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From the headquarters of Ramsey Solutions, this is the Entree Leadership Podcast, where I take calls from leaders like you about what it takes to win in leadership and in business. I'm Dave Ramsey, your host. I run a business. This is not theory. I do it every day, and I have for 30-plus years. I put up with all the crap. I shovel all the manure. I do it every day.

I endure all of my own bad ideas. I put up with the drama and have the wonderful privilege of working with 1,100 thoroughbreds every day. So we're here to talk to you about your business and how to help you win. It's called Entree Leadership. If you got a question, you can make it a part of the show at 844-944-1070 or go to entreeleadership.com slash ask.

Starting today is Sierra in Salt Lake City, Utah. Hey, Sierra, what's up in your world? Hi there. I'm so grateful to talk to you today. You too. How can I help?

So I founded a nonprofit grant writing business a little over three and a half years ago. We currently have five staff, including myself, and we're in the process of hiring our sixth employee. Last year, we did a little under $250,000 in gross revenue, and this year we're projecting to do over $350,000. Good for you. So...

Thank you. My question is, as a founder and owner of a small but growing business, how do you know if you're the right person to be your business's quote unquote CEO? Or if you should look at alternatives like hiring or maybe even selling at a certain point of growth? I've never met an entrepreneur that started a small business that wasn't, including me, that wasn't at times insecure about it.

So that's a normal thing. John Johnson used to say, he was the editor of Ebony magazine, he said, the entrepreneur is the only animal that can go from sheer terror to sheer exhilaration and back every 24 hours. And so we normally go through these cycles because this is what we do when we run a business, particularly a small one, is it's a roller coaster ride. There's a thrill a minute, you know? And so it makes you...

By nature, wonder if you've lost your mind, wonder if you're capable, wonder, you know, it makes you if you're, you know, insecure. Now, the more you do it, the more secure you get. 30 years now and, you know, a whole path of success. I'm a lot more confident today on average than I would have been, but I've got reason to be. I've got a track record, okay? It's not arrogance. It's just observation.

And so, but in the early days, you know, I spent more of my time terrified than I do now. And so that's a normal thing to tell you that that doesn't mean you're not qualified. What you will always have also as the owner of a small business with five or six team members is you'll always have areas of strength and areas of weakness, right?

And just, you know, what you need to do is constantly be identifying those and backfilling for them. So some of your hires don't need to be grant writers. Some of them need to be doing stuff you hate doing or suck at doing. An example of that here is I am excellent at math. I do it for a living. And I am excellent at reading accounting reports and seeing things in the math.

The preparation of accounting, the detail that you have to do to actually create an accounting system and run it, I would rather shoot myself. I'm horrid at it. And so one of the first people we hired was someone at the first thing we hired, third person I hired was a bookkeeper. So I didn't have to freaking do it. It's that simple. I can do it, but I suck at it and I hate it with a passion.

Okay? I mean, if you do accounting out there, I love you, but you're weird. You know, I mean, it's just no. Yuck, yuck, yuck, yuck, yuck, right? So, whatever it is that you identify like that, that's going to be a problem in your business because if you don't do the accounting, you'll fail, right? As an example, you hate marketing, but if you don't do the marketing, you will fail. If you don't get new customers in, you're going to fail, right?

you know, I hate dealing with dot, dot, dot, and I'm really not good at it. Well, get somebody on board to do that. So identifying your weaknesses and backfilling for those, identifying your strengths, because they're going to be the natural flow

of your company. The Bible says the anointing drops from the beard, and it comes from the Old Testament picture of the prophet pouring oil over the head of the potential king, David or Saul or whoever was in the story. And if they had a beard, David didn't, he was a shepherd boy, but Saul certainly did. And the...

The oil represents God's spirit. And so whatever's on the head of the organization is going to drip on the rest of the organization. That's what that means. And so whatever you're, I'm a really good salesperson. Consequently, Ramsey to this day is excellent at marketing.

I mean, I can sell ice to Eskimos. I mean, I'm good at it, okay? And it's natural to me. I grew up with salespeople, mom and dad. I did it, you know, I've been around it my whole life. So that's an easy one, right? So you got to figure out what that is and go, okay, we're always going to be naturally good at that. And we're going to have a very low tolerance for that.

for somebody doing that poorly. But now what are these other things? Well, detail and processes and systems and things that look like bureaucracy. I hate those things, but you have to have some of those things to run a business well. So what do you suck at, Sierra? Oh, I'm sure quite a bit. But one thing that I'm finding myself really struggling with now is

spending the time on reviewing my staff's work, which is a big part of what I do as a more senior writer is making sure that my team is supported in their work. So you need to hire a senior editor, right? Yeah, I think so. And that's sort of what I'm looking at with that sixth employee for sure. Yeah, I'm not good at editing either. I'm good at producing it.

But God knows it needs to be edited when I write it, okay? And we need somebody to come in that knows the English language because my first language is hillbilly. But I write a lot of books that sell a lot, you know, so I still get it done. But, you know, you still got to have somebody come alongside you to backfill. So you've already identified that. Now, what is your natural strength? Obviously, grant writing and the actual production of the documents is a strength, right? Yeah.

Absolutely. I think that was like my first strength. What's your second? What's your business strength?

What I found that I really love and where like I could do it all day and the time just passes is talking to people. So talking to new potential clients, making sure my current clients are supported. And then I love working with my team. I love making them feel empowered to do good work so that I don't have to do the day-to-day. But I find that I'm still getting bogged down in the day-to-day. You're a natural encourager and people give you energy.

Yeah, I think so. You're going to be a great business owner. No, you don't need a separate CEO. You're it. You're it. Thank you. No CEO is the whole package. You backfill for your weaknesses, you identify your strengths, and you lean into them. That's how you do it, especially in an operation your size. You bring in a CEO over your organization, they'll make that thing look like something that you don't like.

Mm-hmm. The thing is, it's got you all over it right now, and that's a good thing.

I think you're amazing, and I think you deserve more confidence than you're giving yourself. So give yourself a little pat on the back. I'm giving you one. And go get them, girl. Get them. Get them. You got this. You can do it. I love it. See, man, that's what America's made of right there. Small business people just like her. Is she amazing? I mean, she don't even know how cool she is. That's neat right there. That's powerful. Those people, you want to work for people like that instead of corporate America where they pee on you. You know what I mean? Seriously. Seriously.

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Entree Leadership Summit's coming up in Dallas. The last time this lady and I were together was 2019 in San Diego. We had rented the aircraft carrier out for the pre-party. It was several hundred folks on the deck, and then she spoke to our team and brought the house down.

Her name is Carrie Lorenz. She was the first female F-14 Tomcat pilot for the United States Navy. Carrie's a world-class speaker. She brought it last time five years ago, so that's why we wanted to have her back. She's a business owner, author of two bestsellers, Fearless Leadership and Span of Control. She helps organizations refine their skills, lead amidst uncertainty, thrive under pressure, and maintain a competitive edge.

And I'll never forget walking around the deck of that aircraft carrier, Carrie. Welcome back. Glad to have you. Glad to be here. With you and Sharon and I. And we're walking past one of those Tomcats that's sitting there on the deck. And they're like, you were the first woman to fly one of those. That's pretty cool. She could tell us everything about every aircraft as we walked past it. Not just the Tomcat, by the way, folks. So pretty incredible. So as the first time, the first female pilot of that, yeah.

Flying, people don't understand. It's rumored. I've never done it. But this is not riding with Southwest over to Phoenix, right?

When you're flying in a fighter aircraft like that, the intensity not only of life and death if you're in a combat situation, but the sheer – you're driving a NASCAR in the air. The G-forces and the reaction, the heat, everything else that's involved is nothing like other air travel, correct? Yeah.

Oh, it's a little bit different. Didn't even get close to describing it. Okay. I'm sorry. I tried. So talk about the parallel of being combat ready and something that's that intense. And I think you unpacked some of this in the book, Fearless Leadership. Yeah.

Because we were just talking to Sierra a minute ago. I think you were on hold, probably heard me take that call. This idea that it's normal to be insecure. It's normal to have fear. But you've still got to step into that fear and be fearless. And talk about the parallels on that.

Absolutely. And she was so interesting. She's going to just rock it, no doubt. Like you said to her, she has a little more confidence, you know, and a little more experience under her belt, and she's going to do amazing things. But no different than what she's trying to accomplish, literally, what we did is that even in these times when you had really, you know, intense challenges or crisis, you know,

in order to make your goals or your commitments or your dreams, those business goals that you have a reality, we really have to be able to understand that to succeed when the pressure's on and really improve our performance overall,

we have to be very clear on what we can and what we cannot control. And similar to you, I've got about 30 years in doing this, of researching and working with really high-performing teams. And as you can imagine, and you just shared, you know, the cockpit of an F-14 is one of the most demanding environments on Earth. But it's where I also have learned a couple of really critical lessons, and that

No matter your situation, whether it's in a cockpit going Mach 2 or maybe you're starting a new coffee business or you work a metal or a heat treating facility, people are counting on you to make the right decisions. And you have to do this with wingmen, whether you're running a shop a two or a shop a 200.

And so we all have to figure out how do you achieve the extraordinary, right? How do you achieve the impossible? How do you lead yourself, your teammates, your customers even through these really dynamic times? And what I've found to be true is that the people who are able to do this constantly

consistently and stay relevant in the marketplace have three really strong personal characteristics or attributes. They over-index on courage, i.e. they have that ability to feel the fear and go for it anyway. They have a lot of tenacity, which some people call that grit, right? And it's really fun to talk about being gritty until you realize that being gritty is

rhymes with or feels like something that that rhymes with. And then being gritty is really not so much fun anyway. And then we always have to operate with integrity, right? It's having the audacity to do the right thing in really difficult circumstances. But then whether you're working on an aircraft carrier with 5,000 people or you're running your business, how are you going to take what you know to be true and what you're trying to achieve

and flip it into action. And I believe, similar to a lot of the things that you teach your entree leaders, we have to really, really work on clarifying the complex to allow people to do their jobs successfully. Let me ask you, it occurs another parallel in my mind. Working with other folks, plus experiencing just running this thing for 30 years myself, you run into...

times that the marketplace may not be having a crisis, but you have an internal crisis. Or there's an entire marketplace crisis like a 2008 or a pandemic or something. And these times of intense pressure

where everything's up for grabs, where from a business standpoint, not a literal, but a business standpoint, it's life or death. And my guess is that the people that survive those things have the issues you're talking about. They have the tenacity, they have the courage. And

They have a high-performance mentality on that, but they've also got a muscle memory of doing everything the right way before all hell broke loose. So when all hell broke loose, the muscle memory just kicks in, and they do the right thing. They have that integrity muscle, that rhythm in who they are. Do you observe that when you're working with these other companies?

100%. And one of the ways that I even have tried to kind of conceptualize this, as you're familiar with, is that framework called span of control. And it's understanding that you need to

you need to understand how to focus on what matters most, formulate a plan for success, because there are no mavericks in business success. We actually plan, we're very good planners as well as executors, and then you have to communicate what's possible. And what people don't understand is that oftentimes when

There's this connection between fear focus and actually prioritization, right? Because we don't want to eliminate fear in our day-to-day operations. Because I think fear actually helps keep you on track because it prevents you from becoming complacent.

So if you think about working in that really fast-moving, dynamic environment of a fighter jet, we're always on that cutting edge or that leading edge, if you will, of danger. But we have to be relentlessly prepared so that we know how to prioritize what matters most. The game slows down when you play. 100%. And most people, the number one killer is,

to your people's effective execution is task switching and task saturation. And we know that it is going to happen to us. We know it, no matter how good of, you know, load managers we think we are, how well we think we can prioritize. So switching is just not staying on task, ADD, you're just all over the place. Is that right? It can be. What's saturation?

So, task saturation is where you just become either information overwhelmed. Oh, it's just too much. Or your task, it's too much. It's too much to do, not enough time to do it. Right. And what we want to do is on every single flight or every evolution, we want to look ahead and see where are those instances where that is going to happen to us, that that then becomes dangerous or doesn't allow us to achieve our mission objective or be successful.

So that we can work really hard to minimize, manage and really mitigate it. And what we don't often understand right now or coming through a really turbulent time is

What we as leaders might see as personality defects or maybe a talent shortcoming or somebody not doing what we think they know they should be doing, it's actually because they're just overloaded. So how do we recognize that? How do people shut down? How do they detach? How do they become overwhelmed? But all of that...

we effectively look at by relentlessly preparing and then executing. Yeah, I guess it was about seven or eight years ago, we started internally trying to quit rewarding successful people by giving them too much to do. Yeah, yeah. If you're good at something, we're just gonna bury you. That's right, that's right.

And you would not be alone because what do we do? Somebody hits our sales quota, you're like, that's awesome. We're going to add another 25% on. There you go. That's right. Just destroy them. Oh, my God. So from an interview perspective, one of the biggest things folks are struggling with in the marketplace right now is talent and talent acquisition. What parallels do you draw from pilot selection to team member selection? Yeah.

So one of the biggest things that I think that you can do, we need to have somebody who is going to fit within our culture. The culture at Entrez Leadership or Ramsey Solutions might be a little bit different than the culture at your muffler shop, right? Always with integrity, but the

and the way you work might be a little bit different. But what you want to, I think, really look for is find those people who have overcome what feels like it could be an impossible setback or a failure, and who then had the ability to learn from it. Because what they were looking at in every stage of training, no matter what it was you were doing in that piece,

was who were those people who were going to be able to be flexible, who could adapt and overcome any scenario that they put you in? Maybe you knew what success looked like when you started, but then the game changed. Yeah. So... Did you yell at the wind or reset your sails? Yeah. That's right. And so what you need to have as either somebody who learns to develop the skill set or they have it already on board, do people have a

a bias to act because the place where people get stuck and we can see it across the board or people who reach, you know, all of a sudden they've kind of their business is stagnated a little bit is they, they think they either have it all figured out or they wait to feel like it. And I'm sorry, but a little bit of tough love is no one. We're feeling afraid that

action is the only thing that conquers fear. And mood follows action. You can't wait to feel like it. And people get that inverted. They think, oh, well, as long as I find my purpose, then everything's gonna be awesome. And I'm just gonna feel like showing up and going to work every day. And isn't it outstanding? And unfortunately, that's not true. So it's how do you identify those people

that as long as you give them a direction to go, they'll start running and they're learning. So it's good to identify if someone has persevered through something. My pastor used to say, I don't trust a man who doesn't walk with a limp. Absolutely. And if somebody tells you, yeah,

don't know. I've never really failed at anything or I've never really had any crushing setbacks. I'd rather not be the place you do your first one, so we'll move on. Thank you very much and bless and release. I love that for you. Oh, that's fantastic. That's good for you. Have a great day. I hope you find your way.

Out the door. Spectacular. Carrie Lorenz, first female F-14 Tomcat pilot. Also, most importantly, best-selling author from the principles that she learned along the way and all of the...

wonderful performance coaching she's done for businesses across America since her military career. Thanks again for your service, of course. Thanks for hanging out with us in 2019. We are really excited to have you in just a little while here in Dallas at the Entrez Leadership Event Summit. It's going to be amazing. You can contact her or see her at Carrie with a C.

kerrylorenz, L-O-H-R-E-N-Z.com, kerrylorenz.com. Same thing for her social media. It's at kerrylorenz. You'll want to follow her. She's an amazing lady, an amazing patriot, and you'll get all kinds of things that'll keep you moving. You won't get anything from her except the truth and tough love. So I love it. That's why she hangs out with us. So, Kerry, thanks for being with us. We look forward to seeing you in a few weeks in Dallas.

Oh, gosh, I can't wait to join you. Glad to be here. Thanks for coming. All right, folks, that's how it's done. You do not want to miss this. Be sure you're tuned into it. And those of you that are coming, that's just a taste of what you're going to have. Coach K will be there. James Clear from Atomic Habits is going to be with us. Mike Rose is going to be with us. It's going to be quite a lineup. And you guys are going to you're in for a treat when you hear Carrie. She's amazing. She's an amazing lady, amazing communicator. And her message is solid.

This is the Entree Leadership Podcast. You're super busy handling your day-to-day operations, but there's so much more to growing a successful business. You know, like finding new customers and promoting your products and services. If you don't have enough hours in the day, that marketing stuff's not in your wheelhouse, or you're not ready for a full-time hire, you need Belay.

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Wow, Kerry is amazing. Hey, here's the deal. The premier leadership event of the year is only two weeks away.

If you don't have your ticket to the Ontario Leadership Event, you're not coming. So you've got FOMO. But you can do the live stream. And you're about to miss three days of life-changing teaching from the best. Like I said, Coach K is going to be there. James Clear from Atomic Habits. Mike Rowe, Carrie Lorenz, Dr. Henry Cloud, Craig Groeschel.

John Deloney, Ken Coleman, me. And these live event tickets or these live stream tickets are amazing. You can watch it with your whole team. It's a real bargain. So the Summit live stream, it'll transform your business. It'll give you some information and inspiration to go to the next level. It's happening April 22 through 24 with or without you. Don't wait. Go to entreleadership.com slash live stream and get your ticket today.

today. Erin is with us in Los Angeles. Hi, Erin. Welcome to the Entree Leadership Podcast. Hi, Dave. It's an honor to be able to speak with you. You too. What's up? I'm a hairstylist. I've been a hairstylist for 18 years, and I'm ready to step into my role as an owner. Currently, we have three part-time stylists, but my question to you is, would you buy a negative business that

The three part-time stylists bring in about $1,260 a month, but the total rent and bills would be about $4,500 a month. Do you think I should move forward into buying this salon? Yeah.

Only if you see a way for that to stop real fast. The current owner does not do hair. He just bought it for a girlfriend, whatever. They went south, so he's been stuck with it ever since. He was asking $6,500.

thousand dollars for it, which I offered 13,000. He said that was disrespectful. So then recently he dropped it down to 35,000, which is more in the ballpark that I was willing to kind of come up to. Why would you pay 35,000? Well, I did the math on a build out in our area just because there's not really a lot of salons in our area. So, um,

I did the math and it was about $120,000 to $150,000 for a build-out. So even if I buy this... So the build-out being the furnishings as well as the tenor improvements? Yes. The plumbing, all that stuff. The equipment. Yes. So how many bays are in there? Ten. And you've got three filled. Correct. So you could fill those bays. Can you do that?

Yes, absolutely. And it would take about two part-time or one full-time person in that would at least let me hit my breakeven point. Okay. There's a couple of ways to place a value on a business. Okay, yeah.

The way you place a value on a business, number one, is if it has a profit, it's a multiple profit. That's called a cap rate appraisal. And typically, you don't have a profit, so you can't use this one, okay? But if it made $10,000 and that business would be worth somewhere between four or five times that,

So it'd be worth $40,000 or $50,000. At $40,000, that's a 25% rate of return on your money. At $50,000, it's a 20% rate of return on your money. That's the most you should pay for something on profit. It's four or five times net profit after all expenses are paid, including the salary of the manager. Okay? Now, this one, that doesn't apply to you, but I'm just giving you that. The second way that you can buy a business is what's called book value, which is what you're looking at.

Okay. Correct. Which is you're buying, basically, it's an asset buy. You're buying the tenant improvements. You're buying the equipment. You're buying the customers. You're buying the relationship with the three ladies, whether they stay, the idea that they're going to create $1,200 to offset your $4,500, right? Right. All of that kind of stuff. Now, do you have the cash to do this? Yes. Okay. Okay.

All right. And so the tenant improvements, let's put the shoe on the current owner's foot. Okay. Now, the only thing he can do is basically break this up and sell it by the chair. Correct. He can sell the chairs off. What's a used...

beauty salon chair worth, right? Not much. Yeah, nothing, yeah. And what are all these tenant improvements, the actual stuff that's tacked to the wall that stays with the rented area is worth zero. Correct. Because you can't take the drywall down and use drywall in the cell, okay? Correct, yeah. So all that crap, the electrical you put in, all that stuff, that's what it would cost to do it over, but that's, you know, he's in a position that

He has something that doesn't make money. So the only value it has is whatever the customer base is worth. If he had a customer list, somebody might buy that. If he had people that owed him money and he doesn't, that's receivables. That would add to the value. And whatever the auction price on the used furniture is. So your $13,000 was not insulting.

It was insulting based on what he paid for it, but not based on what he can actually get for it. Correct. I think your 13's a good offer. He said it was disrespectful. I don't care. He's an idiot. I know. I mean, this is a guy that opened a beauty parlor for his girlfriend. This is not a smart man, okay? So let's just start with that. No, that's not relative. Okay.

You're not trying to be disrespectful. You know, what I always do in these situations is I do, if I'm sitting with someone, I just say, okay, from my perspective, it appears this is your option. Do you have another option that I'm not understanding? Right. No one's going to buy a business and pay you for the business that loses money. No one does that. Okay. A business that loses money has zero value. It's not even a good hobby. Okay. Good hobbies at least break even.

So it's not even that. So your option, it appears, is just sell off the stuff. And how do you think you're going to sell off this stuff for more than $13,000? I mean, maybe I'll go $15,000, but talk to me and tell me why that's disrespectful. I'm not trying to be disrespectful. I'm just trying to understand what your options are because if you can show me how you can get $30,000 for this pile of used beauty salon equipment...

We'll talk about it, but show me how you can do that. Because I don't understand. And that's a truthful thing because I don't understand right now just talking to you. And so I did that with a landlord that we were leasing a building from about 20 years ago.

He had it priced about 25% the rent offer on the street, about 25% above what it was worth. There were buildings that were a lot nicer that were $12 a foot, $11 a foot. He's asking $14 a foot, okay? So I brought in these other, I brought in his competition. I said, I can go over and rent this building for $11 and look at it. It's nicer than this. I'm not being mean, but it is. And you know it is.

And I can rent this other building for $12 and you're asking $14. So tell me what I'm missing. Why is this worth $14? And he kind of, and he goes, well, I'll have to go home and think about it. All right. And he came back and, you know, we did a deal at $10 because that's about what it was actually worth. But he actually, he had his, you know, he had a false perception of what his options were.

I said, if you were in my shoes, his name is Robert. Robert, if you were in my shoes, why wouldn't you go one of these other buildings for $11 or $12 instead of yours for $14? They're nicer and a better business park and everything. Why wouldn't you do that? And there's no answer to that because any logical human would, right? And so that's what we're doing to your boy, okay? We're going to sit down with your boy and go, okay, what is it that I, why would, if you were buying this, why would you pay $11?

I don't want you to be insulted. I'm not trying to be insulting. I'm just trying to understand. And that's a great negotiating process because what we're doing is we're helping him find reality. I wrote out a list of all the furniture and everything I thought what at full price value it would look like versus it used for seven years since he's owned it.

And that's when he said it was disrespectful. And I was like, I'm just, I'm not trying to come up with a devalued, you know, like I'm not trying to depreciate the value of your business, but I'm just saying like, this is what I think it's worth. And I had a reason for it, you know? And I asked, well, if you don't agree with that, can you give me,

your reasoning. And he's like, I don't need to come up with an itemized list for just a $65,000 sale. So I just don't think I'm negotiating with... You're not. ...particularly, like, a businessman. You know what I mean? He's not bright. He's just an emotional character. And his little heart's broken, and the whole thing reminds him of the girl that left him. So, you know. Yes. You know. So... Okay. You know, I honestly...

I think you could probably replicate this whole deal for $35,000 and take the three girls somewhere else. Yes. Okay. I mean, you don't have to price out that. You don't have to buy brand new equipment. You can go find used barber chairs or whatever, beauty salon chairs, whatever they're called. And you could build this out. The value that... The other thing is you're actually walking into a place that has a bad reputation and you got to turn that around. Yeah, it's... No, it does. It sucks. It's only got three people out of 10 working there.

Correct. Correct. It's not exactly a booming enterprise. It's going to take some work, that's for sure, yeah. And what do you want to bet a bunch of the people that used to come in there and get their hair or nails or whatever done, they knew about and were informed of all the drama?

I'm sure. Oh, yeah. Count on it. It's stereotypical. Seriously. So you actually have a negative situation you've got to turn around. You might be better off to just start your own deal. And if you kind of get that internalized and actually go work that out somewhere else, then you can take one more drive by this guy and he will smell the air where you really don't care because you really don't. Right now, you kind of want it.

Right. And he smells that. Right. I'm not sure you want it. Yeah, I want his rent. His rent is by far $2.50 cheaper per square foot in the area. So that was, I was willing to come up a little bit. Is the lease assignable? Yes. Okay.

Really? The landlord says I could get a five-year with a five-year option and keep it at the exact same rate. Okay. All right. I mean, I don't really find value in his business. How long is it? Is it closed? No. I'm running it right now. Yeah.

So that would be the only other reason, like really that is the only reason I want it. Were you running it when all the drama went down? Yes, yes. Oh, well then you can tell me if what I said was true, was it? Does all the customers know?

No, nobody knows because he doesn't live in our area. No, they know she was there. You're not the girlfriend, are you? No, I guess I've only met her three times. She left right in the beginning, and he's just been holding on to it this whole time. Oh, okay. By allowing us to run it. The on-site romance drama has been gone a while. Oh, yeah, from day one. Okay. But basically the only stink on this thing is just that it smells like it's not winning. Right.

Correct. Okay. All right. You got to get that stink off of it. You know that. Yes. Yes. Yes. Yeah. A fresh coat of paint and some fresh, some new coffee pots and, uh, some smell changes and anything you can do in there. And, uh,

brighten it up and cause a smile to happen instead of a frown and all that kind of... Exactly. Bake some homemade cookies for everybody that comes in for the first while. You know, I want it to smell like mama's kitchen. I don't know. We're going to do something here, right? Yes. Oh, yeah. We'll do it. I promise. You're on track. You're on track. So... Okay. Okay. So here's the other thing he hasn't realized and you haven't either. You're probably his only buyer.

Yes. You have so much power. Yes. Yeah. So what I would do is I want you to go work out a deal down the street

And you don't have to sign it, but start working it out. Go find the people that are selling used equipment that's in good shape, good enough shape to use. Replicate the store for $30,000 or for $20,000 down the street in your mind and with some actual things. And that will change your posture and your vocal cords when you're talking to him. And if he doesn't do it, quit and go open down the street.

Okay. I can do that. Yeah. I think that you need the walkaway power of having done that exercise. It'll probably cause the deal to happen. But I'm thinking a maximum of 20 grand here. I think you can do it. Maybe 30, but maybe you can do it for that. It's not 120 just because he spent that on it.

Right. Right, right. So, yeah, let's keep beating this up. I love doing this kind of stuff. That's fun. Yeah, you're in the right mindset on it. And wow, what an interesting situation. That's amazing. Way to go, Erin. I think you're going to win. Hey, holler back and let us know what happens. The case of the abandoned beauty salon. We want to hear what happens. That's great. I love it. Golly, I bought it for my girlfriend.

Man, there is no competition with people like that out there. This is the Entree Leadership Podcast.

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Leave a nice five-star review. Share it, subscribe, follow. It's a big help when you do. A bunch of you have been doing it. Our numbers are way up. Thank you for telling people about us. We really, really appreciate it. Laura is in Hobbs, New Mexico. Hey, Laura, how are you? Hi, I'm very well. How are you? Better than I deserve. What's up?

Yes, sir. I have a landscaping and construction business in Southeast New Mexico.

And we also opened up a retail nursery for plants and trees in a rock yard last year. Wow. Our 2023 growth was just a touch over $2.2 million. Way to go. And our net was $272,000. We kept...

75 take home and we invested 40 and then we kept the rest in the business for retained earnings to buy inventory. Okay. How can I help? Well, since we opened the retail shop, it increased our sales substantially. And this is our fifth year in business. We have run into...

other little landscapers cropping up over the years that way undercut us in pricing, but they aren't licensed, they're not insured, and they definitely don't do the high standard work that we do. Well, they're not getting your customers. Your customer doesn't want to work with a jack leg. They work with a pro like you. Right. So they're not competition, they're mosquitoes. They just bite. Right.

This is kind of what our contention is. My husband and I, we run this business together. He's more the on-site everything, and I'm the design slash bookkeeping everything at the retail yard person. And we're kind of rolling around with the idea of kind of stepping away from the installations because of this.

Because of the mosquitoes? Well, kind of. This last year was especially tricky with the margins there. It costs us a lot for payroll because we're in the heart of oil field. It costs the mosquitoes for payroll.

Yeah. But our construction side is always busy. We have people booked a year out. And the hard part with that is we only have four on that crew, whereas the other 12 to 14, we carry around 16 to 18 employees at a time, are on landscaping.

And we can't find enough skilled workers to meet that demand, which is where we would kind of like to chase in conjunction with the retail yard. But I don't know. We aren't sure if we should keep juggling everything and just keep at it. And maybe our high costs and high expenses over the last year having to develop that new land that we bought for the store is

you know, if it's going to even out eventually. Okay. Well, the landscape installation and the construction are service businesses. So by their very nature, they're higher margin than a product-driven business. The yard where you're selling rocks and plants, you've got a cost of goods sold there that you don't have in the other. Right.

And so if you don't manage your margins and your inventory turnover in that environment, in an actual hard products retail situation or even wholesale situation where you're running product in and out of that yard, it's going to eat you alive if you don't keep your inventory turns straight and make sure you've got good margin, good gross margin on each one of those plants.

Yes. And each one of those rocks, okay? And that's a merchandising type mindset versus running a landscaping project is a service and project mindset. It's a different business skill. You follow me? Yes. Okay, so the only thing that the store and the landscape installation have in common is they both have to do with plants, right?

but business model and operations and systems do not overlay on those two. They're both very unique from each other. Does that make sense? Yes. Okay. But construction and landscape installation is very similar.

That's how we got into it. Yeah, the actual process. And so you don't have inventory carry. You're just managing project by project. You're cost estimating. You estimate your cost. You do the bid. You do a final when you finish and look and see if you actually hit, you know, did I estimate my cost right? If I did, then my profit is correct.

is what I thought it was going to be per project. And do I need to adjust my prices or do I need to manage my costs as I go along, quit buying some dadgummy tools and stuff like that? That's all, you know, your project cost managing and, you know, each job site's a separate P&L, in other words. Those are, it's easier to make money on that than it is the other thing, probably. Well, that's what we're kind of finding, especially because with the landscaping process,

And customers don't realize all the skid loaders that we have to have, the man lift. No, I'm saying the landscaping and the construction are the same. You should be able to run out your job cost on that and say, this is what it costs me to run this job. And I've got my profit built in and I've got my cost of goods, cost of plants. I got my cost of labor. I got the cost of the skid steer being here. And it's what it takes to run this job. And if a mosquito wants to underbid that, they're going to lose money on it.

They can't undercut you. Yes, they go out of business eventually. Yeah, they do because they can't even do math. Okay, they don't make it because, you know, we're losing 25 cents a watermelon. Let's get a bigger truck. You know, it's like, God almighty. But that's what you run into. But you cannot decide that you want to try to figure out how to compete with people that don't know how to run a business. That's not even on the table.

All that matters is can I acquire high-end customers who want to pay for a proper design, proper installation, proper labor, people that are clean and they're doing what they're supposed to do, meaning they're not over there

you know, offending all the neighbors and everything else with their whole routine. And, you know, can you do that? Yes, you can do that. You've done, that's how you built a whole business up to this point. You've just gotten frustrated with some of these little jack legs kicking you around. But I think you need to raise your prices a little bit and raise your target on your customer a little bit. Some customers, if they want to cheap out, they may not be your customer. So maybe just...

That's funny that you say we should raise the price. Yeah, I don't want you to get in a race to the bottom with idiots. Right. And you can do that real quick in this situation emotionally just because it pisses you off and you want to run them out of business. But I wouldn't do that. I would go so far up over their head where I'm dealing in a different stratosphere where they're not even welcome in that neighborhood, that kind of thing. Okay. And that changes your margins dramatically.

And because, you know, if somebody's building a $5 million house or a $2 million house or whatever, they are putting in an office of that size. They don't want to deal with this. A commercial contractor of size is not going to deal with one of these people because they don't want the drama, the hassle, all the whining about, I'm over budget, all the stuff that goes with somebody that's a jack leg. Any of us that have been around construction know these people.

And if you're doing a high-end project of some kind or a decent-sized project of some kind, you know, we're building these huge commercial buildings. The commercial contractor on that wouldn't even let the guy on the site like that. He wants to talk to you.

Okay. Right? Well, that's kind of what I've been wondering because in the last year, we haven't been able to get any of the restaurants that have come in. We haven't gotten any of those bids accepted. Some of the city bids, you know, some of the bigger... Well, then there's something else going on. It's not because you got undercut by some guy running the thing out of the back of his pickup because they don't get a city bid. To turn in the...

The RFAs on that, you have to have a level of bonding on a city bid. Right. So they're not, your competitor there is not Jack Legg. And if it's a restaurant chain, they know how to roll in and do that. Again, those guys aren't, that's not somebody that's a startup that's running an illegal operation because you can't put them on a commercial site like that. You get hammered by codes. Right.

So I don't know. I don't know what you're up against on that. But I was assuming it was residential stuff and these guys are coming in just fly by night like some roofer that follows a hailstorm in or something. Yeah, we do both for sure. Okay. And we've, you know, a bunch of the landscape. So why did you lose a city bid? Why did you lose a bid with the city? We don't know. They told us it was too much.

Okay. And who got the bid? So, we don't know. Oh, it hadn't come out yet? No. Okay. All right. So, did you ask? And sometimes, you know, on other people you talk to. Typically, in a bidding process, they'll say, was the bid awarded? Do you know?

I haven't gone back to check on that particular one. Okay. But on past ones, you know, they've brought people down from, say, Albuquerque or something to do it for less than we can do it. Okay. All right. That's a different issue. That's bringing somebody down from Albuquerque that is competent in the business is not some fly-by-nighter that's doing this illegally. Right.

Which is what you described earlier. That's a different type of competitor. I think we're getting both. And I think what we're finding is, you know, the cost of equipment. Okay, if you had your perfect world five years from now, which of these three things would you be operating? Which two of them? Construction and the shop, for sure. Okay, do it.

So start moving that way. Redeploy your assets into the shop and into the construction. Pick up more construction jobs. They're more fun. You started the whole thing doing landscaping, but you're sick of it. Right. You're tired of it. Y'all don't want to do it anymore. I mean, I can tell that from talking to you. It's not fun anymore. Even if I could tell you how to do it right, you don't want to do it. It's not fun.

Right. You don't. I don't know about your husband, but I know for sure talking to you, you don't. So yeah, redeploy your labor back. Let them go or move them into one of those other two areas. And let's jack up and double the construction staffing and get it going because you're backlogged on that. And it sounds like you're having fun and making a profit. And then make sure you're dadgum doing your merchandising, Laura. Make sure these products aren't killing you, that you're not selling these stupid rocks at a loss.

Yes, sir. Okay. Really lean in on that spreadsheet. Really lean in on that accounting system on that and make sure. Well, and that was a secondary question. So we did get a new POS system last year to go along with QuickBooks, which was a smart move. It was costly, but it was worth it for tracking inventory. At what point do you know that you need to get out of QuickBooks? You probably do. You probably need to get into NetSuite.

That's what I was thinking. Yeah, you're running $2.5 million, yeah. You probably pushed QuickBooks to its edge already, yeah. Yeah, it feels like it. Yeah. And I hate buying accounting systems. I've only bought three or four in my 30 years because it feels like it's throwing money down a rat hole, you know. But every time I upgrade my accounting system, it upgrades my controls and it upgrades the quality of information I get on my desk to make decisions with.

And when we put in NetSuite, I think it was about three years ago, we moved to NetSuite, or maybe four now. But anyway, it's like a thousand times better than what we were running before. The amount of information I've got as the CEO at my fingertips now to analyze and look at something like the product line, like our bookstore, our store online at remsysolutions.com, you know, we've got books and we've got

Ken Coleman's assessments. We sell live event tickets. And that's a merchandising operation like yours is. It's a POS operation. And to get into that and make sure our margins are right and our pricing is right, it takes 10 seconds now because it interfaces with the...

with the software that's running the store and it feeds the information right up to everybody that's making the decisions. So yeah, you need to spend the time and the money on that if you're going to be in the store business because the store business is much more complicated and people screw it up much more often than you do job costing on a construction site.

Right. But you can do both. You're capable of doing both. So here's the thing. Business is too stinking hard to do something you hate doing just because you used to do it. Okay. So get out of the landscape business. You're sick of it. That's what I would do if I were in your shoes. Hey, you guys are amazing. You built something pretty cool in Hobbs, New Mexico, down in the corner.

I mean, that's neat. Way to go, kiddo. Keep fighting, keep scratching, keep clawing. We're here to help you. We love you. We're proud of you. We want you to win. Keep it up. Hey, folks, remember, better a warrior than a quivering critic. This world needs more high-quality leaders, so take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast. ♪