My Employees Can’t Stand Each Other (It’s Driving Me Nuts)

Summary

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The EntreLeadership Podcast

Host: Dave Ramsey, Ramsey Network
Episode: My Employees Can’t Stand Each Other (It’s Driving Me Nuts)
Date: September 1, 2025

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Episode Overview

This episode focuses on real-life leadership challenges from listeners, with a particular emphasis on workplace conflict, setting behavioral standards, and managing difficult team dynamics. Dave Ramsey takes listener calls, offering direct, no-nonsense coaching and practical insights from decades of business experience. The show’s hallmark is its actionable advice, often rooted in personal stories from Dave's own leadership journey.

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Key Discussion Points & Insights

1. Managing Toxic Staff Dynamics ([00:48]–[13:32])

Caller: Scott, dental practice owner
Challenge: Two high-performing employees with clashing personalities have created a tense, disruptive workplace environment.

Core Issues:

• The employees “fight like cats and dogs” and have an “inherent distrust.”
• Scott has tried separate and joint interventions, but conflict persists after two years.
• Scott wants guidance on when and how to intervene forcefully, and at what point to terminate.

Dave’s Advice:

• Leadership Duty: As the leader, it’s Scott’s non-negotiable responsibility to fix toxic culture, even if hard decisions or firings are required.

• Zero Tolerance Policy:

  “This has to end. It’s not an option. And I’m not gonna put up with it. If I own the place, I'm not gonna put up with it.” (Dave, [03:49])

• Direct Conversation Script: Bring both employees together. Firmly state that the next instance of disrespect or conflict will result in immediate termination for the instigator.

• Respect as Job Requirement:

  “Part of your job description is to be respectful to the other people that work here… this constant bickering is done.” (Dave, [05:24])

• On Tolerating Bad Behavior:

  “We get in the building what we’re willing to tolerate.” (Dave, [10:00])

Application:

• Immediate action is required; further inaction signals permission for bad behavior.
• It is likely that one or both employees will leave following this ultimatum, but that's preferable to continued toxicity.

Notable Quote:

“You don’t have to like each other… but you at least have to be kind and reasonable.” (Dave, [05:14])

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2. Handling Partnership and Succession Crisis ([17:11]–[25:17])

Caller: Michelle, restaurant co-owner
Challenge: Inheriting leadership amid partner fallout, massive debt ($375,000), and the risk of her spouse inheriting the business mess if she dies.

Dave’s Advice:

• Life Insurance: Take out a policy naming her husband (and optionally the business) as beneficiary to clear debt if she passes away.
• Buy/Sell Agreement: Compose a clear legal agreement among remaining partners detailing succession and responsibilities in the event of death.
• Long-Term Path: Maximize profitability to pay off debt, then aim to sell the business, thus avoiding ongoing work for disengaged or vanished partners.

Notable Quotes:

“The only ship that won’t sail is a partnership.” (Dave, [17:59])
“All we’re trying to do with your husband is set him free, not profit.” (Dave, [23:53])

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3. Managing PTO and Team Expectations ([26:56]–[36:56])

Caller: Chris, VP at a general contractor
Challenge: Employees are regularly exceeding their paid time off (PTO), taking additional unpaid leave, citing a desire for flexibility.

Dave’s Advice:

• Expectations Reset:

  "We give people all kinds of time off... but it goes before our HR committee and the HR committee decides if this is an act of grace... but I don’t do unpaid time off because I want to take a vacation and I’ve used up my PTO. You need to be at work.” (Dave, [27:49])

• Acts of Grace Reserved for Emergencies: Offer extra time only for legitimate emergencies or under FMLA, not discretionary absence.
• Private and Public Communication: Address chronic abusers one-on-one and communicate policy to the whole team via meeting or memo.

Notable Moment:

“If you want to be a ‘we’, this is what we do.” (Dave, [36:36])

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4. Accepting Partnership at a Small Law Firm ([37:19]–[46:56])

Caller: Jake, associate attorney
Challenge: Offered 20% ownership in a firm (essentially as a gift), but concerned about lack of profitability and formal structure.

Dave’s Advice:

• Best Practices: Consult experienced law firms for partnership agreement templates and proven structures.
• Tap the Brakes: Only accept partnership if the firm is profitable and there’s clarity on responsibilities, profit sharing, and exit strategies.
• Help As Employee First: Suggest working towards profitability before formalizing partnership.

Notable Quotes:

“You want me to become a 20% owner in something that loses money? Thank you for the gift.” (Dave, [44:47])
“Let’s get this thing up and running... when we get it profitable, let's revisit.” (Dave, [46:00])

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Memorable Quotes & Leadership Nuggets

• On Leadership Accountability:

  “You get in your building what you’re willing to tolerate.” (Dave, [10:00])

• On Setting the Tone:

  “Be blunt, be direct, but you don’t have to be unkind.” (Dave, [12:23])

• On Succession Planning:

  “I would draft a buy/sell agreement that includes death upon death... all we’re trying to do... is set them free, not profit.” (Dave, [23:19])

• On Managing Generational Expectations:

  “It’s an entitlement to more time off... like you think you’re French or something.” (Dave, [32:36])

• On Partnership Structure:

  “Let's find somebody that knows how to do this, that the agreement that's in place... has survived at least a decade.” (Dave, [42:17])

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Important Timestamps

• [00:48] Scott’s call: introducing workplace conflict
• [05:14] Dave’s “zero tolerance” speech script
• [10:00] “We get in the building what we’re willing to tolerate”
• [17:11] Michelle’s call: partnership & debt crisis
• [23:19] Succession/buy-sell agreement advice
• [26:56] Chris’ call: PTO management
• [32:36] Generational attitudes on PTO
• [37:19] Jake’s call: law firm partnership offer
• [42:17] Structuring successful partnerships

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Summary

Dave Ramsey’s advice throughout this episode is direct, candid, and deeply practical: leaders must shape their culture by confronting issues head-on, setting clear expectations, and refusing to tolerate behaviors that undermine teamwork. Action trumps avoidance, whether dealing with toxic employees, uncommitted partners, or shifting workplace norms. Listeners come away with concrete script examples, relatable stories, and the reassurance that even battle-tested leaders like Dave have faced—and conquered—the same challenges.

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Transcript

[Michelle]

Foreign.

[Dave Ramsey]

Solutions. This is the Andre 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. If you've got a question you want to ask, fill out the form on entreeleadership.com ask or give us a call at 844-944-1070. That's 844-944-10790. Scott is with us in St. Louis. Hi, Scott. Welcome to the show.

[Jake]

Hey, Dave.

[Scott]

Thanks for having me. I'm looking forward to seeing you at the leadership summit as well.

[Dave Ramsey]

Absolutely.

[Scott]

I. I've got a small dental practice in St. Louis, Missouri. We've got five employees, did about 1.3 million last year. And my question is, I have two employees who are great at their roles, but I think they fight like cats and dogs. They're always at each other, and I'm wondering how to handle that.

[Dave Ramsey]

And.

[Scott]

Yeah, if you can help me with that at all.

[Dave Ramsey]

What are they fighting about?

[Scott]

Everything. So the. I feel like the crux of the issue is they're just two very different people. You know?

[Michelle]

No.

[Dave Ramsey]

Different people can get along and respect each other.

[Scott]

Yeah. So, okay, let me give you a little background on them, if that's okay. One is kind of a classic Southern belle. She has very strong ideals, very strong morals, and if you don't match up to those ideals, she can be a bit judgmental and.

[Jake]

Kind of look down.

[Scott]

On you a bit. The other employee is very. She's kind of rough around the edges. She's got, you know, five kids, single mom, crazy tattoos and makeup colors. And so just, I mean, if the two of them saw each other passing on the street, they wouldn't like each other. And there's just kind of an inherent distrust between them. They're both excellent at what they do, and I, you know, I'm very happy with the performance in their roles, but they just. They, from day one, have not liked each other and just do not get along.

[Dave Ramsey]

Who's been there longer?

[Scott]

They started around the same time. One is, like a couple months longer than the other. But they both been with me around two years now.

[Brendan]

Okay.

[Scott]

And it's a small office. You know, we've only got five team members. That's tough when two of them aren't getting along.

[Brendan]

Okay.

[Dave Ramsey]

Yeah, it is tough. So how long is this? How long they've been working there?

[Scott]

Couple years now.

[Dave Ramsey]

So this has been going on for two years?

[Scott]

Yeah.

[Dave Ramsey]

Have you attempted to address it before.

[Scott]

Yeah, yeah, I've had conversations, one on one with each of them. I've had conversations with both of them. You know, I've. I've really tried to help them get along, and I. I'm kind of getting to the point where it's like, okay, how much is this my job to help these two adults?

[Dave Ramsey]

Oh, it is like, adult. It is your job. You're the leader. Your job's to.

[Scott]

Exactly.

[Dave Ramsey]

You got to fire them both if you can't get it straightened out.

[Scott]

Well, and that's what I was wondering is like, you know, at what point do I say, okay, it's my job to develop the culture and help? You know?

[Dave Ramsey]

It is your job. You have. This has to be. This has to end. Yeah, yeah. It's not an option.

[Brendan]

Okay.

[Dave Ramsey]

It has to end, and I'm not gonna put up with it. If I own the place, I'm not gonna put up with it. So you've been very careful to draw a line right down the middle of this without laying the blame on one or the other, and yet you have a sense that one of them is more of stirring it up than the other. You think the southern belle's stirring it up with passive aggressive eye rolls?

[Michelle]

It's.

[Scott]

It's both. I mean. Yeah. I mean, I. Yeah, but when she.

[Dave Ramsey]

Once she lays that into that old girl who's got some street time on her street wise, that old girl don't put up with it, and she comes back at her hard.

[Scott]

Yeah, yeah, yeah.

[Dave Ramsey]

But I think the other one's starting it.

[Jake]

I. I think the.

[Scott]

They both started. I've seen them both. Yeah, yeah. No, I.

[Dave Ramsey]

Well, I think the deal is this, then. I mean, at a minimum, we have to establish this. This ends now.

[Brendan]

Okay.

[Dave Ramsey]

Okay. I own this business, and in a place that I own. I don't want people treating each other this way. Yeah, I'm not. Okay, yeah, so this is stopping. So I'm gonna sit down with the two of them together and say, the next time that you guys go at each other like this, the one that starts it, I'm gonna fire them. Zero tolerance from this point forward. I've talked to you about this, and you two are acting like a couple of high school girls, and I'm done. Yeah, I'm done. And you're acting like a couple kids in a movie or something. And this ain't a movie. This is your life. You guys, I treat you with respect, you treat me with respect. You're going to treat each other with Respect. You don't have to like each other. You don't have to go to dinner together, but you at least have to be kind and reasonable to each other. And this constant bickering is done. Yeah, I'm not going to do it. If I have to fire one of you or both of you, I will. And I will start again. I am not going to do this. Part of your job description is to be respectful to the other people that work here. And you don't have to be. You don't have to be. Go out of your way. You don't have to do anything, but you cannot function this way. One of them will say, well, well, that's just the way I am. Fire them when they say that, okay, now you can pull them aside in a moment. You don't have to do it in front of the other one, but just go. What you're telling me when you say just the way I am is you're telling me you're not willing to abide by what I just said. And so our time is done. I'm so sorry, okay? Because it can't fix it if they don't want to fix it. It's just the way I am. I'll give you an example, okay? I had a guy who worked here years and years and years ago, and I really liked the guy. I think I was the only one. He was like the guy on Sesame street, the grouch. Oscar. Oscar. And he was super politically right wing, like just to the right of Genghis Khan, right? Politically. And he had to tell everybody about it. And he was real rough and gruff, and I kind of thought he was fun. Cause I grew up with people like that. He didn't bother me a bit. He just real, like you said, kind of had a few miles on him on the street. And he's just like. He's just gruff, you know, He's a grouch. And the problem was though, that I end up with the guy who's leading him comes into my office and he goes, hey, the last three people he has worked with cried. Oh, yeah, because he was so such a jerk. And two of them were women, you know, I mean, come on. I mean, it's like this guy is a jerk, right? And so I sat down with him, I said, look, dude, you can't do this anymore. Can't do this anymore. He goes, well, it's. You know, I've been here a long time and these people just need to get over it. They need to have thick skin. And I'M like, no, no, they don't. You do. Yeah, nobody's changing here but you. We all treat each other nice and reasonable, and we may not agree. We may not like each other, we may not like the way somebody votes. We may not agree about jokes or whatever, all that, whatever, but at least you need to be calm, kind, compassionate when you're dealing with the other people. Well, I don't think I can do that. And I said, well, then our time here is done. You're making the decision to fire yourself. I'm telling you the terms under which you get to stay. Yeah, I'd like you to stay because you and I get along. I like you, but I'm not going to have people in my building crying because of you. Yeah, that's not happening. They don't cry because of me, and they ain't crying cause of you. And, you know, so I'm pretty blunt, pretty direct and all that, but nobody in here is crying. They're all know I love them, and they all know we're working together to get the job done. And he goes, well, some of them are just doing some stupid stuff. And I said, I don't disagree with that. I just disagree with how you handled it.

[Scott]

Yeah, yeah.

[Dave Ramsey]

So that, that's where you are. You're gonna have to sit down. And I think one of them is gonna say, well, you just have to accept me the way I am. And, you know, I can, I can do that as a person and we can still be friends and I can accept you the way you are, but you can't work here anymore.

[Scott]

Yeah, yeah, yeah. I mean, one of them's showing a lot more willingness to grow and change already. So which one? Yeah, the one who's a little more streetwise.

[Dave Ramsey]

I go back to my original.

[Scott]

Yeah.

[Dave Ramsey]

Mrs. Judgmental passive aggressive Eye Roller is the. Ah, maybe I may be right. We'll find out Scott after this. Stay tuned to the Scott scenario. The Scott as the World Turns. Right? And so the. The soap opera. I. I gotta tell you, man, I admit at times in my building, over the years, not lately, not in the last two decade, but at times I would go home and tell my wife, I think I'm running a freaking beauty parlor. I mean, these people fight and gossip and carry on. I can't seem to get them to quit, you know, So I know the frustration you've got. I completely understand it. But once. But my son says this all the time. He reminds me, because I taught him this saying and then he uses it on me. He Goes, hey, we get in the building what we're willing to tolerate. And so if we're not willing to tolerate it, then we won't get it in the building anymore. Cause it will leave the building. Cause we won't tolerate it. And so you're getting this. Cause you're tolerating it. And so you've got to clean it up. And here's the thing. When you do, the other three team members will breathe a sigh of relief, too, because they're having to come to work, and there's so much electricity in the air that their body tightens up. Their shoulder blades tighten up before they walk. They don't know when the next cat fight's going to be.

[Scott]

Exactly. Yeah.

[Dave Ramsey]

And they're having to work in this environment, too. It's bothering you, and you own it. Think if you were trapped there as one of the other team members, so you are going to get super credibility from the team when you deal with this.

[Scott]

Yeah.

[Dave Ramsey]

And I'm just going to sit them both down and go. You can either do it together, you can do it separate. I don't care. You've already tried it once, so I don't mind doing it together. Normally, I would at least try separately first, but you've already taken a few runs, so I'm gonna sit down and say, ladies, you know, I've been thinking about this, and I'm just deeply distressed. I want a place where everybody likes to come to work and feels good and is comfortable, and you're all's constant bickering and fighting. We've talked about it before. I've just reached the end of my rope on it, and I'm not going to do it anymore. And I want to be very clear with you so that you don't. You don't have some kind of expectation. I'm really, completely done with this. I considered firing you both today, but instead I decided I'm going to just give you a one last chance for both of you. If one of you starts this crap again, that is the last day you work here.

[Scott]

Yeah.

[Dave Ramsey]

And I hate to be that direct. I'm sorry to be that blunt, but I'm just so frustrated with y'. All. You're destroying the quality of all of our lives by going at each other all the time, and we're all tired of it, and so we're not gonna do it anymore. God gave me this to run, and I have to be strong enough to run it. So I'm declaring today zero tolerance from this point forward. And does Anyone have any questions or any comments, one of them may quit. That's happened to me before. Once you get that much up in their face and you're that clear, you don't have to raise your voice. You don't have to use cuss words. You don't have to be unkind. I'm not being unk. I'm just being very, very, very clear.

[Scott]

Yeah, it's direct. Yeah.

[Dave Ramsey]

And you know what? You might use the jump online with our entree leadership stuff and watch Brendan, our CTOs, talk on uncomfortable conversations. And you might use that framework. He says to go into an uncomfortable conversation prepared. I'm doing it more off the cuff up to this point with you on the phone.

[Brendan]

Okay.

[Dave Ramsey]

But he says, go in completely prepared and sit down. Say, all right, ladies, no one is losing their job today. This is going to be an uncomfortable conversation. And you make it really short and you say, does anyone have any questions? I want to be on your team. I want to be here. And I have not. I have failed you by allowing this to go on too long. I should have dealt with it immediately, and now I'm having to deal with it two years later. That's my fault. But, but nevertheless, it's still. It's still where we are and we're still not going to do this anymore. And it's like, swear to God, it's like having two teenagers, I mean, in the house and they're trying to kill each other. It's the same stuff. It's crazy. So. But that happens. It happens with men, happens with women, happens in office settings, happens with blue collar jobs on the job site. This stuff happens all the time. And leadership, if you're strong, you have to step in. And Scott, the lesson you will learn from this is the sooner you nip it in the bud, the easier it is to deal with and the higher the probability of success of dealing with it. This has gone on so long for two years that I'm pretty sure you're going to lose one of them. You may lose both of them. And I'm okay with that if I'm you, because I'm really not going to work in an environment like that ever again. That's a good question. And you're a good man. You're a kind guy. You've been putting up with this crap. And I used to do the same thing. And now, now I'm not as kind. Now I just get right to it. I'm kind, but I. I just don't have any patience for it anymore. I just get right to it. These days, business as usual is anything but. Tariffs make trade policy a moving target. Supply chains are squeezed and your cash flow is tighter than ever. If your business can't adapt in real time, you're in a world of hurt. That's why you need NetSuite by Oracle. Trusted by more than 42,000 businesses, including Ramsey Solutions. You need to see what's happening, what's stuck and what's costing you and how to fix it. NetSuite is the number one cloud based business management suite because it helps your business make the right decisions fast. It brings accounting, financial management, inventory and HR into one place so you're not left shuffling a dozen different spreadsheets. That gives you the visibility you need to make quick decisions based on actionable data. And NetSuite AI automates everyday tasks so your team can focus on strategy. It's one system for full control and no guesswork to tame the chaos. And right now, if your business is doing a million or more in annual revenue, download NetSuite's free ebook Navigating Global Trade. 3 insights for [e-mail] Ramsey that's NetSuite.com Ramsey if you're stuck in the day to day operations of your business and it feels like there's a never enough time for the important work that'll actually grow your business, well, you need to come to Entree Leadership Master Series. This conference is where business owners like you come to get a course, custom growth plan and learn the tactical strategies that'll make the most of your time and resources. Join us in Frisco, Texas this October 19 through 24. Go to entreeleadership.com masterseries or click the link in the show notes and you'll be there before you know it. Michelle is in Salt Lake City. Hi Michelle, how are you?

[Michelle]

I'm great, thank you.

[Dave Ramsey]

Good. How can we help?

[Michelle]

So I am the managing member of a multi member LLC that owns two restaurants, Full service restaurant. And I am also the operations manager of one of the restaurants. That restaurant is currently functioning. The other one is not. I have.

[Dave Ramsey]

By functioning you mean it's not open?

[Michelle]

Yeah, it's not open.

[Dave Ramsey]

Why did it close?

[Michelle]

Well, that's part of the story. Okay. We had a couple of partners that started it and then had a falling out and closed it and one left town and one wanted a divorce from us and that's. It's a big mess. It's a huge mess. Anyway, so the only ship that won't.

[Dave Ramsey]

Sail is a partnership Right, exactly.

[Michelle]

I know this is. So I never anticipated being in this position where I am the key person in the business. I was just a small. I was doing little secretarial work, like that's what was my job. But when they fell apart, I had to take over. So now I'm looking at 375,000 worth dollars worth of debt that was created by this other restaurant and realizing that if I were to leave, they would all fall apart and if I were to die, it would become my. My husband's problem. So I'm.

[Dave Ramsey]

Signed the note.

[Michelle]

So we have four partners. All of us are guarantors on the.

[Dave Ramsey]

Including the two dubers that closed the restaurant and took off.

[Michelle]

Yeah, yeah, yeah.

[Dave Ramsey]

Do they have assets?

[Michelle]

The lawyers? The lawyers are working on that right now. I've got them working on that right now. So we'll get that figured out. But my problem is if I were to. If something were to happen to me, I don't want my husband to have to deal with this mess. So I'm trying to figure out what the best way to go about creating a secession plan that would help my husband and not benefit those two groomers.

[Dave Ramsey]

Buy life insurance on you?

[Michelle]

Yes, life insurance. And who is the beneficiary? Just my husband.

[Dave Ramsey]

Your husband has a pile of money. He can use the money as he sees fit to get the thing wrapped up and closed up and then try to recoup. But I mean, you take a half million dollar policy out on you that'll pay for some lawyers and pay off the debt, and then he can use the lawyers to try to get some of the money out of all the other three, four, there's five people, right?

[Michelle]

Yes.

[Brendan]

Okay.

[Dave Ramsey]

The other restaurant, is there a piece of real estate involved or just a lease?

[Michelle]

There is a lease. And those two are actually the signees on the lease, the guarantors on that lease. So they still have that on their plate.

[Dave Ramsey]

So you're not on the lease?

[Michelle]

I am not on the lease.

[Dave Ramsey]

And the LLC is not on the lease. The individuals are.

[Michelle]

Correct.

[Dave Ramsey]

That's awesome. Yeah. Let that landlord have that.

[Brendan]

Okay.

[Dave Ramsey]

Is there any equipment in there that's yours?

[Michelle]

Yes. And that's all.

[Dave Ramsey]

Is there a leasehold lien on it by the landlord?

[Michelle]

Yeah. But no, by the bank, because on the SBA loan.

[Dave Ramsey]

Awesome. And I get the equipment.

[Michelle]

Yes, we're working on that too. That's what the lawyers are doing. Yeah. I mean, how profitable is this?

[Dave Ramsey]

The one that's running?

[Michelle]

So I did about 800,000 last year. I'm looking like, I'll be about 900,000 this year.

[Dave Ramsey]

What's the net on that?

[Michelle]

Probably about a hundred thousand net. So, yeah, not great, but.

[Dave Ramsey]

How much you gonna get out of this equipment?

[Michelle]

Not much.

[Dave Ramsey]

Yeah. Use restaurant equipment.

[Michelle]

Yeah, yeah, yeah. No, I mean, it's. We've looked at lots of things. We're looking at bankruptcy, whatever.

[Brendan]

You're not bankrupt. I want to go, but you're not bankrupt.

[Dave Ramsey]

You're probably.

[Michelle]

Exactly. Yeah, exactly. So. Well, with the other business, with the one that's not working, but. Because all the debt is in that business. Really. But.

[Dave Ramsey]

Oh, you don't. Well, but it has your name on it.

[Michelle]

Yes.

[Dave Ramsey]

Yeah. If you bank, you have to bankrupt personally to get rid of the. It's going to come after you anyway.

[Michelle]

Yes.

[Dave Ramsey]

Bankruptcy does not help. Bankruptcy is not going to help right now at all.

[Michelle]

No, I know, which is why I don't want to go there.

[Dave Ramsey]

Okay, so what's your. What's your path forward.

[Michelle]

In terms of.

[Dave Ramsey]

What if you live. Sorry, we figured out what to do if you die?

[Michelle]

My path forward is to make it as profitable as possible. So pay off as much debt as possible so I can sell it and have something left over. That's the path forward.

[Dave Ramsey]

But so the.

[Michelle]

I don't know if that's gonna happen.

[Dave Ramsey]

The current ownership of the one you're in is all five of you still. Or one of them got bought out.

[Michelle]

Yes. No, we've not bought anyone out.

[Brendan]

Okay.

[Dave Ramsey]

He wanted a divorce. It's not final.

[Michelle]

Yeah, he wanted the divorce. I said, okay, fine, you take part of the debt, we'll take part of the debt. He said, okay. We sent him the papers. He said, no, no, I didn't really mean that. Yeah, it's a mess.

[Dave Ramsey]

Not that part. Yeah, I wanted the other part.

[Michelle]

Yeah, I wanted everything. I wanted you to give me everything and not have to pay for it. That was basically his response. So. Yeah, so we're. Again, we're with the attorneys on that right now, but yeah, I just, I was just wondering yesterday. And what about my partner who has stuck with me because he's put a lot of money in. Do I take out a policy that benefits the business for him so he can buy out my shit? I mean, like, I just, I don't know how to.

[Dave Ramsey]

Yeah, you could, you could do a buy sell. I would want a. That, you know, if you just took out a policy that paid off the debt for him. But there's two other partners that are with you, right?

[Michelle]

Correct. Yeah.

[Dave Ramsey]

Yeah, but I mean, it would just be for the, for the entity, you could leave the LLC the money to pay off the debt, and I would also leave your husband some money because there may. You may need to, you know, you know, are you healthy?

[Michelle]

Yes.

[Dave Ramsey]

How old are you?

[Michelle]

50.

[Brendan]

Okay.

[Dave Ramsey]

Yeah. I mean, you can go either way. We could, we could either buy a $500,000 policy or you could buy a, you know, $750,000 policy and, you know, and split the beneficiary up and just say there's beneficiaries, some to the llc, some to my husband, and then one of them gets it paid off. Right.

[Michelle]

Okay. Yeah.

[Dave Ramsey]

But I would draft a buy sell agreement that includes death upon death. That. And really all three of you ought to go buy policies if you're going to do that.

[Michelle]

Yeah. Okay.

[Dave Ramsey]

The three remaining partners that if any of you die, it pays off the debt for the other two and gives you the money to buy out, which is not. There's no buyout. It's set free. The other one. Because all we're trying to do with your husband is set him free. All we're trying to do with their wives is set them free, not profit.

[Brendan]

Okay.

[Michelle]

Right.

[Dave Ramsey]

And then of course, the best thing that could happen is if you could get somebody to just give you $350,000 for this, take it and run. Would the other two take it even though they got money in it?

[Michelle]

I don't know. Probably not.

[Brendan]

Okay.

[Michelle]

I don't know. I mean, they've been so their answer. Right. That doesn't matter.

[Dave Ramsey]

But they've been what?

[Michelle]

Well, no, they just. They've been non communicative. So.

[Dave Ramsey]

No. Your current good partners.

[Michelle]

Oh, my. My good partners. Oh, yeah, I think they would. I think they would.

[Brendan]

All right.

[Michelle]

Sorry.

[Dave Ramsey]

Yeah.

[Brendan]

Okay.

[Michelle]

So. Okay, so I can have multiple beneficiaries.

[Dave Ramsey]

Yeah. Or you could just take two policies. Either one. Either one's fine. Cheaper to have one, but not much.

[Michelle]

Yeah.

[Dave Ramsey]

Save you 100 bucks or something. But the policy fees. But the. Yeah, that. That's if you die. I'm still trying to figure out what your best way forward is. Yeah, you're right. Get it up. Get it up where it's making a Prof.

[Brendan]

It.

[Dave Ramsey]

And pay off the debt. The problem is you're paying off the debt for these, the two doofuses that are gone. You've got to clear them to have sanity, because otherwise you're working for them for free.

[Michelle]

100%. Yes, I know that. And I mean, the last, the last year, I've just really been. Just trying to get my head on Straight. And now that it's on straight, I'm like, why am I. Why am I supporting these guys?

[Brendan]

Yeah.

[Dave Ramsey]

Yeah, absolutely. And so I'm putting on an attorney all up in their business where they can't breathe because all they got is attorneys coming at them from the left and the right. I don't know what else to do since you can't get them to behave. But this is the problem. This is the problem. And the more partners you have, folks, the higher the probability of this. She got Two good ones, two bad ones. That's hers. She's a fit. Run at 50%. If you get that, you're pretty good, actually, overall. But it ain't over yet either, so we'll see how it turns out. Ouch. I'm sorry, Michelle. Sorry. Y' all are facing this. Yeah. You got. You got two big problems. A big pile of debt and some doofus partners. And, yeah, you got to work through both of them to end up prosperous here and that. You. You see what your challenge is? You got it in front of you. Go get them, kiddo. Go get them. Thanks for hanging out with us. If you want to help us out here on the entre. On Entre leadership, we would love to have your help. You can do that by clicking the follow button, the subscribe button, the five star review. You leave that. That helps share the show, let people know we're here. When you do that, it helps a lot with the algorithms on the Internet. It pushes everything this way. And we deeply appreciate it. Thank you very much. Chris is in Des Moines. Hey, Chris. Hey, Dave.

[Chris]

Thanks for taking my call.

[Dave Ramsey]

Sure. What's up?

[Chris]

Yeah, I'm vice president of a general contracting business, and we got 21 employees, and we do about $10 million in revenue per year.

[Dave Ramsey]

Good for you.

[Chris]

I'm wondering how I can manage employee time off that goes beyond the allotted amount of PTO with our expectations to be results oriented.

[Dave Ramsey]

Help me what you're talking about, why would they want time off beyond pto? Well, they.

[Chris]

They take unpaid time off beyond their PTO allotment.

[Brendan]

Who.

[Dave Ramsey]

Who said they could do that?

[Chris]

I guess we didn't say they couldn't. Oh, we want to be generous.

[Dave Ramsey]

Generous or you can't get your work done because they're not at work?

[Jake]

Sure.

[Dave Ramsey]

I mean, that's. We give people all kinds of time off around here beyond their allotted pto, but it goes before our HR committee and the HR committee decides if this is an act of grace, like, you know, I've got one lady that's Getting cancer treatments right now. Well, she's got a lot of extra time and it's paid time off. It's not unpaid. I don't do unpaid time off because I want to take a vacation and I've used up my pto. You need to be at work. That's why we hired you to get the work done. And so we just don't do that. I mean, occasionally we do, but it's very rare. So this, I kind of work when I want to. That's like a part time job or a contractor or something. And if you want to do that, you need to go work as a part time job or a contractor somewhere. But here we hired you for this salary amount and we need the work done. So I just don't want to come to work today or we're going on a fishing trip after I used up my pto. No, that's not really a thing we do here.

[Chris]

Yeah, the PTO is we give three weeks of pto. We used to do sick leave and vacation leave, but we didn't want to manage the difference.

[Dave Ramsey]

So you just lumped it all in together. Most people have. We have to. Yeah. We don't have anything except pto. And we're generous with the pto. I forget what it is right now, but it's a bunch. And you know, but if I don't mind people having time off, that's not the point. But sometimes what we've run into is people don't manage their year very well and they nickel and dime their way through the pto and then they look up and go, but I've got a vacation planned. I'm like, well, yeah, I guess you do. It's going to be a long one. No, I'm kidding. I wouldn't do that. But it's tempting. You know, it's like you think about it, it does go through your mind, right? Yeah. So I mean, but I think you got to set your expectations at the higher.

[Chris]

Sure.

[Dave Ramsey]

And if you reset expectations after the whole group's been doing one thing and you go, hey guys, we've been pretty lax on this and we're not gonna be anymore. Cause we're not getting our work done because we're a results oriented organization. We can't get our work done if you're not at work. And so you can't just take time off beyond pto. The only time you can do that is some kind of an emergency situation that is approved and we may approve it to be paid if it's a situation we're extending grace, but we're not gonna just take time off. Now. There's things under the Family Leave act that you're required to do that. That's not what I'm talking about. You have to abide by the law on the Family Leave Act. Okay, but I'm talking about somebody just says, I just really don't want to work this week. You know, that's. No, I can't really go there. So. But I think when you re. This has been going on a while, it's kind of become part of the culture. And when you make an announcement, staff meeting, this is what we're doing, guys. It's getting out of control, so we're going to have to tighten it up. We are now on a pta PTO only time off with the exception of. You get approval from me and I'll give you approval. Paid or unpaid, depending on what situation is. But I'll go ahead and forewarn you. We're not doing a bunch of unpaid for miscellaneous stuff. We're doing unpaid according to fmla, that's all. And, and we're doing paid. If there's a situation where you've got a problem in your family and you know, just came back off a two week vacation and then three weeks later your grandmother passed away and you want to go to the funeral for two days, I'll help you with that. Okay, we're kind about that. And we may send flowers to the funeral home. We love our people. We're not mean to our people. But I just want to, you know, I just came off vacation and I think I want another one, you know. No. And I don't really care if I get paid or not. That, that's. That means I've hired the wrong person. How much of that do you have? Out of 21 people.

[Chris]

In 2024, it was four salaried employees. And in 25, I'm anticipating five will go beyond. They're spending too fast.

[Dave Ramsey]

Their budget is going okay. And do they fall in a particular category of job description? Are they all somethings?

[Jake]

Nope.

[Chris]

Various different positions within the company, but tends to be younger people.

[Dave Ramsey]

Yeah, that's what we run.

[Chris]

Generational.

[Dave Ramsey]

That's what we run into. Yeah. And I want to work from home instead, so I'll just quit and. Okay, we work from work. So you'll just have to. I'm sorry about that. But you know, and so yeah, that's. That's one of the areas we're running into it most. And some of it has to do with work ethic. Yeah.

[Chris]

And it seems like it's an entitlement.

[Dave Ramsey]

To more time off. Yeah, yeah, yeah. Like you think you're. You think you're French or something. Yeah.

[Chris]

Plus the six holidays. And we give Christmas Eve and Friday after Thanksgiving.

[Dave Ramsey]

Oh, we do all that. And then we give, you know, extra time at 4th of July. We do extra time on this and that. We're very generous. And then on top of that, we still get people that just don't want to come to work. So. Yeah, it doesn't happen much, but it's enough that you can tell I'm somewhat aggravated about it. But the. Yeah, like you are. So I don't know. 4 out of 21. Do you address the whole company or do you just address it to them?

[Chris]

Yeah, we've been trying to be generous.

[Dave Ramsey]

I'm not being generous. I'm saying one off. Pull the 4 in 1 at a time and go. Not doing this.

[Jake]

Sure.

[Dave Ramsey]

Okay. When your time runs out, you're gonna have to wait till your renewal date to take time off. Well, I'll just take it unpaid. No, you don't understand. We don't do unpaid time off anymore. You didn't know that. And then you could just make a gentle general announcement to the whole company. Hey, guys, manage your PTO carefully because we're not doing any unpaid time off except for family emergencies or FMLAs. Sure. And so other than that, you're going to be at work, so y' all need to manage this pretty careful. And then I'd probably have a more detailed one off conversation with these four. And we definitely are going to address it in private with the individual. We're definitely gonna do that if we see there's a problem or whatever. But I'll tell you, the instances we've had that are not aggravating are ones. And we do extend grace. There, like I said, is where they just used up their last pto. They got four months left, and then something bad happens in their family and they do need to go to a funeral or they do need to take. The husband is diagnosed with a brain tumor or something, and they've got to take some time that's gonna be paid. Time off as an act of grace from people who love you that happen to also employ you. That's the way that's gonna be. That's different than I'm just sloppy, immature, and don't have any work ethic. And if that's the case, you're just not gonna be here. Cause you won't be here anyway much. So it's okay. It's gonna go work out for you. And pretty much once I set that, they'll usually exit and go do some work from home thing within about six months. They won't stay because I want more flexibility and work life balance. Translation. I want to be paid for eight hours from working from home while I really only work about four. That's what's the problem with the work from home is the productivity goes off the cliff. The number of people that actually work, the number of hours they're paid for when they work from home is close to zero. So no one does. They're too busy making a burrito for the dog. I mean, it's just, you know, it's nuts. So anyway, that. That's the same category of what you're dealing with. It's the same place you're finding this. So they may need to get one of those jobs if that's the flexibility they're looking for. But I don't have one of those jobs, so. I don't have one of those. Well, I want a job that does that. I'm sorry, I don't have one of those. I want a job that has. I'm sorry, I don't have one. This is the job I've got. And if you want to be here, this is how we do it. And so if you want to be a we, this is what we do. It's a good question, Chris. I like it. Thanks for letting me discuss it with you. I think you're going to handle it well. You sound like a very solid, mature leader and I'm probably going to have one off discussions with each of the four and then a general reset with the whole company. Let everybody know the information. Might even just send out a real brief email. Hey, guys, just be be aware. A couple folks had trouble managing their pto and I want to make sure everybody's on notice that this is where we are. And then it's in writing and just put that in the HR file and go on with your life. That's how it works, the whole thing. So good stuff. Hey, man, appreciate you calling. That's good. You're a good guy. You're gonna be a great leader. You already are a great leader. You're doing a good job. Very cool. Does leading your team feel like herding cats? Even if your business is winning financially, a misaligned team will create new fires for you to put out every single week. But with Entree Leadership Elite, you'll align your Team and hold them accountable so you can stop herding cats and start scaling your business. To join elite, go to entreeleadership.com elite or just click the link in the description if you're listening on YouTube or on podcast. Thanks for joining us, America. We're glad you're here. Jake is with us in Pittsburgh. Hey, Jake, what's up?

[Jake]

Hi, Dave. How are you today?

[Dave Ramsey]

Better than I deserve. How can I help?

[Jake]

So I'm an associate attorney at an estate planning law firm. We have 17 members, three attorneys, and four staff. We did about 710,000 last year, and we are on pace for about 875 this year. I'm 27, and at the start of this year, I was offered a chance to be a partner at the firm. And so my question is, should I accept that offer of partnership at my firm?

[Dave Ramsey]

Okay, what do you make?

[Jake]

Salary? Yeah, salary just got bumped up to 100,000.

[Dave Ramsey]

And you're one of the three lawyers?

[Jake]

Yes.

[Dave Ramsey]

The other two guys own it.

[Jake]

So we started with a founder who retired at the start of this year. He started the firm back in 2010.

[Dave Ramsey]

He's no longer a partner, right?

[Jake]

No longer a partner. And so there's the managing partner, and then there's myself and another associate.

[Dave Ramsey]

Oh, so there's only one guy owns.

[Jake]

It right now, right? That's correct.

[Brendan]

Okay. All right.

[Dave Ramsey]

And he's offering both of you a partnership?

[Jake]

That's correct.

[Brendan]

Okay.

[Dave Ramsey]

And then you've got seven team members that are your overhead.

[Jake]

So it's seven, including the three of us.

[Dave Ramsey]

Oh, I'm sorry. Four team members, 14 members that are your overhead.

[Brendan]

Okay.

[Dave Ramsey]

Because you guys are the revenue producers. That's correct. You made a. Your salary or your total income last year is 100k.

[Jake]

So my total income last year was probably closer to 80.

[Dave Ramsey]

Oh, this year you're gonna make 100.

[Brendan]

Okay.

[Jake]

Right.

[Brendan]

Okay.

[Dave Ramsey]

All right, I'm with you. So what? The only, quote, partnership that I have seen work long term are medical partnerships and law firms, because it's a different structure of partner and a different process than two guys opening up a heat and air together or electrical engineering firm together. Those typically don't last 10 years outside of there. So I'm willing to entertain this discussion versus the lady earlier in the show that has five partners in two failing restaurants. And that whole thing's a nightmare. So this is quite different. So what are the terms of partnership?

[Jake]

So this is where I pick up my shovel and start digging a hole for myself here, Dave, because the terms are not exactly certain. Right. Now, we've had verbal discussions, but it comes down to the managing partner doesn't want to require us to buy in to the firm. So he's more or less gifting myself and the other associate 20% equity stake in the firm. And so we're not buying in at all. He's going to give us a seat at the table. And up until recently, we had been discussing certain requirements as far as the revenue production that each of us would be expected to maintain in order to maintain our seat at the table. But we've since gone a different path in our discussions. So as I understand it, it's right now projected to be a. An unconditional, just sort of gift.

[Dave Ramsey]

So what is the purpose of you being a partner?

[Jake]

Well, I think part of the purpose, as it's been explained to me, is that the managing partner feels a little overwhelmed with the business, and he would like to delegate some of the managerial authority to myself and the other associate.

[Brendan]

Okay. All right.

[Dave Ramsey]

And what is the exit in the event of death, disability, or retirement?

[Jake]

Yeah, so we don't. We don't really have a. An articulated vision for that.

[Dave Ramsey]

Do you know someone at another law practice, even if they're not in Pittsburgh, that you could ask for some examples, some best practices on how to structure this?

[Jake]

Yeah, I have some mentors that I've reached out to.

[Dave Ramsey]

I think they will know better than I know, because what I want to do is find an old law firm that has 40 partners or 20 partners, or at least 10, and they've got comings and goings. They've got death, disability, they've got retirement, they've got all kinds of different. And they've got people that they threw out because they weren't working or whatever. And I want to know what their structure looks like because it survived a while.

[Jake]

Right.

[Dave Ramsey]

Rather than the three of you sitting around and making this up. That scares me.

[Jake]

Yeah, Especially because this isn't our practice area. And so it kind of feels a little bit out of our depth to be structuring a business organization as estate planners.

[Dave Ramsey]

Oh, you mean the actually business structures, not your practice area? Yeah, that's fine. That's not a big deal. But I mean, if you were a dentist, I'd tell you the same thing. Let's find somebody that knows how to do this, that the agreement that's in place, the processes that are in place and agreed to have survived at least a decade. And I want to see their document, I want to see their structure. What's the term sheet, so to speak? Of their approach. And then that tells me if I mimic that, I've at least got a shot at this working.

[Jake]

Right.

[Dave Ramsey]

Most law firms, I'm not aware, I don't remember law firms having people buy in. Anyway, when you make partner, it's usually because you worked your butt off for a period of time and they want to keep you around, and so they make you partner so that you share in the profits of the law firm and you create your revenue stream as well.

[Jake]

Right. Okay.

[Dave Ramsey]

And that's typically what the motivation behind it. And so today you get paid a salary or an hourly or whatever, but they're making a profit on every one of your hours. Right.

[Jake]

Well, no profit is another concern for why I might turn down this opportunity. So we, like I said, did 710 last year. We're on pace for about 875 this year. The problem is that when the managing partner retired or the founding partner retired, the managing partner increased payroll across the board. And we're projected right now by MyMath for about 900,000 as our annual expenses, which is projecting for about a $25,000 loss. So there isn't really any profit in the firm right now.

[Dave Ramsey]

Yeah, that's kind of a problem.

[Jake]

Yeah, yeah.

[Dave Ramsey]

You want me to become a 20% owner in something that loses money? Thank you for the gift. Yeah, yeah.

[Jake]

So it kind of feels like we've been. When the founding partner was running things by himself, it was sort of a treadmill, operational treadmill operator type of stage. And then he added somebody else, the current managing partner to the treadmill with him. And now the founder left, and the managing partner is by himself on the treadmill, and he's looking for other people to join on the treadmill and power it.

[Brendan]

Yeah, yeah.

[Dave Ramsey]

That's where you're exactly right.

[Brendan]

Yeah.

[Dave Ramsey]

Yeah. It might be wise then. A, you do need to get some best practices that I can't provide you. I don't have the knowledge as far as how to structure something. B, it might be wise to tap the brakes and let's get the thing profitable. And that's your math. Let's see his math. And, you know, the three of you sit down together and say, okay, we're going to work to help you get it profitable. When we get it profitable, let's revisit the thing. Because there's no point in making us a 20% owner and a losing endeavor. It doesn't do you any good. Doesn't do us any good because I'm not writing you checks to become an owner. I can tell you that for sure.

[Jake]

Right.

[Dave Ramsey]

And so I think you tap the brakes. I think it's wise for him and you. Let's get this thing up and running. Let's get the. The wrinkles ironed out after the other guy left. And we got to get the overhead to match the revenue. Let's all jump in here and create a bunch of revenue, a bunch of billable hours. Let's go to get our work done and let's get the thing to a million five and it's making three or four hundred grand. And then we got something to talk about. And then if you want to give us a seat at the table, fine. Meantime, if you need a little help with the administrative stuff, I'll throw in any hours I got. I'll just help you. And let's just try to get it going because it's a small operation.

[Jake]

Sure.

[Dave Ramsey]

This is not. It's not 60 or 70 people running around the building. I mean, the two you two lawyers can help him manage the three people or four people. That's not really. And a little bit of administrative stuff so I can take some of that on as just a part of being an employee here. That's fine. And meanwhile, let's go make a little money and then let's revisit this in a year when we get. If we can get it running and get things moving. And then there's a benefit to it. You don't have to give me 20% to get a little help with the admin. I'll just help you. That's what I would do today. I don't think you got anything here you want. And so there's no point in taking. Doesn't do any good at all. I wouldn't go that way. So you're a good man. You're thinking this through. You're wise. Your analytical skills, of course, are excellent. And so I think you just, you know, thank him for the generosity and let's go. Go from there. So there you go. 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 joining us on entree leadership.