Could My Growing Business Divide Me and My Wife?

Summary

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Episode Overview

Theme:
This episode of The EntreLeadership Podcast, hosted by Dave Ramsey, dives into the complexities of business leadership, succession, and family dynamics as small businesses grow. Dave provides real-life, real-time leadership coaching by taking calls from entrepreneurs facing questions about ownership transitions, spousal involvement, project management, internal promotions, and planning for the future.

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Key Discussion Points and Insights

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1. Navigating Ownership, Marriage, and Succession in a Growing Family Business

Caller: Lance, San Francisco
Concern: Ensuring a healthy relationship with his wife as he gains majority ownership of his family's plumbing business.

Key Points:

• Gradual Ownership Transition:

  • Lance has grown a family business from $600k to $1.5 million, moving from 10% to nearly 50% ownership. This steady increase points to a well-managed, gradual succession plan with his parents.
    • Dave Ramsey: "So somewhere around the next five years or so, you'll own it and you'll be 42 years old." (01:46)

• Spouse's Detachment from the Business Finances:

  • Lance’s wife views business money as separate ("mom and dad's money"), which allowed Lance operational freedom but is about to change as his share increases.
  • He seeks advice for keeping his marriage and communication healthy as they transition to business income being “their” money.

• Dave Ramsay’s Advice:

  • Involving a spouse in high-level decisions is critical, not necessarily in daily operations but as a “board of directors” member.

  • Early in Ramsey Solutions, Dave invited his wife Sharon to management meetings to give her insight and occasional input, even if she didn't always enjoy it.

    • Dave Ramsey (on Sharon): "She really hardly had anything to say about it, but I actually wanted her to watch it and see it and feel it... she honestly hated it." (03:08)
    • Dave Ramsey: "Any large decisions in the business, I run them past Sharon... 95% of the time, she doesn't care. But occasionally she’ll go, 'That doesn't feel right. Tell me more.'" (04:53)

  • Define what qualifies as "large" spending together; it’s relative to stage and size of business.

  • Spousal involvement helps spot risks or “smell a rat” where the operator might not.

  • Maintain operational efficiency but value a spouse's perspective on big purchases, hiring, or firing.

    • Dave Ramsey: “I want her involved as if she was on the board of directors, but not in the day to day operations.” (07:50)

• Marital Alignment and Decision-Making:

  • Dave and Sharon’s rule: For big moves, “When in doubt, we don’t.” Both must be aligned before pulling the trigger.
    • Dave Ramsey: "Every time I go against one of those bad 'phelan's,' it cost me a minimum of ten grand. So I just quit doing it." (09:05)

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2. Standardizing Project Management in High-Variability Contexts

Caller: Kevin, Canada
Concern: Creating cohesive project management documentation in a variable steel fabrication shop.

Key Points:

• Projects don’t follow a set template due to their unique nature; the only common ground is shared principles (e.g., on time and on budget).

  • Dave Ramsey: "The only template option you have are principles... completed on time and on budget. Those don’t change, no matter how customized." (14:15)

• Seek industry best practices by networking with non-direct competitors or forming a best-practices group.

• Invest in robust project management software tailored to your industry’s needs.

• Consistently compare estimates vs. actuals, and perform “autopsies” on completed projects to refine processes and estimates.

  • Dave Ramsey: "If you measure everything and then do an autopsy... your estimating will get better because you're adjusting your estimating based on the mistakes." (16:20)

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3. Promoting Internally vs. Outside Hiring and Maintaining Organizational Health

Question from Listener: Diane, Milwaukee
Concern: Frequent internal promotions leave gaps that are tough to backfill; wondering when it's better to hire from outside.

Key Points:

• Bench Depth Philosophy:

  • Everyone should be training their replacement so upward mobility is smooth.
  • When a promotion occurs, ensure the previous role is filled—either from the bench or by hiring externally.
  • Limit the time a promotion is delayed to six months maximum.
    • Dave Ramsey: "No one is important enough to not plan your replacement... we need bench depth on every position." (19:30)

• Organizational Benefits:

  • Planning for replacements creates a healthy culture of advancement and readiness.

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4. Clarity in Succession for Father-Son Businesses

Caller: Mitchell, Nashville
Concern: Running and vastly expanding a father-son fence business—Mitchell leads most operations, but his father (the founder and part-time pastor) holds half the ownership and wants a traditional buyout, but concrete plans are lacking.

Key Points:

• Stress emerges when there’s a lack of clarity on future ownership or buyout plans (“not knowing is much more stressful than bad news”).

  • Dave Ramsey: "Good news and bad news are okay, not knowing is not an okay." (28:30)

• Stage Gating as a Solution:

  • Rather than using fixed retirement dates, tie ownership transfer and buyout to milestones (“stage gates”) like age, business revenue targets, or business events.
    • Dave Ramsey: "At 60, I need to be at 75%. At 65, I need to be at 100%." or tie to revenue: when it hits $1.2m I get 75%, at $2m 100%.” (29:40)

• Buyout Structure Advice:

  • Buy father out at a capped price (e.g., Mitchell pays out half the value of land/equipment up to $300K).
  • Possibly pay a stipend for a set period to support retirement and honor pastoral service.
    • Dave Ramsey: "I'd put a cap on that... Not half of the equipment and the value, whatever the land... best case $100,000... half would be $150,000 today." (32:00)
    • Discuss supplementing with an annual stipend—amount and duration to be determined by Mitchell as a gesture of respect.
      • Dave Ramsey: "It would be your donation to the Kingdom of God to support the man of God. I think that’d be awesome. But you’re not honor bound—it’s your call spiritually." (35:37)

• Urgency of a Written Plan:

  • Even simple, written clarity will relieve stress and ensure good stewardship of the business and relationship.
    • Dave Ramsey: “Not having a succession plan in detail is bad stewardship... not doing that brings harm to things that I love, which is my kids and this place.” (33:10)
    • Dave Ramsey: "Ambivalence will kill you. Get something down where the two of you... write it out on paper." (37:37)

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Notable Quotes & Memorable Moments

• On Spousal Involvement:

  • Dave Ramsey: "I want her involved as if she was on the board of directors, but not in the day-to-day operations." (07:50)
  • Dave Ramsey on decision-making with spouse: “When in doubt, we don’t.” (09:11)

• On Uncertainty in Succession:

  • Dave Ramsey: “Not knowing is more stressful than bad news.” (28:30)
  • Dave Ramsey (to Mitchell): "Not having a succession plan in detail is bad stewardship... the old man having a death grip of control and ambiguity, unclear plans... Neither are served best." (33:10)

• On Internal Promotions:

  • Dave Ramsey: "No one is important enough not to plan your replacement. So if you're sick, have a tragedy or you get promoted, we're not left without your job being done." (19:30)

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Important Timestamps

• 00:50–09:12: Lance and Dave discuss ownership succession, spousal involvement, and healthy family business transitions.
• 12:10–16:20: Kevin and Dave discuss project management standards and documentation in variable business settings.
• 17:50–21:30: Diane’s question about promotions, training, and bench depth.
• 25:13–37:37: Mitchell’s challenge of succession, fair buyouts, and honoring both business and family relationships.

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Conclusion

This episode offers practical frameworks, sage guidance, and honest discussion on the sensitive intersections of business, family, and leadership. Dave Ramsey’s responses blend tactical wisdom with emotional intelligence, providing actionable advice for listeners wrestling with growing pains, leadership, and relational dynamics unique to family-owned businesses.

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For more resources or to ask a question yourself, visit ramseysolutions.com/shows/the-entreleadership-podcast.

Transcript

[Dave Ramsey]

From the headquarters of Ramsey Solutions, this is Entre Leadership, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host with over 30 years of experience leading in the trenches right alongside you. If you've got a question you want to ask on the show, fill out the [e-mail] ask or call and leave a voicemail at 844-944-1070. That's 844-944-1071. Lance is in San Francisco. Hey, Lance, what's up in your world?

[Lance]

Hey, Dave. I run my family's plumbing business. Over the last seven years, I've grown us from two employees and about 600,000 to eight employees and about 1.5 million. Good for you and having a ton of fun. My parents are grateful. You know, we're making more money than we did when. When I was a kid and mom and dad were running the business. So my parents, they give me a lot of leeway to run the business. I've been. They own it, handling everything.

[Dave Ramsey]

They.

[Lance]

They've been transferring portions of ownership over to me slowly.

[Dave Ramsey]

How old are you?

[Lance]

I am 37.

[Dave Ramsey]

What portion do you own now?

[Lance]

I am 40%. Today, January 1, I will be 50%.

[Dave Ramsey]

Okay. And is that the rate that every year you're going to get about.

[Lance]

Yeah, it's hard to pin them down on it, but that's. We went 10%, 25, 33, 40, and now we're at 50 or about to be 50.

[Dave Ramsey]

Okay. So somewhere around the next five years or so, you'll own it.

[Kevin]

Correct.

[Dave Ramsey]

And you'll be 42 years old.

[Mitchell]

Correct.

[Dave Ramsey]

And they're giving it to you each time?

[Lance]

Yeah, they're happy as could be to be making more money than they ever have. And so they've been gifting me percentages every year, and they give me pretty much full control. If I'm going to make a big decision or fire somebody, I'll usually consult with them. But day to day, if I need to spend a few thousand dollars here or there or fire a guy, they've just given me a tremendous amount of grace and room to do my thing. And we've been profitable and they're very happy with that.

[Dave Ramsey]

Sounds very healthy. Good.

[Lance]

Yeah, we're having a great time.

[Dave Ramsey]

Good.

[Lance]

So anytime I'm spending money in the business, my wife is always detached.

[Dave Ramsey]

It is.

[Lance]

Oh, that's the business. That's your mom and dad's money. And it's a little bit your Money. But now we're at about to be 50%. And so she doesn't see, you know, if I go, if I have to go spend a couple thousand bucks, she doesn't see that as potentially our money. And I like that. I like being able to go out there and you know, draw fire, reholster as you say, and just handle business. But I want to make sure things are healthy with my wife over the next few years as she starts to see that hey, I could bring that money home or I can put it in the business. And so how do you have any advice on how to handle that with my wife?

[Dave Ramsey]

Well, my wife has never been involved in the day to day operation of Ramsey in almost 40 years. But in the early days when there were about 10 of us, I asked her to come to our managers meeting is what we called it in those days. The three guys that were running it with me and there were 10 or 12 people working there, right. And every Monday morning we would sit down and go over our workflow, what, what we're buying that week, what bills we have to pay, what personnel issues we've got. And I wanted her, she really hardly had anything to say about it, but I actually wanted her to watch it and see it and feel it. And occasionally I wanted her really to give input and she did. Occasionally she honestly hated it.

[Lance]

Yeah, that sounds very similar to my situation.

[Dave Ramsey]

But it was very helpful. It was very helpful on two fronts. Because proverbs says who can find a virtuous wife for her worth is far above rubies. The heart of her husband safely trusts her and he will have no lack of gain. So because she was looking at it and we own it. And we said, look, both of us own this together. I'm doing the operations. But you're looking at this through the lens of an owner and we want your input on this person were getting ready to hire or fire. I remember one time there was a $7,000 telephone system. That's how long ago it was. It was actually a telephones that we bought. Can you imagine that? And we were looking at that and another time we were looking at buying some office furniture. And another time we were making the decision to start doing retained earnings and she was instrumental in that. And so she just occasionally would drop this gym on us. Most of the time though, she just griped about having to come down there. So she only did that for about two years or so. But it started a model that says that any large decisions in the business, I run them past Sharon. Just because I want her to know what's going on and see if she has any actual insight or input. And 99% of the time or 95% of the time, she really doesn't. She doesn't care. But occasionally she'll go, you know, I don't. That doesn't feel right. Tell me more, and we'll talk through it. And sometimes she kind of smells a rat where I didn't smell one, you know, so. And when we first started hiring people, she was involved in the final decision on each hire. We would go to dinner together as a spousal interview. And. And my spouse and the person we're hiring, spouse would all meet each other because it's a small business and make sure we all like each other. And we felt like this is what God was all telling us all to do. And I asked her, do you think after we have dinner with the guy or the gal and their husband or their wife, and we go home and we're gonna pray about it? And I ask her, what do you think about this person? We've continued doing that to this day, but it's not Sharon and me. It's a leader in a business area now, in the size of Ramsey, that take somebody to dinner. And that's our final interview step. And it's very insightful. And occasionally a spouse will raise their hand and go, I don't think this is right. It feels funny. But it's very occasionally, because if they were virtuous, they're humble and they're worried about throwing their weight around, and they have a trump card in those meetings. So anyway, that's how Sharon has been involved. And so I don't think it's a your business, your parents business, you do whatever you want thing. I don't like the feel of that. Instead, I would just say, honey, you're down there running it. If I were her, you're down there running it every day. I trust your input, and you say, thanks, but on large things, I'd like you to look at it with me. So I got another set of eyes because we own this business. And large, I have figured out, is relative. You know, when you're 1.5 million with eight team members, you know, large is 20,000 bucks is huge, or 50,000 bucks is huge. Right. Especially if it's a new thing, like we're getting ready to buy a new piece of equipment for 50 grand. That's a lot. And, you know, and if I got caught up in I want gadgets, have I got gadgetitis? Or is this really business justified? And let her look at that with you and think about that through with you. You know, if you're frustrated with a team member, she might ask you, have you done all you can to be patient? Have you been clear with them? Or she may go, you need to quit being a wuss and fire. The guy's a jerk. You know, she. Sometimes they'll do that either. Any of those are really good input. But I want her involved as if she was on the board of directors, but not in the day to day operations.

[Kevin]

Okay, all right, I got it.

[Dave Ramsey]

That makes sense because you're going to add to your, you're going to add to the wisdom factor here.

[Mitchell]

Sure.

[Lance]

I get deep inside, I'm just a little bit nervous about the first time. I'm ready to just go cowboy some decision. And she says, hey there, pump the brakes a little bit. Because we, that's never happened yet.

[Dave Ramsey]

But you know what? It makes me think about the decision more carefully because she may say that and I need to be able to bone up my position. So this is why we're doing this. This is what's going on. This is why we're doing it. And if I lay all that out and she still doesn't want to do it. Okay, let's wait 24 hours and talk about it again. Cause I really think we need to do this. And I'm gonna show it to you and I'm gonna look at it again. But Sharon and I have a rule on large giving. With our generosity, our philanthropy, or on large purchases or on large decisions in our lives. When in doubt, we don't. We have to be aligned. Because every time I go against, if she hit, she's from the hills of East Tennessee. If she has a bad feeling, every time I go against one of those bad phelan's, it cost me a minimum of ten grand. So I just quit doing it.

[Kevin]

Copy. Got it. Okay.

[Mitchell]

Thank you, Dave. Really appreciate it.

[Dave Ramsey]

Hey man, it's a great question and you're a good man. I'm excited for how functional your mom and dad and your family is, man. It's very unusual and it's beautiful to hear that your succession plan, 37 years old, you've already got 50% at the first of the year coming. That's just incredible. I just, I love where you are on that. That's pretty stinking cool. Lance. Way to go, man. I love entrepreneurs. Don't forget, guys. I started my company on a card table myself, so I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest. Early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did. We got netsuite. That was years ago and we've never looked back. See, netsuite isn't just for tech giants. It's built for growing businesses like yours. Over 43,000 businesses already run on NetSuite, including a lot that started just like you. And now with built in AI, NetSuite is helping them even more. It's one system connected to every part of your business for real time insights, not guesswork. NetSuite AI flags inventory issues, cash flow risks, even supplier delays before they become problems. So you can trust the data, stop wasting time and make the right decisions faster. Take a free product tour [e-mail] Ramsey that's netsuite.com Ramsey Listen up. Your business won't grow until you do. When you lead better, your people perform better and your business wins bigger. That's why you've got to come to our next Entree Leadership Summit. It's the premier event for leaders who are serious about growth. You're going to spend four days getting insights from world class leadership experts, including Will Guidera, the New York Times bestselling author of Unreasonable Hospitality, Vanessa Van Edwards, the national bestselling author of the Science of Succeeding with People, Brian Buffini, our favorite Irishman, the founder of North America's largest real estate coaching company, Duncan Wardle, former head of innovation and creativity at Disney. Pat Lincione, Dave Ramsey, Ken Coleman, Dr. John DeLoney. And the best part is it all happens at Disney's Coronado Springs Resort in Orlando. To join us May 17 through 20, visit entreeleadership.comsummit or click the link in the show Notes. Kevin is with us in Canada. Hi Kevin. How are you?

[Kevin]

I'm doing fantastic, Dave. It's a pleasure to talk to you.

[Dave Ramsey]

You too, sir. What's up?

[Kevin]

I am an estimator, project manager for a steel fabrication shop. It's about eight years old. I'm quite new to project management. I've only been in the role for two years. The company has about 17 employees, including the owners, and we've done about 1200 individual jobs this year, kind of ranging from 200 to $300,000 per job. My question is, how can we create a cohesive standard of documentation and a project management process for the company?

[Dave Ramsey]

How generic are these projects? Are they each custom or are they all kind of flowing with similar veins to them?

[Kevin]

They are very variable. We do projects that change quite a lot, and each project can be quite fluid. We could be fixing someone's farm equipment out in Timbuktu, or we could be fabricating a very fine piece of something that is borderlining on artwork for someone else. And they can change as the project goes constantly.

[Dave Ramsey]

Okay. So the processes and the details are not consistent enough to develop a template of any kind. So the only template option you have are principles. What are the principles that are the same in every project? And I would try to identify there's four, five, maybe six, probably no more than six things that these projects all have in common, that we adhere to these principles. And if we violate the principles, we're not doing it our way. Our in air quotes. In other words, at our place, we would say that's not being done the Ramsey way because we violated some principles in how the project was evolving, how it was managed, how it was completed around our place. A project needs to be completed on time and on budget. That's two principles. Those don't change, no matter how customized or unique the situation.

[Kevin]

Yeah.

[Dave Ramsey]

And so you can lay out, but you can't template because, you know, you may have somebody develop an app over here, in our case a digital app, and that's a project, and somebody over here writing a book that's going to come out in paper, in analog form. Both are projects that must be managed, but both must be done on budget and on. On schedule as a part of our principles. We would have a few other principles we'd lay in there, but that's an example. But you can't template a book project the way you would template a digital app. And you can't template a project of implementing, fixing a piece of farm equipment with doing a piece of art. They're completely different, but they're not.

[Mitchell]

Yeah.

[Dave Ramsey]

Is that logical?

[Kevin]

Oh, yeah, for sure. I know one thing that I've struggled with coming into the role is that, like, there's lots of other companies around us, they all do something similar. Everybody has their niche market. And neither my boss nor I necessarily know what the picture of project management and document control should look like for a company in our stage. So we're kind of just. We're in this, like, it feels like we're just winging everything.

[Dave Ramsey]

I See what you're saying. Okay, so there's two things you can pick up there that'll probably help you in the process because both of these things would apply. What I said earlier. One is you probably need some project management software of some kind. And the second thing is I'm going to find that by doing. The second thing is I'm going to talk to my competitors that are either not direct competitors, but they're just running around the same space because they're in one niche and we're in another and ask them what they're doing, take them to lunch, form a project management best practices group. So I have a friend that is in an equipment business, huge equipment business, several hundred million. And he has formed an industry wide best practices group among his competitors and they all go on a retreat once a year and share best practices even though they're all direct competitors. But they value the information so much that they're willing to come and share without sharing individual proprietary secrets. But share, you know, this is how we handle this service order, this is how we handle this sales situation. And they share best practices back and forth. And it's helped the whole industry clean up and it's helped him have, you know, to learn some things from some old dogs that have been doing it a long time and some young dogs that are more sophisticated and digitally minded. So you're looking for some best practices from the arena that you're playing in. One of those would be find some software management systems that'll help you run these particular types of projects. I don't know enough about your world to suggest one, but there's tons of stuff out there in this space. I mean, project management is a full science in and of itself. And so you should be able to find stuff in the manufacturing realm that's almost plug and play and meaning you can just load it and learn how to operate it and have a, you know, something that tracks the thing from the time the order is placed and the budget's developed and the schedule's put in place and the materials are ordered and the labor cost is there. And then you can track back against that put, take the actual result back against budget. This was the estimate the budget and then here's the completed actual and compare actual to estimated and your estimating will get better then because you're adjusting your estimating based on the mistakes you made in the estimating process. Because you always make mistakes in the estimating process 100% of the time, even if you've been doing it 1,000 years. But if you measure everything and then do an autopsy on each project after it's over and say, okay, here's estimated, here's actual what happened in between there, that we can know that we can standardize and make the estimates more accurate next time because this was missed or that was missed, and that process will help you there. But a good project management software should lead you through every bit of that. Just like good budgeting software will run you through an accounting system that will do the exact same thing. On the accounting side, this product is not as profitable. What happened? We thought, you know, it was budgeted at X and it came in at Y. What in the world? And, oh, wow, it's a whole lot better than we thought. How did we miss it? So how do we miss being as popular as we are? I didn't know that. Or how do we miss, you know, losing a bazillion dollars on this one thing because we're stupid? All that kind of stuff comes up when you measure it against something, and that'll clear up a whole lot of fuzziness. So, yeah, some best practices, some good project management systems and software processes plugged in probably make your life a thousand times better than it is right now, because you guys are flat out pulling this out of your ear on every deal, it sounds like. Question of the day from Diane in Milwaukee, Wisconsin. Hey, Dave, Every time we promote someone from within, we create a hole in their old role that's hard to backfill. At what point is it actually healthier to bring in outside talent to so the whole structure doesn't get shaky? No, no, no, no, no, no, no, no. Two things. One is, if you primarily want to promote from within, everyone in the building needs to be continuously training their replacement. Everyone. And if they're not training their replacement, you should be training their replacement bench depth. When the star player on the floor gets hurt, somebody's got to come off the bench and they got to be ready because they've been trained and practicing. And so, you know, you need bench depth on every position. Then when you move someone up, there's someone ready to step up into their role and someone ready to step up into their role, and you get a little domino effect upward. And everyone in the place likes that because they go, oh, there's upward movement here. I can move up if I do well and I plan my replacement and I need to plan to be someone above me's replacement in the org chart, and that way I get to move up. So planning the replacement and bench depth is one Thing that we've done. The other thing is if we hadn't done that, and that's more in years past, lately, we got a pretty good bench depth idea going on because we've made such a stink about it around here that everyone in the place, no one is important enough to not plan your replacement. So if you're sick, there's a tragedy or you get promoted, we're not left without your job being done. So that's one thing. But. So we've been doing that a long time. But before that and even occasionally now, if we want to promote someone and it's going to leave a hole, they cannot take the new job until we hire or train internally their replacement. So they cannot accept the promotion. Or we can give them the promotion, we can identify this. But then we talk to the recruiting team and we go, we need to fill their role so they can move up. We need to fill their role so they can move up. So they don't make the move up until the role is filled under them. And that could be by bench depth like I suggested at first, or it could be by an outside hire that's coming in to fill their role. To fill their role. To fill their role. And so usually this happens where someone leaves suddenly that we didn't plan, we didn't know they were leaving and they're gone. Poof. And now we got a hole in a leadership team and we've got someone on the bench that looks pretty good for that leadership team and we want to jump them up into there right quick and fill that leadership hole. But instead we just circle around and take care of that. That person's work until we can backfill the person moving up. Hopefully we've grown their bench and we can do it real quick or hopefully so the recruiting team can get real excited and get someone in there in that slot so we can do it real quick. And then we have a maximum time that we allow that to go on. We're not going to hold someone's promotion back for more than six months. After six months, we're just going to make it hard on the people that's left behind. The whole that's left behind. And so then everybody gets their crap together from the next time this comes around about having bench depth and. Or the recruiters get jacked up about getting somebody in here. Hello. Get somebody hired. This is a big problem. So you fill the hole and that way it's not shaky and you either fill it with a recruit while you hold the person back on their promotion temporarily or you have bench depth, which is your best option. So go for bench depth. Start working right now, Diane, for everyone in there to have their replacement, their eye on who will replace me when I move up and start mentoring, apprenticing, training, discipling them to step into that role. And that's exactly how we do it. Every breakthrough in your business starts with a breakthrough in you. That's why you need to come to Entree Leadership Summit. You'll get insights from top thought leaders in the leadership and business space, like Will Guidera, Vanessa Van Edwards, Brian Buffini, and more. And the best path, it all happens at Disney's Coronado Springs resort in Orlando. To join us May 17 through 20, visit entreeleadership.comsummit or click the link in the show notes. Hey, guys. Please consider following this show, subscribing to this show, leaving a nice review. Sharing the show. Sharing is good. Sharing. Please share. They taught you that in kindergarten, right? So click the sharing button and just say, everything I need to know I learned in kindergarten. Push share. Let people know we're here. Hey, it's helpful, man. We really appreciate it when you guys do that and we appreciate you being with us. Mitchell is with us in Nashville. Hi, Mitchell. How are you?

[Mitchell]

Hey, I'm doing good. Mr. Ramsey.

[Dave Ramsey]

How are you Doing better than I deserve. How can I help?

[Mitchell]

I had a quick question. Well, I'm Mitchell Gregory.

[Dave Ramsey]

We.

[Mitchell]

We do fences. Me and my dad have a fence business here in Nashville, and we have about five or six employees besides me and my dad. And we did right around 900,000 last year. We're trying to break that million mark. Haven't quite hit it yet. But my dad, he started doing fencing on the side. He's also a pastor of a church, and he started doing fencing about 20 years ago. And about five years ago, I was working on the road. Anyway, I come back, he said, we'll split it 50, 50 and, you know, you can grow it and where we can both have an income. I've done that. I've done that for the last three years or so.

[Lance]

And what was it doing when you

[Mitchell]

took it over around 100,000 a year?

[Dave Ramsey]

So you've 9xed it in three years?

[Mitchell]

Well, yeah, the last four or five, I would say probably. Yes, sir.

[Dave Ramsey]

Oh, I thought you said you took it in three years ago.

[Mitchell]

Okay, I'm sorry.

[Dave Ramsey]

Maybe. Maybe I misunderstood. All right, so Anyway, you got 900k now, and it was 100 when you started. And you got. You and your dad are 50. 50?

[Mitchell]

Yes, sir, are you.

[Dave Ramsey]

But it's not 50. 50 on the workload. You're doing most of the work now.

[Mitchell]

I, I do more because he pastors the church.

[Dave Ramsey]

Right, right. Okay. So what percentage of the work are you doing?

[Mitchell]

You know, we have a project manager, but I, I answer. He calls me all the time.

[Dave Ramsey]

I mean, you run the business.

[Mitchell]

Yes. And he does the books? Yes.

[Kevin]

Yes.

[Dave Ramsey]

Your dad only does the books?

[Mitchell]

Yes, for the most part. And he comes in four days a week.

[Dave Ramsey]

What's he do when he's there?

[Mitchell]

Just basically help, you know, help, help me, you know, line out the team and stuff like that. You know, he spends probably 20 to 25 hours a week into it and I spend, you know, probably at least 10 more hours than that a week. And I, I would like to grow it more. I kind of honestly feel a little stuck. I would like to put more into it and try to grow it more, but I don't know if I should, knowing that I'm just going to give half of it away. But I do want to honor my dad and I respect him and I want to set him up good. But I also don't want to put a ton of time in it and not reap the benefits.

[Dave Ramsey]

Your full time job.

[Mitchell]

It is my full time job. Yes, sir.

[Dave Ramsey]

You're already putting a ton of time into it. You've got the whole thing. Bet on this thing.

[Mitchell]

Yeah. Yes, sir.

[Dave Ramsey]

And it's not his full time job, it's his part time job. Because he's a full time pastor.

[Kevin]

Yes, sir.

[Mitchell]

Yes, sir.

[Dave Ramsey]

Okay. How old is he?

[Mitchell]

He is 57.

[Dave Ramsey]

Okay.

[Mitchell]

And I've had the discussion about, you know, when. Just would like to know when he was thinking about retiring and he said he's just, he doesn't know, you know, because he doesn't know how the world's gonna go. And so I, I don't really have any idea on the time frame.

[Dave Ramsey]

Okay.

[Kevin]

All right.

[Dave Ramsey]

Well, what we know from research from people like Jim Collins and so forth is not knowing is much more stressful than bad news.

[Mitchell]

Yes, sir.

[Kevin]

Okay.

[Dave Ramsey]

And so good news and bad news are okay. Not knowing is not an okay. And so now it doesn't necessarily have to be an exact date, but. Dad. But I'm pouring everything into this and I could be doing something else. I like being here with you. I like what we've done and I want to honor you and I want to honor the fact that you're serving the Lord and that this money is helping you do that. But we need to at least at our place, we use a phrase called stage gating. And stage gating is not a date, but. But it's an event. When X happens, then ownership is transferred. Or when X happens, a portion of ownership is transferred, and when Y happens, another portion of ownership is transferred. Okay, that could be an age thing. It could be. Okay, dad, at 60, I need to be at 75%. At 65, I need to be at 100%. That would be an age stage gate. Or it could be that if I continue to grow this, it's at 900 now. When it gets to 1.2, I need to be at 75%.

[Kevin]

Okay?

[Mitchell]

Okay.

[Dave Ramsey]

And when it gets to 2 million, I need to be at 100%.

[Kevin]

Okay?

[Mitchell]

Okay.

[Dave Ramsey]

And at 100%, I will pay you X number of dollars a year retirement as long as you and mom are alive.

[Kevin]

Okay.

[Mitchell]

That is what complicates it a little bit, is his wife is not my mom.

[Dave Ramsey]

Well, okay, whatever you want to do with that part. But I'm just saying, in other words, he could be gone out of the business completely, not an owner and not working there at 65. And you could agree to pay him $60,000 a year.

[Mitchell]

Okay.

[Dave Ramsey]

Or whatever. I made that number up. Okay. But something to supplement his retirement and something to supplement, you know, his pastoring, his pastoral duties. Or you could pay him a certain number of dollars to buy him out at a certain stage.

[Kevin]

Okay.

[Dave Ramsey]

And then that nest egg would give him money to live off of.

[Mitchell]

Yes, sir. That's what he was wanting to do. Whenever he just retires, he wants half the value of everything we have. The land, the equipment as a value.

[Dave Ramsey]

He wants you to buy him out?

[Mitchell]

Yes, sir.

[Dave Ramsey]

Oh, good. Okay, then that's settled. Good. So half the value of the equipment. Yeah, that's fine. Not to exceed X number of dollars because I don't want you to grow the thing to quadruple while he's working part time and doing the books. Because you're fighting against yourself.

[Mitchell]

Then that was exactly my problem. Because if I buy.

[Dave Ramsey]

Yeah, you need to put a cap on that. Half. Not half of the equipment. And the value, whatever the land, y' all own the property, is that right?

[Mitchell]

Yes, sir. Yes, sir, we do. And it's all paid for in cash.

[Dave Ramsey]

What's the property worth?

[Mitchell]

Not very much. I would say 70 to, best case, 100,000.

[Dave Ramsey]

Okay.

[Mitchell]

All right.

[Dave Ramsey]

Well, ideas are flowing through my head, but okay, so first thing is, let's go back to what we're talking about and say, and your equipment is worth what today?

[Kevin]

Oh, we've got five trucks.

[Mitchell]

Let's say 150,000.

[Dave Ramsey]

Okay. So if we call. If we round this up and call it $300,000, half would be 150 today.

[Mitchell]

Yes, sir.

[Dave Ramsey]

Okay. And so, you know, you could just say something like, okay, I can give you half of the value of the land and the equipment to max out at 250 or 300.

[Mitchell]

Okay.

[Dave Ramsey]

Your half.

[Mitchell]

Yes, sir.

[Dave Ramsey]

Okay. But past that, I'm just going to grow it and it'll be mine.

[Mitchell]

Okay. If he doesn't agree to this, because I've tried to have a few conversations with him and he just. He doesn't even really want to put it on paper. I'm trying to work towards that.

[Dave Ramsey]

Well, listen, there's two things that he's going to kill if he doesn't have a plan. And he loves both of them, his son and this business. And I'll just say this to him, Pastor, not having a succession plan in detail is bad stewardship. God's word says those that are faithful with the little things will be given more to manage. And you're supposed to be faithful with the management of what God has given you here. And that includes your son, and that includes the business opportunity. So, in the name of doing good by the Lord, I have turned over 99% of Ramsey now to the next generation, and I've turned over 80% of the operating to the next generation. The only thing I'm doing other than that 20% is on air, stuff like this, but I still could keep doing it. I'm only 65, and I got plenty of energy left. But not having a plan and not doing that brings harm to things that I love, which is my kids and this place. Neither one are served best by the old man having a death grip of control and. And ambiguity, unclear plans. And so that's how I would address your dad. And you can bring this up and play it for him if you want. Cause I think your dad's a good man. He just doesn't know what he doesn't know. By the way, having some clear numbers set on certain numbers. When we reach this number, we'll do this, this, and this gives him peace because he knows what's happening. So up to 300,000. Your part, dad, we will go halves. Whenever you want to step down, I'm going to scratch up 300k and I'm going to pay you out out of the profits. And it may take me two years to pay you out of the profits, but I'll pay you out of the profits until I get there. And if you want to add to that, you could put him on some kind of a stipend for some number of years, for five years, I'm going to pay you 60,000.

[Mitchell]

And I was thinking about that because he. He didn't put a lot back for retirement. He just kind of started recently. So I would like to.

[Dave Ramsey]

Sounds like a pastor.

[Mitchell]

There you go. To make money after he, you know, retires. And I would, if I can, the Lord willing, and I can keep growing and I'll definitely.

[Dave Ramsey]

Yeah, I think it would be your donation to the Kingdom of God to support the man of God. I think that'd be awesome.

[Kevin]

Okay.

[Mitchell]

Yes, sir.

[Dave Ramsey]

But I don't know that that necessarily. It. That's not. That's not. You're not honor bound to do that or ethically bound or mathematically bound to do that, but spiritually you're making that call.

[Kevin]

Okay.

[Mitchell]

And would you do that until he died?

[Dave Ramsey]

Whatever you want to do.

[Kevin]

Okay.

[Dave Ramsey]

You'll be able to afford it because you're doing a good job growing the business. As long as you're not paying him 2 million a year, you're going to be okay. Right?

[Mitchell]

There you go. Yes, sir.

[Dave Ramsey]

Yeah. So, I mean, something. Some kind of something for him to live on and them to be able to get. To get to the beach once a year and, you know, whatever it is they want to do or that kind of stuff, you know. And so he's got a. It's his retirement fund and he's got the 300 grand also in the bank and a good mutual fund that he can get some income off of because you gave him that.

[Kevin]

Okay, okay.

[Dave Ramsey]

You know. All right. Yeah. But I think some structure and, you know, it might be that, you know. Okay, dad, what if we did this? Okay, when we get to a million two, I'm going to be at 75%, and when we get to 2 million, I'm going to be at 100%. Or when you get to 65, I'm going to be at one hundred percent if any of those things happen. So let's talk that through. And I'm going to buy you out at 50%. Like you've always said, whenever we do that, I'm going to buy you out. I'm going to buy you out 25%, half of it, and then another half later. Okay. The 25, 25. You following that?

[Mitchell]

Yes, sir.

[Dave Ramsey]

With a maximum of 300. And then I'm going to pay you out for 10 years after that, just to Assist you in your ministry of retirement because you've been serving the Lord. And I'm going to pay you X number of dollars a year from then on or from then for the 10 years or for then for five years or until you die or whatever you want to do. I don't care.

[Kevin]

Okay?

[Dave Ramsey]

But if he had, if he knows that it'll give him more peace because him not knowing, he's kind of looking over his shoulder going, I didn't put anything back for retirement. What am I going to do?

[Kevin]

Yes, sir.

[Dave Ramsey]

I sure hope we don't screw this thing up, you know, and you're not gonna screw it up. You've done a good job. You're a good man, Mitchell. You're a good son. And you're honoring your dad with a process. And the way you're thinking about it. But the not knowing is more anxiety inducing for him and for you than the knowing. So ambivalence will kill you. Get something down where the two of you and write it out. It doesn't have to be a big fancy lawyer contract. You can just write it out on paper. This is the formula we're going to use stage gating it by age or by income or whatever. And then at this stage, I'm going to buy out half of your half. And the other stage, I'm about the other half of your half. And it's going to be the way you wanted it, dad, at half of the value of the land and the equipment. And we'll put a valuation on it, have the land appraised, and then when you do step down completely whenever you want to do that, I'm going to pay you X number of dollars a year for X number of years and something like that. I just made all that up while we were talking. So you can make up whatever you want to make up. You own it. The point is, there's a lot of clarity and there's a bit of a formula. And so we already know what our formula is here. We're at 99%. And someday I'll turn over the final 1% and someday I'll turn over the final 20% of operations. And I will continue to be on the microphone until I don't make sense anymore. That is our plan. Some say I've already reached that. So here we go. All right, folks. Better a weary warrior than a quivering critic. This world needs more high quality leaders, so take courage and lead. I'm Dave Ramsey, your host. Thanks for joining us on entree leadership.