My Dad Refuses to Talk About Succession

Summary

The EntreLeadership Podcast: "My Dad Refuses to Talk About Succession" - Detailed Summary

Release Date: February 3, 2025
Host: Dave Ramsey, Ramsey Network

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Introduction

In this episode of The EntreLeadership Podcast, host Dave Ramsey delves into the sensitive and often challenging topic of succession planning within family-run businesses. The episode primarily features a poignant call from Wesley, a long-standing employee grappling with his father's reluctance to discuss the future of their family-owned insurance agency. Alongside Wesley's story, Dave addresses additional caller questions, providing practical advice grounded in his extensive experience as a CEO and leadership coach.

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Caller Highlight: Wesley's Succession Dilemma

Timestamp: [00:54] - [10:31]

Wesley's Situation: Wesley, a dedicated member of his family's insurance agency for 13 years, shares his frustrations regarding the lack of a clear succession plan from his father, the current business owner. With the company nearing a million dollars in revenue and rapid growth surpassing initial expectations, the conversation around who will take over the business has become increasingly urgent. However, communications with his father have been ambiguous and unproductive.

Key Issues Raised:

• Ambiguous Valuation: Wesley mentions his father has floated a valuation of two to three million dollars (roughly two to three times the total revenue) but remains vague about the terms and specifics of the buyout.

  Quote:
  "[01:46] Wesley: Yeah, he's talked about the price... but I'm not ready to go over it with you yet... sticks like that."

• Role Confusion: Despite being referred to as a partner, Wesley feels he functions merely as an employee, compensated based on commission without true ownership stakes.

  Quote:
  "[04:03] Wesley: So I've kind of resolved in my mind that... I'm just an employee until... figure it out."

Dave Ramsey's Advice:

1. Establish a Gradual Transition Plan ([04:56]):
   Ramsey underscores the importance of a step-by-step approach to succession, ensuring that both parties understand and agree on the roadmap. This gradualism helps maintain stability within the team and with customers.

   Quote:
   "[04:56] Dave Ramsey: There are four principles that we find that are in place in successful succession plans... it's gradual."

2. Enhance Communication ([04:56]):
   Emphasizing open and transparent dialogue, Ramsey advises Wesley to confront his father about the need for clear communication. This includes setting definitive timelines and openly discussing the succession terms.

   Quote:
   "[04:56] Dave Ramsey: Number two is extreme levels of communication... I can see if it's something I want to do."

3. Address Emotional Barriers ([09:43]):
   Recognizing the emotional difficulty founders face in relinquishing control, Ramsey advises honoring and respecting the founder's legacy while insisting on the necessity of a future plan.

   Quote:
   "[09:43] Dave Ramsey: As a founder, this is an emotionally difficult thing... you gotta get more noble and start to talk about gradually handing this off."

4. Maintain Respect and Honor ([10:31]):
   Ramsey suggests continually expressing admiration for his father’s efforts and achievements to ease the emotional strain of the transition.

   Quote:
   "[10:31] Dave Ramsey: Always speak highly of your dad to him... pay honor to the founder."

Conclusion for Wesley's Case: Ramsey concludes by reinforcing the necessity for Wesley to step into uncomfortable conversations to safeguard both personal and business relationships. He commends Wesley for recognizing the underlying issues and encourages proactive measures to establish a transparent and effective succession plan.

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Additional Caller Highlights

Trent's Growth Management in Auto Repair Shops

Timestamp: [14:21] - [22:46]

Trent's Situation: Trent, co-owner of two auto repair shops with plans to expand by acquiring another shop and opening a car lot, seeks advice on key Performance Indicators (KPIs) to monitor to ensure sustainable growth.

Key Issues Raised:

• Managing Expansion: Balancing the pace of growth with operational capacity.
• Hiring Quality Staff: Ensuring new hires align with company values and maintain service quality.
• Resource Allocation: Efficient use of bays and managing cash flow.

Dave Ramsey's Advice:

1. Supply Line Metaphor ([15:41]):
   Ramsey likens business growth to military logistics, emphasizing the need to expand resources in tandem with growth to prevent operational breakdowns.

   Quote:
   "[15:41] Dave Ramsey: I don't wanna grow my business faster than my supply lines... gas, food, and ammunition."

2. Identify Limiting Factors ([17:13]):
   Ramsey advises identifying and monitoring critical resources—technology, cash flow, and quality personnel—to determine if growth is sustainable.

3. Prioritize High-Margin Jobs ([20:36]):
   By focusing on high-margin, quick-turnaround jobs, Trent can optimize bay usage and maintain profitability without overwhelming the workforce.

4. Emotional Discipline in Decision-Making ([22:46]):
   Ramsey stresses the importance of making tough decisions, such as turning down certain growth opportunities, to ensure long-term stability.

Conclusion for Trent's Case: Ramsey commends Trent's strategic thinking and encourages meticulous analysis of operational capacities. By adhering to these principles, Trent can achieve balanced growth without compromising service quality or financial health.

Jake's Seasonal Labor Challenges in Grain Elevator Business

Timestamp: [32:57] - [38:02]

Jake's Situation: Jake manages a family-owned grain elevator with fluctuating labor needs during the harvest season. Recruiting dependable temporary workers has become increasingly difficult, leading to operational stress.

Key Issues Raised:

• Dependability of Temporary Staff: High turnover and absenteeism disrupt productivity.
• Low Profit Margins: Operating with slim profit margins exacerbates financial strain.
• Seasonal Operations: Balancing peak and off-peak seasons without overextending resources.

Dave Ramsey's Advice:

1. Diversify Business Offerings ([38:02]):
   Ramsey suggests expanding or diversifying business activities to provide year-round employment opportunities, reducing reliance on seasonal labor.

   Quote:
   "[38:02] Dave Ramsey: You might add one or two more full-time People... lower the stress by that number."

2. Evaluate Cost of Temporary Staffing ([40:17]):
   Assess whether the financial and operational costs of relying on temp agencies outweigh the benefits, potentially justifying the hiring of additional full-time staff.

3. Repurpose Workforce ([40:17]):
   Implement strategies to utilize staff during off-peak times, similar to seasonal businesses that offer complementary services throughout the year.

4. Streamline Operations ([37:26]):
   Focus on process optimization to reduce dependency on temporary labor, ensuring that core operations remain efficient regardless of workforce fluctuations.

Conclusion for Jake's Case: Ramsey emphasizes the importance of assessing the long-term viability of the current staffing model. By exploring diversification and potential full-time hires, Jake can mitigate the challenges posed by seasonal labor dependencies and enhance overall business resilience.

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Final Insights and Takeaways

Throughout the episode, Dave Ramsey underscores several critical principles for effective business leadership and succession planning:

1. Gradual Transition:
   Succession should be a phased approach, allowing for knowledge transfer and adjustment over time.

2. Transparent Communication:
   Open dialogue between current and future leadership is essential to align expectations and prevent misunderstandings.

3. Emotional Intelligence:
   Recognizing and addressing the emotional barriers that come with transitioning control is crucial for maintaining relationships and business integrity.

4. Operational Alignment with Growth:
   Ensuring that business infrastructure, including technology, cash flow, and human resources, can support the desired rate of growth prevents operational strain and potential failure.

5. Employee Value and Retention:
   Investing in dependable, value-aligned employees and fostering a positive workplace culture directly impacts business stability and growth.

6. Adaptability in Staffing:
   Companies with seasonal operations must develop flexible staffing strategies to handle peak periods without compromising service quality during slower times.

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Conclusion

This episode of The EntreLeadership Podcast provides invaluable insights into the complexities of succession planning in family businesses, managing growth sustainably, and addressing seasonal operational challenges. Dave Ramsey's pragmatic advice, grounded in real-world experience, equips leaders with the tools necessary to navigate these multifaceted issues effectively. By emphasizing communication, gradual planning, and alignment of operational capacities with business goals, Ramsey offers a roadmap for leaders striving to ensure the longevity and prosperity of their enterprises.

For more detailed discussions and expert advice on leadership and business management, listeners are encouraged to tune into future episodes of The EntreLeadership Podcast.

Transcript

[Dave Ramsey]

From the headquarters of Ramsey Solutions. This is the Entree leadership podcast where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host. With over 30 years of experience leading in the trenches right alongside you. I've done this stuff today. If you have a question and want to be on the show, fill out the form on entreeleadership.com ask or call and leave us a note at 844-944-1070. That's 844-944-1090. We'd love to have you. Wesley is in Akron, Ohio. Hi, Wesley. What's up?

[Wesley]

So I'm part of a family business insurance agency working there for about 13 years. We have nine employees right now. Revenue is getting close to about a million dollars per year, and business is continuing to grow rapidly, a lot quicker than we ever thought it would. And the conversation of succession plan has come up. But I was wondering your advice of trying to take out this business or take over this business without taking on any debt. My conversation with my father, who owns the business around it, has been a bit muddy and confusing about it, and I just don't really know how to move forward with this.

[Dave Ramsey]

What does muddy and confusing mean? He's not willing to talk about the terms or not willing to talk about the price or what's all that mean?

[Wesley]

Yeah, he's. He's talked. He's talked about the price of being somewhere between two and three million dollars, like two to three times total revenue. But when he's talked about, he's like, I have it all written down. I'm not ready to go over it with you yet, but when the time will comes, we'll talk about it, stuff like that.

[Dave Ramsey]

How old is he?

[Wesley]

A little bit. He's 50. Five.

[Dave Ramsey]

Five. Five.

[Wesley]

So, Yep. Yep. Five, five.

[Dave Ramsey]

Okay. Well, I, you know, I know insurance companies like yourself or multiples of gross, and I don't know if three is the right one. That sounds awfully high to me.

[Wesley]

It's a bit high. I mean, we're the type of franchise that we have because we're doing other acquisitions. We're between 1 and 1.5 when we're buying other people. And a lot of the value of the agency is the team and me included on there too, which kind of muddies me a little bit.

[Dave Ramsey]

Now, the team, the team doesn't have any value unless they create profit.

[Wesley]

Sure.

[Dave Ramsey]

Profit, a multiple of profit is the only thing that 100% of the time has value. And the only time you'd use a multiple of gross revenues is if it's an indicator of profit.

[Wesley]

Sure.

[Dave Ramsey]

But you don't buy teams.

[Wesley]

Yeah.

[Dave Ramsey]

Unless they're creating profit. I mean, let's say you were losing a million dollars a year. Who gives a crap about the team?

[Wesley]

Yeah. Makes sense.

[Dave Ramsey]

So, okay, so. Well, my guess is your dad's probably going to work another 10 years.

[Wesley]

Yeah. He's already been winding down a little bit and he. But yeah, he. I think that's a plan is he's got another about 10 years or so into this. But in the next 10 years too, we're hoping to double or even triple the size of the business and that's the trajectory that we're continue to go on.

[Dave Ramsey]

And is that going to raise the price even further that you have to pay him?

[Wesley]

Correct. Yeah.

[Dave Ramsey]

Okay, so you're. I'm assuming you're helping him build a business as he winds down and that costs you.

[Wesley]

Yeah, correct. It's kind of like I'm digging my own grave, it feels like sometimes.

[Dave Ramsey]

Yeah.

[Wesley]

So. And so I've kind of, I've resoluted in my mind that because I'm a mostly straight, I'm like straight commission and I've been straight commission Since. For about 10 years. And that's fine because I get paid what I'm worth. But I've just had to come to resolve that I'm just an employee until I. And because it just kind of works me up just a little bit. So I'm just an employee at this point. And then if they're, you know, there comes down a future to buy it out or figure it out. I guess we have to figure out that point. But he talks to me like, hey, you're a partner, you're a partner in this business, stuff like that. But I've not really compensated. I feel like I was a partner because I'm just going to pay what I kill and drag over here. So. So that's what. I guess that's maybe part of my confusion and frustration with it.

[Dave Ramsey]

There are, there are four principles that we find that are in place in successful succession plans. One principle is that it's gradual. You all are violating that. And so you need to talk to him and say we need to put in place. Even if it's a 10 year plan and it's gradual, we need to develop a plan that you and I are both in agreement with. Because the team not knowing what's going to happen at the end and me not knowing what's going to happen at the end. And the customers not knowing what's going to happen at the end is not. Not cool, dad. It's gonna harm the business not having the plan. The second principle of successful succession plans, number one is gradual. Number two is extreme levels of communication. And you all are violating that. You have feelings about being asked to act like a partner, and yet you're being treated like an employee. You have negative feelings about that. You need to communicate that. Dad, you can say partner all you want to say, but right now, I'm an employee, and you need to say that outside of your head, in your mouth, okay? And then he needs. And then. Dad, when we don't communicate. When you don't communicate to me what the plan is, you've got it all written down, but you're not ready to go over it yet. I'm calling BS on that, okay? So you need to communicate that to me because the most successful plans are communicated. And then I can see if it's something I want to do, I might not want to do it. So we need to start to talk about that. And I'm not trying to run you off. I'm just trying to figure out what this plan looks like 5, 10, 15 years out. And then we need to start. Once that is in place and you and I are in agreement, we need to start communicating that to the customers and to the employees, because you're going to lose your star employees if they think the old man's going to hold on to the keys until he lands in the grave. They're not going to hang around to watch that, because everyone knows that doesn't go well.

[Wesley]

No.

[Dave Ramsey]

So you're violating those two things. And I got to tell you, there's no sin on your dad's part in violating those. He's 55. I would say 90% of the small businesses violate those. But also, succession plans are very difficult for that reason. If you want a successful succession plan, that is two of the elements. Extreme levels of fanatical communication and gradual movement on the plan. I'm 64. We started working on ours when I was 48. So we're 16 years into our succession plan, and I'm still here. That's gradual, okay? And we've talked about it so much, we're all sick of it. Everybody's tired of hearing it, by God, you know, but at least everybody knows what's going on. There's no confusion. It's very stinking clear. And the frustration comes with confusion is unbelievable. And let me Tell you what, your customers and you could pass this on to your dad, your customers, and your team, when they don't know what's going on, they write a story in their head that's much more negative than reality actually is. When people don't know about something, they always write a more negative story than it really is. That's true about anything in business, but it's definitely true about a succession plan. Last thing is this. And I think your dad's a standard dude. I don't think he's doing anything really substantially wrong. I'm just telling you how to make it. Take it from a. You know, he's about a five or a six out of ten. He's at least recognized that there needs to be a plan that's more than some do. So. So. But I'm just trying to get him from a 5 or a 6 up to a 10. The last thing I'd say about that is this. In his defense, the most difficult of the different generational handoffs is the first gen to the second gen, emotionally. Now, the most difficult tactically is like, you know, gen 4 to gen 5. You get all these different players involved. Okay, but when. But the founder, the guy that your get, your dad, when you were in diapers, is out there scratching and clawing and hustling and grinding and stepping and fetching. He was, yeah, absolutely. And so that. That guy that can do that, it's hard for him to let go. He's the founder. The founders are hard heads. I'm a founder, I'm a hardhead. And so I'm always right, even when I'm not right.

[Wesley]

Sounds familiar.

[Dave Ramsey]

Yeah. And that's the guy who could do stuff from the ground up. Right. They can eat dirt if they have to and spit out dollars. I mean, you can go, you get her done, man. And so I will tip my hat to him and say, as a founder, this is an emotionally difficult thing, but it is a requirement. If you love the people you work with and you love your son, to make this not you, dude, you got to get more noble and start to talk about gradually handing this off with lots of really, really, really clear communication. And that's the direction I would go with this. Then I'll give you one more thing. And I didn't even intend to do this until you spoke up, but you made me think of this because you did a good job with it. A way you can help the founder turn loose is always paying them honor.

[Wesley]

Yeah.

[Dave Ramsey]

You know, always speak highly of your dad to him Talk about how you admire what he has done to get it where it is in front of him and pay honor to the founder. It helps them to deal with the emotions of turning loose of something that they formed with their own hands and the calluses on their fingers. So you're a good man, Wesley, your dad's a good guy, but y'all gotta work on this or it's gonna screw both of you up. So you gotta. You gotta step into the discomfort and the awkwardness of this for the good of what's going on. That's. That's definitely, definitely the way to go. This is the Entree Leadership podcast.

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[Dave Ramsey]

Says 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, then you got to grow your ability to lead your team. Which is why you should always join us at Entree Leadership Summit. And John Maxwell will be one of the headline speakers. And he, along with myself and 10 of the top leadership experts and thought leaders and writers in the world. This is the premier freaking leadership conference in the nation today, boys and girls. I mean, we're talking John Maxwell, Jim Collins, Dave Ramsey, Pat Lincione. The lineup on this is. I mean, it's a mic drop. You're gonna be refueled and with fresh vision. I get in the audience and Take notes at this thing. Cause these are the people I've learned from. They've taught me freaking good to great. And Jim Collins, my God, people. I mean, that's like one of the bibles of business leadership. And then you got the grandpa of business leadership, John Maxwell. I'm telling you, there's just a few tickets left, so I don't know why I'm hyping it up so much. But anyway, May 18 through 21, if you want to come, we can still get you in. Get your tickets, Join me and Maxwell and 2700 business leaders like you at Summit. Go to entreeleadership.com summit to reserve your seats, or if you're listening on YouTube or a podcast, just click the link in the show notes. If you want to join us here on the Entree leadership podcast, go to 8449-441078-44944-1070. Trent is with us in Kansas City. Hey, Trent. Welcome to the Entree podcast.

[Wesley]

Hey, Dave.

[Trent]

How you doing?

[Dave Ramsey]

Better than I deserve. What's up in your world?

[Trent]

Well, my name's Trent. I'm with Bobby and Noah as well. We're all three co owners. We have two auto repair shops. We employ 15 people. We just bought another auto repair shop. And we also have a car lot opening on January 1st.

[Dave Ramsey]

Wow.

[Trent]

Our question is, what are the key KPIs we should be watching to measure if our growth is too fast, too slow, or just right?

[Dave Ramsey]

Okay. The rule we use around here, and it's helped us with this, and we'll have to talk it through with you guys, is exactly what's going on. But the military has a rule. In the middle of a battle, there's a battle line. The forward soldiers fighting on the front lines. And they do not advance the line, the battle line, faster than they can get. Three things to them. Gasoline, food, and ammunition. And so if the battle lines, if the soldiers advance faster than they can get gasoline, food, or ammunition, they're gonna get killed because of the lack of one of those. You follow me?

[Trent]

Yes.

[Dave Ramsey]

So I don't wanna grow my business faster than my supply lines. Now, in my case, around here, what we did is we flipped that metaphor and we said, okay, what are the things at Ramsey? That if we get past those, we're growing too fast and we're gonna tip over because we're getting top heavy or we're getting it out over our skis. You follow me? And so with us, the three we figured out is it's technology that runs the business Runs the systems of the business and things like the website and so on. Cash and quality humans, people. So if we grow so fast that we end up hiring a bunch of doofuses. Cause we get in a hurry, we're over our skis, and we end up having to draw back. Right? If we grow out past our money and we get all stressed out on the edge of the money, the cash is running low. We're not going to do that at Ramsey, but people do that, right? That would cause you stress. And around here, if our technology doesn't keep up, we end up having to backtrack and reset to the old technology until we can get the stuff moving to go forward. So with you guys, I would suspect at least two of those are true. That you've got to have quality people to man those shops. Not only mechanics, but leaders in the shops and on the car lot.

[Trent]

Right?

[Dave Ramsey]

Because if you got people in there that are screwing up the cars or they're buying bad cars to put on the car lot, or they're making bad deals on the cars or selling the car lot, then you're gonna lose money because your people are screwing it up. Cause you grew so fast that you put a doofus in there. Instead of going slow and getting a good solid thoroughbred. Turning the wrench or managing the wrench turners or so on. Is that making sense?

[Trent]

That makes sense.

[Dave Ramsey]

Yeah. So don't grow faster than you can get good people or that's too fast. You're over your skis. And with you guys also, it's gonna be the cash position. Cause you get around a freaking car lot, you're gonna get in debt in a heartbeat if you're not careful.

[Trent]

Yes, I've learned that.

[Dave Ramsey]

Yeah. Everybody wants to run a floor plan. Everybody wants to sign up with the bank. And you know, oh, we could if we had three more pieces of inventory. Oh, just slow down. Just slow down. Grow at the speed of cash. Grow at the speed of cash. And I would say those are two with you guys that probably are the same as us. I don't know if you've got a third one or a fourth one. You might know better what that is. What do you think it might be?

[Trent]

I mean, definitely, the bays can limit us. If we get too many big jobs going, the bays can limit us up. That's definitely one thing. And then finding. Finding people who are competent but also carry our values as a Christian company, that's hard. Because you find people that are really good at fixing cars, but they curse and they're not good around family and it's difficult. But that's the keys.

[Dave Ramsey]

Yeah. Nobody wants to work around there because they're scummy.

[Trent]

Right.

[Dave Ramsey]

Yeah, I understand that's hard. Yeah. So the people is a limiting factor. The bays. Let me think about the bays. So if you're, if you're scheduled too far out, you're going to lose customers because you can't. Somebody's got a car broken, you can't say, we'll get to you in two weeks.

[Trent]

Right, right. And if we got too many big jobs, like if we have, you know, if we have, let's say we have 18 bays and we've got, you know, 10 or 11 of those bays tied up with big jobs like engines or transmissions, you can't pull up. You can't pull a car in there that you need a quick strut job or brakes, anything like that. When you got the bay tied up, that engine's got to run before you can pull it out.

[Dave Ramsey]

Yeah, yeah. So if you got your number of customers beyond your capacity might be a limiting factor then. Right. That might be a supply line. So it's like a scheduling issue and, or, and you know what's going to end up happening there, probably that might help solve for that is you start figuring out what your high margin jobs are and then you don't mind turning away the low margin jobs. So, for instance, if those engines that are tying up those bays are a high margin job and the strut's a low margin job, which I suspect is probably the opposite of that. But if that engine is tying up the Bay for two weeks and it costs you 22 strut jobs or 10 strut jobs, you don't care because there's so much margin in it, or vice versa. I don't need to take that engine job. I need to send that to somebody else that's in that business. So I can keep those strut jobs running through there because I got a lot better margin in them and I can do 10 of those while I do one engine or whatever the number is. I'm making that up. Okay. That's probably not accurate. In other words, I don't know what the crap I'm talking about.

[Trent]

Yeah, the struts are definitely higher, higher, higher margin margin jobs.

[Dave Ramsey]

Yeah.

[Trent]

And our technicians like them better because they're easier.

[Dave Ramsey]

Yeah. And they're in and out. So, you know, you may want to limit the low margin slow jobs that stop up the base.

[Trent]

Right.

[Dave Ramsey]

And just say, that's not, you know, you need an engine rework and here's a company over here I'll send you to, that's a friend of ours, and they're going to do a great job for you because we got to keep this bay open. That's assuming you're full. That's assuming you're full.

[Jake]

Right?

[Dave Ramsey]

I mean, always.

[Trent]

We're always full.

[Dave Ramsey]

Okay. Yeah, because you do a good job and you're, you know, you don't lie and stuff. You know, there's that.

[Trent]

Right. If you take care of people and we don't, we don't upsell, you can't.

[Dave Ramsey]

Beat them off with a stick in your world, if you do a great job and you don't lie.

[Trent]

That's right. That's right.

[Dave Ramsey]

Yeah. So, you know, you. What I would do is do some analysis on the jobs on this third one and say, all right, if I've got the bay tied up, the average engine job takes X number of days. And that means I can't do Y number of these other quick, high margin jobs like brakes and struts. And so based on that, I'm only gonna take so many. I'm only gonna allow so many bays to be tied up with an engine out of my 18 or whatever I've got available. Does that make sense?

[Trent]

That makes sense, yeah.

[Dave Ramsey]

And then, so if an engine one comes in, that means you're going to turn it down, you're going to send that business to somebody else, and you got to find some friends you can help make their business better. Because you would rather not have that. You'd rather not have 18 engine jobs going, right? Or 17 or 16 or 15, you know, you'd rather just have two or whatever the number is. I don't care what it is. But you guys put some. A little bit of math crunching to that and a little bit of discussing of your philosophy. Because every one of these things in this supply line metaphor that we're using, in my case, technology people and cash, in your case, cash people and bay usage or whatever we want to call this third one. Every one of these requires saying no to something that is good.

[Trent]

Right.

[Dave Ramsey]

I can't grow because I would rather not grow right this second than grow. My only option is to grow with a donkey. That's gonna cause me trouble in my team. And I would rather not grow until I get that solved. So you're saying no to growth because you don't want your soldiers to be out there starving to death without ammunition and gasoline. Cause they get killed and you're gonna kill yourself. You're gonna get out over your skis. But it requires this emotional discipline to say no to growth. Until I can keep my supply lines lined up, until I can keep these bays running at the efficiency level we've all decided they need to run the ratio of high margin quick jobs to low margin slow jobs. What's that ratio? And until we get dialed in on that, and until we get dialed in on cash and on people, we don't add the next thing. We don't add the next thing. And that's a hard emotional discipline, but it'll keep you from being your own worst enemy with growing too fast. You guys are studs, man. Way to go. I'm so proud of you. Great business and you're thinking so high level. You're going to be so big, you're going to make so much money, you're gonna help so many people. I'm so proud of y'all. Well done, Trent. Good job, guys. Very good stuff. Very good. 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 I'm Dave Ramsey, your host. If you're looking for leadership theory from a college professor who's never made payroll, you got the wrong podcast. I do this stuff every day and I make payroll and have for 35, almost 40 years now. And so this is not new to me and I face the same stuff you guys are facing. Sometimes I got more or less zeros on it than you got, and sometimes it's been A decade since I've done the dumb butt thing you're doing. But anyway. But I did it still. And so I've got a PhD in dumb. I know what it is. So we're here to help you. That's what we're doing. I love small business people, so give me a call. 844-944-1070. I love the concepts around leadership. Question of the day is from Brett in Arizona. I was asked to relocate to help improve culture in an office of 40 team members and make the office profitable after. It hasn't been for years. The expectation was that I would take over the VP role of that office. However, a year later, the current VP still doesn't have an exit date and goes around me when making decisions. Senior leadership has asked me to continue taking on more of the current VP's work. How do I continue to be a good leader when it seems like the goalposts keep moving for me to take over this role? Well, Brett, I probably wouldn't. They've signed you up for a lose lose deal here, brother. And so I'd start looking for a position somewhere else. And in the meantime, I'd start having some discussions with. Who was it called? Senior leadership. Okay, so my discussion with senior leadership would sound like this. You sent me over here to fix the profitability and culture problem, and you left the cause of the profitability and culture problem in the building. The old vp. So now you get to choose. Do you want me to fix the culture and profitability problem? If you do, this is his last week. If you don't, this is my last week. Either one's okay with me, but I can't do both. It's not unkind. And you're just being clear. Because what it amounts to is your senior leadership's a bunch of wusses. They know what the problem is and they won't do anything about it. It's the old dude that won't bail because the culture problem is a problem and the resulting lack of profitability is from the old vp. And then they left the old fart sitting there. Well, no wonder the stupid thing's a mess, because your senior leadership's wusses. So I'm gonna help them install a backbone, or I'm gonna look for somebody that has one. And we're just gonna say, guys, I came over here willingly. I was told what to do. But the very problem that is causing all of this is still in the building and I can't fix it, and I'm not going to Sit here and beat my head against the wall because you're gonna end up blaming me for this and I don't wanna be blamed for it. So you can decide. I need a date certain on this VP's exit and it's really, really soon. Like days, not weeks, not months. And if you wanna move him to corporate office, let him hang out with you, that's fine, I don't care. But he needs to leave this location and have no input into this location anymore if you want me to fix these things. Because they can't be fixed as long as he's here because he caused them to start with. That's kind of obvious, at least the way this is worded, that that's what's going on now. And Brett, if you stay without doing that now, it's your fault. You can't blame it on the old vp. You can't blame it on the senior leadership because they've already said who they are. And then if you just go along with it now we said who you are, so you need to leave or you need to demand the right kind of changes so that you can be successful. Leadership's job is to put you in a position to win, not put you in a position to lose. Cause they're weak. That's their job. That's how they serve. My job as the CEO of Ramsey when I'm dealing with one of my leaders in this place is to knock down blockers for them, not create blockers for them. And the old VP is a blocker here. It's a problem child. So I don't know if you'll be as drastic as I'm suggesting, but I'm old. And so my hesitation to do that quickly is very. It doesn't exist. I would do it instantly. I just, I have these conversations frequently and it's just like, this is what we're going to do and if we're not going to do that, then this is what we're going to do. And you get to decide. And then some people decide to do something that surprises me. And then other times they go, you know what? That's right. I think I'll go with that. And so that's what I would do in your situation, sir. Appreciate your email question. It's a good one. And listen, you people out there that are leaders, take a lesson from Brett's situation. Don't send somebody to battle with an unloaded gun and then be shocked that they get killed. Come on. That's what these idiots did. They put a good Guy in the building with no bullets. Come on man, seriously. Senior leadership fail. This is the Entree Leadership podcast. If you want to make 2025 your best year ever, you've got to invest in your leadership development and Entre Leadership Summit can help you do. At this conference, you'll be poured into by John Maxwell, me and 10 other leadership experts so you can get fresh vision and proven strategies to be the leader your business needs this year. To join us, go to entreleadership.com summit or click the link in the description if you're listening on YouTube or podcast. Hey guys, if you want to help us out, you can. We need the help. I know we sound like we need help and you're right, we do. Subscribe. Click the follow button right there on the old YouTube or the old podcast platform. Okay. Share the show, let people know we're here. Send a link. If your platform has a share button, use it. And if you can, leave a five star review. All of these things help the algorithms and help this show get pushed to the front and people find out about it. And here we go. Boom, boom, we take off and we start winning. Thank you for that. Jake is in Peoria, Illinois. Hi Jake. Welcome to the Entree podcast. What's up?

[Jake]

Hey, thanks for having me, Dave. I appreciate it.

[Dave Ramsey]

Sure. How can I help?

[Jake]

So we. My family owns and operates a grain elevator and we have seven full time employees. We're needing 12 to 15 employees in the harvest season and we're really struggling finding good dependable health during that season. So I was just curious your thoughts on that.

[Dave Ramsey]

Well, ever since there's been grain elevators, that's been an issue. So what have you done before?

[Jake]

So currently we're using a temporary agency that just finds people for us and bring them in. And I mean, if we go through 10 guys a season, that's a good season. And it's just been hard the last couple of years.

[Dave Ramsey]

I mean, 10 years ago, what did you do?

[Jake]

I mean, 10 years ago I just started on and we.

[Dave Ramsey]

No, I know, but I mean your fan. Was your family running it or somebody else?

[Jake]

Yeah, no, my dad's been using this temp agency for 25, 30 years.

[Dave Ramsey]

Okay. So he's been running. He's running a staffing agency for two decades.

[Jake]

Yep.

[Dave Ramsey]

Okay.

[Jake]

Yep.

[Dave Ramsey]

And that's now not working. Why?

[Jake]

Because it's just harder and harder to just train people in the middle of our busy season. Be nice to have a little bit more dependable people to show up into work and to get that done and Just not have the inconsistency because when they don't show up and we don't hear from them for two or three days, then we've got to pull our main guys from their main jobs. And it just stresses an already stressed time, so.

[Dave Ramsey]

But Jake, is that what, the last two decades, has that not been the case?

[Jake]

No, it has. My dad just hasn't addressed it.

[Dave Ramsey]

Oh, okay. All right. So we're operating this way, but it works. But it creates a level of stress because of the turnover and the lack of training and the lack of dependability. And I'll guess and say the people are probably less dependable than they were 10 years ago or 20 years ago. Would that be true?

[Jake]

I would agree with that. Yeah.

[Dave Ramsey]

Yeah. That's just a cultural thing, I guess. I'm guessing. But. Huh. Huh. What's gross revenues on the elevators in a year?

[Jake]

Yeah, so we're between 12 and 15 million, just depending on commodity pricing.

[Dave Ramsey]

Right. And what are you. What's your profits? Do you know?

[Jake]

We float between 250 and 500,000, just depending on. I get my prices and basis levels.

[Dave Ramsey]

Pretty low margins then.

[Jake]

Yeah. Yeah.

[Dave Ramsey]

Okay. And you currently have full time. How many team members?

[Jake]

So we have seven full time.

[Dave Ramsey]

And what do they do in the down season?

[Jake]

So, yeah, so we work really hard for two months, and then we work, I guess, even harder in the other nine to get. Or the other 10 to get them all empty. And so we have two. Two sides of this. We have two facilities, so each has a crew. And then we have a fertilizer plant as well. So it's loading trucks, fixing equipment that breaks.

[Dave Ramsey]

Okay, now wait, wait a minute. It's a seasonal business. So how long is the peak of the seasonal business?

[Jake]

So I always say we are like harvest, right? Yeah. Labor Day to Thanksgiving. That's our go, go, go, go, go season.

[Dave Ramsey]

Okay, so you have three months of really wild and crazy, almost like tax season or something. And then the other nine months are slower.

[Jake]

Correct? I mean, still 40 hours work, but.

[Dave Ramsey]

No, I'm just saying. Okay. And during those. What are those people doing during the nine months again? If there's no harvest coming in, what are they doing?

[Jake]

Yeah, we're loading trucks, fixing equipment, keeping facilities clean, making repairs and improvements, those sorts of things.

[Dave Ramsey]

Loading trucks with what?

[Jake]

Grain. Selling the grain.

[Dave Ramsey]

Okay, so you fill it up during. And then it takes nine months to unload it.

[Jake]

Yes.

[Dave Ramsey]

Okay. I didn't know how the business worked. I'm trying to learn. Okay.

[Jake]

No, that's fine.

[Dave Ramsey]

All right. And so you're storing it and selling it off as people need, as needed.

[Jake]

Yep.

[Dave Ramsey]

So the. What is the work that is happening during peak season to fill it up that's different than the unloading? I really am ignorant about this, Jake. I'm sorry.

[Jake]

Yep. No, no, no, that's fine. So how. The best way, in our opinion, to attack this is have our full kind guys that know these systems in and out. What they're doing is monitoring how full bins are, how dry the corn is, how well our dryers are running, making sure our equipment is working properly. And then we hire these, the staffing agency people. They just dump the trucks. It's very simple. It's very easy. All you have to do is just dump the trucks, clean up after it dumps, and then wait for the next one.

[Dave Ramsey]

Got it.

[Jake]

And so what one guy can do all that? It just. It's very stressful.

[Dave Ramsey]

Okay. I do not know where to find three months of labor because I've never done it. That is dependable that you only work them three months. So the only things that pop into my head, I don't have a good fix for this. It's seasonal labor. I don't know where to find it. The only fix I know is to diversify your business and have, like you said, you've got fertilizer plant that's a different product completely. And have other things that you're doing during the nine months that keep everybody busy and raise the level of your staff, but you're diversifying your business. You have different products that you're doing, not just siloing. And I guess the fertilizer plant might be an example of that. And so the more of that kind of thing you can do, that allows those people to have some downtime at their inverse of the seasons, in other words. So a simplified example of that would be. And it's super simplified, so forgive me, but it is. It's the lawn mowing guy, the landscaping guy that he cuts grass in the summer, snow blows in the winter. Right? Okay. And so he keeps everybody on board. They snow plow and snow blow in the winter, and he's in an environment where he needs to do both. So he finds a complimentary product line that in the off season keeps his people busy, and then he can just keep them around year round. So something along those lines is what comes to mind. The other thing that you might investigate, and I don't think there's a lot of room here, but it may be you could add one or two more full time People giving up some of your profit because they're there all the whole year, but decreasing your stress by that number. So how many temps are you guys bringing in in the middle of the hot season?

[Jake]

Probably six to seven.

[Dave Ramsey]

Yeah, so if we lowered that to four to five, that lowers the stress level. And I would make the case that possibly the turnover and the downtime created by somebody not showing up and all that is probably costing you as much as keeping somebody else year round. Now, I don't think you staff the whole thing that way. I don't think you go hire five people. That's not what I'm saying. But you might add two and lower your temp base and thereby lowering your stress. It sounds like when you're doing that you're gonna lower your profits. But you might find that the freaking dealing with the temp agency on the others and all that other crap is eating as much as a couple salaries is eaten. That's possible. I'm not positive, but that's possible. Again, I don't know what the flip I'm talking about. So I'm spitballing this with you. Just making it up. Cause I don't know your world and I don't know the industry there. And honestly, we don't have any seasonal people we hire. We do have products that are complimentary. So we have things that like right now, or not right now, but I mean like if you go back to Christmas and you look at Christmas and December, we've got retail and no live events. In live event season, retail's down and live events are up. So, you know, we can repurpose people throughout the building on those different things. That way, still serving the consumer, but serving them in different ways that are the seasonal aspects are complimentary rather than competing. And we have tried to do a little bit of that here. It might have been accidental, to be honest with you, but we still did it. We just figured out that's when people needed whatever and we went and did it. But it's that idea of the snow blower versus the yard cutting guy. That's the thing you think through. That's how I've been looking at our business for a long time. So good stuff, man. Well done. Hey folks, remember, better a weary warrior than a quivering critic. This world needs more high quality leaders. So take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.