I'm $300,000 In Debt From My Dog-Training Business

[Music] brought to you by Xander 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 congratulations when's it due uh July 14th excited good for you um I have thank you I have my own business in petare I'm a dog trainer and I am $300,000 in debt from what so my question is is so 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 dad as possible or focus on paying off debts is the debt business debt is it from you building this business is that where it came from yes yes that's where it came from most of it how do explain how does it take $300,000 to train a dog yeah so um we started mobile so I started the business when I was 19 doing it mobile kept cost low did it out of my truck um and then as we expanded we decided that we needed a facility um so we rented and then uh like kind of renovated a 4,000 foot facility um that was in April of last year so we I took a home e l credit loan um from my from my dad which I know now from listening to you guys as a no no just give me 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 a service I'm just curious our lowest package is 33.75 and our most expensive package is 8,000 okay and and these are house pets they're not um service animals or anything some some are service dogs some are protection dogs uh we work with a large range you're doing protection dogs for eight grand that's low okay all right now so you you spent money renovating someone else's building that you rent yeah so getting uh we did like walking Kels we had to put into but you don't own the building no it's a rental 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 and you should get it only from Xander Insurance because they work for you not the insurance companies Ander Compares all the top term plans to save you money so you don't get ripped off with insurance that they market like a so-called investment term from Xander is the only life insurance I would get from my family it's all I've ever bought and all I've ever recommended go to zander.com or call 800 35642 82 you spent $300,000 on someone else's building so the whole line of credit the total of it was 20 I'm sorry uh was uh 225,000 um and then we use some of that to do employee salaries when we first moved in we some a lot of that for renovations um and then also into marketing then we have uh $330,000 for a a van that we use are you profitable yeah so last year we did $300,000 in sales 40,000 of that was profit for our first year wow Lord what's all the overhead coming well so our total overhead per month is 17,000 okay and and so what's your question hun so um do I focus on expanding the business no hiring trying no okay you need to make some money with all this money you've spent like you need to double your revenues with your existing facilities in your stupid $30,000 van that you did not need okay you you you you have never seen anything you wanted that you didn't go buy it stop it you're going to run yourself out of business so fast it's unbelievable you need to learn to organically grow the business Ramsey invest Ramsey Investments Ramsey Solutions has grown from a card table in my living room to a $300 million business and 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 a little bit and so now you've invested lease hold improvements in someone else's building how what's the length of the lease you have it's five years at the end of five years all that money is gone if that guy wants you out you've got to amateurz 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 uh realize which part the part that you're 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 of it like I believe that the total cost of res of Renovations alone that we did was between like 15 65,000 um but the goal was to then extend our lease once that five years was up yeah that that's a goal that's a wish that's a hope it'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 would that include stop stop quote expanding no work how many employees do you have okay it's just me I work completely by myself I thought you said you spent 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 uh uh 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 up to three at one point um but then in October we got pretty slow so I let everyone go went down to just uh me working uh and then you have you have a $40,000 year job that you own so your job is to make it an $880,000 a year job that you own and then $100,000 a year job that you own you need to find out the most profitable areas of your business and grow those areas and yes you need to do it as far as you being at home with the baby fathers since time has begun have 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've made a mess and you need a shovel and you is the shovel how much is the lease every month Lea is 4,200 yeah that's why you brought in 3 100K and you're only 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 of goods sold except dog food for God's sakes he needs your book Dave and so um yeah uh I'm going to send you a copy of the entree leadership book but um and um jump in on the Entre leadership podcast and start listening to it that I do on on small business and so forth because we've coached people exactly like you for for 20 years and I love small business people um but the 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 you've bought everything fresh and shiny and new and now you need to go make some money um and you probably ought to dump the $30,000 van and get rid of it and get some of the money back towards your dad anything you can get rid of and still operate the business get money back towards your dad I want you to concentrate on making 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 break through in business if you are not the secret sauce you're screwed the other stuff around the dog training is 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 that 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 but you got a lot of work to do and it's not unusual for a young dad to be working it's not a bad thing if anyone depends on your income you need affordable term life never cash value insurance visit zander.com to today for quotes