How to Lead High Performers and Scale Your Business

foreign ERS of Ramsay Solutions this is the entree leadership podcast where I take calls from leaders like you about what it takes to win at any stage of business and Leadership I'm Dave Ramsey your host we built this thing called Ramsey solutions from a card table in my living room over the last 30 plus years so we've done a whole lot of stupid butt stuff and we've done a lot of smart stuff and the smart stuff was bigger than the stupid stuff so we're still here that's what we're going to help you with you want to talk about your business you want to talk to a practitioner somebody who does it every day I made decisions today in this building it's what we do this is not Theory it's not a think tank and we're not going from only research we're going from this neat thing called experience so give me a call at 844-944-1070 we'll try to help you whether you're a treadmill Operator just getting started and uh too much of the business relies on you or maybe you're all the way up to being a legacy Builder the last stage of our five stages of business where you're planning your succession plan and you're planning how to leave a legacy but you haven't got that done yet but you're in the Legacy Builder stage Pathfinder Trailblazer treadmill operator Peak performer we want to talk to you the number is 844-944-1070. Nathan's going to start us off Peoria Illinois hi Nathan welcome to the entree leadership podcast hey Dave how you doing today better than I deserve what's up man awesome so we're in HVAC contractor mechanical contractor my question is how would you deal with a high performer somebody who goes out and kills it every day um or 60 of the days and if I can just color it in a little bit um like their best or their on time is you know better than most people's 100 percent if that makes sense their 60 is better than most people 100 and they're industry leading when they're on but then it just seemed disinterested you know the other 40 of the time so would you offer them flexibility how would you deal with that employee hmm I just have a low tolerance for lack of ambition and motivation so personally so it would be hard for me but let me think through how to how to how to push this is this person attacker in sales they're in sales sales and estimating okay and so they uh what is it that does excite them when they're on why are they on well the estimate day is what excites them you know we we call it the war room so we're we're Gathering subcontractor bids and supplier bids and putting them together for for an estimate um where's the negotiation going on uh that excites them and then you know the the attack the tactile part of it maybe is what doesn't excite them um which involves what I'll do and takeoffs like um so we're mechanical so you know HVAC equipment counting the number of X does that make sense yeah yeah so won't you have somebody else do that yeah it's a good solution let's just split the job into one of the things we did around here and we didn't do it for the same reason as this but um we did it because we were broke but uh we would hire somebody and they you know because there were like five of us in the office and everybody had like four jobs until one of the jobs got big enough or let's say let's say you had four jobs and two of your jobs got big enough that they were now a full-time job so we would hire somebody and we would kind of do this division a cell division like a Ford you know split it off and now you got two and then finally you'd end up with four people doing the four jobs because they had the jobs the the volume had grown enough that those four jobs were full-time each but when we were starting you know none of them were full-time jobs and what you've got is two different jobs here tacked together got it makes sense or maybe not at the size where we could have could bring another person on to do the smaller portion of the job yeah or or um have you got other guys in the same position yeah we do yes we do how many people in doing this sales and and and estimating and takeoffs so four people okay you might have one that likes the takeoff part more than the other part hates the war room I mean it's like the inverse of this guy and so you might split it off that way if you've got somebody because I'm guessing the takeoff thing is more of a detail thing detail person and the other guy's more of a people person that's 100 accurate yep that's 100 accurate yeah so have you run have you run disk profiles on these guys no we have not okay I would do that I'd run disc profiles on all four of them let me give you four disk profiles as a gift I'm gonna give them to you we sell them for like 30 bucks or whatever on the website it's not much but but I'm gonna give you for them run four of them and and if you if you I think you're going to find your high performer guy is a DI or an ID he said I is the is the otter it's the party looking for a place to happen the people person uh the the D is the disc is the driver the dominant I'm an iddi that's what I am okay and the C is the detail person the accounting the engineer that kind of thing right and then the S and is the um uh the stable person the loyal person the golden retriever they want everybody to be happy they don't like conflict so I'm guessing your guy it likes the art of the deal he likes the action and he likes the people interaction the one we're talking about it's 100 accurate okay and so if you've got one of the other texts then that is uh that's the detail guy and he really kind of cringes when he has to screw around with the contractors they intimidate him a little bit uh but he likes the details he likes the counting of the stuff then I would just bifurcate the thing and um you know and and figure out a way to pay them both a little bit more than they were making but I think what because I think what's going to happen is they're going to make you more by by getting them in their sweet spot getting them in their Zone that way and so it may just be a redesign of your org chart in terms of Duties and stuff may get you there let's let's try that and and see if that works and hang on and Austin and the team in the booth will pick up we'll get you those disc reports out and uh folks everybody that comes to work at Ramsey for gosh for 20 years now we run that disc on them it's one of our hiring steps and the reason we do that is not because we would not hire someone based on the disk but we get two things out of the disk profile in the interview by knowing how you tick how you process information the D and the I make decisions quickly uh the D is very task oriented the C is very task oriented but makes decisions very slowly based on details so are you task oriented are you people oriented are you a fast decision maker slow decision maker are you a d-i-s or C there's a lot of different personality things out there there's strength finders that's a good one uh there's lots of others out there that Myers my my friend Pat Lindsay only loses uses Myers-Briggs all the time all of these are fine and Pat's got some really good stuff on just the uh you know we've had him on the podcast here talking about it uh your working genius he's got the six working Geniuses or eight working Geniuses or whatever it is and I got to be part of the test he had me earn the testimonies running the thing out on it which is hilarious because it nailed me exactly so you can run these different profiles and the reason for running them is again not to say I would never hire a salesperson who is a high c a high detail person I wouldn't I wouldn't say that I would tell you not to actually you do want to hire sales people their High season a lot of them are the best sales people you ever have but we always think of the loud gregarious I I person being the salesperson so one thing is you're kind of looking at the position you're putting them in but again it's not a deal breaker it's just you're asking yourself uh if you have someone who hates details and it's very and makes decisions very very fast you really don't want them doing your accounting okay so that is one where you would rule it out but most of the time we're just looking for how this person functions then the second thing we're looking at is how they're going to interact with their leader and their team now the way the disc is laid out it's laid out on a quadrant okay and the cross quadrants the angles are where conflict is so D makes decisions fast and based on uh task orientation s makes decisions slow and doesn't like conflict and makes decisions based on people orientation they're Polar Opposites and so if you're a high D and you hire a high S as your personal assistant she's going to cry every day you're going to hurt her feelings every morning before you start so you kind of need to know this going in because I I'm a high D when I'm at work I'm getting crap done my personal assistant Patty has been with me for 21 years and uh she she or I She nor I neither one have a feeling we have no feelings whatsoever we just get stuff done and so but if she was all feels and all worried about how everybody feels and I mean while I'm getting crap done it would be horrible right or vice versa if you're all about fields and someone's bulldozing through then it's going to be a very difficult chemistry so you want to think about the chemistry that you're plugging the team into let's say you've got a uh you're working with a bunch of Engineers and a whole bunch of them are high C's High detail people and you put a high I in the middle of that that's that's again a cross perpendicular and you put a high I in the middle of that well that what that's going to end up being then is conflict because those Engineers that are slow to make decisions and make the decisions based on detail and the I makes decisions fast and based on people the polar opposite the their the eye is going to seem like they are a person lacking in integrity to that sea that c becomes a Pharisee in that situation and you've got to be very very careful yeah and the eye doesn't the eyes just they're just having fun getting life done and Life's a party wherever they go so we run these discs to see what we're plugging the team into and what the potential downfalls are of the chemistry in the team and then we run the disc also to just say okay how is this person given their style going to accomplish the job that we're plugging them into that's why that model will work really well for Nathan's situation for him to figure this out that's going to be the best way to go so good stuff guys good stuff so you can check out the disc and uh we teach you about it all the time of entree leadership Elite uh we teach about it in our entree Master Series fairly often and hey guys you're listening to the entree leadership podcast with me Dave Ramsey good hey Business Leaders entree Leadership Summit possibly America's greatest leadership event is almost completely sold out this is the event that if it wasn't mine I would still go to it it's that freaking good yeah you're going to be challenged and inspired by a world-class business and thought leaders Malcolm Gladwell Jordan Peterson Willie Robinson me I'll be hanging out with my smart alec sarcastic self it's happening in Nashville this may through June 2nd and maybe you can still get a ticket but you better do it right now or down to the last couple entreeleadership.com Summit get your tickets before they're gone and believe me they're going to be gone you want to participate in this podcast give me a call 844-944-1070 if you got a question you want to ask on the show fill out the form at entreleadership.com ask or call and leave a voicemail and if you guys want to help me out I would appreciate the favor you can do a couple things one is uh follow uh this show subscribe to this show on YouTube and on all the ways you listen to podcasts all that stuff do all the podcast follow thing and subscribe thing that helps a bunch leave a five-star review we don't need any one Stars your mom said if you didn't get something nice to say don't say it at all so let's get there and uh you know tell some people about this share the show hit the share link and send a link and go hey I've been listening to this crazy guy who's answering questions from the real world who knew business people from the real world existed all right ones that are getting it done and helping people and loving our customers and loving our team and loving our families and being great Americans we can all do this together we really can David is with us in Canada hi David welcome to the entree leadership podcast hello David it's a pleasure to be speaking with you today you too how can I help yeah so I worked for my father-in-law he owns uh three tire shops um we've got about 13 employees uh spread out among the three and um so I managed one of the shops full time for him gross we do about three and a half three to three and a half million in sales every annually and um so he's um he's been wanting to start transitioning some of the leadership um so that he's not so much involved in the day-to-day operation of the business he says he doesn't want to actually retire and leave the business but to be able to take a step back um so we're not quite sure how to go about that transition um and um he doesn't really have a clear plan in place as far as he doesn't even know if he wants me to take over full management of the entire operation or what exactly you want to do so there's not a lot of clarity there and um and yeah I guess we don't really know even how to go about starting that process okay well it starts with starting of course and that that's what you guys haven't done so on the one hand you're calling up saying hey we're ready to do this transition on the other hand he's saying I don't know if I want to do it or not so I guess he needs to decide what he wants to do what what does the end game look like When the Smoke Clears on this plan what what's standing you know we got a new owner and you work for the new owner or you don't work there at all and you go somewhere else and have a career or uh how's he going to get out how's he going to get bought out I mean what's the what does he want from his business after this transition's over and he needs to decide that now yesterday he's late he's really late yeah it's frustrating you and he's just kind of wandering around listless a lot of kind of like to get out of here but I don't know how to do it and I don't know what to do and I don't know if I'm going to do it I don't want to retire but I sort of want to retire and good Lord so yeah yeah yeah yeah for sure he he says what he wants to do he wants the business to stay in the family because it's it's always been his his family business and um and that's what he would like he doesn't want it to just be sold off to somebody else so I want you to take it or not is there another family member in it well not right now no it doesn't seem like any of the other kids are really interested in being part of the business so that's another thing here so you want to stay in the family but you want it to stay in the business you want to stay in the family there's one or two things happens someone else gets involved or we work with you so that's I mean nobody else wants to get involved so it's me or it doesn't stay in the family so now we've established I am the family I mean you guys need to sit down um how old is he uh he's turning 53 this year I believe or 54. when does he want out do you know no I don't know exactly okay so what I would say is this I would say hey I don't care what you do with your business I do care that we continue to stumble along with a lack of clarity I'm not okay with that and so what I what I would like to do is to sit down somewhere and go you know go to a a bed and breakfast or something and rent it for a a day and just go sit on the back porch and um you know where it's pretty weather and we're gonna just sit here and we're gonna talk okay what is it you want to do and how can we get there what does what does Henry Cloud says what is your desired future right what is your desired feature okay let's let's just pretend I'm going to make this up and if he doesn't start with something in that conversation you can start and say okay if this doesn't sound good tell me but here's an idea we could say at 65 you are 100 retired and you've been bought out by me if that's our desired future then how can we work over the next 12 years to accomplish those two goals one is we've got to have a an escalating thing for your leadership positions and you've got to have to start building up some kind of a way to buy him out or him give it to you or whatever he's going to do and and you got 12 years to incrementally do that you don't have to do anything the first two years but if the plan is in place that after two years we're going to take step one and after two more years we're going to take step two and step one might be that you move as uh over two of the stores step three might be you move over all three of the stores and then what does his job look like his daily job if you're doing that and so you're increasing he's diminishing in his duties and we're figuring out the ownership transfer concept and how we're going to pull that off and how can we incrementally do that in 12 years you could do this very gradually and and that way he won't freak out okay nope but you're gonna get you need to have but and and you're but you're going to get increasingly frustrated if there's no freaking plan agreed um yeah it's already happening and I can feel it creeping in yeah yeah because it's so disrespectful to you I'm just saying that's my main concern because at the end of the day I have to look out for me and my family and and if I don't have any clarity about my future in this process then yeah then I don't know what I'm doing here's what I would tell him I said listen I love you as my father-in-law as my boss I'm gonna be looking for a job if we can't figure this out because I've got to take care of my future and I don't want to do that I'd rather work something out here and I'm not threatening you I don't have to take over tomorrow but we have to lay out a plan that over the next however many years we incrementally by five or ten steps make the moves to cause this transition to occur and let me tell you David there's a couple things to keep in mind here one is the founder him he founded these stores right and I founded this business the founder all the data all the data we have on family business says the found the transfer from the founder gen 1 to generation two is the most difficult emotionally because the founder oftentimes has a lot of their identity tied up in the business and they're uh they're also a hard head they're stubborn I am yeah and they're real opinionated and they're always right that's me and so I'm really good at talk radio okay because I'm always right and I'm an expert on my opinion right so yeah that that's who you're dealing with and so he's going to have all these emotions go through because it's very difficult for him to let go of this even in his mind and when he and he knows when he lays off this Exit Plan that this you know here's the exit ramp and the car has got to get off over here to get off the exit ramp or you're going to miss the turn he knows intellect I mean we all know intellectually intuitively that when we lay out the plan that the freaking thing is going to happen and it scares the Jesus out of you as soon as I started laying out my succession plan the ground started moving under my feet it was weird it's emotional okay so that's thing one you need to know about succession planning and and this is for legacy Builders people that are in a stage where you're ready to do a succession plan and you can learn all about this at entreeleadership.com and look at the look at our Elite stuff and get with some of our coaches they can walk you through that too but the second thing is the more gradual the succession plan the higher the probability that it's successful and so you know if you if you do this in 1.2 years your probability of success is very low if you do it in 12 years it's much higher does that make sense yes it does because it doesn't shake everybody to their bones it doesn't shake your whole nervous system up in everything that you're doing and all that and it doesn't shock the customer and it doesn't shock the vendors and it doesn't shock the employees but too oftentimes a Founder's succession plan is as they're dying they grab their chest and as they fall back into the grave they toss the keys out and that's their only plan that's dumb you have a real high probability of that thing going down the tubes when you do that yeah yeah that worries me too yeah so you know I was just sit and say listen I don't want to steal this from you if if you want to keep it until you die that's fine I don't want to force you to do anything I'm just I I as a team member have to know what the future looks like in order for this to be okay long term so let's figure out our future and if it's a 20-year plan if it's a 10-year plan if it's a fi I don't care but I need a plan I need a plan because I I just staying exactly where I am with no plan sets my family up for failure and you love your daughter more than that that's your father-in-law right yes this is you talking to him you love your daughter more than to set her provider up for failure and so let's figure this out where you get out of this what you want to get out of it and you get out when you want to get out but let's lay out a timeline that that as long as I'm proving that I can handle the job my competency then we're going to accelerate along that timeline and and then you've got to figure out of course how to you know how if you're going to be buying him out or how you're going to do that or you're gonna share profits the rest of his life what's the plan there what you're going to do from there so yeah you know that's what we're after so amen we appreciate you calling in family business oh one of the other rules about family business your family business is going to be no more functional than your family if your family's cray-cray your business gonna be cray-cray this is the entree leadership podcast foreign number one small business podcast in America today it's called entree leadership I'm your host Dave Ramsey we take calls from actual business people running small businesses which by the way account to the large larger bulk of the gross domestic product over 54 percent of our GDP in America the all goods and services are created by businesses two to five hundred team members small business you are the backbone of the economy for that matter you are the freaking economy so that's the way this works we love you we're one of you this place uh Ramsey grew up that way we think that way it's who we are we start these businesses because we like our independence and many people start a business because Corporate America pooped on them and they used all of that manure as fertilizer to start the next business they used all of that anger and rejection to start their next businesses that I'll show you not unusual at all for somebody that's had a negative experience with corporate America now let me Define for you when we say Corporate America around Ramsey and around entree leadership what we mean has nothing to do with size it has to do with your concerned only about stock price and you piss on your employees and your customers and you're everywhere out there you can do that by the way when you got 10 people but you can do it when you got 100 000 people too and Corporate America is concerned about one thing and that's their own deal there's a certain level of greed to it and I've got no love for Corporate America the other thing we see with corporate America is that if they want to increase profits and you've got a huge Workforce an easy way to short term and it is a short-term play to increase profits is cut your biggest line item which is payroll next quarter your profits will go up and your stock price will go up so basically you're trading when you you fire people you lay people off you put them on the street their dreams are crushed their house is in foreclosure they're panicking they're scared but you got your profits up you suck that's absolutely unethical and it's also very short-sighted because as soon as you want to grow your little business again you've got to rehire those people that you sacrificed on the altar of stock price or somebody like them and somebody dumb enough to walk in your doors and work for you again after you pissed on the last bunch out of control it's going on out there big time right now Yahoo announced February 9th 20 percent of its staff 1600 employees laid off a firm if you don't know who is that is it's one of those stupid buy now pay now later like you can Finance your T-shirt when you buy it on Amazon for a firm it's reducing its staff by 19 500 employees shutting down its crypto unit Zoom how the crap is zoom losing money I mean they that's like during covid Zuma's like being in the Plexiglas business how did these people mess that up 300 people laid off February 7th 15 of his staff Dell six thousand six hundred and fifty people laid off Sofi oh I love these people oh aren't they the sweetest people that screw you with their financial products uh sofa Technologies announced on I guess that's part of sofa I think it has to be right on January 31st it's cutting 65 jobs five percent of its 1300 person Workforce good old PayPal not your pal 2 000 full-time team members laid off seven percent of its Workforce January thirtieth January 23rd Spotify six percent of its Global Workforce around 600 team members alphabet Google in other words 12 000 employees how is Google losing money that's impossible Microsoft 10 000 employees laid off January 18th Amazon January 5th 18 000 employees sales force oh there's another one ten percent of its Workforce more than seven thousand employees laid off big Tech coming to the rescue for you America putting you on the street so let me tell you how small business does this small business loves their team the good ones anyway and let me tell you when covet hit we did it Ramsey and I'm I am bragging because it's called having values it's called having principles and the principles aren't I'm going to increase my profits now if you're actually losing money and you can't pay the bill yeah you got to lay people off that happens in the real world but this idea I'm going to increase my profits by dumping 6 000 people in the street guys that's just unethical so covet hit our we lost like tens of millions of dollars of Revenue instantaneously the entire business segments evaporated here uh we of course had like everybody else our team goes home for about 60 days not long enough to suit some of you lefties but uh our team went home for 60 days and then by God we came back to work because we wanted to keep our jobs me included I didn't go home I had my leadership team was here 30 of us every day trying to replace the Lost revenues with new ideas temporarily during the quarantine garbage and um during this time uh we weren't sure if our revenues were going to if we're going to keep enough revenues to make payroll without hitting our uh without hitting our cash position and we told the team very clearly as soon as we send them home here's what's going to happen we've got this level of this this all of our Live Events just stopped of course right other stuff just stopped of course and we said look we're going to try to replace that Revenue we're all going to work together you guys are working from home we're all going to be more the leadership team is going to be in a war room in the office every day trying to figure this out and what we're going to do is we're going to keep revenues up and as long as we can keep enough Revenue coming in Pay everybody up to pay everybody we're going to do that if we can't then we've got a pile of cash here and we're going to start burning that cash when the cash gets down to where there's almost none of it left the first people to not get paid is going to be leadership then if that doesn't work and we don't turn it and somebody doesn't get paid we're going to offer you guys the chance to not get paid for a while until we can turn this uh but we will not be announcing layoffs today and if we're going to announce a layoff you're going to see it coming from eight miles away because we simply do not have the money to pay the bill that will be the only reason we do layoffs we do not do layoffs here to increase our profits we increase our profits by selling more stuff and helping more people that's how you increase profits you Goobers but instead the bean counters are running these companies and when the Bean Counter starts running the company when the bin counters and the lawyers are running the company that is the beginning of the end baby because now all we're trying to do is keep Wall Street happy we're trying to keep stock price up or artificially Drive stock price up when our sales are down and we suck at running our business and when you do that it's an artificial thing it's a temporary thing and it's a it's a Band-Aid on a leaking ship and you are doing it on the backs of families and small businesses that small businesses run right doesn't do that I mean small businesses got 10 10 members 50 team members we we know the husbands we know the wives we know their dog's name we know their kid's name we're not going to put those people on the street we're going to take a hit first personally I'm not going to make an extra million dollars at Ramsey that I take home and I gotta and I lay people off so I can make an extra million dollars that's just asinine and it's wrong and I don't know if anybody said this lately but I just said it right out there on podcast land so somebody needs to say it so here's the thing those of you that got screwed by Corporate America here's a plan go talk to small business people most of them are going to treat you right most of them are going to treat you like family and I don't know if they have the benefits package let me give you a benefit they're not going to screw you for profit that's a benefit you just got your benefit your dadgum check is going to clear and you're not going to get laid off so they can line their pockets that's a benefit now again if you're running a business large or small I am not talking about you if you don't have the money to pay the bill I'm not talking but that's different than I'm going to increase profits by slicing the heads off my team that's just it's appalling that we walk around and no one says and it's standard practice I mean the names I just read off are all household names this is standard freaking practice in the corporate America crap but so guys if you're listening to this and you're looking for a job this is the reason you ought to go to small business the small business will take care of you not not a hundred percent of small business people are good people but more of them than these corporate Jews I'm for sure I mean because we in small business do not have a track record of doing this crap right here we don't have a track record of making our money off the backs of layoffs we have a track record of making our money off of doing our job if it's heating air we're going to put in some more heat and air that's where we get money it's not from laying off the tax and then wonder why we can't get the tech work done oh my God it's so stupid it's so short-sighted and it's so unethical so guys that's how it works if you're looking for a position oh and by the way if you're a small business guy and you're trying to recruit don't be intimidated like oh they're looking over at Google Google offers they they have a Skittle ball in their playroom that's just ridiculous that's absolutely ridiculous that's crazy y'all you're gonna go play and then the first thing that comes up they're going to cut your dad gum head off man and you're going to be looking for a job so don't be intimidated if you're trying to hire a good talented person and Corporate America wants to steal them just tell them don't trade skittleball for for real people that care about you you have the opportunity your brand differentiation when you're hiring as a small business person your brand differentiator is you care and the first sign of trouble you're not going to cut their throat you're going to take the hit because you brought them in because you needed them you wouldn't have hired somebody if you didn't need them but Corporate America just takes bodies in and bodies out bodies in and bodies out as if there's not people's lives attached to those things those people have children they've got house payments they're going to be scared to death you ever been fired you're been laid off it's not easy these people treat that like it's just nothing like your dad gum Commodities you're not a commodity you're a team member when you work for a small business that's how this stuff works this is an Ethics question America it's one we need to be asking more and more often and again I've got another I've got a friend whose business is way down way down and he didn't have a choice he couldn't pay everybody he had to put some people out and there's no way it could get around it even if he had taken zero pay he he was the thing is it's just off he didn't have a choice that's not what I'm talking about here I'm talking about when you just simply I need an extra million dollars an extra 10 million dollars some will cut payroll [Music] unbelievable this is the entree leadership podcast thank you for joining us America I'm Dave Ramsey your host this is the entree leadership podcast real people talking about real business problems and questions if you want to join us we would love to have you do that just call me anytime leave a voicemail we'll get you set up to do this 844-944-1070 or fill out the form at entryleadership.com ask and we'll make you one of the uh one of the team members here for a minute you can be a caller and that'd be pretty cool I'll get to talk to you like I'm going to talk to Joe right now in Boston Hey Joe what's up hi Dave here all fired up today I'm glad I called in it's pretty much every day man I'm over caffeinated what's up I don't like it um Dave a little background I am a sole proprietor I am one man in a van doing electrical work my question is uh regarding paying myself I currently pay myself a monthly salary I pay myself the bare minimum to cover my expenses my personal expenses and then what's left over from that I throw into a savings account and I pay my taxes my quarterly estimated taxes and things like that and then I'm not sure what to do with the rest of the money that's left over it just sits in the savings account so I thought I'd give you a call and see what you had to say about that how much was in there uh right now I have about sixty thousand dollars wow okay uh do you have aspirations of uh growing the business from a one-man shop I do I'd like to grow it and and actually run the business and and not just work in it yeah yeah that's a good plan um well I think that's what I would use the money towards let's talk about how that can work number one I want you to keep your quarterly estimates separate I want you to calculate them each month calculate your profits and calculate your taxes as a result of that profit that month set that money aside withhold on yourself in other words which is what you're doing but you're slopping it into that other account you're slopping it together I want to keep it separate because I don't want the tax money mixed in with my retained earnings this is this money that you're saving is called retained earnings in business okay now retained earnings can be used for buying things to increase the business uh tools trucks whatever retained earnings can be used to invest in people adding payroll and retained earnings can be used for emergencies and that's what we use ours for is those three things so when we've got excess profits like that of course you could take them home that's another option but in your case you're you're thinking about I need to I need to get another man in another truck or I need to go to the man first on my truck until I get him trained and then I can put him on his own truck and then the next step might be to hire a third one train them on your truck and put him out in his own truck uh or however the model works I don't know if you're putting two guys in a truck or one but you see what I'm doing so something like that you can bring them into your truck and Mentor them for a little while and then buy a truck and add it uh you got the money to do both right now you do not have to buy brand new trucks you know that right so I mean you could you gotta uh if you want to bring on a uh an apprentice so to speak maybe not technically an apprentice uh not I'm not talking like a union Apprentice I'm just saying you bring on someone that says they know how to do this stuff and then you teach them how you do your business and you ride with them for six months and they can finish your sentences and they know how you interact with customers and they know how you do the work technical parts of the work then they're set up to you can release them into a truck by themselves and trust them because you've been watching them do it for six months or a year right right and you can say and I'm gonna pay you X while you're in the first six months in in my truck but when I put you in your own I'm going to pay you a little more but you're also going to produce more because that ought to raise your income substantially when you put that second worker out there probably won't quite double it but it ought to raise it way up right right yeah definitely minus the cost of the operations of the truck the supplies on the truck and the person driving the truck right so that kind of thing so you start to run those calculations out a little bit uh we would if you want to get real technical we just call that a pro forma on your expansion uh but it's just your business model I mean okay what have I got to pay a guy and what's he going to be doing and what can he produce and what's this material cost on the truck and you know so what do you what's your top line now as a single guy uh so I did about 175 000 worth of work and out of that I paid myself 70. what Can you hire somebody to do what you do for 70 or 80 probably uh probably about 70 60 or 70. yeah I'd start them at 60 in your truck bump them to 70 when you put them out and then give them a small percentage of whatever they produce out in that other truck so they kind of have their own little business within your business a little bit just an incentive plan is all right where they might make 80 if they went crazy but we're gonna have a 70 base or something like them I mean you changing me 65.75 I don't care what it is but something like that and then if they can produce 150 160 maybe they're not as good as you maybe they're not going to do 175 right but if they can add 150 to 160 to the Top Line they cost you 75 or 80. you've got truck costs operational costs Insurance taxes tags fuel you got to put you got to put uh I assume that Top Line it didn't include your materials expenses did it uh that's the money I brought in then after I pay my taxes my material all my expenses what's left over um I gave to myself which was 70. yeah okay so that's the thing I mean can you make a profit on that person running that separate truck that's what I'm trying to figure out and you just got to run that out Joe and I think you know what I'm talking about I think you can do this but I think that's how I'm going to use that money I'm going to use that money as the the the the water to prime the pump to get this pump going which is the second truck and then you go from there and then you know you get three four of these things running out there then maybe you step back in the office and you run uh you know you run the uh the call center so to speak you run the customer interface uh you you run some of the the operational side from the office and let those guys do the actual Hands-On work but you're not going to do that at two trucks you're probably not gonna do that at three trucks but you you might do it at three but it's probably going to be four before you get economies of scale to make that happen but that you start thinking through how I'm going to get there how I'm going to get there how am I get there you've done a great job you're not afraid of hard work you're managing the business well you're profitable uh man you're you're impressive how long you've been doing this I've been on my own about eight nine years okay so you're ready to make it to take the next step right I just don't know what that first step is and I know you say to eat an elephant and you do it one bite at a time yeah that's what I was doing just breaking it down first steps higher guys put them in your truck and when you can see when you can see he can do the work and be profitable and you can make a profit on the second truck then you invest in that truck and you write a check for it because you're gonna have the money to do that right but you're not gonna make money on this guy for six months okay because he's not actually he's not bringing in the extra Revenue because he's hanging around well he could because you could do more work with two of you you could increase your revenues a little but but you're not in two different locations you're just doing the work faster because there's two of you right right and I do a lot of small jobs a lot of service calls and so I do a lot of small stuff I get paid that day type of work I'm not doing large construction jobs so let's go through residential work that's the best kind of work because it gets paid you know cash on the barrel head you don't have to every time the economy Turns Upside Down you make more getting paid by the contractor doesn't get paid right so you're you've got a good you got a good gig here you just got to figure out a way to work it up how can I scale this up using this money to prime the pump and do it gradually and as you said a bite at a time on the elephant and that'll actually make this work that's a good plan very very very well done sir proud of you you're what makes America great out there man guy in this truck I love it love it love it love it this is where it is hey guys I'm your host Dave Ramsey remember becoming a better leader is a choice leaders aren't born they're formed you get to make the decisions and we're here to help you do it you decide though so go be a great leader this is the entree leadership podcast [Music]

Channel: EntreLeadership

Views: 22,899

Keywords: entreleadership, dave ramsey, How to Lead High Performers and Scale Your Business

Id: c9SNR57yN98

Length: 46min 52sec (2812 seconds)

Published: Mon Mar 20 2023