EntreLeadership - Why Dave Ramsey Doesn’t Recommend Hiring Family Members

Episode Date: May 27, 2024

Today we’ll hear about: A brother looking for advice on hiring family A business owner struggling to make the right hires How to protect your business in case you die A business owner unsure of how to scale his company Next Steps 🗳️ Submit your question for a chance to be on the show with Dave Ramsey: https://ter.li/askus 👣 Find out what Stage of Business You’re In: https://ter.li/axd39b ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/y8qdo7   🏢 Attend EntreLeadership Summit: https://ter.li/fcazl2   🎤 Attend EntreLeadership Master Series: https://ter.li/wcjhpu ☎️ Learn more about EntreLeadership Coaching: https://ter.li/ycznhl 💵 Learn more about Ramsey SmartDollar: https://ter.li/4imot0   🗳️ Help us make the show better! Please fill out the quick survey form. https://ramsey.qualtrics.com/jfe/form/SV_01hjJ6UN8mnQPNI   Offers From Today's Sponsors NetSuite: https://ter.li/x1t20q BELAY:  https://ter.li/yohiu6 Payority:  https://ter.li/fh2oau Trainual:  https://ter.li/a8zexl Found:  https://ter.li/ggwmrv Listen to More From Ramsey Network 💼 The Ken Coleman Show 🎙️ The Ramsey Show   🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show Ramsey Solutions Privacy Policy https://www.ramseysolutions.com/compa… Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast where I take calls from leaders like you about what it takes to win in any stage of business and leadership. I'm Dave Ramsey, your host with over 30 years of experience in the trenches. Got a Ph.D. and D.U.M.B. Boys and girls. This is not a think tank. This is a guy who's done it today before I turned on this microphone. And we're here to take calls from you about your small business and leadership questions. Help you level a lot. up, move on to the next level, and, well, get some new problems. We always want different problems, right? Because otherwise we've got the same problems. We're not growing. So time to do something different.

Let's kick this in the butt, get it going. Entreeleadership.com slash ask is the website if you want to leave your question there or leave us a voicemail at 844-944-1070. Tyler starts today off in Bedford, Indiana. Hey, Tyler, what's up? Hey, Dave, appreciate you having me on. First, I want to say, my wife and I love listening to all the shows and really enjoy nerd and out here on the Entree Leadership podcast following you weekly. Thanks. I'll just jump right into it if that's okay. Sure.

Cool. I work as a benefits advisor for a business consulting firm, and our mission is to provide clear, simple solutions to complex business issues. Typically, that's in the world of employee benefits and the related servicing of those. So my dad started the firm, or started with the firm, rather, out of college in the early 90s and was offered partnership in the early 2000s. So I started working here personally in 2017 as an intern. I never looked anywhere else as I developed a passion for the work

and the culture our leadership has developed. We've been named the best place to work in Indiana four times consecutively. Wow, good for y'all. Way to go, man. It's awesome. Let me tell you, dude. Anyway, one of my younger brothers did an internship with us out of high school originally like I did, and he decided it wasn't for him after a few months.

he ended up pursuing a completely different path, and unfortunately that hasn't ended up working out either. So now he's going to try and come back and pursue sales at our firm. So my question for you, Dave, is what can I do as a future partner myself at the company and lifting my brother up, while also pushing him to grow both personally and professionally. Are you going to be the leading him or making this decision? So not directly, but he will be an immediate peer to myself on the sales team. So you've been there all these years He's going to be walking in and be a peer

From a title perspective, yes sir And who owns this now? So my dad is one of the partners And then there's another family actually Who has partnership as well So there's three children of that Original founder who have taken over His successors

Okay, and your dad does not own controlling interest then That's correct is voting stock, but not a controlling interest. And how many people work in this place? We have about 35 employees total. Okay. All right. I don't think you've got to answer anything as a future partner. I think you're just going to be his comrade.

Your brother's going to be working beside you, and you've just got to decide what that looks like. Because I don't think you get a say in this. do you well i've had so my my direct report my or co-o has included me in the conversations as for my input feedback things of that nature but ultimately i have no deciding factor there's no you know blackball so to speak that i can say no you can't join yeah um the the way you structured the question the sentence structure made me think that maybe you think your brother's just hasn't found his thing, so he's just going to try something else.

Like, he's not really sold out on this. Like you are, he's just trying to, like, this is a place he could land, and he figured they'd hire him. He's not real. Well, I think they're spot on with that. What I'm really trying to figure out is how I can ensure that he's committed for the long haul. You can't. And not just, you know, here for a J-O-B.

Yeah, you can't. And he is. Your fear is that he's coming in just to collect a check because your dad has influence and, you know, You've done a good job, and he's riding that coat tail, and he's just going to pop in there. Because it wasn't like he sat down and said, you know, what I really want to do with my life is sell benefits. He didn't make it the last three things he did, and he's just trying to find a soft place to land is what you're describing. Am I missing something?

I'm not certain on that front. It's just I get a weird feeling that, you know, he's done a lot of maturing over the last few years. He moved out, got his own place. He's got his own bills. and he's saying he wants to make a career move here as opposed to just his next J-O-B so it feels right, but there's just something I'm not sure. There's another question I could ask

or how I could phrase that maybe back to him. Like, dude, this might be your only opportunity to not screw it up. Yeah. I think this is a very, very tough conversation because nobody asked you. He didn't ask you, your dad didn't ask you, your C-O-O asked for your input, but I don't know what he expected you to say.

Don't hire my brother because he lasts three times he's done stuff, he half-but-de-it. You're not going to say that. So I don't know what he expected you to say. And I don't know how you warn off your little brother and say, hey, man. But I guess the only thing I can think of is it's a cup of coffee away from the office. And you say, hey, coming back in here, you know, if you're wanting to come back in here and you're looking, because this is an easy way out, it's a soft landing. and it's not going to work because this is hard work and this sales thing is a lot of rejection

and a lot of problems and a lot of drama and you're not going to find your way through that unless you are very, very, very committed to this and just, you know, as your brother, it's not going to go well for you, I'm telling you, if you don't come in here with the right thing and I just want you to know that. I'm not your boss.

I don't have a say in this at all and I'm not trying to get you to not do it, but just for your sake, I don't want you to think this is going to be like an easy job. It's not. It's hard. For sure. I mean, if you want to tell him that, that'd be okay. But I don't think that's going to change anything to you.

I think you're still going to do it. Yeah, I just hope it works out at this point. You don't have control over that. I know. Neither do I. For that matter, neither does your dad. I mean, the people that are interviewing him should be very concerned about this. and they're not.

I feel like they have been, and maybe I just haven't been privy to it all. Well, maybe they've already pinned his ears to the wall and, you know, gotten some straight answers and they think are believable, and this, maybe he's going to step up. Because, you know, there's two things that we don't do here. Well, I say we don't.

Let me try this. We have two policies, both which say at Ramsey, almost never do we hire family. So if you work here and your brother wants to come to work here, we almost never do that because it almost never works. Because if you get mad and quit, he quits too. Or we wish he did and we have to fire him. And so it's because it screws up everything, right?

That's why we don't do it. And so we could take an actual really good team member and bring in their sibling or cousin or parent or whatever who doesn't do the job, and then we have to deal with the one that doesn't do the job, and it affects a good team member, and we end up losing both of them. So it's a net, net loss to us, so we almost never hire family members. So one out of 50 times it comes up, we do it. But it has to be everything dialed in, and we've set all this stuff out loud,

and we feel like both players are very mature, and there's a high probability of success of both players and those kinds of things. The second thing we almost never do is rehire. I've got 1,100 people on the team. One of them is a rehire. One. For the reasons you left before are the reasons you'll probably leave again,

and I ain't got time for that. We want people that are planning to stay, cost too much to onboard, cost too much to go through the hiring process, and so we don't rehire. even if you were immature a little intern before and you know you took off for all the wrong reasons that's you know i'm sorry that's just we very very seldom do we do a rehire now you know again we got one guy we caught his nickname's unicorn i mean he's got one guy out of 1100 that's a rehire

and i've had a whole bunch of them after the great resignation who wandered off to better greener pastures and they'd come back around man did us screw up i sure wish well yeah wish We don't rehire. Because the next time there's a dadgum greener pasture you'll take off again. So this is violating both of those things. So if we were to be talking to your brother at Ramsey and you were a stud sales guy for us, we would be very, very tough. And it would be a very difficult screen that he probably would not get through.

But if he did, so much would have been said out loud to you. and to him and to your dad about how this is going to go down if junior doesn't behave, if junior doesn't produce, if junior doesn't work hard, and so on. And so it's just putting everybody in the whole thing

in a tough position. And somehow, to your knowledge, your brother doesn't know that or appreciate it. Now, maybe the people doing the interview have done all the things I just talked about and they've been really, really tough. But we know they haven't talked to you except to say what was your input, instead of saying, hey, how's this going to go if he goes sideways?

How are you going to feel if we have to release him because he doesn't come to work on time? Or he has bad work ethic or he's incompetent and just doesn't hit his numbers. How are you going to feel, brother? How are you going to feel, dad? How's it going to leave you? And junior, how are you going to feel if you don't do your stuff on time and you don't make your call sheets and you don't get your dad-gum work done. Your closing ratio is awful.

You're horrible with your people's skills, and it doesn't work out, and we have to let you go, and your brother and your dad still work here. How are you going to feel? And you got to say all that stuff out loud to all the players is your only chance of this working

if your leadership team did that. But they haven't done that to you. We don't know what they've said to your dad or your brother. But it's very concerning. It's very concerning. I'm not saying it can't work. I've done it successfully a few times. One that's popping into mind is we hired one of our operating board members' mom,

and she came to work here, and she was amazing. She was better than him, and he's one of my best friends. I give him a hard time. I'm like, all we just want is Martha back, Blake. I mean, come on. And so it's just, you know, because Martha was amazing, and she retired from here later, but she worked for us for us for about. five years. She was incredible, and she's still an incredible friend. Her and her husband,

her son's still on our operating board. It all worked out great, but we had very big talks about all of it, even though we knew the players were very mature and very competent people. So that's what you're dealing with. You just got to be careful out there, folk, if you're going to be doing this. And I've got a friend of mine that he hired, he said, I always hire family, because if it's a good person, the other good person will be in the family. And I'm going, no, the law of averages is against you on that one. So you may have got the only good one they had. So you need to think this through, and you really need to lay out a screening on it

and be very, very careful. I've had more bad experiences on both of those issues than I've had good experiences, rehires and family hires. So that's what we're looking at. But Tyler, as his brother, just love him, pray for him, help him win, you know, be kind to him. But I don't think it's your job to be the screening agent here

because you're not in that position. That would be your dad and the other, and the C-O-O. and they're the ones that should set the table on this so everybody can win. This is the Ontario Leadership Podcast. Today I've got the privilege to announce that Summit 2025 is going to be in Denver, Colorado. Yeah, baby, at the Gaylord. Hey, it's happening May 18 through 21. We've got an incredible lineup for you.

The best of the best is going to be there. John Maxwell. Ah, the grandpa of leadership. My buddy, John, he is incredible. you do not want to miss him speaking. Of course, he's best-selling author of about 80 or 90 books, his best of all time, the 21 irrefutable laws of leadership, best-selling anyway.

He'll be taking the summit stage. Crowd favorite, best-selling author of the five disfunctions of a team, Pat Lynn Shione is going to be there. There's some others that are on here that I'm not ready to announce yet, but oh, my goodness, this may be one of the best lineups. Oh, and we've had some incredible lineups. There's some big dogs on here, though. Dr. John Deloney will be back, Pat Lynchione, me, Ken Coleman, and, oh, I promise you some others.

You're going to leave Summit with the insight you need to build a unified team, transform the future of your business. And if you purchase your tickets now, you'll secure better seats for you and your team. The earlier you purchase, you get the earlier more upfront seats for the section you buy in. First time ever, we're doing reserve seating for the whole room. So go to Entreeleadership.com slash summit and get your seats right now. I am Dave Ramsey. This is the Entree Leadership Podcast. Andrew is in Tucson, Arizona. Hi, Andrew. Welcome to the show. How can I help? Hi, Dave. Thank you so much for taking the time, sir. Appreciate what you do. Thank you. How can I help? I am a part owner of a residential plumbing service company. We do a little over $6 million in annual revenue.

Wow. Approximately 30 employees, including management. And although we've managed to grow very steadily year over year, the biggest This barrier we've always had to growth has been people. Hiring and maintaining them. We all want thoroughbreds. Although I have an amazing team, not everyone can be a thoroughbreds. Yeah, they can. Go ahead. Okay, fair enough.

With new hires, I often feel like I take risks on hiring if I'm particularly not very impressed or even with my current team, I often feel like I might need to accept some semblance of lower performance or some behaviors that I'm. might not want to accept because very limited labor pools. So my question is this, how do you go about deciding if and what concessions you make on either new hires or lower performance from an existing team when the labor pool is very rough, particularly in the trades? You said you're a part owner? Yes, sir. Okay. And what percentage do you own? On the way to 10% my father is the majority owner currently.

And he started it. Yes, sir. Okay. Are you making these hiring and firing decisions then? I am. And so what's your dad do? He's largely kind of uninvolved in the day-to-day. He kind of has his own thing that he's trying to start also in the industry, the vast majority of the day-to-day.

So you're the operating. manager and only own 10%. Correct. Well, we'll reserve the succession transition plan discussion for another day and answer your question instead. Okay, so how old are you? 38. And how long have you been in this role, this operating manager role? Since 2017. Okay. All right, since you were in your 20s. Okay. Almost, yeah. All right. Okay. It just took me a long time. Okay, I, you know, let me give you any, I share the same problem at Ramsey.

We're not in the trades, end quotes. But out of the 1100 folks on the team, I have about 400 that are tech. They write code, build websites, manage hardware, software issues, software engineers. They're in the technology world. And developers, for instance, we've got devsons, we've got devs, one, two, threes. We've got architect platform people. We've got cybersecurity people all in the tech world. The tech world is a world that is high turnover, high pay, and there's always a shortage. So same thing you got, okay? High turnover, because it's construction plumbing, they can jump anywhere else with, if they know how to fit a pipe, somebody else or hire them, for a nickel more, an hour, they'll run over there.

And there's always a shortage. And frankly, the people in the developer world are not known for relational IQ. They're not, you know, a lot of times very detailed people. Not always, but it's a tough bunch

to deal with relationship issues with in general. So similar feeling, right? Exactly what you're dealing with. So but having done this for a lot of years now, I came to two very solid conclusions. One conclusion was, I did not want to work every day

in a place that has a percentage of people who are half butts. Hard to work with, poor performance, trouble causing, don't get their work done. it just is not fun. It's not fun. I don't want to work there. Oh, wait a minute, I own it. So maybe I ought to do something about it.

That was thing one. It takes the joy out of my life to work with people who don't give a crap or who aren't competent and refuse to get competent or their buttholes about being incompetent or whatever it is, right? It just takes the joy out of running a business. And like you said, it is one of the biggest problems we face is the people problem. So the second thing I'd just, discovered, not only did it rob my joy, it robbed everybody else's joy in the building.

Turns out that most people are like that. They don't want to work with half butts. They don't want to work with people that don't care. They don't want to work with people who are incompetent. And so when you leave incompetence or lower your standards because it's so hard to hire, and that's what I whine like that in my own head when I do it, okay? and you did it too a little bit. So you and I share that in common. But I mean, we do that. And so we lower our standards on the higher

and we let somebody's not a thoroughbred in the building with a bunch of other thoroughbreds. Then what happens is the rest of the team looks at me and says, why did you run our great place? Why did you do that? Because the word that John Maxwell always says, He says, sanctioned incompetence,

incompetence that is sanctioned or allowed by the leader, meaning you allow it to stay or you allow it in in the first place because you lowered your standards. Sanctioned incompetence demoralizes the team. It demoralizes the team because nobody likes to work beside that, work with that, or put up with that,

and it makes them question the competency of their leader, the strength of character of their leader. and once I got that, I realized we get more work done with fewer people, even if we can't fill the slots, because the only people that are in the building are freaking thoroughbreds. Because you can't stay and you can't get in here unless you are. Now, it doesn't mean you can't have a down period of time because you've got a personal problem.

I don't want to shoot or wounded. It's not what I'm talking about. But by and large, this idea of I just refuse or can't do the work. for whatever reason, does not get you a ticket to stay. Because guess what? If I suck at this podcast, there'll be no listeners. That's how life works. If you suck at your job, you don't get to keep your job.

Even the guy who owns it doesn't get to keep his job. So you can't suck at your job. And you can't suck at working with the people who are helping you do your job, your relational skills. And so we had a guy not long ago who came in and said, there was the third time we had confronted him. He was excellent at his job, but one of our leaders had to sit down again with him,

third time and say, listen, the way you're behaving towards your fellow team members is just not going to cut it. You cannot be Oscar the Grouch on the Sesame Street and get your work done and everybody want to work with you. Nobody wants to work with you because you're being a jerk all the time. And he goes, well, that's just the way I am. I guess we're all going to have to make a decision.

I went, okay, decision made, Bubba. Yeah. And so he accepted his severance package that day. And, you know, that, I mean, that, of course, we can't do that, right? It doesn't work. So that's, I'm going to encourage you to say, A, I want you to enjoy your business, and it's more enjoyable when you're working with excellent people who care. And I want your team to enjoy the business because it's more

enjoyable when they're working with excellent people who care. And you will get more work done, even with less people, if you don't let your guard down and tolerate it. Tolerate this lack of excellence out of weakness because I'm just afraid. I would rather have a breathing butt in the seat you're saying when you do that. When I've done it, I've done it. We let it say, okay, okay, we're going to overlook that. We know it's probably going to be a problem.

but we desperately need to get this work done. And so we sacrifice at the altar of getting the work done. We sacrifice the culture of excellence and productivity that our customers and our team have come to expect. And every time I've done it, it's bit me in the butt. Every time I've done it, I've had to go back and clean up the mess, shovel the manure out, and start again. And every time I've done it, I go,

God, man, why don't you learn this lesson? Because it's so freaking hard. Andrew, what you're trying to do is so hard. But what I'm trying to encourage you and say, it's worth it to do it right because it just takes all the joy out. Does that make sense? It absolutely does. Have you found that you have to accept a slower growth rate to maintain that mentality?

Yes. Yes, absolutely. It bothers the crap out of me. I got stuff right now that we need to get done and I can't get the people in here that qualify to get the work done. I got more ideas that I got people. I got plenty of money to do it, but I can't get to people that meet our standards to come in and do the work. But, I mean, we got probably 40 positions on the board right now to hire, and we can't find them.

I mean, right now I could hire content people. Today, I could hire seven. Today, I can hire four social media people today. Today, I could hire six developers, today. And, you know, I'm talking about, what, a million dollars in payroll. I could feel today. And I, you know, and but I can't, and we have people apply, but they come in here and you're going, you didn't take a bath before your job interview.

I mean, come on, man. I mean, it's really basic crap. I mean, like, I don't know where they, were you raised by wolves? You know, it's like, and so it's nuts. I mean, so it's so frustrating. And I will tell you this, there are three things, and it's a good thing to go off on because it fits this whole thing. you give me a chance to get up on a soapbox. But in the, and I've used this analogy on the podcast before,

but in the military, they say don't let the battle lines advance faster than the supply lines for food, bullets, and gasoline. If you can't keep the ammunition flowing to the front lines, the gasoline and the food flowing to the front lines, you will beat yourself in a military battle. You'll lose. In business, the three things that we face, there are three things that we can't move faster than these three things,

the human resources, the technology resources, which in my case is tied to the dead gum human resources to get them in here and get the technology done, right, and the financial resources. So don't outrun your money. Don't outrun your, don't grow faster than your people, and don't grow faster than your technology to get the work done. I don't know.

Yours might not be technology. It might be tools. I don't know what it is, but in the plumbing trades. But it's something like that. And so you can't grow faster than the quality supply that you can find a people. Now, I will tell you this. Once you get a reputation for hiring thoroughbreds, the other thoroughbreds around town will go, oh, that's where I want to go to work.

That way I don't have to work with Dufus. I want to work over there because they don't hire doofuses and I'll get to work with people who care and aren't dangerous with their forklift or whatever it is, right? And oh, God, you know, it's like they don't hire people who smoke dope on the job, amazing, you know?

And so you get a reputation for that for being tough to get on with? I mean, Ramsey has a reputation being one of the best places to work in Tennessee and maybe one of the best in the nation, without a doubt. But we also have a reputation of being very, very hard to get on here. It's like you can get on with the CIA's here, right? Because we don't want crazy in the building. You know, we interview your butt off because we're going to find out if there's

crazy anywhere in there. We want to find it for you. Come on. Because crazy just takes up too much time. So, yeah, don't out. But I share your frustration. I have the inner whiner in my head that goes, come on, man. And just, oh, just get some people in here. But every time I do that, I spend more time on that than I do running the business, cleaning up the bull crap the people who don't care do. And people, or they come in and they're, God help us, they think they're an activist or something. Jesus, Murphy. I mean, unbelievable. Why don't you just like do your work and stuff or go somewhere else if you want to be an activist?

Don't do it on somebody's payroll unless they're hiring activists. I mean, oh my gosh. But it's like, where does this stuff come from? But yeah, that all comes down to. We lowered our standards and let's stupid in the building, crazy in the building, incompetent in the building, and that's a leadership failure because we allowed it at Ramsey. And then the rest of my team has to put up with the fact that their leaders screwed up until we clean up the mess we made.

And that has happened in two or three different waves over 30 years. And every time I relearn the lesson, I go, I'll never do it again. And I think maybe I've done it my last time, but now I'm so old, it doesn't matter. So there you go. that's you know but hey man please hang on and do it right you're going to have a better quality life if you do that your people have a better quality life your customers have come to count on you because they know a hundred percent of time Andrew is not going to send a doofus to their house a dufus to their job site this guy only hires the best and i got to tell you man i get all kinds

of reports positive reports on ramsie people in the community and stuff they do because they're studs and studettes this is the entree leadership podcast for hanging out with us, America. If you want to be on the show, call us at 844-944-1070 or fill out the form at entreleadership.com slash ask, and we'll make you a part of the program. If you want to help us, we can use the help. Click the follow button, the subscribe button. It's a big deal. Thank you very much. We need your help. And also, you can leave a nice five-star review. That's a big help. You can share the show. If it's got a share button on the platform you're on, that's fine. Or just cut the link out and send it to somebody to say,

listen to this crazy guy. He says stuff I was thinking. So, which is kind of about all I do. There's no real insight here. I'm just saying what you're already thinking. So, but helping you do it, helping you win the business. We think small business people are heroes and we want to help you win. John is in New York. Hey, John, welcome to the show. How can I help? Hello, how are you? Better than I deserve, man. What's up? All right. My name's John. I run a family, run window cleaning company doing residential and commercial window cleaning. I got four full-time employees and two are part-time.

One's my son and one's my wife. And last year, our revenue was at $500,000. Good for you. So my question is, because my wife is very involved in the business between administration, payroll, she'll even sling a squeegee when an employee calls in. Wow.

She'll jump right in there. What a woman. She is. She's been on the ride for 20 years, and I couldn't have done it without her. So my question is, because she's so involved in the business, in case of a situation with an untimely passing of myself, you know, financially we have things situated. But legally, if I was to pass, what would the best way be to have her take the reins of the business for the smoothest, transition, whether she wants to continue to run the business or run it and then eventually sell it, being that we've invested so much over the past 20 years. Is that illegal? Would that be covered by a will? Or do you feel the LLC would have to be modified to be effective for that?

Does the LLC have her name on it? Well, recently I did her as a 10% owner, and I'm a 90% owner. And basically it stated that in my passing, my shares would all go to her. Okay, in the minutes with the LLC. Yes, that is correct. Okay. And your will would actually need to mirror that and say the same thing. And then that's what will happen. She'll become the owner.

My will just currently states, I verified with my attorney, that it says any and all my assets will be transferred to her. That would be your 90% interest in the LLC, so it would mirror. Then if you predecease her, that's what happens. And then what happens if both of you go in a car wreck? What happens then? It goes to your son? I never thought of it.

Well, the will should deal with that. He's 18, and he's a computer guy. So although he does, he loves work, and I don't necessarily think it would be his cup of tea. I am trying to be very very. intentional with my hires to possibly try and have somebody in the wings who might have the potential to take the reins in that case. So long term, you think he'll have a different career and you will have an employee rise up and buy it from you? Yeah, yeah. Eventually that would be the hope. I did do pressure washing for years and I sold the pressure washing side of the business,

which was pretty lucrative two years ago. And now I'm solely window cleaning. But definitely would love to capitalize on, you know, the investment over the years. So that's obviously something I didn't really think about, you know, for the kids to actually benefit as well. Yeah, I mean, if, you know, you could just direct in the case. Basically, your wife and you need wills. And when you put together a will, one way to do it is what we call a mirror image will.

and that would be like your wife's will and your will are just alike, only they switch, you know, switch names out, okay? So meaning that if you die, everything goes to her, if she dies, everything goes to you, if you both die, the same thing happens with whatever you're going to do. Like we're going to leave it all to the kids in trust to be sold, or we're going to do whatever. The business is to be liquidated.

This is a piece of real estate to be done that. But the event both of us die, then, so both will. reads exactly the same if both of you die. You follow me? Okay. And then your will says it all goes to her. Her will says it all goes to you, right? And so that's called a mirror image well.

It's very inexpensive to build out unless you put some complicated trust or something in it, which you may need to do with the business. I don't know. But you just need to direct what happens to the business if both of you are in a car wreck, both of you're in an airplane, whatever the scenario is, both of you're in front of the milk truck. I don't know. Whatever it is, right?

but the and that's how mine is built with my wife as well and so yeah you need to think that through and then she becomes the owner then the second part of the equation what you've got the will and you've already done the LLC laid out is you know make sure she's on the bank accounts personal and business so she's not locked out of the bank until there's a judge ruling or something on on the estate so she's got full six. signature privileges so she can continue to operate. Then the third piece is for you to sit down with her and write out and type it out and put it in the file with the will, detailed instructions of the easiest way for her to do this, this, this, this, and this. Here's what I would do if I were you,

you know, in the event of my death. I would do this, this, this, and this. And, you know, I would get rid of that piece of equipment and I would carve off. only this cream part of the business and I'd stop doing the other part. And I'd just take this high profit area and just run it. Or I'd run the whole thing exactly and I'd count on George to be my manager. And I'd, you know, just give her instructions of how she's going to do this exactly because she's only run part of the operations side. She's not run the out front with the customer side.

She's not run the production side. She's seen it done, but doing it and, you know, leave at least a one page detailed thing, okay, of exactly what to do. And that really is a gift to her. That's you saying I love you. Yeah, I've just seen situations where, you know, unexpected, you know, heart attack or things like that and have, you know, seen businesses with, you know, lots of assets and the value in their cost of her. I have, too. I've seen a bunch of them go sideways, yeah. I mean, it's like none of us think we're going to die. It's not really unexpected. I mean, we're going to die. It's just a matter of when, you know, I mean, what catches you off guard is the win or the how,

you know, I mean, so I laid out mine years ago and we update it once a year. We go over it with the whole family and all the leadership team. We have the, I call it the Monty Python meeting once a year. We get everybody together and go over, if Dave dies this year, what do we do? And it's Monty Python because I'm feeling much better. It's just a flesh wound, you know, and so, but, you know, and we just laugh about it because I'm sitting there in the room. We're talking about me being dead. you know, what do we do with the, what do we do with this? What do we do with that? What do we do with that? And here's how this is going to go. And this is how this pool of money is going to be going that way. And this is what's going to happen, that piece of real estate. And everybody knows,

what everybody knows. And then nobody's feelings are hurt. Nobody wondered what Dave intended. It's all written out in a will. It's all written out in a series of estate plans and trusts and so forth. But even then, we review it once a year and update the nuanced things for that calendar year or for that 12-month period of time. And so you're very smart to think about this, John, very smart. And thanks for calling in. We appreciate you being part of the show. That's wise. All you small business guys need to plan for your retirement and you need a plan for your death. Both are going to occur. Hello. You're not getting out of this alive. I've done detailed research. A hundred percent of us are going to die. This is the Ontario Leadership podcast.

Thank you for joining us, America. I'm Dave Ramsey, your host. This is the Entree Leadership Podcast where we love small businesses. You're running in Operation 5 people to 250, 500 people. You are our, man, you're just our heroes. We love what you do. We love who you are. We're one of you.

We're not that small anymore, but we're small business people at heart still. All right. Aaron is in Fort Dodge, Iowa. Hi, Aaron. How are you? Hey, Dave, doing well. Thanks for taking my call. What's up? Hey, so a little bit of a brag about our business and then a question following that up.

So we started this, it's a moving company, I'm the owner, and we've got six employees, and last year we grossed a little bit over 400,000, so we're doing pretty good there. And so what that's done is it's actually led us to the point that now we're experiencing some unexpected growth, and I'm not sure if it's just a bubble that we're in, or if it's something that's going to continue long term. and so my question is, would it be more beneficial for me to focus in on only the quality jobs, raise some of the quotes to kind of shy away from some of the low-end things, or hire a few more guys and get a few more pieces of equipment rolling so that we can continue to keep up with the volume?

It was interesting that you said that you didn't know where the volume came from, so you didn't know if it was going to continue. Right. Why don't you know where it came from? Well, a lot of our business is word of mouth. We're a moving company and it's relatively seasonal. And so, you know, I don't always know what calls we're going to get. So last year and the years previous, around the same time of year, we didn't have as many calls as we've been getting this year. And I'm not sure if something's changed in the industry that's causing a surge or if it's just, you know, I wouldn't say that we're undercutting any prices because we're actually, well, comparing our costs for our prices. rather, versus other companies in the same.

So you've shopped, you've shopped your competitors? Yeah, we've shopped our competitors and we're on par and actually in some cases we're already higher than they are. And yet folks are still closing the deals and, you know, people, sometimes people will just call and say, we want to work with you because we know you, our friends knew you, that sort of thing. And, you know, it's not something that people don't move all that off. How long have you had the business?

So I bought it, well, I helped start it in 2016, and I bought out the remaining portion of it just last March. So a little over a year since it's been all mine, but before that I've been running it and doing everything. Yeah, but your reputation has been growing for five or ten years. Right, right. And so I don't really want to turn away business, but at the same time last summer, towards the tail end of it, the summer, anyhow, we had an increase of call volume that was short-lived. and what happened was I would schedule the jobs and then a couple guys wouldn't show up for work and then now I'm stuck with myself and the rest of our crew just getting drained,

trying to keep up with the calls that we had. And that's what caused me the hesitancy to just say, well, yeah, let's bring in some more guys. So I don't want to make a bad move in that way. When you bring in more guys, are they sitting around the office if you're not doing a move? No, not necessarily.

I mean, do you pay them by, the hour when they work or pay them by the, give them a guaranteed 40 hours or whatever. So depending. So whether they hire on as part time or full time. So if they're a full time employee, they're paid hourly and then there's commissions and tips. Okay. So you got, how many of those guys? Four full timers. Okay. And how many part timers now? Two. Okay. So what's wrong with adding six more part timers? No. They only work when you need them. So then that falls into the second portion in order to continue to keep up. So what I have with my full-time guys, I'm tapped out for equipment.

So then that pulls into, in order to do another job the same day, you got to have a truck. We would need another truck, exactly. Okay. And then that might be sitting around for six months not being used, which lended me into the thought of, okay, do I just focus on high-quality jobs and just let them? Do you have the ability to rent the truck on a daily? In some cases, we do. Yeah. I guess it'd freak them out if you pull up in a U-Haul, right? It probably would. You know, we're a five-star moving company, and so we provide a top-level service, so showing up with a U-Hauls kind of sets them on edge.

Yeah. It would me if you did that. I can, as a customer, I can imagine that. That's why I thought it. I'm just trying to think of a way to not have the equipment investment, and really, when you're not hiring full-time, you don't have the people investment. You're just, it's almost commission. It's almost only when I need you, right?

Right, right. So if I could only when I need you on the truck and only when I'm I need you on the part-time. I could get the volume up. And if the volume maintained, then I ride a check by a truck and bring some people on full, more people on full time. But if it doesn't maintain, I can turn it back off. Right.

That's what I was trying to build. I get that. So when looking at our calendar, I see what we have scheduled out. So over the next month, two months, and even into the third month out into June, I can see what jobs we already have scheduled. And I'm already maxed out for my equipment and the manpower that I currently have. from now until at least mid-May and then we're starting to get into a little bit of flexibility towards the end of May, but we're six weeks out, and moving season is just getting started

in our area. Well, I mean, you've analyzed it properly. There's two ways to look at it. One is that I can, I feel good enough about this growth that I can reasonably invest in full-time people and equipment. or I'm not that steady about this growth, and so I'm willing to just not grow right now until I feel good about it.

And if I'm not going to grow, then I might as well raise my prices to not grow. I mean, that's... So either one of those ways is a fine way of looking at it. So what I'm going to be trying to do if I'm in your seat, and I can't seem to feel it right now with you, but if I'm in your seat,

I'm trying to figure out how much I can, is this just an anomaly or is this just a steady growth curve of nine years of doing the right thing for people? And people are right now, you know, the word of mouth, the book of business that we've got over that nine years spreading the word for us is bigger than it was when we had done it for three years. And so now I'm just going to get a steadier influx. So, you know, it is the next right step to make that leap. So what does a piece of equipment cost? So, well, depending on if we were to buy a new truck or a used truck, I could get a used truck. Yeah, I would buy a used truck. A used 26-foot trucks right around $30,000 to $40,000 for one that's in decent usable condition.

Okay. I mean, they're over 200,000 miles. And what do you, well, that's okay. You're just pulling around town. It's not the other girl. Right. What's the, and so what would that vehicle make you in a year? In a year's work. If it were, if you work at a reasonable. amount, what you think it might be able to work it? Oh, it would definitely pay for itself, probably double its own value. So, I mean, we could probably pull in 80 off of that one unit.

In gross revs. In gross revs. And then you got payroll. Well, of course. Okay. All right. So you could break even on it in a worst case scenario in a year. You have the cash?

We do. We do. I'm still trying to pay off the business purchase, so that's the thing. so, you know, I'm going hard and heavy to knock off what, you know, remaining out there on the business. How much is remaining on the business? About, well, just under half a million. Yeah. I'd buy the truck.

Okay. And I'd hire two people. Sure. Yeah, I think you're there because the downside is not that great. No, I don't really want to turn away business. Well, your break-even analysis is fairly assured, so we're not going to lose money. We're going to recoup inside of 12 months on the equipment and on the people. It's got to go, something's got to go really bad for you not to at least break even.

Sure. I can see that. And so if you break even on it, then you paid yourself back and you didn't really slow down your payback to the former owner that much. True. You kicked a can about 12 months is all you did. On that little bit of money, it's only 30K, it's not a half a million. and yeah, then you can wrap the truck and it'll pull up looking pretty even if it's 200,000 miles.

And if anything's sitting, it's the one sitting and you drive the good one, right? Exactly. And then I think you start kind of shaking the bushes and see if we can't fill this calendar on up. Sure. I'm down for that. I mean, this one move could take you from 400 to 700 pretty quick. Oh, yeah. One good job could bring us, I mean,

one good job could bring in three to three, to $4,000, and that's just one job. Yeah, and that's like, what, two days or something? Yeah, about a two-day project. Yeah, yeah, okay. Wow, that's fun. That's cool. Yeah, not a bad deal.

I think you're fine. I think you're fine. And what I think I'm hearing is that the, and what I'm counting on in our discussion is that the good business you have done is now earning you more business, and that is an exponential growth. It's not a linear growth. So I think we're probably sitting on more business than you even realize,

and this might open the floodgates to even more. I think you're going to be in really, really good shape. So you're killing it, man. You're really thinking clearly. You're doing all the right stuff. You got your head dialed in on the finances. You know your business. Aaron, you got everything right to move through the process

from Pathfinder, up into Trailblazing. you're right on the edge of kicking that loose and you're looking at your systems you're looking at your break-evens this is this is well done it's good talking to you you're you got a good future ahead of you it's going to be great hey 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 ramsay your host thanks for listening to the entree leadership podcast