Brought to you by Zander Insurance. Compare rates from top-term life insurance companies in seconds at Zander.com. So I'm 21 years old. I have a baby on the way in the line.
Congratulations. What does it do? July 14th. Oh, sorry man.
Good for you. Thank you. I have my own business in pet care. I'm a dog trainer and I am $300,000 in debt.
For what? Well, my question is, do I focus on expanding the business, hiring and trying to be able to make the business self-running so I could be as present of a debt as possible or focus on paying off debts? Is the debt business debt? Is it from you building this business?
Where it came from? Yes. Yes, it's where it came from. Most of it.
How does it take $300,000 to train a dog? Yeah. So we started mobile, started business when I was 19, doing it mobile, kept costs loaded out of my truck. And then as we expanded, we decided that we needed a facility.
So we rented and then kind of renovated a 4,000 square foot facility. That was in April of last year. So I took a whole-mecular line of credit loan from my dad, which I know now from listening to you guys and no-no. Just give me a quick synopsis.
If I bring my dog to you and say, I'm dropping my dog off, train him. What does it cost me? What do you cost for service? I'm just curious.
Our lowest package is $33.75 and our most expensive package is $8,000. Okay. And these are house pets. They're not service animals or anything.
Some are service dogs, some are protection dogs. We work with a large range. You're doing protection dogs for a grand. That's low.
Okay. All right. So you spent money renovating someone else's building that you rent? Yes.
So getting up, we did like walking panels. We had to put them in the building. But you don't own the building? No.
Okay. So where's the three? You spent $300,000 on someone else's building. I only recommend term life insurance because it's simple, affordable coverage.
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It's all I've ever bought and I'll have ever recommended. Go to zander.com or call 800-356-4282. You spent $300,000 on someone else's building. So the whole migrant line of credit, the total of it was $225,000.
And then we used some of that to do in 40 calories. When we first moved in, we'd sum a lot of that for renovations and then also into marketing. Then we have $30,000 for a van that we used. Are you profitable?
Yes. So last year, we did $300,000 in sales. $40,000 was profit for our first year. Wow.
What's all the overhead coming from? Wow. So our total overhead per month is $17,000. Okay.
So do I focus on expanding the business? No. No. Okay.
You need to make some money with all this money you've spent. Mm-hmm. Like you need to double your revenues with your existing facilities and your stupid $30,000 van that you did not need. Mm-hmm.
Okay. You haven't ever seen anything you wanted that you didn't go buy it. Stop it. You're going to run yourself out of business so fast as unbelievable.
You need to learn to organically grow the business. Ramsey and Vess Ramsey, Ramsey Solutions has grown from a car table in my living room to a $300 million business so we've never borrowed a dime. 100% of our growth has been funded by profits. A little bit and a little bit and a little bit and a little bit and a little bit and a little bit.
And so now you've invested leasehold improvements in someone else's building. What's the length of the lease you have? Five years. At the end of five years, all that money's gone.
If that guy wants you out. You've got to amaturize all of that cost in five years on 40k profit. You can't even come close. Did you know that?
Did you realize that? Or you just didn't care? I'm just curious. Realize which part?
The part that you're leasing and that you don't own the building. So when your lease is up, there's no guarantee that you get to stay there with all the renovations you've made. So what I figured while going through the process, I believe that the total cost is the cost of renovations alone that we did was between like $15,000 to $65,000. But the goal is to then extend our lease once that five years was up.
That's gold. That's a wish. That's a hope. That's not how you run a business.
Okay. So what you as a young entrepreneur, what I would have you to do is I want you to concentrate on getting revenues up without spending any more money. Stop, stop, quote expanding. No work.
How many employees do you have? It's just me. I work. I thought you said you'd be pissed at some of this on salaries.
Where the heck did the 200 grand go? All I got is 30 in improvements or 40 in improvements and a $30,000 van. Where the rest of it go? You paid yourself out of the loan?
No, no, no. I didn't pay myself out of the loan. We had employees. We had at the three at one point.
But then in October, we got pretty slow. So I let everyone go, went down to just me working. And then you have a $40,000 job that you own. So your job is to make it an $80,000 job that you own and then $100,000 your job that you own.
You need to find out the most profitable areas of your business and grow those areas. And you need to do it. As far as you being at home with a baby, fathers since time has begun, I've gotten up and gone to work and babies have survived. And you're going to work my son.
You have $300,000 in debt. You made a mess and you need a shovel and you is the shovel. How much is the lease every month? Leif is $4,200.
Yeah. That's why you're brought in $300,000 and you're only making 12% margin on a service oriented business because you've used it all up. Your margins ought to be double triple what they are in a service business. You don't have any cost to get sold except dog food for God's sake.
He needs your book, Dave. And so, yeah, I'm going to send you a copy of the Entrez Leadership book. And jump in on the Entrez Leadership podcast and start listening to it that I do on small business and so forth because we've coached people exactly like you for 20 years. And I love small business people.
But the disease that you have is the idea that if I spend more, I'm always going to make more and that is a disease that doesn't work in business. Spending does not equal income. And so, you've bought everything fresh and shiny and new and now you need to go make some money and you probably ought to dump a $30,000 van and get some of the money back towards your dad. Anything you can get rid of and still operate the business and get money back towards your dad.
So, you need to go make money, not spending money and quit telling yourself you just need one more marketing plan or you need one more purchase for this to get breakthrough. In business, if you are not the secret sauce or screwed, the other stuff around the dog training is window dressing. Your ability to look at an animal and teach it to behave is the secret sauce. And your ability to teach other people to do that to work for you is the secret sauce.
It is not whether you have a van and it's not whether you have a rental property with a kennel in it. It's your ability to do your job. And so, if you'll go do that and make a bunch of money, you're going to be a great dad financially and you're going to be fine. You've got a lot of work to do and it's not unusual for a young dad to be working.
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