Dave Ramsey: The 5 Stages Every Business Must Master to Scale | Entrepreneurship | YAPClassic

If you're only purpose in business system, make money, you will not last. If you help enough people, you don't have to worry about money. What are the five different stages of a business?

Well, the first one is treadmill. Everything depends on you.

And then the second thing is you start, and then when you've done that, you'll level up and you go into the pathfinder stage. And then we move into Trailblazer. The next one is a sweet spot. Pink performer, oh, you're making so much money. Everything's going so good that you forget to break it, but you better break it for breaks.

And then what you do that, you will naturally roll into the last one, which is...

“What advice would you give to an entrepreneur right now who wants to start their own media business?”

Do it! Young and profitors, what if building a business you love wasn't a guessing game? But a road map you could actually follow. That's exactly what we're getting into in today's Yap Classic episode with the one and only Dave Ramsey. Dave isn't just a best-selling author and financial expert.

He's built a full-blown media empire called Ramsey Solutions, and he's helped millions of people with our money problems over the past 30 years. His resume speaks for itself. Now, in today's conversation, Dave gets into his book build a business that you love. And he really impacts what it takes to create something that actually lasts.

From the six key drivers behind every successful business, to the five stages, every entrepreneur needs to move through to get there. This one is a really good one, guys. I absolutely love this episode. It was one of my favorite ones that I recorded last year.

You guys are going to love it, especially for you entrepreneurs out there. So let's get right into it. Dave, welcome to Young and profiting podcast. Well, thank you for having me. I'm honored to be with you. I'm so excited for today's conversation.

I'm really looking forward to talking about business and not just financial advice, because I know that you have so much advice out there for people to look into, but we don't really hear too much about the business side from you.

“And to warm us up, I was thinking, can you give us your core principle for financial freedom?”

Like you talk about so many different things, but just so everybody knows what you stand for. What is one of your core philosophies when it comes to financial freedom? You know, we've been teaching this stuff for gosh almost 40 years now. And I think the thing we've discovered more than anything else is, if I can get folks or if we can get folks to just be intentional.

And just think about, you know, look at what they're doing, instead of just, you know, impulsing every single thing in the financial arena. And not considering the unintended consequences, not considering the downsides. When you're intentional, you automatically consider the downsides. And when you're intentional, that's going to lead you to being on a budget.

That's going to lead you to avoiding debt. That's going to lead you to infesting. Because no one says, hey, I want to work my whole life and have no money. That's not an intentional thing, right? I want to be broken deeply in debt, and hundreds of thousands of dollars

a student loan debt and card debt and I can't breathe. No one says sets out for that to be their goal.

“They fall backwards into it from a lack of intention out.”

Yeah. So you have been preaching financial advice for so long. But I found out that you actually started your career with a radio show, a really small radio show. And it all started because you kind of hit rock bottom. And this was really like your way out of that,

getting this radio show. So talk to us about financial ruin and what happened there.

And then how you started with your first radio show.

Well, when I got out of college, I got married and Sharon and I were broke. We had no money. And I went through a couple of jobs. And then I started buying into selling houses, doing flips. And that's before there was cable TV and before chip and Joanna were born.

So this is way back there in the early 80s. And so I was good at it. I grew up in a real estate household. And I was doing a lot of flips and making profit. But I borrowed a lot of money to do that.

And I continued to borrow short-term notes to do the flips, because we weren't holding the property. We were flipping it. The largest banker dealing with got sold. And they looked down and said there's a kid 26 years old.

There's a million to this is scary.

Me and two and in 1982 was some money. And so they called our notes. And then another lender heard we were in trouble, because we were in trouble. And so we had to come up with all of the three million dollars worth of debt that we were in in like six months.

And that's impossible in the real estate business. So it started a crash of foreclosures and lawsuits and stress that lasted two and a half years. And finally with a brand new baby and a toddler and our marriage hanging on by a thread, we hit bottom after two and a half years. I made $250,000 one year of the next year.

I made $6,000. This has been the whole year selling everything, trying to pay the bill. And so at 28 years old I got the opportunity to start over. And I went to buying and selling real estate again. But this time I was just doing it as a wholesaler just pitching it to other people that I in the business.

And then gradually I started learning common sense financial principles from old people that were rich. And from the Bible as a Christian.

“And start telling people to live on less than you make and be on a budget and get out of debt.”

And we this was shown that I were doing to recover to heal. That started as just a little Sunday school class of my church. We went on a broke radio station. As you said, it was talk radio is huge. And those there is just beginning in those days actually. And Rush Limbaugh was just coming on the scene that kind of thing.

We went on it has just a lot just for fun. We weren't paid. There was no money. It was just just to do just to help people. And we were horrible.

We were awful at it. And the accents were super thick and the country fried and heal Billy. And if you heard those tapes, you would really good a good Saturday night live skit laugh. And so, but that's how we started.

And people got helped and they kept calling because they kept getting helped. And that was 34 years ago. Incredible what you built with it. It's turned into this whole big empire. So was there any like pivotal moments where you're like,

Wow, like this is going to be way more than just a radio show.

“Like what were some of the key moments that you remember.”

You know, I'm like you. I'm an entrepreneur at heart. And so we see a need and fill it. And I'm looking around going getting people out of debt. This is not exactly a niche market.

I mean, this is huge. It's mammoth.

And we always laugh and say me and Jenny Craig got a big job.

And so it's like, you know, it's crazy out there. And so we knew it could be huge based on the need. But what I didn't know at 33 years old when I started. 34 years old when I 32 when I turned on a microphone. And that I had no idea how much work it was going to be to monetize it,

to scale it, to build business models and systems and products that would insert themselves at at volume into people's lives. I had no idea how much work. And I did no idea what I didn't know. I didn't know what I didn't know.

I probably wouldn't have done it if I don't know how hard it was going to be. But it's a lot of work. We worked our tails off for a long, long time. And it's fun. And we've helped a lot of folks.

And it's turned into a wonderful, wonderful life. Yeah, and now you've learned so many principles that you're teaching other to help build a business not only just gain financial freedom.

So you started this show, this first radio show in the 90s.

And so much has changed over the past 30 plus years in terms of how people consume content. And when I think about your brand,

“I think of you as like one of the pioneers of creator entrepreneurship.”

Nowadays, like everybody's a creator entrepreneur. They're, you know, on social media. They've got their own personal brand, and maybe they have a company. But you are one of the first people to really be a creator entrepreneur in this way, being the face of a company and, you know, running a company,

having your own show and things like that. So my first question to you related to this is, how have you approached the way that content is consumed over the years? You know, it's really insightful for you to notice that. Most people don't.

I have to explain it to them. So thank you. That's impressive. Because we're not talk radio people, and we're not podcasters, and we're not YouTubers, and we're not bestselling authors, and we're not a live events company,

and we're not a curriculum company. We are content creators. And so what that means is we have a message that helps people that we believe in and that we're effective at teaching.

And once you say that, then the answer is, we're platform agnostic.

I don't give a credit. I personally, I'm a boomer. I personally, did test TikTok. I make fun of it, but aside from my personal flavor, we utilize that medium. Because we're able to reach a lot of teams.

We're able to reach a lot of early 20s, juniors that are kicking off, and so we're wearing TikTok out. My social media team, you know, aside from my personal taste of it, I actually don't consume any personal media personally any more.

I check out my Instagram a little bit, but that's about it. I've never been personally on Facebook. When Twitter started, I got on a big time, because it was a lot of fun way back before it got taken over by the trolls. And I've not been on it since it's X.

I'm on it, but I'm not on it. So anyway, we're platform agnostic. So talk radio, and then the first thing that happened was in the 90s, two satellite companies put up satellites. One called serious and one called XM.

And talk radio, people were freaking out. Oh, that's going to be the end of talk radio. It's going to take over everything. And then we're like, nah, probably not. But, you know, that's kind of fun.

And so we did a deal and got on both of them. Well, they both financially struggled and then ended up combining. And so today, I have a whole channel on serious XM. But I was one of the first people on there,

And we kept doing talk radio.

“And then Mark Cuban sells broadcast.com for 11 billion.”

Because broadband was actually starting to get some penetration. Of course, when I started on talk radio, there wasn't an internet. So, you know, when we come along past that, now this thing pops up called the The Wild Wild West,

WWW.avramz.com. And we used to say that, you know, it's crazy. The broadband where you could actually get something that wasn't that was streaming. And it was clean like you and I are doing right now. And that kind of thing.

And so, I got walked into my office. One of my team and he goes, "We need a podcast." And I'm like, "What the flips a podcast?"

And we were one of the first people in the podcast space.

We were there very, very early. We didn't shift the whole business model to that. Because we don't really care what it's on as long as we can help somebody with it. And we're not going to abandon all the others.

And we're not going to be, we're not radio people. So, we don't have to worry about radio. We're not podcasts. We're going to worry about podcasting. And if one of them gets mad at us or the other,

that's their problem. We're going to be on everything. I love that. I love that approach. I love how you guys have been just platform agnostic.

It's all about the message, just the different megaphone. So, I think that's really great. You're on Zoom pitching a huge client. You're in the flow, you're confident. The client seems super interested.

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which a lot of entrepreneurs are now content based entrepreneurs, and that's a major focus of their business. It's very different from being just like our traditional CEO. And I find myself like wearing so many hats two days a week. I'm recording all day recording my podcast recording commercials,

and it's very hard to balance it all. So what has been your secret of being the face of your company

and doing speeches and things like this,

“but actually having to produce content every day,”

and also managing your business. How do you juggle it all? You're right. We do three hours a day of talk radio that turns into a podcast and also turns into a YouTube show that's much less than that,

because they're so stinkin' many commercials and radio. So by the time we extract those with the algorithm, put it back on, but we're sitting in the seed every day doing a three-hour show, and have 430 plus years.

So I'm both your right. I'm both the product and I am the CEO. And so what do I do?

Well, I've got to be able to

and master the task of shutting off one and turning on the other. So while I'm on stage talking to 4,000 people in an auditorium, I can't be up there thinking about business strategy. I need to be the best product. And when I'm not up there and I'm doing something else,

I can't be thinking about that stage. I've got to be the best CEO. And so to compartmentalize and to say, once I get off the radio show, this is what we're doing.

Once I get off the microphone, this is what we're doing. We're going to sit down and go straight into that meeting. And so today I've done two podcasts and I'll do hours as a guest, and I'll do hours.

So I've been the product a lot today,

but I had an early morning meeting over coffee with one of our team leaders on some stuff we were dealing with as the CEO. And I'll have another meeting after I get off the air today. And so it's just switch on switch off as what it amounts to.

“And what that means is that my calendar has become very, very important.”

We are very selective and intentional about what I'm going to spend my time on. Whether it's being the product. And so I can't go speak to a group of 35 people. I don't have the bandwidth to do that and still run the company. I have to turn that one down.

And I'd love to. I like the people. I'm not an arrogant about it. I just have to be doing the other stuff. And so, you know, my calendar is 15 minute blocks is 100% full from 8 a.m. to 5 p.m.

when I'm working probably out through about August right now. That way. So if something gets on there, that means something else got bumped off right now. And between on and that will happen periodically. My personal system has been with me 23 years. She helps me manage that so that I don't get off the teagued and stressed out and become a jerk.

Our too much caffeine and become a jerk. But yeah, we just got to navigate our way through that and manage those time blocks. Yeah, so I'm hearing time blocking.

“I'm hearing saying no even though you want to help people, but sometimes you just got to say no.”

If it's not going to be aligned with your priorities. So you've got this new book and it's called Build a Business that you love. By the time this comes out, the book will be out. In the beginning of your book, you mentioned an analogy about golf and red lights. Can you share that story with us?

Yeah, I went to Scotland recently and play golf. I'm not a good golfer, but I had a lot of fun. And because it's the home of golf. And Scotland is famous for its horrible weather when you're playing golf. Among the horrible weather's fog.

And so we played one course one day in my wife and I, and it was super, super foggy. And you couldn't see, you know, you couldn't see 40 feet in front of you. And so we had a caddy and he would say just aim at that way. And you're just hitting a ball off into oblivion. You have no idea where it's going.

None whatsoever. And it was really, really, really frustrating experience. And then we went about three days later, it was foggy again. And we went to a different one. And these people had taken bicycle seat lights that were strobes and put them on little posts about every 50 yards out through the fog.

And so you couldn't see the hole where you were hitting two. And you couldn't see really a lot of the nuance of the terrain that you were hitting into. But you could see one light blinking in the fog. And so if you could hit the ball towards that light, you knew you were going to be okay. And that changed the whole experience.

Exact same weather. But it was nowhere near the frustration, even though it wasn't as enjoyable as being able to see the whole thing and place the ball where you wanted to place it. But at least we had this sense that what we were doing was getting traction. And it wasn't just a random freaking chaotic thing.

And so you land out there and then you could see the next light and get up onto the green. And you know, and then you got a whole different process. So the point of that is that having a clear path in anything gives you a huge hope and energy and belief to move forward. It's very difficult to move forward when you're in the fog when you can't see. And you don't know what you don't know.

And it's just, you know, not only do you have all the frustration and the angst of being in business and working your butt off and not knowing.

So one of the things we attempted to do is to lay out a clear path through the process of business that we've observed in our business. And back in about the year 2000 we started coaching small businesses and we've not coached about 10,000 of them. And as we've coached them we've watched them go through the same five stages of business and that's the clear path. That's the light in the fog. And I can't wait to go over those five stages and the six drivers.

It was really interesting to learn about that. But first I want to ask you why you think this book is so important right now because I've heard from other entrepreneurs have been on this show that it's the easiest time to be an entrepreneur and a business owner and then other people come on the show and they say it's a very difficult time. So what is your opinion on that? It is the easiest time but that doesn't mean it's easy.

“That's what it is. I mean ease of entry into the world of content creation as an example.”

You can just decide one morning and you have a YouTube channel. You only have two people watching it but you can decide and start. You can start. I guess you can start in print a book today very easily. You can become an author very easily. The ease of entry into, for instance, your world, my world is amazingly easy in terms of the actual tactical things. But starting and running a business is hard. When as soon as you become self-employed you realize you have a jerk slave driver for a boss.

I mean your boss will work you to death when you're self-employed. Because they think about it all the time and they think about what you should be doing all the time and you're just consumed with it. And you do stupid stuff and it leaves it hurts and you make mistakes. Lots of them and you have to survive them. So ease, easiest time to start a business. That's the tactical thing and all that. But it's still hard because the thing, the first prototype you come up with is your sweet little baby and then you figure out your baby's ugly.

And it's never even going to make it to market.

We've got to iterate this ugly baby and get it. Because it sucks. It's awful. And we do that at Ramsey to this day. We're messing with products. We're putting them out for tests. We're doing beta with them. We're doing all kinds of stuff. We'll test stuff on a real and throw it out there. And if the real goes crazy, we ask ourselves why and does that indicate we should be in a product lane. And all that and it's, you know, no, it's not easy.

But it is easiest to start that it's ever been. So you ought to do it. And the other thing that's happening right now to the super exciting. I've got 1100 people on our team right now. And somewhere around 650, 700 of them are Millennials in Gen Zs. Most of them are Millennials in Gen Zs in other words. And those two generations are the most exciting entrepreneurs I've ever seen in my life.

They are amazing entrepreneurs. They don't trust the standard way of doing things.

And they color outside the lines. And they've grown up with a magic wand in their hand that if they push a button stuff happens. And you can get the answer to anything. And so they believe anything's possible. They have an abundance mentality, not a scarcity mentality. They distrust traditional processes and bureaucrats, which is what every entrepreneur should do. And so these two generations, the ones that you work with a lot and I work with a lot, I'm a huge fan, especially from an entrepreneur standpoint.

So you're uniquely suited for this moment and time. Yeah. Well, that makes me feel good. It does a confidence boost for all the entrepreneurs, tuning in to our Millennials and Gen Z trying to make it work. But we still want wisdom from you. And you talk about these six business drivers.

“Can you break that down for us and help us understand why they're so important?”

What are the things that drive a business? We started asking ourselves, what are the components of business that we had to continually get better at? And as soon as we got around and got better at each one of them by the time we came around, it was a whole new set of problems and we got to get better at them all again. So these things spin out. And I would say we've rolled through these six drivers probably somewhere around 10 or 20 times over the years, over the 33 years here.

And so there's not a set thing, but the point is you've got to get good at each competent in each one. And as soon as you do, you get the opportunity to solve a new set of problems in each one. And so we start with most of the time one of us wants to start a business. We have a product or service idea. So we skip ahead and start with product, which is a mistake, but it's normal.

It's what most people do.

“It's I've got this great idea. And that's what causes you to be a business person, cause you to be an entrepreneur.”

I've got this great idea. And that's okay. You've got to start working on the prototype. Like I said, it sucks. You're going to get to do it over.

But you can start working on the first version of the show, the first version of the book, the first version of what the app whatever it is.

But really the first thing that you had to work on before you got there and you didn't even realize it. Number one is personal.

“The person. And John Maxwell, my friend, one of the top leadership gurus in America today is written a bazillion books.”

And his best seller and my favorite of his is the 21-year-reviewed of the laws of leadership. The third law is the law of the lid.

And the law of the lid says that my business will never outgrow my competencies in character.

And so I personal growth is 1,000 percent necessary to move forward. The person that started Ramsey couldn't even get a job at Ramsey today. Okay, the 33-year-old version of me, I couldn't even get on here. You know, obviously I'm not the same guy. I've learned a lot from experiences, books, friends, mentors, events, taking notes, learning, learning, learning, learning, learning, learning, learning.

So the problem with my businesses and my mirror, that's the bad news. This solution for my businesses and my mirror, that's the good news. This is a controllable, I can control. I can continually fight, scratch and claw to get better, smarter, faster, wiser, all of those things. So you got to do that one.

The second one is purpose. And if your only purpose in business is to make money, you will not last. Business is too hard. It's too painful. There's too many emotional ups and downs. You work too freaking hard.

And if all you want is a stack of cash, as soon as you get a stack of cash, you're going to figure out it doesn't do it.

“Now, I want you to make money. I like making money and I believe in making money.”

I'm not against profit. I'm a capitalist pig. I love it. And so I want you to go do that, but it does not get you there. It doesn't fulfill you spiritually, psychologically, anything else.

And we always just say, you know, when I was a little kid, I never had lobster until I was like 14 years old,

because I grew up in a redneck neighborhood. And they read lobster came to town. That was the first lobster I ever got. But I loved it. I thought, man, if I ever get some money, I'm going to eat lobster every day.

No, you won't. If you eat enough lobster, it tastes like soap. If you get enough cars, they're just stupid car. If you get enough jets, it's just a stupid jet. I mean, you cannot get enough money for the stuff to give you fulfillment that your spirit is not built that way.

So you need a bigger purpose of reason for doing it at Ramsey. It's we provide hope. And we get great fulfillment from giving people instruction and a clear path in this book, or in the total money makeover on finances or whatever. We get great psychological income, spiritual income fulfillment from meeting someone and go, hey, you know,

our business was doing 2 million a year. We came through one of your untreated leadership programs and we're doing 25 million a year. And that just makes me high. I love that because that means the small business guy who's one of my great love gal,

“who's one of my great loves in life is succeeding because I was able to be a helper.”

And I want to help them. I want to give them hope and I want to give them a process. So that's purpose. And then that leads you to people where you start adding people to your team. Oh, that's so fun. I love my team.

And there are days that drive me nuts. Hiring and firing is probably the hardest thing a small business person does.

And you get better at it and better at it and better at it, but you never really arrive.

And building culture inside the team building unity and loyalty and high levels of communication and conformity to a set of values that we call core values. And if you're not doing those, you're not a we and you can't stay if you're not a we because this is who we are. And so, you know, we're working and working and working on the hiring and firing piece. And so we just go all the way around to planning, laying out a strategic plan, a tactical plan, a marketing plan to go to market.

Most entrepreneurs don't plan enough. We just go throw something in so I'll see if it sticks. And and then product comes up and then profit product should be a by product of having to have purpose of who you are growing as a person of the quality of your team. There's gathering around and in collaboration we create this product. We develop a plan and out of that a product comes.

But we often start with product and skip over those others. You'll get to do them again if you do skip over me you don't really get to skip them. And then the last one is if you help enough people, you don't have to worry about money. If you put out a really good product or service, people will give you certificates of appreciation with presidents faces on them. Product profit is the by product of serving well.

It's the applause your customers give you can blanch it says. Well, thank you for that overview and you mentioned that these drivers, they're not a checklist, right?

So can you explain that?

“I know you were kind of alluding to that before, but now that you broke it all down, can you explain how it's not really just a checklist that you go through?”

Because you get to do it again and it does flywheel and pour into each other you're exactly right.

So for instance, once we get around the wheel of the six drivers, you're sitting on that profit one, okay, and you're making some money. Well, you're going to grow and in order to grow, we go back to personal and the person has to get bigger to grow. And so if you haven't changed since you left the thing and came around, it's going to fall out. You've got to get better and then you've got to drive the purpose deeper into the team and deeper into the client base and deeper into the vendor base. And then it was before or it won't spill over and go to the next and you know, and now we're going to get better at hiring and we're going to maybe maybe start developing our second layer of leadership.

A higher level of competence because we're able to hire more people or and/or better quality people, people that are smarter because now we get a little more money. But it brings with it a whole lot of the set of problems as well as opportunities. And so again, they just keep pouring around and then by the time you make a little more money and you come around, now you've got to grow again and hear beer the things cycles again.

So it never really stops and it's not necessarily tied directly to the five stages, meaning it doesn't turn like once per stage.

You know, sometimes you might turn all the way around that three or four times in a stage. That's very possible. I know we have it, Ramsey as we've looked at it. Yeah, it makes me think like now that I have problems I can be like, well, is this people, is this product, is like, what is the actual problem? Is it me, right? So what's the stall, what's stalling the flywheel? Yeah, because it is one of those buckets has stopped up. Yeah, when it comes to personal, I know a lot of entrepreneurs start out being really tactical, right?

We've just got to be scrappy, we're wearing so many different hats, and then as you grow and like for example, now I have 60 people who work at yapp all around the world. I have to become more strategic, but I was, you know, programs that I do well or like things good things happen when I'm tactical. So sometimes really hard for me to just like be strategic. So what advice do you have from moving from tactical to strategic as an entrepreneur? When I started, I couldn't spell strategic. All I was was tactical, I'm an old salesman, and so get up, leave the cave, kill something, drag it home.

I mean, that's about as tactical as it gets, right? And so push something, if nothing's pushing nothing happens. So push something, shove something, kick something, go, go, go, go, go, go.

“Lack of activity, you'll kill you. And that's how we start, and you should start that way.”

And you need to maintain that energy all the time because you should have folks on your team at all times that are doing very tactical things. And so, and they need to feel the energy and the importance of that tactical behavior. Because if all we have is an organization that plans, that's called a dreamer. And dreamers live in their parents' basement. You know, that's not, we're not going, we don't want to be a dreamer. We want to be somebody executes dreams. And so you move through the tactical, the tactical has to be there.

So, but I was beating my head against the wall at the treadmill stage and even up into the second stage of pathfinder.

And so, because there's only so much tactical will move because it's very inefficient once you start putting some scale to it. If it's not the execution of a plan, you know, it's kind of like getting in the car and slamming on the gas and saying I'm going to Florida. Oh, wait, where's Florida? I don't have a plan. I don't have a map. And you can end up driving in circles. You can end up driving in the wrong direction. It might be, it might be a good party. We might have a lot of fun on the road trip, but we really are not very efficient about getting to Florida.

“If you want to get to Florida, you get the map out. You know, and one of the map apps tells us the most efficient way.”

And then we begin to execute tactically on that strategic plan. And so, what happened with me was people get talking to me about this and I wasn't very good at it. And I've learned in the personal to be good at it, but it wasn't my natural. I started hiring, we ended up with some people with MBAs on our team. And 100% of the MBA programs in America, masters in business teach strategic thought. If you get an MBA, it's one of the things you're going to get out of getting an MBA. I don't have an MBA. But I have observed this and talked to a lot of MBAs that worked for me that are have worked for me over the years. And strategic thought is one of the things to build into an MBA's head.

And so they came on board and they're like, "Hey, if you're missing this, you need to do strategic thought." And I'm like, "I don't want to do it. I want to get worked on." And they're like, "No, you're work will be more efficient." And I'm like, "If you get above it, get a 30,000 foot view, you can actually walk around the barrier instead of running through it."

And I adopted it and I taught them how to work. I love that. I love that.

“Yep, gang, here's a hard truth. I had to learn the hard way. If you're running a business and you don't have a clear picture of your cash flow, you're flying blind.”

There was a time when I was approving expenses and making decisions without fully knowing what was going out of my account or when. That's a dangerous place to operate from as a business owner. So as we started to scale, yeah, media, I needed a change. And all of it improved when I started using Intuit QuickBooks bill pay. It's a bill management tool inside of QuickBooks that brings all of your bills, vendors, and payment details into one organized dashboard. So you can track and pay everything in one place. With QuickBooks bill pay, you can see what's due, control approvals, and understand how each payment impacts your cash flow.

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I had no idea what it was when I first started, yeah, I signed up with one and then I never checked the platform because it was only for my registered agent. I didn't even know what it did.

Apparently I learned this third way that a registered agent is what notifies you if anybody ever sue you. So I actually got in trouble this year because I didn't even know that an old client that we barely worked with put out a lawsuit and they didn't notify me and I ended up missing a court date and it cost me a lot of money. So you really need a registered agent that you trust that does a great job and I've recently switched to Northwest Registered Agent. So this never happens again. Don't pay hundreds or thousands of dollars for what you can get for free on Northwest Registered Agent.

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Now I know you've been kind of teasing the stages so just so everybody is like on the same page and understands all the different stages and then we can talk through drivers and stages some more but what are the five different stages of the business.

Well the first one is treadmill and that's where we all start and you work your butt off and it's very chaotic and everything depends on you.

You set up the microphone you set up the chairs you set up the screen you set up the printing you create the revenue and you create the product that creates the revenue. And if you're not at work nothing happens you don't really actually own a business when you're at the treadmill stage you actually own your own job because if you don't come to work you don't get paid. A business if you don't come to work you get paid because it keeps running without you.

I got I would get home I would flop on the couch and my wife would say what you do today I said I have no idea but I did a lot of it.

“You know and we just you're just working and running and running and running you don't feel like you're getting traction that's why we call it treadmill you don't feel like you're ever going to get out.”

And if you don't begin to see a way out of that you will burn up not more than burn out you'll just burn up you fry and and because the the hours you're crazy the stress is crazy. The weight on your shoulders the whole thing depends on you the dream is going to die if I take a minute off I can't let it die I got to get this done and it's very it's it's a lot of fun. And you're you're very important because you are very important that's kind of nice and you can really see the short term feedback loop you get real quick results and real quick answers to your questions because you're it.

And that's very rewarding but it's not sustainable and so the way you level up to the pathfinder stage the next stage is you work on a couple of things one is you work on time management and you start with.

“I have got to do some things that I have to think past Friday I quit I can't quit I have to quit thinking short term only and I've got to start time blocking.”

And I've got to say all right I have to block out time to in you know the other discussion we're having to be the product and I have to block out time to make sure the accounting is done and I have to block out time to make sure the SEO people are doing their job with all the social media launches and reels and shorts and. Tik Tok drops and whatever we're doing I got to watch over their shoulder as the leader and make sure they're getting that done and after block time for that it doesn't happen unless I block time and I look at it and make sure it happens so time management is one of the things you do to level up.

Very careful time management time management away from the treadmill and then the second thing is you start you start making your first tires here to where all the production.

The actual unit of service or good is not dependent on you as a matter of fact you quit doing it they do it you might be the product like you and I are.

“But the you know the the video the editing the placement the chopping up and saw dusting out of the actual piece of content in the case of content people.”

Is not dependent on you you're you're going to do your thing in front of the microphone then somebody else is going to do all that so we started to put people in place which is where you are right now you've done that.

And in your case you usually have you know 10 to 50 or 60 people at this stage that will be typical.

It's not necessary to be at the stage with that's about where you are you so you start to delegate the creation of the product and the creation of the revenue. You're starting to own a business and then when you've done that along with time management you'll level up and you go into the pathfinder stage and pathfinder is is where you discover you've really got to lean into your values and your people that you're starting to hire have to be able to complete your senses. What would Dave do in this situation what would Dave say in this situation and if they can complete your senses you've got a delegateable environment.

But if they don't know what you would do then they're frozen every time a decision comes in front of them. And so they haven't been trained yet on the values and they haven't been trained on the decision making paradigms. And so we train them we start to build that level of delegatable people and then we move into trailblazer and trailblazer is the biggest thing holds you back in trailblazer is the middle it's the middle one. It is really frenetic there's a lot going on it's so fabulous lot of chaos and the thing holding you back now is what got you here won't get you there.

And and so you've got to implement systems that are more sophisticated than you've ever done processes that are more sophisticated than you've ever done. Technology's picking up the weight of things that people have been doing on paper you've been killing two-decker many trees we've got to get this digitized we've got to get this accounting system where it's efficient and automated not where we have to pull 17 spreadsheets together to make a basic accounting system work that's ridiculous. And so but but it got us here but it won't get us there it's not taking you out it's not going to keep you but it's going to keep you from moving forward and getting bigger.

And so you really start working on systems and processes I resisted this stage a lot because I didn't want to be corporate America. I didn't want a bunch of rules I didn't want a bunch of freaking policies policy manuals and people saying well accounting said we can't do this or legal said we can't do this. We got to get this done and I didn't want that and so I resist processes because I like the chaos of entrepreneurs but it won't get you there you've got to do you got to increase your sophistication level and start to do those things and this is also the place where you start doing your first real serious strategic planning where you really start looking forward.

You sit down you shut everything down get the best minds in the room where we're going how we're going to get there you convert the strategic plan into tactical breakouts of defined objectives and you get in gear and push it through. And the team is all bought into it we all know where Florida is and we all know how we're going to get there and we know Georgia's going to make sure the tires are good and Sally's going to make sure that the cars got gas and Henry's going to make sure we got lunch in the back and so on whatever we got to do to get there what are the defining objectives to keep us from getting there if we don't do them and get us there if we do do them when you do that you move up to peak performer the fourth stage that might take you 20 years to do that's not going to be 20 months.

“I don't know how many years it's not a set number of years but we have observed that people will move through these things and only to the extent they do the stuff to level up will they move into that next stage.”

But the next one is a sweet spot peak performer all you're making so much money it's unbelievable your team is incredible they can finish your sentences stuff is getting done better than you would have done it because they know stuff you don't know. They're taking you places that you couldn't have thought of they're teaching you things when you're the owner of the leader that you wouldn't even even know and so the six drivers are spending all throughout this you can hear them in there as I was doing this almost.

“But peak performer is the there's only one negative thing about people for it's so freaking good everything's going so good that you forget to break it but you better break it for breaks.”

It's broken you better continue to iterate you better kick you better you better send a joke of energy and lightning ever so off shock the crowd out of people ever so often and stick a cattle prod on the thing and get it moving because you will kick back and ride on how cool and how great and how profitable you are and you'll start to believe you're a big deal and you're not you're just doing good that's all so we that this one's real easy to settle in because everything's going so good. That you can take your hand off the wheel put your feet up on the dash and run the car in the ditch don't do that you've got to keep driving you got to keep thinking you got to keep getting better you got to keep iterating you got to keep killing bad products and inventing new ones you got to keep going and then what you do that you will naturally roll into the last one which is where Ramsey is which is the legacy stage and that that's where we start talking about.

I have this thing survives the individual whether it's it through a sale whether it's through a succession plan in our case the my children or in their 30s and 40s and they are the owners of Ramsey all but 1% and I only voting stocks I'm still in charge but anyway. But they you know the the ownership is already passed they leadership team can carry this without me we now have multiple other brands other than me on the stage on the microphone called Ramsey personalities and the show is actually gets higher ratings when they're on them when I'm on which is distressing to me personally but it was the plan so.

It's kind of insulting they guys real and so means our plans working we've been working on that for 16 years by the.

Wow wow wow while we were writing along in peak performer we've been working on how we were going to six how we're going to create a succession plan how we're going to implement it we keep asking herself if Dave does this year how much of this place survives. We started it was 3% would survive 16 years ago because I was 100% dependent on my being the product even though we were in the peak performer stage.

But nowadays it's like 97% would survive without me and so I've worked myself out of a job so to speak which means I'm a fabulous leader but also hurts my feelings on a personal level.

Sometimes you gotta get ego out of the way right for what that's for the business. So when I was thinking about this and learning about all these stages I was like imagining like our company where we're at.

“I think we're like somewhere between the past finder and the trail blazer stage right now and when I was thinking about being a treadmill entrepreneur I found myself thinking you know.”

I feel like parts of our business have moved back to treadmill because now it's way slower to hire the people who used to be directly working for me are now leading departments and then I find myself again working a lot. We haven't hired fast enough because we have all these new fancy processes and I used to just go on LinkedIn and post whoever I wanted and now it like might take three months and then that compounds and then suddenly I'm doing grunt work that I wasn't even doing two years ago now I'm doing it again right.

Yeah, anything that's new or broken is gonna start at treadmill and so you can have a company and organization that's running all the way up at pathfinder but when you launch a new product everybody on the brand new product is starts at treadmill.

“We're all gotten it until we get the thing up and moving and when that product starts to monetize or that service starts to monetize it can start to self.”

You could feel you could feel positions to carry it but in the meantime it's somebody's got two jobs you know I got I got to lift this new baby out of Nick you.

But yeah so anytime you're launching or if you have something that gets in the ditch we've had product lines that they just kind of got the flu and then they got pneumonia. They were sick you know and now we have to stop and take care of the ill patient and then how do you get them going why you know paddles clear you know and you're boom and you get them going again and that's like starting a brand new product almost. So yeah it's gonna start at treadmill the good news is those little those departments or those product launches are recovering areas.

“They'll blast through the stages and catch up with the organization pretty quick because the organization is not functioning at that level.”

Now I know you were talking about this lid on leadership the the note that John Maxwell says the law of the lid right and you mentioned some characteristics about leaders like their servant leaders their humble they can be godly visionary.

How can we start to learn how to be a better leader and start to emulate those characteristics.

What I did was I read every book I could get my hands on of successful people I read a lot of biographies of business people that were successful. And I started noticing a trend in the leadership literature and in the biographies the best leaders in the world the world class leaders are our other.

“They're serving they care about the outcome of of the individual and of the organization at the same time and even the personal situation of the individual the team member.”

And so I can love my team and I can one act of love is not allowing them to work here because they're incompetent here which means they must be competent somewhere else.

And so working with them and teaching them and lovingly guiding them and then you know having a difficult conversation or two or six and saying you know this is not working. We probably need to find you something else to do because you can't you can't this you're not fitting here. This isn't working. We have 1100 team members who probably have close to 2,000 people over 35 years that you store care and they either left of their own accord because they got married and kids or they left because they moved or they left because they got a better job or they left because we let them go.

The vast majority we did not let go we don't have that many many firings around here but we are not going to sanction incompetence or misbehavior or lack of character interacting with each other we don't have people messing with each other and that kind of we don't we don't do that here. And you can't be a we if you do that what it took me a while to figure out was was that I was loving someone well by not allowing them to sit in the poop you know if they're just sitting in the poop it doesn't work.

And sometimes we've all been in situations where we're just not good it's something and it's just it's frustrating for us oh by the way it's frustrating for the customer oh by the way it's frustrating for that person's leader oh by the way everybody's pissed you know I mean but we're not admitting it because we don't want to do anything about it because it sounds like it's mean to do conflict it's not mean it's mean to not do conflict we say around Ramsey it's it's un unkind to be unclear we need to be very kind and clear and very blunt with folks and we don't have to have wait to do annual reviews.

For in the middle of a project or something not going right because of an individual we pull the individual side and talk about it right then we don't embarrass them or shame them in front of the rest of the team but we don't let this stuff lay around. And consequently we have an incredibly productive wonderful culture where people trust each other and things move at the speed of trust. When I was reading your book I saw that you have a 90 day period for onboarding we actually do this at YAP and I've been loving it because within 90 days if somebody is not able to get up to speed on a job.

But it's really great that they know and we know that there's like a provisionary period for us and that they can be let go and there's kind of like just no hard feelings it didn't work out. It's already pre planned that they're going to get evaluated so talk to us about that and how that's helped improve your hiring. That's the other way too that for the team member they don't have to sit and ring their hands if you like they let everybody down or everybody's going to be mad or whatever it's this is a probationary period and so we don't require it too we can notice anyway but you don't need a two-week notice you seem to come in and go you know I'm just this isn't working and we've had some funny ones some weird ones over the years during that time you know.

And we're like what he goes I this I what I signed up for I just and he really even couldn't verbalize what was wrong.

But he quit that day four days he'd been here oh my god better you know it's better than you know 40 months of lack of productivity and everybody around him's frustrated and he's angry and he doesn't even know why he couldn't even verbalize what the panic was from but that's okay I get it.

“I mean I you know everybody gets but the hilarious when we hired a kid that owned a landscaping company and he'd sold it and he was like 22 years old or something and he wanted to work in an office he wanted to work in you know.”

White collar setting instead of pushing lawnmower you know we went through the whole interview process the whole onboarding thing and I put it was going to be in customer sales and he put on the headset sat down started making calls start taking calls and he was there about two hours. And he like at lunch he ripped the headset off what running out the door. We never saw him again. We it took two days to get in touch with him and we said what's the thing is I just can't work inside what part of working at our company did you not think was inside.

I mean you know how did you miss that part in the interview it's like hilarious but I can't work inside so yeah we we laughed at the HR team and the recruiters we said hey you have to start people telling people that we work inside as part of the onboarding. But yeah I mean that's okay let them go it's that's better than the pain of somebody staying in a job they hate they start to hate themselves they start to hate the boss they start to hate the company.

They start to to test the very organization that feeds their family which is betrayal and lack of loyalty that's ridiculous.

And it happens because leaders aren't strong and aren't strong enough to release somebody go during that 90 day period on the flip side there's a lot of internal promotions that are going on especially. When it comes to the trailblazers stage and that really pull people into leadership so what are you looking for when you're pulling somebody into a leadership position.

“Well leadership is service again you're you know doing a task is one thing leading people doing that task is a whole different skill set leading people is different task orientation.”

And so we've got you know probably 500 people on our tech team writing code for software engineers platform people architect people so on all the way through the organization. Because everything's digital today of course a lot of those tech guys our our gals are really really good at the execution of the tech writing the code building the code. Making the website do what it's supposed to do that's a whole different skill than leading tech people leading tech people is a whole it's a science under itself.

Because they're different they're they're very most of them are introverted and say you're really looking at how we're going to lead how we're going to love them well how you're going to serve them well. So in other words a great salesman might not be a great sales manager because sales management leading sales people's different than making a sale. Now they can empathize as simple as what's going on naturally because they've been there and the natural path is for them to move into leadership from having done the task.

But we just have to identify that that the rest of the leaders have to train the new leader to be a leader not just a salesman not just a tech. Before we close my last two questions I want to ask you what advice would you give to an entrepreneur right now who wants to start their own media business. Do it. Start it.

Don't get married to your first microphone your first set.

I'm think I'm sitting in my seventh or eighth studio I built in 30 years. Don't get married to a platform like we said earlier platform agnostic. I would be on everything. I wouldn't just be a youtuber or just be a tick tocker. I think that's a mistake.

“Now each of the platforms that we all know watching this are participating in this hey they have different personalities and you have to put different versions of you in that we know that.”

I'm not saying that at all but but you need to get good enough at all of them and start using all of them and it doesn't cost anything. Just go do it. You'll mess it up. Well so what I'm convinced about 90% of the ideas that we've had at Ramsey including me during the 33 years of done this is about 90% of them suck. That we survived them.

We lost money. We lost reputation. We look back on that stuff and we look that's pitiful. You were awful. Those old tapes make me laugh.

But do it anyway.

Quit doing the stuff that doesn't work obviously, but you know this and every idea I have is a good one when I'm out walking in the morning, right?

“Or having a cup of coffee, every idea is a good one.”

But when it hits the market, most of them aren't. So go do it anyway and keep going, keep going, keep going. Don't stop. Don't stop never quit. I love the motivation.

You taught us so much today. So I'm going to end this show with two questions that I ask all of my guests. The first one is what is one actionable thing are young and profitors can do today to become more profitable tomorrow.

Make sure you're always wearing your customer shoes.

To quit thinking about how you can make money. Think about how you can make their life better. And they'll give you money. I love that.

“And what would you say your secret to profiting in life is?”

And this can go beyond business.

Well, in my case, when we went broke, I had met God on the way up. I got to know him on the way down. And so my walk with God has changed my entire life. I'm a different man. I'm a different dad.

I'm a different husband. I'm a different leader. And that faith journey is woven into any story that is a Dave Ramsey story. So that might not be true for others, but that's the answer to my question.

“And where can everybody learn more about you and everything that you do?”

Oh, it's pretty well everywhere. I think you can find it. RamseySolutions.com is the mother ship website and you can find all the stuff going on there. I'm sure everybody knows where to find you Dave. Thank you so much for joining us on Young and profiting podcast.

Honored to be with you. Very good job. Thank you for having me.