Question: Brent wants to know the key to becoming a great salesman. Dave can answer that with one word.

Dave Ramsey's advice: Serving. That entails a lot of things. Making sure you have the best product at a great price and you're excited about it. You want your customer to have a great experience and you've got a great attitude about it. When you sell or build a house, you are helping someone get their next house. You have to provide a good or service and let people know enough about it that they are willing to trade their time and money to interact with your business. If you serve people, you'll have clients for life and they'll send all their friends.

Hear the call!

Download Dave's show, commercial free, right here!

Podcast Dave's show!

Question: Bob and his wife are debt free except the house. He has a small business opportunity that he wants to pursue, but he would have to borrow about $1 million. He can pay the money back in about 18 months, but he's still queasy about the amount. In any case, Dave tells him why doing business that way is too risky.

Dave Ramsey's advice: It's a good idea to open a business and live out your dreams. I don't want to do something that allows the dream to turn into a nightmare. The two things in this scenario that could make this into a nightmare are borrowing money, which dramatically increases risk, and the fact that 90% of business ideas suck. Only about 10% of them actually work, and you don't know which is which. You have to be able to survive your mistakes, and when you borrow money, you magnify the size of the mistake.

You usually have to go to about version seven of your product before you start making good money. Business is a process, and even around here we can launch stuff that totally flops.

Also, if your idea doesn't work, you are bankrupt. I don't want to make errors that completely destroy the organization, and I don't want to do that. Scale down your business as you are starting it up. Be the tortoise rather than the hare. Test what you are doing, and when it works, you'll make a little more money and expand your market. Either do that or find a chain that will carry your product. You'll make a little less, but you'll take much less risk.

Hear the call!

Download Dave's show, commercial free, right here!

Podcast Dave's show!

Question: John has heard about buying an existing small business without going into debt. He can buy a landscaping business where the owner says he made $250,000 last year. He has three employees and is asking $390,000 for it. What advice would Dave give for doing something with the business without debt?

Dave Ramsey's advice: You take over management for him, and in return you get a percentage of the net profits that you create that pay toward your ownership in the business. You have an option on the business and take a living wage out of it, and everything else goes toward buying the business.

It could be grossing $250,000, but it could have $350,000 in expenses. Don't just look at gross revenues. I would rent the building from the owner with an option to purchase as a separate transaction later, after buying the business.

If he's not charging rent in the calculation, that's not realistic. You have to add that and utilities, those types of figures into his actual calculation of profit before you figure out of there is any profit. I'm not sure this guy is making a profit as you describe this.

Hear the call!

Download Dave's show, commercial free, right here!

Podcast Dave's show!