Interview with Dave Ramsey
By Deborah Jeanne Sergeant
Dave Ramsey is no stranger to building new business enterprises. With no start-up capital, he grew his net worth to more than $1 million by age 26 but lost it all through poor money management. He went back to his “first love,” real estate, to get out of debt. 
To figure out where he went wrong, he interviewed dozens of older, wealthy people. Through writing books and a syndicated radio program, he began to share their wisdom and the insights he gained from his own experience.
Home Business® Magazine recently sat down with Dave and asked him about business franchises and effective entrepreneurship.
Home Business® Magazine (HBM): How can entrepreneurs pick the right kind of home business franchise?
Dave Ramsey (DR): It’s a lot like picking the right business to go into. The only reason to go into business is to make money. You have to work hard at it. If you’re not passionate about it, you’ll burn out so fast that it is incredible. First and foremost, it should be something you’re passionate about it. Second, is it a unique operating process/product line. (Is it unique where it cannot be duplicated?) Third, is it a national brand that’s recognizable? They should have a quality control process.
HBM: What are a few common mistakes people make when investing in a home business franchise?
DR: They don’t dig into it further than the materials given to them by the company. You need to talk to the competitors and 20 to 50 franchisees. {The company] needs to give you the five best that give you the song and dance. You also need to talk to the five worst. Ask the competitors if they have a better deal and why didn’t they go with the brand you’re looking into. Get them to talk bad about the company you’re looking at, but realize they may have mixed motivations.
HBM: What are some effective means of promoting a home business franchise?
DR: Anytime you open a business, you have to be effective in promoting whether it’s a franchise or not. You’ll need to learn to be a Web marketer extraordinaire. There’s plenty of material out there.
HBM: How can entrepreneurs make money when they don’t have much or any capital to start a business?
DR: We started in our living room on a card table in our living room, and we have a multi-million dollar company and we know it can be done without borrowing a dime. It takes a while to get it started and to turn the wheel over, but the next time it’s easier and the next few hundred times, it’s easier than that. Have a budget where you reinvest a percentage of every dollar you earn to grow it.
HBM: What are the biggest ways that home entrepreneurs waste money?
DR: Toys. Technology and buying a computer or copiers I’ve “got to have” or office furniture within the home. The creature comforts we tend to rationalize as “business expenses I can write off.” Poorly purchased advertising. They lurch into the advertising market without learning anything about it. I can’t tell you how many home businesses are almost in bankruptcy court over a Yellow Pages ad only to find out that the Yellow Pages ad isn’t where their market will look for them, and it cost more than they thought.
HBM: How can home businesses advertise effectively?
DR: Instead of just purchasing an ad campaign, target test and measure. Give an ad a small try. If the response is enough to pay for the ad, make it larger. With a franchise, ask the most successful franchisees what they did. Ask the bottom five guys what they did and avoid it.
HBM: On your site, you state that you give “biblically-based advice” to clients. Why?
DR: I’m a Christian. Years ago, I went broke, so I decided to run every part of my life according to the Bible. It sounds hokey, but it works. You run your marriage that way, and it works. It will work with business, too, and finances. Treat people like you want to be treated. Instead of working out an ethics policy, this is a pretty simple thing. It’s not rocket science: It’s living life well and enjoying the people in your business. HBM
Deborah Jeanne Sergeant writes magazine and newspaper articles, marketing materials and Web copy from her home in Wolcott, N.Y. Visit her online at www.skilledquill.net.
Previously published in the October 2010 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($19.00 for 1 year, six issues). Visit http://www.homebusinessmag.com
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More About Dave Ramsey
Dave Ramsey hosts the nationally-syndicated radio program The Dave Ramsey Show (heard on more than 450 stations), pens best-sellers, including The Total Money Makeover, and heads The Lampo Group, which advises consumers on how to spend and save wisely. Ramsey and his wife, Sharon, make their home in Franklin, Tennessee with their 18-year-old son, Daniel. They have two older, grown children. HBM