Jonathan D. Byrd I

More money can solve a money problem. It cannot solve a purpose problem.

More Money Won't Make You Generous People say it all the time: if I had a certain amount of money, I'd give a certain amount of it away. The reality is they won't. Not because they're lying, but because it doesn't work that way. You are who you are right now, and what you do with your money right now is what you'll do with more of it. More money doesn't make your character better. It just reveals who you actually are, and a lot faster. The widow's two mites There's a passage in the Gospels about a widow who put two mites into the treasury. It was all she had, and she gave it trusting in God. I'm not telling anybody to go give away their last two pennies. That isn't the point. The point is that her generosity wasn't waiting on her circumstances. Your level of generosity now is going to match your level of generosity if you had more, and having more simply reveals a lot quicker who you really are inside. Gratitude comes first If generosity doesn't come from money, I think it comes from gratitude. The more grateful we are for the things we have, for what has been given to us and for the people around us, the more generous we tend to become. Without gratitude, you're not going to be generous. Some people will say nothing was given to them; they worked for everything they have. If someone said that to me, I would simply tell him he's a fool. No man is an island. The very economy we work in was given to us. The safety we have on our streets was given to us. We don't build businesses alone, and we don't have families alone. The man who is simply alone is a very lonely man. I built a company, for sure, and God gave me grace for sure. But it wasn't me alone. It was a multitude of people working together for a common good. It starts with order None of this means giving away what your family needs. Everything I think about this is predicated on a rightly ordered life. For me as a father, that order is God, my own soul, the souls of my wife and children, and then providing for them. If I don't have enough food to feed my family, I should not be giving our food to other people. And within the hours that are appropriate for me to work at my age, I think a man should do the absolute best he can to earn as much as he can with the skills he has, and keep developing those skills. I'm not against making money. The trouble starts when the pursuit of more breaks that order. Where most of us get into trouble is confusing needs and wants. I love good coffee. I don't need coffee at all, and I certainly don't need the most expensive coffee. I choose it because I want it. When we tell ourselves every want is a need, our expenses can greatly exceed our income, and that's why people get into debt in the first place. It's also why Dave Ramsey's method works so well for people getting out of debt: you write down what you really need, and the rest becomes a choice. Generosity lives in that space of choices, and it's one of the things that keeps us from avarice. If we never take actionable steps that cost us something, we won't change. Teach it early That's why I think the best time to learn generosity is as a child. We teach our children to say thank you when they're given something. What is thank you but acknowledging a gift and passing it on? It's merely words, though. Shouldn't we have actions that back our words as well? If I've been given something, I need to be grateful for it, and the way I express that gratefulness is by passing some of it on. When children start giving early, before they have much, they learn that they are needed to give. I believe if more of society did this, we wouldn't need nearly as many of the social programs we have in this country. Be thoughtful about it, too. Know what good you're trying to accomplish and be selective. Find causes you care about, ideally ones where you personally know who you're giving to, and support those rather than giving money away willy-nilly. But give. It is more blessed to give than to receive, and I don't think that becomes true only after you've made enough.

Why I Took the Phone Number Off Our Website In 2016 I took the phone number off our website. We stopped taking phone calls and handled customers by email and text instead. For a home-service company that sounds like a strange thing to do, and I'm not going to pretend it was a good idea in the normal sense. I did it because I was managing far too much at one time and the company was in trouble. How we got there The short version is that we grew faster than our systems could handle. We were spending a lot of money trying to grow, and we put too much into the build-up. Payroll got too big. The systems we were running weren't right for what we had become, and we weren't getting accounts receivable down the way we needed to. When you aren't watching your money and your growth patterns carefully, you can spend yourself into a cash-flow problem while everything on the surface still looks like growth. That's what happened to us, and it was my doing. We had grown too fast without controlling our systems, and that is what caused it. We ended up cutting back to 25 metro markets and rebuilding over an extended period of time. Liking people doesn't change what the company can carry The hardest part wasn't the phones. It was payroll. I liked the people I was working with. But that didn't matter for the company to survive, and I had to make a hard choice. I don't know a way to make that sound better than it is. When a company is in disarray or losing money, you don't get to cut what you want to cut. You figure out what is mandatory, the things that absolutely have to keep happening, and those continue. Anything superfluous to that, in any way, shape or form, has to be cut until you're on a better foundation and can begin to rebuild. It isn't a matter of wanting to. That's where the phone number went. Answering calls was something I couldn't carry at that stage, so it went, and customers could still reach us by email and text. We lost some business because of it, though not much as far as I could tell, and new business kept coming in. We had already started offering online quotes a few years earlier, and that helped. A survival measure isn't a strategy I want to be careful here, because it would be easy to turn this into a story about how a service company doesn't need phones. That isn't the lesson. I certainly made more money taking phone calls than we did without them. I personally prefer texting over phone calls, but that doesn't mean everybody else does, and you have to adapt to the customers you're actually serving. Taking the number down was what I had to do at that stage of the business just to survive. It was right for that moment and wrong as a permanent way to run a company. That's the distinction I'd want any owner to hold onto. Some of what you do in a crisis is necessary and still not good. If you forget that, the emergency measure quietly becomes your operating model, and you keep the cut long after the reason for it is gone. Shrink to what you can carry, then build The best advice I have about a situation like 2016 is not to get into it. Don't grow faster than your systems, and watch your money and your growth patterns closely enough to see trouble before it becomes a crisis. But if you're already there, look honestly at what is possible with the people and the systems you have right now. Shrink to that level. Then build from that level, and don't make the same mistakes twice. It isn't quick, and it isn't painless. But a company that is honest about what it can carry has something to build on.

When You Get It Wrong on a Customer's Home Not long ago we screwed up a gutter guard installation. One of our technicians installed the guards incorrectly and bent them in the process, and once that happens there isn't much to do except take them off and start over. So we did. We installed a completely new set on that home. That part wasn't a judgment call, and I don't think it should be for any company. We made the mistake. The homeowner didn't bend the guards, and they didn't choose the technician. We sent him. When you inconvenience a customer, that's on you, not on them, and making it right isn't something the customer should have to argue for. I'm not going to leave someone with a crappy product if I can help it. Promises are cheap until they cost you something I'll be honest that it's easy to say that and harder to live it when the cost is real. Every company that does enough work is going to make mistakes. The question isn't whether it happens, it's what the customer has to go through when it does. Do they have to call three times? Do they have to prove it was our fault? Do they get the feeling we're doing them a favor by fixing our own work? If they do, then whatever we say about standing behind our work isn't really true. Promises are cheap until they cost you something, and that's the only time anyone finds out whether you meant it. What you owe and what you choose We also ended up waiving the bill for that job. I mention it only because it was a different kind of decision, and I don't want anyone to confuse the two. Fixing the work was owed. Waiving the bill wasn't; it was my call for that customer in that situation, and I could almost call it arbitrary. Another owner could have charged for the finished job and been completely in the right. I'm not saying every mistake means you give the job away. You have to make money, and most of the time correcting the work is the whole answer. What doesn't depend on the situation is the first part. You fix what you broke, without making the customer fight for it. Everything beyond that is judgment, and you'll make that call your own way. But if your people know the first part isn't negotiable, your customers will find that out too, usually right at the moment something has gone wrong.

Reality is a pretty good teacher if you're willing to let it correct you.

Most business problems get clearer when you ask: What is true? What is this for? What does my responsibility require next?

The hardest person for an owner to manage objectively is often himself.

You know your intentions. Your company experiences your patterns.

Best practices are not a substitute for prudence. The particulars matter.

Before "What should I do next?" ask: What is the business for now? What does reality say? What pattern is the owner reinforcing? What higher goods are involved?

Being capable of doing something is not a sufficient reason to spend your life doing it.

Freedom from work has never interested me much. Freedom to choose worthy work does.

A mature company should need less of the owner's availability and more of his judgment.

The goal isn't no work. It's chosen work.

The Trouble With Easy Money: What 1929 Still Teaches Us About Debt Ninety-seven years ago this week, the American stock market began one of the most famous collapses in financial history. October 24, 1929, became known as Black Thursday. Black Monday and Black Tuesday followed on October 28 and 29. By the summer of 1932, the Dow Jones Industrial Average had lost nearly 89% of its peak value. There were many causes behind the crash and the Great Depression that followed. But one feature of the speculative boom deserves attention: people were buying stocks with borrowed money. According to the Federal Reserve's history of the crash, investors could commonly put down just 10% of the purchase price and borrow the rest. Think about that. For every dollar of their own money, they could control ten dollars of stock. As long as prices kept rising, it seemed like a wonderful arrangement. But a relatively small decline could wipe out their entire investment. And when lenders demanded additional collateral or repayment, investors could be forced to sell into a falling market. The larger economic collapse cannot be explained by margin borrowing alone. But leverage made speculative losses much more dangerous. I find myself thinking about that history because I've made some expensive mistakes with debt myself. And after more than twenty-five years of building businesses, I've come to believe that the greatest danger of easy credit isn't always the interest rate. It's what having access to borrowed money can do to our judgment. I bet my future on tomorrow looking like today When I was young, I failed in my first business and accumulated a substantial amount of unsecured debt. I eventually enrolled in one of those debt-settlement programs that advised me to stop paying my creditors while they worked toward settlements. My credit was ruined. But this was during the era of no-documentation mortgages, when lenders were willing to make loans that would be difficult to obtain under more conservative lending standards. I wanted to buy the house of my dreams. Despite my credit problems, I was able to get a 40-year mortgage at 11% interest, along with a second mortgage at 14%. Those were expensive loans. I knew they were expensive. But I was young, optimistic, and convinced things would continue going the way they had been. I already had debt from my previous business failure. Now I was adding an enormous housing obligation on top of it. Then came 2008. Within roughly six months, our income fell by 50%. The mortgage payments didn't fall by 50%. Neither did our other obligations. We discovered substantial problems with the house that would require expensive repairs. We also faced the coming obligation on the second mortgage. Between those expenses, we were looking at more than $100,000 in potential cash requirements over the following couple of years. Meanwhile, the value of the house was falling. Eventually, we walked away from the house and surrendered it to the bank. I believe it later sold after foreclosure for around $70,000. I had lost the house I wanted, damaged my finances, and spent years dealing with the consequences of decisions I'd made when I thought the future was reasonably predictable. Looking back, I can summarize my mistake pretty simply. I bet my future on the economy continuing to behave the way it had been behaving. That's what borrowing against future earnings involves. You commit income you haven't earned yet to obligations that won't disappear simply because circumstances change. That doesn't automatically make borrowing wrong. But it should make us considerably more careful about the assumptions we make. The monthly payment isn't the whole decision I think one of the largest problems with consumer debt is how people approach the decision in the first place. They ask: Can I afford the monthly payment? That's often where the analysis begins and ends. But a monthly payment tells you remarkably little about whether the purchase is prudent. What is the total cost? What happens if your income falls? What other obligations are you carrying? How much money do you have available if circumstances change? What are you assuming about your job, your business, the economy, or your future family situation? And perhaps most importantly: Why do you need this thing now? We've become accustomed to being able to obtain things before we've earned the money to purchase them. Want a new vehicle? Finance it. Want new furniture? Finance it. Want a vacation? Put it on the credit card and pay it off over the next couple of years. The ability to purchase something gets confused with the wisdom of purchasing it. And the smaller we can make the payment appear, the easier it becomes to justify the decision. It's worth asking whether we would make the same purchase if we had to withdraw the entire amount from our savings account today. Sometimes the answer would be yes. But sometimes the answer reveals something about how credit has influenced our thinking. I stopped borrowing for twelve years After what happened in 2008, I stopped using debt for twelve years. I eventually rebuilt my credit and began using credit cards again, but I pay the entire balance off every month. I don't carry a balance from one month to the next. I don't use consumer debt today, and I don't want business debt either. I realize this puts me much closer to Dave Ramsey or Larry Burkett than to Robert Kiyosaki. And I understand Kiyosaki's position. I understand why successful investors use leverage. I understand how financing can make acquisitions possible, preserve liquidity, and increase returns. Some businesses and investments require sophisticated capital structures, and there are people who manage those structures successfully. That doesn't mean I want to operate that way. Frankly, I hate debt. I prefer owning what I own outright. I like knowing that my property belongs to me without a lender having a financial claim against it. There's a certain peace that comes with that. But there's something else I learned during those twelve years that I consider just as important. When borrowing isn't an option, you have to find another way to accomplish what you want. People told me you couldn't buy a house without a mortgage. Well, I did. I built a business that produced enough money to purchase a house with cash. That took time. It required learning, creating value, solving problems, and developing the ability to earn more than I had previously earned. There were plenty of mistakes along the way. But removing debt as an option forced me to approach problems differently. Instead of asking how much money a bank would lend me, I had to ask how I could create enough value that people would willingly pay me the money I needed. Those are two very different starting points. Easy credit can make a bad decision easier Years later, I was involved in another business that had access to a line of credit. We didn't obtain it because we were desperate for money. It was available in case we wanted to make a business purchase or take advantage of an opportunity. I had enough money in the bank to pay off what we borrowed. The line of credit was interest-only, the payments were relatively small, and accessing the money was easy. That combination was more influential than I expected. For example, we had an opportunity to purchase materials at what appeared to be an attractive discount. Using the line of credit made the purchase seem reasonable. But business slowed. We incurred interest expenses, additional storage costs, and other expenses associated with holding inventory longer than expected. What looked like a bargain ultimately cost us money. Here's the interesting part. I wouldn't have used our available cash to make that same purchase. The money was there. But if I'd been required to withdraw it from the bank, I would have approached the decision differently. Somehow, using borrowed money made the purchase easier to justify. I noticed a similar tendency in how other managers thought about expenses. And although I challenged some decisions, I also allowed myself to be persuaded. The line of credit changed the way we evaluated opportunities. An even more consequential example involved operating expenses. We were heading into a slower season with a cost structure designed for a rapidly expanding business. The original business plan anticipated financial pressure, but some operating expenses had become higher than they needed to be. The prudent response would have been to make difficult adjustments before the slower season arrived. Instead, access to credit allowed us to postpone some of those decisions. We could keep carrying expenses because the line of credit was there to support them. Now, sometimes borrowing during a slow season is perfectly reasonable. If a business has predictable seasonal demand, healthy margins, and a sound plan for repayment, financing a temporary cash requirement may be a prudent choice. But that isn't what concerns me. What concerns me is when borrowing becomes a substitute for correcting something we already know needs to change. Debt bought us time. But having that time also made it easier to put off decisions we should have made. Growth isn't always worth financing Suppose a business owner tells me he can borrow $100,000 at 7% interest and invest it in an expansion that should produce a 20% return. Sounds attractive. But that's nowhere near enough information for me to have an opinion. How experienced is this owner? Has he operated through a recession? What industry is he in? What is the actual size of the opportunity? How much market share does he have, and how much can he realistically capture? Who will manage the expansion? What assumptions are built into that 20% return? What happens if it takes twice as long as expected? What are the real carrying costs? What does inflation do to those assumptions? How much cash does he have in reserve? How long can the company survive if the economy turns against him? What measurable milestones will tell us whether the expansion is working? And what happens if it doesn't? Notice that I haven't told him not to borrow the money. I'm trying to understand whether he has actually thought through what he's proposing. A loan doesn't make a business opportunity good. It merely provides money to pursue it. And the lender's willingness to provide that money doesn't establish whether the investment is right for the borrower. Sometimes financing allows a capable owner to pursue an extraordinary opportunity. Sometimes it allows an inexperienced owner to make a much larger mistake than he could have afforded to make with his own money. Debt can accelerate both success and failure. It doesn't provide the judgment necessary to tell them apart. For most home-service businesses, I question the assumption that substantial debt is necessary to grow. It can make growth faster. But faster isn't always better. If the organization hasn't learned to manage its existing operations, adding more trucks, employees, customers, and locations can magnify those weaknesses. The business becomes larger before it becomes capable of handling what it has created. I've experienced some version of that myself. The discipline of having to wait There's another part of this conversation that I think financial advice sometimes overlooks. Saving for a purchase can teach you something beyond how to accumulate money. It requires patience. It requires self-control. It requires you to postpone something you want today for something you've decided matters more. Those are habits worth developing. And they don't apply only to money. Learning to delay gratification, examine your desires, and exercise restraint can influence the way you approach work, family responsibilities, and decisions throughout your life. Now, I'm not claiming that people who pay cash always make good decisions. I've wasted money myself. I've bought things with cash because I thought the tax deduction made the purchase attractive. Sometimes having plenty of money can lead to its own kind of foolishness. So cash isn't some magical protection against bad judgment. But I do think the process of saving can help develop the habits that make better judgment possible. And access to easy credit can allow us to bypass some of that discipline. For certain people, that creates serious problems. If someone regularly carries unsecured consumer debt, pays credit-card interest, finances vacations, and consistently spends money he hasn't yet earned, I would question whether borrowing is serving him well at all. Some people probably need to take debt off the table entirely. Not because every debt is financially irrational. Because their own habits make it difficult for them to use debt without harming themselves. Recognizing that about yourself is not a failure of financial knowledge. It may be the beginning of better judgment. The problem is where we begin When I look back at 1929, I see an example of what happens when speculation, optimism, and borrowed money combine in a way that leaves very little room for things to go wrong. When I look back at my own life, I see a young man who assumed tomorrow would look like today and borrowed accordingly. And when I look at some of my later business decisions, I see how having access to credit sometimes made it easier to avoid making difficult choices. I'm not arguing that nobody should borrow. I understand perfectly well that debt can be used responsibly and productively. There are investors who have spent decades learning how to manage it, and their experience deserves respect. But I also know that understanding the arithmetic of a loan is not the same thing as understanding how to use debt prudently. A person can understand interest rates, amortization schedules, and projected returns while still making very poor financial decisions. The more difficult work is examining your assumptions, understanding your own habits, knowing what you can survive, and being honest about whether borrowing is actually necessary. And I think we've developed a habit of beginning with the wrong question. We ask: How much money can I borrow? I would rather begin somewhere else. How much value can I create? What skills do I need to develop? What problems can I solve? What resources do I already have? What would happen if I waited? And if borrowing still appears to be the right decision after answering those questions, what evidence supports that conclusion? I've spent more than twenty-five years building businesses, making mistakes, and learning from them. I certainly haven't learned everything there is to learn about money. But I've learned more about why I make the decisions I make. Today, I prefer living and building without debt. Not because I believe everyone must do what I do. But because I've experienced what easy credit can cost, and I've also experienced what happens when you have to rely more heavily on your own judgment, creativity, discipline, and ability to produce something valuable. One path gives you access to money you haven't earned. The other asks you to become capable of earning it. Both may have their place. But I think far too many people begin with the first without seriously considering the second.

The business will never tell you it has enough of your attention. That is the owner's job.

The business does not become more successful because the owner destroys the person required to own it.

Rest is not the opposite of ordered work. Sometimes rest is what comes after the work actually reached its end.

There is always an "after this project." Eventually "later" shows up.

Health is not the one account the business gets to borrow from forever.

I was invited to chat with Kevin Price on the Price of Business radio show about my Four-Cause Framework.