EntreLeadership - We Make $13 Million, But We Didn’t Pay Our Bills

Episode Date: February 18, 2026

Today, we’ll hear about: How to recover after incurring debt and damaging relationships with vendors A business owner looking to maintain company culture with his remote teams Dave’s advice on reversing a bad promotion A dad struggling to hand off the business smoothly to his sons   Next Steps: 📞 Have a question for the show? Call 844-944-1070 or send us a message: https://ter.li/ask-us 🚢 Set Sail with Dave Ramsey! Book your cabin today: https://ter.li/s8xnyo 📚 Learn about the EntreLeadership System™: https://ter.li/system-p 💻 Get EntreLeadership Elite™ for your business: https://ter.li/elite-p ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/enl 🏢 Attend EntreLeadership Summit: https://ter.li/summit 🎤 Attend EntreLeadership Master Series: https://ter.li/masterseries 📖 Order Dave’s new book, Build a Business You Love: https://ter.li/b4kru2 📃 Build your KRA for free: https://ter.li/ks4jnp   Connect With Our Sponsors: 💼 Go to Belay Solutions or text ENTRE to 55123 for their free resource! 💻 Visit NetSuite today to learn more. 📈 Grab Sales Gravy’s free resource to help you hire and lead better.   Listen to More From Ramsey Network: 🪑 Front Row Seat with Ken Coleman 🎙️ The Ramsey Show 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is Entree Leadership, 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 got a question you want to ask on the show, fill out the form on Entreeleadership.com slash ask or call and leave us a note at 844-944-1070. That's 844-944-1070. Thanks for joining us. Andrew is with us in Dallas. Hi, Andrew. How are you? I'm done. Great, Dave. Thanks for having me. I appreciate the time. Sure. What's up? I am the CEO and founder of a third part of logistics company based in Dallas, focused on e-commerce and retail fulfillment. We have about 30 full-time employees, 20 to 40 temps a day, depending upon the workload and the warehouse. We're doing 13 million revenue this year.

We've got about 1.25 in debt. And I'm looking at doing a debt consolidation loan for our debts, and I would love your thoughts on that. Why? It would relieve a little bit of our finance. We have also we're handling with AP, obviously paying off multiple different collections on getting these debts down. And then the second piece of this too is most of the 1.25

is between about three different suppliers, and our services are paused with them. need them, but it would be nice to have them in to be able to use their services. They're paused because you haven't paid them? Yes, sir. Yeah, we're back. We're profitable now. We're, we have payroll. I'm sorry, we're paying them down now, which is about $20,000 a week to each of those. And it'd be nice if we just got them all knocked out and get done right now. How long have you been out with them? How long have you been in collections? About four months. We moved this year and we had

bad labor management on my part and also a move into a larger warehouse. So we forecasted about 70% accurately, which put us behind. And we've been calling them ahead of time. We haven't been avoiding it. It's just as a pain struggle that we've been through. So 20,000 a week is a million dollars a year, right? Yes, sir. Yeah. So you'll be gone in a year. So So are they, how evenly distributed? So give me the breakdown between the three of them.

One of them is about the three major ones. One of them about 400 grand. One's about 300 grand. The other ones remaining about 180 to 225, I believe it's out right now. Okay. So that's gone in just a matter of weeks. Yeah, it'll all. It'll all be gone in a year.

Yes, sir. Okay. And you said three major ones. Is there more? Those are the three major ones. The 1.25 is actually probably getting closer down to $1 million because we had a lot of these little ones that we were floating through and just asking them for another two weeks through the time period. As we get our cash flow positive back in January, all those little ones are going to go away. And so because we'll be back, we're back profitable now.

So we'll be back managing and paying them on time. These three major ones are these ones that are going to be about, it's going to be about $800,000 and $900,000 left between those three major ones for the rest of the year. Okay. And how long have you had this business? We started in, we started out of an existing parent company, but then we really started and broke away in January of 2021. Okay, so just a few years. Yes, sir. Okay. So is it also safe to assume that your cash and your profits are not linear? They should be hockey sticking.

Yes, they are. Yes, sir. We have 10x growth pretty long. well, revenue-wise, and then we've been profitable all of last year. In other words, we don't really want to extrapolate only $20,000 a week. No, no, we want to knock this out and get on at ASAP. It's just more of like, you know, I've never had debt in my life. And so it's kind of like now we're in this position of building a business and not, you know, less than stupid tax stuff we've done. And so it's like, all right, I can relieve our operations by having one main target with a little bit higher interest rate, pretty friendly. Like it's no personal guarantees.

or I can continue to deal with collections and. And who's offering this? We have a private lender here. Actually, it's a great partner, actually. The friendliest terms probably you get across when it comes to this type of debt reconciliation offer. When you say partner, what do you mean? Oh, I say partner, just in my network of relationships I have. That's not a partner.

Oh, okay. It's a relationship. Okay. Yeah, good relationship. It's a private equity company that invests in faith-driven faith leadership. businesses. Okay. Are they taking an equity position for this? No, no, sir. There's no equity position. There's no hostile language. It is strictly going to be interest, a high interest loans. It's at 16 to 19 percent. We have a term sheet in front of us we're talking to them. And then 0.5

of any realized revenue over the course of the two-year term that they're offering us. Nah, I'll pass. What would be, okay, I agree with you. I'm going to submit to you. What's the, what's the reasoning on your response there? Like, how would you... Interest rate is absolutely ridiculous. And I would just call these three lenders and just start and say, guys, look, we want to get you back online

and these vendors, and I want to get you back online, and we're going to commit $20,000 a month to this and at a minimum, or $20,000 a week get to this at a minimum, and you're going to see these healthy payments coming in. And if the healthy payments don't stick, then yeah, you could pop us back off line again,

but you want our business. We want to work with you, and we're going to make good on this. Yeah, yeah, and they see our financials and everything, too, so they'll know what we're doing. Yeah, and, you know, we give them the 19, the 19% gets you out of this a month and a half sooner. Yeah.

Yeah, it does. It's $22,000 a month. Yeah, this is like a September horizon. I mean, it's not a, this is not a, five or 10-year program here. And so this is, you know, you, you stubbed your toe. You didn't manage your cash flow well. And like you said, you missed budget and grew too fast and it caused you to stumble.

And you missed your projections. And you won't do that one again. I've been there. No. It's too painful and it's too embarrassing. And that's what this is more than anything. honestly, I've been there, and you want to get rid of the embarrassment as much as you want to get rid of the actual debt, because we're really not, we're really slowing down how fast we get out of debt by this.

It's not speeding it up. So, I think I would call them, and depending on the nature of the vendor and, you know, what they put, what was it they provided? Did they provide a service? did they provide a good that had a low cost of goods sold? You might say, you know, under, if you were to give me a discount on my balance, I might put you at the front of the line. And instead of paying them evenly, if somebody gives me a 25% discount on one of these

because to get me to get paid off and to get back to doing business again, to get cash flow in both directions again, so even if it's the 400, I might put them to the front and say, you get $20,000 a week until you're paid. And I'm going to just let the others are going to sit a little bit. Somebody wants to do that and get out of debt even faster. I would ask, but I mean, not demand and not say we're about to go broke because it's not true. But just say, I'm committing $20,000 a week to this process.

We're going to be done with all three vendors by September. If you would like to be at the front of the line on that, if you want to offer a substantial discount, then we can do that. Otherwise, we're just going to run all three of you at the same time. And either one's fine with me. I don't care. And see if somebody steps up and, you know, knocks another hundred grand off this or something, which is entirely possible. If I were on the other side of this, I would seriously consider that if I were looking at you. And I wanted to get you back in the saddle as a customer and paying me again and buying from me again and doing business with me again and all that kind of stuff. So that's a, that's a,

assuming it gets there. So I've done that in several different situations that were positive. So I don't know, but no, I wouldn't, no, I wouldn't give somebody 19% to avoid the embarrassment and to extend the pain one extra month. No thanks. If you're a business leader and you're constantly behind, here's the truth. You're doing work that shouldn't require your time. When that happens, most leaders look for speed. Better tools, smarter software. And yes, AI can help you move faster, but faster isn't always better, and speed isn't the same as leadership. Tools can't replace your vision. That's why real progress doesn't come from piling on technology.

Progress comes from delegating to capable people who know how to use it. B'Lei matches you with qualified U.S.-based marketing assistants, accounting professionals, and executive assistants. They're real humans who understand your priorities and use technology like AI to execute. your plan. Look, leadership is about building systems that work without you focusing on every detail. So, if you're still doing everything yourself, you're not leading. You might just be the bottleneck. Download Blaze Free Resource, 25 marketing tasks you can delegate today by texting Entree to 55123. That's E-N-T-R-E to 55-123. Zach's in Atlanta. Hey, Zach, what's up?

Hey Dave, I just wanted to give you a call and ask a question that I've been having trouble with for a while. I'm a power utility contractor in Atlanta, Georgia. We run a debt-free business. We have 40 employees, and we did just over 11 million last year. My question is, how do I create alignment across my team that does construction work across the state? They report daily to our customer direct. and I find often that they form silos with cultures of their own that do not line up with our core values. Why do they report to your customer daily?

So I guess for some context, we're contractors for the power company, and we have dedicated contracts where we have crews anywhere from two to five men on a crew that are assigned to a region of the state with a director that assigns work orders to them daily. and they cover that region completing work orders as a contractor for the power company. Okay, so because of the daily communication and the isolation, they've forgotten who they work for. Correct. That is exactly the problem. Yeah, that makes sense. It's logical. And I even find that because they form strong relationships with the director that they work with,

that sometimes the director will almost help them get out of things that we try to do, like safety meetings right. So they'll almost come up with a reason to not be there. Yeah. How long do you end up having a relationship with that director? I mean, you're going back to them repeatedly, are you not? Yes. Yeah, I mean, I speak with most of them, if not weekly, every several weeks.

But, I mean, once that particular job or contract is finished, you probably are going to sign up with them again for some more later, right? Oh, yeah. These are multi-year contracts. I mean, we've been doing this work with these people for eight to ten years. Yeah. Okay. Well, I may need to retrain my customer, too, then. Yeah, I think so.

They need to keep their dadgum hands out of my business. They're the customer. They're not in charge of my safety meetings. They're not in charge of my guys. They're giving them work, and that's the workflow. How cumbersome, how many different crews? You've got 40, so far, so you've got 10, 15 crews, right? Yes, about half of those are a different division that does a different service,

but I have 12 employees that this issue pertains to. How hard would it be for the work orders to come to you and you give them to your men every day? Probably not easy. We have a login on their internal computer system where they do the work orders and things. I know. They have not designed it to come through me. I know, but you could log in. That's true, yes.

And then you could hand out the orders. Your guys don't have the login. That's true. That's an idea for sure. You can centralize it and get the power off of them. And then they're no longer confused about who they work for. They're confused because they get their marching orders every day from somebody else. and then that guy sometimes steps in and circumvince other things you're trying to do.

So he's augmenting the confusion. So I don't know if it's worth all that effort or not. I don't know how much pain you've got. If you're in enough pain from this lack of alignment, then it's going to be worth the extra hassle to take the orders off the computer and distribute it them yourself or have a manager do that for you every morning. And that's just added to somebody's job every morning. and so they check in with your computer and you move the you move the word order over onto your

computer and then they log into you they don't log onto the customer um and you know that that's one way to do it that's a bit that's cumbersome and a bit drastic so i don't know how drastic we need to get i probably would start with something else and just say um you know so who actually leads these 12 people? I have this year promoted a manager that just he is just over those. And we've been working on putting processes in place for him to start making weekly site visits and grading them and scoring them on meeting the competencies and doing the things that we want to see repeated, right?

Yeah, I think that's going to create a lot of alignment because it's creating accountability. And we're reminding who's, you know, we're reminding who they work for. I mean, because it's very logical that they're getting confused in this situation, even though intellectually I know that this guy doesn't, but, but, you know, he kind of, I kind of do report to him because I have to get my work from him every day and then, and then he's interfering in other stuff. So that's one thing I would do. The second thing I would do is the instant one of these guys stepped between you

them on something like a safety meeting, I would do a sidebar with that customer and say, we're not doing that. Agreed. Yes, sir. We're not doing that because this is important to our organization. My relationship with you guys is to serve you and get the work done, not to manage my people. And we're not doing that. So we're not going to do that.

Okay. And, you know, it takes 30 seconds, but you just sidebar with that guy. And you won't have to stop that but a couple times. and it'll be done. You'll never hear from it again. Because nobody ever told them, nobody ever told them it's wrong. That's all it is. And if you do it, you don't have to wait like 30 days and get all upset about it or something, just instantaneously.

Hey, I need to jump on the phone with you right quick. And 30 seconds later, it's over and you've moved on, right? And you just go, we're not doing that. These guys are my guys. And we demand that they do safety meetings and you don't need to interfere in our safety meetings. our relationship with you is to get the work done and for you deliver the work every morning, not to get involved in my company culture. Understand?

Got it. I'm retraining my customer. And I'd be pretty direct with them that way, especially in that world where you don't want to be subtle. Right. And that's, you know, and that's the biggest thing is like the safety culture we have is paramount. I mean, these guys work with voltage up to 500,000 volts. I mean, safety matters, right? Yeah, it's death.

Yeah. Correct. This is not joking around. Well, whether it's safety or anything else, he's involving him himself in something that isn't anything to do with him. Correct. You know, and inappropriately. So, yeah, I'm going to, you know, no, you don't get that option, you know. So, but just a little course correction, and you don't have to be mean about or anything, but I would be very clear, very brief and very direct and very instantaneous and very private.

and course correct that. I think that'll make that go away. Then you do the stand-up, do the weekly meetings, and the more frequency you have with your guys, the more alignment you're going to get. So like in the restaurant business, every shift has a stand-up. All the employees, all the waiters, the cooks,

the front of house, the wine steward, everybody. Everybody stands. up and we have a circle and we all get aligned and then we break the huddle and then we go serve the customer and they don't do it once a day they do it every shift and so stand and we do standups at ramsie we come in we're not sit it's not a sit down meeting it's a 15 minute meeting and we just gather it we huddle up and we break right we call the play put the ball in the end zone today is what we're doing let's go and um you know not not every one of our departments does that but a lot of them do it

every day. And they certainly do it once a week around here. So your guy's going to be on site once a week. But in the interim, you could do every other day. We're going to do a five-minute Zoom gathering here. Yeah, we just talked about that this week. I mean, I think the Zoom calls, if nothing else, it's just a point for them to see our face and a reminder of who they work.

Where I agree with you completely. Exactly. It doesn't take long. And, hey, I'm here to help you. You got anything I can help you all with today? Is there something going on in the field I need to interject? And, you know, you got a supply issue. You got a safety issue.

You've got a problem with a customer. Is there something as your leader? Because my job is to make your life better. I'm going to knock down blockers for you. What do you got? And, you know, you're supporting them, but you're also staying aligned, which means we're course correcting as we go along, gently in public. When there's three construction guys stand there, we don't take one of them to task, right?

But a good way to lose the whole team. But yeah, you know, and you just stay aligned. And then you go, that's what we talked about yesterday. We all remember. We talked about that two days ago. Everybody ready? Okay. Everything okay with what we talked about?

Yep, we're on track. Okay, here we go. Anything I can help you guys with today? Hey, just want to check in, make sure everybody's good. Here we go. And the more, that kind of, the more touches you have, the more alignment you get. And so I was talking to the guy in a more of a corporate setting the other day. And he said, I think my job is the C.R.

Oh, the chief reminding officer, the chief repeating officer. I just remind everybody and repeat everything over and over and over and over again. Finally, they hear it, you know. And that's how culture is built and that's how values are aligned. It's communication and then implementation and then accountability to the culture. And so, yeah, you're doing, you know, I think you got your finger on the pulse of this really well. And I think you caught it before it's out of control. So, yeah, let's back the customer off and put them back in the customer's seat

just to the manager's seat just because he's issuing work orders. Put your guy out there once a week and then doing every two-day stand up for a little while. Let's see how that goes. Throw a couple things like that in and then, again, make sure the customer backs off. And then I think everybody's going to remember, yeah, there he is. There's a guy on the Zoom call. That's the guy writes my check. Yeah, I remember him, yeah.

That'd be helpful. Very good stuff. Very good stuff. I love it. Very cool. Zach, you're a good man. Keep it up, brother. Sales Gravy understands that managing a sales team is one of the toughest jobs in the business. You're trying to get your team aligned, motivated, and paid in a way that drives real results, not just busy work. But let's be real. If your commission plans aren't working, that mission turns into a daily battle. You're fighting to spark the right behaviors without setting your budget on fire. and instead of leading with confidence,

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Hey, we were just talking about that. But you can't hold your team accountable to something you didn't communicate. Hey, we were just talking about that. Our free key results areas template will help you set expectations and create role clarity for every member of your team. So you feel confident that everybody's working on the right things to drive the business forward. Go to Entreeleadership.com slash roll clarity to download the KRA template for free and start setting clear expectations for your team. Our question of the day comes from Ken and Kansas City.

Dave, I promoted someone into leadership who is clearly in over their head, and the team sees it. How do you correct a bad promotion without humiliating them or losing credibility? Well, you've already lost credibility. Can't get that one back. They know you made a mistake. Everybody knows you made a mistake. Probably even the guy knows you made a mistake. The person who made a mistake.

I'm not sure. depending on how self-aware they are, where they feel like, I am drowning over here. The problem is the humiliation, and you may lose them. You know, this mistake may cost you a good team member. Because, I mean, they've got to walk in the next day after they don't have the position anymore and do the walk of shame. And I don't know how you avoid that. I don't know. You can't, you don't want to lie about it.

butter over and act like, well, you know, so if the team is, the smaller the team is, the better your chance of pulling this off. Because you could sit down with everybody and just apologize to the whole place. There's seven of you, right? There's 10 of you. And just go, guys, I have screwed up. And John over here and I have talked about it, I really thought, because John was so good at his job that he could do this leadership part and it's killing him it's killing everybody

is killing me and i screwed up moving him into the role john is a great guy and he doesn't need to be in that role right now and so he and i've talked about it and he's going to be back in his old role and we're not going to go that way right now someday maybe there'll be a time when he is there or maybe someday there's a time when one of you are there and every bit of this is not john's fault 100% of it's my fault because I should not have as the leader made this decision. I goofed up the decision. And the problem is that I've hurt John in the process because this is hard for him. And he's sitting there while you're saying all this.

And you're just, because if you put all the junk on the table and people can all see all the junk, they're very forgiving of John. John's very forgiving of you. You're very forgiving of them. And you got a chance of pulling this off. but if there's 60 people involved, it's going to be hard to transfer the feeling where John is not shamed by this process, no matter what you say, because you're going to be, you know, it's just too big a group to turn this around. So you can go, look, this is his strengths.

We moved him into this role. But the bigger the group, the harder it's going to be. But I think you take the whole thing on you. first you sit down and talk to John you say John you can't do this I goofed up I'm so sorry you know this is struggling right and I think we need to go back to where we were and we'll look at it again later maybe there's a day in the future we can do this but right now I've screwed up and I'm in the process I've hurt you and I'm embarrassed you and it's my fault and I'm the one that's embarrassed and I'm so sorry and I love you and I'm glad you're here and I sure hope you'll stay and help us in

that other role, and that's what I want you to do. Can you do that? And just talk, just demote him, put him back where he was. And then, you know, what, 50, 50 chance that works, right? But you don't blame him. You blame you. You don't go, you know, I thought you were smarter than you are. You're a doofus. Now, that won't work. Okay. No, we're not talking about that. This is like, I screwed up. I made a mistake. Yeah. When you say I promoted someone into leadership who's clearly in over their head, you screwed up. So when the leader says that, when the leader says I was wrong, I messed up, I apologize. Most leaders don't have the backbone and the courage to do that. They're too small-minded. So they're really just bosses. And if you can look at somebody and go,

I mess this up, you'll get a lot of grace from people. Now, he's still got to come in the next day and not be the boss, not be in leadership anymore. And he still got that walk of shame back to the desk, right? And all of that. And you're still got to walk through this. So it's still, I don't know, what a 50-50 chance you could keep the guy. But, and the team, the team doesn't care because the team already knows he can't do it. And the team will gain respect for you when you say, I did this.

It's not John's fault. I should have looked at this more carefully. I screwed up. I'm sorry. I've already apologized to John. And John and I have talked about it. he's going to move back into this role and he and it's embarrassing for him and you guys I'm so sorry I want to tell John in front of y'all I'm sorry John I'm sorry I screwed this up and I'm sorry I put this

put you in this situation and but we're still going to do it we're not going to act like it didn't happen and even though everybody's embarrassed we got egg on her face and red and the walk of shame and all that stuff is there but we're still going to do it still going to put the guy back where he needs to be and then if it doesn't work then you're just your mistake cost you a good guy. And that's, I've been there, mishandled something and I'll lose a good person. I've been there. And it's 100% on me when I do that. So a couple things there. Just the authenticity, gentle conversations, first handle it with a guy. You take 100% of it on you. Lots of apologies. Talk openly about embarrassment. Talk openly about a walk of shame. Talk openly about all

that and then everybody hears it, everybody sees it and everybody goes, yeah, man, it sucks. But we're okay now because at least, at least O Ken, our boss has a brain, and he's a big enough man to say when he screwed up, and so I'm working with a guy who's a real guy, and he's going to tell me the truth, and he told me the truth this time, and people will rally around that, be loyal to that. They'll push themselves through for somebody like that. That's good stuff. So, very cool. Good question, Ken. Been there myself, brother. You'll get through it. I love entrepreneurs. Don't forget, guys, I started my company on a card table myself.

So I know what it's like to have people counting on you. Your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did. We got NetSuite. That was years ago, and we've never looked back. See, NetSuite isn't just for tech giants. It's built for growing businesses like yours. Over 43,000 businesses already run on NetSuite, including a lot that started just like you. And now with built-in AI,

NetSuite is helping them even more. It's one system connected to every part of your business for real-time insights, not guesswork. NetSuite AI flags inventory issues, cash flow risks, even supplier delays before they become problems. So you can trust the data, stop wasting time, and make the right decisions faster. Take a free product tour today at netsuite.com slash Ramsey. That's netsuite.com slash Ramsey. John is in Los Angeles. Hey, John, how are you? Dave. All, thank you. I appreciate you taking time to talk today. Sure. How can I help? So I've got a dilemma here. I'm about the same vintage as you are, getting ready to retire, but some of us have an exit plan. I don't

have any one of them. So I have a general contracting firm. We specialize in building custom homes and large remodels. I currently have 11 employees, and we do about between $5 and $6 million of sale the year. We operate on about a 12 to 15% profit margin on this. And I have, of 11 employees, I've got two of my boys that are working. And one runs pretty much everyday operations. And I'm trying to figure out what is a fair way to segue out. How old are you?

I'm 64. Okay. Are you ill? I have another month to do. No, I'm not ill. No. Okay. Just, I think more than any, probably

What's your, what do the two boys do? One runs what? One runs operations, the other one does what? Every operation is the other one works in the field. Okay. So like a super? Basically, yes. Okay.

All right. Because, you know, if you're doing this much volume, you're doing more than one job. Correct. Okay. Correct. All right. Huh. So, so it's, the dilemma is, one of them is,

run every operation, it's a phenomenal job with everything. It's super detail-oriented, hyper-focused, engaged, organized, everything you can ask for an employee. The other one is not in this category. But it's a family business. How do you, you know, and the one has been worked for me for probably up to 13 years now. And you're looking to take it over. and I want to pass it off, but what we presently have,

I bury him. You were burying? Why would he bury him? With just too much stress, too much pressure, not properly staffed or positioned. So...

Okay, wait a minute, so he's running operations for the whole thing. That's correct. And there's six or 11 team members. Correct. What's the difference in running operations and running the whole thing in an organization this size? Well, I'm working on the whole backside dealing the office and bidding.

So he's running production. He has run production. He's not running operations. He's running production. You're running operations. Correct. That is correct. Okay.

That makes sense. Okay. So you're doing all the customer interface. On the back side right now. Yes. Who's making the sale? He's making the sales right now. Oh.

So someone's someone comes and wants to do a big remodeler and wants to build a custom home. They're talking to your son. That is correct. Okay. So what is it you do? Basically, I run the office. I do all the billing, the ordering, interaction with subs, contracts, and the like. subs

subcontractors yeah I know but why are the subs not being run by the job it's mostly the paperwork coming through me so I'm basically running the paperwork in the office for those guys okay okay so it's really a matter of trying to figure out I mean of course you got to put a value so what you just need bench depth for what you're physically

tactically doing and yes so if someone was doing what you were doing and they worked for the president of the company who was your son, and your son kept doing what he's doing now and had the title of president, and he had a C-O that did what you do. He could do the customer work, the job management and so forth, and then you'd have someone doing the accounting and the logistical sub-operations out of the C-O's office, and you put them in there and you pay them $50,000 or $100,000 a year to do that.

Sure, sure. And that's someone we're trying to lean towards. But then I also have a situation of the, I don't need to sell the business. You know, there's a value to everything, right? I mean, I can't just slide the whole computer over with all the books and the bank statements of someone. So on, say, here you go, keep going, where his income is going to jump dramatically because I'll step out of the picture and won't be drawn in income. That's a different subject, okay? Sure.

But the first subject is, okay, there's three components. There are two components here that are very, very important. One is for succession plan to work, you've got to have strong leadership that can run the organization. We just discussed how to build that out. You're going to bring someone on and you're going to stay another 12 months and you're going to get your bench depth covered and they're going to do what you do. And their new position is going to be C-O and your son's going to be president. And that's his day job. Okay.

That's your leadership team, his leadership team, that can run the business for you guys. Then there's ownership. Ownership is separate from working there. My oldest daughter does not work here, and she is one of the owners. Okay. Rachel Cruz is a Ramsey personality, and she's one of the owners. But she doesn't run operations. Her brother, Daniel, is the president that runs.

operations here. Okay, runs the business. And so that's his day job. Her day job is Ramsey personality. You've got one son whose new day job is president who has a COO reporting to him that does the job you used to do, and you've got a son in the field that gets paid to do the job. Now, your son, when he gets promoted to be president, you may give him a bit of a bump. You should, okay, and that's going to lower profits. Then the profits are going to come to the bottom line, and you still own the business. But you no work there. See how you separated the ownership versus work in there? So you've got a day job and then you've got an ownership. Then you get to decide, okay, out of these profits, how do I want to share it with these two boys, these two men that are my sons, as an ownership position? So you

could give, you know, 5% of the profits to the son in the field. as an owner, but not because he's working in the field, just because he's an owner. Sure. And then you could give 10% to your son that's the president of the profits. You don't even have to give the stock over for right now, and that's a first step or two. Later on, you know, you could have just in your will that the whole thing goes to some mix of the two of them. Is that your only two children? I've got three others.

Okay. What are we going to do with them? Well, they're not part of the business. So you don't intend for them to get any of it? There's another dilemma. Okay. I mean, if they have two walk into it and are technically rewarded some degree or compensated for it. No, they're compensated because they got a job.

Certainly. That's why they're compensated. So not because they hit the DNA lottery and ended up being your kid and you're successful. So they got a job and that job pays. You don't pay them more than they're worth for their job. do you? No. Okay. No. So, so there's, if you keep this real separate in your mind, it helps you walk out of there. First thing is we have to create the leadership team that can run it with me being an absentee owner. Just checking in with my president, son, and a couple of the other leaders,

and I could have a leadership meeting once a month as the owner that doesn't work here with the leadership team that's running it and how can I help as the owner? And then you do the books. They have the books done by the COO and you review the books. We close the books and I take the profits and put them in my pocket if I'm you. And then the next step would be to start to share the profits with the two that are there if you want to. And then the next step is to figure out long term what are we going to do with the ownership as you age and or die? How are you going to break that up and how you're going to hand that off. And there's no wrong answer.

You could choose to give it all to the president's son. You could choose to give 75% to him, 25% to the one, the other one that's working. You could choose to give it evenly to the rest of the kids, which would make it hard for the president's son to run, by the way. I wouldn't recommend that. So you've got five kids, right? That's correct. Yeah, so you can figure out, you know, maybe President's son gets 51%

and the rest of them split up 49. I don't know. You can make it up, right? And all that means is, not that they tell anybody what to do, it just means they get paid out of the profits. Okay. That's one angle I never looked at it. Yeah.

I appreciate that input. Yeah, so if you'll separate the leadership team and the operations of the business as one category and the ownership is another category, you can start to see a path to create a one-year exit ramp or an 18-month exit ramp or whatever on your succession plan, and you'll get new energy from doing that. And you can telegraph that to the customers.

You can telegraph it to your sons. You can telegraph it that I haven't decided what I'm doing with the ownership aspects to the rest of everybody. I'll let you know on that later, but I am going to let you know right now that we're elevating so-and-so to president as I step away sometime in the next 12 to 18 months as soon as I get my bench depth done here. I've got to train somebody up tactically to do what I do every day so they can report to the president's son, the son that's the president, that guy. So cool stuff.

You're a good man, John. You're closer than you feel like you are. You just need to treat this like a building project. We need a blueprint, a timeline, and a budget, right? And let's lay it out and just execute. And then you'll look up and the house will be built. And that's exactly how it's just another project. That's all it is.

Folks remember better a weary warrior than a quivering critic. This world needs more high-quality leaders, so take courage and lead. I'm Dave Ramsey, your host. Thanks for joining us on Entree Leadership. If you're a business owner who's been grinding it out and rarely gets time to step back and think clearly, I want to tell you about something special. The Live Like No One Else Cruise is a seven-day experience in the Western Caribbean with me and the Ramsey team. This isn't just a vacation.

It's an intentional time away to reset your perspective and celebrate the progress you've made financially and professionally. And in 2027, we're bringing entree leadership at sea back. That includes special entree leadership breakout sessions you can sign up for, design specifically for business owners and leaders. You'll get practical teaching, real Q&A, and focused time to think through your business with people who understand what you're carrying. Space is limited. learn more at ramsysolutions.com slash events or click the link in the show notes.