Can Your Family Business Survive Your Family Problems? With John Delony

Summary

The EntreLeadership Podcast: Can Your Family Business Survive Your Family Problems? With John DeLoney

Podcast Information:

• Title: The EntreLeadership Podcast
• Host/Author: Ramsey Network
• Episode: Can Your Family Business Survive Your Family Problems? With John DeLoney
• Release Date: September 30, 2024
• Description: Dave Ramsey, alongside co-host Dr. John DeLoney, delves into the intricate dynamics of running a family business amidst personal and familial challenges. Drawing from over three decades of leadership experience, Ramsey provides actionable insights to help business leaders maintain professionalism and harmony in their family-run enterprises.

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Introduction

The episode kicks off with Dave Ramsey introducing Dr. John DeLoney, a Ramsey personality and Ph.D. in counseling, who specializes in addressing the unique challenges faced by family businesses. Ramsey emphasizes the importance of leadership growth paralleling business growth and sets the stage for an in-depth discussion on managing family drama within a business context.

Notable Quote:

Dave Ramsey [00:10]: "Whatever you lead can only grow when you do."

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Defining a Drama-Free Family Business

Dr. John DeLoney outlines the essence of maintaining a drama-free family business. He emphasizes the need for intentionality in balancing professional and personal relationships, ensuring that issues in one sphere do not spill over into the other.

Key Points:

• Intentionality: Being deliberate in how family members interact within and outside the business.
• Role Clarity: Understanding and respecting the different roles family members play in the business versus the home.
• Problem-Solving Together: Addressing issues openly and collaboratively to preserve essential relationships.

Notable Quote:

Dr. John DeLoney [02:27]: "Running a drama-free business is about how to address the elephant in the room, how to tell the truth, how to wear the right hat in the right moment and how to solve problems together."

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Listener Questions and Expert Advice

The core of the episode revolves around listener-submitted questions, with Ramsey and DeLoney providing expert guidance on navigating family-business conflicts.

Question 1: Balancing Business Leadership and Family Life

• Caller: Lee from Cleveland, Ohio
• Background: Lee is the CEO of an IT managed services company with significant family responsibilities, including a growing family.
• Concern: Struggling to balance being an effective business leader while being present at home without causing marital friction.

Advice:

• Be Present: Ramsey and DeLoney stress the importance of being fully present in both arenas by setting clear boundaries.
• Set Boundaries: Define when you are in "business mode" and when you are in "family mode," ensuring minimal overlap.
• Intentional Relationships: As demonstrated by Ramsey’s example with his daughter, consciously maintain distinct roles at work and home.

Notable Quote:

Dave Ramsey [06:24]: "Be where you are."

Question 2: Addressing Passive-Aggressive Behavior in a Family Employee

• Caller: Chelsea from Austin, Texas
• Background: Owner of a medical SPA with her older sister as part of her staff. Experiences periods of passive-aggressive behavior from her sister related to unresolved personal issues.
• Concern: Breaking the cycle of unaddressed personal conflicts affecting professional interactions.

Advice:

• Direct Communication: Engage in a candid conversation using "I" statements to express your feelings without casting blame.
• Set Clear Expectations: Outline new guidelines for professional behavior, separating personal grievances from work interactions.
• Documentation: Put agreements in writing to ensure clarity and prevent future misunderstandings.

Notable Quotes:

Dave Ramsey [11:02]: "If anybody else in the building was doing this, you wouldn't put up with it."

Dr. John DeLoney [16:25]: "Can we talk about this?"

Question 3: Overcoming Fears of Third-Generation Failure in a Family Business

• Caller: Ethan from El Paso, Texas
• Background: CEO of a third-generation family-owned manufacturing company facing concerns about the high failure rate of third-generation businesses.
• Concern: Paralyzed by fear of becoming another statistic, potentially leading to business failure.

Advice:

• Identify Specific Fears: DeLoney encourages Ethan to articulate precise fears to address them effectively.
• Challenge False Narratives: Ramsey dispels myths about generational failure, highlighting that family businesses often outlast non-family counterparts by approximately 20 years.
• Strategic Planning: Focus on adapting to market changes, embracing new technologies, and continuous learning to secure the business's future.

Notable Quotes:

Dave Ramsey [29:33]: "Family businesses last, on average, 20 years longer than any other kind of business."

Dr. John DeLoney [23:08]: "Put it on paper. What are you scared of?"

Question 4: Transitioning Business Ownership After a Parent’s Passing

• Caller: Ethan from Akron, Ohio
• Background: CEO in the process of buying out his father’s construction business, who recently passed away. Navigates the emotional and logistical challenges of ownership transition while ensuring his mother’s financial security.
• Concern: Balancing the purchase of the business with caring for his mother amidst grief.

Advice:

• Take Time to Grieve: Ramsey suggests postponing major decisions to allow emotional processing.
• Structured Buyout Plan: Implement a clear, financially sound plan to buy out the business gradually, ensuring the current owner (mother) remains financially secure.
• Family Meetings: Facilitate open discussions with all siblings involved to maintain transparency and mutual agreement.
• Documentation: Keep all agreements in writing to avoid future disputes and ensure clarity.

Notable Quotes:

Dave Ramsey [38:12]: "Try to buy yourself some time and buy your mom some time."

Dr. John DeLoney [45:02]: "When you lose somebody, hold a positive memory ready to insert."

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Conclusion and Key Takeaways

The episode underscores the critical importance of intentionality, clear communication, and strategic planning in maintaining a successful family business amidst personal conflicts. Ramsey and DeLoney highlight that the functionality of a family business is intrinsically linked to the functionality of the family itself. They advocate for setting boundaries, addressing issues head-on, and fostering an environment where both business and family can thrive harmoniously.

Final Notable Quote:

Dave Ramsey [33:24]: "The family business can only be as functional as the family is functional."

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Additional Resources and Upcoming Events

• Live Training and Q&A: Dr. John DeLoney will host a live session on running a drama-free family business for elite members.
• Free Templates: Ramsey offers a free key results area template to help set clear expectations within teams.
• Mission Statement Builder: Available for download to help businesses define their mission clearly.

Call to Action: Listeners are encouraged to visit entreleadership.com to join the Elite membership, access free resources, and participate in upcoming live coaching sessions.

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Summary By: The EntreLeadership Podcast team, leveraging a detailed transcript to provide comprehensive insights for business leaders navigating family dynamics within their enterprises.

Transcript

[Dave Ramsey]

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 leading in the trenches and the ditches. Just like you, we do it every day here. I know what it feels like to really be excited one minute and 20 minutes later be really pissed off. That's part of running a business. So we're glad you're with us. If you want to call in, you can. Today's show, Dr. John DeLoney, Ramsey personality, is my co host, PhD in counseling and he's going to be here answering questions about family business and all the associated drama about that. We'll get into that in a minute. Number here if you want to call and leave a voicemail, be part of the show 844-944-1070 or go to entreleadership.com ask. We would love to hear from you. This Friday, Dr. John DeLoney will be doing a live training Q and A and Q and A with all of our elite members about running a drama free family business. He'll be doing it on E. Coaching with our elite members. E Coaching is a training and coaching session we do with elite members twice a month. If you' not an elite member yet, you can be by Friday. Be sure to [e-mail] elite and you can hang out with John for that particular E. Coaching session and a couple of others a month. We do two a month like I said. So John, you're going to be talking about running a drama free family business and not to spoil the answer to the callers this particular hour and taking a Q and A and so forth, but what does that involve this drama free family business idea?

[Dr. John DeLoney]

Well, it's probably best to call to say it's about not furthering drama because I think drama business is hard, man. And relationship issues come up and trying to figure out what hat to be wearing, when and how and how do you keep the thing that happened at the office out of your house and vice versa. So man, running a drama free business is about how to address the elephant in the room, how to tell the truth, how to wear the right hat in the right moment and how to solve problems together so that we can continue in the relationships that actually matter. It's all of it all at the same time.

[Dave Ramsey]

Very cool. Good stuff. Lee's in Cleveland, Ohio. Lee, your question about family business drama.

[Lee]

Hi Dave and John, it's an honor to speak to both of you.

[Dave Ramsey]

You too.

[Lee]

I am the founder and CEO of an IT managed services company in Northeast Ohio. So we do about 1.1 million in revenue with a team of four, including myself. And I've actually had the privilege of going through the Entrez Master series twice.

[Dave Ramsey]

Wow.

[Lee]

In 2008 and again in 2013. And it was an amazing experience.

[Dave Ramsey]

Thank you.

[Lee]

I do appreciate, appreciate that. So I jump into my question here. So I think the overarching thing I'm trying to figure out here is how to be fully present. And what John was talking about here is spot on here. Trying to be fully present both at work and at home without causing friction in the marriage while still being an effective business leader. So I want to give you a little bit of background before we dive into that. So I started this business 21 years ago when I was 17 and right out of high school I went full time. And through my 20s, I very routinely worked 12, 14 hour days to keep things moving. But when I was 31, I got married. We adopted a 7 year old daughter. That's a whole new dimension out of life. So now I'm 38, daughter's 14, we've got a 4 year old son and I've got a baby girl due in about two and a half weeks. Yay. Well, I thank you. We're just, we're just trying to. Again, what I'm trying to do is I want to be the best business leader I can be. But more importantly, I want to be the best husband and father I can be. And I'm just, I'm struggling to find that, that balance, if you know what I mean.

[Dr. John DeLoney]

I think the word that would guide every minute of every day is intentionality. And I think we try to do it all at the same time and we try to do it as best we can at the same time. And you can't. And so it's about being intentional. And I think the fallacy here is you can't work 20 hour days during certain seasons and be a good dad. That's simply not true.

[Lee]

Right.

[Dr. John DeLoney]

But you have to have talked about it with your wife. You have to have set it up to where on the other end of that wild season. It's got a payoff, right? It's got a. It's not. This is never ending. Treadmill Dave and his team. I've watched it in real life. I tell this, I tell the story. This is a real story. Dave had left a meeting. We had all the personalities right when I got here. And you know, his daughter Rachel Cruz is a personality. Well, Dave left and it was. I don't remember what you're talking about. It was something, but it was, it wasn't hot, but definitely was. We knew where Dave stood on an issue. Dave left and Rachel said, can you believe Dave? Fill in the blank. And I looked at her and I was like, I'm new here. She set me up. Like, don't, don't respond, John. Right. Cause I didn't want to be like, yeah, I didn't know what to do. Right. And she's like, I'm going to tell Dave at our next meeting that this and this. Well then, you know, a few months later, fast forward, we're all out at Dave's home and it was a very, it was a friend. Everyone was hanging out. It wasn't work, it was, everyone was laughing, carrying on. And she called him dad. And that's when I started getting, oh, there is Dave at work and there is dad at home. We are intentional about this relationship here and intentional about this relationship here in my life. The first book I wrote here for Ramsey Solutions, number one bestseller, did great. It. I was not intentional about it. I tried to do my day job and be a parent and be a husband and write a book on top of that. The second book was way bigger, way busier, but my marriage ended up stronger on the back end because we were so intentional about what that looked like on the front end.

[Dave Ramsey]

Yeah. So be where you is.

[Dr. John DeLoney]

There you go.

[Dave Ramsey]

When you're at work, be at work 100% and your. Unless your 14 year old has an emergency, she doesn't interrupt work and you.

[Dr. John DeLoney]

Have to have that conversation.

[Dave Ramsey]

By the way, the number of times in 35 years that Sharon Ramsey called me on the telephone during the day, I can count on my hands in 30 years now she might send me an email knowing I can respond whenever I want because she didn't want to forget about it or to let me know to bring something home or something like that. But, but if Sharon Ramsey calls here, it's an emergency.

[Dr. John DeLoney]

There you go.

[Dave Ramsey]

Cause it doesn't happen because when I'm at work, I work. Oh, and by the way, when I'm at home, don't call me at home. There you go. I'm not, you know, don't bother me at home. The only people that can bother me at home are the publicity people because I gotta be down here at 4:00 in the morning to do some media hit and they're sending me notes the night before right but that's by email. The only time they call me by phone is if it's 3:00 in the morning and they canceled and didn't want me to come down here. You know, that kind of stuff. Right, But I mean, this is how we don't. It's not. It's just assumed that when I'm at home, I'm at home, right? And when I'm at home I'm dad and when I'm here, I'm Dave.

[Dr. John DeLoney]

But there's also a fallacy that if I get home that I can still be effective at work and I can be effective. You have to be willing to draw that line.

[Dave Ramsey]

Put that stupid phone down.

[Dr. John DeLoney]

There you go.

[Dave Ramsey]

Close the computer. And by the way, if you want to be present with your family, Netflix is not involved.

[Dr. John DeLoney]

There you go.

[Dave Ramsey]

Turn off your television. Be present with the 14 year old. Look in her eyes. She's adopted. She really needs you to look in her eyes and remind her that she's the center of your universe. She has a new little sister coming. She needs to be reminded that she's still valued in this family.

[Dr. John DeLoney]

There you go.

[Dave Ramsey]

And that's physical touch and eyes. And none of that happens while you're looking at your phone. Throw your stupid phone in a basket and throw a brick through your TV and be present when you're home entrepreneurs. And that'll go a long, long way towards that. Today, Dr. John DeLoney, Ph.D. in counseling, is helping us with family business questions. This is the Entree Leadership Podcast.

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[Dave Ramsey]

This Friday will be doing a live training and Q and A with all of our elite members about running a drama free family business on E Coaching. If you want to be part of that, go to entreleadership.com and join Elite. Between now and Friday you can hang out with John for that Q and A and that coaching as well. Also, I want to remind you that as a small business owner, it is your job to set expectations for each role in your company to make sure those expectations are met. You cannot hold your team accountable to something you didn't communicate. They're not mind readers. This is a discussion I've had at home too. Our free key results area template will help you set expectations and create role clarity for every team member on your team. You feel confident everybody's working on the right things? Go to entreleadership.com clarityrollclarity to download the template for free and start setting some clear expectations for your team. Did I mention it's free? Chelsea's in Austin, Texas. Hey Chelsea. Your question for Dr. John.

[Chelsea]

Yes. Yes. Thank you guys. I am the owner of a medical SPA, have about 63 staff. We do 8 million in revenue each year. My older sister works for me and the vast majority of the time things are really just wonderful. But every once in a while she will get upset with me, typically regarding something in our personal lives and it's not something that's addressed. I don't even know she's upset with me and she doesn't communicate about it. And then she will treat me passively aggressive, passive aggressively at work. It could go on a week, it could go on three months. And then at some point she decides to drop it and then acts totally normal and we just move on like nothing happened. And I just would love to break this cycle and I'm curious how I could possibly address this with her.

[Dr. John DeLoney]

Does she work for you?

[Chelsea]

Yes.

[Dr. John DeLoney]

I think you have to have this conversation direct because here's the deal. The rest of the other 62 of your staff members are watching this interaction as a cue for how to treat you.

[Chelsea]

I do hear you, but let me just add one piece. She kind of runs her own little. It's very unique in our business. Her own little operation over here under me. And we don't have to interact a ton.

[Dave Ramsey]

And when we do interact, no, that's near. That's an escape. You're being a coward.

[Dr. John DeLoney]

It's your sister.

[Chelsea]

Do you think people see this?

[Dave Ramsey]

Oh, they all see. Yes, it has a stink on it. Yeah. And there's nothing worse. Listen, I don't, I can handle aggressive, aggressive, passive aggressive. Oh, that one pisses me off. No.

[Chelsea]

So, yeah, I find myself just.

[Dave Ramsey]

If anybody else in the building was doing this, you wouldn't put up with it.

[Chelsea]

No.

[Dave Ramsey]

Okay.

[Chelsea]

Definitely not.

[Dr. John DeLoney]

But it means it's not okay. And Dave just, just, just so you know, I've seen Dave and his other family members who are co workers here. They're aggressive aggressive. It's awesome. There is no passive aggressive.

[Chelsea]

I would love that. I would love to deal with whatever.

[Dr. John DeLoney]

The issue is that, okay, then you have to lead. You have to lead. And you made the decision to hire a family member, which means the stakes are higher and the conversations are richer and harder. But that's your job.

[Dave Ramsey]

When he says we're aggressive aggressive, what we're doing is we're arguing about which play to call to win the Super Bowl. We are not mad at each other from something at home and brought that to the office.

[Dr. John DeLoney]

Absolutely.

[Dave Ramsey]

That's not tolerated here. We don't do that. We set that boundary a long time ago. And so while everything's cool, you need to sit down and have a discussion and set some new guidelines of how our working relationship will be when we're at the office. I'm the CEO and this is how the CEO gets treated. Right, John?

[Dr. John DeLoney]

100%. Yes, sir. And you're handsome, sir.

[Chelsea]

It's so interesting because we've worked together 13 years and she has never ever questioned anything business wise. She totally respects me. Never like usurps by authority or, you know, tries to manipulate. It's incredible. But when it comes to this personal side, she gets something frustrated about. It's, it's really, it's really wild. And it would be, it would be, it would probably cost me half a million a year in profit if, if I have to.

[Dr. John DeLoney]

Hey, Chelsea, I'm going to challenge you. I don't think you're correct.

[Chelsea]

Okay.

[Dr. John DeLoney]

I guarantee you with 99.999% certainty that she has gone around your back and your leadership at work because somebody's that's going to do something on this side of the fence is going to also do it on that side of the fence. That's the way character integrity works. And so the thing you somehow have, have become so voidant of yours, of this interaction that you know is coming with your sister that you, you believe in your guts, you're not even pretending for us. You believe that you have this isolated and Contained. You do not. It is all over your business.

[Chelsea]

I guess probably the reason why I feel like it's somewhat isolated and contained is it happens about once every three to four years. But when it happens, it's painful, but it's not all the time.

[Dr. John DeLoney]

Okay, forget the business section. Forget the business.

[Chelsea]

Right.

[Dr. John DeLoney]

Pretend you all didn't work together. Would you call your sister and say, hey, what's the deal?

[Chelsea]

Oh, well, that's the problem, is our entire lives, you cannot address anything with her. That is. That is.

[Dr. John DeLoney]

What kind of relationship is that?

[Chelsea]

I know there's four girls and one of us. That other three, we can address everything. And then with this one, like, she just. She will literally physically leave the conversation if it gets hard.

[Dave Ramsey]

Yeah, she's getting ready to physically leave the building if she works for me.

[Dr. John DeLoney]

And by the way, you just put a dollar amount on the. On your relationship with your sister. You said it's about 500,000 bucks.

[Chelsea]

That's. Yeah, that's what I know would lose.

[Dr. John DeLoney]

That should cause you significant pause. You just put a dollar amount on the relationship with your sister. There should be no dollar amount on that relationship, period.

[Dave Ramsey]

So what should she do?

[Dr. John DeLoney]

She said to say, hey, can we go out and have a sister, sister conversation? And I would frame it this way. In the past, I have not had this conversation. Right. So you're going first. I haven't addressed this right. And I need to say some hard things, and I'm afraid you're going to leave. Will you please promise to stay with me here?

[Chelsea]

Mm, yeah.

[Dr. John DeLoney]

And then say, the last three months have been hell here. I did something in our personal life, and you won't talk to me. It comes here. The employees notice it. Can we talk about this? And then she gets to decide whether she wants to be an adult or not.

[Chelsea]

So I do. I wait until there's an issue, because.

[Dr. John DeLoney]

I have an issue. You don't wait to start your weight loss program until you got the flu. You go and you're healthy.

[Chelsea]

Okay. So go now. And I would be basically bringing that something that happened like, eight or probably over a year ago now.

[Dave Ramsey]

That's fine. Just say this has been bothering me, and I. Here's what I would say. Okay. And I'll put words in what John's saying. If I was taking his advice, I would say. He said for you to go first. So I would say something like, okay, as the leader of this company, I should have addressed this a year ago, and it's been bothering me ever since, and that's my fault. I'm sorry that I didn't bring this to you earlier. I apologize for that. But I am bringing it to you now. And you and I, as team members and as sisters, have to set some new guidelines on how we're going to walk forward at the office. If you want to be mad at me at home and be passive aggressive, we can deal with that as sisters. When you're working for me at the office, you cannot be passive aggressive. If you're mad at me from something personal, you can. It cannot show at the office, and it does show. And the other team sees it and I see it, and there's a chill in the air, and we're not going to do that anymore. I can't live like that. That's how it would sound at my place.

[Chelsea]

Okay.

[Dave Ramsey]

And then she gets to decide. But I can tell you this. Here's what will be strange. If she stays, you've increased the quality of her mental health and her emotional maturity and the quality of your life and the quality of the team, and you will see an uptick in revenues long term as a result. If she goes, you will not lose a half a million dollars. You will probably, four months later, not even know she was there before. I'm amazed at when people have left here that I thought our world was going to come to an end. And it's really sad that we hardly even noticed.

[Chelsea]

Yeah, I had to do this with a position I felt like that about, and it was crazy. In 60 days, it was not a. I was glad I did it.

[Dave Ramsey]

Yep. And that's what you'll be here. I hope she stays and I hope you all both grow. But not addressing this is no longer an issue. It's cowardice. You've got to address it.

[Dr. John DeLoney]

And, Dave, you said something so important. Start the conversation with I, not with you.

[Dave Ramsey]

Exactly.

[Dr. John DeLoney]

I messed this up and we're going to go from there.

[Dave Ramsey]

That was the advice you just gave. I was following it. And you're handsome, too. This is the Entrez leadership podcast.

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[Dave Ramsey]

It's two handsome devils. Well, the devil part was right. Dr. John DeLoney, Ph.D. in counseling, Ramsey Personality My co host on the Ramsey show is now my co host on the Entre Leadership Podcast. Today answering your questions about family business and family business drama. I'll chime in cause I am the cause of a lot of the family business drama around here. So I'm an expert on it.

[Dr. John DeLoney]

Amen.

[Dave Ramsey]

And we'll do all that this Friday. Dr. John DeLoney will be doing a live training and Q and A with all of our elite members about running a drama free family business on E. Coaching. We do two E Coaching sessions a month with our elite members. If you want to join elite, it's not that much to it. We'd love to have you. Not that expensive. Anyway, go to entreleadership.com elite and you can hang out with John this coming Friday as well. Ethan is in El Paso, Texas. Ethan, your question for Dr. John Deloney.

[Ethan]

Hi Dave.

[Unknown]

Hi John. My question for today, I'm an owner of a manufacturing company that's focused in plastics manufacturing. We're a third generation family owned business. We've been doing business for 70 years, so we have close to 100 employees. Our top line revenue is around the $20 million range and on one hand things are going very, very well. We are debt free and I feel more in control of our business today than I did 10 years ago. However, when I look at the statistics of family owned companies like ours, it feels like the odds are stacked against the third generation. You know, I've heard upwards of 90% of third generation family owned businesses fail.

[Dave Ramsey]

That has nothing to do with three generations.

[Unknown]

Okay.

[Dave Ramsey]

That has to do with the people.

[Unknown]

That's a good point. That's a good point. So my, my question is about that, that lingering fear that's in the back of my mind. I'm afraid that we will be the Generation that. Yeah. Screws it up. And that fear paralyzes me at times.

[Dr. John DeLoney]

So get that fear out of the back of your mind and put it right in the front. Put on a piece of paper and be very specific. What are you scared of, period? What is it? Or question mark. What are you scared of?

[Unknown]

I mean, I'm scared of everything that we build and everything.

[Dr. John DeLoney]

No, no, no, no, no. You're going back to the back of your head. Put it on the front of it. Do you have a child that is not acting right?

[Unknown]

Are you saying, like, for a. Like an employee in the business?

[Dr. John DeLoney]

No, I'm trying to ask what. I want you to get this fear out of the ether, put it on paper. What are you scared of that you are going to do.

[Dave Ramsey]

That's a fact.

[Dr. John DeLoney]

Or that one of your kids is going to do? I want you to be specific because here's what you're doing. You're walking through the woods and you're thinking, I got. I think there's bears. I think there's bears everywhere. I think there's bears everywhere. And I want you to stop and demand evidence from that fear. What am I actually afraid of? Running out of money? Nope. We don't owe anybody any money. And I've got this much reserve in the bank. The world not eating plastic. Nope. Because if we're there, then we got bigger issues. Right. Like, what are your actual fears? Because right now it sounds like you're anxious and what you're doing is you put on a lens that says the third generation fails and screws up the whole family lineage. And so everything you see is fulfilling that narrative. And so I want you to take those glasses off and begin to demand evidence from these fears. Be specific. What are you scared of?

[Unknown]

I mean, again, I don't know if this is back. Back mind thinking, but I'm scared of what I can't control. I'm scared of, you know, economic fears. New technology.

[Dr. John DeLoney]

Yep.

[Unknown]

Competitors that are larger than us that, you know, we hear that they are down to working three days a week. We're not. We're working five days a week and we're working on overtime. And, you know, we. We've not. We've not seen the pressures and the. In the negative things that they're seeing. And I agree with you. I feel like I'm in the woods and there's a.

[Dr. John DeLoney]

Keep going, keep going. You're. You're right on it. Keep going. You're getting more specific. I love it.

[Unknown]

Yeah. So to recap the new technology, man, the 3D printers that are out there, the different equipment that, you know, can give people the ability to do what we're doing. That, that, that makes me afraid. The economic pressure.

[Dave Ramsey]

Okay.

[Unknown]

The competitors.

[Dr. John DeLoney]

Outstanding. So you just took it from this very personal, existential end of the family tree. I'm going to be the one that kills the family tree to a lack of understanding about a new technology and how it may alter our business. Because that's something you can go take a course on. That's something you can get on an airplane and go sit with the best manufacturers in the country who are using 3D printing and learn about and find out, hey, we got to make a major business pivot asap or we're going to start teaching courses on three. I don't know. But now you've identified the thing.

[Dave Ramsey]

And Ethan, would you agree with me that anyone that is in your business, first generation, second generation, third generation, eighth generation, is facing exactly the same thing?

[Unknown]

Yeah.

[Dave Ramsey]

Has nothing to do with. Has nothing to do with the magic third generation of failure. It's just. It's just the marketplace that you're in has absolutely nothing to do with this. So my point earlier was the thing that if, okay, my grandfather passed away of a heart attack. And so when I do a life insurance exam, they say, who died in your. Who died in your family of a heart attack, who died of cancer, who died of whatever. Because they want to try to figure out if I'm going to be susceptible to the same thing, Right?

[Unknown]

Yeah.

[Dave Ramsey]

Now, if I know that, that I'm susceptible to any of those things, it doesn't guarantee that I'm gonna die of a heart attack. I could die of a car accident. The way I drive, it's actually more likely I could die. You know, but this. If I sit around and obsess about heart attacks because that's my destiny based on the statistics, then all of a sudden I have a heart attack. So that's my problem with this data, because the data is a. That says that the third generation fails has very little to do with. Okay, here's why the data is giving you a false narrative. We actually did a study on this because I got so pissed off about it. So family businesses last, on average 20 years longer than any other kind of business. So normal business cycles take out businesses in about two generations. Family businesses seem to be able to survive because new technology and competitors and foreign trade and whatever comes on the scene, something cycles through. And family businesses, on Average last about one generation longer. About 20 years longer than non Family businesses. So normal business cycles take people out on business and it's not based on the generation and it's not based on the gene pool just got so thin by the time it got to you that you're pitiful. And that's what that narrative says. And that narrative's false. You're actually probably stronger and have a better chance of going forward. And some of the longest lasting businesses in history are four, five, six generation family businesses, not publicly traded businesses, not some other magic form of ownership or something else. So it is not your destiny to fail based on a generation. It is your destiny to fail if you don't respond to marketplace indicators, which is what you were talking about. And anybody will fail first, second, third, publicly traded, anybody will fail if you don't respond to those things. So don't believe the narrative that there's something inherently wrong with the third generation. Believe the narrative that family business is inherently stronger than any other form of business.

[Dr. John DeLoney]

I think the irony here for this company, what you and I are doing, Dave, is you started what you do.

[Dave Ramsey]

In radio and radio's dying.

[Dr. John DeLoney]

Radio is transitioning out. And we're on a podcast now. That didn't exist.

[Dave Ramsey]

Right.

[Dr. John DeLoney]

This technology that we're doing didn't exist.

[Dave Ramsey]

The word didn't exist.

[Dr. John DeLoney]

That's right. Much less the medium. And It's. We got YouTube. Right. We got these different things, but underneath it, what are we actually doing for our customer? And so I think this could be a moment where maybe your business, it literally is. They're going to a year. Everyone's going to have a 3D printer in their house, like they do a microwave. And suddenly. So you got a year of an on ramp to figure out how we're going to pivot this thing out. What are we going to do next? And maybe you're not making plastics in a year, you're doing something else. But that's the reality that's before you. Let's jump right into that. Let's don't sit and get paralyzed by this fear in the forest.

[Dave Ramsey]

Yeah. There is nothing that says that third generations fail more often than anybody else. 80% of small businesses fail in the first five years. That's first generation. That's SBA statistics. So this narrative that's out there, and also the same narrative is out there on wealth, that the third generation squanders it, you know, and that's just simply not true. That's one of those old wives tales that is running around out there in the culture that somebody just made up and A bunch of poor people believed it. And so they go around telling each other, well, wealth doesn't really, you know, it ruins a family. It doesn't ruin a family. Family was already ruined. Wealth exposed it. There's a bunch of doofuses and they got some money and it exposed it. Cause they doofus in a reality show then, you know, I mean, it's like that's what happens. And the same thing's true in business. So Ethan, you got some bad numbers and you bought off on a narrative. I think you're probably a better business guy than your grandpa was and then your dad was. And you're already addressing the variables that are giving you real fear and they should give you fear. Those are the things you need to go after and face head on. Like John said, front of mind. But this vague thing that somehow the gene pool thinned out by the time it got to you is just bull crap. The numbers don't back it up. And so you're a hero. Go get them, man.

[Dr. John DeLoney]

Go get it, dude. Face the fear. Run right at it.

[Dave Ramsey]

About as good as it gets. That was eye opening to me when I found out that family businesses on average last 20 years longer than non family businesses.

[Dr. John DeLoney]

Yeah, I've never heard that. That's fantastic.

[Dave Ramsey]

Isn't that interesting data? It kind of just puts that whole wives tale bull crap notion to bed. This is the Entrez leadership podcast. Without our mission statement, Ramsey Solutions wouldn't be the company it is today. A mission statement clarifies who you are and who you aren't, so you and your team have clear direction for all your decision making. To get help creating your own mission statement, download my free mission statement [e-mail] mission or if you're listening on Spotify or podcasts, just click the link in the description. I don't get to have a co host very often and I kind of like this, especially when he's a smart one. Dr. John Deloney, Ph.D. in counseling. Lots of good answers and lots of good questions as we talk about family business today here on the Entree Leadership podcast. So John, one of my theories and expand on this because it's right.

[Dr. John DeLoney]

I was gonna say this ought to be good.

[Dave Ramsey]

Is that kind of like with money Business, Family business. The family business can only be as functional as the family is functional.

[Dr. John DeLoney]

Correct.

[Dave Ramsey]

If they're dysfunctional, boundaryless, disrespectful, emotional impulse, out of control, immature, at home, they're gonna be in the business. They don't come to the work and Magically become whole people.

[Dr. John DeLoney]

Yeah. Your meal can only be as good as the ingredients. That's exactly right. You got it. You got to do the hard stuff at home so that you can show up and do it at work. That's it.

[Dave Ramsey]

And so sometimes we have folks asking about, I want to raise my kids to be in the business. Okay. Raise your kids to be great adults.

[Dr. John DeLoney]

Raise great humans.

[Dave Ramsey]

Yeah. Raise kids to be great adults that know how to function and work well with other. Be respectful.

[Dr. John DeLoney]

And that goes back to a thing that Dr. Michael Gomez told me. You can tell your kids whatever you want, but they're going to watch you. They don't listen. They watch you. So you want to raise great adults. You and your spouse, y'all live right, and y'all tip well, and you be extra generous, and you teach your kids about budgeting, and you fight with dignity and treat each other with dignity and respect. When y'all get sideways with each other, you will raise great humans, and they will end up becoming great people out into the world. Right. That's how that works.

[Dave Ramsey]

Yeah. I think the Ramsey kids do conflict so well because we did a lot of things.

[Dr. John DeLoney]

They're amazing at conflict.

[Dave Ramsey]

The best because we did so much of it at home.

[Dr. John DeLoney]

I had to go to grad school for the. For the learning I got. They're great. They are great. They are great. But, hey, here's the thing, though. I have got to work in different capacities with all three of them. I get to work with Rachel pretty close. I work with Daniel a lot more now. Denise and I, when she partnered with Haywood Elementary School here and started that, what's really amazing is as people, they call things out very fast.

[Dave Ramsey]

They're very different, though.

[Dr. John DeLoney]

They're very different, but each one of them heads right into a problem. There's. There's not like, hey, we have this issue. And Denise, she'll smile more than the other two. She's kinder, but it's. She'll head right into it. And I got an email from Daniel on a project there's several of us working on. And at the very bottom of the email, very clear, I do not support this direction. We need to go in a different direction. I don't think I've ever had a president that clear. And it was. It was refreshing. And Rachel. And like, Rachel, I think you should do this. No, John, I'll tell you what I think we're going to. Right? So. But here's the deal. They. They both have it modeled. Let's deal with whatever the Thing is, when it's teeny tiny right now, so it never was, that conflict deferred becomes conflict amplified. We're going to deal with it right now, and then we're going to be back to laughing and having fun and support each other, moving on with what we're actually trying to do.

[Dave Ramsey]

And to be very truthful, they got that from their mother.

[Dr. John DeLoney]

You like to let it simmer.

[Dave Ramsey]

She's the youngest child of a hillbilly family. She does not manage conflict. She just does it.

[Dr. John DeLoney]

She just gets it. She gets it.

[Dave Ramsey]

Eric is in Akron, Ohio. Eric, your question for Dr. John Deloney.

[Ethan]

Yes. So what I. What I have here is I'm a CEO of a small family construction business, and I was in the process of buying it out from my father. We just started talking about it. And in the meantime, my father passed away here in May.

[Dave Ramsey]

I'm sorry.

[Ethan]

Oh, thank you.

[Unknown]

What happened?

[Ethan]

He had congestive heart failure and an autoimmune disease. So.

[Dave Ramsey]

How old?

[Ethan]

Yeah, he's 59.

[Dave Ramsey]

Oh, my goodness, Eric, I'm so sorry.

[Dr. John DeLoney]

Yeah.

[Ethan]

Yep. Yeah. So in the meantime, with the way the will was set up, my mother currently owns the business.

[Dave Ramsey]

Sure.

[Ethan]

But how do I go about it to purchase it or. I mean, we've been talking about it. We want to move. Move on with it. But my number one thing is how do I take care of Mom? And also, how do you. How do you. What do you suggest? Because dad and I. Excuse me a little bit. Dad and I had talked about a five year plan. He retires at 65. Do I. And my mom is currently 58. Do I still go ahead with a five year plan? Or do you wait? Wait till mom's 65 or. What's your thoughts on that?

[Dave Ramsey]

Wow. Well, you're right in the middle of a lot of emotion right now. And so the first thing I would do is try to buy yourself some time and buy your mom some time.

[Ethan]

Okay.

[Dave Ramsey]

If you can just run it for a little while, I don't think there's a rush for you to buy it. I would just keep her on payroll. What was he being paid?

[Ethan]

So he just took a salary of 75,000 a year and then whatever was remaining in the business.

[Dave Ramsey]

Okay. Can she live on 75,000 a year for a little while?

[Ethan]

Yeah, she's totally fine on that.

[Dave Ramsey]

Okay. What I'm trying to do is just get something where we can just park the sale for a minute and give us room to cry.

[Ethan]

Okay. All right.

[Dr. John DeLoney]

My general rule of thumb is six to nine months. Six Months to a year. I'm not doing anything major.

[Ethan]

Okay.

[Dr. John DeLoney]

That would be different if mom couldn't pay her bills.

[Ethan]

Yeah.

[Dr. John DeLoney]

And me and dad already had a plan.

[Ethan]

Yeah.

[Dr. John DeLoney]

So I'll tell you how to talk to mom. Do you have any siblings?

[Ethan]

I do. I have one brother and two sisters.

[Dr. John DeLoney]

How are they involved in this business?

[Ethan]

So my sister works there as a part time secretary, but we've already sat down. This was before dad passed. We discussed about who gets the business and all that. And we're. Their siblings are totally okay with it, and they're. That's. That's what the plan is moving forward. That I would buy it from. From mom eventually.

[Dr. John DeLoney]

Okay. So have y'all. Y'all have talked since your. Your dad passed away?

[Ethan]

Yes, we have.

[Dr. John DeLoney]

Okay. All right. Often plans made before somebody passes can radically change once somebody's passed. But assuming you all have talked about it, I would slow the roll. And if mom is okay on 75 grand, I'd be very clear with her and say, mom, you know, dad and I had talked about some of this. I'm going to. I'm going to continue to make sure you get dad's salary and we'll circle back in a few months and we'll sit down and do this stuff. But right now I just want to be sad about dad, if that's okay with you. And she might tell you, I need to get this thing sold. I don't want it. It makes me uncomfortable. And if that's the case, then you all can go down that road. And yeah, whatever arrangement you had with your dad, if that works for your mom, then I figured that out financially.

[Dave Ramsey]

And I would add to it. I've just found that people physically in the same room, we get agreement that is remembered. They don't remember texts, they don't remember, whatever. And so if I were you, if you guys can have a family dinner where your brother, your sister, and your mom are there and say, okay, I can do whatever you all want. Dad and I had talked about buying this. I can move forward with that. It might be good for us to just sit a little bit in our grief and let's park this for four months and. Or five months and let's revisit this the end of January. In the meantime, I'm just going to pay mom a $75,000 salary. Dad's old salary. Mom, is that okay with you? If we revisit this the end of January, Brother and sister, is that okay? If we start the discussion again of I'm gonna Buy this from mom beginning the end of January. And between now and then, let's just remember dad and cry.

[Ethan]

Okay.

[Dave Ramsey]

Would that work?

[Ethan]

That's kind of. Yeah, that would work. And honestly, we had this discussion already and we all. We sat around many evenings around the living room and just talked about that already. That. That's kind of the road we want to go on.

[Dr. John DeLoney]

Good.

[Ethan]

But.

[Dave Ramsey]

And then.

[Ethan]

Okay, so. So in January, would you. I'm thinking forward. Would you wait five years or.

[Dave Ramsey]

No, that's my name. No, I would close the deal now.

[Ethan]

You would close it. Okay. And whenever we feel the time's right.

[Dave Ramsey]

Yeah. And I'm gonna structure the deal in such a way that mom is always gonna have something to eat. Okay.

[Ethan]

Okay.

[Dave Ramsey]

And that could involve sending a bunch of money home for the purchase as soon as the business is able and then helping her manage that pile of money at home so she has money to eat. Okay. Rather than her constantly being on the salary for life out of the business. That one makes me less comfortable. So, for instance, if you bought her out for. What do you think the value of the business is?

[Ethan]

So we never put a purchase price together, but we were thinking roughly a million to one and a quarter.

[Dave Ramsey]

What's it net?

[Ethan]

Net net's around 200 to 250 per year.

[Dave Ramsey]

Okay. It's not worth one and a quarter. It might be worth one, be worth eight somewhere in there. Okay. But let's call it a million dollars. All right.

[Ethan]

Okay.

[Dave Ramsey]

And you're making 200,000 bucks a year profit, right?

[Ethan]

Yep.

[Dave Ramsey]

Okay, Mom, I'm going to give you. I'm going to live on a salary, and I'm going to give you 90% of the profits towards that million dollar number until you've gotten a million dollars.

[Ethan]

Okay.

[Dave Ramsey]

That means you'll probably get it in somewhere between three and five years. If we grow faster, it might be three years. If things slow down, it might be five or six years. But I'm going to give you 90% of the profits every month out of the business and that until we hit a million dollars, and that's my purchase price, and that's how you're going to get paid. Now, when I send you $200,000 home, then I'm going to take my purchaser hat off and put on my son hat, and we're going to meet with a financial planner and invest that money so that you can live off of the interest and the income that it create. Live off the 200,000. Because the $200,000 checks are going to end in about five years. And I want you to have a million dollars in the bank when that happens.

[Ethan]

Correct? Yeah.

[Dave Ramsey]

Does your mom work outside the home?

[Ethan]

No, she does not.

[Dave Ramsey]

Okay.

[Ethan]

No. Yeah. And she's honestly there. I mean, she's 58 years old. She's. She's well taken care of. And we discussed this already, that she's. She can live off what they have without the business. So that's. That's the blessing, I guess.

[Dave Ramsey]

Then the money that you save goes into a nest egg, or the money you pay for the business. You walk over to her house, take the business hat off, put the sun hat on, and make sure she puts it in a nest egg.

[Ethan]

Okay.

[Dave Ramsey]

And that's your gift to your mom, not your purchase from the owner.

[Ethan]

Okay.

[Dr. John DeLoney]

And there's one more important gift here, and this may be the most awkward part of this whole interaction, all right? And I would tell her, mom, I have a habit of forgetting stuff or things get moving real fast. I'm going to put all this down in writing so everybody stays on the same page forever.

[Dave Ramsey]

And we're going to show it to brother and sister.

[Ethan]

Okay?

[Dr. John DeLoney]

And when that million dollars is done, you're going to send her a certificate that says the sale of this business is complete.

[Ethan]

Okay. All right.

[Dr. John DeLoney]

Because I don't want her. I don't want her calling you in seven years and saying, hey, where's my money?

[Ethan]

Okay. All right. Yeah. And so, yeah, that answers my question. It just a lot of challenges right now.

[Dr. John DeLoney]

Can you do one thing for me?

[Ethan]

Yeah.

[Dr. John DeLoney]

What's your dad's name?

[Ethan]

Larry.

[Dr. John DeLoney]

Larry. What's. What's a hilarious thing Larry was known for?

[Ethan]

Probably he had a fishing boat. Well, my dad was a minister as well, so he had a fishing boat. And anytime someone calls and he was fishing, he just say, too busy. He's on visitation right now.

[Dr. John DeLoney]

Was he a good fisherman or was he terrible?

[Ethan]

We had many good memories of good fishing, so I think it was really great.

[Dr. John DeLoney]

All right, I'm gonna challenge you with something. Okay.

[Ethan]

All right.

[Dr. John DeLoney]

When we lose somebody we love often, especially somebody that was surprising, like this. Right. He was playing in his retirement.

[Ethan]

Yes.

[Dr. John DeLoney]

And it went pretty fast, right?

[Ethan]

Yep, it went really fast.

[Dr. John DeLoney]

So often when we think about dad, the thing we think about is, like, the funeral. We think about the funeral home. We think about that first phone call. That's what pops into our head. That's our body's just trying to take care of us. And if we have at the ready that other memory of that time you and him were fishing and he caught a big fish and he almost fell out of the boat because he's a little bit goofy. Or the time he hung up the phone and told somebody, I'm on visitation, he looked at you and winked. You get to pick which one of those memories of your dad you think about.

[Ethan]

Yeah.

[Dr. John DeLoney]

And so I want you to hold one ready to insert. And I want you to smile and say, not today. And I want you to think of that funny one, the one that brings you joy. And you're going to smile and you're going to light up at those fun memories of your dad. And that's going to become that legacy that carries with you. And he's going to have a reputation, the community, how he talks to people, how he honored people. And you're going to keep that thing going and you're going to take this business from where it is and you're going to double it and triple it, quadruple it. You're going to make it something special. That's pretty amazing.

[Ethan]

I appreciate it.

[Dr. John DeLoney]

Cool. Thanks for letting us honor Larry today, man.

[Ethan]

Alrighty. I appreciate it.

[Dr. John DeLoney]

There you go.

[Dave Ramsey]

Thank you for calling, brother. Wow, what a story. This is why we write it all out. This is why we have a plan. This is why we think ahead on all the steps of family business, especially in the legacy stage. And that's certainly where they were. Where I am in this legacy stage, you've got to be very, very intentional. You have to be at every stage. But this one is really, really important. The good news with that family is it sounds like all four of them are solid people.

[Dr. John DeLoney]

So good. And they can just have that conversation.

[Dave Ramsey]

There was not a turkey in the mix. Those were all eagles.

[Dr. John DeLoney]

And it's real challenging, Dave. It feels like we're violating family sometimes when we write stuff down, it's the greatest way to honor each other.

[Dave Ramsey]

I can tell you story after story after story of big businesses, even where it took an attorney and three years to deal with your own mother. And that's just because she, in the middle of the grief, the did not remember things the way they were actually done.

[Dr. John DeLoney]

That's right.

[Dave Ramsey]

That's right. And it's a problem. It's a serious problem. Dr. John Deloney, you can join him this Friday as we do an elite member e coaching session on and live training and Q and A about small business and family business drama. So you could do that by becoming an elite member. If you're not already, go to entreleadership.com John, thanks for joining me.

[Dr. John DeLoney]

Thanks for having me. Man. Handsome as always.

[Dave Ramsey]

Remember, better a wary warrior than a quivering critic. This world needs more high quality leaders, so take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.