My Employees Keep Wanting More Time Off (Bad Sign?)

Summary

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The EntreLeadership Podcast

Episode: "My Employees Keep Wanting More Time Off (Bad Sign?)"

Host: Dave Ramsey, Ramsey Network
Date: September 29, 2025

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Episode Overview

In this episode, Dave Ramsey hosts a wide-ranging Q&A with small business owners tackling critical leadership challenges. The main focus kicks off with managing employee time-off expectations in a post-COVID culture, especially in small businesses where operational coverage is crucial. Additional segments include advice on timing and strategy when selling a successful business, handling disengaged team members, and systems for scaling up an e-commerce venture. Throughout, Dave infuses tough love, clear policy recommendations, and hard-earned wisdom from his decades leading Ramsey Solutions.

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Segment Breakdown & Key Insights

1. Navigating PTO Expectations in Small Businesses

(00:50 - 10:27)
Caller: Denise from Philadelphia

• Denise’s Situation:

  • Husband-and-wife pest control company, grown from 2 to 13 employees, $2.3M revenue.
  • PTO policy: 5 days after one year, increasing with tenure.
  • Facing pressure from younger employees to allow unpaid time off beyond allotted PTO.
  • Employees are burning through PTO early in the year and expecting additional unpaid time off for non-emergencies.

• Dave’s Advice:

  • Draws the line against casual unpaid time off: “I hired you to get a job done. If you don’t get the job done, I don’t need you.” (04:00)
  • Strict policy: Only unpaid leave for medical emergencies, not leisure.
  • Highlights organizational impact: If many employees did this, essential work wouldn’t get done.
  • Importance of upfront communication: “We do a better job at onboarding explaining this is not gonna happen. So before it even comes up...we’re saying, OK, here's how we do things. We do not do unpaid time off.” (08:01)
  • Use difficult conversations and enforce consequences to uphold culture and standards.

• Notable Quotes:

  • “This is grown up time now. You’re no longer in high school, you no longer get summers off. Your mommy isn’t doing your laundry anymore. And you’re now a grown up. So it's time to do that. Time to step up.” — Dave Ramsey (09:25)
  • “If you have a crisis, we’re probably gonna give you what we call grace period... You just want to go on a hike? Sorry, it’s not an option.” — Dave Ramsey (08:01)

Memorable Moment:
Denise and Dave commiserate on shifting generational expectations, with a humorous exchange about the rise of paternity leave and the “old-school” attitude toward work.

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2. When Is the Right Time to Sell My Business?

(12:55 - 20:40)
Caller: Savannah from Baltimore

• Savannah’s Situation:

  • Spa owner, 18 years, thriving post-COVID.
  • Business is maxing out profitably ($2.5M revenue, $800K+ net).
  • Now semi-absentee, working 4–6 hours/week, strong delegatable team.
  • Considers selling but is unsure whether to cash in now or keep reaping high profits.

• Dave’s Insights:

  • Urges against premature sale solely out of fear or “timing the market.”
  • “Let’s fast forward a year and a half. You’re putting a million dollars a year in your pocket. Why would you sell it?” (16:10)
  • Suggests selling only if work becomes unenjoyable or a truly attractive offer arises (high multiplier, $5M+).
  • Dispels fear of “missing the top” — the business is worthwhile as long as it continues providing satisfaction and strong income.

• Notable Quotes:

  • “There’s no universal wisdom that says you got to get out just because you’re on top.” — Dave Ramsey (16:55)
  • “This idea that everything should be built so that it can be sold and I can maximize my profits at the top is a very utilitarian view of business, and it doesn’t have much soul.” — Dave Ramsey (20:20)

Memorable Moment:
Dave celebrates Savannah’s success: “I’m proud of you. Well done.” (19:59)

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3. Confronting Disengaged Employees (“Quiet Quitting”)

(20:40 - 31:37)
Q&A from Tanya in California

• Situation:

  • Tanya suspects a team member has checked out, doing only the basics.
  • Unsure how to address the issue without seeming petty.

• Dave’s Approach:

  • Engagement and initiative are non-negotiable cultural values; minimum effort isn’t enough.
  • Immediate, direct “difficult conversation” to surface issues, with openness to underlying causes (personal struggles, etc.).
  • Makes it clear: “If your spirit leaves the building, you should take your body with it or I’ll help you.” (23:30)
  • Do not tolerate disengagement, or it will infect company culture.

• Notable Quotes:

  • “No one wants to work with people who are mailing it in... If you’re excellent at your job, but you work with a doofus who’s mailing it in, then you don’t... your team doesn’t look good.” — Dave Ramsey (25:40)
  • “When you tolerate someone checking out... you are tolerating lack of productivity, lack of care... and it will spread through your organization.” — Dave Ramsey (27:07)

Memorable Moment:
Dave recounts confronting an employee who rolled her eyes during a staff meeting—emphasizing a leader’s obligation to address disengagement head-on.

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4. Scaling an E-commerce Side Hustle: From Treadmill Operator to Pathfinder

(31:37 - 39:55)
Caller: Scott from Houston, TX

• Scott’s Situation:

  • Side e-commerce business ($1M sales, $170K projected profit), plus day job.
  • Operates with two virtual assistants; wants to hire an inventory manager.
  • Uncertain about how to split profits between personal pay, new hires, and retained earnings.

• Dave’s Playbook:

  • Systematically build retained earnings (suggests 10–20% profit set aside).
  • Hire for the right reasons and train meticulously: “They’re not going to produce any results that you wouldn’t have produced by yourself in the first six months, because you’re going to be sitting in their lap anyway.” (37:00)
  • Consider incentivizing growth (e.g., $20K bonus if sales hit $1.5M).
  • Path to growth: one solid hire at a time, build outwards, don’t relinquish control prematurely.

• Notable Quotes:

  • “You can delegate to someone easily when you trust their competency and their integrity. And the only way a sane person can trust someone’s competency and integrity is by hanging out with them and observing them.” — Dave Ramsey (37:49)
  • “Go from owning a job to owning a business, right?” — Scott (39:31)
    “That’s the one, man. That’s the one.” — Dave Ramsey (39:33)

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Notable Quotes Recap

• “I hired you to get a job done. If you don’t get the job done, I don’t need you.” (04:00, Dave Ramsey)
• “This is grown up time now. You no longer get summers off.” (09:25, Dave Ramsey)
• “Let’s fast forward a year and a half. You’re putting a million dollars a year in your pocket. Why would you sell it?” (16:10, Dave Ramsey)
• “If your spirit leaves the building, you should take your body with it or I’ll help you.” (23:30, Dave Ramsey)
• “Go from owning a job to owning a business, right? ... That’s the one, man.” (39:31–39:33, Scott & Dave)

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Key Takeaways

• Set Clear Boundaries: PTO and work attendance policies must be clearly stated, enforced, and communicated both in writing and verbally.
• Hold Firm on Culture: Leaders have both the right and obligation to address disengagement and quiet quitting — it’s not nitpicking.
• Sell Only for the Right Reasons: Don’t feel pressure to sell a thriving business unless you want to, or the offer significantly outweighs ongoing value.
• Systems Fuel Growth: Building retained earnings and extensively training hires form the foundation to transition from “operator” to business owner.
• Leadership Requires Difficult Conversations: Enforcing standards, even when uncomfortable, is crucial to maintaining team performance and company health.

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Useful Episode for:

• Small business owners struggling with PTO requests post-COVID
• Leaders worried about disengaged staff
• Entrepreneurs debating selling at a perceived "peak"
• Operators wanting to scale from solo act to sustainable business

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Transcript

[A]

From the headquarters of Ramsey Solutions, this is entree Leadership, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host with over 30 years of experience leading in the trenches right alongside you. If you got a question you want to ask on the show, you can fill out a [e-mail] ask, or you can call us, leave a note, and we'll get back to you and get you on the show. 844-944-1070 is the number. That's 844-944-1090. Denise is in Philadelphia. Hi, Denise. How are you?

[B]

I'm great, Dave. Thanks for taking my call today.

[A]

Sure. How can we help?

[B]

Well, my husband and I started a pest control business here in Pennsylvania about 2011. Just he and I in the dining room, as most stories start. And since then, We've evolved to nine technicians, a salesperson, two office people, and our revenue last year was 2.3.

[A]

Way to go. Good for y'. All.

[B]

Yeah, we were. We're proud. And we got good people.

[A]

Good.

[B]

We have really good people. And trust me, that doesn't happen every year. Right now, I can say it.

[C]

Knock on wood.

[A]

Amen.

[B]

Well, my question is, and I think I've noticed a bit of a shift since COVID but I'm having a hard time navigating what employees are expecting in the way of benefits, specifically in a small business climate. What is a reasonable amount of PTO for my people to expect?

[A]

Well, I mean, personal time off is sick time and vacation time combined. And, you know, in a small business, you know, two, or depending on how long they've been with you. I mean, we start off with a couple of weeks, and it goes up to three, four, five weeks over time. You know, somebody's been with me 20 years or whatever, and, you know, so it does. They build that. But our experience has been depending on the age group that you're dealing with, they view this differently. Is that what you're running into?

[B]

I certainly am. I mean, I'm at the old crotchety age of about 60. And certainly folks that are younger have different expectations. We give them an employment letter that states the tier on know where you are with one year, two years.

[A]

What do you give them? What do you give them at one year?

[B]

So one year, we're just. We're giving them five days. They just walk through the door. They start with this. They'll have five days for that year.

[A]

To start, and then the next year what?

[B]

10.

[A]

Okay.

[B]

And then the next year 15, and then when we hit five or 20.

[A]

Yeah.

[B]

And so I'm, I'm. We're. And I've always considered. And I've raised that over the 15 years that we've been in business that's been adjusted.

[A]

So what is the, what's the pushback that you're getting this. That's caused to ask the question.

[B]

I'll tell you what, I've got, you know, a small group here, you know, less than half of my folks, they're using their PTO in the first six months of the year and then they're continuing to request time off the last half of the year, but they say it's, it's not paid time, so they feel as if that's an acceptable thing to expect now.

[A]

No, it's not. I hired you to get a job done.

[B]

There you go.

[A]

If you don't get the job done, I don't need you. Okay, well, I'll give you some time off without pay. A lot of it.

[B]

Infinite amounts. I, I think that every day. But I don't say it, Dave, but.

[A]

No, I mean, we've had that conversation lately too. We've got, as you know, we've got over a thousand folks and the, there is a group that we're running into that is running through the PTO and then coming in and requesting exact same thing. And our policy has been only if there's a medical emergency, otherwise you just need to be at work. We hired you to work and we need a certain number of hours of production out of you a year. And that involves five days of PTO or 10 days of PTO. And if you can't give me that production and just cause you know, I'm going to go on vacation now that I've run through my pto, but it's unpaid, so you shouldn't be concerned. No, I'm concerned. You're supposed to be at work. Yes, it's a problem.

[B]

Yes. Couldn't agree with you more. And I've been.

[A]

And that's not old and crossing. That's just called owning a business.

[B]

Well, yeah, I mean, the work is done whether or not you.

[A]

So what I would do is say to them, look, what if half the people in the company did this and just didn't show up? I didn't have to pay them, but none of the work got done, so I wouldn't be able to pay him. Hello.

[B]

That's right.

[A]

So this is a dumb butt idea, you know, Kind of defeats the purpose.

[B]

Of having a job, I've declined. I've declined a request. And he's requesting a special meeting, and I'm concerned it's not gonna go well.

[A]

Yeah, it's not.

[B]

He's gonna get fired because I'll give.

[A]

You a special meeting.

[B]

And when the heck did paternity become a thing?

[A]

Yeah.

[B]

Because now I'm living that.

[A]

And now you and I are both in tragedy. Okay?

[B]

Now, I had a baby. I went to my own doctor's appointments, and guess what? My husband took a couple days off. You sound like my mom had to pay the. Somebody had to pay the damn bills.

[A]

You sound like my wife.

[B]

He's got to go to work and he's got to pay the bills, but these guys in this day and age was.

[A]

I drove by, saw the baby, and went back to work. That was her memory. Didn't happen. But that's her memory. That's how she remembers.

[B]

Well, the mortgage isn't. The mortgage isn't getting paid by itself, by time, by.

[A]

By life balance. Yeah.

[B]

And so some of these folks that I'm talking about, that's. You know, I've already agreed, they burned through their pto, and I said, listen, baby's a big deal. I'm going to give you another week unpaid, you know, just because I said, you know, I get it. So that I get. But I've given that. And I'm still being requested.

[A]

Everybody that. Me and Denise, if the baby was sick, it's a whole different answer, whole different thing. But I just want to go home and change diapers. No, you don't get your work done now.

[B]

And, you know, I have. I've had an employee that was hospitalized in and out of the hospital for a month. He came back a month and a half later, and he had his job. That wasn't his fault. He was ill. He's a good man, and we took care of him.

[A]

Yeah. In that case, at Ramsey, we probably continued to pay him. But on the other hand, I just want to go. I want to go on a hike. I want to go on this real special hike. I've always wanted to do it. And so I'm going to take unpaid time. No, you're not. Just. Just take a hike. Just take a hike. I mean, that's it. You know, we're done. I got your fishing trip. Yeah. You better pick in. Get the. You better get the commercial license so you can make a living doing it.

[B]

The difficult thing is.

[A]

No, seriously, the other thing that we're doing now. But the thing we're doing to preempt this now is we're doing a better job at onboarding explaining this is not gonna happen. So before it even comes up, like when you first start your job and we're bringing you on, we're saying, okay, here's how we do things. We do not do unpaid time off.

[B]

Right.

[A]

Okay. If you have a crisis, we're probably gonna give you what we call grace period, which is where we pay you while the crisis is going on. Cause we love you and we wanna take care of you. You just wanna go on a hike. You wanna go on a fishing trip and sorry, it's not an option. The only way you get to go on the hike is you don't work here anymore. So take a hike. That's the only thing. And we tell you on the front end that that's what's going on.

[B]

They're doing their employment letter. I put it in writing. Holy cow.

[A]

So then you're gonna have to make an example. And so when this difficult conversation comes up, you're gonna have one less person. And everyone else in the building is gonna know Denise is serious about this PTO policy.

[C]

Yes.

[A]

Because you're going to hold to it and just go, I'm sorry, honey, I'm not trying to be mean. We have work to do here. The pests don't get controlled if you're not here. This is a pest control company, and so we need you here to control the pests. And if you're not here, regardless of whether you're getting paid or not, we can't control the pests. And that's a problem. You're a technician. That's what we do. And so the work's not getting done. The customers aren't getting served. We don't make money. No one's winning. And you're all fishing. That's not okay. It's not a plan. We're not doing that. This is grown up time now. You're no longer in high school, you no longer get summers off. Your mommy isn't doing your laundry anymore. And you're now a grown up. So it's time to do that. Time to step up. And sometimes, Denise, they exit and we have to go, well, that was a bad thing. We didn't do a good job when we hired them because if we had hired them properly, they would have known all of that and they wouldn't have ever even asked. So I've got to do a better job communicating it, not just in writing, but verbally. And I've also got to communicate it by holding to that standard and saying no doesn't work. You can't just not come to work. That's not okay. Well, it's unpaid. Doesn't matter. Doesn't matter. Doesn't matter. You got pto. You knew that when you came in. You knew what the package was and you're going to live within that since Pretty dad gum Simple. And Denise and I are not just being crotchety. We're actually trying to operate a freaking business, not a kindergarten. That was crotchety. Okay, It's a new management technique. I'm going with it.

[D]

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[A]

If you want to grow your business, you need a proven system that actually works. And that's why you need to join Master Series Live Stream 10-20-24 My executive team and I will open our playbook and show you the exact tactics we used to grow Ramsey solutions into a 300 million dollar company. You'll see how we lead, how we strategize and how we grow profits and how we build a unified team that's fired up about our mission. It's like having my leadership team in your office training your leaders for five days. It's not theory, it's practical, step by step tactics. You can start using in your business on Monday. The best part is you only need one ticket to stream the event with your whole leadership team. That's like getting 10 tickets for the price of one without paying for travel. But there's no time to sit on the fence. Go to entreeleadership.com livestream and register today or click the link in the show notes. Savannah is in Baltimore, Maryland. Hey, Savannah, what's up?

[B]

Hi.

[C]

How are you, Dave?

[A]

Better than I deserve. How can I help?

[C]

Yeah, so I'm in a really interesting, very blessed position. So I've owned a day spa in Baltimore for 18 years now and have been through all the ups and downs that an entrepreneur would have. And honestly, at Covid, I thought we were going to shut our doors and that was my exit. I haven't had an exit strategy yet post Covid. We came back just so successful. Just got our team back together. I've got 30 employees. We did 2.3 million in revenue in 2024. Going to be at 2.5, maybe 2.6 this year. Looking at profits at we're at about 800,000 after add backs. You know, I throw some stuff in there, but. And I know about the add back and kind of how to value my business because I have brought on an M and a firm to help me through sort of the next step and what should I do? And I've been listening to you for years and I know that I could, you know, sell to someone local or, you know, do some owner financing. But I wanted to see kind of what, you know, a larger corporation might want to do with my business. And here's the deal. My, the reason I'm calling is that I work probably honestly four to six hours a week right now I'm away. I have a very, very strong team. I'm. It's, it's just the entrepreneur's dream. I'm making money finally. It's not that I'm not doing anything.

[A]

But like for you and it's growing.

[C]

And, and it's growing, but there's a maximum.

[B]

Okay, so it is.

[C]

We are a goldfish and a fishbowl because we can pro. We probably will max out with the business model we have at honestly, like I can squeeze 2.8, 2.9 million out of the place if we don't open another location because we're only, you know, we've got X number of rooms. So I started going down the rabbit hole looking for when is the right time to sell my business because we are on top now right Like, I don't want to fire sale. Like we. I. I can wait. And, you know, they come in and. And there's like some kind of cruddy multiplier. I mean, to be honest, like, why would I sell my business for 3x when in 3 years I can make that much more, that I can make that much money and then sell my business in three years? So the question is just when is the right time? Because I'm not. I'm never going to get 10x, you know, and I'm not opening more locations. I'm only 53, you know, I just, I'm in a really good place. And I'm glad I'm calling in a good place. But what should be my next step?

[A]

I sense you're still having fun running it.

[C]

Oh, I don't.

[B]

Yes.

[C]

I mean, I don't not want to run it, but I'm not really running it.

[A]

What's the, what's the need to sell? Why the need to sell?

[C]

Timing the market right. Like, God forbid something else happens. I don't know. Like I told you, I'm not even home right now. Like, I'm. I'm kind of on vacation and I go in once a week.

[A]

Yeah, but I mean, let's fast forward a year and a half. You're putting a million dollars a year in your pocket. Why would you sell it? How long? I mean, let's pretend that the horizon on the thing is only 10 years and I only put $10 million in my pocket. And then we just close it. I mean, whatever. I don't care. I mean, or then you sell it for 3X, you know, or whatever, but you enjoy running it and you just put the cash in your pocket. That's not a bad thing. There is no. There is no wisdom. There's no, you know, universal wisdom that says you got to get out just because you're on top.

[B]

Right. So when.

[C]

When does someone like me get out? Maybe never.

[A]

Maybe I just want to. When do you want to? That. That's.

[C]

But why would I want to if I can do it?

[A]

Well, I mean, if it ceases to be fun.

[C]

Okay.

[A]

That would be a reason.

[C]

Yeah. It was not fun for many years. I mean, it was not fun. I mean, I wanted to quit so much.

[A]

Okay.

[C]

It was awful. But. But I'm past that.

[B]

Right. I am, definitely.

[A]

You got a team. You got a team built that's trustworthy and delegatable. So you've moved through the stages of business. I mean, you've done a good job. You're at the peak performer stage and you got systems and people and vision and values and culture all dialed in. And so it takes four hours a week to keep the wheel turning. That's a great place to be. There is no thing that says you have to sell this. Okay. And I kind of think you might be empty if you did. I'm not sure it would give you the joy if somebody writes you a $5 million check. I'm not sure it's going to give you the joy. You think it's going to.

[C]

Well, I need to figure out what I'm going to do next. For sure. Yeah, yeah, yeah.

[A]

And where are you going to put $5 million? That creates a million dollars a year.

[B]

Right. See that's, you're not math.

[C]

I'm just doing simple math. I don't think I'll get 5 million for it.

[A]

No, I'm not. I don't either. I don't think it's worth that. Yeah, I think it's worth three. I mean, I think it's worth four to five times the net. The net value or the net profits.

[C]

Right. Minus, minus, minus. I mean, then there's all the money.

[A]

It might be worth five, you might get five out of it, but probably not through M, because they're gonna, they're trying to do some kind of roll up. But the. So, I mean, you might. But I, you know, again, I would not sell it for three. That'd be dumb because you're gonna make a million next year. Yeah, no, I wouldn't sell that for three. Unless you just hate it and you're pissed off and the world's bad and whatever and I'm just running from it with my hair on fire. Then you'd sell it for three. But that is a quote unquote fire sale at that point, for whatever reason, emotional or so. Yeah, I, I do not have a need for you to sell this. I don't hear anything here that says this has to come to an end or that somehow you missed the peak or some kind of crap like that. I just don't think that exists. So I, I think, you know, if you're not having trouble operating it and you can put a million dollars a year in your pocket. I keep running it. Probably if somebody wants to give me five, we'll talk about it. But if somebody wants to give me three and a half, I don't even want to have a conversation. It's not worth it. So the answer to your question is when would I sell? When I got enough money and if I don't get enough money, I'd rather have the million a year. It's not that hard to get it out of here.

[C]

I mean, and thanks to you, honestly. I mean, I'm here honestly because of Dave Ramsey, and I can put most of that away. Yeah, well, I hope I have another company. I mean. Well, I mean, most of literally, because I have another business and my husband works.

[A]

Oh, wow. You put all of it away minus taxes?

[C]

Yeah, yeah, yeah, yeah.

[A]

I mean, you start banking three quarters of a million or 600, 000 a year. Jim and me, I mean, you have some money and stuff, you know, I mean, that's pretty cool. I'm proud of you. Well done.

[C]

And I just keep going until, like.

[B]

Don't want to die. Yeah, well, I mean, because there's nothing.

[C]

I mean. Yeah, I mean, I just don't want to go through another covet or, you.

[E]

Know, but I mean, whatever, you know.

[A]

I. I don't want to go through another Covid either. But it's part of business is the outside variables that we can't control that impact us, and that's just part of the risk of the thing. But you've controlled the controllables. You're in the peak performer. You're riding this thing really well. You've got it systematized. You got a good team, you got a good culture. It's giving you joy. And if I'm in your shoes, unless I got five, I'm not even looking at it. Because you don't have any need to walk away now. At some point down the road, if you do want to bail, then we start talking real seriously about getting the price right instead of being. But by then it may be making even more. I don't know, you may find a way to expand the physical location a little bit, to put more rooms in and take it on up past 3 million and gross, which probably is a 1.2 based on your margin ratios here, because most of what you make at that point is going to the bottom line because your fixed costs are covered. So it should be pretty strong. That's what I'm thinking. But, you know, this idea that everything should be built so that it can be sold and I can maximize my profits at the top is a very utilitarian view of business, and it doesn't have much soul. And so I. I don't think you have any reason that you have to sell this on FOMO that I'm fear of missing out on, you know, the peak or something. Did I Sell it at the peak. I don't know. I sold it when I wanted to sell it, and that's where you need to be. That's the way I would go with this. So, hey, thank you for the call. You're running a great business. I'm so proud of you. Way to go, peak performer Savannah. Whoa. Rock it. Our question of the day is from Tanya in California. Dave, I suspect one of my team members has quietly checked out. They're still doing the basics, but the energy, creativity, and ownership are gone. How do you confront someone who's still technically doing their job without feeling like you're nitpicking? Well, it's a requirement here at Ramsey that we don't have anybody working in J O B. Doing the bare minimum to get your pay is not acceptable. You don't get to stay. You have to be engaged. It's a cultural icon. It's one of our values that I am self employed. I'm engaged. I care about my work. I care about my. The output. I care about the people on the other end of my work. I care about my team that I work with. And I have all the energy, creativity, and ownership of someone as if I'm self employed. And that is a core value here. And if you're not functioning one of those core values, that's not nitpicking. It's a big deal. Because here's the problem, Tanya. Everyone else knows it too. And when you sanction this, you're inviting more of it. You remember the thing a few years ago where this thing came out quiet quitting? Yeah. And I came up with a phrase during that time. I told our team, we will have quiet firings to go with your quiet quitting. We'll be done. Because if your spirit leaves the building, you should take your body with it or I'll help you. And I'm not mad about it, but I'm here. And when I'm here, I'm all here and you are, too. That's not nitpicking at all. It's a requirement. It's a job performance issue. And so no one wins the Super Bowl. Mailing it in or quiet quitting. This is someone doing the bare minimum. I'm going to come in as late as I can come in, leave as early as I can leave, and work as little as I can work while I'm at work. I'm mailing it in. No one wants to watch a sports star sports team do that. You can tell when somebody doesn't care. It's A big deal, and it's contagious as crud. It'll run through your organization if you don't stamp it out. So I suspect one of my team members has quietly checked out. They're still doing the basics. How do you confront someone who's still technically doing their job? Well, the difference is I don't think they're doing their job because part of their job is to be engaged and bring in 110% and excellence and caring. And so I would just sit down and say, at Ramsey, we call it a difficult conversation. This is going to be a difficult conversation. No one's getting fired today, but we have some things we need to work on. It appears, based on all the exterior evidence and just observation, that you have checked out and that you don't care and that you really aren't giving your best. You're kind of mailing it in. Tell me about that and let them talk. They may go, yeah, I think I hate you. You know, they may go, I think this is a cult and I don't want to be here anymore. They may say all kinds of things. You have no idea what they're going to say back. But you just open the door and let them talk. And that may be the last conversation. And go, well, I changed my mind. Someone is getting fired today. So. And I have the right to change my mind. But what we're doing is a discovery here. We're trying to figure out what's going on, and if we can't correct this, then we're going to have a different difficult conversation that is going to involve someone leaving the building, and that's going to be you. So we need to work through this together. And I'll try to help you. I'm your leader. I want to serve you. Is there some kind of an environmental issue, the team you're working on? Is there a problem that I don't know about that's caused you to lose faith, that's caused you to not rotate the thing so, you know, no, you can't stay. So there's something about those of us, when we own a small business that we feel like we're not allowed to confront certain things like this. And I jumped the fence on that a few years ago, and now I not only feel like I'm allowed to, I'm obligated to. So years and years and years ago, 20 years ago, roughly, I'm standing in staff meeting, 250 people, and I'm talking in staff meeting, telling everybody what we're doing. And I'm watching this girl and she's yawning. And I said something and she rolled her eyes. And I thought, well, that was kind of weird, okay? And I just kept going. And then I went to her leader later and I said, hey, that was kind of weird. And I don't know exactly what to do about it. And I was kind of walking around the edges of it and I'm like, maybe, maybe I didn't understand or maybe maybe I was saying something that was stupid or whatever. I don't know. It's possible. But I guess we ought to talk to her about it. And the guy went and talked to her about it, and she basically vomited all over him that she hated working there. And I'm like, yeah, okay, all right, good. So then we can fix that for you. And so, yeah, you're not here anymore. And so. But I almost didn't. I almost thought, well, I'm being childish because I'm on stage talking and I'm offended that someone in the audience wasn't buying what I was selling. No, that really wasn't it at all. But as a. It was a leader observing that someone had checked out. And then it is my obligation to be proactive with someone that has checked out and find out why. And is this fixable and can we get you checked back in, or do we need to do a permanent checkout? And it's better for everyone if someone that's not there is not there. Everyone likes it. No one wants to work with people that are checked out. No one wants to work with people that are mailing it in that are half butt doing their work because it makes the team look bad, it makes the production in that area look bad. And so if you're excellent at your job, but you work with a doofus who's mailing it in, then you don't to want, you know, your team doesn't look good, you don't feel good, you don't want to work with them. And so when the leadership steps in and goes, hey, they're not here anymore, you go, wow, thank God, you know, I'm a thoroughbred and I don't have to work with a donkey. And so that's what it is. So, no, you're not nitpicking, Tanya. You're doing your job. Your job as a leader is to manage and create culture. And when you're managing and creating culture, you are going to get what you tolerate. So when you tolerate someone checking out, quiet, quitting, whatever the flip, you want to call it you are tolerating lack of productivity, lack of care, lack of energy, lack of creativity. And it is infectious and it will spread through your organization. And then you'll be emailing me going, dave, I have a problem with my culture. Yeah, because you did not remove the bad apple and the whole barrel got stunk up, baby. That's what happened. And so it's your job as the leader to address this with this person. It could just be that they're having a bad time at home, husband's sick and they're distracted with that. Well, then we give them some grace. Right? And we're not all smart aleck about it, but it could be that they're just being a butt and they're immature and they don't like working and stuff. And so that work thing is bothersome to some people. So we need to help them with that. Like find somewhere else to not work. That's a good plan. We can do that. But again, you dig into the, find out the information, just ask about it. What's the cause on this? And if I can help you with the cause as the leader, that's my job. And if I can't help you, we gotta correct it because we can't stay in status quo. I mean, we give you a little grace while you get through some personal stuff, but meantime, you gotta smile and bring your best anyway. And we're gonna work with you and help you. If you want to grow your business, you need a proven system that actually works. That's why you've gotta join the Master Series livestream. October 20th through the 24th. My executive team and I are opening up our playbook and we'll show you the exact tactics we used to grow Ramsey solutions into a $300 million company. You'll see how we lead, how we strategize, and how we grow profits, and how we build a unified team that's fired up about our mission. It's like having my leadership team in your office training your leaders for five days. This isn't theory, it's practical, step by step tactics you can start using in your business on Monday. The best part is you only need one ticket to stream the event with your whole leadership team. That's like getting 10 tickets for the price of one without paying for travel. But there's no time to sit on the fence. Go to entreeleadership.com live stream and get registered today or click the link in the show notes if you're listening on YouTube or podcast. Scott's in Houston, Texas. Hey, Scott, how are you?

[E]

Dave, how are you doing today?

[A]

Better than I deserve. What's up?

[E]

David, this is a great privilege. I appreciate it. I am a owner of a small e commerce company. We're going to do about a million top line this year. And that's just with myself and two virtual assistants. I'm trying to move past the treadmill operator phase. How do I correctly manage cash flow so that I can both start to pay myself and hire my first employees?

[A]

What's your profit on a million dollars?

[E]

About 170.

[A]

Okay, cool. And what do you need for your family to live?

[E]

Maybe 0 or 10. This is my side job and my wife works full time and we're all the way onto baby step six personally.

[A]

And what do you make at your main job?

[C]

About 80.

[A]

Wow. What are you paying the virtual assistants?

[E]

About $1,500 a month. They're international each. Yes.

[A]

So $3,000 a month if you hire someone, is it to replace them or what are you doing?

[E]

No, sir, they'd be in charge of buying the inventory for me, which takes up maybe 80% of my time. It'd be a totally different job.

[A]

Okay, what's it take to hire them.

[E]

In terms of dollars? Probably 60 to 70.

[A]

Okay, so you only make 110.

[E]

Exactly.

[A]

Or you only make 100 that you don't need anyway.

[E]

I'm just nervous to do it. Going from the treadmill operator to the. The pathfinder, letting go of the reins a bit.

[A]

Okay, that's different than can I afford it.

[E]

But that's also paying myself zero.

[A]

No, it's not. You make 170 profit?

[E]

Yes, sir.

[A]

Pay someone 70, you make 100 profit paying yourself 100.

[E]

Is there a ratio or a percentage that you would recommend how much you pay yourself versus how much you keep in the business to keep growing it?

[A]

No, not at this stage. The, you know, it's what works out. You've got a different situation because this is a side hustle. So you've got. That gives you a lot more flexibility. So let's talk through all of it. So you want to put. You want to hire someone to do this and you want to set some money in retained earnings. So the 170 you made last year, did you bring it home or what'd you do with it?

[E]

The 170 is a projection for this year. I'm only about 18 months in.

[A]

Oh, okay. All right. All right. So what was your plan with the 170? What do you plan to do with it?

[E]

I've been basically flying by the seat of my pants so far. Just trying to, you know, build this thing with cash and debt free. I figure it's time to grow up and create some systems here that I don't have so far.

[A]

Okay, all right, so let's add two things to the systems. Let's add a delegatable position. We'll talk about that in a minute. For $60,000 to get someone started. And let's add to your P and L that we're going to take. Just make up a number, I don't care. 10% of your net profits, 20% of your net profits, and hold those in retained earnings. We're going to build a savings account inside the business. You got to pay taxes on it. Welcome to small business. And even though it stayed in the business, it's all taxable. So we're gonna pile up 20% or 10%. So we're gonna put 20,000 bucks away out of 170. I'm gonna make up a number, okay? And so every time I make a profit, I'm gonna put this percentage add to retained earnings. So retained earnings is systematically growing. And I'm gonna hire somebody for 60k to do this. So that's two things that are building systems to move you up and out of treadmill because you've now got a delegatable situation and you're building a financial system that allows you to grow and create some sustainability in case there's a bump in the road. Okay. Now then, let's go over to the 60k guy or gal. You bring them in. Number one. We don't hire them and walk away and hope they figure it out. We're going to stay in their back pocket for six months teaching them every single minute detail of exactly what you do. Because what they do is the only revenue generator of this whole stinking thing. And if they do it wrong, they're going to screw up the whole business. And I'm going to tell them, I'm going to tell them that over and over. This is really important that you get this, because if you don't get this, we're not going to be able to work together. Because the whole reason for you being here is to take this over, but you have to do it right. And so I'm going to train you and it's going to feel like micromanaging, but it's not micromanaging. It's training until you prove you can do it. As you prove you can do it, I will lengthen the the rope of freedom and give you more and more rope, more and more room, more and more things to do without me looking over your shoulder. But I'm going to have to see you do it many, many, many, many times before I'm going to be comfortable giving you the keys to the kingdom, baby.

[E]

Fantastic.

[A]

And you just talk and talk and talk and talk. So, in other words, they're really not going to produce any results that you wouldn't have produced by yourself in the first six months, because you're going to be sitting in their lap anyway. You got it?

[E]

Yes, sir, I do.

[A]

There's no relief. You can't just hire someone and go, poof, sprinkle some unicorn dust on them and they go do their job. It doesn't work that way. So you've got to teach them not only how to do the job, but how to do the job the way you want it done. And they have to ask wwsd, what would Scott do? What would Scott do? What would Scott do in this situation? What would Scott do? And if they get. Once they know the answer to 98% of those, you'll never have to do it again. You can delegate to someone easily when you trust their competency and their integrity. And the only way a sane person can trust someone's competency and integrity is by hanging out with them and observing them.

[E]

Makes sense to me.

[A]

Yeah. So then you've got somebody that's solid and they become a key player in your business. And you have moved officially from treadmill to pathfinder at that point. And because that's the thing to do, you're now work. Now you're not the only revenue producer and the only producer of whatever. So, yeah, you're. But. And honestly, I'm going to pay them 60 and I'm going to pay them some spiffs of some kind that. Okay, we're currently doing a million. If we do a million and a half, I'm going to give you a $20,000 bonus.

[E]

I like that.

[A]

And I'll just go ahead and put that in writing in your deal and then we'll rework it next year and we're going to do this together. We're figuring this out. But I'm willing to share with you if you add value to this place, if you make it bigger than it was before you came. And if you do that, yeah, I'll share with you. If you kill something and drag it home, I'll split it up. You can have some and I'll have some. I mean, that's okay. I don't need all these dollars. What I need is progression and growth. And when I get that, then I'm getting an ROI on my team member, that payroll is actually creating a return on investment. And then I'm now growing and running a business. And then you can add another one and another one and another one. And then you can bring your assistant in house and do away with a $3,000 expenditure and trade it out for a $4,000 expenditure for one person in house that's here and in person and so on. And you can start to build out the team from an administrative standpoint, a financial standpoint, a marketing standpoint, operations standpoint. And, you know, now we're starting to look at, you know, eight or 10 people in a $10 million business.

[E]

Go from owning a job to owning a business, right?

[A]

That's the one, man. That's the one. You're right on track. You already knew the answer. So proud of you. This is cool. I love that where you are and it's got a lot of upside, and that's what's so exciting about it. You don't have to do anything here, but you can choose to to create something that is more sustainable and not so dependent on old Scott. And it's much more fun, by the way, when you do it that way. When it's all on your shoulders, it takes a little of the joy out of it. So that is absolutely the process. Hey, good show today, folks. We appreciate you guys calling in. Be part of it. 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. Sam.