EntreLeadership - The Team Is Threatening to Leave! What Should I Do?

Episode Date: April 10, 2023

Today, we hear from: •      A team member looking to purchase a business, but the team doesn’t want to stay •      A business owner wanting to hire another chiropractor, but it would cut his salary in half •      A street vendor making $1.5 million and wanting to increase his traffic level •      A start-up business owner wondering if he should take on investors or go into debt to pay his team Links mentioned in this episode: •      The EntreLeadership Podcast: https://bit.ly/TheEntreLeadershipPodcast •      Start your free trial of EntreLeadership Elite: https://bit.ly/3tI2fN8 •      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: •      Hite Digital: https://bit.ly/HiteDigital •      NetSuite: https://bit.ly/NetSuiteEntre •      BELAY: https://bit.ly/351P9AE •      Payority: https://bit.ly/3IaA5SK •      Staples: https://staplesbusinessadvantage.com/ramsey Learn more about EntreLeadership Events: •      EntreLeadership Summit: https://bit.ly/EntreLeadershipSummit •      EntreLeadership Master Series: https://bit.ly/EntreLeadershipMasterSeries   Learn more about EntreLeadership Coaching: •      Elite: https://bit.ly/3tI2fN8 •      Advisory Groups: https://bit.ly/EntreLeadershipAdvisoryGroups •      Executive Coaching: https://bit.ly/EntreLeadershipExecutiveCoaching •      Workshops: https://bit.ly/EntreLeadershipWorkshops Listen to all the Ramsey Network podcasts anytime, anywhere in our Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership Podcast, where I take calls from leaders and small business owners 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. We'd love to have you participate in the show. If you want to be a caller, just call us, leave a voicemail. We'll get you set up to be on the podcast at 844-944-1070, 844-4-4-4-4-7-8-4-4-4-4. or you can just fill out the form and we'll get back to you and set it up either way at Entreeleadership.com slash ask. Entreeleadership.com slash ask. Dave is with us in Kalamazoo, Michigan. Hi, Dave. Thanks for having me on this afternoon. Good to have you, sir. How can we help?

Yes. I am currently looking at purchasing the company that I work for. we have four full-time staff members, two part-time staff members. We're a commercial contractor. We work in general trades in schools, in the public school sector, and also for the government. And one of the big issues that's come up through this purchasing is that the full-time field guys no longer want to work for a new owner, whether it's me or somebody else. and I am questioning whether I should continue with the purchase and rebuild the team or move on. What's their problem? I think it's frustration with the previous ownership over the years,

and I feel like this is their point of leaving and getting that frustration out because it's a new transition. And who have they communicated this to? You or the former owner? kind of through me in different ways just in communication before the talks of ownership was made you just kind of hear it through the conversations with the crews and stuff like that crews i thought there were four employees we had we had six guys in the field um within the last three months we have our field crew as went down to two and they didn't leave obviously they left because the former the current owner not you okay

Correct. So you have two in the field? Correct. And two in the office? Yes. The two in the office don't want to stay? Well, one of those is me and one of those is the owner. Okay.

So it's two whole employees. Correct. Dude, do you want to own a business or not? I mean, those guys, the tail doesn't get to wag the dog. I sit down and have a cup of coffee with them and say, boys, this is getting ready to go down. I'd love to work with you. Let's talk about how that can happen. Or if you want to hit the road, Jack, we'll work that out too.

And I'll get another one looks just like you. Yep. No, I appreciate it. That makes sense. That's why I wanted to ask someone that has the experience with doing it and making those transitions and making the hard decisions. There's a weird dichotomy that we have to walk when we're a leader. A real leader serves the team.

but sometimes the best way to serve the team is allow them to be somewhere else. That makes sense. And sometimes the best way to serve the team is do what's right for the business so that the business is able to pay the team, even if the team doesn't necessarily understand that at the moment. And so it's good to communicate and sit down and listen. So I'm here to serve you, but I'm not here to be subservient to you. And so you, you know, you get to have input to the extent that you're part of the team and we're trying to pull the wagon together up the hill.

We're all in the, we all got our shoulder to the wheel. We're all doing this. But to the extent that you're just trying to figure out how you get to tell everybody else what to do, like you got confused about whose names on the building. And so that doesn't serve the team well. It doesn't serve the customers of the business well. It doesn't serve the future team well for, you know, someone to have inordinate power or to think they have inordinate power from the seat of a team member. So you've got power by influence and by persuasion, not by, you know, throwing your weight around

because you don't have that much weight. Right. And so I would sit down with them very kindly and go, look, I would love to work with you. you guys. But if you have no desire to work here when I take this over, let's talk about that now. And, you know, I'll help you. I mean, I've heard this. But I'd like for us to sit down and figure how we can have a fresh start. Because if you go somewhere else, dude, you're going to have a fresh start. And if you and I can sit down and figure out what the new culture of this place looks like and you speak into that and you speak into how we're going to run the place to serve

the customers, you're a valuable team member. I'd love to have you. But, you know, you, you objecting to the sale is not going to keep the sale from happening. You need to know that. Absolutely. And I don't think that's unkind or belligerent or, but it just lets folks know where they stand. I mean, this is what we are going to do. And the only question now is, do you want to be a we?

Yep, exactly. You know, we kind of went through that with some of the COVID stuff. We had 25 or 30 people quit because I said, you know, we are going to work in the office at Ramsey. We work from the office. We have, we're WFO instead of WFH, right? We don't work from home. We work from the office.

And so, and we work while we're in the office, too, and that stuff. And so some folks didn't want to do that because they were afraid or they were mad or they were whatever. And I can't make them. This is America. It's a free country. I can't, you know, but I can say, this is what we are going to do if you'd like to come. we'd like to have you, as long as you leave your bad attitude outside and bring your full self to

the game, let's go. And some of them said, you know, I don't want to work in a place that goes back to work after COVID. And we're back at York and have been since very early in the process. And I haven't lost a single employee, by the way. But I mean, you know, that, you see the point. I mean, it's, it could be something else. It could be we are, you know, this is the way we're going to do marketing. Well, I don't want to do marketing that way. Okay, then you're not a we. And I'm sorry, I wish you would, but I can't, you know, I'm looking out for the whole thing, serving the whole thing, including the customers, the other team members.

And so your vote does not carry that much weight, so much weight that we're not, that we're going to say, oh, wait a minute, if George is going to, if Joe's going to leave, if Henry's going to leave, then we just, we can't do this. And so, I mean, it's just two people, get you two more. I mean, it's not like you're going to lose 200, like there's some kind of mutiny on the bounty or something here. So I hope you don't. I'll guarantee you if you'll sit down with the right kind of attitude,

add a cup of coffee and listen, have a listening tour when you start this and go, look, I really want you here, but we are doing this. And, you know, if you're here, you get to speak into how we do it. You get to speak into this and that. and, you know, I'm going to listen to you. I'm going to carry your opinion, whatever. You know, I'm not the other guy. I might be worse than him in some ways.

I might be better than him in some ways. I don't have to run him down, but, you know, it's going to be new sheriffs in town. And I'll bet you retain, you might retain both of them if you go at it with that angle. Because you might be surprised they just wanted somebody to finally listen to them. That could be what it is. But listening to them is not the same as doing what they say. say. There's two different things. So, hey, man, that's a really good question. If you're supposed to own this business, Dave, go own it. And don't let, whether some single person stays

or not. I've got about 1,100 folks now. And over 30 years of running this place, there's about another 15 or 1,600 that used to work here. And I'm still here. I didn't quit. This is the Entree Leadership Podcast. I'm Dave Ramsey, your host. Welcome to the Entree Leadership Podcast. Running a business is hard. You spend all day putting out fires as the CEO, the chief everything officer. And by the end of the day, you can't even remember what you did. Yeah.

If that's the case your business is running you, you might be a treadmill operator. Yeah, if your business is running you, you're not running your business. That could be where you are. That's the first stage of business. That's where we all start, by the way. And that's what it looks like to be in the early stages. If you want to change, you want to level up and move through the stages of business and make your business more and more

secure, more and more fun, check out our Entree Leadership Elite. It's a digital membership for business owners. You get a detailed action plan with tools and teachings that fit into your day and show you how to gain momentum and level up through the stages of business. And it's free for the first 30 days. You can cancel any time, no hassle. Did I mention it's free for the first 30 days? So check it out, start your free trial today. You love it. It's pretty incredible. Entreeleadership.com slash elite and sign up for a free 30 days of Entree Leadership Elite.

Scott is with us in Indianapolis. Hey, Scott, welcome to the Entree Leadership podcast. Hi, Dave. What a pleasure to talk to you. You too, sir. How can I help? Yes, I am a treadmill operator. I'm a chiropractor.

there's a team of three, including myself. I've been in practice for coming up on seven years, and since day one, I've been the sole chiropractor in the office. I would love to get off the treadmill and hire another chiropractor, but kind of trying to do some market research on what the going rate is for another chiropractor, it would be a significant chunk of my pay. So I would really love your insight on when it would be wise or when it would be a smart decision to make that move and get another chiropractor.

chiropractor. It doesn't sound like you're overwhelmed with business yet. I'm in the office six days a week, and I'm emotionally plugged into office on Sunday as well. Okay, but in terms of delivering the chiropractic service itself that you get paid for, do you have more customers than you can get to? We haven't had to turn anyone away. Okay. Well, I mean, you're going to you're obviously going to cut it in half if you give him half your book, right? I mean, unless you've got a plan for dumping a whole bunch of new customers in there really fast. So that's the answer. I mean, we've got to have a way to say, I've got to have a reasonable scenario that's laid in front of me that I'm, that's believable,

that says I'm going to be able to get this guy to 75%, which means he justifies his existence. very quickly, and I keep my clients. And can you get new clients that fast? I mean, getting new clients has not been the bottleneck in the practice, I would say, when it is just me. So what is it a chiropractor cost in your area? I feel like $60,000 is a pretty good rate. But when I was looking on Indeed and looking at posting a job,

It said the average rate rate was about 72 to 77 before taxes and covering malpractice insurance and continuing education. In the world, in the world that you're in, would it be normal to pay him a base and share a big chunk of his productivity with him? In other words, I'll pay you 50 and show you a path to 80. I think that would be very acceptable. Yeah. Because, I mean, to the extent you can move it, the lower you move the base, the faster this thing makes sense for you. But he's got to then, the lower, the more you lower the base, for instance, if you had no base, he'd have to really believe there was clients standing at the door. Right. You know, and so, or, you know, just really, really wanted to be in with you or whatever it is. But, I mean, so, in. So, in. Instead of saying I'm going to pay you a 60 flat and hope I can monetize on all this,

I would rather pay him 45, 50, whatever number you can come up with that you feel good about, and then whatever percentage it is that shows him how he can make another 30, and that would be probably when he's at somewhere around 75 or 80 percent productivity, a billable hours. Okay. I'm guessing. I don't know exactly how that business works. I mean, if you talk to a chiropractor that had four chiropractors working for him,

what percentage of billable hours would you think out of 40 that he would get out of his guys working for him? I mean, I've talked to a few chiropractors, not in Indianapolis area, but just nationally. And one was, I haven't gotten that information about productivity, but one said that he paid a base of 105, and that's very high, I felt like. Yeah, but that may be a different market. It may be a different market or a different situation. Right. I mean, if you're in Indianapolis and he's in Orange County, that'll be a whole different thing, you know.

So, you know, a completely different world. So, yeah, if you're looking and doing local, regional comp study on Indeed or something like that, then it ought to, you know, or LinkedIn, they ought to be able to give you some info that indicates what the going rate is. And if the going rate is 60 to 70, then I'm going to, I would try to say, I'm going to bring you in at 50 and show you a path to 80 based on your productivity. But then you've got to provide the leads because we don't typically ask the chiropractor that's an employee to go do the marketing. So you've got to grow the marketing side of the business. You've got to bring the people on the door. Sure. And indeed, it does give

pay ranges for the other listings that I've seen, but it doesn't say how much of that is guaranteed and how much of that is based on performance incentives. Right. And so you and are going to make it up and try it, you know, because it doesn't work for you to pay 80. Right. And so the only thing that works for me is 50 and an opportunity to get you to 80. And if you will go crazy, you could get to 100.

But let's just say reasonably, I think I can get you there by bringing in leads in a addition to this. And so then what I'm going to do is, you know, I'm going to give him some of your book, but I'm not giving him much of your book. I'd rather him be sitting there twiddling his thumbs. You're making your money. I want to get you back to a normal workload. You're carrying a little bit heavier workload. So we trim your book back 15 or 20 percent or something and get you back to a five-day-a-week guy, right? Right. And then and that then let him have that much. much. And so basically your trade-off then for that portion is you get a better quality of life for this salary you're paying than the rest of it is we're looking for a return on investment.

We're looking for if I'm going to put this much out in payroll, I've got to make more than he costs me on him. Right. Net, net, net, that's growing the business. And if you can, if you can hire him for 70 or 80 and you're bringing in, you know, gross revs of 150 on that total, you know, then you can do that an infinite number of times. I mean, then your bottleneck becomes office space. Right. We would only be able to have two treatment rooms with the space that we have currently. No, that's not what I'm saying.

I'm saying conceptually, business model-wise, if you can get these guys where they cost justify, then the only end to them is just other logistical things. It's not the model. So if you've got a guy that you're paying, 75 or 80 or 90 and you're you got gross revs coming in of a hundred and a half or 160 on him you take out his what you're paying for the rental on the space and extra administrative costs and that kind of stuff associated with that guy you're still making good money then you can do that 10

more times if you had the space and you don't have to but you could sure you've got a scalable model is my point so that's what we're trying to build out here and yeah that that's what I would do and honestly that position your offering, if somebody's looking for a J-O-B and they're not looking for an opportunity, it's not going to be appealing to them, which if I'm you is cool. It keeps that guy out. I don't want a J-O-B guy. I want a guy or gal that's stepping and fetching that's getting it.

That's what I want. And so the very first person I ever hired 100 years ago was a different world, and it's not, I think everything we've talked about is what I would do if I were. you, but Russ Carroll was the first employee of what we now call Remsey Solutions, and he was a financial coach, financial counselor, we called it in those days. And Russ worked 100% on what he, he got 50% of the counseling. And I told him, I said, you better do a lot of counseling. Your kids are going to be skinny. And, but he believed in the mission, and he believed in what we were doing, he was coming out of ministry and wanted to do this, and he could see how we, I was overwhelmed.

I had more counseling than I could possibly do, so I knew I was turning away customers. So I knew I could feed him a certain amount, but I was telling him, you know, you need to go out and talk to marriage counselors and get them to send the financial problems over here. You need to go out and talk to accountants and get them to send the financial problems over here. Meanwhile, I'm going to start this thing. I call Financial Peace University. I'm going to keep doing the radio. I'm going to do more speaking, and I'd rather do less counseling.

It wasn't, but about a year later, I quit doing counseling, and he took it all. But at the first, I was still doing it, and he was still doing it. And it was, you know, but he only got paid for the first quite a while working here on what he actually produced. And he ended up doing very well financially doing that. But didn't start out that way. Start out believing in the mission, started out believing in what we were doing. And Russ, a good friend of this day, he's retired now. He believed in what we were doing.

He stepped into it. He was not looking for a J-O-B. He was looking for an opportunity to make a difference in people's lives. And in chiropractic, you've got that same vision, the same opportunity, where all they're looking for is how much money they can take from your business and how little work they can do. Obviously, that's not who we want on the team. So that's where you go with that.

Hey, Scott. We appreciate you calling in, man. Appreciate your questions. be very good question. And you're right. You are on the treadmill operator and the way to level up is get the business to where it all doesn't depend on you. And then you move from the treadmill operator to the pathfinder. And that's the next step. And you're right on the way to doing that. You're getting where the business can run where it's not dependent on you to survive 100%. This is the Entree Leadership Podcast. Thank you for listening, America.

practical business talk for real business people, by real business people. This is the Entree Leadership podcast. Thanks for hanging out with us. If you want to participate, you can call in at 844-944-1070 or leave your question, and we'll get back with you, make you a caller, schedule you to be part of the show at Entreeleadership.com slash ask. We would love to hear from you. Also, I need your help if you're enjoying this. share it with other people, click the share button and send a link out and go,

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listen, we appreciate you. And you can leave a review if you want to leave a five-star review. Otherwise, just don't. Because if your mother said, if you ain't got anything nice to say, don't say anything at all. So five-stars are what we're looking for there. Hey, this comes in from Instagram. J.H. says, Dave, I'm worried about handing my son my business. Because he doesn't know what it took to reach the point of any clients.

His grandfather and I have followed your content for years. Any advice? You should be worried about that. He needs to have some calluses. He needs to have experienced some stress, some disappointments, some betrayals. He needs to have a client lie to him and say they're going to sign up and then they don't. He needs to sign up a good client and then somebody steals it. So all in all, he needs some road miles.

Otherwise, you don't hand it to him. There's nothing wrong with that. I mean, he needs to have spent some time in the business, learning the business, and obviously clients are part of your business. But if you hand somebody that doesn't know what it takes to go get a client or keep a client, a business that is client-based, pretty much doomed to failure, dude. You're smart. I wouldn't do that.

So just randomly handing that off. And I wouldn't hand off any position inside your business to someone who's untrained. and inexperienced, regardless of their relationship. I don't give people stuff to do inside Ramsey, whether they're Ramsey's or not, that they haven't given us some indication that they know how to do. And, you know, when they first come on board,

they don't even know where the bathroom is. So we've got to tell them, you know, I mean, we've got to show them everything. They may be very good at their particular discipline when they come on board, but we don't just bring somebody and go, oh, you have a nice resume. We're going to turn you loose and let you make a mess.

No, that's not delegation. that's stupidity. So, no, you need to train people your way of doing things, and they need to get a few calluses on their hands. Now, does he have to have been there when it started to be qualified to take it over? No, no. But he has to show an acumen and an understanding

that experience only experience indicates. So it sounds like he's fairly new into the business or he's been given something over in the corner to do and that didn't have anything to do with the core pieces of the business. And you're not ready to do your succession deal yet. I mean, you can lay it out and go, when you have managed this many clients successfully, then we will be in a position to hand this to you. And then that's the only thing that's fair to the clients. It's the only thing that's fair to the employees.

It's the only thing that's fair to you. And it really is unfair to him because you're setting him up to fail if this is a client-based business and he hasn't what it took to reach the point of any clients. I mean, you need to probably get him some since it's obviously important. He needs to go get some. And so, yeah, that's the process. Michael's with us. Michael is in Philadelphia. Hi, Michael.

Welcome to the Entree Leadership podcast. Hey, how you doing today? Better than your phone. What's up? I do $1.5 million so on clean the supplies in Philadelphia. I'm open to the end of the week, and I want to buy a picture sign for my trailer. So I sit higher so people can see me because I started my business on. Okay.

Very interesting. I'm not sure I grasp it. So let me ask a few questions so I can understand what you're doing. So I'm kind of visualizing you got like a folding table. when you started at the intersection and you're selling glass cleaner or 401k or whatever, not 401. 409, 401K is a mutual fund. Oh, my God. Yeah.

But, I mean, you're selling like, you're selling like spray bottles or something off this folding table at the intersection. Is that what you were doing? Correct. Wow. And you grew that to a million and a half dollar top line? Top nine, million, revenue. Yeah, revenue. Not profit because you got all the cost to get sold.

So explain to me. So you have other guys working for you at some point that are running into the intersection selling this stuff? No. Just to be set up on the side of the road. We started in bread boxes and we moved to tables. And then tables were right before the pandemic. We bought a 48-foot goose neck trailer. And then we put the same shelves that Walmart uses to soft our shelves.

We put them in the trailer. So we have six of them And then we put our cleanest supplies on the shelf And then we don't have to keep packing and unpacking every weekend So you pull up now with the gooseneck and roll up the sides of it And you've got a standing deal ready to go Correct, I open all my sides and I'm good But people pull over and buy

What's your biggest selling item? My laundry turgant in a five-gallon bucket Okay And so why would they buy them? that instead of buying that at Costco or Walmart? Because it costs $40, and then with the one that you buy from Costco's, it costs $25, and the Costco fits in my 5-gallon bucket, seven of them. So the 7 bond return that you buy from Costco fits in one 5-gallon bucket of my laundry

detergent. So yours is 1-7th of the cost? Correct. And I sell for $40. It's known as a bargain. Correct. So the appeal is price point? point, yes. Wow. So they just pull over and open up their window and hand you money and you hand

them the laundry detergent into the back seat? Pretty much when they come out, their car and look put it on my trailer and buy laundry detergent, clean the supplies, paper, tails. So do you have to pay rent for a place to set the trailer? My rent is $300 a month once I move it because over a week, I'm not open only on the weekends. Yeah. So you just pick out a high traffic local? location of blank lot and you talk to the guy and you pay him i'll pay you to i'll pay you let me sit my trailer here no no blank lot just right on the where you park you're parking car on the street i park my trailer oh oh you're pulled into a parking you're pulled into a parking spot okay

yeah park a spot all right i've been there for 13 years okay but now you've got multiple trailers no one trailer oh still just one yeah i started one but in bed in bed boxes yeah i got you then you went to tables and now you got one trailer and you did a million dollars i'm impressed this is interesting to me thank you for sharing all this very you're inspiring dude and then on mother's day fourth of july new years and then when it snows i change over to the seasonal item what's a seasonal item like mother's day i'll make baskets mother's day baskets and sell mills day baskets and not the cleaning supplies that's only for 15 days out of the year you're a freaking genius.

I love this. And Valentine's Day, you know, it's saving 15 days. Dadgum flowers, yeah. No, not flowers. Teddy bears. Stuff on Victory Secret. Stupid teddy bear. Put in the box, put a Victory Secret perfume in it,

and buy the perfume at the end of the season on clearance on Victoria's Secret. And I put it in my basket. So what's a Valentine's basket sell for? $60. $6? $6. $60? 60.

60. Okay. Oh, 60, 50, 60. Okay. And what's your cost of goods in that? 18 dollars. You're genius. I'm not sure.

And so I got, now I'm dying to know how I'm supposed to help you. This is in spousy. So I want, so once, without a trailer, right, people could see me driving by easier. When I put my business in the trailer, I'm only getting a lot of my regular customers on get new customers. So I want to put a, you know what a picture sign is for advertisement when you're building.

It's a box, it's called a picture sign in reality. So you put your sign in it and it lights up and I want to put one in them on my trail. So it's eight feet wide, four feet high. And that will sit.

My trail's 11 feet, so I'll be 15 feet high in the air. So people can now see me in both directions, my sign. and know what I sell in my trailer. Okay, what's that cost? Five grand.

Dude, you made a million dollars. Why are you calling me? Buy a sign. Because the guy won't pay cash. He won't. I was like, I want to just pay the old nail up front. And he's like, no, you only can pay me, you know, $500. And then it takes me about two months to make it for you and you pay me later.

So once he installs it, I'll pay the balance. is smart to do it. I mean, I'm going to do it. So you're just asking me if you should put $500 down. Do you trust the guy? You know, he did my other five signs. We're no issue from my banners, the ones that you just... So if you give him $500 and he takes two months to build a sign and you give him $4,500,

are we not done? When he's done, he'll get to $4,500. And that's when he's done, he gets the other $4,500 and we're done? And we're done. Okay, so why wouldn't we do this? I don't know. I was going to do it. I'm doing it.

I just think of it as soon. And I'm paying cash. No check, no credit card, no debit card, physical cash. That's fine with me. I don't care. But, yeah, you need a receipt because if you're going to write it off on your taxes, you need to keep it in your file in case you're audited. But if you're going to write it off as a business expense, which it is, my brother.

So, man, yeah, I mean, and you think this is going to get your traffic level back up? Yeah, I think people know, because when you drive by my trailer, it only looks like a trailer because it only opened on one side, not both sides. Okay. So you're going to put stuff on there like the way to beat inflation is to see Michael. Correct. Yeah. It would be Mike. I think you're the antidote to inflation.

Yes. I like it. I mean, you're worried about it. You worried about spending too much of the grocery store. You hadn't seen enough of Michael. Correct. Yeah. Yeah.

And I did, in my business, we lived in our business for 10 years in our warehouse. We landed in a warehouse for 10 years. And last year, in March, we bought our house 20% down, and we did not pay sticker price for the house either. And we didn't overpay you. I can't imagine you would pay sticker price for it. It just wouldn't be like you. No. Yeah, 10 years in the warehouse, living in my business, sleeping on my floor to get where I'm at today.

Michael, you are what makes America great. Oh, my God. Anybody out there that's unemployed after you heard that story, I have no mercy for you. He sells laundry detergent off a folding table and turns it into a million-dollar-year business. And he's working with margins that most businesses wish they had heard of. unbelievable, fabulous entrepreneurship. I love you, Michael. Amazing.

Call me back sometime. Tell me how this business is going. You're an amazing dude. That's a lot of fun. This is the Entree Leadership Podcast. This is the Entree Leadership Podcast. Thank you for joining us. We're so glad you're here.

This is the place where we love small business people. We love people that get up and get it done, that leave the cave, kill something, and drag it home. you know, we understand your race is effective when you are. Whereas sometimes we're having a conversation with the marketplace. The marketplace says you're awesome and that means you're making a good profit. Sometimes the marketplace says you suck and that product you launched was horrible. And marketplace will talk to you if you'll let it.

And if the government will stay out of it, then we can have this conversation. It's called capitalism where good people serve other people with goods and services. 54% of the gross domestic product in the United States of America today is created by small businesses that have less than 500 team members. That means more than half of our economy is you people, if you're one of those small businesses. You can call us here again at 8449-1070 if you want to be part of the show. We would love to have you. Travis is with us in Tampa. Hi, Travis.

Welcome to the Entree Leadership Podcast. Hi, Dave. How are you? Great, man. How can I help? So, well, actually, I'll start. So I'm the founder of a Christian game development studio. I lead a three-man team, and we are a startup, so we don't have any revenue currently. And so my question is, what is the purpose behind giving away a percentage of your company to investors instead of going into debt to raise capital?

I've never suggested either. So I don't know who we're posing the question to, but I can address it. if you want, in general. So when are you going to start making money, Travis? We're currently working on a game right now that we're looking to launch at the end of this year. Okay. Is there any incremental revenue you can create in the meantime? This feels like all or nothing so bad.

I'm looking to launch a Kickstarter over the summer, but as of right now, the team that I have working on it, we're kind of all in it in the same. sense where, like, nobody is getting paid, and everybody's looking to just finish out strong and finish making the game. Okay. And how's everybody feeding their kids? Extra jobs, other jobs on the side. So I have two jobs on top of making the game.

Okay. So this is a glorified side hustle for everybody involved as a startup with the idea being that we're going to make our money when we get the game launched? Yes, sir. Okay. Why don't we just do that? Why do we have to borrow money? Well, we don't.

Okay, and why do we have to have investors? We don't. As of right now, we don't. We don't, because there's not, you've covered, you've got the game, you've got a model that works, as long as everybody stays. But if everybody goes at some point, I really need some freaking money, I'm out of here, and we've not got the game launch, then you've got an issue, right? But what you've sold is the end game, no pun intended.

You've sold the end of this. And now, you all, when you take it to market, is your plan then to sell it or to just monetize it? Monetize it. Excellent. Excellent. Okay. And so what's everybody, I mean, if I sat down with the team, you said there's how many people

three or four working on it? Three team members with me. Okay. If I sat down with the four of you independently, would you all tell me the same number that you thought you were going to sell? Have you all talked about it and agreed that we think there's a lot? that we think this is what it is? I talked about that.

So one of you might be thinking you're going to make a million dollars, one of you might be thinking you're going to make $10 million. Yeah. Okay. So what I would do, to be fair to everyone, is align expectations. Just so that we, okay, why do we think this? And what, you know, give me some marketplace examples

that are reasons that another game did this, that was similar or in a similar space. But there's always that one or two that went to the moon and we don't think we're them, but boy, if it did, that'd be really cool. But we really are doing this on a reasonable expectation that most people that launched something in this type of space make X. I don't know what that is, because I don't know anything about the space. You follow me? Okay. I'd be pretty ignorant about it. But here's the thing. Okay. The interesting thing is that most small businesses start and organically feed

the business with their own produced revenue, not with investor money and not with going into debt. The vast majority of them do. Most people do what you're doing. I did it. I've never borrowed a dime. I've never brought in an investor. We're going to do $300 million top line this year. And I did every bit of that. And I'm sitting in a $400 million building that we pay cash for. so are worth of buildings on the campus. But the, how did I do that? Over 30 years, every time I made some money, once we started making some money,

and you're not quite there yet, we would take some home, put some back into the business, some home, put some in the, leave some in the business. Sometimes we left more in the business. Sometimes we took more home. But we've always done a little of both once we got some money going. But, and I don't mind sharing with you,

the first year when I started this, I started doing it the way you all were doing it. I had some income coming in, and I figured out, projected that if I shut down my real estate stuff I was doing and went full-time on financial peace stuff, that I would probably make about $60,000 that year. That previous year, I had made $120,000 doing real estate, and this is in the 80s, okay? And so my projections were exactly right. I cut my income in half the first year.

Obviously, I don't make that now. So it worked out. But my point being that you start to do those kinds of things that give you hope. And then, you know, okay, we can live on the 60. We can live on the 120. We're going to dump the next 100 into the back end of the business and grow it and make more and make more and make more and grow the product line, grow the team size and ROI on the team and all that kind of stuff. So then when I got into this, I started, everybody keeps saying, oh, you need to bring in partners. And I'm like, no, I've had partners.

I don't ever need a partner to the partner again. Oh, you need to bring in investors. And I've got a friend that says, you know, a venture capitalist that comes in and takes your business, gives you, takes a percentage of the business is like picking up a hitchhiker and then they carjack your car. Because a venture capitalist usually wants controlling interest for the money that they put in. And then you work for them. So, you know, they'll give you a million dollars, but now you're done because they own 86% of the company. So if I'm you, I'm going to gut it out and not be beholden to a bank because most people don't. In your world, if you go into debt, you have a high probability of ending up with a bunch of debt and no income.

Because you've got zero proof right now, social proof of product market fit. you've got a perception you've got an idea you've got a dream you're building into that you probably know what you're doing i'm not suggesting that but i i am suggesting that until you have actually collected money from a customer you haven't proven squat it's theory until then and i know that because i've lost millions of dollars trying to grab like that so um you know and i had great idea this thing's beautiful but it just didn't work you know and and but i i i don't think you've got a high probability of this turning into money, but not so high that I want you in debt.

Okay. Some banker breathing down your neck, man, just roll up your sleeves, sell the dream, sell the dream to the team like you've been doing. Keep this thing moving. Keep it moving. Keep the line of code coming out. Keep the software engineers moving, whatever you're doing there. And, you know, let's set some deadlines.

Let's get a beta out there. Let's get, you know, some customers playing with it so they like it. And if you can get some customers in a beta situation to give you a few dollars to show that they'll actually transact on this thing, that would be, that would give me a lot of comfort if I'm you. And, but let this thing grow it at the speed of cash. When we broke ground on this building, the newspaper who hates me here, it's a little pamphlet, a little liberal pamphlet, and they put, came out and did a big story against our will,

and it's, and, you know, the governor was here, we're breaking ground on the building and everything. Ramsey says he's going to build at the speed of cash. That's after I've been running the business 25 years. I'm still building it at the speed of cash. So it's mythology that you have to take on investors to win. It's mythology that you have to have a banker in debt to win. As a matter of fact, the vast majority of people don't do that.

And the ones that do often live to regret it. So I'm with you. I wouldn't do either. I think you can do it. and I really want to hear back from you when you launched that you made $10 million. What do you think things going to do? I think it has potential to really do a lot. What's a game like that cell for in the marketplace, something similar?

A free model where they have in-app purchases, but I mean, they've done anywhere in excess of at least a million to 10 million plus. So in that purchase, meaning you let them play at a certain level, but if they want to engage with other players virtually or they want to go past a certain level, they've got to get behind the paywall. Yeah. Wow. And then that turns into a million,

so I ran into a guy at an entree leadership event at one of these events that was 19 years old. His dad was working for him and his brother was working for him. And he had written, it wasn't a game, but he had written, and they had done $4 million in 12 months. He had written, I'm trying to remember the game. It was like a little kids game, a farm game where you got farm animals and you built barns and all that crap. And he had written an app where you could add stuff to the game.

He was adding on to someone else's game. You know what I'm saying? Oh, yeah. That type of thing. And they had done $4 million top line. He's 19 years old. But this was about, this was a few years ago. go. But it was pretty impressive to sit and talk to the young guy because he was on it. And his dad's

like, yeah, I mean, we got, you know, $4 million. Looks like we're going to get another $5 or $6 million next year. So we're all in here helping him, you know. And the dad's like, I can't even spell software. And I'm like, yeah, me neither. Let's get over there and figure it out, buddy. So the kids a genius. So, yeah, that. So you got a pretty good thing there. If you got a million dollars came in, and you shared that four ways. You guys have had a pretty good year or good 18 months we're building this thing right yes sir yeah that would be that would be called a that would be called a hit okay cool that's fun well that's got great upside then and and then of course it could be 10x of that if it got really crazy so that would be cool oh man i love it

and what you learn from this one you'll launch into the next one too right yes you always get learnings and iterations and so on all digital stuff that much i even know so um yeah very cool Travis You guys are rock stars, man. That's pretty impressive. Man, we have talked to some cool entrepreneurs today. They're out there. They're out there. If Washington just leaves them alone, they can do all kinds of stuff.

Oh, man. I'll sit around and stick your lip out and think America isn't great. It is. Everything's good around here, man. We're loving it. Hey, I'm your host Dave Ramsey. Thanks for listening. Your business only grows when you do.

You've got to choose to be a better leader. This is the Entree Leadership Podcast.