Ask Dave On Business With Dave Ramsey
- Dear Dave,
I’m running my own business as a sole proprietor, but the place is growing beyond my capacity to handle it alone. I’d like to find someone to work with my clients and further generate sales. Do you have any advice on how to hire my first employee?
- Dear Mike,
I would put any first, new team member on a small base salary, plus a percentage of what the clients they work with generate. I mean, you’ve got to make sure they don’t starve. But at this point it’s not so much about what’s “fair” as what works mathematically and seems reasonable to you.
I’d be willing to give them a bigger percentage in the early stages. Then, as the business grows and your rep becomes more successful, you could shift it to a smaller percentage, and it would still mean more money. In other words, they’d probably rather have 10 percent of $1 million than 25 percent of $20. Cut them in early at a bigger rate, but reserve the right to adjust your compensation agreement as their sales and productivity increase down the road.
It sounds like you’re still in the early stages of being a small business owner. At this point, both you and your newbie have to realize things could still go south. Bringing another person on board means you’re either going to win together or lose together. So, your compensation structure has to be something that will allow a new hire an existence with room for financial advancement, while still giving the company opportunity to grow!
- Dear Dave,
I own a company, and I make a good living and love what I do. It seems as if most of the time, though, I feel worn out and stressed. Plus, I know I’m not spending as much time with my family as I should. How do you handle this kind of situation?
- Dear Jim,
To be perfectly honest, sometimes I don’t handle those situations well. I’m a lot better about it than I used to be, but after a point I had to accept the fact that putting things on a calendar—even things that should never have to be put on a calendar—is a pretty good idea.
My wife and I have to be very intentional about time for each other, as well as time for rest, recreation and the kids. We even plan our vacations and other time off several months or more in advance. I’m the kind of guy who likes goals, no matter if they’re in my personal or professional life. If I’m not intentional when I’m away from the office, chances are I’ll find something work related to fill the time. So, a lot of the planning we do is my wife’s efforts to protect me from myself and to protect the family from me.
But there’s a good side to this type of personality too. I love tasks and thrive off them. So, if it’s work, I’m working my tail off and making sure things are done right. By the same token, if it’s a personal thing, like a dinner party or a date night with my wife, I’m totally into those too. Let’s relax and have some fun!
Just be deliberate and intentional in every aspect of your life, Jim. Sometimes you have to work at it to make time for things, but I’ve found that this makes you more focused when you need to be and appreciate everything a whole lot more.
Take Part-Time Job While Trying To Launch Business?
- Dear Dave,
My husband was laid off a few months ago. He has a degree in graphic design and has been doing that ever since to make money. He made $6,000 during his best month, but only $300 during his worst. I’m working with him on marketing now to get more clients, but in the meantime we’re not sure if we should also get part-time jobs, or push extra hard to make this business a success.
- Dear Sharon,
From what you’ve told me, I think your best bet is to get out there and work yourselves silly to find more accounts and generate revenue. If this guy can turn the page from a full-time job to something he was doing on the side, and make $6,000 in a month, there’s definitely potential there.
I’d also suggest getting a book called Guerilla Marketing by Jay Conrad Levinson. It lists inexpensive, grass-roots ideas for marketing. You need to read that book tonight. If your husband has professional-quality graphic design skills, he can create all kinds of marketing pieces.
I’m excited about this for you! Read the book immediately—together—then set a goal of talking to about 30 good, new prospects the very next day. Just cold call them with examples of your husband’s work in hand, and tell them you’re running a special. Offer 25 percent off any graphics work done on orders placed before week’s end.
Walk in with enthusiasm, great samples and make sure you talk to the decision maker. If you’ll do this, I bet you guys will begin landing some accounts that very day!
Wants to Open A Franchise But...
- Dear Dave,
I’ve always been intrigued by the restaurant business and wanted to open one of my own. Recently, the opportunity presented itself to open a fast food franchise. I really want to do this, but it would take years for me to save up the money. Is it okay to borrow money to start a business?
- Dear Jim,
You’re right. It will take longer to save up the money and open the business debt-free, but that’s exactly what you should do. Most small businesses fail within the first five years. One of the main reasons for failure is the struggle to repay debt.
If you’re into restaurants, try starting small with a catering business out of your home. This will give you a taste of managing your own food service business, and let you know if you really like that kind of work. It will also give you the opportunity to make and save some money. That way, when your restaurant dream becomes a reality, you can honestly say that you own the business instead of it owning you!
By: Dave Ramsey
Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.Read More Articles by Dave Ramsey