I Want to Fire Her, but Then My Business Would Be Screwed

Summary

The EntreLeadership Podcast: "I Want to Fire Her, but Then My Business Would Be Screwed"

Release Date: February 24, 2025

Overview

In this episode of The EntreLeadership Podcast, Dave Ramsey addresses complex business leadership challenges faced by entrepreneurs. The central theme revolves around managing critical personnel issues without jeopardizing business operations. Through real-life scenarios shared by listeners, Dave provides actionable advice grounded in his extensive experience as the CEO of Ramsey Solutions. The episode delves into topics such as safeguarding business processes, making tough personnel decisions, and maintaining profitability while serving customers effectively.

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Listener Call-In: Emory from Tampa, Florida

Challenge: Transitioning a Key Employee Without Disruption

Timestamp: [01:21 - 09:15]

Emory, the CFO of a home services company in Tampa, seeks guidance on transitioning their long-tenured controller who holds exclusive access to essential financial accounts and processes. With the company generating $50 million in revenue and facing resistance from the controller in moving from cash to accrual accounting, tensions have escalated, raising concerns about business continuity.

Key Discussions and Insights:

• Risk of Sole Control: Dave emphasizes the inherent risks of having a single individual control critical business functions. "[She walked out the door tomorrow or got hit by a car, we cannot deal with the bank account access. Being a solo person in a $50 million company for even 24 hours, that is just not okay." (03:29)

• Immediate Action Plan: He advises a direct and immediate approach to redistribute access and knowledge. "We're going to make a transition to where in addition to you having the password and the access to this account, the CEO and the CFO also have the password and the access to this account." (04:53)

• Separation of Issues: Dave recommends addressing the procedural risks separately from the employee’s attitude issues. "We're going to rectify that mistake before lunch... We can deal with her attitude and whether or not she gets to stay, but those are separate issues." (04:56)

• Apologizing for Past Mistakes: Acknowledging the company’s earlier oversights is crucial. "I would say, you know, I would apologize. I'd say I'm sorry for this awkwardness. It's not your fault." (07:43)

• Encouraging Systemic Changes: Establishing redundancy and robust systems to prevent future dependencies on single individuals. "Never again build a system that has a singular set of knowledge. Never. If there's only one person knows how to turn on the lights and they leave, it's going to be dark." (08:51)

Conclusion: Emory is advised to swiftly implement structural changes to distribute control and knowledge within the company, ensuring business resilience while addressing the controller's reluctance and attitude issues separately.

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Listener Call-In: Daniel from Houston, Texas

Challenge: Balancing Dual Businesses Amid Personal Responsibilities

Timestamp: [14:07 - 45:47]

Daniel, a residential division leader for an electrical contractor in Houston, grapples with managing his role in a Houston-based company while owning and attempting to scale a separate electrical contracting business in Tennessee. With a newborn and financial responsibilities, he is torn between continuing his side business remotely or fully committing to one venture.

Key Discussions and Insights:

• Evaluating Business Viability: Dave encourages Daniel to assess the sustainability and future prospects of his Tennessee business. "If you had a $3 million business and you didn’t believe you could sustain it, what do you do? Sell it." (16:51)

• Selling the Side Business: Advising to divest from the Tennessee venture to focus on current opportunities. "If I were in your shoes, I'd sell it and just focus on... what's the pipeline like for 2026?" (18:24)

• Pipeline Management: Emphasizing the importance of maintaining a steady pipeline to ensure business continuity. "You can't just work on the projects and not keep the pipeline full. Part of your job as a business owner is to fill the back of the pipeline." (43:49)

• Financial Security: Highlighting that the profits from his side business exceed his current full-time salary, providing financial security for his family. "You're making two and a half times more. That makes the concerns about a newborn and health insurance manageable." (42:00)

• Encouragement and Confidence Building: Dave boosts Daniel’s confidence, urging him to leverage his success and make decisive moves. "You're a stud, man. Act like it... You got this, you're killing it." (45:42)

Conclusion: Daniel is advised to prioritize his Houston position, divest from the less sustainable Tennessee business, and focus on building a robust pipeline to ensure continued growth and financial security for his family.

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Dave Ramsey’s Insights on Business Profitability and Service

Timestamp: [22:37 - 45:47]

Beyond listener call-ins, Dave Ramsey delves into the philosophy of profitability anchored in serving customers effectively. He dismantles the misconception that making a profit equates to exploiting customers, instead portraying it as a natural outcome of providing valuable services and products.

Key Discussions and Insights:

• Profit Through Service: "When you serve someone, they give you applause. When you serve a lot of people, the stadium full of people is giving you applause. And now you become what we call wealthy, what we call successful, and you earned it." (30:35)

• Avoiding Socialism: Addressing critics who equate profit-making with unethical practices, Dave defends capitalism by illustrating the mutual benefits of service and profitability. "That's how capitalism works... why I sold to a million of them. It was word of mouth. People said, go get the book. It changed people's lives." (32:00)

• Business Stages and Drivers: He outlines the five stages of business growth—from Treadmill Operator to Legacy Builder—and the six drivers that sustain business development, including personal growth, purpose, people, planning, product, and profit.

• Rejecting Exploitation: A firm stance against extracting undue profits from customers. "You don't sit around and go, how can I extract money from someone's bone marrow? You say, how can I make their life better?" (34:00)

• Cultural Defense of Profit: Countering societal narratives that view profit negatively, Dave reinforces that legitimate profits signify valuable service and customer satisfaction. "Making a profit is not evil. Making a profit is not wrong. As a matter of fact, making a profit is an indication that you have served your customer well." (39:59)

Conclusion: Dave Ramsey champions a business model centered on excellence in service, ethical practices, and genuine customer satisfaction as the foundation for sustainable profitability. He encourages entrepreneurs to focus on adding value, thereby naturally generating profits without compromising integrity.

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Final Thoughts and Encouragement

Timestamp: [45:47 - End]

In closing, Dave Ramsey reinforces the importance of leadership, personal growth, and serving customers with integrity. He motivates listeners to embrace challenges with confidence, emphasizing that true business success stems from dedication to improving others' lives and maintaining robust, scalable business systems.

Notable Quote: "Remember, better a weary warrior than a quivering critic. This world needs more high-quality leaders, so take courage and lead." (45:47)

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Key Takeaways:

1. Distribute Control: Avoid business dependencies on single individuals by implementing redundant systems and shared access to critical functions.
2. Make Decisive Leadership Choices: Address personnel issues separately from structural risks to maintain business integrity and operational continuity.
3. Maintain a Robust Pipeline: Ensure continuous business growth by actively managing and filling project pipelines to sustain and scale operations.
4. Profit is a Byproduct of Service: Focus on delivering exceptional value to customers, which naturally leads to profitability without unethical practices.
5. Personal Growth Equals Business Growth: Leaders must continuously develop their skills and emotional capacity to effectively guide their businesses through various growth stages.

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Resources Mentioned:

• Book: Build a Business You Love – Available for pre-order with bonuses at entreeleadership.com/build.
• NetSuite by Oracle: A recommendation for business management solutions.
• Trainual: An app for organizing business operations, available at trainual.com/entree.

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For more insights and real-time business and leadership coaching, visit Ramsey Solutions and subscribe to The EntreLeadership Podcast.

Transcript

[Dave Ramsey]

Hey, business owners, today is the day to pre order our new book, build a business you love. Reserve your copy from the Ramsey store and get more than $350 in bonuses for free. Go to entreeleadership.com build or click the link in the show notes from the headquarters of Ramsey Solutions. This is the Entree leadership pod 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 right in the trenches and ditches right alongside you. If you want someone who has theories, you're in the wrong place. I'm an actual pragmatist. I do this stuff every day. I'm the CEO of Ramsey Solutions. Today. If you want to submit a question, go to the [e-mail] ask or leave a voicemail at 844-944-1070. That's 844-944-10790. Thanks for joining us, America. We're so glad you're here. Emory is in Tampa, Florida. Hi, Emory. How are you?

[Emory]

Good, Dave. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Emory]

I'm in the home services industry. I'm the CFO. We have 200 people in 50 million 5,0 million in revenue. My question is, how can we transition our controller out of her role given her 20 years of managing all the cash and her deep process level knowledge of the business. I joined a year ago and I respect her tenure. I've communicated that to her. However, over that year, she's been unwilling or unable to transition from the cash accounting to accrual accounting and we've been forced to build our business processes around her. Recently, in the past three months, we have started to raise the bar of what we're needing out of this role. She's become bitter and tensions are pretty high right now. She does retain control of the bank accounts, the account logins, the business processes, and she's been reluctant to share that information. In the future, we plan to design the role to reduce relying on just one person. But we need a smooth transition to avoid a major business disruption.

[Dave Ramsey]

Okay, well, I think you and I can both agree that this was set up poorly, that you should never have a single person that has exclusive access. I mean, God, if she got hit in a car wreck, y'all be screwed.

[Emory]

I think so.

[Dave Ramsey]

I know so. You said passwords, signatures on the accounts, account access, right?

[Emory]

We've moved over a couple of those.

[Dave Ramsey]

Pieces, but I mean, she has. If you said you said she's the sole holder of some of them, right?

[Emory]

Of one of the bank accounts, yes. Some we've moved away and she can no longer sold the signer. She's not signer anymore, thankfully. But still too much sits in her sole control.

[Dave Ramsey]

What one bank account?

[Emory]

The primary bank account access to it, definitely the process level knowledge of these vendors send us this cash, we apply to these accounts. With the exception of the CEO who's been with the company for a long period of time, she's the only one who really knows and runs that process.

[Dave Ramsey]

Okay. We can figure those processes out. If she walked out the door tomorrow or got hit by a car, we cannot deal with the bank account access. Being a solo person in a $50 million company for even 24 hours, that is just not okay.

[Emory]

Yes, sir.

[Dave Ramsey]

Has nothing to do with the fact she's not working out. If she was the dream team member. No one needs to have sole access because it's too much risk for you guys. Again, the proverbial milk truck catches her, you're screwed. So it's just you've set this up from a financial standpoint and you'll understand this, and you already do. That's why you're calling. But there's no diversification here, so there's no safety. You need some redundancy in these systems, and that's just good systems and processes that you guys have got to install. So the fact that she's being a butt or being hard to work with has just highlighted what was already horrible. Okay?

[Emory]

Correct.

[Dave Ramsey]

So if I'm you, I'm going to get the CEO and I'm going to sit down with her tomorrow and say for the next hour, we're going to sit down here and we're going to make a transition to where in addition to you having the password and the access to this account, the CEO and the CFO also have the password and the access to this account. We're not leaving this room until that happens.

[Emory]

Okay?

[Dave Ramsey]

It's too much risk. It's crazy.

[Daniel]

Absolutely.

[Dave Ramsey]

And there's six vendors that I'm concerned about and I need to know what those processes are and I need to know what that is before you leave this room. And. And it's not because I'm mad at you. It's because we've realized that it's too scary for one single person to be the only person that has this information. If something happened to you, it would shut down our business. And that's not okay. And then we can, as a sidebar, we can deal with her attitude and whether or not she gets to stay, but those are separate issues. I'm not getting rid of her because of that. You guys caused that. You know, I'm not gonna get rid of her because she has sole access, but I would get rid of her for being a butt. You know, I would get rid of her for not transitioning and not being willing to move to accrual from cash. That's what we announced as a company we're doing. And if you want to be a we, that's what you gotta do. You can't. You don't. You don't. You don't run your own country here. You're not the president, you know, you're the controller. So we made a decision. We're moving to accrual. I hope you like it. If you don't, then you probably need to go somewhere where they do cash. That's a different discussion. And we made a decision. We don't. With people who are bitter and angry. And so you need to leave that at the door because we don't do that here. So if you can't do those two things, then you can't stay. But that's a separate issue. Those are her fault. The fact that she is the sole controller of all of this and the queen bee is because somebody gave her those keys. And that was dumb.

[Emory]

That's on us for setting up that process incorrectly. Way back at the beginning, 20 years ago.

[Dave Ramsey]

Exactly. You weren't there, but the CEO or the owner or whatever, and it just. It turned into a monster. And this is how bureaucrats are made, right?

[Emory]

Yep.

[Dave Ramsey]

And so, hey, man, I think you already were on to something and you're doing that. But what I would do from an emotional standpoint is I want to separate the mistakes that. That the original leadership team made from the mistakes that she's making.

[Emory]

Would you call those out in the same conversation or would you get the one big rock taken care of? And then.

[Dave Ramsey]

No, the first thing is to say, you know, I would bring her in in the morning tomorrow with the CEO and you in the room, and I am literally not moving the room. We're going to get the bank on the phone and we're going to start sending emails back and forth with the bank, and we're going to do DocuSign and we're putting some other signatures and developing some other passwords for the stinking account right now. And the way I would handle that conversation is I would say, okay, you have been fabulous for 20 years up to this point. But as we have looked at this, we have made a huge mistake by having one single person in charge of something. Because if something were to happen to you, we'd be messed up. And I'm so sorry we made that mistake. And it's gonna cause us some discomfort here for the next couple of hours. Cause we're gonna rectify that mistake before lunch.

[Emory]

And clarifying it's not. This is not on you. You did not do this.

[Dave Ramsey]

But how. I heard you. Yeah. I would apologize. I'd say I'm sorry for this awkwardness. It's not your fault. You didn't cause it. She didn't steal this and capture it and keep anybody from it and hold it secret. Or she probably protected it like any good bureaucra. Then once I get all that stuff moved. Now you're not held hostage to firing her.

[Emory]

Yes, that's absolutely how I've been feeling. Yep.

[Dave Ramsey]

Yeah. And you can't be blackmailed in your own mind. She hasn't done that. But in your own mind, you're like, God, if I get rid of her, I'm screwed. So you don't write up on a holiday. Do both things. If you got a holiday or a vacation in front of you. Let's take care of our problem first. Then it allows us to be a little bit more gentle and grace filled and give it a couple of weeks to start dealing with the attitude and the cash basis and the bitterness and all that kind of stuff. And what I would do is try to explain to her why accrual is a superior system in the way our business operates and the size our business is. By the way, at $50 million, the IRS requires it.

[Emory]

Yes.

[Dave Ramsey]

You don't have a choice. It's the only way you can. You have to do accrual accounting. If you want to run a cash flow, cash basis, hybrid accounting system, you can, but you have to do your taxes based on accrual.

[Emory]

To me, it's been amazing that it's obviously a very successful business. The father and son have built it up. It's incredible that they got this far on the cash basis. It's a much needed transition.

[Dave Ramsey]

I personally love cash basis because we're not ever confused about where the money is. But accrual has its advantages and is a more sophisticated methodology. You have to get your head around how it works. As a primitive entrepreneur like those guys and me, in order to get that, I resisted it too. But we have been on accrual for 20 years. And so I've learned to read it better. But also it has huge advantages on inventory issues and other things. So all of that to say, I would explain to her why we're doing it. A, the IRS requires accrual accounting. B, here's how it works to our benefit to have these reports done this way and accrual spits those reports out that way on our KPIs and other things. So this is why we're moving to accrual rule. It's not to punish somebody. And so I'm going to help you learn it. If you want to learn it. You've been here 20 years. I want to honor that. If you don't want to learn it and you want to leave, let's talk about a severance plan. You've earned it. You're a wonderful person. I'm not mad at you. But we're doing accrual. We're no longer doing cash basis. And we're also going to be happy about it. So. But I would separate the two and then I would separate the two conversations by at least two weeks. But 24 hours from today, by lunch, I will have passwords and multiple accesses to bank accounts and multiple people understanding vendor allocations and what bucket that money goes in and how we put it in the chart of accounts and whatever it is that she has the singular set of knowledge on. And never again build a system that has a singular set of knowledge. Never. If there's only one person knows how to turn on the lights and they leave, it's going to be dark. It's a problem. So yeah, that's just. Oh man. And you feel like you're held hostage. So it's good. Really good question. Emory. Thank you for calling in and participating with us. We appreciate it. This is the Entree Leadership Podcast. What does the future hold for business? Ask nine experts, you'll get 10 different answers. Economic growth or a recession? Business taxes will go up or down. AI will help us work or replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite. And you should, too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities with one unified business management suite. There's one source of truth for the visibility and control you need to make quick decisions. NetSuite's real time insights and forecasting help you See into the future with actionable data. And when you're closing the books in days, not weeks, you spend less time looking backward and more time focusing on what's next. And speaking of what's Next, download the CFO's Guide to AI and Machine Learning at netsuite.com Ramsey it's free at netsuite.com Ramsey well, my friend John Maxwell said, leadership ability is the lid that determines a person's level of effectiveness. In other words, if you want to increase your impact as a leader and scale your business, you have to grow. You have to grow your ability, your intellect, your emotional capacity in order to lead your team to a new place that none of you have ever been to before. Which is why you should join us at Entree Leadership Summit this spring. John Maxwell is one of our headline speakers, and he, along with myself and 10 other leadership experts, like the one and only Jim Collins, like Jefferson Fisher, like a bunch of others, it's gonna be. John Deloney will be there with me. You're gonna be refueled and refreshed with new vision. You're gonna be equipped with some new strategies. I sit in the audience and take notes at this conference because this is the conference I would go to even if I didn't own it. So mark your calendar for May 18 through 21. Get your tickets to join me, John Maxwell, and almost 3,000 business leaders like you at Summit in Denver. Go to entreeleadership.comsummit to reserve your seats, or if you're listening on YouTube or podcast, just click the link in the show notes. Daniel is with us and Daniel's in Houston, Texas. Hi, Daniel. How are you?

[Daniel]

Hey, Dave. I'm doing great. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Daniel]

So I am a residential division leader for an electrical contractor, Houston, Texas, and our revenue is about 1.6 million. And we have eight employees for my division. I'm unsure of the total numbers for the whole company. There's also a commercial service and a commercial new construction and a medical arm of the electrical contracting company. And I also own a residential and commercial electrical contracting business in Tennessee. That is about 700,000 in revenue and about. And we have five and five employees, including myself.

[Dave Ramsey]

That's separate from. That's a separate company. You work for one company, you own the other one?

[Daniel]

Yes, sir.

[Dave Ramsey]

Sounds like you moved to Houston to take a job and had a business and left it behind.

[Daniel]

That's what it sounds like. Yep. I. I met my wife online and she's a. Has a great job As a, as a petroleum engineer in Houston for a big oil company. And she had no interest in moving to Tennessee. And so I moved to Texas and thought I could run my business in Tennessee while I plan on running my business in Tennessee and getting it to the point where it doesn't need me as much. But that is proving a lot harder than I originally thought it was going to be. And so I found a great company in Houston that could support me while I try to reinvest all the kind of profit from my Tennessee business back into the business. Since I'm not there, it's not as efficient as it used to be by taking this job in Houston. But now, of course, this job in Houston is taken away from the time that I can dedicate to my Tennessee business. So I'm in a between a rock and a hard place trying to figure out, do, do I give up my wife's great salary as a petroleum engineer for an oil company and my salary and opportunity potential here and go back to 10, move us to Tennessee and focus on my business that, you know, got me, got me off the ground and made my first money, or do I continue limping it like I have been and get better systems in place and kind of run it from afar while I take this opportunity in Houston and run with it? That's, that's where I'm really stuck and looking for some advice from somebody a lot more experienced than me.

[Dave Ramsey]

When I'm looking at that kind of a thing. One way that helps me with my decision making paradigm is to reverse engineer it. And so let's do that. Let's pretend that you lived in Houston, Texas and had the job that you have and you're married to this beautiful woman who makes a lot of money as a petroleum engineer and you did not own an electrical contracting firm in Tennessee.

[Daniel]

Okay.

[Dave Ramsey]

Under what circumstances would you go open one in Tennessee? None.

[Daniel]

None.

[Dave Ramsey]

So sell it.

[Daniel]

I don't know how to really sell something that doesn't really. I mean, it's been running without me for the past.

[Dave Ramsey]

Does it make a profit?

[Daniel]

Yes.

[Dave Ramsey]

Sell it to a competitor.

[Daniel]

Okay.

[Dave Ramsey]

How many trucks have you got?

[Daniel]

Two.

[Dave Ramsey]

All right, so you have trucks and tools.

[Daniel]

Two in a service vehicle?

[Dave Ramsey]

Trucks and tools, service contracts, and some profit associated with those things. Someone would like to absorb that and they'll give you.

[Daniel]

Unfortunately, I don't have any contracts.

[Dave Ramsey]

Okay, so. So you do residential service or resident or brand new installs?

[Daniel]

No, no brand new installs. We do residential service, remodels, service calls, and we put a lot of leads out there, and we're trying to get more in a commercial service. But currently, commercial service is only about 5% of our company.

[Dave Ramsey]

Yeah. I mean, I live in that market, and you and I know that there's 75 other companies doing what you do.

[Daniel]

Yeah.

[Dave Ramsey]

So if I were in your shoes.

[Daniel]

I'd sell it and just focus on. Because I want to be an entrepreneur, but I can't be an entrepreneur and really dedicate my all to.

[Dave Ramsey]

You can be an entrepreneur in Houston, but you can't be an entrepreneur in Tennessee because you're married to a woman that lives in Houston.

[Daniel]

Yeah. And we just had our first. Our newborn. That was the big reason I had to hurry up.

[Dave Ramsey]

Daniel, you're in Houston, so whatever you do, you're going to do it in Houston. For now. I mean, someday y'all may move, but right now, for the near. For the next five years, you're in Houston.

[Daniel]

Yeah.

[Dave Ramsey]

You're not in Tennessee. And so if I woke up in your shoes, I think you're going to have this tremendous. I mean, you don't have to get a lot of money, but whatever money you get from this, just put it in the bank and, you know, think about. Start doing some side hustles that are not in competition with your existing employer and. Or, you know, y'all build up a big pile of cash and you quit that employer and start your own gig in Houston. Or load the. Or load the truck. Or load the trucks and the tools up and bring them to Houston and quit now and start now in Houston.

[Daniel]

That's what I considered.

[Dave Ramsey]

But I would not continue to run something in Tennessee that is a part of your past. It's like you're trying to go swimming with an anchor tied around your ankle.

[Daniel]

Yeah. Yeah.

[Dave Ramsey]

It's no fun.

[Daniel]

No. No, it's not. And it's. It's.

[Dave Ramsey]

And it doesn't. And it's not working well. You're not good at it. It's a very difficult. Because nobody would be. It's not that you're inept. You're fine. But I think you're a new dad, new husband, and you got a good job. And if you just sat in that for 18 or 24 months, it wouldn't be the end of the world. That's what I would think about. So. Good question, man. Good question. And congratulations. It sounds like you're doing a good analysis on this, but if I woke up in your shoes, I'd be done with that within three months. I'd find me a competitor that give me something for the trucks and for the accounts and the lead generation and the volume and the relationships I've got. Let them pay me something for all that. If they won't pay me enough, I'll load up the trucks and bring them to Houston and start thinking about opening something down there. But you don't need to be running something in Tennessee when you live in Texas because it's left over from your former life. Sometimes, folks, that's how they end up, with a rental property too out there. For the rest of you listening, you know, you know I have a rental house in Cincinnati and I live in Des Moines. Why? Oh, I used to live there and I couldn't sell it. So you became a landlord by default, not by strategy. And that's the same exact thing here. So sunk cost analysis is if you hadn't done it, would you do it now? And if the answer is no, then undo it. Get rid of it. Sell the stupid rental house in Cincinnati. In this case, sell the electrical service contract in Tennessee. So cool. Very cool stuff. This is the Entree Leadership Podcast.

[Isaac]

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[Dave Ramsey]

System, there are five stages of business. You start with Treadmill Operator, where too much of the business relies on you. You are stuck on the treadmill. And then once you learn some delegation, some time management, you do some hiring and some budgeting, you move from there to Pathfinder. And that's where you start laying out clear direction, mission statements, core values, role clarity. And from there you move to Trailblazer, which is where you start putting the leadership layers in place to carry your business to scale. And then you move from there to peak performer. And that's, of course, where your business gets to be comfortable and you're making a lot of money. And your challenges there is to break it before it's broken. That makes a lot of sense. And then, of course, you move to the final stage, which is the legacy builder, and that's developing a succession plan and figuring out what endgame is for the person who was owning it and running it all along, that kind of a thing. As you're going through those five stages of business several times, you're gonna go around the wheel of the six drivers of business. The first driver is the personal driver. You're the problem, you're also the solution. So like we said earlier about John Maxwell, you're the lid on your business. As you grow, your business can grow. Until you grow as a person, you're not gonna grow your business. Your purpose is the business has to be bigger than simply money. What's the purpose of this business? What's the nobility that we bring to the community? People, which is building a unified team, getting the right people on the bus, the wrong people off the bus, right people on the right seats on the bus. You know, constantly dealing with the issues that people represent that are positive and negative. So a lot of energy goes into the people driver, the plan driver, which is having an intentional plan, some strategic thought, a desired future. We teach you how to do all of that. And then once you've got your plan, you develop the product and you deliver excellence in the product. And then, of course, we hit profit. That's number six. Profit is so paradoxical in the small business owner's mind. Almost everyone who starts a small business starts it, of course, with profit in mind. I want to make some money. In some cases, I say I want to make a lot of money, and neither one's wrong. And then you develop all of these things. Your personal skills, your purpose, your put the right people in place, the right plan in place, develop a product that the customer wants and go out there in the rough and tumble world. That is called business. This is hard. It's scratch and claw and fight, and then you finally start making some money, and then you start making some good money, and you start being what people call successful. And the paradox is that our culture teaches us to go win, to go be successful. But if you're becoming wealthy, you must have done something wrong. Well, let me assure you, you did not do something wrong. I don't care what some communist professor who's never made payroll says, you didn't do anything wrong. Making a profit is not evil. Making a profit is not wrong. As a matter of fact, making a profit is an indication that you have served your customer well. People do not give companies money that screw them over and over and over again. Now they may once or twice, but they don't send their friends and they don't tell everybody positive things on social media. I just had the best meal at this restaurant. I just got my car fixed by an amazing guy who didn't cheat me. The heating and air guy came to my house. He was here 15 minutes and fixed something that I've been fretting about for two days. And now we're warm again because he did his job. Thank you. You serve someone, you get money. That's how it works in America. That's how the free enterprise system works. And if you serve more people, you get more money. So I had this left wing nut job reporter doing a hit piece on us. And I was sitting with her in her little New York coffee shop trying to be nice, which was a mistake. I should have just ghosted her and let her do whatever she was gonna do because she's gonna do it anyway. Cause she's a freaking lefty. But she's one of these socialists, right? And she's like, well, you know, you're taking advantage of poor people. I'm like, hell, you say, I'm not taking advantage of poor people. I'm helping poor people. You think it's wrong to make a profit if someone is served? And she said, yeah, that's bad. And I went, what's your favorite restaurant in New York? And she told me, I said, so do you want them to go out of business? No. I said, well, you go in there and eat their food and give them money and you give them more money than the freaking food costs. And that's called a profit. This is how capitalism works. They apparently didn't teach you this in your journalism class. And she's like, oh, I understand. They need to make a profit and I don't have a problem with them making a profit. And I said, okay, why? Because I got good food and I willingly paid that price for that good food. I said, see, so what if that guy opened another restaurant just like that one in another city? Now he's making twice as much money. Oh wait, he opens 10 of them in 10 different cities and now there's 10 times as many people that are happy like you, and ten times as much profit to him. At what point did he become evil? See, this is the problem with socialism. You eventually run out of other people's money. Margaret Thatcher said that you can't do this. So I refuse to be shamed for my success, and I refuse to let you be shamed for your success because you're serving someone. My wife Sharon and I went to a fine dining experience not long ago. It was rather expensive. It's one of my favorite sports, fine dining and good wine, right? And we go in, we sit down. This guy comes to the table, white tablecloth. And he's unbelievably helpful. He's pleasant, he's not pushy. He wasn't in our face bothering us. But the water glass never got half empty, nor did the wine glass. The food was not crammed down our face to get a table turn. It was a luxurious, calm experience. But we also were not lacking in anything to eat. They kept bringing us stuff just as we were finishing the other course. Isn't that interesting? Like a fine dining experience should be. Food was high quality. It was presented on the plate. Well, the recommendations. I asked him about something. He said, oh, no, don't do that one. Do this one instead. I took his advice. It was a good recommendation. It was a fabulous night. You know what? He got a big juicy tip. Why? Cause he served us. That's what you do when you run a business. You fix someone's car. Cause you run a car repair place, you are serving just like that world class waiter in that world class restaurant. When you fix someone's heating and air, you are serving. When I write a book on how to get out of debt, and you get out of debt and you build wealth. And you paid me a whole $20.

[E]

Whoa.

[Dave Ramsey]

You got served. We took care of you. When you listen to this show for free, I think you got a bargain. Even if it's bad, you came out. So I mean, seriously, serve. As long as you're serving. As long as people find themselves in a better condition as having come across you than they did before they came across you, you deserve your profit. And that means you have designed your product in such a way that your product or service serv. So if I sell an item in the Ramsey store that is not bringing people more joy than its cost, then guess what? It doesn't sell. And we end up pulling it and getting a different product that does bring joy, that does help, that does serve. And so that's where profit comes from. Daniel Rabbi Lapin, who wrote the book Thou shall Prosper, says that when you do a good job in business, your customer gives you certificates of appreciation with president's faces on them. You have not done something wrong when you serve. Ken Blanchard said, profit is the applause your customer gives you. You ever been in a stadium with a really good football team that's on fire and they score a touchdown? The entire place stands up and applauds that 18 year old who just ran a ball across a line. You were entertained and you gave applause and you paid $200 for the seats. Hello. This is how this works, boys and girls. So when you serve someone, they give you applause. When you serve a lot of people, the stadium full of people is giving you applause. And now you become what we call wealthy, what we call successful, and you earned it. One of the sayings, one of our core values on the walls here at Ramsey is if you help enough people, you don't have to worry about money. People will beat down your doors to hand you money. If you are loving them well, if you're taking care of them, if their life is better because they came in contact with you. That's how you design a profitable product. That's how you design a profitable business. You don't sit around and go, how can I extract money from someone's bone marrow? You say, how can I make their life better? How can I be the waiter at the fine dining restaurant where my level of excellence makes you, you know, makes you proud to give me a huge tip? I just want to throw money at you because you've done so much wonderful things for me. Isn't that interesting? Also shows up even in something like a non profit. I know churches who, their budget is completely awash with money. They have money coming in. The generosity of the people that go to that church is unbelievable. You know what else I find at the exact same church? That those people who are unbelievably generous have had their life changed and transformed by the power of Jesus Christ. At that church, that church is bringing life, change, change to them. And the natural result is gratitude. The natural result is generosity to that church. That church has no budget problems because it has a habit of regularly transforming people's lives with the power of Christ. Oh, there you go. That's how this works. Same thing's true in your heating and air or your car repair business, or your chiropractor business, or your dental or veterinarian or whatever it is you're doing out there, whether it's a good or a service. If I can sell you a book called the Total Money Makeover, and I've sold 12 million of them, and I can sell you that book for $30, and it teaches you how to get out of debt and become a millionaire. And then you do it and you become a millionaire. I think 30 bucks was called a bargain. And it works. And a lot of people did it. So guess what? That's why I sold to a million of them. It was word of mouth. People said, go get the book. It changed people's lives. I didn't steal money from poor people. I helped poor people not be poor anymore. And they told everyone about it, and they gladly bought the book. Oh, you know what else they do? They buy 10 of them and give them away. There are a lot of people in America that buy cases of Total Money Makeover and keep them in their study. And every time they run into a young couple getting started, they hand them one. Every time they run into a friend that's got a problem with money, they hand them one. They didn't do that because I took advantage of them. They did that because I helped them transform their lives. Now, I'll go ahead and tell you that the royalty on a Total Money Makeover book is somewhere around $3.45. That's what I get paid by the publisher. Times 10 million means I made $34 million ripping poor people off. No, that's not how it works, boys and girls. See, the natural flow is that we helped a lot of people and we don't have to worry about money. If you help enough people, you don't have to worry about money. You get out of debt. You do your budgeting, do your accounting. You're wise on what you pay for a product. You price it with a margin, a profit margin. You manage that stuff, you watch what's going on, you look at your costs, and you make sure that you're charging enough to stay open so you can continue to feed that poor socialist who needs a meal, who still doesn't understand that the restaurant that she loves is not doing harm because she went to the wrong stinking college instead of the college of the real world out here where the rest of us live. So that's how this works. And so I wanna encourage you. If you're making a lot of money, that tells me you're helping a lot of people. Very few people make a lot of money screwing people. Very few. Cause word gets out, you screw somebody, you mess up their car, you overcharge them, working on their car, they're gonna tell everybody not to go to your place. And pretty soon word's gonna be out on you and there's gonna be a stink on your brand. And that's the kind of stuff you're facing and you should I hope you go out of business. If your food is cold at the restaurant and it's slow and your service is horrible and I get food poisoning every third time I go there, I hope you go out of business. I hope you fail for your lack of service. That's what the wonderful free enterprise system does. It puts crooks and incompetence out of business regularly. And so this is where profit comes from, boys and girls. It comes from nobility. It comes from being kind and compassionate. It comes from loving your customers so much that you make sure their life is better because they met you and they will give you a profit. That is the natural byproduct. But if you go looking just for profit, you're not gonna find it. Go looking for an opportunity to add value, looking for an opportunity to serve, an opportunity to cause people's lives to be better. And then profit will find you. That's where profit comes from. That's how this whole Entree leadership thing works. This is the Entree Leadership Podcast. Running a business is freaking hard. It's easy to get caught up in the daily challenges and fears that keep you stuck. That's why I want you to reserve your copy of our new book, Build a business you love, where we share the proven system that helped us break through those challenges and build a $250 million company in the process. When you pre order today, you're gonna get more than $350 in bonuses for free, including an enhanced audiobook experience, early access to the build a business you love ebook, and instant access to our hiring playbook so you can start transforming your business right now. To reserve your copy and to get these special bonuses, you gotta place your pre order on our [e-mail] build or click the link in the description if you're listening on YouTube or on a podcast. Thanks for joining us on the Entree Leadership Podcast. If you would like to help us out, we would appreciate the help. You can do that by following the show, subscribing to the show. Leave a nice 5 star review. If you don't like what you're hearing, don't listen anymore. But don't say nasty stuff on the Internet. It makes you look dumb. Leave a nice five star review and share the show. Take a cut of the clip here and Send it out. Cut the link out and send it to somebody. Or some of the platforms have a share button. Use it. We appreciate the help. If you guys don't spread the word, the word is not going to get spread. And you've been spreading it because our numbers are way up. Thank you very much. Isaac's in Sacramento, California. Hi Isaac, how are you?

[E]

Good. Dave, thanks for taking my call.

[Dave Ramsey]

Sure. What's up?

[E]

So I have a question. I own a small residential construction company in the Sacramento area. Last year was our first year in business. It was more of a side hustle. We did about 70,000 in gross sales with about 10,000 in gross profit. This year we're going to do about 300,000. 330 in gross sales with 70,000 in gross profit. And next year we have a little over $3 million in signed contracts with a projected 350,000 in growth.

[Dave Ramsey]

How the crap did you grow from 300k to 3 million in one year?

[E]

Clients. Clients. Clients. I mean honestly, just bigger jobs.

[Dave Ramsey]

Word got out that you weren't ripping people off. Huh?

[E]

Word got out that were reliable.

[Dave Ramsey]

Yeah. You do, you do what you said on the time frame that you said and you can't beat them off with stick.

[E]

Right. It's piling up. The, the question I have is this is my side job. I work a, I work a full time salary position remotely for a. I'm a project manager for a company.

[Dave Ramsey]

You made 70 on 300. Are you gonna make 700 on 3 million?

[E]

No. So that's kind of where I'm playing with the numbers. We're gonna make about 350 on the 3 million.

[Dave Ramsey]

What do you make at your day job?

[E]

Make 110 roughly.

[Dave Ramsey]

Sounds like a waste of time.

[E]

There's a few factors that are kind of playing in that's having me a little scared. So number one, we have a newborn baby, their first baby. So just the security is kind of scaring me a little bit. Number two, we lose our health insurance. And number three, my wife doesn't work. She's full time mom and student that we're cash flowing her education. So just kind of scared to make the leap.

[Dave Ramsey]

And really question 150 divided into 350 is two and a half years.

[E]

Right.

[Dave Ramsey]

In next year you're going to make what you would make in two and a half years at your other job. You can buy health insurance with that.

[E]

Right?

[Dave Ramsey]

Easy. You can feed a little baby with that. Easy. The only risk is if the next year you make 70.

[E]

Right?

[Dave Ramsey]

Oh wait, a minute, you made two and a half years. So the next year, if you make 70, it's now going to take you three and a half years to get back to even. You're going to get so far ahead next year that if you like took two years off, you'd still be ahead. That makes sense.

[E]

Yeah. Yeah, it does.

[Dave Ramsey]

Why do you not believe that? Okay, if in 2025 you make $3 million, net or gross, and you net 350, so you run about a 10, 11% margin, why do you not believe that the following year, in 2026, you will do at least that well?

[E]

Well, the contracts I have for the job starting this year, for this next year, for the 3 million, I've been working with these clients for a year in the planning stages.

[Dave Ramsey]

Are you not working with clients now to fill up back when those are done?

[E]

Exactly. We don't have anything for 2026. And that's what it takes.

[Dave Ramsey]

Something in the pipeline, man. Where'd you get these customers?

[E]

Referrals from architects. I only market to architects.

[Dave Ramsey]

Then you need to be working architects and go, where's my referrals for 20?

[E]

Okay.

[Dave Ramsey]

You can't just work on the projects and not keep the pipeline full. Part of your job as a business owner is fill the back of the pipeline. As you finish these other projects, you got new ones to replace them, right?

[E]

Okay.

[Dave Ramsey]

It's not just executing the project, it's keeping the pipeline full. That's the marketing.

[E]

Okay?

[Dave Ramsey]

Yeah. I think the whole thing is growing so fast it's scary and you don't feel like it's sustainable. You don't have confidence in yourself to sustain it.

[E]

And that's part of it. The other thing is, like I said, it's mostly been a side hustle to pay off our debt.

[Dave Ramsey]

If you make 350k, it's officially not a side hustle.

[E]

Okay?

[Dave Ramsey]

It doesn't matter where it came from. But all that matters is whether you believe in the future. And I. Listen, the guy I'm talking to, I don't know how you could screw this up unless you just don't keep the pipeline full. But if you'll go fill up the pipeline, I think you'll have at least 3 million the next year, don't you?

[E]

Hopefully, yeah.

[Dave Ramsey]

Not hopefully. I think you can do it. You've proven you can do it. Unless these contracts were just a fluke and it was a one time thing and they're never. People like that don't exist anymore. You got the only ones and you're Done. That's just not true. Right, Right. There's other people just like them in 2026 that need your help. Maybe it's 4 million.

[E]

Right.

[Dave Ramsey]

So health insurance is bull crap. Go buy some health insurance. You're making $250,000 more. Of course you can afford health insurance for a quarter million dollars. And little babies can eat on a quarter million dollars more better than they could eat on a quarter million dollars less. So new baby doesn't cause it. You're making more money if you're making less money. Those would be valid concerns if you said, I'm making 150 and when I go full time, I'm only going to make a hundred. Okay, now we can talk about I got a baby and health insurance, and that makes me nervous. But you can't talk about that when you're making two and a half times more. Right?

[E]

Right. No, you're right.

[Dave Ramsey]

You're a stud, man. Act like it.

[E]

Oh, thank you.

[Dave Ramsey]

You got this. You can do it. You can do it, man. Go into the game and knock something over. You can do this. You're better than you feel like you are. And you know how I know that? $3 million worth of people bet on Isaac. I don't even know you, but I know people don't give doofuses $3 million. Not much, anyway. And so, you know, you're obviously doing a lot, right? There's a lot to be proud of here. A lot. Can you do some things better? Yeah. I'm glad you're listening to this podcast. I'm glad you're engaged in entree leadership. We'll help you do better, but, man, you're a stud. You got this. You're killing it. So proud of you. Well done, sir. Quit your stinking job and go to work and be a business guy, man. You're that guy. Get her done. Man, you are. You are on fire. So proud of you. 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.