EntreLeadership - When Firing Someone Could Save Your Business

Episode Date: October 9, 2023

Today we’ll hear about: •       How to establish a team culture people want to be a part of •       A business owner whose wife is miserable because of their business •       How to teach kids how to be strong business owners •       What to do when your bookkeeper isn’t being honest about business finances Links mentioned in this episode: •       The EntreLeadership Podcast •       What Are Company Values and How Do You Define Them? •       Stages of Business Assessment •       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 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 •       BELAY •       Payority •       Trainual Learn more about EntreLeadership Events: •       EntreLeadership Summit •       EntreLeadership Master Series Learn more about EntreLeadership Coaching: •       Elite •       Advisory Groups •       Executive Coaching •       Workshops 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 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 in the trenches, which means I'm not only old, but I'm grouchy. No, I'm kidding. We're here to help you with your business and whatever's going on. been there, done that, and got all the T-shirts. I'm just telling you. We have had some fun running this business, and we've shed some tears running this business over the years. It's part of the process, and we're here to share that with you. If you're looking for highbrow theory from a finance professor who's never made payroll, you're in the wrong podcast because this is, well,

this is the stuff we do every day. Give us a call if you want to be part of it. Emily, you'll get back to you. She's our phone screener and associate producer. She'll make this happen for you. Yeah, the phone number is 844-944-1070, and she's not grouchy. All right, Isabelle is with us in Charlotte. Hi, Isabelle. How are you doing, Dave? Better than I deserve. What's up in your world?

Not much. I'm just super excited to be here. Great. How can I help today? Awesome. So I am an owner of a local commercial cleaning company out here in Charlotte, North Carolina. I actually started the company last August. and it's been growing exponentially.

We have seven employees now, seven team members, and we run about three crews. And so my biggest question for you is, how important is team culture? And how should I go about establishing this when our crews rarely cross paths with each other? We have some working during the day. We've got some working at night,

and we do not have a common office or shared space that we meet at. Yeah. Well, your team has a culture, but how important is it that you control it? Yeah, every team has a culture. Some of them are toxic cultures. Some of them are, you know, it's Lucy Goosey and the value system is not identifiable, but there is always a culture. The question is, you know, what are you known for?

What do you want the team when they're a way to say about your company? That's the culture. It's your internal reputation. And so how do you develop that? Well, it generally is going to be based on the consistent application of your values. And so you state your values, what they are, over and over and over and over to the team, and then you enforce those values. And people that are in violation of those values continuously as a pattern don't get to be part of the team.

And that's the culture. And so, and we're looking for people that are going to align with those values to be on the team. And that then keeps the consistency of the culture. For instance, one of our values that happened from years ago, we had a lady when I was about your size that spent, she was a really good salesperson, and she spent a lot of her time selling all the other employees on the fact that I'm an idiot behind my back. Wow. Yeah, that was our culture.

And so I decided we weren't going to have that culture anymore when I fired her because I walked into the meeting, her back was to me, she's conducting a meeting to other team members, telling them all, she didn't hear me walk in the room, how stupid I am. And then the hair stood up on the back of her neck, and she turned around and went, oh crap. Yeah, so that was the end of that. So that's when we developed at Ramsey, one of our core values. We don't go with gossiping. Gossiping is we are going to have problems at Ramsey, guaranteed, when you have a problem, not if, when you have a problem, you hand your problems up to leadership, not to other team members. And we work on the problem together. You don't hand it to people outside the building,

and you don't hand it to people that can't do something about it. That is gossip. And we will fire you for that, for not abiding by that value. And we tell you when we hire you that we will fire you for that. we're very consistent. We just don't do that. We don't talk about each other behind each other's back. If you're going to come into, if you're going to bring a problem about a team member or a problem about a leader or a problem, just a problem or a frustration, you got to hand it to someone somewhere in leadership that can do something about it. And then you can follow up with them and make sure they do something about it. But sitting in the lunchroom and discussing with all your buds how stupid the boss is, don't fly here.

I'll fire your butt in about 30 seconds for that. Got no tolerance for it. And only took me once to figure it out. So that's a consistent application of an ongoing value for 25 years now at Ramsey. And it blows people's minds when they work here that we don't gossip. Because, you know, why we don't gossip? Because we don't tolerate it. We're not going to have it.

And it's not we're not mean about it. We'd like a gossip-free zone. you're safe here. It's like the little snowflakes. They want safe zones. Well, this is a safe zone. You're safe from gossip here because we don't do it here. And if you do it, it's going to be a problem for you.

And the natural consequences are not fun. So, you know, that's a consistent application. Another consistent application is one of our core values is everyone here treats this place like they're self-employed. Treat it like you own it. If you're walking through the parking lot, you see a piece of paper, pick it up. your mama don't work here. You know, you do. So treat this place like you own it.

And when you're making decisions, treat this place like you're on it. When you're working, work like you own it. When you're taking time off, take time off like you own it. You know, treat it like you own it. And if you're not doing that, we're going to talk about it. Because we don't want people in here working a J.O. freaking B. How late can I come in? How early can I leave?

And how much time can I spend on Facebook? not working while I'm at work. This is what most people do at work. Not here. We don't do it because that's our culture. Our culture is self-employed. Our culture is we don't gossip. We've got these core values and we put them out of the team over and over and over again.

They don't have to be in the same location. They don't have to have a weekly meeting to get that the values are that we're going to align with the values. The alignment with the values represents the culture. And if the values are unspoken, if the values are negative, and toxic, like I'll slit your throat to get my way. I'll climb on your political body to get my promotion. And that's an unspoken value, a toxic value that actually functions inside the organization. That's the culture. To the extent people line up with that, that's your culture. So you're going to have culture by default or by intention. So decide what these values are,

decide who you is, and tell everybody this is who we is. And if you want to be a we, we, this is is. This is how you do it. I mean, this is how we is. You got to talk it through over and over and over and over again. And everybody you're interviewing, everybody, you're exiting. When you tell people why someone exited, I'm not being mean, I'm not throwing people on the bus, I'm not shaming people, but we don't do that here. We don't do that here, you know. And so that's the kind of stuff you deal with. And so the more you discuss that kind of thing, you know, we're hardworking, We're generous. We have a sense of humor.

And so if you're going to be a we, you've got to do these things. You know, whatever your values are. And you've already started to establish some values because you're having exponential growth and they're positive values, not toxic values. So just identify those and then get everybody understanding that this is what got us here and this is what's going to take us there. And that's going to get us where we want to go for sure. So head that way.

Good, good plan. Hey, you're awesome, Isabel. I'm so proud of you. Love the fact you're growing so fast. You're a getter, girl. Get her, get her. This is the Entree Leadership Podcast. Well, we ask you to leave nice reviews, like five-star reviews,

because it helps the algorithm move the podcast forward. We ask you to share and to subscribe and to follow and to like and to do all those things with podcasts and with YouTube. And you've been doing it. Thank you. Thank you. Thank you. and since we asked you to do it, they gave me some of the times that you did it.

This is pretty cool. So podcast reviews. Hmm. All right. Scott says insane amount of practical value, probably the most practically valuable podcast I consume. I'm a senior employee in a family-owned business, and Dave's real world advice has been incredibly valuable to us as a small business. As a residential HVAC service provider, it's hard to find practical and applicable advice and direction in our field. keep up the good work, I'll be listening.

Thanks. Zeus says, best entrepreneurship podcast ever unmatched, real, raw, and genuine. If you're not listening to this podcast as an entrepreneur, you're losing money. Whoa, keep killing it, Dave. Thank you, Sue. Appreciate that. Stevie said anyone who says this material doesn't translate to running a business, either doesn't run a business or won't be running a business for long.

These are the nuts and bolts of running a business well. You could run a business without these principles, but you'd be miserable. Your employees will be miserable and your clients won't stick around. Thanks, Stevie. Angie says, I love this, is the perfect transition into work mode after the weekend. I can listen shortly after I get up on Monday and it puts me back into the mindset of running my business. So listening to other entrepreneurs' problems and successes and Dave's advice is inspiring. Thank you, Ange.

Hey, I appreciate you guys leaving us those nice five-star reviews. Very kind of you. I appreciate it. We will continue to mess around here on the airwaves as long as it's helping you. That's the point of doing this. Patrick is next. He's in Los Angeles. Hi, Patrick. Welcome to the Entree Leadership Podcast. Hey, thanks for taking my call. Sure. What's up? So I've got a couple businesses where we are in manufacturing repair of like RVs, trailer type things.

We feel it's a very lucrative business, but it's very demanding. And we want to start doing something else. We feel like it's just draining dealing with the public. I guess you could talk. say. And we want to do something more real estate-wise, but every time we see the numbers, it doesn't make any sense to us with what we make now. So I don't know. I'm just looking for some guidance on what to do with the money we have to invest it because we kind of don't want to keep doing what we're doing because it's such a, we just can't stay in the industry. Okay. Interesting. What are you making?

So we manufacture like utility trailers, various type trailers, RV repair industry, axles, stuff like that. How much money are you making? About $3 million a year. Top line? What's that? Top line? That's just the gross.

Yeah, that's the gross. What's the net? I want to say we're about $1.75. A million $7.5? Yeah. You're in a 50% margin on this puppy. Yeah. Okay. So what type of people are making you miserable?

The thing is it's a lot of problem solving. I'll give it. So like the automotive industry, when somebody comes in and has a vehicle they're working on, there's a set of hours it takes to do something, and it's written in a book. And our business, it isn't. So there's a lot of problems.

Your custom, yeah. Exactly. There's a lot of one-offs. Yeah. Exactly. So that's why it's so draining, trying to, you know, have all this knowledge in place, and we've tried different people to service right estimate, and it just, all the businesses around us have failed that have done it, and we've acquired people from them and machinery from them. And it's just a very demanding draining field to be in, and we're just kind of... Okay, I'm still confused what's draining. I get that it's one-offs and they're custom, but who are the people? Who are the people? that are draining. So I'll give you an example. If we even have to order certain parts that we don't have ordering from these other

manufacturers and other suppliers, it's just there's so many variables involved. It's not like in construction where I can go down to Home Depot and get some lumber every day. It's specialty parts. You know, it's just there's too many gears in the transmission, I guess you could say, that we have to rely on people, and it puts everything back. We come out so much money to make sure we have inventory. And we use up all our money to do it.

And for us, we just wanted to get into something else like real estate or anything that's going to net some more good cash flow for us instead of us having to be ran into the ground doing it. So all I'm asking is, if you have a way that or another way with the money we have liquid and what we have now to do something else. Yeah, I heard what you were asking, but I was curious. I'm trying to still understand the actual problem. because, I mean, it's tough to walk away from a million seven annual net profit. Yeah. There's got to be a lot of buttholes involved for me to want to walk away from that. That's the problem.

Wow. Yeah. I mean, I could probably, I could just, like, you know, amputate a few of them and, like, pick out the worst ones and get rid of them. And I'm not going to be in that part of the business anymore because those people are just scummy and I don't want to be over. over there anymore, but I'll do this port of the business and instead make a million instead of a million seven. I mean, oh, darn. You know, I mean, here's another thing to, I think you could clean it up and reset the expectations. I think the problem is you're trying to be too nice to everybody. Yeah, that's the thing, though, we're not, like we have a process that we don't deviate from and

we either fix it this way or we won't even touch your job at all because if we deviate and let the customer dictate the repair, never gets done properly. And then it's always we're attracting the client that doesn't want it done properly. So we have a process that works well. Well, let me just tell you, real estate business is exactly the same way. Is it? It's exactly the same way. Because, I mean, if you're doing a rehab, you're dealing with subs and you're going to have

to go through the exact thing because no two rehabs are alike. No two bills are exactly the same. and, you know, and subs don't show, and, you know, Biden screws up the supply chain. You can't get windows in the house. And, you know, there's crap. I mean, every business has these frustrations. And the part of, that's why I was poking around on it, because I'm afraid you might jump from the frying pan over into the fire. So how much liquid have you got?

I'll come back to your question, just try to help you. I've got about a million liquid. Okay. What is it you want to do? You said, you're just going to shut this down, sell off. inventory? I was thinking of just letting, hiring in certain people, watching the sales go down, and everything else just go down, and just to where it's getting a little bit in every month, and then focus on, you know, we've never been one to go in debt. So we've, you know,

we live by like a 10 times rule. If we didn't have 10 times that amount of the bank, we didn't buy it. So all of our equipment was used secondhand, bought out other companies, and went out of business, just to get to where we are. and I, you know, I keep seeing all these people saying, oh, going to debt and get cash flow going, and we've never done it. You've got cash flow. You don't need to go into debt. You've got cash flow. I'm not saying, so you have a million dollars, and you're going to let this business just kind of atrophy,

and you take what you can get out of it while it just dissipates and deteriorates. So that's the plan. Ideally, I'd never do that. Well, that's what you just told me. Yeah. I get tired of waking up next to the wife and just seeing the hell through the eyes. And, like, this just is another day of just dealing with. Does she work down there?

Oh, yeah. Okay. Okay. Let me stop one more time. What do you want to do with a million dollars? I want to get some cash flow coming in every month that requires a lot less people involved. I don't know if it's. What can you live on?

Well, that's the other thing. I don't know because I live a pretty good life. We do what we want when we want, but. Yeah, you got a million. coming in a year. Yeah, it generally will get you where you want to go. But it never seems like it is. I always feel broke.

Like right now I feel broke. Why? Because I think maybe the people we hang around that just, I don't know if they're credit card captains or what they are. They make $3 million a year? I mean, yeah. I have no idea. I don't ask.

But I just know we're not in debt and that's good. Comparison is the thief of joy. Okay. So, yeah. All right. Let's see. Because, I mean, you could take a million dollars and put it in a mutual fund. It'll make $80,000 a year in perpetuation.

I mean, you can pull 80 or 90, 100 grand off a year if you want to live on that with a million dollars and just invest it and you're done. But that's really not what the question is. The question is you need to find something you can do with all of these skills that you have because you have a tremendous entrepreneurial ability. You're really crummy at systems. and you're really crummy at saying no. And what is it your wife does down there that's taking her life away from her? Is she dealing with all the butthole customers? Uh-huh, uh-huh.

And that's stolen her joy. Is that what's driving this whole thing? Fire her. Honey, I relieve you of your burden. I'm going to get someone else to deal with the idiots. You are, you're dealing with idiot, savants all day long, and it's stolen your life. I see it in your eyes. you're dying slowly and your husband is killing you.

I am going to set you free of that. What would you like to do, honey? Here's a million dollars. I'm going to go get a salesman to do what you used to do so you can breathe again. What would happen then? We've tried it. Who's we? Many times.

We've brought somebody in to do it. That's the thing is if we had a book on how to fill out. No, no, no, no, no, no. There's other people can do what she does. Oh, man, if, you know, I like to say yes, but then when I look around and I see the other businesses weren't in, I don't see it. I see them all failing, and I wonder actually how.

You think they all fail because of the salesperson? Come on. They're not. Your wife is the only savant on the planet that can pull this off. Come on. I'm not kidding. I'd love to find another business that's just like ours, and I guarantee you can't find it. We've been through them.

I have guys that worked at all of them. They're working for me now. And so is she, and it's not working. So I think we found the key here, Patrick. You think that you can't survive without her doing this, and it's taking her joy, and she is not fun because of that, and you're not fun because she's not fun. Happy wife, happy life.

And if you fix this, I think you're going to like your business again. Because I think you've got a really cool business, actually. you just need to get above it. You're just way too torqued out about every little thing in it. And, yeah, fire a few customers, get somebody to do what your wife does, and, you know, start being a little harder to get along with on some of these things, take a few, figure out what percentage of these jobs are causing all the stress and don't take those types of jobs.

You know, we figured out there are certain kinds of things around Ramsey. We just, certain types of industries we just don't work with. We have a large customer today that came in and started telling us the way things that were going to be. And I sat down with my leadership team. He said, what are we going to do? And I said, well, just tell him, we will miss you. I mean, that's, you know, sad, but you don't, that's not how it works here. So, you know, it's just, you need to do some of that, man.

You know, because there's some of these jobs, some of these vendors, I bet you if you took 10% of the bad vendors, 10% of the bad jobs, and 10% of the bad team members, 15%, and cleaned them out, you could probably have a lot more joy. And part of that is your wife hates what she does. And you've become convinced that she's the only one on the planet that can do it. And that's absolute bull crap. That's just bull crap. There's no single thing that only one person can do.

There's only one job that was ever that way, and Jesus had it. And she ain't Jesus. So he's the only one that could do that job, but that's the only job that only one person on the planet can do. That's it. So somebody else can, you can skin this cat another way and let your wife have her smile back. You've got too good a thing going,

and you're going to go do the same crap in another business is the problem. Because you're going to be the common denominator. So I don't think you're going to find great joy in one of these other things. I really don't. I would tell you to do it if I thought you did. I love you. I want you to win. I think what you're doing is freaking amazing, actually.

But there we go. Tard arguing about it. This is the Entree Leadership podcast. Well, if you've been listening to this podcast for a while, you probably heard me or the other callers mentioned the stages of business. But how do you find out what stage you're in? The Entry Leadership team just released our new and improved stage of business assessment. It'll help you easily and accurately identify exactly where you're

your business is today and you'll know what you've got to do to move up through the stages then what's your next thing to level up by the way the whole thing's free click the link in the show notes or go to ontaryleadership.com to find out which stage of business you're in. Brian is with us. Brian's in Winston-Salem. Hi Brian. How are you? Hi, I'm all right. How are you doing, sir? Better than I deserve. What's up? Well, actually, my question is more for my daughter. I run a martial arts school in the off of Winston or a little out of south side of Winston and I have honestly not done the best of jobs. I started listening your podcast.

Your phone is kind of breaking up and going sideways on me. Can you stand in a different place or something or talk directly into it? Yes, sir. Let me stand elsewhere. Is that better, sir? Yes, sir. Thank you. Sorry about that.

So you got a martial arts school and you said you've not done the best of job. What do you mean? I have not run it very well. I've run it more like a hobby, to be honest with you. As I am, my daughter's getting a little older. She's now 16, about to be a junior in high school. And she tells me that's what she wants to do for a living. As I look around, I realize I've really kind of failed not having good systems and everything else. So my goal is I want her to be set up to do better than I have. And we've already, last year, she went through the personal finance or the foundations of personal finance for high school. She's homeschooled.

And then this year she's going to be going through the foundations and entrepreneurship from you guys as well. And I'm just trying to figure out the best ways to deal with this. We actually print our own shirts for our school. So I thought about setting that up as a business and kind of either having her run it or manage it or something. So she gets a better foundation in actually how to do this and kind of make that a part of her school curriculum. this upcoming year. Well, that doesn't hurt anything, but that doesn't turn her to run a martial arts studio.

I mean, that's a teenage side job. We would do T-shirts. Right. And then, but then running a business is a, I mean, that's a teenage representation of running a business. And that's not a bad thing. It's always good to teach kids how to be entrepreneurs.

I love that. But if you're actually wanting to have her come in and take over the store at some point, you've got to get the store running right. Yeah. And then she'll find her own mistakes to make later, but she doesn't need to make yours. Well, that's what I'm trying to avoid at the moment. I don't, I want her to be able to come up because she tells me that's what she wants to do.

She wants to be an entrepreneur. Yeah. And I feel like I've been a bad example of that. So I'm trying to set her up the best way possible. Well, what I would do, I mean, it's fine to do the T-shirt thing. That's not a bad thing. But in addition to that, what I would do is you sit down and say, okay, here's the areas to yourself, you and your wife or you just sit down the kitchen table,

here's the areas I'm deficit in. Here's what I'm missing. I don't have systems. I'm not good at marketing. Our accounting is bad. Here's what our, whatever it is that you're struggling with, that you, because you have some things in your mind that you think you're not good at. Am I right?

Right. Correct. And so then we got to go get those skills. So you jump in like entree leadership elite or you get an entree coach or you start reading some books or, you know, whatever you do. do, but you start acquiring those skills to implement into the business. As you're doing that, let's just do a real world example. Okay, what is the area of the business that is the absolute worst in your mind? What category? Um, to actually running the business itself. I've always kind

of haphazardly done. Give me an example. I don't know what you mean when you say that. Bookkeeping. Okay. Um, kind of managing that would probably one. So your accounting system is horrendous. Correct. Okay. That's a good example. That's not unusual, by the way, for a company your size. So it's one of the things that most small businesses struggle with.

So what I would do is sit down with her, regardless of whether we're doing the T-shirt thing or not, and say, listen, I know you want to be an entrepreneur someday, and I'm kind of scared that I've not set a good example. So I'm going to start setting a better example today. And here's the first thing I'm doing. The first thing I've identified, honey, is the weakest part of our, you know, studio is the accounting systems. And I know that, and I've tolerated it, and starting today, I'm not going to tolerate it anymore. So you get to walk beside me and watch me go through the

discovery process of how I'm going to put a new accounting system in that actually works, how I find that accounting system by talking to someone who has a very successful studio in another city similar size, and you say, what do you use? And you talk to different software companies, and you look at the stuff and you try to find something that works, and then she gets to watch you discover it, find it, and then implement it, and go through the pain and the frustration of learning something new and throwing out old broken crap and putting in a new shiny thing,

and it takes longer than you thought it was going to, and it's really hard. But she gets to watch you do all of that. Guess what? That is an entrepreneur. Yeah. That is, that's an adult that throws her shoulder back, and run straight into the storm and fixes crap.

That's an entrepreneur. That's entrepreneur training. She watches her dad fix stuff he wasn't good at and admitted and watches this business flourish as a result. And then what's the next one? We're not good at social media. Okay, we're going to freaking learn how to, you know, put this stuff out on TikTok.

And, you know, we're going to get some people in here that can teach us this and they're 14 years old, but we're going to get them in here. And, you know, whatever it is. I don't, whatever, you know, on to the next thing and on to the next thing. So, Brian, I started doing that here 17 years ago. We reached a point in our growth that we had areas of the business that were running extremely well. And I was, I had, okay, God, what is my job now at Ramsey? I know it's not to just be on the stage or on the microphone.

I know I also have an operational job. What do you want me to do, God? And it was really clear in my mind. It's almost like he yelled at me. He said, fix broken things and work on new things. And that's been my job for 17 years as a CEO of this place. I work on the broken things and the new things. And so I'll step into an area that's bad and struggling and do just exactly what I just told

you to do. I get in discovery mode. I don't know squat about it, but I got to figure it out. So right now at this moment, I'm sitting in meetings with these digital geniuses that I have in the building, and they speak another language. I don't even know what they're saying. Three hours ago, I just said, you know, you're really way smart, but you're not smart enough to explain what you do where I can understand it. So try again, because I'm like in charge and stuff, so you've got to teach me what the crap you're saying so we can work on this together. That was a discussion I had three hours ago in this building, because I'm working on.

broken stuff. We got a digital thing that's up a creek without a paddle, to say the least, it's driving me bananas, and we're going to freaking fix it, you know? And guess what? Guess who's watching me do that? My son, who's the president of the company, is Daniel Ramsey, sitting in the dadgum meeting with me going, calm down, David. I'm like, I ain't calming down. This crap's broken, you know? Yeah. And this is exact conversation. So he's, he's been mentored watching dad for 17 years work on new things and broken things. And that's the best training I could give him on running a business because that's what a real entrepreneur does. We don't tolerate substandard crap in our presence ongoing.

We got to fix it. And it's really intimidating and it's really scary and it's really frustrating because I feel dumb half the time doing it because I am the dumbest person in the room, usually on the thing I'm working on because everybody else understands what the flip it is except they ain't fixed it. So still we got to work on it together. That's the whole thing. and so I just get to be the driving force, the boot up the butt that keeps things moving.

And your daughter gets to watch you do that. You're teaching her out of being an entrepreneur, dude. So go fix this business one element, one category at a time, and let her watch you. Let her sit on your shoulder while you do it. This is the Entree Leadership podcast. Well, speaking of digital products that need help, would you guys please put a five-star review on this show? Please follow it.

Please subscribe it. It helps push us forward because you're the only marketing we got. You know, word of mouth, people that like your crap. That's the best marketing there is, right? So you like our stuff. Thank you. Tell people. Thank you.

Thank you. Thank you. Thank you. Click the share. Click the follow. Click the subscribe button. Click the five-star review. All of those things.

Move this thing forward and let people know. Take a little clip of the link and send it to somebody and go, this guy's nuts, but listen to it. It's funny anyway. All right. Hey, Chris, it's in Myrtle Beach. Hey, Chris, what's up? How are you? Better than I deserve.

How can I help? Hey, ma'am. Well, we are an actual exterior cleaning company. I run Rivertown ProWash. We've been in this business for about 18 years. The last four and a half years, we've been full-time in the business. We left the corporate world in 2019, went full-time. So our revenues have jumped and jumped and jumped.

19 we did 116 and in 20 we did 205 21 we did 298 and last year we closed out the year with 547 wow yeah and just house washing hockey stick up until the right baby yeah it's God's been good to us he's blessed us incredibly this year we're on track

to hit right close to a million so How many people on the team? So we've got seven people on payroll. We've got three technicians in the field. I've got me and another guy doing sales, and then I've got two office staff, one doing the back-in office staff, the thank you cards,

the follow-up emails, and my wife running the front office with scheduling jobs, scheduling customers, answering the phone when the leads come in. So that's our team, in a nutshell. Our question is, last year we did 547.

Our net income, our taxable income off of that was around $85,000. I feel like that's a little bit low because we're debt-free. Like, we're totally debt-free. And we just run our P&L from this year up through July. And so 405 this year. and it says we've got net on the bottom of a at 101,000, but I don't have anywhere near that amount of money in the bank. And my question is, where's all the money going?

I don't, I can't get my head wrapped around. Who's doing your books? So I've got an external bookkeeper, and he does my taxes and all, and he's a CPA, and he's QuickBooks certified. And so he's doing my books, but talking with him is a little bit like talking to somebody that's not engaged because I can't really, I can't get him to teach me.

You need to get a new bookkeeper. Okay. Because this guy, his part of his job is to show you how your business is running through the numbers, not just produce a P&L. And he's doing, he's doing a seventh grader's job, a producer's job of producing. a P&L and because your job is to know your numbers. Your numbers are that P&L's done right will talk to you and tell you things about your business.

When you look down that P&L, you'll go instantly, you'll go, fuel cost shouldn't be that high. Where are we buying our dead gun fuel? Or you'll look down and you'll go, what's the maintenance running on this stupid? We've got to get a different brand of washer. These maintenance is driving me nuts. Your business, your numbers on your P&L will talk to you or you'll go, we're paying that guy.

What? What are we paying him? and you go, what? You know, I look down at our, and so, yeah, there's three or four documents that you need to be looking at in detail, and you need to allocate in your day at least two hours a week to this at your stage, personally. And your job is not to produce the documents, but your job is to look at them and to put someone in place that can teach you what you're looking at. So, yes, you need a profit and loss statement, but it needs to be detailed.

and a profit and law statement has what's called a chart of accounts. It does. And so you've got a list of, you know, categories of what these expenses are. And if that chart of accounts isn't sliced thin enough, it's got big, broad categories, then those numbers aren't talking to you. You've got to slice it thinner and let them talk to you. And it will teach you what's going on with the business. These P&Ls should talk to you.

And if they're not talking to you, they're not being produced correct. and if the person that's producing them correctly can't talk to you where you can understand it and where they can help build this because their job is not to prepare you to do your taxes. Their job is to give you documents that help you run your business, call P&L and call a payables list. Do you have receivables or do you get paid cash on the barrelhead? No, we're usually cash on the barrel, but we're getting a small amount of commercial starting, and so some of that is 60 and 90 days out.

So you got to run a receivables, and then you need a cash flow statement. Where did the freaking, what you said a while ago, where did the freaking money go? I need a one pager that shows me where my money went. Because otherwise I start thinking one of you goober stole it. Right. It's like a ledger. Like I'm reading these books on how to run a P&L and how they run documents. And I'm thinking, what is the stinking ledger?

So I'm reading through this book. And my man's never told me about a ledger. I mean, do I need to be? A ledger is fine. I don't use a, I use, we use a modified cash flow statement because we don't, we don't, you're running on a cash basis and you should be at your level. Okay. Don't, don't let them get you into accrual.

It'll drive you bananas at your stage. Okay. Yeah. Later on, when you're over 10 million, you'll have to go, 12 million the IRS requires to go to accrual. So we're definitely, we've been at accrual for years. But we do a modified accrual so we can manage cash because we live like you do. We live cash to cash.

So even though it's got a, you know, different set of zeros than when I was your size. But yeah, but still same principle. So I have a one-page cash flow statement. I need to know where the money is. Why does this, why do I feel like if I'm making this profit that there's nowhere near that in the bank? I need to know why. I need to know why.

And you give me a piece of paper that shows me exactly why. And it really is not rocket surgery. I mean, it can, it can be put together, okay? And if this guy's not the guy, he's just a, he learned bookkeeping, but he doesn't even know enough about business to cause these numbers to talk to you. That's what's bothering me. You may have to get a different one. You can give him one more chance to grow the heart of a teacher and to help create these documents that will show you. But you need a P&L.

You need a payables list. And you need to go through every line of your payables every week. And we did P&L up until this year. I give it away. My wife ran it in the office. But when we hit half a million last year, she said, honey, I think it's getting out of my league. Well, you may want to put somebody on staff. Okay.

And that may be what we need to do. You may need to staff it. But again, the person that you staff it with, the problem with accounting people is they're taught how to do accounting, and they don't know beans about run the business. Right. And so the accounting satisfies their accounting professor, but not their boss. Okay. me, that's what you got right now. This guy would pass his accounting test with his accounting professor

because he's using generally acceptable accepting accounting principles, I promise you. He's probably not doing the books wrong. He's probably not stealing, but he's academically correct, but the practical application of the academics is where he breaks down. He's not, he doesn't have, they don't train them how to show business people where their freaking money went, which is the whole purpose of accounting after all, but somebody somewhere in the accounting academic world forgot that, right? And so you end up talking to them and they're talking like Charlie Brown's teacher.

Wah, wah, wah, wah, what the crap are you saying? Right. Right. Okay. And I've had these conversations for 30 years, man. And so can you imagine being interviewed to be my CFO after you and I've had this discussion today? Oh, my God. So, yeah, our CFO actually has common sense.

It's amazing. So, yeah. So that's what you're looking for. You've got to get English. out of this. He's speaking a different language. And what happens is, unless you're just weird, you start wondering if somebody's stealing. Right. Well, it's like this. So I looked at my gross profit and, and I'm looking at my cogs, all my direct costs to my jobs. Yep. And my fuel is ranking around 7%. Yep. And I'm thinking, is that high? Is it low? You know, I don't know. We've got

seven vehicles. I don't know. Yeah. But what you'll determine is over years, you'll say 7% is the ratio or it's not, 10%, 9%, 9.2%, and you'll start to see anytime it bumps up above that, then you're going, okay, danger, danger, danger, that's a warning sign. That's your numbers talking to you and telling you how to run your business. That's the beginning of what I'm talking about. That's exactly the kind of thing you're looking for here. So you need to get with this guy and either bring it in-house or he's going to have to step up, and the quality of the production of the documents,

the P&L has to probably be sliced thinner in the chart of accounts so that it's telling you in detail what's going on. Help him develop some key performance indicators, some KPI's. Yep. Okay. And a cash flow sheet, some KPI's, and a thinly sliced P&L and a payable sheet. Those four or five documents you can run this business with.

Sure. You've got to spend enough time looking at them where you become an expert on your business. if one of our guys and one of our P&Ls comes into one of our meetings and he can't tell me his numbers on the thing we're just talking about, he'll get his butt chewed because you can't run your business if you don't know your numbers. Right, and that's the problem. I know my average close rate. I know my average ticket. I know all those numbers on the sales because that's what I run.

You wouldn't be having this success if you didn't. Now you've got to do it on the other side of the equation and that's the detail on the outgo. All of that's income. Yes. You're a salesman. You're a revenue machine. That's what I, yes, that's what I am. But you're discovering you can't out-earn your stupidity.

Right. You've got to get into the detail. You're the man. You're stud. You're going to fix this. I can hear it in your voice. You've had it. You're done.

You're going to clean it up. I think you're going to end up bringing somebody in-house that you train maybe with a good accounting on the outside, helping you train them to speak English, not just accounting. And build the documents that tell my business. business, me how to run my business better and where my business is hurting and where my business is succeeding. Just like you're looking at those sales ratios, those closed ratios, you'll look at the fuel ratio and you'll look at your cogs, your cost of good soul, and you'll look at all these

key performance indicators in the business. You'll discover what they are. And, you know, as soon as you start running these dead gum receivables, you're going to figure real quickly aging on those. The older they get, the less likely you were to get paid. So you don't like old receivables. I can tell you that. That's a known fact. So you're going to go back to cash on the barrel hill with a bunch of these people as soon as you start having that fun. But that's what you get into. That's fun, man. You're a stud.

Get it. Get it. I love it. Hey, folks, better a wary 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.

Choose to lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership podcast.