2:00

in a construction business in

2:02

the suburbs of Portland, Oregon.

2:06

We do anything from painting

2:09

remodeling, doing additions,

2:11

building new speculative homes or

2:13

custom homes. So

2:16

kind of runs the gamut residentially over

2:18

here. We've

2:21

got three employees aside from my

2:23

partner and I. Three? Our

2:25

growth revenue. Yes. Okay.

2:29

Growth revenues between

2:31

two and three million a year. Okay.

2:34

My business partner just failed

2:37

personal bankruptcy. Funny

2:40

thing is less than two years ago, his

2:42

parents died and left him a

2:45

sizable inheritance. Has

2:47

a little over a million dollars cash and-

2:51

What happened to his LLC interest in

2:53

the bankruptcy? That's a good

2:55

question because I don't even know the

2:57

ramifications of it at this point in

2:59

time. Part of what I wanted

3:01

to talk to you about. My

3:04

concern is that the bankruptcy

3:06

court can come after a

3:08

company assets. Absolutely they can.

3:10

I don't think we know the answer. Absolutely

3:12

they can. All right. And

3:15

likely will if you've got substantial assets. What

3:18

are the assets of this LLC? Yeah,

3:20

it's not much, probably a hundred thousand.

3:23

I mean we've got property that's got

3:25

deed of trust means on them. Not

3:28

really an asset. You know what kind of bankruptcy

3:30

he filed? 11, seven, 13? I

3:33

do not know that yet, Dave. When did

3:35

he file it? I should have. It's

3:38

been within the last month. Do you

3:40

have any documentation as to what happens

3:43

in your business? Any

3:47

detail of how partners interact

3:50

in default and divorce and

3:53

bankruptcy disinterest. Do

3:55

you have any kind of documentation on this partnership or

3:57

y'all just got an LLC drawn up and took 50%?

4:00

each and walked away and never did any documentation

4:02

at all. All

4:06

we did was a

4:08

boilerplate by ability operating

4:10

agreement when we started

4:12

the company. You have

4:14

that. Did

4:16

you read over it see if it says anything about

4:19

bankruptcy? I've

4:23

read through it. I don't see

4:26

anything about bankruptcy. Okay.

4:32

Well, we don't know what we don't know

4:34

here and that's a lot. Sure. So number

4:36

one, you have a

4:39

serious legal and financial problem. Very

4:42

serious. Not to mention a major

4:45

personal problem with a

4:47

ongoing dysfunctional toxic partnership.

4:50

Okay. Understood. Let's back into this

4:52

one at a time. Okay. Number

4:55

one, we need to find

4:57

out what bankruptcy he filed. Okay.

5:00

If he filed a chapter 7 bankruptcy,

5:04

his personal assets, you

5:07

have to find out what the personal asset exemption

5:09

in Oregon is. In most states

5:11

it's around $10,000. Anything that he owns,

5:16

including his share of the

5:18

LLC above that, will be

5:20

confiscated by the court in order

5:22

to pay his bills.

5:26

Oh wow. Okay. So the bankruptcy court's probably

5:28

going to force you all to sell this

5:30

property or you to buy out his half.

5:33

Okay. What is the, how much, what kind of,

5:35

you said $100,000 worth of assets, right? Do you

5:38

have any money? Do

5:41

I have money? Do you

5:43

have any money? Only what's in my

5:47

401k and some, you know, paid

5:49

off vehicles and such. Okay. So

5:51

what is the, you said

5:53

there's property, is it a piece of real estate? It's

5:56

mostly vehicles in our company,

5:58

company trucks, tractors. dump trucks,

6:00

things like that. Okay, all

6:02

right. So be prepared for half

6:05

of those to leave. Really?

6:08

Yeah, really. Okay. He

6:10

filed bankruptcy. He lost his half. And

6:13

the bankruptcy trustee is going to be knocking on your door. He's

6:15

first going to put a lien on all

6:17

of it, and then you're going to have

6:19

to prove you own half of it and

6:22

negotiate which half, what the, you

6:24

know, $50,000 worth of $100,000 worth of stuff. You

6:27

get to keep $50,000 once you prove it

6:29

to the bankruptcy trustee. You're going to need

6:31

a lawyer. Okay? That

6:34

sounds terrible. And then you're going to have to

6:36

figure out which $50,000 worth of equipment you keep

6:38

because the bankruptcy trustee is going to auction the

6:40

rest of it off to pay your partner's bills.

6:43

Okay. And if it's a

6:45

Chapter 7 bankruptcy, and I'm betting it is. Okay?

6:50

And then the next thing your lawyer needs to

6:52

tell you after he helps you work with his

6:54

trustee is what this

6:56

does to the disposition of your

6:59

partner's half of the LLC. Are

7:01

you going to have to just shut this LLC

7:04

down and start another one with your half of

7:06

the equipment and get to get

7:08

his name off of it? Or does his name go

7:10

away in Oregon based on this bankruptcy? I

7:12

don't know the law on this, but you're going to figure that

7:14

out. How are you going to

7:16

no longer be his partner? Sure. Because

7:19

his half of this is all going away.

7:22

So he no longer is going to be your partner.

7:24

You understand? Yeah.

7:27

I'm pretty sure it's coming to that. No, no, it's

7:29

not coming to that, honey. He did

7:31

that when he filed bankruptcy. It's

7:33

done. It's not coming. It's here. It's

7:36

arrived. It drove up in the driveway and is honking

7:38

the horn. It's here. Yeah. I've

7:41

got credit lines being shut down because of it.

7:44

Yeah. It's definitely real. Yeah.

7:47

You're going to be operating by yourself, which by the

7:49

way is probably the biggest blessing has ever happened to

7:51

you. I

7:53

probably wouldn't have chosen this method to get rid of

7:55

him and you wouldn't have either. But

7:58

this is a, this is an. that's long

8:00

overdue. Okay. Am

8:03

I wrong? No, I know

8:06

it's overdue and my mind

8:09

is like should I be asking

8:12

him if I can buy him out? He

8:15

doesn't own it anymore. What happens

8:18

when you file bankruptcy is you

8:20

no longer own anything. Anything

8:23

you used to own is surrendered to the court

8:26

to pay your bills. He doesn't

8:28

have anything for you to buy. The

8:30

bankruptcy trustee might have some stuff for

8:32

you to buy but he

8:34

doesn't own anything anymore. It's gone.

8:37

So you owe him zippy

8:39

zero. Okay. So

8:42

the question is, is

8:44

it better to try

8:48

to keep the company by doing

8:50

whatever to part ways or should I

8:52

just dissolve the company and start my

8:54

own company? You need to ask your

8:56

attorney that. I think you should dissolve

8:59

it and start your own company probably

9:01

and you're going to do that with 50%

9:03

of the equipment because the other 50 is going

9:05

to go to the bankruptcy court and his ownership

9:07

in the old company that's dissolved is going to

9:09

the bankruptcy court. Okay.

9:12

But that way you can go start fresh

9:14

and you can go to your lines of

9:17

credit and you can go to your vendors

9:19

and set up new accounts in a new

9:21

name that does not include the guy that

9:23

filed bankruptcy. You're scott-free, you're clean, you

9:25

don't get burned in this unless

9:27

you try to be codependent and keep

9:30

trying to shovel money towards this black

9:32

hole known as partner. Correct.

9:34

He's done man. He's roadkill

9:37

and he did it to himself and he didn't

9:39

bother to include you in the discussion because

9:42

you don't even know what the hell is going on here. That's

9:46

correct. One last thing

9:48

I just want to say. I have no idea

9:50

what kind of bearing this has on the situation

9:53

but his parents amassed

9:55

considerable wealth and

9:57

have passed and always...

10:00

of their children, including my partner,

10:02

got their inheritance. Long story short,

10:04

his brothers, I got two brothers

10:06

of his that manage their money

10:08

wisely and are willing to invest

10:11

in our project with us. I

10:14

don't know how willing they're going to be.

10:16

Why do you want, why do you want

10:18

any more of this? Well,

10:21

there's nothing in this has been fun. Dude,

10:24

go do this yourself. You're capable

10:26

of doing this yourself. Square

10:29

your shoulders, straighten your backbone, step into this.

10:31

You are capable. You do not need

10:34

these codependent bozos dragging your butt down.

10:38

Run free, my man. Run free.

10:41

Thank you. Get free of these

10:44

people. Move on. Uh,

10:46

I mean, the only one that was functional in

10:48

this entire family you're describing was the people that

10:50

died. They left the

10:52

money to their dysfunctional children.

10:54

I do not know. Thank you. No,

10:57

thank you. No, thank you. I

10:59

will pass. I'm sorry,

11:01

Larry. I'm sorry you're going through this, but here's the

11:03

thing. The bankruptcy law

11:05

is federal law. It

11:08

trumps all state law. Just like

11:10

you're playing a Rook and you got a Trump card. Okay.

11:13

The, he just played the Rook. He

11:16

just played the Trump card and

11:18

it, it, it takes

11:20

over everything. He

11:22

has lost control

11:25

of everything he had control of.

11:28

Any asset he ever touched, anything

11:30

he ever touched and to the extent

11:33

that it's connected to you, it's you're,

11:35

you're going to have some tearing and

11:38

some cutting to like decide

11:40

with the bankruptcy trustee who now owns

11:42

half of your trucks on

11:45

behalf of his credit, your partner's creditors.

11:48

When the bankruptcy trustee comes in, you're going to

11:50

have to sit down with an attorney likely and

11:52

negotiate with them and go, okay, here's the LLC

11:54

document. I own 50%. Here's

11:56

all the vehicles. Here's the inventory list of the

11:58

vehicles. I want this $50,000 worth and

12:01

you can have this $50,000 worth and the bankruptcy trustee is

12:06

going to go, well, okay, because the bankruptcy trustee doesn't

12:08

know squat about trucks anyway. They're just trying to sell

12:10

them off and get a little bit of money for

12:12

the creditors. And

12:14

if you can scrape together some money, you

12:16

might get a really good deal on those

12:18

trucks. You might buy $50,000

12:21

worth of trucks for five or six thousand bucks,

12:23

but you're going to scrape together some cash

12:26

to offer the trustee to buy these assets,

12:28

not from your former partner,

12:30

but from the bankruptcy court because the

12:32

bankruptcy court now owns everything your former

12:35

partner used to own. That's

12:38

how this works. The day you

12:40

file bankruptcy, all of

12:42

your assets transfer title by

12:45

law into the bankruptcy court's name.

12:48

The bankruptcy court then relinquishes them

12:50

based on exemptions, homestead exemption on

12:52

your home equity and personal exemption

12:55

on your personal assets. This

12:57

is if he filed a chapter seven bankruptcy and

12:59

I'm betting dollars to donuts. That's what he filed.

13:03

So there we go. Larry,

13:05

I'm sorry you're going through this. You're a

13:07

much better man than you're giving yourself credit.

13:09

You do not need this. You

13:11

need to move on and go be you. Ten

13:14

years from now, you being used is going to be

13:16

a really cool thing. Right this second, it

13:18

sucks to be you. But in

13:20

10 years from now, if you'll step into this,

13:22

it's going to turn out really pretty. With

13:25

this much manure, there's got to be a pony in there

13:27

somewhere, man. Seriously.

13:30

Wow. Open phones and you call us. We'll talk at

13:32

844-944-1070. Ladies

13:37

and gentlemen, we say around entree leadership and

13:39

have for 25 years, the only ship

13:42

that won't sail is a partnership. And

13:46

I present the last case as

13:49

evidence as to my genius when

13:51

I say that. Stuff

13:55

happens in life. Divorce. You

13:58

end up being partners with your partner. partners,

14:00

ex-wife, death. You

14:02

end up being partners with your

14:05

partners, ex-wife disability. You end

14:07

up being partners with your partner's ex-wife

14:09

trying to take care of your partner,

14:11

who's now in a wheelchair, drug

14:13

use. Your partner's doing cocaine and

14:15

screws up the entire universe. Disinterest.

14:19

Your partner is a lazy butt moron

14:21

and sits on his hands all the

14:24

time and doesn't do anything. You

14:26

get to do all the work and he

14:28

gets half the money. These is the crap

14:30

that happens in partnerships and you

14:32

can cover it in a partnership agreement, but

14:34

then you have to go to this wonderful

14:37

thing called court with these wonderful people called

14:39

lawyers to get this fixed. And

14:41

you know the difference in a, I mean,

14:45

man, oh, don't seriously.

14:48

So you just don't want to, you don't want to go there. You're

14:51

much better off to grow smaller, start

14:54

smaller, be

14:56

a little more scared cause you're by yourself cause

14:58

you don't have your friends standing beside you. If

15:01

your friends standing beside you, let them work for you, but

15:04

not on half of your deal. This

15:06

is how poor Larry got into this. And this is how a whole

15:08

bunch of you get into this. Here's what

15:10

I know from 25 years of doing this

15:12

coaching small businesses. 10

15:15

years from the day you start a

15:17

small business partnership, almost

15:19

none of them survive very

15:23

close to zero. The

15:25

only ones that we see in the marketplace,

15:28

partnerships and small businesses that survive our

15:30

law practices and medical practices, and they

15:32

operate with a different opera, different operating

15:34

systems than a couple of old boys

15:36

in Portland, Oregon, that built some houses

15:39

and did some rehabs. They

15:41

have a completely different operating system. And

15:44

so, you know, we see docs survive and

15:46

we see law firms survive and those are

15:48

true partnerships. We see them survive longer than

15:50

10 years, but the number of you that

15:53

open a heat and air thing or two

15:55

veterinarians open together Or

15:57

three, whatever. two of you go together

15:59

and do.. This thing and we're going

16:01

bar farm with my brother. and Oh

16:04

My. God. you people, you get yourself

16:06

into a ditch. It's. A mess.

16:08

And please don't Do it. Just.

16:11

Cause he spawned a drink beer with and mean

16:13

you want to open a business with him? I'm

16:16

just promising. You're. Much better off

16:18

ten years later, Fifteen years later, to

16:20

have grown slower, to have been more

16:22

scared by yourself, to have been a

16:24

little bit lonely, or not have the

16:26

camaraderie. Or. Whatever and look up

16:29

and not. Had all of these other

16:31

things from it's disability to death to

16:33

drug use to disinterest to bankruptcy known

16:36

as default one of the other sees

16:38

smack and you have saw the here

16:40

in this is just a fad. Don't

16:43

mesh. You guys feel so bad for

16:45

my series of good Guy where you're

16:47

better than you think you are ma'am

16:50

Please swear your shoulder strap on you

16:52

tube else. go run your business, get

16:54

away from the that dumb garbage pile

16:56

of. This is the on for

16:59

a letter to Foster. A

17:03

Folks I started Ramsey Solutions on a

17:05

card table thirty years ago. Over that

17:07

time, we had too many different systems

17:09

and I slowed us down. That's

17:12

why we now use Net Sweet. Net.

17:15

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17:17

for your business to. Whether.

17:19

You're just starting out or you're well on your

17:21

way to becoming a multi million dollar company. Next.

17:24

Week and scale with you to

17:26

help communicate across departments and plan

17:28

ahead better. See. You.

17:30

Know your day to day forward and backward. But.

17:32

Stuff like analytics, accounting, Human.

17:35

Capital Management. All that my

17:37

be another story. Or. Maybe you're not

17:39

tech savvy wall? That's okay, it's

17:41

net sweet will help your company

17:44

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at Less Sweet. dot com slash

18:00

ramsay that's

18:03

netsuite.com/ramsay thanks

18:05

for being with us america this

18:07

is the ontario leadership podcast if

18:11

you were here for the last call i

18:13

don't know how you appear now if you were here for the last

18:15

call but you

18:18

got some you get this is the stuff we get

18:20

here every day this is what we do in our

18:23

tradition every day we coach people in

18:25

all of these situations and

18:27

i can promise you there's not another podcast

18:29

on leadership none of the podcast

18:31

on small business in america the a even knows

18:33

how to answer that freaking question but

18:35

be would even get that call so

18:37

uh... this is not theory from

18:40

your college professor this

18:42

is me and larry trying to figure this out together and

18:45

you get to listen in so

18:47

thanks for hanging out with us chris is next

18:49

chris is in myrtle beach hey chris what's up

18:53

a day of our user better than i deserve how

18:55

can i help a

18:57

third thorough quick uh... two years

18:59

ago after sixteen years of uh...

19:01

military service uh... started a pressure

19:04

washing company and a christmas light

19:06

installation business uh... we

19:08

are four employees now uh... first

19:10

year did two hundred and

19:12

second year one track to do four hundred

19:15

yeah i look at you start yes

19:18

sir yeah so uh... my

19:20

question sir is basically you

19:23

know we we've been so blessed uh...

19:25

especially coming from the place so that

19:27

i was actually lost

19:29

pretty much everything and it

19:32

over my heart to the homeless veteran

19:34

ministry uh... we yeah

19:37

and so when you when you came out you had

19:39

a hard patch yes

19:42

sir yeah i uh... basically had

19:44

a ten-year marriage and in divorce

19:46

and uh... between you know

19:48

i thought i was going to listen to the last call but

19:50

you know and the lawyers uh...

19:54

lost everything uh... you

19:56

know short story and it's

19:58

been amazing you know I just, I

20:00

woke up one day and I said, hey, like,

20:03

this is not going to be my story. So I worked

20:06

every, I've been working every single day for 16 hours a

20:08

day. You're

20:11

doing whatever I can to provide

20:13

for my family. And it's been

20:16

amazing because I've had such

20:18

a surplus that I

20:20

can get back to the homeless veteran ministry

20:22

and we have one that we work with.

20:24

Good. Yeah. And,

20:27

you know, they, they build the tiny homes

20:29

for the homeless vets. And I,

20:32

I want to get back, you know,

20:34

I already get back with my time. I, you

20:36

know, we go in, we hire these people whenever

20:38

we need employees when we're busy.

20:41

Um, we, yeah.

20:43

And we, uh, you know, we go and

20:45

we, we clean for them. We press your

20:47

watch, keep up with the, the

20:49

houses and we do financially contribute. And

20:51

that's basically my question, sir. Um,

20:54

is, is how, what is the best way to

20:57

go about, uh, contributing to

20:59

the little home, uh, ministry,

21:01

because I want to keep

21:03

giving what I can. Uh, there is still

21:06

a huge need. They don't have enough homes

21:08

for the amount of veterans on the street.

21:11

And I want to

21:13

do whatever I can to help financially. Well,

21:15

you're a good man. Thank you for your service

21:17

too, by the way. Thank

21:19

you, sir. I appreciate it. So you know,

21:21

your numbers. You told me you did

21:24

200 and then you're doing 400. So you

21:26

know, your gross revenues. Do you do

21:28

a good set of books, a profit and loss

21:30

statement, a budget? Yes,

21:32

sir. So we, we've been met 30,

21:35

both years. Um, so first

21:37

year we netted 60

21:39

this year. I'm projecting one 20. Yeah.

21:42

But what I'm saying is, is are you doing a

21:45

written budget to

21:47

where you can tell me next month,

21:50

I think I'm going to bring in this much money.

21:53

And these are going to be my expenses. And

21:56

then that number is going to be my profit, which

21:58

is the what I brought in. minus

22:00

my expenses. Do you have that projected into

22:02

next month, the next month, and the next

22:04

month? Yes

22:07

sir, typically we do. With the

22:09

Christmas light installation season, it is

22:11

being kind of difficult because it's

22:14

such a... How

22:16

do I say... It's a short season, yeah. Yes

22:19

sir. It's not steady, yeah. But I mean, what

22:21

I would tell you to do is if you

22:23

backed up a little bit, and

22:25

here's what we do at Ramsey, we started

22:27

doing it 25 years ago when we were

22:29

your size, is there's

22:32

two or three financial instruments that you

22:34

need to move, that you need to

22:36

have, to move from the

22:38

treadmill stage up into the

22:42

Pathfinder stage and the Trailblazer stage.

22:45

And that is accounting, your accounting

22:47

documents, okay. So number

22:49

one is most people in

22:51

business, even treadmill operators, do

22:53

a P&L, a profit and

22:55

loss statement, which is looking

22:57

at last month and last

22:59

year, what we brought

23:01

in actually, what we actually

23:04

spent, and therefore what our actual

23:06

profit is. Most people

23:08

do that just to get their taxes

23:10

done, okay. That's

23:13

number one. That's the first accounting document

23:16

that most people do, all right.

23:19

The second document that I want you to

23:21

do after that is a

23:23

checkbook reconciliation. So you keep up with

23:25

your dadgum checking balances, and

23:28

you cash reconcile. The third document is what

23:30

I was talking about a minute ago, which

23:32

is a budget, and that's

23:34

the reverse of the P&L. It's looking

23:36

out the windshield and saying, next

23:39

month in February,

23:41

in March, in January,

23:45

in May, I'm going to

23:47

walk through each month and say, I think based on

23:49

what we did last year, we're going to do X

23:52

in income and we're going to have Y in

23:56

expenses. Therefore we're going to

23:58

have Z for that month. that

24:00

particular month that unique month and it'd

24:02

be very unique during Christmas light season

24:04

for you Z is your

24:06

profit now I'm telling

24:08

you all this to answer your question because

24:11

when you do that budget if

24:14

when you put in there what your expenses

24:16

are fuel repairs on

24:18

equipment salaries generosity

24:24

but generosity and as a line item in

24:27

the business I want to automatically give

24:29

x dollars or x

24:31

percent each and every month

24:33

I want to set it aside and you

24:35

make it a system make generosity

24:38

a systemic

24:40

thing a system a process

24:42

that's automatic that makes

24:44

sense yes sir absolutely

24:46

if you project it like that it'll be easy

24:48

to do and you won't feel like

24:51

you because if you don't do that

24:53

you could do too much and mess

24:55

up your business and starve

24:57

your business of cash but because your heart's

24:59

so big for these veterans and I appreciate

25:01

that heart or you could

25:03

do when you do

25:06

do something you wonder if you've messed it up

25:08

because it's not a tie it's not attached to

25:10

anything it was just your emotions and you just

25:12

went oh I'm gonna give them ten thousand dollars

25:14

oh there it is okay oh I wonder if

25:16

I just screwed up something well you you don't

25:18

need to wonder it needs to be part of

25:20

your system and part of your planning and when

25:23

you do that you're going to be as it's going to be

25:25

easy for you to be generous and

25:27

men and women like you Chris who

25:30

have a heart for the community are

25:32

they make the best small business people ever you're

25:35

the heroes of the small business landscape corporate

25:39

America when they give it's generally for

25:41

virtue signaling when you give

25:43

it's because you're a good man there's a lot

25:45

of difference this

25:47

is the Entre leadership podcast forty

25:53

two percent of small business owners say

25:55

they've experienced burnout in the past year

25:57

too many are running at top speed facing

26:00

the same roadblocks and distractions every

26:02

week. The good news is

26:04

you can end the daily cycle of

26:06

chaos that's plaguing your life

26:09

and your business. I got

26:11

my work week under control years ago and

26:13

the ultimate guide to time management will help

26:15

you do it too. So

26:18

go to entreleadership.com to

26:21

download your free guide and

26:23

finally find time to work

26:25

on your business instead

26:27

of just in your business. A

26:31

recent Entre leadership study found that

26:33

40 percent of small business owners

26:35

regularly finish their workday physically and

26:38

emotionally drained. That's 4

26:40

out of 10. I remember that.

26:43

I remember being stuck in that. When

26:45

we were little in the first few stages of

26:47

business I was working my butt off, man. I

26:50

would go home after putting out fires all day

26:53

wearing my little fireman's hat, running

26:55

around all over the place putting this fire out,

26:57

that fire out, collapsing my easy chair and Sharon

26:59

would go, what'd you do today? And I'd be

27:01

going, I got no freaking idea. But

27:03

I've been doing it all day. And

27:06

that's what it feels like when you're in that treadmill

27:08

stage, man. It's hard. It

27:12

only stopped when I got my

27:14

time management skills up and

27:16

I was able to work on the business not just in it.

27:20

If you want to grow your business, one of

27:22

the first skills you've got to master is time

27:24

management. It helps you level up from treadmill operator

27:27

up to pathfinder, the

27:29

first stage to the second stage of business. Our

27:32

free, did I mention it's

27:34

free, ultimate guide to time

27:37

management will walk you step by

27:39

step through everything you need to know to

27:41

get a basic time management system in place

27:43

so you can get out of the fireman

27:45

business. You can end the

27:47

daily cycle of chaos and

27:50

you can finally find some time to work on what

27:52

really matters in the business instead of just being a

27:54

dog chasing its tail. entreleadership.com/time.

28:00

and you can download your

28:02

free guide to time management.

28:05

entreleadership.com/

28:08

time. Jennifer is

28:10

in Chicago. Hi, Jennifer.

28:13

Welcome to the Entreleadership podcast. Hi,

28:16

Dave. Thank you so much for the opportunity to

28:18

be on the podcast. I really appreciate it. I

28:20

appreciate you being here. How can we help? Yeah,

28:23

so I'm a salon owner in

28:25

the Chicago suburbs, and I own

28:28

one location. And I'm working

28:30

on scaling my business. And

28:33

I wanted to know what APIs or

28:35

systems do I need to be testing

28:37

or tracking in order to know I'm

28:39

ready to open up a second location.

28:41

I currently have 10 employees.

28:45

Last year, we grossed $680,000. This

28:49

year, we've had some great growth of $800,000 so

28:53

far this year. Wow. We

28:55

just recently retired behind the

28:57

chair after 20 years, so

28:59

I can focus on building my

29:01

team and trying to be the best leader

29:03

that I can for them. Yeah, you

29:05

have officially moved up into Pathfinder, heading

29:07

towards Trailblazer. Way to go. Very

29:10

proud of you. Way to go.

29:12

You got to be like flexing some muscle

29:14

in the mirror, girl. You're kicking it. It's

29:19

exciting and scary, and it's always just a

29:21

learning experience. Oh, it's always scary. I

29:23

mean, John Johnson, the

29:25

editor of Ebony Magazine, says the entrepreneur is the

29:27

only one that can go from sheer terror to

29:29

sheer exhilaration and back every 24 hours. Welcome

29:33

to my world. Welcome to your world. I love

29:35

it. I'm proud of

29:37

you. Way to go. Way to go. OK,

29:39

you can only duplicate

29:43

the things that aren't due

29:46

to your personal brilliance. All

29:51

founders have a

29:53

quirky personal

29:55

brilliance. I

29:57

do, and you do. There

29:59

are things. that make us unique. In

30:02

my case, I can draw, shoot, and

30:04

reholster before you even know

30:06

what hits you. I'm so quick on the

30:08

draw. You follow me? That's a quirky brilliance

30:10

of mine. It made me

30:12

great in Talk Radio. It makes me

30:14

great at entrepreneurship, making great decisions. And

30:17

if they're wrong, I'll just make another one. I'm

30:19

fast and driven.

30:22

You've got other things that make you

30:24

quirky and brilliant. But those things are

30:26

not duplicatable. You can't

30:29

delegate that. That's

30:31

lightning in a bottle. And you've

30:33

got some of that, and you need to figure out what

30:37

only you can do, because

30:40

that is a limiting factor. Anything

30:45

that you can figure out a way that someone

30:47

else can do it, you've got

30:49

to systematize it and detail

30:51

out the processes. When

30:54

you systematize things that

30:56

you thought only you can do, but then

30:59

you discover other people can do them, now

31:01

you've got a delegatable process and

31:04

a scalable process. It's

31:06

not scalable if you're the only one that can do it.

31:08

You become the bottleneck. Does

31:11

that make sense? Right. Yeah.

31:14

My goal next year is how

31:16

can I fire myself from almost

31:18

every position besides just being that

31:20

visionary and really directing

31:23

the ship? So about

31:25

20 years

31:27

ago now, I was 15 years into

31:29

this endeavor. And in

31:31

my prayer time, I was asking God the

31:33

same questions you're asking right now. And I'm

31:36

saying, okay, what is the deal? And I

31:38

heard in my little head real clearly, I'm

31:40

supposed to be on the air

31:43

and being talent, which I've continued to

31:45

do and write books and

31:47

speak and so forth. That's one of

31:49

my jobs. But my job inside of

31:51

Ramsey is to work on big things,

31:54

broken things and new things.

31:58

And everything else. else needs to do.

32:02

If it's not broken, big or new, I shouldn't

32:04

be in the meeting. And

32:08

I had to quit because I like doing

32:10

the operational stuff. I like,

32:12

you know, cranking out the widgets and making sure that

32:14

the, you know, the manufacturing is working. In your case,

32:17

how many heads are we cutting? What's

32:19

the technique? What's the art with the hair?

32:21

All the eat. That's crap. You're not in

32:23

that business anymore. You're

32:25

now working on new things, big things, and

32:27

broken things. And in your case, one of

32:29

the things that's broken that I pointed out

32:31

earlier, it's not broken, but it's a requirement

32:34

for you to move to this next level

32:36

is for you to work on taking

32:38

things that you do down into little

32:40

bitty bite-sized pieces that are explainable and

32:42

turn them into processes so you don't

32:44

have to do them anymore. Love

32:48

that. Systematizing process. Systematizing process.

32:50

And it's not to take the

32:52

soul out of it. It's

32:54

to make sure your DNA and your soul is

32:57

in the process. So

32:59

we have a process, for instance, at Ramsey,

33:02

we have successfully launched probably

33:05

more number one books than just about

33:07

anybody else in America that is not

33:10

a major top one or two publishers.

33:13

We put out one or two

33:15

number one national best-selling books a

33:17

year. The process

33:20

of launching one of those books and creating one

33:22

of those books is a detailed

33:24

process. It came from the way

33:26

I launched Financial Peace with help of many

33:28

others. I didn't know what the flip I

33:30

was doing in 1994, you

33:33

know? And then it came

33:35

from the success of the Total Money Makeover book

33:37

tour, the things we learned from that. And it

33:39

has come from the adjustments in the book market

33:42

since then. Bookstores disappeared as

33:44

an example. So the markets

33:46

changed. But still, we

33:48

launched a book a few months

33:50

ago by Dr. John Deloney, and it was the number

33:52

one book in the nation times

33:54

two. In other words, number two sold half

33:57

the volume. We not only were

33:59

number one, we absolutely destroyed

34:01

everybody else. You

34:04

know, and that is a system and

34:06

a process that caused that to happen,

34:08

including Dr. John Deloni's Quirky Brilliance in

34:10

the book. But the

34:12

book is incredible. That's part of the process

34:14

though. So you know, I've had to detail

34:16

that down. So in order for Ramsey to

34:18

launch a number one national

34:21

best-selling book does not require

34:23

my personal involvement. Tada!

34:27

Isn't that weird? But

34:30

I've broken it down into it's like 500

34:32

little steps. Little

34:35

things you got to do. Now I'll

34:37

sit in a meeting occasionally just to

34:39

make sure that they're pushing all those

34:41

500 buttons or whatever they are, but

34:43

it is a very detailed system. And

34:46

the same thing's true here. So the things in your

34:48

shop that are working, we need to

34:50

write them out long hand. Be

34:52

able to hand them to somebody else and say, this is the way

34:55

we do it in the $800,000 shop and we're

34:57

going to open another shop and we want it to be at least $800,000. So

35:00

by God we're doing

35:02

them this way. It's a system.

35:04

It's a process. When you get all that

35:06

in place, you've got a scalable event. That's

35:09

how people franchise ideas. Is

35:12

Subway has, there's not two ways

35:15

to make a Subway sandwich.

35:17

There's one way. When

35:20

you are a Subway franchisee, you

35:22

are required to

35:25

follow the exact process.

35:28

To bake the bread, slice the

35:30

salami, put it on the bread,

35:33

where the counter is situated, how the

35:35

customer watches you do it, the portions

35:37

they watch you do, the portions they

35:39

don't watch you do. It's

35:41

exact. So every Subway in

35:43

the freaking universe that you

35:46

go into has the exact

35:48

same sandwich. That's

35:50

what you have to do. Otherwise

35:52

it's not scalable and that's

35:54

detailing out the process and franchising it in

35:57

a sense. You don't have to technically be

35:59

a franchisee. as or that's not what I'm

36:01

talking about. But, you

36:03

know, if you're going to scale

36:05

business that creates a delegatable environment

36:08

and you're making subway sandwiches in your

36:10

case, you're cutting hair, you're doing nails,

36:12

you're doing whatever else is involved in

36:14

the salon. And so, way

36:16

to go. I'm so proud of you. You

36:19

are getting it. Man, what a,

36:21

I mean, you're running a business. It's almost

36:23

bringing in a million dollars.

36:27

Wow. What a

36:29

great country we live in. Wow.

36:32

And even the communists can't argue with that.

36:35

I mean, it's amazing. Way

36:37

to go. So proud of you.

36:39

That's about as good as it gets you guys. I

36:42

love small business people. She started this thing,

36:44

man. She's been cutting hair, comes out from

36:46

behind the chair and is

36:49

asking these really high end

36:51

sophisticated, intelligent business questions. Way

36:54

to go. Way to go.

36:57

Wow. I love it. I

37:02

love celebrating with small business

37:04

people that are winning. I

37:08

don't love it, but I also get to sit

37:10

with small business people who are crying and it's

37:12

not working. Some

37:14

of you have had that kind of year last

37:16

year. You're

37:20

dragging butt, man. Your tail's hanging.

37:23

It's been hard. Mortgage

37:27

interest rates were up. You're

37:30

still trying to recover from the

37:32

Fauci pandemic. You know,

37:34

we're still backing

37:37

around trying to figure this thing out. The

37:40

labor situation in America.

37:43

Oh my God. I don't really

37:45

want to work, but I want you to pay me and

37:48

I'm going to tell you how to run your

37:50

business. Oh, shoot me. Oh

37:52

my gosh. The

37:55

great resignation. Then all the people want to come

37:57

back because they have the great regret. Nope.

37:59

Sorry, you left, but

38:02

now we've got, you know, we're trying to rehire. We're

38:04

trying to fill stuff. You, it's been a hard year

38:06

for some of you. Some

38:10

of your vendors went broke and they just about took you

38:13

with them. Some

38:15

of your customers went broke and they just about took you

38:17

with them. Some

38:19

of you it's been really, really hard. So

38:23

I get asked all the time, should I quit? Well,

38:28

I don't believe in the saying winners never quit.

38:31

Winners quit all the time. They quit

38:33

doing stupid stuff that didn't work. And

38:37

if your business is stupid stuff that didn't work and then

38:39

you want to quit, I'm okay

38:41

with that. Go get you something that's not stupid stuff. We

38:44

quit doing some stuff last year and

38:47

then some of it was stupid stuff. And we said, we're not doing

38:49

it anymore. Then it

38:51

didn't work. And, but

38:54

if your business is something you've invested into

38:58

spiritually, emotionally, financially for decades,

39:00

you love it, but

39:03

this is a rough patch and

39:05

your business is not stupid stuff. It's

39:08

just really hard right now.

39:13

Whatever you do, don't quit.

39:18

The number of times I see people quit right

39:20

before they have a breakthrough. They

39:23

were just about to turn the corner.

39:28

You almost pushed through and they

39:31

ran out of gas a hundred yards from the finish

39:34

line, a hundred yards from the breakthrough, there

39:37

was a free Uber ride up

39:40

there and they were going to get to ride

39:42

in a car for the next 10 miles. It was going to

39:44

get easy and they fell over in the ditch a hundred yards before. The

39:50

number of times I've seen that is sad. So

39:53

I'm going to tell you this. If

39:55

you had a tough year last year, If

40:00

it's been rough, if you're struggling, I

40:03

understand me

40:05

too. Sometimes

40:07

I've had those tough years. Sometimes

40:10

I've had years that were tough emotionally. Sometimes

40:12

I've had years tough financially. Some

40:15

years I've just had year. You just had a

40:17

year that was just full of manure. And

40:19

sometimes we're just on victory mountain flashing our

40:22

gold medals everywhere too. Okay. That's okay too.

40:24

If that's you, I'm not mad at you.

40:26

I'm cheering with you. If you're flashing your

40:28

gold medals, have at it, baby. I'm

40:30

happy for you. I want you to win, but

40:33

I'm talking right now to those of you

40:35

that's been, it's just, you're just about out

40:37

of gas. So

40:40

the first thing you got to ask yourself is, is

40:43

this business coming from down in my gut? Or

40:47

was it just coming cause I thought I could go make some money.

40:50

If you thought you could go make some money and you didn't

40:52

and you want to quit. Oh, well quit. That's no big deal.

40:54

Get you something else to do. But

40:57

most of us that run a small business, there's more to

40:59

it than that. Most

41:01

of us got something down in the DNA.

41:03

That's just churning. There's gears grinding. It

41:06

means something to us to

41:10

be an owner, to be an entrepreneur.

41:13

It means something else to do the thing we're

41:15

doing right now. We're

41:17

invested, not just

41:19

financially. It's not a transaction.

41:22

There's a soul involved. If

41:26

that's you and you've

41:28

just hit a rough patch, please

41:30

don't quit. Whatever you

41:32

do, push one more day.

41:35

Take one more step, get up

41:37

one more morning and do the next right thing that you

41:39

know you're supposed to do. Push

41:41

through. I mean, you're looking over

41:44

there. You got somebody's cause in some of this

41:46

fire their butt and keep going. They're

41:48

the problem. Not you. Keep going.

41:53

I've been putting it quit putting up with it. Don't

41:55

do it. Don't stop.

42:00

Don't stop because someone

42:02

else said to stop. Many

42:07

years ago, I quit doing exit

42:09

interviews when people quit. Well,

42:12

they quit and I didn't, I'm still here. Why do

42:14

I care what they think? I

42:16

got stuff to do and them bitching and

42:19

moaning about me doing stuff. I don't have

42:21

time for, I got stuff to do. Well,

42:23

you can learn things, probably not, but

42:26

I might learn a little something. So

42:28

our HR people think it's important. So

42:30

they do exit interviews. Well, why are

42:32

you leaving? Well, well,

42:34

okay, good. That's great. I still,

42:37

I'm here. I'm not quitting. You

42:39

are. And next thing, baby, next

42:41

thing. So, you know,

42:44

this is in the same vein. And you got to figure this

42:46

out. Where are you on the

42:48

spectrum? If this is down in your

42:50

gut and it bubbled up originally from your soul

42:52

and from your heart, not from your wallet, not

42:54

from mathematics. Oh, I think we can make some

42:57

money. Now this is, I have to do this.

42:59

I, you can't keep me from doing this. I

43:01

can't not do this. I have to do it.

43:03

Then don't stop because

43:05

somebody quit or you had to

43:08

fire somebody that was half butt

43:10

doing stuff. Don't stop because some

43:12

customer misunderstood you. And for God's

43:14

sakes, don't stop because some moron

43:16

on social media had an opinion

43:18

that lives in his mother's basement.

43:22

Don't stop. Push

43:25

through. America

43:27

needs people with backbone and

43:31

a culture full of wussies. We

43:33

need people that can step up and get stuff done.

43:36

We need people that can knock things over. We

43:38

need people that care deeply about

43:41

their team, about their family, about

43:43

their team's family, about their customers,

43:45

about their customers family. With

43:47

the corporate America doesn't give a crap

43:49

like small business does. We need people

43:51

like you to push through. Don't

43:56

stop. Don't quit.

44:00

Don't quit. You

44:03

might be that close

44:06

to a breakthrough, to

44:09

something busting loose. And

44:13

you look around five years later and go, man, I

44:15

almost quit. And this whole

44:17

thing almost didn't happen. Wow.

44:21

Don't be that guy. Don't stop.

44:24

Look back five years from now, standing

44:26

on a different mountain top going, wow,

44:29

I was in the valley of manure and I almost

44:31

missed this. I almost

44:33

missed it. I almost quit. Don't

44:36

stop. Don't stop. Push

44:40

through. The culture needs

44:42

people of courage. The culture

44:44

needs people of character. Business

44:47

needs people to do things right. And

44:49

you're the people, the people that listen

44:51

to this podcast, you're the ones that

44:53

do this stuff. So

44:55

don't stop. We love you. We're

44:57

glad you're here. Hey, remember

45:00

batter, a wary warrior than

45:03

a quivering critic. This world

45:05

needs more high quality leaders. Take

45:07

courage and lead. I'm

45:09

Dave Ramsey, your host. Thanks for

45:11

listening to the Entree Leadership Podcast.