We Make $13 Million, But We Didn’t Pay Our Bills

>> From the headquarters of Ramsey Solutions, this is on Tray 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've got a question you want to ask on the show, fill out the form on untrayleadership.com/ask,

or call and leave us a note at 844-944-1070. That's 844-944-1070. Thanks for joining us. Andrew is with us in Dallas, I Andrew, how are you?

>> I don't get it. Great day, thanks for having me. I appreciate the time. >> Sure, what's up? >> I am the CEO and founder of a third part of

the Justice Company, based in Dallas, focused on e-commerce and retail fulfillment. We have about 30 full-time employees, 20 to 40 temps a day to putting on on the workload in the warehouse.

We're doing 13 million revenue this year.

We've got about 1.25 in debt, and I'm looking at doing a debt consolidation loan for our debts, and I would love your thoughts on that. >> Why? >> It would relieve a little bit of our finance.

We have also we're handling with AP, obviously doing paying off multiple different collections on getting these debts down, and then the second piece of this, too, is most of the 1.25 is between about three different suppliers, and our services are paused with them.

We don't need them, but it would be nice to have them and to be able to use their services. >> They're paused because you haven't paid them? >> Yes, sir. We're profitable now.

We have payroll, I'm sorry. We're paying them down now, which is about 20,000 a week each of those, and it'd be nice if we just got them all knocked out and get done right now. >> How long have you been out with them?

How long have you been in collections? >> About four months. We moved this year, and we had bad labor management on my part, and also we moved into a larger warehouse. We forecasted about 70% accurately, which put us behind,

and we've been calling them ahead of time. We haven't been avoiding it. It's just as a pain struggle that we've been through.

“>> So, 20,000 a week is a million dollars a year, right?”

>> Yes, sir. >> Yeah. >> So, you'll be going a year. So, how evenly to fruit? So, give me the breakdown between the three of them.

>> One of them is about, the three major ones. One of them is about 400 grand, one's about 300 grand. The other ones remaining, about 180 to 225. I believe it's that right now. >> Okay.

So, that's gone in just a matter of weeks. >> Yeah. It'll all be gone in the year. >> Yes, sir. >> Okay.

You set three major ones, is there more? >> Those are three major ones.

There are 1.25, it's actually probably getting closer down to 1 million,

because we had a lot of these little ones that we were floating through, and just asking them for another two weeks through the time period. As we get our cash flow, cash flow positive back in January, all those ones are going to go away. And so, it says we'll be back, we're back profit one hour.

So, we'll be back managing and paying them on time. These three major ones are these ones that are going to be about, it's going to be about 800, 900,000 left between those three major ones for the rest of the year. >> Okay.

And how long have you had this, business? >> We started out of an existing parent company, but then we really started in Brooklyn, January of 2021. >> Okay, it's just a few years. >> Okay.

So, is it also safe to assume that your cash and your profits are not linear? They should be hockey-sticking? >> Yes, there. >> Yes, sir.

We've ten extra pretty well revenue-wise, and then we've been profitable all last year. >> Sure. >> We don't really want to extrapolate only $20,000 a week. >> No, no, we want to knock this out and get on at ASAP.

It's just a more like, you know, I've never had debt in my life.

And so, it's kind of like now we're in the position of building a business and not, you know, less than stupid tax stuff we've done. And so, it's like, all right, I can relieve our operations by having one main target with a little bit higher interest rate, pretty friendly, like it's no personal guarantees,

“or I can continue to deal with collections and who's all for us?”

>> We have a private lender here. They actually it's a great partner actually. The friend that's turned for all of you would get across when it comes to this type of debt reconciliation offer. >> Sorry, when you say partner, what do you mean?

>> Oh, I say partner, just in my network of relationships I ask. That's not a partner. >> Oh, okay, it's a relationship.

There's a private equity company that invests in faith driven faith leadership businesses. >> Okay, are they taking an equity position for this? No, no, sir, there's no equity position. There's no hostile language.

It is strictly going to be interest.

A high interest loans, it's at 16 to 19 percent.

We have a term sheet in front of us, we're talking to them. And then 0.5 of any realized revenue over the course of the two year term that they're offering us. >> Yeah, I'll pass. >> What would be, okay, I agree with you.

I'm going to submit to you. What's the reasoning on your response there? Like how would you-- >> Interest rate is absolutely ridiculous. And I would just call these three lenders and just start and say,

guys, we want to get you back online and these vendors. And we want to get you back online. And we're going to commit $20,000 a month to this. And at a minimum, or $20,000 a week get to this, at a minimum. And you're going to see these healthy payments coming in.

And if the healthy payments don't stick, then yeah, you could pop us back offline again. But you want our business. We want to work with you. And we're going to make good on this.

>> Yeah. >> And they see our financials and everything too. So they don't know what we're doing.

>> Yeah, and you know, we give them the 19 percent.

Get you out of this in a month and a half sooner. >> Yeah. >> Yeah, it does. >> Yeah, this is like a September horizon. I mean, it's not a five or ten year program here.

And so this is, you know, you stub your toe. You didn't manage your cash flow well. And like you said, you missed budget. And grew too fast. And it caused you to stumble.

And you missed your projections. And you won't do that one again. I've been there. >> Yeah. >> It's too painful.

And it's too embarrassing.

“And that's what this is more than anything.”

Honestly, I've been there. And you want to get rid of the embarrassment as much as you want to get rid of the actual debt. Because we're really not really slowing down how fast we get out of debt by this. It's not speeding it up. So I think I would call them and depending on the nature of the vendor and what they put,

what was it they provided? Did they provide a service? Did they provide a good that had a low cost of goods sold? You might say, you know, under if you were to give me a discount on my balance, I might put you at the front of the line.

And instead of paying them evenly, if somebody gives me a 25% discount on one of these, because to get me to get paid off and to get back to doing business again, to get cash flowing both directions again. So even if it's the 400, I might put them to the front. So you get $2,000 a week until you're paid.

And I'm just let the others are going to sit a little bit. Somebody wants to do that and get out of debt even faster. I would ask, I mean, not demand and not say we're about to go broke because it's not true. But just say, I'm committing $2,000 a week to this process. We're going to be done with all three vendors by September.

If you would like to be at the front of the line on that,

“if you want to offer a substantial discount,”

then we can do that. Otherwise we're just going to run all three of you at the same time. And either one's fine with me, I don't care. And see if somebody steps up and knocks another 100 grand off this or something, which is entirely possible.

If I were on the other side of this, I would seriously consider that. And I wanted to get you back in the saddle as a customer and pay in me again, and buy in from me again. And doing business with me again and all that kind of stuff.

So that's assuming it gets there. So I've done that in several different situations that were positive. So I don't know. But no, I wouldn't give somebody 19% to avoid the embarrassment and to extend the pain one extra month.

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Entray to 55123. That's ENTRE255123. Zaxon Atlanta, Hay Zach, what's up? Hey Dave, I just wanted to give you a call and ask a question that I've been having trouble with for a while. I'm a power utility contractor in Atlanta, Georgia.

We run a debt-free business, we have 40 employees,

and we did just over 11 million last year.

“My question is, how do I create alignment across my team that does construction work across the state?”

They report daily to our customer directly, and I find often that they form silos with cultures of their own. They do not line up with our core values. Why do they report to your customer daily? So, I guess for some context, we're contractors for the power company,

and we have dedicated contracts where we have crews anywhere from 2 to 5 men on a crew that are assigned to a region of the state with a director that assigns work orders to them daily. And they cover that region, completing work orders as a contractor for the power company. Okay, so they're because of the daily communication and the isolation they've forgotten who they work for. Correct, that is exactly the problem.

Yeah, that makes sense, it's logical.

And I even find that because they form strong relationships with the director that they work with,

that sometimes the director will almost help them get out of things that we try to do, like safety meetings, right? So they'll almost come up with a reason to not be there. Yeah.

“How long do you end up having a relationship with that director?”

I mean, you're going back to them repeatedly or you're not? Yes, yeah, I mean, I speak with most of them. It's not weekly every several weeks. But I mean, once that particular job or contract is finished, you probably are going to sign up with them again for some more later, right?

Yeah, these are multi-year contracts. I mean, we've been doing this work with these people for eight to ten years. Yeah, okay.

Well, I may need to retrain my customer, too, then.

Yeah, I think so. Then you keep your dad gun hands out of my business. They're the customer. They're not in charge of my safety meetings. They're not in charge of my guys.

They're given them work and that's the workflow. How many different crews?

“We got 40 so far as we get 10, 10, 15 crews, right?”

Yes. About half of those are a different division that does a different service. But I have 12 employees that this issue pertains to. How hard would it be for the work orders to come to you and you give them to your man every day? Probably not easy. We had a login on there internal computer system that where they do the work orders and things.

I know. They have not designed it to come through me. I know, but you could log in. That's true, yes. And then you could hand out the orders.

Your guys don't have the login. That's true. That's an idea for sure. You could centralize it and get the power off of them. And then they're no longer confused about who they work for. They're confused because they get their marching orders every day from somebody else.

And then that guy sometimes steps in and circumvince other things you're trying to do. So there's augmenting the confusion. So I don't know if it's worth all that effort or not. I don't know how much pain you've got. If you're in enough pain from this lack of alignment,

then it's going to be worth the extra hassle to take the orders off the computer and distribute it to yourself or have a manager do that for you every morning. And that's just added to somebody's job every morning. And so they check in with your computer. And you move the order over onto your computer and then they log into you. They don't log onto the customer.

And you know, that's one way to do it. That's a bit, that's cumbersome in a bit drastic. So I don't know how drastic we need to get. I probably would start with something else and just say, you know, so who actually leads these 12 people? I have, I have this year promoted a manager that just he is just over those.

And and grading them and scoring them on meeting the competencies and doing the things that we want to see repeated right now.

“Yeah, I think that's going to create a lot of alignment because it's creating accountability.”

And we're reminding who's, you know, we're reminding who they work for. I mean, because it's very logical that they're getting confused in this situation. Even though intellectually, I know that this guy doesn't, but, but, you know, he kind of, I kind of do report to him because I have to get my work from him every day, and then. And then he's interfering in other stuff. So that's one thing I would do.

The second thing I would do is the instant one of these guys stepped between you and them on something like a safety meeting. I would do a sidebar with that customer and say, we're not doing that. Agreed. We're not doing that because this is important to our organization. My relationship with you guys is to serve you and get the work done, not to manage my people. And we're not, we're not doing that. So we're not going to do that.

Okay. And, you know, it takes 30 seconds, but you just sidebar with that guy. And you won't have to stop that, but a couple of times, and it'll be done.

You'll never hear from it again.

Because nobody ever told him, nobody ever told him as wrong. It's all it is. And if you do it, you know, at the weight, like 30 days and get all upset about it or something. Just instantaneously, hey, I need to jump on the phone with you right quick.

“And 30 seconds later, it's over and you've moved on, right?”

And you just go, we're not doing that. These guys are my guys. And we demand that they do safety meetings, and you don't need to interfere in our safety meetings. Our relationship with you is to get the work done and for you to deliver the work every morning. Not to get involved in my company culture. Understand? Got it. I'm retraining my customer. And I'd be pretty direct with them that way.

Especially in that world where you don't want to be subtle.

Right. And that's the biggest thing is, like, the safety culture we have is paramount.

I mean, these guys work with voltage up to 500,000 volts. I mean, safety matters, right? Yeah, it's death. Yeah. Correct. So this is not joking around. Well, whether it's safety or anything else, he's involving himself in something that isn't anything to do with him.

Correct. And it appropriate, like, so, yeah, I'm going to, you know, no, you don't get that option, you know? So, but just a little coarse correction, and you don't have to be mean about it. And then, but I would be very clear, very brief and very direct and very instantaneous and very private. And, and coarse correct that. I think that'll make that go away. Then you do the stands up, you do the weekly meetings, and, you know, the more frequency you have with your guys, the more alignment you're going to get.

So, like, in the restaurant business, every shift has a stand up. All the employees, all the waiters, the cooks, the front of house, the wine steward, everybody. Everybody stands up, and we have a circle, and we all get aligned. And then we break the huddle, and then we go serve the customer. And they don't do it once a day. They do it every shift.

And so, we do stand up, set ramps, we come in. We're not sitting, it's not sitting down, meeting, it's 15 minute meeting. And we just gather it, we huddle up, and we break, right? We call the play, put the ball in the zone today, it's what we're doing, let's go. And, you know, not, not every one of our departments does that, but a lot of them do it.

Every day. And they certainly do it once a week around here. So, your guys going to be on site once a week, but in the interim, you could do every other day. We're going to do a five minute zoom gathering here. And we just talked about that this week. I think the zoom calls, if nothing else, it's just a point for them to see our face.

And we're a reminder of who they work for. I agree with you completely. Exactly. It doesn't take long. And hey, I'm here to help you. Got anything I can help you all with today. Is there something going on in the field? I need to interject. And, you know, you got a supply issue, you got a safety issue, you got a problem with a customer.

Is there something as your leader? Because my job is to make your life better. I'm going to knock down blockers for you. What do you got? And, you know, you're supporting them, but you're also staying aligned, which means we're course correcting as we go along. Gently in public, when there's three construction guys standing there, we don't take one on the dance, right? But, um, good way to lose the whole team. But yeah, you know, and you stay aligned.

“And then you go, that's what we talked about yesterday.”

We all remember. We talked about that two days ago. Everybody okay with what we talked about. Yep, we're on track. Okay, here we go. Anything I can help you guys with today. Hey, just want to check in. Make sure it buys good. Here we go. And the more that kind of, the more touches you have, the more alignment you get.

And he said, I think my job is to see our, oh, the chief reminding officer.

The chief repeating officer. I just remind everybody and repeat everything over and over and over again.

“Finally, they hear it. You know, and that's how culture is built. And that's how values are aligned. It's communication.”

And then implementation and then accountability to the culture. And so, yeah, you're doing, you know, I think you got your finger on the pulse of this really well. And I think you caught it before it's out of control. So, yeah, let's, let's back the customer off and put them back in the customer seat. It's to the manager seat, just because he's issue and work orders.

Put your guy out there once a week. And then doing every two day stand up for a little while and let's see how that goes. Throw a couple things like that in. And then, um, again, make sure the customer backs off. And then I think everybody's going to remember, oh, this, there, there he is.

It's a gallon of zoom call. That's got to write my check out. Remember him? Yeah. That'd be helpful. Yeah, because, uh, very good stuff. I love it. Very cool. Zach, you're a good man. Keep it up, brother.

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Salesgravy.com/antray. It's exclusive for our Entry Leadership Audience. Again, that salesgravy.com/ENTR-E. Go get it. As a small business owner, it's your job to set expectations for each role in your company and make sure those expectations are met.

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Go to Entry Leadership.com/rollclarity to download the KRA template for free and start setting clear expectations for your team. Our question of the day comes from Canon Kansas City. Day of up promoted someone into leadership who is clearly in over their head and the team sees it.

“How do you correct the bad promotion without humiliating them or losing credibility?”

Well, you've already lost credibility. Can't get that one back. They know you made a mistake. Everybody knows you made a mistake. Probably even the guy knows you made a mistake.

The person made a mistake. I'm not sure. Pin on how self-aware they are, where they feel like I am drowning over here.

The problem is the emulation and you may lose them.

You know, this mistake may cost you a good team member. Because I mean, they've got to walk in the next day after they don't have the position anymore and do the walk a shame. And I don't know how you avoid that. You don't want to lie about it. And butter over.

If the team is, the smaller the team is, the better your chance of pulling this off. Because you could sit down with everybody and just apologize to the whole place. There's seven of you, right? There's ten of you. And you go, "Guys, I have screwed up." And John over here and I have talked about it.

I really thought, because John was so good at his job, that he could do this leadership part and it's killing him. And it's killing everybody, it's killing me. And I screwed up moving him into the role. John is a great guy and he doesn't need to be in that role right now.

And so he and I have talked about it and he's going to be back in his old role. And we're not going to go that way right now. Someday, maybe there'll be a time when he is there.

And every bit of this is not John's fault. A hundred percent of it's my fault. Because I should not have as the leader made this decision. I goofed up the decision.

And the problem is, is that I've hurt John in the process

because this is hard for him. And he's sitting there while you're saying all this. And you're just, because if you put all the junk on the table and people can all see all the junk, they're very forgiving of John, John's very forgiving of you.

You're very forgiving of them. And you got a chance to pull in this off. But if there's 60 people involved, it's going to be hard to transfer the feeling where John is not shamed by this process.

No matter what you say, because you're going to be, you know, it's just too big a group to turn this around. So you can go, look, this is his strength. So we moved him into this role. But the bigger the group, the harder it's going to be.

“But I think you take the whole thing on you.”

First, you sit down and talk to John. You said, John, you can't do this. I goofed up. I'm so sorry. You know, this is struggling, right?

And I think we need to go back to where we were. And we'll look at it again later. Maybe there's a day in the future where we can do this. But right now, I've screwed up. The process of hurt you and embarrass you.

And it's my fault. And I'm the one that's embarrassed. And I'm so sorry. And I love you. And I'm glad you're here.

And I sure hope you'll stay and help us in that other role. And that's what I want you to do. Can you do that? And just talk just to motive. Put him back where he was.

And then, you know, what, 50, 50 chance that works, right? But you don't blame him. You blame you. You know, go, you know, I thought you were smarter than you are. You're a doofus.

No, that, that won't work. Okay. No, we're not talking about that. This is like, I screwed up. I made a mistake. Yeah. When you say I promoted someone in the leadership who's clearly in over their head.

You screwed up. So when the leader says that, when the leader says, I was wrong. I messed up. I apologize. Most leaders don't have the backbone of the courage to do that.

They're too small-minded. So they're really just bosses. And if you can look at somebody and go, I messed this up. You'll get a lot of grace from people. Now, you still got to come in the next day and not be the boss,

not be in leadership anymore.

“And he still got that walker shame back to the desk, right?”

Then all of that. And you still got to walk through this. So it's still, I don't know, what a 50, 50 chance you could keep the guy. But in the team, the team doesn't care because the team already knows he can't do it. And the team will gain respect for you when you say, I did this.

It's not John's fault. I should have looked at this more carefully. I screwed up. I'm sorry. I've already apologized to John and John and I've talked about it.

And he's going to move back into this role. And it's embarrassing for him. And you guys, I'm so sorry. I want to tell John and front of y'all. I'm sorry John.

I'm sorry I screwed this up. And I'm sorry I put this put to put you in this situation. And but we're still going to do it. We're not going to act like it didn't happen. And even though everybody's embarrassed,

we got egg on her face and red and the walker shame. And all that stuff is there, but we're still going to do it. Still going to put the guy back where he needs to be. And then if it doesn't work, then you're just your mistake. Cost you a good guy.

And that's, I've been there.

“Miss handled something and I lose a good person.”

I've been there. And 100% on me want to do that. So a couple things there. Just the authenticity. Gentle conversations.

First, handling it with a guy.

You take 100% of it on you. Lots of apologies. Talk openly about embarrassment. Talk openly about a walker shame. Talk openly about all that.

And then everybody hears it. Everybody sees it. Everybody goes, yeah. Man sucks. But we're okay now.

Because at least, at least, oh, Ken, our boss has a brain. And he's a big enough man to say when he screwed up. And so I'm working with the guy who's a real guy. And he's going to tell me the truth.

And he don't be the truth this time. People rally around that be loyal to that. They'll push themselves through for somebody like that. That's good stuff. So very cool.

Good question, Ken. Been there myself, brother. You'll get through it. I love entrepreneurs. Don't forget guys.

I started my company on a card table myself. So I know what it's like to have people counting on you. Your team, your family. Not to mention your customers. And when you're the one signing the paychecks,

you can't afford to fly blind. But I'll be honest, early on. One thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other.

I finally told my team just fix it. And they did. We got net sweet. That was years ago.

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That's net sweet.com/ramsy. John is in Los Angeles. Hey, John, how are you? David. Well, thank you.

I predicted you taking time to talk today. Sure. I kind of know. So I've got a dilemma here. I'm not the same vintage you are.

Get rid of a tire. One retire. But some of us have an exit plan. I don't have any one of them. So I have a general contracting firm.

We specialize in building custom homes and largely models. I personally have 11 employees.

And we do about between $56 million of sale there.

We operate on about $12 to 15% profit margin on this. And I have, if you let employees, I've got to two of my boys that are working. And one runs pretty much every day operations. And I'm trying to figure out what is a fair way to say way out. How old are you?

I am a 54. Okay. Are you ill? I have another, I can't do it. No, I'm not ill.

Okay.

“I think one of the two boys do one runs what?”

One runs operations. The other one does what? Every operation the other one works in the field. Okay. So like a super?

Uh, basically yes. Okay. Because if you're doing this much of all you're doing more than one job. Correct. Correct.

So it's, so it's, the dilemma is, uh, one of them is run every operation to the phenomenal job. Everything is super detail oriented. Hyper focused, um, engaged, organized, everything you've asked for. I can play.

The other one is not in this category. But it's a family business. How do you, you know, and then, and, you know, the one has been worked for me. I've got to have 13 years now. And, uh, he's looking to take it over.

And I want to pass it off. Well, what we presently have. I bear him. And so you are buried. Why would you bury him?

Well, just too much stress, too much pressure. Uh, not properly, uh, staffed or positioned. Uh, so. Okay. Wait a minute.

Um, so he's, he's running operations for the whole thing. And that's correct. And there's six or 11 team members. Correct. Um,

“What's the difference in running operations and running the whole thing in an organization this size?”

Well, I'm, I'm working on the whole backside deal on the office. And, uh, Uh, bidding. So he's running production.

He, basically, he is running production.

He's not running operations. He's running production. You're running operations. Correct. That is correct.

Okay. That makes sense. Okay. So you're, you're, you're doing all the customer interface. On the, on the backside right now.

Yes. So he's, he's, he's making the sale. Uh, he's making the sales right now. Oh. So someone's about comes and wants to do a big remodel or wants to build a custom home.

They, they, they're talking to your son. Yeah. That's correct. Okay. So what is it you do?

Basically, I, I, I run the office.

I do all the, uh, the building the ordering, um, interaction with subs. Contracts and a light subs. Subcontractors. Yeah. No.

But why are the subs not being run by the job? If mostly the paperwork coming through me. So I'm basically running the paperwork in the office. Oh, okay. Okay.

All right. So it's really a matter of trying to figure out. I mean, I, of course, you've got, so what you, you just need bench depth for what you're physically tactically doing. And so if someone was doing what you were doing.

And they worked for the president of the company who was your son. And your son kept doing what he's doing now and had the title of president. And they had, he had a COO that did what you do.

And then you'd have someone doing the accounting and the logistical sub-operations out of the COO's office. And you put them in there and you pay them 50 or 100,000 hours a year to do that. Sure. Um, and, and that's some of the work we're trying to lean towards. But then I also have the situation of the, I don't need to sell the business.

“You know, I, you know, there's a value to everything, right?”

I mean, I can't just slide the whole computer over with all the books in the, in the bank statement, to someone that here you go keep going, where, where it says income is going to jump dramatically. Because I'll step out of picture and, won't be gone anytime. So that, that's different subject, okay. Sure.

But the, the first subject is, okay, there's three components.

There are two components here that are very, very important. One is, for succession plan to work, you've got to have strong leadership that can run the organization. We just discussed how to build that out. You're going to bring someone on and you're going to stay another 12 months, and you're going to get your bench depth covered and they're going to do what you do.

And their new position is going to be COO and your son's going to be president. And that's his day job, okay. That's your leadership team, his leadership team that can run the business for you guys. Then there's ownership. Ownership is separate from working there.

My oldest daughter does not work here, and she is one of the owners. Okay. Rachel Cruz is a Ramsey personality, and she's one of the owners. But she doesn't run operations. Her brother Daniel is the president.

There runs operations here, okay, runs the business. And so that's his day job. Her day job is Ramsey personality. You've got one son who's new day job is president who has a COO reporting to him that does the job you used to do. And you've got a son in the field that gets paid to do the job.

Now your son, when he gets promoted to be president, you may give him a bit of a bump. You should, okay. And that's going to lower profits.

Then the profits are going to come to the bottom line and you're still on the business.

But you no longer work there. Certainly. See how you separated the ownership versus working there. See you've got a day job and then you've got an ownership. Then you get to decide, okay.

Other out of these profits, how do I want to share it with these two boys, these two men that are my sons, as an ownership position. So you could give, you know, 5% of the profits to the son in the field as an owner, but not because he's working in the field, just because he's an owner. Here.

And then you could give 5% to your son that's the president of the profits. You only have to get the stock over for right now. And that's a first step or two. Later on, you know, you could have just in your will that the whole thing goes to some mix of the two of them.

Is that your only two children? I've got three others. Okay. What are we going to do with them? Well, they're not part of the business.

So you don't intend for them to get any of it. There's another dilemma. Okay. I mean, maybe if two walk into it and are technically rewarded, some degree are compensated for it.

Now they're compensated because they got a job. Certainly.

“That's why they got, that's why they're compensated.”

Not because they, not because they hit the DNA lottery. And they ended up being your kid and they're in your successful. So they got a job and that job pays. You don't pay them more than their worth for their job, do you? No.

Okay. No. So, so you, but if you keep this real separate in your mind, it helps you walk out of there.

First thing is we have to create the leadership team that can run it with

me being an absentee owner. Just checking in with my president son and a couple of the other leaders. And I could have a leadership meeting once a month as the owner. That doesn't work here with the leadership team that's running it. And how can I help as the owner?

And then you do the books. They have the books done with by the COO and you review the books. We close the books and I take the profits and put them in my pocket if I'm you.

“And then the next step would be to start to share the profits with the two that are there if you want to.”

And then the next step is to figure out long term what are we going to do with the ownership as you age and/or die. How are you going to break that up and how are you going to hand that up? And there's no wrong answer. You could choose to give it all to the president son. You could choose to give 75% to him 25% to the one that's working.

By the way, I wouldn't recommend that.

But so you got five kids, right? That is correct.

“Yeah, so you can figure out maybe president son gets 51% and the rest doesn't split up 49.”

I don't know. You can make it up, right? Or and all that means is not that they tell anybody what to do. It just means they get paid out of the profits. You can.

That's one one the angler never looked at it.

Yeah. So if you separate the leadership team and the operations of the business as one category and the ownership as another category,

“you can start to see a path to create a one year exit ramp or a 18 month exit ramp or whatever on your succession plan.”

And you'll get new energy from doing that. And you can telegraph that to the customers. You can telegraph it to your sons.

You can telegraph it there.

I haven't decided what I'm doing with the ownership aspects to the rest of to everybody. I'll let you know on that later. But I am going to let you know right now that we're elevating someone sort of president as I step away sometime in the next 12 to 18 months as soon as I get my bench depth done here. I got to train somebody up tactically to do what I do every day so they can report to the president son. The son that's the president that guy.

So cool stuff. You're a good man, John. You're closer than you feel like you are. You just need to treat this like a building project.

“We need a blueprint, a timeline and a budget, right?”

And let's lay it out and just execute. And then you'll look up in the house will be built. And that's exactly how it is. It's just another project. It's all it is.

Folks remember better away warrior than a quivering credit. This world needs more high quality leaders so take courage and lead. I'm Dave Ramsey your host. Thanks for joining us on Entry Leadership. If you're a business owner who's been grinding it out and rarely gets time to step back and think clearly,

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