0:10

From the headquarters of Ramsey solutions,

0:12

this is the entree

0:14

leadership podcast where I

0:16

take calls from leaders like you about

0:18

what it takes to win at any

0:20

stage of business. I'm

0:22

Dave Ramsey, your host with over 30 years

0:25

of experience in the trenches, doing

0:27

what you do every day, still do,

0:30

and we're here helping you. We

0:32

love small business people. We love

0:34

leadership, and we're glad

0:36

that you are in our tribe

0:38

and you're out here getting things

0:41

done in America today. If

0:43

you've got a question you want to talk about

0:45

business, particularly small business, just

0:47

give us a call. You can fill out

0:49

the form at entreeleadership.com/ask, or you can

0:51

call us at 844-944-1070. We'd

0:56

love to hear from you. Ross is with

0:58

us in Louisville, Kentucky. Hey Ross, how are

1:00

you? I'm doing

1:03

good Dave. How are you? Better than I

1:05

deserve. What's up in your world? Well,

1:08

so I own an electrical contracting

1:10

business and we do about five

1:12

and a half to $6 million

1:15

a year. We're

1:17

on track to hit 10 million this year and

1:20

we had a good year this

1:23

past year and our

1:25

accountant suggested that we go

1:27

borrow money to cover

1:29

our tax bill

1:34

because we just spent most of it to

1:37

pay debt. You

1:42

did not set your tax money aside?

1:45

Well, I just started my

1:48

business. So

1:50

I didn't quite

1:53

expect to do

1:55

this well nor necessarily knew to go set.

1:58

But I Mean you knew you were... Money, Money and

2:01

over fist. And your accountant knows you're

2:03

making money. hand over fist, I assume.

2:06

He as as she called December twenty

2:09

Seventh not mean that what happened in

2:11

June. When. You guys

2:13

are making five million on the way

2:15

to Ten million. Nobody.

2:19

Talked about Axis. No.

2:24

Other and were didn't speak to our

2:26

account until. She called in December when

2:28

she has for a quick but upload. Okay,

2:33

you're You're running this like it's a

2:35

one million dollar business. Be.

2:39

On you because you need to attach. You

2:42

need to be doing tax planning every single

2:44

month. At your level. And.

2:48

And need to be talking to whoever is

2:50

doing your books every month and figuring out

2:52

what your tax liabilities gonna be. And be

2:54

sure you're saying that aside so you don't

2:56

get to the end of the year and

2:58

have a freaking two hundred thousand dollar bill.

3:02

right? Okay, I don't like us.

3:04

I don't like surprises like that. At

3:08

home Either answer not at all out

3:10

attack or extra money for the year

3:12

and paid off. Was

3:15

actually going a debt free the

3:17

week before December twenty seventh and

3:20

think got a with this. Were

3:23

debt free? Not gonna. The fact that you had to

3:25

her does not you over the Rs or you're not

3:27

dead free. For. Years

3:29

correct? Wow. So. Where

3:31

are you going to borrow? two hundred thousand dollars? Or

3:35

her recommendation was is that we

3:38

pull off the line of credit.

3:40

And borrow that and

3:43

then pet and then

3:45

just. Paid. Off as fast as

3:47

we possibly can next year. But

3:50

I'm trying to figure out what do

3:52

we do to not get in a

3:54

situation? Ever again. Yeah, I

3:56

mean like. Now our

3:58

know right now. month, the

4:01

first three months of this year, I want to get in balance.

4:04

And you need to be,

4:06

you know, it's almost like you need

4:08

to be setting aside withholding on yourself

4:10

is that's the basic concept,

4:12

right? You're supposed to be doing

4:14

quarterly estimates to start with where the flip. You

4:16

probably need a new accountant. I think you've got

4:18

a new, I think you've got somebody that's used

4:20

to doing tiny little businesses.

4:23

I'm not sure. QuickBooks will survive a

4:25

$10 million business. You

4:29

probably got, probably got a criminal

4:31

company software. I

4:35

would say we, we grew quickly this year

4:37

with just starting and now

4:40

trying to figure it out. Yeah. What was it? How

4:42

many years you've been open? Uh,

4:44

this would be my second. So you did

4:47

5 million one year, 10 million the next. Uh,

4:50

no, we did 5.5 this year. This

4:53

in 2023 and under contract for 2024,

4:55

we currently have 9.8

4:59

million under contract. Okay. And

5:01

the year before you did five, you did

5:03

what? Uh,

5:05

one. Okay. You

5:08

need to hire a CFO

5:12

or at minimum a controller in

5:16

house that manages your

5:18

books, builds out some good

5:20

software. That is sophisticated as

5:22

the size of your business. And

5:25

as a part of that tax

5:27

plans and such, you're

5:29

taking it, get your quarterly estimates going, cause you're

5:31

going to get your butt kicked in penalties for

5:33

not doing your quarterly estimates in your third year.

5:38

In other words, you have to pay your taxes

5:40

for the first quarter of 24 in March.

5:47

Okay. And in addition to this

5:49

other problem we've got, but this other problem

5:51

just reveals how weak, your

5:53

how, how weak and primitive your systems

5:56

are for how quickly your business has

5:58

grown. Congratulations on killing it. That's

6:00

awesome. But now what's

6:02

gonna happen is your lack of systems

6:05

and your lack of sophistication is gonna cause you to

6:07

lose it if you don't. You

6:09

can't out-earn stupidity. I've tried

6:12

it. And

6:14

so you've got to put some good software. Yeah,

6:16

you need to hire an accountant,

6:19

I mean a CPA, a controller

6:21

at a minimum, in-house that

6:23

works for you full-time, does nothing but

6:25

manage your payroll, your books, and

6:28

your taxes, and keeps you up to date.

6:30

And working with an outside accounting firm is

6:32

fine. I use an outside accounting firm

6:34

for my taxes, and they work

6:37

with our financial team inside Ramsey today.

6:40

But make sure, by God, my taxes are

6:42

current. The last thing we need to

6:44

be behind with is stupid IRS. So

6:46

her solution to this disastrous

6:49

mess is the correct solution.

6:52

Take it out on the line of credit, pay it

6:54

back as soon as possible. You

6:56

would rather owe the bank on the line of credit than you

6:59

would the KGB. The

7:03

IRS's penalties and interest are much higher

7:05

than the line of credit. Yeah,

7:09

yeah, because I think the line's run at like 8.5% or

7:11

something. I don't even care.

7:13

And we do not want the IRS in your life. It's

7:17

the last thing. It'll screw up everything.

7:19

You're gonna have them breathing down your throat,

7:22

man. You don't even want any, no, no,

7:24

no, no, no, no. So do what she

7:26

said. Take that line out. But much

7:29

more important than that is

7:31

get this fixed so it doesn't happen again. And

7:33

that is hire a controller, get somebody

7:36

on top of your books, upgrade your

7:38

software. QuickBooks won't handle a

7:40

company this size. You need to look at

7:42

something like NetSuite or something along those lines,

7:45

put a more sophisticated thing in. It'll help you with

7:47

the job costing, too. And

7:49

then if you work with an

7:51

outside firm, that's fine. I don't think she's sophisticated

7:53

enough because at some point during

7:56

the year, if you're running that kind of volume,

7:58

she should have been raising her hand. hand going

8:00

we need to get you're gonna get yourself you're gonna get

8:02

your butt in a crack here with these taxes man I

8:05

mean I don't like being surprised by my lack of systems

8:07

and the people in my life just supposed to be telling

8:09

me what to do I helped me and

8:11

aren't so I think you probably

8:13

need to upgrade your software your accountant and you need

8:15

to bring some some accounting help

8:17

inside the building a controller level at a

8:20

minimum the CFO at a maximum and

8:22

that's what I would do if I were in your shoes well

8:25

very very good stuff Wow

8:28

congratulations on your success be

8:31

careful success is one of

8:33

the leading causes of failure this

8:38

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8:43

processes rolling out policies creating

8:45

onboarding and training plans that's

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10:47

pass today. Jacob

10:50

is with us in Georgia. Hi, Jacob.

10:52

Welcome to the Entre Leadership Podcast. Hey,

10:55

Dave. How are you doing today? Better than I deserve.

10:57

What's up? Hey, just

10:59

calling in. I had a little bit of

11:02

a brag to share with you guys today.

11:04

Cool. Tell us about it. Yeah.

11:07

So I currently own and operate

11:09

a just a small window cleaning company here

11:11

in Blue Ridge. We

11:14

have the top-line revenue of right around just over $500,000

11:17

for the last year. Good

11:20

for you. Netting about $175,000. Excellent.

11:25

And so in

11:27

this window cleaning company, I have

11:29

had the pleasure

11:32

of meeting some real great great

11:34

people, real great community leaders. And

11:38

about two years ago, I got

11:41

involved within a scholarship

11:43

foundation. I'm on the

11:45

board for a local Pray

11:47

of Homes organization. This

11:49

organization was started back in 2019. You

11:53

to date, we've gave

11:55

out Just over 370,000. Dollars

12:00

in scholarships or to have

12:02

to choose to this within

12:04

within our church. A. Geographic

12:07

regions of the Forest a county

12:09

Few: Wow, that's awesome he held

12:11

so it's a pretty special love

12:14

for special group got to be

12:16

involved means so scholarships to do

12:18

what whatever they going to school.

12:20

So so we're up on what

12:22

we did Organization: We felt like

12:25

the or the trade in particular

12:27

was a very underserved. A

12:29

group of kids go nuts. You

12:31

are going into the the Trades

12:33

shop kids if you will. So.

12:36

When wanted to focus on at that particular

12:38

demographic. Of have kids so

12:41

we've so far are we gave

12:43

out or thirty six scholarships? Oh

12:45

I'm thirty scholarships or two thousand

12:47

dollars apiece. or we separate that

12:49

out between each semester of the

12:52

thousand dollars apiece per semester. Oh

12:54

I'm a in. The is she's

12:56

made is just absolutely specialty involved

12:58

in this days. Wow! Why to

13:00

go man? Congratulations are buddy Mike

13:03

I will be thrilled to hear

13:05

this. This is great! Yeah you

13:07

know he's having a micro works

13:09

other. That I give voice scholarships

13:11

for this exact same thing And

13:13

ops. And. Pushes folks and and

13:15

helps people get into the trades and

13:18

do. They're all kinds of different things

13:20

but well done sir. Congratulations Nuts are

13:22

worth your time and your energy. Adnan.

13:25

Yeah, it is Absolutely and it is is

13:27

so humbly did to see these groups of

13:29

kids. Come through every year

13:31

on we we. We plan on given

13:33

out a rather two hundred thousand dollars this

13:35

year. So what do you think? The

13:37

best couple of trades or two or

13:39

three that somebody can go into their

13:41

gone in the Trade Sisters chaos mean

13:43

there's not a bad economy. Seats are forcing.

13:46

A lot of Weldon students are come

13:48

for you or H Back technicians, plumbers,

13:50

you name it, it's it's needed. A

13:52

media species. are all the

13:54

way around i asked my they'd and

13:56

all make really good money coming on

13:58

cancer absolutely i had That's

14:00

phenomenal, Jacob. That is

14:03

a good realization and

14:05

a good use of money. Well done,

14:07

sir. Well done. We

14:09

really, really want to appreciate the, or we

14:11

appreciate you calling in and bragging. By the

14:13

way, if you don't know what Jacob was

14:15

referring to on the Entre

14:17

Leadership Podcast, we invite you to call and

14:20

tell your brag stories. Small

14:22

business people don't have anybody they can brag to in

14:24

America. We love you. We

14:27

think you ought to brag. We had a crow from the

14:29

mountain top, baby, when we went. Yada,

14:31

yada. Just howl at the moon. Let's

14:33

do it. This is the

14:35

Entre Leadership Podcast. Hey,

14:40

by this time of year, you've set goals

14:42

for your business, communicated them to your team

14:44

and are making them happen together. But

14:47

while you're busy getting after it, don't

14:49

forget the primary goal of every single

14:51

one of your employees to get paid

14:54

on time and in the right amount. Payroll,

14:57

it isn't the most fun part of

14:59

your business, but it's probably the most

15:01

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15:04

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15:08

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15:10

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15:13

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15:15

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15:18

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15:25

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15:39

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15:41

a free consultation. That's

15:44

payority.com/Entre Leadership. Thank

15:48

you for joining us, America. I'm Dave

15:50

Ramsey, your host. This is the Entre

15:52

Leadership Podcast. Give

15:54

us a call with your questions or comments

15:56

about business and leadership. The phone number is

15:59

844-9 nine four four ten

16:01

seventy or you can leave a little

16:03

message at the website will get back to you make you

16:05

a caller here on the air that's

16:07

on trade leadership.com slash

16:10

ask if you're looking for a very

16:13

year in the wrong place we talk about the five

16:15

stages of business here because

16:18

we've lived on and because we've

16:20

walked them people

16:22

like you that are running businesses for the

16:24

last several decades we

16:27

work with tens of thousands

16:29

of small businesses all across

16:31

america most of us start out

16:33

at the treadmill stage we feel like

16:35

you're on a treadmill the whole thing counts on you and

16:38

if you're smart and you're lucky and you learn

16:40

to do some delegation and sometime management you

16:43

can move up to the pathfinder stage and

16:45

uh... that's where you need to

16:47

get a very clear direction you can i

16:49

get in chaos mode at the pathfinder stage

16:51

in your clear direction with

16:53

some role clarity in mission

16:56

statement core values got lots of communication

16:58

you can move to the trailblazer stage

17:01

and this is where you need people to scale your

17:03

business you need leaders in their seats you

17:05

need more than just you helping to make

17:08

decisions and think of think like an owner

17:11

and so planning and repeatable processes

17:13

and leadership development for sure will

17:15

lead you into the peak performer stage where you probably

17:17

make the most money ever made your life and

17:21

your business can become too comfortable

17:23

because winning is everywhere and

17:25

if you're not careful you can get caught in that and you

17:27

have to shock everything and

17:29

create a relentless culture of getting better which

17:32

will lead you to the last stage

17:34

of the sub the five stages the

17:36

legacy builder stage where we

17:39

start talking about succession we

17:41

start talking about making this

17:43

thing last beyond that you next

17:46

generation development estate planning all

17:48

of those kinds of things come into play at the legacy

17:51

builder stage so give

17:53

us a call if you want to join in the conversation with

17:55

the practical people if you want

17:58

uh... leadership theory you need to go somewhere else, cause

18:00

I do this every day. There's nothing here

18:02

about theory. Uh, almost nothing up

18:06

next is going to be Steve in St. Louis.

18:08

Hi, Steve. Welcome to the entree leadership podcast. Hi,

18:11

how are you doing, Dave? Better than I deserve.

18:13

What's up? Hey, um,

18:15

so just a little background and then

18:17

I'll give you my question. So, uh,

18:20

I, we have a family owned business that

18:22

I, I've been away from. I'm getting ready to

18:24

go back into it. It's like a

18:27

plumbing and excavating and, um,

18:29

plumbing and excavating. Yes.

18:33

Those are two very different things. That's

18:37

so a lot of the plumbing we

18:39

do is like, uh, installing like, um,

18:41

septic tanks and stuff. So we have

18:43

the bulldozer, that kind of stuff. Okay.

18:45

So we do some residential stuff. Or

18:47

you might do some infra, a little

18:49

bit of light infrastructure stuff too. Okay.

18:51

Yes. Yup. And,

18:53

uh, so the net profit last year was

18:56

at 215,000. So,

18:59

and I'm wanting to get, I'm getting

19:01

back into the family business with expectation

19:04

that my brother's going to sell it to me

19:07

because my half brothers who owns it, I

19:10

was wanting to see. So like, I'm

19:12

going back in, kind of knock the rust

19:14

off my plumbing and excavating knowledge, and then

19:16

I'm going to start doing almost

19:18

like a succession or grooming, kind

19:21

of like learning how to make bids and,

19:24

uh, like pay taxes,

19:26

all the backdoor stuff. And

19:29

I was wanting to see during that

19:32

succession period, is there anything you can

19:34

put in place, I guess, kind of

19:36

protect me if something were to happen

19:38

to him because he doesn't have any.

19:41

Like errors that are interested in running it, which is

19:43

why he's wanting to sell it to me, but

19:46

if something happens to him before

19:49

that purchase takes place, is

19:51

there anything that we can put in

19:54

place or how, so that a

19:56

way it just doesn't get sold and money divided

19:59

amongst his. his heirs, I guess. What

20:03

have you been doing? Uh,

20:06

I've been, uh, driving a truck. I

20:08

worked for him initially and then 2008,

20:10

there was a slowdown and he was

20:12

like breaking even, so I ended up

20:14

driving a truck. I'm driving a truck

20:16

locally now and I've been talking

20:19

to him, interested. None of his kids are

20:21

interested in it. And it's

20:23

something my dad started originally. So,

20:27

and it's something I enjoyed and that's

20:29

why I'm wanting to get back into it. How

20:33

old are you? Okay.

20:38

Um, yeah, you can simply

20:40

have a contract with him that

20:43

outlines the pricing

20:45

and the method of purchase

20:48

and locks it in. And

20:50

that, that gives him an out

20:53

if you, uh, walk

20:55

away or you're incompetent and have to

20:57

be fired or do drugs or whatever.

20:59

Right. So, I mean, we don't

21:02

want him trapped with you if you go bad, but

21:04

on the other hand, you don't want to be at

21:06

the, you know, you don't

21:08

want to, somebody else to end up with this or

21:10

something happens to him. So his estate where he, to

21:12

die would be liable

21:14

to fulfill that contract. Okay.

21:18

And so you would get with an attorney and

21:20

draft a, a simple purchase

21:22

or an option to purchase contract,

21:25

but the contract would become invalid in the

21:29

event that you don't work out for some

21:31

reason or another, and that would all be

21:33

outlined in there. Okay.

21:36

Yeah. I wasn't sure since I wouldn't

21:38

have actually taken ownership of what could

21:40

be put in place. So you're just,

21:42

you're, you're contracting. It's a

21:44

purchase contract that says you have the right to

21:46

purchase it under the following terms, and it might

21:48

not, it might be that it takes three years

21:51

to close this deal. Right. Okay.

21:53

So, yeah, it doesn't have to be that just because you

21:55

have a contract that is 30 days. It

21:58

could be, you know, that you have the business under.

22:00

contract and during, and part of

22:02

that contract is this apprenticeship period

22:05

where you, you learn the skills

22:07

necessary to run the business. And,

22:10

uh, if during that time, uh, you

22:13

guys decide to separate ways, he's not bound to

22:15

sell it to you then. Okay.

22:17

And then if something happens that protects

22:19

me, so I can still, something happens

22:21

to him, like he dies that protects

22:23

you. Yeah. Okay. Yeah. Okay. That's

22:25

one thing you can add to that. If

22:28

you want to, it's a touch more sophisticated

22:30

and I really wouldn't do this until you've

22:32

been in the saddle for at least six

22:34

months. But, um, if

22:37

someone's in a partnership, it's,

22:40

they normally set up and you're not, but

22:43

they normally set up what's called a buy sell

22:45

agreement, which it sounds like

22:47

this, he buys life

22:49

insurance that

22:51

makes you the beneficiary.

22:55

And so part of the deal is he would

22:57

go buy a term policy for, I don't

22:59

know, whatever you're going to pay for the business, call it

23:01

a million dollars. Okay. You're going to pay

23:03

a million dollars for this business. Then he

23:05

buys a term policy for a million dollars in

23:08

the event of his death before you

23:10

execute on the contract, that

23:13

money is left to you. And

23:16

then you are obligated to use that money

23:18

to buy the business from his widow or

23:21

his hair. Okay. So yeah, basically give

23:23

them the money that comes from that.

23:25

Right. And that would be that's called

23:27

a buy sell agreement. And

23:29

that's not, that's a fairly standard thing

23:32

in term insurance. If he's in good physical

23:34

condition is not very expensive. So

23:37

it doesn't cost a lot to put that in place.

23:39

And you know, where I, in your shoes, I might

23:41

even be willing to pay for that policy because

23:45

it gives you the money, it gives you the money to

23:47

buy out any heirs instantly

23:49

and execute on this contract. If something

23:52

should happen to him. But again, you

23:54

guys need lots of exit provisions

23:58

in the contract. that if

24:01

somebody is misbehaving, we can get a, we

24:03

can get a part. Okay.

24:06

I mean, if he starts doing drugs and selling and

24:09

running, running bulldozers off into ditches

24:11

and stuff, you need to get out

24:13

of there, right? Yeah. Cause that, yeah,

24:15

that wouldn't, yeah, you're going to get, you're going to get

24:17

stuck with a bill you don't need. Uh,

24:20

and a headache you can't afford. So that can, I

24:22

mean, people get into crap like that, if you know

24:24

that. So I'm not saying your brother's going to do

24:26

that, but I'm just saying you need, you need to

24:28

provisions. I call them the go crazy provisions. If somebody

24:30

goes crazy, what's going to, what are we going to

24:32

do? Okay. And

24:34

then you just work all that with

24:37

an attorney. Yeah. There's standard exit clauses

24:39

in a contract of this sort. Okay.

24:43

Yeah. A good, a good general practice

24:45

attorney. This is probably going to cost

24:47

you a thousand, $2,000 to put this contract together.

24:51

Okay. And it'll be worth every penny because it's

24:53

going to spell out every little thing that when

24:55

this happens, then the next thing we do is

24:57

this and this happens. We do this and

25:00

that's all the bad stuff, but also it

25:02

also outlines under what conditions you're going to

25:04

become the owner. And,

25:06

uh, you're going to go through a

25:08

one year apprenticeship to learn, relearn or

25:10

learn the skills for estimating and operating

25:12

and running the business, um,

25:15

and so on. So, uh, you

25:18

know, and then after that one year, then you're

25:20

going to pay is going to be X and

25:22

Y and after another year of that pay in

25:24

X and Y, then you're able to purchase the

25:26

business under this formula for this price, this multiple

25:29

of net profits or whatever, however

25:31

you calculate this, uh, in

25:33

this situation. So all of that'll work. All

25:36

of that'll work perfectly. So well

25:38

done, Steve. Good thinking

25:40

and a really, really good question.

25:43

When family does this stuff on a handshake and

25:45

does it on an assumption. Well, we

25:47

all know about assuming what that

25:49

makes you don't do that. Get

25:51

it all in writing with an attorney. This

25:54

is the Ontario leadership

25:56

podcast. All

26:00

right folks, listen up. You can stream

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27:09

today. I'm

27:11

Dave Ramsey, your host. This is the

27:13

Entree Leadership Podcast. Our question of the day is

27:15

from Nathan in Texas. We

27:17

own a landscaping equipment company

27:19

and primarily sell new and

27:21

used zero-turn lawnmowers. Is

27:23

it wrong to let our customers finance

27:25

their equipment purchases because as a business

27:28

owner that does not believe in taking

27:30

on debt, am I

27:32

violating my ethics to offer financing

27:34

on our more expensive equipment?

27:38

I don't think you are, but

27:41

you've got to decide that. I can't decide that.

27:44

So let me kind of break this down

27:46

for you. I teach people, as

27:50

Dave Ramsey, the money guy, millions

27:53

and millions and millions and tens of millions

27:55

of people have followed our advice on getting

27:57

out of debt, staying out of

27:59

debt. That is our product.

28:01

Our product is not zero-turn lawnmowers. Our

28:04

product is on-trade leadership, helping small

28:07

businesses run their businesses. It

28:09

is not zero-turn

28:11

lawnmowers. Your product is equipment that

28:13

you're selling. So my

28:16

product is to get people out of

28:18

debt on the money side of our

28:20

equation, right? For

28:22

me to put people in debt while

28:24

I'm getting people out of debt would

28:27

be so hypocritical and oxymoronic that it

28:29

would be a violation of ethics. So

28:32

we don't take credit cards

28:34

at Ramsey. We will take

28:36

your debit card only, your

28:38

ACH transfer, your wire, your

28:41

cash, but we will not take

28:43

your credit card and we do not offer

28:45

financing on anything that we do because

28:48

that would, in my case, because of

28:50

who I am and what I teach,

28:52

would be highly unknown for that. They'll be

28:54

highly hypocritical. You, however, are known

28:56

for zero-turn lawnmowers. You are not known for

28:59

this. If you own a Pizza Hut,

29:01

you sell pizza and

29:04

not taking a credit card is an option or

29:06

taking a credit card is an option for your

29:08

Pizza Hut or for your

29:11

zero-turn lawnmowers to, you

29:13

know, have a financing arrangement with whoever,

29:16

John Deere or Kubota or whoever it is,

29:18

right? A lot of those have

29:20

their own financing outlets now. It's

29:23

much like we're dealing with, if you're

29:25

a Ford dealership, you'd have Ford Motor

29:27

Credit available and probably local bank financing

29:29

available as well. If

29:31

you own a car dealership and you believe in Dave

29:33

Ramsey and you believe in being debt-free and you run

29:35

the car dealership debt-free, I

29:37

don't think you're breaching ethics to offer

29:40

financing. Now, I

29:43

think always that you're

29:45

breaching ethics. If

29:47

you're letting someone do something or worse

29:50

than that, encouraging someone to do something that

29:53

you know is out of

29:55

bounds and going to be harmful to them.

30:00

We all know that you

30:02

can borrow more money than you should and

30:04

if you know someone's in finance

30:06

financial trouble. And

30:09

you suspect even that they're lying on the

30:11

loan application to get this thing approved because

30:13

are so desperate for that piece of equipment

30:16

obviously we don't want to participate in that. Because

30:20

we don't want to participate in being the cause

30:22

of someone to lose everything.

30:26

I'll give you an example in the old

30:28

days the local banker

30:32

was all there was there was

30:34

no stupid chase.

30:38

Or bank of america god

30:40

help us right where

30:43

some moron in another city was

30:46

making a decision about your life it

30:48

was joe or henry or

30:51

whoever whatever name you want to plug into

30:53

this the local banker. And

30:55

you knew him from church and

30:58

your daddy played golf with him you

31:00

know every you knew it. And

31:02

so in the nineteen fifties

31:05

if a guy came home

31:08

from the war. And

31:10

wanted to open a hardware store and

31:13

didn't have. You

31:16

know enough sense to do that but

31:19

didn't have enough sense to know we didn't need

31:21

to do that and he goes into joe the

31:23

banker and says i wanna borrow a

31:25

hundred thousand dollars or fifty thousand dollars or whatever

31:28

you would have borrowed nineteen fifty to open a

31:30

hardware store. You

31:33

can. I

31:37

wanna put up my daddy's farm as

31:39

collateral. Well the banker looks

31:41

at this kid and goes look kid you don't

31:43

know how to run a hardware store. I

31:45

don't have to foreclose on your daddy's farm it

31:48

will be unethical for me to make this long. And

31:51

the banker would refuse to do with the banker

31:54

does which is make loans Because

31:56

he knows the kids gonna lose the family

31:58

farm doing this. Or a

32:00

high probability. Now. Course Fast

32:02

forward to the day Bank of America

32:04

make that loan for triple that. In

32:07

charge of a lotta interest? No end up with a

32:09

family farm. Because. I don't

32:11

have so. But. The local bank

32:13

back in those days. The Community Bank there. There's

32:15

a few of those still around. Feel.

32:17

Those type of bankers still around fewer

32:19

and fewer every year as I get

32:22

older. But that's the situation. You.

32:24

Know you look at this new go out and and

32:26

know what I tell you to go borrow money at

32:28

the bank. Know it'll tell you to go to that's

32:30

But if you are going to and you're gonna work

32:32

with a community bank you're gonna get a much different.

32:35

Arrangements are much different set of eyes

32:38

looking at the deal. Than. You

32:40

would with one of these megabanks

32:42

that as know so we all

32:44

accept third of God help us

32:46

please note that Casta rights so.

32:51

That's how you want to be. You want to be the. Joe

32:53

the Banker. You. Are

32:55

be the guy who's and a member of

32:58

the community and doesn't screw his neighbors.

33:01

right? And so if you've got a kid that

33:03

doesn't need to be taken on this kind of

33:05

that, go in on not going to participate in

33:07

the steel. But. If you got a guy

33:09

who's. Still, Perfectly capable gal

33:12

who's perfectly capable of handling the situation.

33:14

They're going to finance it, but you

33:16

don't personally believe in borrowing. I don't

33:18

think that's unethical. I. Think you've

33:20

got a present those ideas and if it

33:22

comes up you could always tell people how

33:25

pay cash for everything and Australia habitat. And.

33:27

Are we always encourage cashier. And

33:30

we encourage you to pay cash for everything

33:32

on and but we have the financing available.

33:34

That's what you want to do instead of

33:36

the first thing outta your mouth. As you

33:39

know, we got zero percent interest on the

33:41

zero turns such god. Now I'm a maybe

33:43

the first thing I your mouth is and

33:45

financing rights. Maybe it's like a last resort

33:47

and Scott a Quiet is only for the

33:49

people that you think are gonna do do

33:52

okay with it. And ah you know you

33:54

make some value judgments about not screwing your

33:56

neighbor. and on and

33:58

so forth now Again, I don't

34:01

have that option. It would be very hypocritical for

34:03

me to do that. And I'm not tempted to

34:05

do it at all. I wouldn't do it anyway.

34:08

Uh, but I wouldn't say

34:10

that you, Nathan, that

34:12

you in Texas are unethical because

34:15

you offer financing at your equipment

34:17

business, any more

34:20

than I would say Pizza Hut or the

34:22

local pizza parlor that's owned there by a

34:24

guy or gal in your community is unethical

34:26

for taking a credit card at

34:29

the pizza place. I'm, they probably don't

34:31

think twice about it and,

34:33

uh, so on. So that that's how you

34:35

look at it. Just again, just ethics are

34:38

the best business ethics you can do. Jesus

34:41

already taught us treat other people like you want to be treated.

34:45

So any of you that have any business ethics

34:47

questions, how to deal with an employee, how

34:50

to deal with a vendor, how to deal with

34:52

a customer, how to deal with

34:54

a refund situation, ask yourself

34:56

if the roles were reversed, treat

35:00

other people like you don't want to be treated. If I was

35:02

sitting there, how would I want to be treated? Well,

35:07

in your case, um, the

35:09

person who wants to finance wants the dignity

35:11

of being an adult and wants to decide

35:13

themselves if they want to finance, they don't

35:15

want you dictating it to them. And

35:18

some, some of those people get mad at me

35:20

when I dictate it to them. But I, I

35:22

again, do not have an option being me. So,

35:25

uh, that's, that's what you're

35:27

facing. It's a really, really good question though.

35:30

Um, so always treat

35:32

people how you'd want to be treated. If

35:34

I was incompetent

35:37

and inept, I

35:39

would like for someone I'm trying to do

35:42

business with to if they thought

35:44

that and they thought they were screwing me

35:46

and I was getting ready to lose everything because I did a

35:48

deal with them, I would want

35:50

them to, to, you know, to turn me

35:52

down and I, and

35:54

I will turn someone down in that situation, I'm

35:56

not going to ask someone.

35:58

I'll give you another example. throw one out, another

36:00

one out there, just keep throwing them out there.

36:03

But this is good, this is a good discussion

36:05

because business ethics is sometimes it's really, um, corporate

36:07

America doesn't have much of a soul left.

36:09

All they do is virtue signal. And

36:12

so those of us that are running small businesses with

36:14

a soul, we, we have to

36:16

think about these kinds of things. So

36:18

we have people that want to advertise

36:21

on the Entre leadership podcast or on

36:23

the Ramsey show and those

36:25

ad slots are, they're national

36:27

and they're, you know, super, super

36:29

expensive. And

36:32

if the ad, if I take

36:34

on an ad that the only way the

36:36

guy can pay the bill for the ad

36:39

is if the ad itself causes

36:42

so much revenue for him that,

36:46

um, you know, otherwise I

36:48

bankrupt him trying to collect from him,

36:51

then I'm unethical for taking that customer

36:53

on and we have

36:55

turned away many potential advertisers over

36:57

the years because

37:00

we thought that if this doesn't work, when they

37:02

pay our bill, they're going to be broke or

37:06

they're going to just be unable to pay the bill

37:08

either one, it's going to completely bankrupt them. So

37:10

we don't take that customer because

37:13

it's not good for the customer. I

37:15

mean, it's good for us to get the money if we

37:17

can get the money, but it's not good for the customer.

37:20

So we don't take them. We don't do

37:22

business in a way that causes our customer

37:25

to go broke because then we want our

37:27

customer to be around forever and be

37:29

our customer forever. They're too hard to come by

37:32

and it's just wrong. It's unethical. So

37:34

that is what we're facing. Really good

37:36

question of the day, Nathan. Thank you

37:38

so much for sending that in. Hey

37:42

folks, that about wraps up this

37:44

session. Remember better a weary warrior

37:46

than a quivering critic. This world

37:48

needs more high quality leaders. So

37:51

take courage and lead. I'm

37:53

Dave Ramsey, your host. Thanks for

37:55

listening to the Entre leadership podcast. you