Dave Says…

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Dear Dave,

I started my own small business a couple of years ago and, thanks to a lot of hard work and your advice, we’re seeing some growth. If you could go back and restart your business, what things would you do differently the second time around?

William

Dear William,
If there was one thing I could change, it would be taking more time during the hiring process. I definitely didn’t spend enough time and energy during interviews way back when. Consequently, there were times when we let crazy people in the door. Once that happened, we had to spend a lot of time and effort dealing with their craziness before we finally moved them out of the building. Not fun!

Another thing has to do with retained earnings. We didn’t begin taking a percentage of our net profits and setting it aside for retained earnings until we got too tight on cash. Starting over, I’d do that from day one. I’d run a profit and loss statement for the month, close the books for the month and take a percentage of the net profit—after paying myself a living wage—and automatically put it aside as savings for the business.

People problems and money problems are small-business killers. We fought so hard and were so passionate about everything. Sometimes I wonder how many mistakes I made as a result of over-the-top intensity. Don’t misunderstand; you’ve got to be intense and passionate to make things work. But there were probably a few times when I could have handled things with a little more understanding and class.

Maybe that would be a distant third. The first two things probably affected that somewhat, too. I’m a little more relaxed now, but I know one thing for sure. Not having to deal with crazy people, and having a little bit of money saved, changes your whole outlook on things!

—Dave

Dear Dave,

I’m a supervisor at a distribution center. The other supervisors and I are meeting soon to try and change the culture of our place. It’s not a terrible situation, but some concerns about communication, development and confidence in the company have come up. How would you start the process?

James

Dear James,
Trust begins to break down when your team members think you don’t care about them. But when someone trusts you and knows that you value them, they’ll fight for you and with you. The only way to make your team feel this way is by thinking of leadership as servanthood. Now, serving someone doesn’t mean you bring them coffee, and it sure doesn’t mean you take a bunch of crap from them. When I talk about serving, I mean looking at your team as real people. As a supervisor, what are you going to do if a guy’s wife is in the hospital after a miscarriage? How are you going to handle that? You’ve got to care about your people as people, not units of production. If leadership will start doing this, and start firing people if they’re screw-ups and stop taking a bunch of garbage off the malcontents, then the good people will be glad they’re there. They’ll see that you care about them and demand excellence.

In other words, quit being bosses and start being leaders. That entails servanthood, and that also means using the Golden Rule. Before you do something with your team, take a minute and think how you’d feel if you were in their shoes. Put every decision through the Golden Rule paradigm. That in itself will cause you to serve.

All I’m talking about is loving on your people well. You can change your entire workplace culture just by doing that one thing. Too often Corporate America has forgotten that, but those of us who run successful small businesses know how it’s done. And we make sure it happens every day!

—Dave

Dear Dave,

What’s the key to becoming a great salesman?

Brent

Dear Brent,
I can sum it up in one word—serving. And don’t think for a second that serving means being subservient. I’m talking about being proactive, and making an effort to ensure that customers and potential customers alike are served well. Serving means you’re excited about what you have to offer and you believe you’ve got a great product at a great price. It means you’re determined your customer is going to have a great experience and if you happen to hit a bump in the road you will take care of it in a way that will make them forget it ever happened.

Serving is an attitude. You have to provide goods or services in a way that makes your customers willing to trade their time or money —things that are very precious to them—to interact with you and your business. You can pressure people if you want, but that’s going to lead to a dull and frustrating life of one-shot deals. But if you serve people well, you’ll not only have clients for life, but they’ll also send all of their friends your way.

If you help enough people, Brent, and make that your first order of business, you’ll never have to worry about money. That’s a different attitude, isn’t it? But I’ve got news for you— it works!

—Dave

Dear Dave,

I’m in the process of opening a business with volunteers until I can pay them. How should I plan for their salaries?

Marie

Dear Marie,
When I opened my business years ago, I had two team members. One of them got a tiny, little salary and the other was on straight commission. You kill it, drag it in and you eat it. He knew if he didn’t kill something that he was going to get skinny in a hurry. That guy is still with me today and I promise you he’s eating very well!

I think the best idea is to share what they bring in with them. If possible, structure some kind of commission into the deal, maybe with a small base. But you’ve got to start with small salaries. Your first few hires will be the hardest because the money’s so tight in the early stages.

—Dave

Dear Dave,

My wife and I own a small bakery and we have a large account to provide wholesale pastries to a client. We work on a 30-day payment period, but he’s more than two months behind on the bill. How should we handle this?

Josh

Dear Josh,
In cases like this, the best thing is to go to his office and have a friendly sit-down meeting. There’s no reason to be abusive or threatening, but he needs to understand that you guys can’t act like his bank. You’re a small business, you need your money, and things have to change.

Start out by letting him know that you need him to help out by getting current on his bill. This is a fair request, since you’ve provided services and he owes you money. Remind him, too, that he picked you for the job because you’re very good at what you do. You also need to come to an agreement that from now on he needs to pay you within 10 days of delivery. If he doesn’t like that, it might be a good idea to switch to a cash-only basis. In other words, payment is due on delivery. If these options don’t work, then politely tell him to get his stuff somewhere else.

Chances are this guy is just another small business person who is just disorganized. He’s probably not a cheat. But you definitely need to correct this behavior before it gets too far out of hand!

—Dave

About Dave Ramsey 9 Articles
Dave Ramsey is America’s trusted voice on money and business. He’s authored three New York Times best-selling books: Financial Peace, More Than Enough and The Total Money Makeover. His latest book, EntreLeadership, was released in September 2011. The Dave Ramsey Show is heard by more than 4.5 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at DaveRamsey and on the web at daveramsey.com.

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