0:10

From the headquarters of Ramsey solutions,

0:12

this is the entree leadership podcast,

0:15

where I take calls from leaders like you

0:18

about what it takes to win at any stage

0:21

of business and leadership. I'm

0:23

Dave Ramsey, your host with over 30 years

0:25

of leading in the trenches, right

0:28

alongside you. This is a common

0:30

sense show about running a business. Most

0:32

of the folks we coach and help with entree leadership

0:35

have five to about 250 team members.

0:39

And if you're running something with 10,000

0:40

people, I can help you with leadership

0:42

in general, but I've never done that. Uh,

0:44

our team is about 1100 and

0:47

Ramsey solutions does about 300 million a

0:49

year. So that's the size we are. We

0:51

started on a card table in my living room 30 years

0:53

ago and, um, God

0:56

and a whole lot of people have caused this

0:58

to happen. And I'm one of them. So we're

1:00

here to help you. So you jump

1:02

in. If you want to be a caller on this podcast

1:04

at 844-944-1070 or go to entree

1:08

leadership.com slash ask. And,

1:11

uh, we'll try to help you out. Eric's going to start

1:14

this episode off and share it

1:16

in Wyoming. Hi, Eric. How are

1:18

you?

1:19

I'm doing far better than I deserve.

1:21

How about yourself? Just the same, sir. How

1:23

can I help? Well,

1:26

um, I am the owner operator

1:28

of a small commercial roofing

1:30

company. I have 11 team

1:33

members and, uh, this year we're

1:35

on track to do a little over 4 million

1:38

in top line sales, uh,

1:40

which is about 25% up from last year. Good

1:43

for you. Thank you.

1:46

I, uh, I bought this company

1:48

from my dad, uh, nine years

1:50

ago. He founded it almost 40 years

1:52

ago. And I'm

1:55

just trying to think ahead of

1:57

my own exit and transition and. And

2:00

I've heard your advice a number of times

2:02

of kind of owner

2:05

financing the sell of a business where

2:09

the new owner takes a minimal salary

2:11

and gives all profits to the old owner to buy

2:14

out. My

2:16

business is somewhat of a high liability

2:18

business. There's

2:21

a lot of liability involved. We do bonded

2:23

jobs and things like that. I

2:25

was just looking for some more

2:28

tactical advice of how to actually go through

2:30

that process of

2:33

when actual ownership would transfer,

2:35

at what point in that process, and maybe

2:37

how to mitigate some of those liabilities

2:39

for both the exiting owner

2:41

and the new owner.

2:46

Well, I mean, you've got to maintain the bonds or

2:48

you don't get the jobs. And

2:52

so I would probably

2:55

put in the documentation that if the new

2:57

owner did not maintain the bonds that they're in default

3:00

so that you could come back in and take it over because

3:03

they're going to run it in the dirt. It's going to be worth nothing in 20

3:05

minutes, right? Correct.

3:08

Yeah. So I mean, you got

3:10

a pretty short fuse on that puppy. So

3:13

in order to not be in default, and if they're in default,

3:16

the default mechanism, you'd basically

3:19

be in a sense foreclosing on the business,

3:21

although there's probably no real

3:23

estate that you're foreclosing on, but you would be taking the

3:25

business back over if they failed

3:28

to keep bonds

3:30

in place. So they need to give you proof of bond until

3:33

they paid you out. And

3:35

then the second thing is that they need to give you proof of

3:37

liability insurance. And you probably

3:40

carry some pretty decent limits on that, don't

3:42

you? Yes. Yeah.

3:45

Mainly injury, right? Well,

3:48

or... Workers comp stuff has got to be rowdy.

3:53

Yeah. And then liability

3:55

for buildings, you know, we roof a lot of schools.

4:00

We're over the top of computer labs, data

4:02

centers, a water intrusion

4:04

on something like that can be pretty costly.

4:07

So what do you do? Do you carry insurance to do

4:09

that, cover that now?

4:11

I do. Yes. We

4:13

have some pretty significant liability insurance. Yeah.

4:16

I would think you would. That would make sense. And

4:18

that's what I would do. And so I think maintaining

4:21

that insurance as well is a

4:23

mechanism. If

4:25

they don't maintain it, it's a mechanism for default.

4:30

Because those are key elements to the destruction

4:34

of the value of the business, the business itself,

4:37

if you don't have those things in place. And

4:40

so if you're going to cut corners and you're the new owner,

4:42

those aren't two you can cut. Otherwise,

4:44

I foreclose and take the business back. Okay.

4:48

And that's... So also,

4:53

what you and I are discussing here, I mean,

4:55

I've never been in the roofing business, but just observing

4:58

from the outside, looking in, I've

5:00

been around building my whole life and built

5:02

large commercial buildings and homes and

5:04

so forth. And

5:07

just observing all of that tells

5:11

me that those two things are...they're

5:13

permission to play. It's table stakes to

5:16

have those two things in place, right? Bonding

5:19

and insurance, liability insurance. You

5:22

don't get to play at...I mean,

5:24

you can play small time out of the back of your truck,

5:26

but I mean, if you want to contract

5:29

a good sized job, you're going

5:31

to have to have these two things, the

5:34

liability to protect you and the bonding to

5:36

protect the...it's

5:38

a performance bond basically. And

5:41

so... Curtain. Yeah.

5:44

And so that's table stakes. If anybody's

5:46

going to buy your thing and they don't have enough sophistication

5:48

to understand that that's permission to play, then

5:51

you probably don't want them as a buyer. Yeah.

5:56

So it's a precursor

5:58

to have a sophisticated enough buyer. in

6:00

the mix as well. So yeah, I'm

6:02

just, anything like that that's essential

6:05

to the running of the business itself

6:09

would be a mechanism for default and

6:12

you can come back in and take it over. But

6:15

if you're passing this to family and you've

6:17

been mentoring them for years, it's kind

6:19

of a no-brainer. They should understand it, but you

6:21

can put it in the documents if you want then as

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the stages of business

8:02

everything from treadmill operator all the way through

8:05

the legacy builder

8:07

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8:09

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8:12

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up and move on through the stages the

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speed at which you move through the stages

8:29

uh...

8:30

you know it doesn't matter it's taken

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quicker and more efficiently but helps

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to know where you are and then what the items are

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that help you to move the next level

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and you'll know what you need to work on so simple to click

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the link in the show notes or go to ontarioleadership.com

8:55

to find out which stage of business

8:57

you're in steve is with us

8:59

in oklahoma city hi steve welcome

9:02

to the ontario leadership podcast hey

9:04

david it's an honor to talk to you thanks for having me

9:07

on absolutely sir how can we help

9:09

so uh... i am a new

9:12

leader in uh... a real estate business

9:14

here in oklahoma city and uh... i've

9:16

been with the company for just about a year and one

9:19

of the things that we don't uh... provide

9:22

to our employees were you know a small company

9:24

and that i have a goal of in

9:27

the future is to provide employee

9:29

benefits like 401k medical

9:32

insurance not for a thing and so

9:34

my question is at what point

9:37

and your stages do you start

9:39

offering uh... formal benefits

9:41

to your employees

9:44

i don't know that it would be necessarily a stage

9:46

issue uh... most people treadmill operator

9:49

stage don't have the margin to do it

9:52

uh... right committee members did you say you had six

9:56

okay what kind of business

9:58

it's a real estate

9:59

property management we do we

10:02

do flip houses and Rental

10:04

properties as well.

10:05

Okay. Well in your world. There's a lot

10:08

of independent subcontractors as well and

10:11

so they're more used to Providing

10:14

their own benefits because they're self-employed

10:16

if you're an independent subcontractor so That

10:21

you know around the real estate world that's fairly standard

10:23

like if you own a real estate brokerage operation

10:26

You might have 40 agents but a hundred percent

10:28

of them are independent subcontractors There's

10:30

not a benefits package typically in

10:32

those settings. So it's

10:35

not there. No, or the marketplace isn't demanding

10:37

it now In terms of when did

10:40

we start doing it? the

10:43

the first thing we looked at was

10:47

Did we have the money we

10:49

have enough margin we have actual profits

10:51

that we could then turn and Invest

10:54

back into the team then the second thing we

10:56

looked at is Was

10:59

that something that we? We've

11:04

morally felt good about Providing

11:07

that to the team and then the third

11:09

thing was I mean do we feel like we should

11:11

be doing that If we could

11:14

and then the third thing is is was there is

11:16

there a measurable ROI? I'll give

11:18

an example Okay, health insurance

11:20

is uber expensive. Just

11:23

it's just crazy It's it's

11:26

every year I have to deal with it and since Obamacare

11:28

came in it's just got a mighty it's a mess

11:31

For small business. It's horrible. Okay.

11:33

Yeah and then

11:36

the on the other side there's Disability

11:39

insurance long-term disability insurance

11:42

now I long-term disability insurance

11:44

costs compared to health insurance

11:47

almost nothing And

11:49

so that's something I believe

11:51

strongly in having long-term

11:53

disability insurance And

11:56

it costs almost nothing

11:58

and when I had the money it was one

11:59

of the first things I bought because

12:02

it was a lot easier decision because it didn't cost

12:04

anything compared to health insurance. Now health insurance

12:06

has been a fiasco since

12:09

day one and to start with

12:11

we you know we came up with a plan this

12:13

was before Obamacare where we you know

12:15

because we've been in business a long time and

12:17

you know we would pay part

12:20

of it you pay part of it and when it increased

12:23

well we both picked up some of the increase

12:25

so you knew what your health insurance

12:27

was costing because people

12:29

that have a hundred percent of their health care insurance furnished

12:32

they don't measure the cost of it at all as

12:35

a benefit right it could cost a business

12:37

a bazillion dollars and the employee

12:40

the team member doesn't even care because they haven't noticed

12:42

so we're more on that end

12:44

of the spectrum today where we furnish all

12:46

I think we furnish all of it or almost all of

12:49

it and so and

12:52

certainly meet all the guidelines of the federal

12:54

requirements today that we have to do so not

12:58

as thrilled with health insurance as you can tell but

13:00

I'm glad we have it and we've got some wonderful

13:03

stories of children

13:05

in the NICU babies being born

13:07

here and they're in the NICU and health insurance

13:09

you know kept them alive a million dollars worth and

13:11

we've got wonderful stories of stuff like that so we're

13:14

been glad we've had it over the years but it

13:17

was a harder one to write

13:19

that check for because it's much bigger than

13:22

simple long-term disability which is a much better

13:24

bang for your buck on the benefits

13:26

side the third thing I would say or fourth

13:28

thing or whatever it is I would say about this is we

13:31

never and I would never suggest any

13:33

of you that are running small businesses get

13:36

in the mindset that you have

13:38

to compete with corporate America on the benefits

13:41

package in order to get a team member I

13:43

want team members here who

13:46

benefits is one of the last

13:48

motivators for them instead

13:51

they're motivated by work that matters a

13:54

quality environment they're motivated

13:56

by working for a family business who actually knows

13:58

about them loves them loves them their family cares

14:00

about them. Corporate America does none of that.

14:04

And if all you're worried about is a benefits package,

14:07

then I'm, I'm suspect of

14:09

you when I'm interviewing you, uh, in

14:11

a small business setting that you're

14:13

just here to collect a check. You want to J O

14:15

B and where can I get the most money

14:17

and do the least work?

14:19

And that's not who I want on my team anyway.

14:22

And so if you're chasing benefits packages,

14:25

you're probably not a future team member.

14:28

And so that released

14:30

me from this need to keep up

14:32

and provide all these benefits that

14:34

that corporate America provides. Now I believe

14:37

strongly morally in a

14:39

401k and using it at the proper

14:41

time. And baby step four that we teach in

14:43

our personal finance curriculum

14:46

and have for 30 years. So

14:48

we have a strong matching program,

14:51

but, and we're not allowed by

14:53

law nor do we tell people they can or

14:55

can't get into it, but we strongly

14:57

suggest you follow the freaking baby steps.

15:00

We can't make you do that, but

15:03

you know, so consequently our people that are in the 401k, uh, you

15:05

know, they're putting a full 15%

15:08

and they're getting a good company match. They've

15:10

got a Roth option. They've got good mutual

15:12

fund options because I'm freaking managing

15:15

the 401k. I mean, I know what I'm doing. So

15:17

this is a more of the best 401k is in the

15:19

dead, but it's not because I'm trying to keep up with corporate

15:22

America. It's because it's a very

15:24

cool thing I can provide and

15:26

I can make a few extra millionaires or how

15:28

the people that work here just doing

15:30

that if they stay here and do the stuff I teach

15:32

all the time. So that's kind of the moral

15:35

component and it's got a great ROI

15:39

by moral component. I don't mean that I'm there.

15:41

I'm there morally entitled to

15:43

it. I mean that I morally

15:46

believe in it. I ethically believe in it.

15:48

And if I teach 401k on the street, like

15:51

as a must as a one of the seven

15:53

baby steps, then I ought to have a robust

15:55

401k program. And I do,

15:58

we do at Ramsey. So. that's

16:00

the kind of thing i'm looking at looking for r o i

16:02

meaning bang for the buck if i put in a million

16:04

dollars dot feel like i'm getting

16:07

a million dollars worth of credit street

16:09

cred with the team and

16:12

with the right kind of potential

16:14

team member but i never want

16:16

someone to join our company because all they've

16:18

got a great four oh one k that should be

16:20

way down the list the reason i joined ramsey

16:23

or all they've got great health insurance that

16:25

someone who's figuring out what they can get rather

16:28

than what they can give and we want

16:30

people coming in here that add value not

16:32

are trying to be parasites on the organization

16:35

so i'm fine running off if

16:37

it was a i want over the i want to work for so-and-so

16:40

cuz they are better benefits package you know what that's

16:42

perfect and we want you anyway that's

16:44

not what that you're not the type uh...

16:46

you know you can work here and you

16:49

love our benefits not because of our

16:51

benefits so uh... that

16:54

that's a different mindset and really

16:56

small business you know

16:58

corporate america the first thing they do when there's

17:00

a downturn economy is they p on

17:02

their team members they turn around fire

17:05

a bunch of men they call it layoffs

17:08

and they they just piss all over measures

17:10

trim awful and so

17:12

you're you know you're expendable you know

17:14

you're just a unit of production and

17:16

they'll put your little but on the street at the first turn

17:19

of a hat small business don't do

17:21

that small business people are talking

17:23

a friend of mine other day is it is getting

17:26

hammered in this downturn right now he had to

17:28

lay off some of the people that he loved he

17:30

was crying it tears run down

17:32

space talking about laying off people covered

17:34

their companies in trouble i

17:36

mean it's a horrible time for them right now that

17:39

small business they got huge

17:41

heart they love you the year that yet

17:44

the last thing they want to do is put

17:46

you on the street they work too hard to get you in there so

17:48

that's the kind of people that steve is in and

17:51

that we are at ramsey and

17:53

so you know keep that

17:55

in mind all of your small business don't try

17:57

to philosophically compete For

18:00

people that are just looking for a benefits package

18:03

with your benefits package but align

18:05

your benefits package with stuff you really believe

18:07

in and

18:09

You really like I'll give you an

18:11

example. Here's another thing you could do, you know

18:13

guess what if you work here financial peace

18:15

universities mandatory and You

18:18

get a whole truckload of our products

18:20

every year free

18:22

as an employee benefit

18:23

Why so you can give them to your friends and relatives? And

18:26

because you believe in what we do here and you're proud

18:29

of what we do here so you can give away

18:32

You know a dr. John Deloney new book

18:36

For Christmas presents this year. That's pretty

18:38

stinking cool That's the equivalent

18:40

of if you work at a heating and air company the

18:43

receptionist at the heating and air company should have a

18:45

really fine air conditioner

18:48

Hello,

18:49

I mean she ought to have the best one in the world, right?

18:51

And if you were if you work at a dentist in a

18:53

dentist office I mean for God's sakes

18:56

everybody ought to have great teeth, right? And

18:58

it ought to be on the dentist not a it ought

19:00

to be just given because these are the products that you

19:03

You ought to be bragging about it to your team

19:05

your team ought to be proud to work there and all that

19:07

whole process so You

19:10

know, there's a lot of things you can do in small business just

19:12

sharing What you

19:15

do with your team? and

19:17

and You know, there's all kinds of wonderful

19:20

things that you can you can plug into that

19:22

way that that you where you're not trying

19:24

to compete Philosophically head-to-head and

19:27

you know, that makes a big difference. So that's

19:29

a really really good question Steve. Thank you

19:32

and congratulations on Making

19:34

your successful business happen man real

19:36

estate. So slow down with your one

19:38

slowed down right now and And

19:41

the one you know The beauty beautiful thing is those

19:43

that have got their crap together and then survive

19:46

the downturn are really gonna be ready when this thing Comes

19:48

roaring back and man,

19:50

I'm ready for it to come roaring back. This

19:52

is the entree leadership podcast a

19:58

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This is the Entrez Leadership Podcast.

21:17

I'm your host, Dave Ramsey. Thank you for joining us.

21:19

Hey, listen around Ramsey, we believe

21:22

in small business. We

21:24

know that statistically and

21:27

factually and actually, you

21:29

are the backbone of the American economy. 54%

21:34

of the gross domestic product in America is

21:37

by businesses that

21:39

have less than 500 team members. By definition,

21:42

small business is the

21:44

backbone of the economy. And

21:46

they survive and thrive and

21:49

come up with the best and brightest and new ideas

21:52

in spite of the fact Washington pees on them every

21:54

chance it gets. They survive

21:57

and thrive in spite of the fact

21:59

that nobody...

21:59

gives them any respect

22:02

and they can, but you know, they, they turn

22:04

themselves into millionaires and they

22:06

do it by serving and taking care of their customers

22:09

and serving and taking care of their team. I

22:11

mean, the brightest spot in

22:14

the cultural landscape of America today is

22:16

small business. They're the best people

22:19

doing the best work and work.

22:21

They work their butts off, man.

22:23

So if you're a small business,

22:25

your family business, man, I'm in your camp.

22:27

You're heroes

22:29

and you deserve to

22:30

win and

22:31

we're here to help you and make sure that you do

22:34

Chad is with us. Chad is in Winston, Salem,

22:36

North Carolina. Hi, Chad. How are you?

22:39

I'm doing great Dave. I'm a long time listener

22:41

of yours. So it's an honor to talk to you. You

22:44

too, sir. What's up.

22:45

So we have nine full-time

22:48

employees, most of which are in their

22:50

twenties or early thirties, so most

22:52

of them either have small children

22:55

or planning to start family soon, we have

22:57

one employee who's been with us almost

23:00

the whole time. We've been in business, but it's

23:02

just missed countless days with either

23:04

the child being sick or her caregivers

23:06

being sick. We

23:09

have kids ourselves. We understand that and

23:11

we are always accommodating to her needing

23:13

to be out. But it puts a big strain

23:16

on our other employees because we're taking the

23:18

same amount of work and just splitting it amongst the rest

23:20

of the employees. And there are periods

23:23

where she doesn't even make enough to meet the

23:25

full-time requirements for the benefits that we're paying.

23:27

So my question is twofold. We

23:31

want to be bosses that are empathetic

23:33

and accommodating, and we want to promote families,

23:35

our family is very important to us. My

23:37

question is one, what

23:40

is your advice on finding the balance between

23:42

being that accommodating and pathetic boss while

23:44

having enough to run a business that relies

23:47

very heavily on these employees day to day? And

23:49

the second part is when it comes time

23:52

for raises or bonuses, would you recommend

23:54

it's based off of hours worked

23:57

and does that seem like a fair system to

23:59

reward? the people that are there working harder

24:01

to make up for this?

24:04

Second question first because

24:06

it's easier. Now

24:08

raises are just merit-based. They're

24:12

not based on anything else and so that can

24:14

be hours worked. That would

24:16

enter into it but I mean you have people that work

24:20

the same number of hours no gaining done. Comparatively.

24:24

I mean if one gal works 40

24:28

hours and brings a company a million dollars

24:30

and one works 40 hours and

24:33

brings company hundred thousand then it's not hours

24:36

worked then right? So

24:40

it is merit-based and that is what you're

24:43

doing

24:47

cost-saving or revenue producing

24:50

that justifies your existence and it's

24:54

pretty stinking incredible. The second thing we

24:56

look at on raises is we want to be at least

24:58

at market. So

25:01

we do comp studies all the time of different

25:03

categories and say okay in Nashville

25:06

or in Tennessee or in the southeast

25:09

what does this

25:11

programmer make? A dev one

25:13

or a dev two or a

25:15

platform or you know our software engineer or a platform architect.

25:19

What do they make and we're studying that

25:21

and going okay I'm really not trying to compete with

25:23

Seattle. I might get

25:26

somebody from Seattle but I'm trying to say in

25:29

middle Tennessee what is the market for this? We

25:32

might look at the national numbers but actually

25:35

on software people we do bring them in from

25:37

all over but what

25:40

does the typical person in this category make? So

25:43

and that's the minimum we want to be at. We want to

25:45

be competitive there but then

25:47

if I've got someone

25:49

that is like the best of the best of the best

25:51

in that then yeah we're gonna be merit-based racist.

25:53

Now back to the other question. So

25:56

that is the person you mentioned

25:58

as a lady I think that is her child is

26:00

ill. Is there a

26:03

chronic situation or the

26:05

kid the kids just getting a cold at daycare or what

26:07

are we talking about?

26:08

Yeah it's a general run-of-the-mill respiratory

26:12

or GI issues. No chronic illnesses

26:14

have been diagnosed but it

26:16

just seems like there's a lot

26:19

more than you would expect. Okay

26:22

I mean do you suspect something

26:24

else? I mean it is

26:27

because again okay

26:29

two or three things

26:31

of how we achieve the balance. Alright number

26:34

one how would I want to be treated

26:37

or how would I want my daughter treated if

26:39

this was my daughter and her grandson

26:42

my grandson okay and

26:44

this was going on how would I want them treated okay

26:47

now we're hard-working family the Ramses

26:50

and so if the kids getting ill

26:52

and you know they constantly are getting ill then you

26:54

know what do we got a daycare that's a germ factory we need

26:56

to change daycares what's going on

26:59

I mean we got a fight we got the bottom of this just because you know what

27:01

the kid ill all the time why is the kid

27:03

ill all the time there's something wrong and so

27:05

I'd want to get you know treat

27:07

other people like you want to be treated so

27:10

I just switch shoes I say gosh if that was my daughter

27:12

my son and they

27:15

were working somewhere and they got cancer

27:17

how would you want them to be treated okay that's

27:20

that's the first thing we look at and

27:22

that also means that we could get involved

27:24

and go you know what the flip's going on here we

27:27

don't have to just stand back and accept this

27:30

all this stuff I mean we can go hey

27:32

that's not okay no I'm not because I

27:34

wouldn't want my I wouldn't expect an employer

27:36

to just

27:39

go forever on

27:42

you know a whim you know

27:44

not not not on facts and without investigating

27:47

and sourcing the actual problem and

27:49

fixing it okay so the

27:52

second thing is then the question

27:54

we always ask ourselves okay

27:56

when I'm 89 99 years old

27:58

old and

28:00

I'm on my deathbed, what

28:03

will I be proud that I did? And

28:06

that always

28:06

leads us to the third thing,

28:09

and that is when in doubt I

28:12

overdo grace. I go

28:15

too long because I'd rather

28:17

make mistakes going too long than too short.

28:21

And our team knows that, so sometimes

28:23

they're looking around going, hey this duper

28:25

doesn't work much, but

28:28

Chad he always gives them every

28:31

chance. He's not a pushover, he's

28:33

not a guy that's gonna

28:37

be taken advantage of, but he's very kind

28:39

and graceful

28:40

and strong, and

28:41

he's always gonna give you every

28:43

chance. So if this ever comes up,

28:46

so the other employees are, here's what's run through their mind whether

28:48

they say it or not, if this ever comes

28:50

up with me, he's gonna treat me that way. Because

28:53

really you're telegraphing

28:56

to the rest of the team how you're gonna treat

28:58

them if they get in a pinch.

28:59

Right, I hope they're mature enough to interpret it

29:02

like that. They can't help it, they

29:03

can't keep from it.

29:06

They just, you know, unless they're just you

29:08

know really infantile, because

29:10

they have to be watching and they go that's how

29:12

that's how that company takes care of that. And

29:15

so I can assume that they're probably

29:17

gonna do that with me. I can't be a hundred percent sure but

29:19

I can assume they're probably gonna do that with me. Where

29:21

if the first time something comes up you're just chop chop

29:24

and they're gone. Then they go well

29:26

first time I screw up it's gonna be chop chop I'm

29:28

gone. And it's harder to keep people

29:31

then because they're not gonna be loyal because

29:33

they don't see loyalty from

29:35

you. So corporate America always talks about

29:38

why aren't employees loyal? Well it's simple because

29:40

you doobers aren't loyal to your employees. And

29:42

Chad is loyal to his employees. Walking with

29:44

this lady thought she's going through with a sick kid. And

29:47

so he's extending loyalty. Well

29:49

what you will get back is increased

29:51

not perfect but increased loyalty

29:54

from her and from the

29:56

team as well. Okay. And

29:58

so we've

29:59

We've got a lady on our team

30:02

who,

30:05

gosh, it's almost 20 years

30:07

ago, had a toddler that

30:10

got cancer. And

30:15

we just shut down her job and

30:17

sent her home and paid her and took

30:19

care of her job. Oh, and a bunch of people got together

30:21

and kept her yard cut and a bunch of people got together

30:24

and kept

30:27

meals on their table while they went through the chemo

30:29

with a toddler. And

30:32

for a little while then we were real happy when there was

30:34

a little bald-headed kid running around the office that

30:36

lived. And we were all

30:38

celebrating and jumping up and down because we had

30:40

participated in the whole

30:42

process with them. And

30:45

it wasn't that long ago that that toddler

30:48

was 16 years old and walked into my office.

30:51

And it made me

30:53

cry because she still works here.

31:00

That's when you know you did it right, but then there's other times you

31:02

treat people right and then 20 seconds

31:04

later they're going, oh, well, they're paying me more

31:07

matching on the 401k. And

31:10

so I have no memory of you being different.

31:12

So I'm out of here and you still get... It's

31:15

not always returned one for one, but

31:17

you do have those cases where you go,

31:20

and I can tell

31:22

you this, if you want to talk bad about Dave Ramsey,

31:24

don't do it in front of that girl's

31:26

mom because

31:29

she will take you out and they'll never find the body.

31:32

I mean, it's like, she is not... Because

31:34

you talk about loyal, but we were loyal to her.

31:37

So we earned that and we're

31:39

a family. We care about each other. So that's what you're going

31:41

to do. And

31:44

the other thing you could do is if you can

31:46

get... I think what would help here was

31:48

some good communication from

31:51

the lady. You need to find out more about what's

31:53

going on and how you can help. And

31:55

then you need to ask her permission to share that with

31:57

her coworkers and say, hey, listen.

32:00

So-and-so is out and here's what's going on with her kid

32:02

and she said I could tell you Because

32:05

I mean we're all having to pick up her slack right now,

32:07

but but it's not because we're weak It's

32:10

not because she's taking advantage of us and

32:13

she just doesn't want to work. It's because this is

32:15

what's going on And the

32:17

co-workers then I'll go. Yeah, I mean I'll

32:19

help because it's temporary. There's gonna

32:21

be an end to it It can't you

32:23

know, you can't be something we're doing forever and ever But

32:25

yeah, you just gotta you gotta take care of

32:27

people when they're down. You don't shoot your wounded And

32:31

and you know And

32:33

then you just sometimes you look up and you go I've

32:36

you know I've reached the end of this and I've

32:38

gone as far as we can go

32:40

and You can't always

32:44

You mean you can't okay. There's an end of this like at the

32:46

end of this thing you're talking about Chad is

32:49

a few more months

32:51

Okay,

32:52

you're not gonna do this for five years Okay,

32:55

so that that that's not reasonable So

32:58

you wouldn't ask someone to do it for you for five years

33:00

treat other people like you'd want to be treated so you're

33:02

gonna do this for a reasonable number

33:04

of Days or months that

33:07

according to your particular situation

33:10

and you're gonna have good clear communication With

33:12

the team and with the team member that's

33:14

in there So they know what's going on and

33:17

so it doesn't sneak up on them where you go. Okay

33:20

today's the last day No, that's not we're gonna day.

33:22

We're gonna say okay, hon Look, we've been

33:24

going with us for seven months now We

33:26

got about 60 more days to turn this around

33:28

or we're gonna have to make other arrangements And

33:31

so I'm trying to walk with you.

33:33

I love you. I love the baby We're trying to help you but

33:36

we've really reached about the far as we can go on this

33:38

and just good clear communication don't sneak up

33:40

on people and

33:42

Then that way you're not but but even

33:44

then you're like at that by the time you have

33:47

say 30 more days or 90 more days You're

33:50

already Emotionally at the end of your rope. So

33:52

you're already going that mile plus

33:54

another mile

33:56

and you won't ever

33:58

Regret that ten years later The

34:00

only part of it you'll regret is when that

34:03

person leaves and says something nasty about

34:05

you after you did something good for them That's

34:07

the only part of it. You'll regret and that will happen

34:09

to That will happen to its part

34:11

of it. It's just part of leadership. It sucks So

34:15

you but that I mean you you know just cuz

34:17

somebody makes fun of you when you dance doesn't mean you quit dancing Dance

34:21

baby dance That's what

34:23

you know bring it just look let's

34:25

have some fun here. Let's do this This

34:29

is the entre leadership podcast

34:34

If you're a small business owner, and you're ready to

34:36

drive forward through the stages of business,

34:38

then you've got to join Entree

34:41

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34:43

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34:45

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34:48

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34:51

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know what to do when to do it and we'll

34:55

be right there to show you how to do it So

34:58

check out entre leadership comm

35:01

slash elite and join today

35:04

I'm Dave Ramsey. This is the entre

35:06

leadership podcast mayor is in

35:08

Brooklyn, New York. Hi mayor.

35:11

Welcome to the podcast Hi,

35:13

Dave. Glad to talk to you you too. How can

35:15

we help? So

35:18

I have a low voltage business we do fire

35:20

alarm and camera security the

35:22

last six years We have

35:25

currently 15 employees

35:28

My question was how do

35:30

I determine when to give a raise and And

35:34

how much to give as a raise? I treat

35:36

my employees very well But

35:41

that's I started out that I

35:43

had a vision how much I think they should

35:45

make and you know like weekly Well,

35:48

it came to I get I raised them very quickly and I

35:50

came to a point that I felt I can't raise them anymore

35:53

Mm-hmm,

35:54

and they don't produce as much as I give

35:56

them but I comes

35:59

up as like every year and the year they think

36:01

they want to look what i get for a

36:05

okay are you overpaying uh...

36:08

pocket technician

36:10

what the rest of the industry pays them uh...

36:15

middle voltage is everywhere so there ought to be

36:17

a standard for a uh...

36:19

black box let's say the person installs

36:22

the alarms ok technician right

36:25

okay didn't mean other alarm

36:27

companies other low voltage companies what

36:29

do they pay that technician and what do you pay them

36:34

uh... good question i have to take that man in

36:36

the industry

36:38

one of the things we do uh... uh...

36:41

and i was talking about that in an earlier segment on

36:43

this particular episode is that we

36:45

do a comp study uh...

36:47

which you can jump on like monster dot com or

36:49

linkedin or different places and uh... fairly easily

36:52

it doesn't require a ton of money to be spent uh...

36:55

or you can just call around ask okay

36:57

what does this particular

37:00

position pay in the brooklyn

37:02

new york area okay what does a

37:04

typical person uh... pulling

37:06

wire and low voltage pay

37:08

or what's a uh... someone who's certified

37:11

to do alarm installations what do they

37:13

get paid on average and you

37:15

want to be at or slightly

37:18

above that amount but

37:20

you don't want to be double that amount uh...

37:23

that uh... instead i would be providing

37:25

them other things even some

37:28

cash bonuses and things out

37:30

of profits before i would just say that your pay

37:34

okay uh... so uh... in

37:37

other words let's say you called around what

37:39

you should how does make up a what

37:41

do you pay an alarm check

37:46

i thought about what uh... dependent

37:48

experience become a medic and or even okay

37:51

but uh... i thought it would be in the range right now

37:53

we can twelve and fifteen hundred a week

37:55

and so they're making like

37:58

seventy a year

38:00

Okay, so you got an alarm tech making 70

38:02

a year mid-range and if

38:05

you've got one that's been with you 10 years and 100% of

38:09

the time or 98% of the time You

38:12

know that when they're doing something a

38:14

they're doing it right and be they're doing it the way

38:17

you would want it done both things Does

38:20

right is okay, but the way I want it

38:22

done and right is really important. Does that make sense?

38:25

Yes, like how they treat the customer how

38:27

they dress do they bathe? Do

38:30

they follow up and check on the you

38:32

know, what's going on if it's a builder

38:34

they're working with on new construction You

38:36

know, are they dependable all those

38:38

kind of things, you know, these are the things that come into it But

38:40

if you've got that for 10 years that

38:43

person Is

38:45

worth more than someone that

38:47

has the exact same skill and

38:49

knowledge and work ethic that starts

38:52

tomorrow That doesn't have the experience with you

38:55

Mm-hmm.

38:56

Okay. So for instance, my personal

38:58

assistant Patty has been with me 21 years

39:02

Patty knows more about Dave Ramsey than Dave

39:04

Ramsey does

39:06

Okay

39:07

She and my wife together could write a

39:09

book that would destroy me Okay,

39:14

so Patti's value Versus

39:17

a personal assistant to the CEO of a company

39:19

this size coming in brand new next

39:21

week where Patty to retire Her

39:24

value is light years more So

39:27

she gets paid a lot more than a personal

39:29

assistant would get paid At

39:32

this level. Okay, but but she

39:34

has but it's back. It's not just because we love

39:36

Patty. It's because 21 years

39:39

of Knowledge

39:41

base of who gets to see

39:43

Dave what Dave does what Dave

39:45

doesn't do She's got a sign outside

39:47

her offices. No one gets to see the wizard.

39:49

No way no how all this kind of stuff

39:52

It's a big joke, you know, we have a lot of fun with

39:54

it But the point is her her experience

39:56

is valuable inside of this company.

39:59

So if you've got got a bookkeeper

40:02

that's been with you for 15 years, they're

40:04

a lot more valuable than a new bookkeeper

40:07

coming in to do just the exact same job. So

40:09

if 70 is the number that

40:11

it takes to hire somebody in,

40:14

in the marketplace, let's say you, you do

40:16

a survey of your competitors

40:18

and you discover that 70 is

40:21

about what the average rate going rate is, then

40:23

you would look around among your team and say, okay,

40:26

this guy over here has been here for 10 years.

40:29

He's worth more than 70. If

40:31

he's does his job properly, and if he doesn't

40:33

do his job, we got other issues. You don't fix

40:35

that with a razor cut. We fix that

40:38

with talking him through how to do the job. But if he's

40:40

a great team member, great alarm tech,

40:43

and you know, and he's worth more than 70 to

40:45

you because you couldn't,

40:48

you replace him with a brand new person. You got

40:50

to start over on how mayor runs the

40:52

business. And so, and

40:54

that has a value. So I'm going

40:56

to give that guy raises based

40:59

on tenure, but not because

41:01

of tenure, but because of what tenure represents

41:04

that he's been doing excellent work for a long period of time

41:06

and it is dependable. Okay. Then

41:08

the second thing is, uh, I've got to

41:10

compete in the marketplace or he will

41:13

leave.

41:15

If 70 is the going rate and I'm

41:17

paying my guys 50, uh, they're

41:19

going to leave. You're

41:22

not going to keep them. So you've got to be competitive

41:25

in the marketplace in terms of, you

41:27

know, what it takes to hire an alarm

41:30

tech in your area. And so you need to be doing

41:32

these call a little bit of an informal or formal

41:34

comp study, uh, on, on what

41:37

these different positions are and,

41:40

um, Then pay them

41:42

a competitively, and then sometimes

41:44

they, a competitor still willing to overpay

41:47

them. Uh, we had a guy in

41:49

here not long ago that we were, we felt like

41:51

we were overpaying him and some

41:53

moron gave him a $50,000 more than we're paying him. And

41:57

we're like, Oh yeah, both of you, you deserve

41:59

each other. So you need to, you know, no

42:01

way, no way is worth that. And, but

42:03

they're just, you know, somebody

42:06

got stars in their eyes. So you're

42:08

still going to lose some of them sometimes, but

42:11

that that's, um, so

42:13

a, we need to find out what it costs to fill the position

42:16

and not have the competitor

42:18

stealing our people, poaching our people.

42:20

Right. Um,

42:23

and then B, uh, the

42:25

longer they've been with you and have

42:27

been competent, the more

42:30

they are actually worth to you. And

42:32

then C, if you want to pay them

42:35

more than those rates that we're talking

42:37

about, like that 10 year guy might be making 80

42:39

or 85 in a $70,000 world. That's

42:44

fine. Cause again, he, he or

42:46

she would be worth that. Um,

42:49

and then beyond that, if you've got extra

42:52

profits and you want to start doing, okay, Hey

42:54

guys, you know, there's 15 of us in here. We're

42:56

making good money in this place. I'm just going

42:58

to share some of it. I'm

43:00

going to, and you can come up with some kind of a plan

43:02

and you don't have to explain to them what the percentages are.

43:05

We have a profit sharing plan at Ramsey

43:08

for a portion of our team members. And,

43:11

uh, it is based on a formula

43:13

that no one knows except me and,

43:15

you know, my CFO and a few others. And

43:17

because we change the formula sometimes to

43:20

make it more generous or less generous, depending

43:22

on what's going on. Uh, but overall

43:25

we're going to share our profits. It's

43:27

one of our core values, but that has

43:30

not, that, that's not compensation.

43:33

That's sharing

43:34

compensation as you're getting paid for what you do

43:36

and what you know, sharing

43:39

is we all did a bunch of work together, made some

43:41

money. I'm going to share some of it. That's

43:43

different than the comp plan. Um,

43:46

corporate America gets those two things confused

43:48

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43:50

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45:17

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45:27

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