. Absolutely. So you outline seven principles that the immer that gives an immigrant, an edge, and again, anyone out there, immigrant or otherwise, can choose to

embrace these principles. Well, if somebody left New York and moved to Tennessee, they're an immigrant now. You're right? So, you know, fair enough right? The way we say it is, you ain't from around here, are you, boy? Yeah. So, look, the first one is an openness to learn. Now, you and I, when we first met, we're talking about Zig Zigler and Jim Rohn and all the

influences. We're both person growth junkies. And, you know, so number one characteristic I've seen with immigrants is they have an openness to learn. Number two is a do whatever it takes attitude. Just going to do whatever takes. Number three, a willingness to outwork others. Now, that used to be a lot. Ding, ding, ding, ding, ding.

That used to be a lot harder. I don't think that's that hard anymore. Yeah, it's a low bar now. Show up on time to do what you said you were going to do and you're a hero. Yeah, you're damn genius. Number four, I think, is what I believe is the missing element in American business today, which is the heartfelt spirit of gratitude. People are not, immigrants are grateful.

Like, I grew up in a great country. I'm very thankful for it. But I come to America and it's like Ireland in the 1980s was a third world country. You know, I came to America and I kissed the ground, you know. And so that would be that. And the next one is a boldness to invest. They're not afraid. They're willing to invest.

They'll reinvest in their company. They'll invest in themselves. they'll get help. They'll put their money back into their business. They bet on themselves. The next one is one you would like, of course, which is a commitment to delay gratification. I'm not sponsored by Ramsey Solution.

I just want you to know that delay gratification is one of the key ingredients for emigant success and what you've been preaching for 30 years. And then lastly, is an appreciation of where you come from, that you know where you came from. And again, if you started with a small business, you've an appreciation where you come from. from. I go visit you the first time. I see your old car in front of the old building, right? And,

you know, every day people would walk in there and say, there's Dave, was selling the books out of the back of the car. You know, you had an appreciation for where you came from. Your staff. They knew your story. There was an appreciation for where you came from. And now you have all these beautiful buildings and a great campus, but there's still an appreciation for where you come from. And so here's the thing. Dave Ramsey is Tennessee through and through. But you have all of these seven, right? You exemplify. this and I think your company does. So you don't have to be born outside the country. The American dreams should be first and foremost for Americans to take hold of. And it shouldn't be the people

coming from the outside are competing and beating you in the marketplace. So Rachel, my daughter and I did a book a few years ago on teaching parents how to teach their kids how to handle money, smart, money, smart kids. And we ended up doing entire chapter and a half on this idea of gratitude. There is something that is unleashed in the human spirit that allows space, allows margin to create success only when you learn gratitude. Gratitude is, again, it's a choice and it's so missing in the culture that if you bother to have gratitude, it's the opposite of entitlement. It's the opposite of taking it for granted. It's, I'm better than I deserve. I say it every day because I don't I don't deserve, man, I've worked my butt off. I'm really smart, but this is still

way better than I deserve. And that's gratitude. That's a statement of grace about God's grace for me, but it's gratitude to him and Jesus, but it's gratitude to our customers. It's gratitude to our military for creating a family, creating a country that's safe because they go around the world and risk their lives so I can be here and have the freedom to win. It's gratitude for everything around me. There's so much to be grateful for, and yet, and I find very few people who are whiners that are not grateful that become highly successful. Yeah, there's very few whiners who are winners, right? Yeah. And we know, our old friend Zig Ziglar used to say, great, an attitude, make gratitude, right? And I'm not talking about the yoga pants type, oh, enter the space

and roll up into the, you know, the fetal position. Won't fit either one of us. Right. You know. How about that? this, the two most powerful words in business. Thank you. Yeah. When was the last time you heard it, Dave? Yeah. Where's the last time you heard it? We just did, my wife and I did a multi-million dollar remodel. We bought this barn, my daughter's on the U.S. equestrian team, and we put millions back into this horse property, yada, yada, yada. My wife's statement, she's a very gentle soul, sweetheart, Tennessee legend, she's a lady vow. And she said, Brian, I've decided I'm going to do business with the people who are least frustrated by me.

And I was like, uh-huh. She goes, yeah, I mean, I'm going to go with the people who are least annoyed. And, you know, hey, I'm sorry, we want to buy $12,000 worth of appliances today. I want to buy $100,000 worth of cabinetry. I want to buy this. And just all day long, for two years, she felt like she was annoying people. Trying to give them her money. Yeah, you know, right?

That's classic. It is. And here's the point. This is why you can, this is why an immigrant can come to America and dominate the competition. Because they communicate to their customers, thank you for your business. We really appreciate you. We never want to take your business for granted. Why?

Because they're coming to a place where they actually can do business. I spoke over, you know, we've been in 50 countries training our systems. I was in one country, Dave. I'm not going to mention it because I wasn't supposed to be there, where they had 3,000 people in an auditorium. locked down, and it couldn't say what it was because it was illegal in that country to be an entrepreneur. Those people come here to America, and they blow up. And so you talk about this gratitude.

Seriously, who thanks you for your business? Customer service. Meet people, you know, from a salesman to a customer service throughout the organization. And I'll give you this. So this will give you a great. It was 1989, and David Dimblebee, the British interviewer, was interviewing George Bush, Sr. And he, there's a great resume, right? Texas oil millionaire, head of the CIA,

vice president for eight years, president, two sons, governors, one president, right? Pretty good resume. And Dimboby says to him, what's the one thing you've done in your life to become successful? And George Bush had a response, like, on a tip of his tongue.

And he said, well, my whole life, I've written 10 personal notes of thanks to people who came, I came in contact with the previous day, had a good experience with, I just wrote him a thank you note. And at the time, in 1989, I was living in a little White House.

was living in a big white house. And, you know, right, I'm going to listen to the fell in the big house. So I set out to write 10 personal notes every single day to people I came in contact with, to people I did business with, thank, you know, someone was looking at a house. I thanked him for the privilege of showing them, on and on and on. And built a fortune. And today, like my company today, we have thousands of people we train. My company today produces over 10 million thank you notes a year for our customers to give

to their customers. So I'd like to say I've made gratitude into a very successful business. You know? Well, it, the interesting thing is it's so rare. Yeah. It's just, it's, it doesn't require much thought. It just requires a, you have to set your spirit on that dial, dial position and not, not turn it off.

Just stay there. Just constantly be a little bit amazed, a little bit aghast. a little bit thrilled that you're still able to do this. Yeah. Yeah. You know, like I do it for my customers. I do it to my staff. And then my staff do it to my customers.

We just won, six years in a row, we've just won the best place to work in San Diego, right? We have 250 staff, it's a much smaller operation than what you have. And, but we keep winning this best place to work. And I believe because gratitude is what our customers feel from us. Gratitude is what our staff feels from us. and then gratitude is then what our staff give our customers. And so you put that all together.

The next thing you know, people like working there, people like being your customer, the retention rates are high, and the profit margins are good. So guess what? Being grateful and thankful gives you even more to be grateful and thankful about. Yeah, it's called prosperity. Yeah, it's good stuff. Good stuff. Brian Buffini, The Immigrant Edge, How to Make It Big in America,

a New York Times best-selling book. Had the pleasure of having him on the show when that book came out. And we'll have the pleasure of him speaking for us all at the Entree Leadership Summit. If you've gotten a ticket, you'll be in the room. Be grateful for that because there's not anymore. And now you can also be grateful for the fact that there's a live stream that you can sign up for at Entreeleadership.com slash summit. You'll hear Brian and Malcolm Gladwell and Dave Ramsey and Dr. John Deloney and Jordan Peterson and Willie Robertson and many, many others. It's quite a lineup.

We're really, really excited and very excited that the one speaker's, engagement you took this year was us. So we're honored to have you. My friend, I'm glad things are going well for you. I look forward to seeing you in person again soon. Can't wait. I'm really looking forward to the entree leadership and I'm bringing my team as well. So we're excited to be there and it'll be a great time. It's going to be wonderful. Brian Bafini, ladies and gentlemen. Thank you, Brian. Good to see you, my friend. Thanks, Dave. See you soon. This is the Entree Leadership podcast. This is the Entree Leadership Podcast. I'm your host, Dave Ramsey. Thank you for joining us where we talk business, small business leadership and what it takes to win in the American economy today.

If you want to be part of the show, all you have to do is leave your question on the form at ontraryleadership.com slash ask or call and leave a voicemail at 844944-1070. Jump in and we'll talk about your life and your money if you want to do that and we'll talk about your small business, whatever it takes to get you to go in the right. direction here. That's our game plan. Hey, running a business is hard. You spend all day putting out fires. You can become the CEO, the chief everything officer if you're not careful. And that would mean you are at the beginning stages of business. We call that the treadmill operator. There are five stages to business that are very distinct. We can walk you through those, help you level up, learn what it is. There's six drivers that drive you through those. That's called the Entree Leadership System. And it specializes, we specialize in helping you walk through that with our digital

membership for business owners. It's called Entree Leadership Elite. It also has a lot of wonderful digital tools. Most people's favorite is the weekly report tools. So be sure and check out all of those things. Elite is free for the first 30 days, so you ought to try it because it's free. If you're actually operating a business, you've got five to 200 employees. This is going to help you. A lot. And it's free. If it doesn't help you, you can drop out of it for 30 days. and you're out of nothing, but you need to jump in there and try it. Entree Leadership Elite. Go to Entreeleadership.com slash elite.

It's free for the first 30 days. Did I mention that? Elliot's with us in Jacksonville, Florida. Hey, Elliot, what's up? Hey, David, it's such a pleasure to talk. You too. How can we help? So I own a real estate brokerage here in Jacksonville,

and I'm just trying to find out with my first really successful year. Dave, what is appropriate to pay myself as a salary. I've got a business partner, a family member, so there's trust. But I definitely would like to know that we're not, you know, obviously taking too much, taking too little, but at the same rate, we're able to still grow the business as we've been trying to for the past about eight years now that I've been in the real estate game. Cool. Well, I mean, to operate the business with a long vision, a long-term mindset,

you're going to have line items that affect your net profit. For instance, you're going to set money aside for HR, for doing things for the team, blessing the team. We have a crazy, big, wonderful Christmas party that we drop coin on here. We have a huge, massive battle of the bands. You probably don't want to do that one, that we drop coin on here. We, of course, pick up stuff like health insurance and 401Ks and those kinds of things that we drop coin on. So that's an HR fund, the Human Resources Fund, that affects, that's an expense here, and it's a way for us to invest back into the businesses, invest back into our most expensive line item and our P&L, which is people and payroll.

So that's an example of investing back in the business. Another one might be that you're trying to buy some equipment to grow the business with, some technology to grow the business. with, a marketing campaign to grow the business with, and you want to invest back into that. So you line item that and set that money aside in that bucket to be used for that, even if it's later in the year, before you calculate how much you can take home. And then the last one that we've done for many years is just retained earnings. When we get to the very bottom, right before we take our pay, we set us out another percentage for growing retained earnings, the business emergency fund. And retained earnings is not only

used for emergencies, it can be used for a huge, like if you bought out a whole other real estate company later and brought them in under your wing and you paid them for that. You might have the money in retained earnings to do that later. And so I systematically built our nest egg inside the business. Again, business people call that retained earnings. And I do it every single month and I have for 25 plus years a percentage of our net profits before the bottom, bottom line that I get paid off of is set aside for. And so if there's not much net profit, not much goes in the HR fund. If there's not much net profit, not much goes into the increased marketing fund. If there's not much net profit, because it's a percentage goes into retained earnings. So it doesn't,

it can adjust as cash adjust, but then when I take money out and take it, the rest of it's mine, I take it home, it's mine. It's why I work. It's why you work. It's why you own the stinking thing rather than work there.

And so, and I can do that knowing that I haven't cheated the business in some way because I put into the budget the systems to make sure that the reinvestment into people, into the future, into emergency funds is done before I take, home money. And then if I take home a ridiculous amount of money, I'm still okay, because I've done everything at the office before I did that. Does that make sense? No, absolutely. I guess for me

and knowing that my expenses are already, well, at least fixed for this year, I'm trying to determine with routine earnings, we still have a little bit of a, I don't want to call it an overage, but some question where I feel like we should be paying ourselves, the two owners, some portion of a salary. So we started out modestly gave with a $500 each salary, which puts us at $1,000, you know, $12,000 a year. It's not enough to, you know, write home about it, but obviously it earns us something in terms of, you know, funding. I have a partner that's Baby Step 7, so she doesn't really need for the $500 for her. It's just retirement fund. And for myself, it's going into retirement as well.

The first thing I did is I worked it up to, I had $100K salary. and I did away with that later, but I worked up to that. And I still, though, I still would challenge you guys to go back and look because you're going to be at $5,000 before you know it from $500. If you keep making money and you keep growing, right? And if you'll set in place the systems, it allows you to do that without thinking about it then. You can burn your calories in your brain for other things. And so what I'm saying is that you kind of have a feeling is the way you outlined at Elliott. that your retained earnings is okay.

But it wasn't based on a percentage. You just got a chunk in there, and you went, okay, that feels pretty good, so now we can take 500 bucks. Instead, I'm going to say, before you get to that retained earnings number, make every single month's profit X percent added to retained earnings. Everything beyond that, y'all can take. It can be 500. It can be $5,000.

I got you. Okay. That's what I mean by percentages. And if you, how big is your office staff at the, I know you got, Real estate agents or realtors on staff there, but they're independent contractors. How about your payroll? How many people on payroll? Zero.

Zero. Okay. So how many real estate agents are in the office? 14. Okay. All right. That includes myself and my partner. Yeah.

So you're probably needing some administrative staff, aren't you? Yes. I have a cousin that's of our admin for a flat fee. the way we've structured it. So every deal that we collect a fee on, she gets a flat, you know, percentage of that. Okay. Not a bad way to start your first staff member.

As long as cousin doesn't mean we settled. No, she's a high-dee personality. Okay. That's okay. As long as we're not settling, that's fine. I don't, I mean, when you said cousin, it scared me a little bit. But yeah, but the, yeah, just make sure that we're getting, you know, that she's got a good deal for her.

You got a good deal for you, meaning that this is a good business relationship, that she's providing more value than she costs, like all team members have to do. That's just how the math works. It's not a mean thing. It's just how math works. If you don't make a business or save a business more than you cost,

pretty soon it goes out of business. So that's the thing. But you got her on a percentage of the deals. That's sweet, very incentivized, very helpful. to keep her motivated and it keeps the team, you know, grateful for her being there and so on. So, yeah, but you've got some staffing to do, then reinvesting into that staff, reinvesting into retained earnings systematically, and then you can draw down. But it doesn't sound like you're making a big pile of profit yet that's a big problem for you.

You'll get there, though, if you keep this up. Well done. I'm proud of you. Good, good, very, very, very good work. That's exactly how this is done. So that's what we do here, folks. We help small businesses. And some of them are real small, and some of them got 200 folks, and some of them do 2 million, and some of them do 20 million.

And it doesn't matter. Most of the principals are still the same. We've grown this from a card table in my living room to what it is today. Thanks for joining us. If you want to talk to a college professor and a think tank who's never made payroll, you're in the wrong place. I'm none of those. As a matter of fact, I'm their worst nightmare. They wake up at night thinking about people like me

because I'm a guy who leaves the cave, kills it, and drags it home and have my entire life. And if you're one of those, you're going to love this. Because I do this every day. I've worked on problems all morning before I turned on this microphone. Worked on opportunities all morning before I turned on this microphone. And that's who we are here.

This is real people that really actually run a free speaking business, not theory. That's what Entree leadership is, and that's certainly what the Entree Leadership podcast is. If you want to be part of it, we'd love to have you. Just call us at 844-4-4-4-7-E. Leave a voicemail, and we'll try to work you in to be one of the callers in the coming weeks. You don't want to miss this. By the way, if you guys like this, we appreciate that both of you. We really appreciate both of you that like it. And so if you would help us out, I need both of you to follow this and subscribe. I need both of you to leave a five-star review.

One-stars don't help. Mama said, if you ain't got nothing nice to say, don't say it at all. And if we get two of you to do this, we got 100% recognition that we're awesome. So we need this to happen. Seriously, share it, subscribe and follow, whether you're YouTube or Spotify or whatever it is you're doing. And let people know it's here. All right, Matt's next. Matt's in San Antonio.

Hey, Matt, how are you? Hi, Dave. I am better than I deserve. How are you? Better than I deserve, sir. How can I help? Well, I appreciate you taking my call, and I always just wanted to let you know. I've been working with my dad in the family business since 2021,

in January, 2021, and we have five employees and do roughly 200 to 300,000 in revenue. And I'm wondering, how can I find or build some sustainability for the future, despite struggling to cover our payroll, 941, back tax, gas, and other overhead costs. Very cool. Okay, so you're an HVAC tech? Yes. And your dad is, and that's how he started the business? Yes, sir.

He started by himself. And you're how old? I am 25. Cool. How old is he? He's 52, going on 53. Wonderful. How long has he had this business?

About 16, 17 years. Okay. So most of your life, you remember him doing this? Yes, sir. Okay, very cool. And you said you've got five people or six people, is that right? Five, six total, five including me as employees. Okay.

How many of those are techs? Four. Okay, so one office, one office staff. Your dad's still going to field and work on units? Sometimes a lot of times, he's like half and half. He's in the office with me, and he's also in the field. Me, I was in the field a lot of 2022 and midway through 2021, but today I'm mostly in the office. Gotcha.

Okay. Well, for 16 years, your dad has carried the water. And for a large portion of that time, he has really just owned his own job. He didn't really own a business. When you don't work one day and there's no income, that means you own your job. You don't own a business. That's the beginning stage. Again, we call that the treadmill operator.

And you guys are halfway between treadmill and Pathfinder, which is where you get to work on your business, not just in it. Because your dad's still making calls. So that tells me he's still got one foot in the boat and one on the dock, right? Definitely. So if he doesn't make calls, if he still doesn't go out and fix a unit ever so often income goes down. So that's, it's, so to answer your question, how to get more profitable is you and or your dad have got to get up above this. And it's not to say you're too snotty or too stuck up to make a call. You need to always be willing to go out there and fix something and find out what is happening

with your techs and what kind of customer issues they're running into and all those kinds of things. There's nothing wrong with sampling it. But I want to get it where it's not based on just YouTube. And then the second thing I want you guys to look at is your pricing structure. Because you're not making much profit. You're doing a good. gross revenue, but I can tell by the way you ask the question that you're not exactly bailing money over there, am I right? No, fair. Actually, I keep the transaction register, and I've been negative because for the last

three weeks, at first it was like negative $10,000 with the payroll and then the next week, and this is what I do is I transfer the amount I'm going to need for $941s and everything that goes through in payroll and then insurance costs at the end of the month. So those costs haven't gone through, but the transaction register is accurate, and it's showing that we're, you know, we're operating out of loss, basically. And there's been several times where it's, I mean, the bank has gone negative, and most weeks were roughly 5,000 to 10,000 in the bank. So it's stressful. Yeah, that's very stressful. So I did, I thought I smelled that in the air, and it was in the air.

Okay. So, here, let me, let me, again, your dad is about as hard work in a dude as there is on the planet. Your dad is a good man. But he has to move from, and you can help, from being an HVAC tech to being a business owner. And because when you're just an HVAC tech and you've got numbers like you're facing Matt, what we try to do at that stage, and I did it too. is we just try to work harder. We just try to do more.

And it's like, okay, we're losing 50 cents of watermelon. We need a bigger truck, is the old joke, right? And so we'll make it up on volume. No, you won't because your pricing structure is wrong. You're not making a profit because your pricing structure is wrong. Because you're doing the calls. I think your guys are in the field working, aren't they? Yes.

You're just not charging enough. A lot of times it comes back to, we have to return to a call several times over, or like a couple times over, and then there's been some installs where the guys will finish, and a week later the customer calls back, they go back, try to fix it, and ultimately it ends up in him having to go back and figure out what's actually going on. Okay, then you got some techs that aren't doing their job. The customer, the stink it, they went over there, fixed a stinking thing, it ain't fixed. You get about three of those and then you're not working for me anymore. Because not only are you pissing the customer off, you're costing me a lot of money.

Yes, sir. And that is, you know, that is the way it makes me feel, but I have trouble because I'm not actually the owner and I don't have the authority over the employees to say things like that. Well, no, you don't need to say it. You're 25. That won't work. But you've got to sit down with your dad over coffee. You need to start. Hey, my son Daniel came to work here 10 years ago, and I started having breakfast with him every Tuesday morning for an hour.

Sometimes we talk about business. Sometimes we talk about my grandkids. But sometimes we talk about whatever, University of Tennessee sports or whatever else, right? But you and your dad need to start having that, so you can then say, Dad, the reason we're losing money is we're having to do the same job four times because these guys suck. That's what you just told me. Did I miss something? No, no. And so, listen, you don't get to stay if you suck.

That's a basic tenet of life. So we're going to start. I have brought this. Yeah, go ahead. I brought this to him, and he's told me that what I'm telling him is he needs to get rid of everybody and do the work himself. No, that's not what I'm telling you. I'm telling you need to get people that can do the work. Right.

You know, listen, you can't win the Kentucky Derby with donkeys. It's thoroughbreds, thoroughbreds. And you're sending don't donkeys into people's houses and then wonder why they don't tell their friends about your company. Well, they do tell their friends about your company, and it ain't good. So you're messing up your whole marketing and brand in the area, your reputation, everything else, when you have to go back four times. Let me just tell you, you've got to come back to my house four times, fix something. it's the last time I'm going to have you over there.

I'm not mad. It's just I got to, I just, you know, you got one job. Fix the heat and air. You can't do that. Then I need to get like somebody that can fix the heat and air. This is one job. So, you know, it's not, it's not like this is brain surgery here. So, you know, your guys have got to change, you've got to change their level of responsibility, their level of professionalism, their level of, their level of, their level of,

of competency so that they can make one trip, and then your profit will go up is what you're telling me. It's not a pricing issue. It's a quality issue. And you're hurting your marketing. You're hurting your reputation because let me just tell you, they go in this lady's house. It ain't the husband you've got to worry about it's the lady

because she'll put it on freaking Facebook that you suck, you know? And that's just, you don't need that. You don't need that. And my wife goes to the Y and with all these little running herd down there, a little herd of them, they go running. and if you piss off one of them in the running herd, you're going to get no business from the running herd. And that's how you make your whole living in small business,

is the running herd at the Y. You get out, there's a grapevine in this stuff that's very real. Social media makes it even more, but this is real. And so you go in, you, but if you go over there, you put the little booties on your feet, you don't mess up her house, you fix everything, you're on time, they never have to call you back,

that you won't be able to beat business off with a stick. you'll have so much business you won't be able to do anything with it. Quite the opposite you got right now. Y'all are working six times as hard as you need to be working to make the money you're making because of the quality. So, Matt, you and your dad have got to fix this. It's not going to get better. It's going to get worse. Nothing stays status quo.

It's either growing or it's dying. This one's dying. It's getting worse. And so your dad's right. I don't blame him for being frustrated. I don't want to do all the work myself. I don't want to do it. I can't write code.

So I've got to get people to write code, but I got to have thoroughbreds writing code. I'm not going to do the accounting. I know how, but I hate it. So I'm going to have thoroughbreds do the accounting. I've got to hire people that can do it. I'm not going to do whatever it is around here that I don't want to do. I work my butt off like your dad has so that I don't have to. But I got to have thoroughbreds doing it, or I got to do it,

or I got to be the guy who goes, either you do this right or you don't get to be part of the Ramsey team, part of our team. If you can't fix heat and air, we got heating air on the door, heating air on the truck, and you can't do heat and air, this is a problem. It's a problem. So, you know, you're going to have to move some people on if they can't get their crap together. That's what that amounts to. So it's sorry, man, but it's not really any harder than that.

And you're right. You're in a tough position at 25 years old to talk your dad into it. You can play this back for him. I admire guys like your dad, but if he doesn't fix this, it's going to cave in on y'all. You're going to have to deal with the quality issues. Hey, remember a better, a weary warrior than a quivering critic.

Leaders serve. Leaders are active, not passive. Leaders act on principle, not appearances. This world needs more high-quality leaders. So choose to lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast. Thank you.