On the show with me today is Mike Michalowicz; the entrepreneur behind three multimillion dollar companies and the author of Profit First, Clockwork, The Pumpkin Plan, and his newest book, Fix This Next. Mike is a former small business columnist for The Wall Street Journal and regularly travels the globe as as an entrepreneurial advocate. If you ask Mike, he’ll tell you that he has one mission in life, and that is to make entrepreneurship simple.
I’m a huge fan of Mike’s work and in our discussion today, you are going to hear Mike share some pretty sage advice on how to make growing your business easier!
Click here to read transcript
Mike: So if you feel that dilemma where you’re saying, I can’t work anymore, then I am and I can’t afford to hire, I’m basically saying you can afford not to hire because you’ve maxed out your output. You can’t, well, you can do work 25 hours that day or 26 sorry, Time’s not available. The only way is to hire now for some businesses you will have to take a momentary step back and this is the gut check you’re making. You know, whatever salary you are now to hire the next person, you’re going to have to divert some cash toward the hire that person, Brett ideas, episode number 282
Trent: hey, I know what we’ll share you out. Welcome to the bright ideas podcast where we let proven experts help you to find the next bright idea to implement in your business today and now here’s your host tread. This is unbelievable. I’ve never been fully understood. Everybody. Welcome back to the bright ideas podcast on the show with me today is an acquaintance, acquaintance rather from many, many years ago by the name of Mike, Mick, Mick, Michalowicz, and every time I tried to say it, you ain’t the first Trent. I struggle. Anyway, Mike is the entrepreneur behind three multi-million dollar companies and he’s the author of a number of books, profit first clockwork, the pumpkin plan and his newest book. Fix this next. Mike is a former small business columnist for the Wall Street Journal and regularly travels the globe as an entrepreneurial advocate. Mike, are you ready to share some bright ideas today?
Mike: APPS of freaking lutely. Let’s do this.
Trent: All right. It’s good to have you back. It’s a, I always enjoy talking with you and thank you for making the time.
Mike: Oh, it’s a joy to be back. Uh, and I know this is our second or third go around and me saying the same comment because we had to do an edit, but I’ll tell you, it’s true, man. You are getting younger. As we age, you’ve defy it’s aging and I think the next business opportunity for you is extracting your blood and to sharing it with everybody else.
Trent: Well, I come by it honestly. My, uh, my dad, uh, he, he fought off father time for a very long time. He’s in his eighties now though. When it caught him, it caught him pretty solidly. So my day of reckoning is coming, but not for a good while yet.
Mike: Go ahead.
Trent: All right, well I want to talk to you about your book clockwork.
Trent: Why did you write it?
Mike: Yeah, so I found that, well, I’ll let me start this. I’m on a mission I’ve defined for myself of eradicating entrepreneurial poverty. And what that is to me is the gap between what we believe entrepreneurs are achieving and experiencing and their reality. You know, you look at the cover of Inc or entrepreneur magazine or fortune, and we see these stories of Sara Blakely or Mark Zuckerberg or whatever the billion aired measure is of the day. And the perception is that’s what entrepreneurship is. Many other entrepreneurs carry on that mystique. You know, you go to any entrepreneur, how’s business going? I go, oh, we got this for crushing it. The reality though is when you look behind the curtains, most businesses are in a struggle regardless of what their revenue is.
Mike: There is some form of poverty. The entrepreneur is working ridiculous hours. That’s time poverty. The entrepreneur has no cash left in their pocket. That’s financial poverty. No, they’ve a lack of purpose or joy. Um, they’re, they’re diminished in, in, in how much energy it feeds them. That’s probably the greatest challenge of poverty. Well, time poverty is why I wanted to tackle in clockwork. I wanted to find a way where entrepreneurs can have a business that is designed to run itself, but there is no dependency on the owner. And what does it take to transition from doing work to designing the outcomes that you want. And uh, the book is about that process of throttling from, from the guy who carries a business on her back to the business carrying the entrepreneur forward.
Trent: So people who’ve been listening to my show for a while know that I’m huge on delegating. I’m huge on standard operating procedures, but I’m going to, I’m going to play devil’s advocate for this conversation. I’m going to throw at you all the objections that someone who maybe hasn’t yet developed the mindset that you and I have because they’re really big stumbling blocks in these micro business entrepreneur minds. I remember when I started my first business and it was a real issue. I don’t wanna make light of it, but people are like, oh, you got to hire you gotta you gotta hire and you got to delegate. And I always thought, well, damn dude, I can’t afford to hire like I’m barely making it as it is and I’m killing myself. So for that person who’s listening to this episode right now, maybe they’re running a a a one person ecommerce business or a one person marketing agency and two, they’re trapped or at least feel trapped. What the hell are they supposed to do?
Mike: Yeah, so trapped translates into kept meaning. If you’re working your ass off to carry a business on your back and you, you’re with this dilemma, do I hire or do I work more? Well, if you’re already working your ass off, you’ve proven you’ve capped out your time, there is no more time available. The only way to expand the business is through the expansion of by hiring employees. [inaudible] there’s this concept right now, there’s hustle and grind mentality and it’s driving me nuts. It is the worst mentality. I see entrepreneurs that are hustling, grinding, expecting the one day the business will kind of switch like a, like a light switch that now all of a sudden they’re sitting on top of the business ends carrying them. I’ll tell you, if you’ve been hustling and grinding for a year, you’ve proven that hustle and grind is not a way to carry the business forward.
Mike: You’ve been doing it for a year. There is times you need that. So the sentiment, I understand you’ve got to make extraordinary effort, but the greatest effort is our minds. It’s not the doing. In fact, doing is is a lazy way. It’s funny, in my book I wrote about, um, there’s two challenges front of you. One is to dig a hole, you five minutes to dig a hole of a certain depth or to serve a to fall of a Rubik’s cube. What do you choose? Most people will say, Rubik’s cubes are impossible to solve. I’ll run out, start digging the hall, and if you’d be like, start the Rubik’s cube, we’ll give up on them and say this is too much and run out and start taking the hall. But yeah, that’s the same kind of mentality we have with business. It feels we’re making more progress by doing a very rudimentary function because we’re seeing the completion of it.
Mike: But the sophisticated work that no one wants to do, or at least are are a challenge to do is is where the real opportunity is solving the Rubik’s cube. So if you feel that dilemma where you’re saying, I can’t work anymore and then I am and I can’t afford to hire, I’m basically saying you can afford not to hire because you’ve maxed out your output. You can’t, we can do work 25 hours that day or 26 sorry, Time’s not available. The only way is to hire. Now for some businesses, you will have to take a momentary step back and this is the gut check you’re making. You know, whatever salary you are now to hire the next person, you’re going to have to divert some cash toward the hire that person. But if you’re strategic and smart, you don’t hire a full time person right away.
Mike: Bring in virtual support, bring in part time, help, delegate out the distracting low level commitments. You know, if you’re, if you’re great at sourcing, if you’re an ECOMMERCE, you’re great at sourcing inventory, uh, and pricing it and price management and stuff like that. Um, but you’re also doing, you know, packaging boxes. Hire someone to package the freaking boxes please. Because that time we avail, we can redirect and yes, there’s a small cost with that, but now you’re doing much higher level stuff and over time you can scale up these part-timers to a lot more and more hours. But if you, you, Stacy talking, don’t start that transition, you’re just going to entrench yourself further and further in hustle and grind, trying to carry the business on your back. And that is not a scalable approach.
Trent: No, as a matter of fact, it is a exhausting demotivating approach to be honest with you. I remember when we started our ecommerce business, we hired virtual assistants first because you could get them on an as needed basis for three or four bucks an hour. Yeah. And we used to have inventory shipped into our garage, which is hilarious. We had these 18 wheelers backing up into our driveway and the Culdesac, but we had our neighbors kid come over and do the product prep for, I think it’s like 10 bucks an hour.
Trent: You know, the other thing, and I just read another book, um, and on, I don’t remember. I wish I could give a shout out to, um, hold on. How to become a capitalist without any capital by a fellow by the name of [inaudible]. Nice.
Mike: Oh, I like that title. Yeah.
Trent: Yeah. I’ve never met the fellow, I’ve never spoken with him. But I really enjoyed the book. And one of the things he devoted some time to is we’re in this sharing it because we’re in the sharing economy, which used to exist. And so now, because obviously how do you, the question that these entrepreneurs are struggling with is how do I create the extra cash to be able to hire? And you’ve just described some great ways. Some ways that I wanted to also make sure people think about is what can you do to lower your personal overhead? Can you take a room in your house and turn it into an Airbnb Room? Do you have an RV that you could turn into an airbnb? Do you have a [inaudible] could you get by on a, on a less fancy car? Could you go for dinner list? I think that a lot of this also comes down to what sacrifices are you willing to make in the beginning cause cause you, let’s face it, you’re gonna make some sacrifices.
Mike: Yeah. So there’s a thing called loss aversion. So a little side Gig of mine at a very rudimentary level is I have a passion for behavioral psychology. I read, actually if you can see the video, I always books up here behind me are almost all about behavioral psychology, mindsets of work. And um, there’s this thing called the loss aversion of factor or just loss aversion. Loss aversion is once we possess something, the pain associated with losing is so extraordinary that we’ll go to illogical levels to retain and keep something. Yet if we don’t possess that thing, we wouldn’t go to the same levels to gain that thing. So a classic example is like that Red Porsche or something and you see it in the window at the, uh, the, the dealership down the road and it’s nice to dream about it, but you don’t start working in Uber Job and renting out that extra room just so you can get the porch.
Mike: The interesting thing is once you do buy that Porsche, however you get it, if the posterior calls and says you missed a payment, a, we’re going to repossess the car, well now all of a sudden were working. We were job, we’re renting a room. Uh, we dropped the insurance and cut costs because that’s my baby, right? We, we will go to extraordinary measures to retain what we possess, but we won’t to, uh, to achieve new gains. Um, and that’s called loss aversion. So the funny thing is, entrepreneurs, as we move our business forward, once we achieve a new life standard, even if it’s like now I go out to dinner once a week when I was eating peanut butter and jelly two weeks ago, I won’t give up that going out to dinner once a week. I, that’s who I am now. That’s my identity. And if I ever hire a new person, I’ll hire them.
Mike: But there’s no way I’m going to miss those dinners and go back to PB and J and, m. So net we, we, we keep ratcheting up our lifestyle so quickly to match the new income. There’s no gap. So I have an additional kind of hacker technique to hiring a new employee. I wrote a book about profit first. In the, in the core concept is, and we’re talking about this off air setting up multiple accounts. One account you can set up, it’s called a future employee account. Here’s what you do. You go to your existing bank, you get a savings account, you call a future employee. You determine when you hire this new person, what that virtual assistant gonna cost, 15 bucks an hour, 20 bucks an hour. Maybe it’s a higher level person. Let’s say over the year their salary is going to be a $30,000 annual salary.
Mike: Well, every time payroll is due, you’re paying yourself also allocate the equivalent money for to pay for 35 $30,000 salary into that future employee account. So you’d even hired this person allocating the money. What happens is your business will say, you know what? You don’t have enough cashflow to support this, can’t do it and ill speak to you before you make the hire. In other cases you’ll see, oh, if I just cut back this and change that, I can actually now afford this employee. So you prove out before you make the hire that you can truly afford this person. Do this for I do for my own company sometimes three to six months in advance, I’m accumulating money to see if I can afford that responsibility. Then I take the next step is I make the hire, but I have now this, this cash of cash if you will.
Mike: I have this reserve of cash that when I hire this person now it’s not this panic to oh my God, they need to make money from me tomorrow morning. I have a runway to bring them up to speed and for them to have a positive impact. So another little hack. Yeah, I like that. I find in my life a huge time suck is email and I’m sure that I’ve no different than anybody else with that. Um, what have you managed to tame that beast at all? A little bit. Like I am far from perfect and there’s two things I’ve done. One is I have an email manager. So there’s, there’s one gal here at the office, Jenna, who’s in my email every single day. And you have to be aware if your friends and stuff have email and they send you obnoxious components as this person, you know, I’ve knocked his emails that they’re prepared for it, especially when your football team loses to their football team like you did last week.
Mike: So, um, [inaudible] have prepare this person for it. The second thing is I have a private email, so my public email is Mike and Mike mckallis.com and that was is was my true email forever. But now I get hundreds and hundreds of emails a day. Um, as we’ve just interviewed three more came in. I can basically the subject lines are there from readers cause I encourage, actually I read, just reach out. So I have access to this by an email manager that’s gonna vet it and sort it for me. I have a private email, kind of like the old fashioned like unlisted phone number that very few people have like four or five people have. And that goes right to the top of my inbox and sits there. So those critical contacts can prioritize communication with me.
Trent: Yup. I love it. Tell us a story, cause I know in reading your past books, um, you typically will end up using case studies and examples and business owners to, to make the points, uh, that you’re trying to make in your books in clockwork to something like that that come to mind. Is there a story we can talk about?
Mike: Oh yeah, yeah. So, uh, multiple stories. Um, let [inaudible] I’m like, oh yeah, multiple stories. I can’t think of a single one. So let me start off with this one. I’ll start off with a, uh, one around efficiency that actually is not a business, but I’ll translate into a business and then I’ll share some stories. So, uh, one of the core concepts in clockwork is the concept called the QB r stands for Queen Bee role. As I looking for the essence of efficiency in businesses, um, I found it ironically in beehives. And what is interesting about nature, nature often has solutions that we can apply in our lives if we just really observe it. And, uh, you know, nature spent a lot of time figuring out what she does well when it comes to beehives. They’re one of the most efficient organizations, if you will.
Mike: They can scale very quickly. You’ll, you’ll see one bee around the window today and tomorrow is a hive with a thousand or 2000 bees laying around. So the question is how they scale that quickly. Well, they’ve simplified the rule set to rule number one is every is responsible for protecting the QBR. I’ll explain that in a second. Rule two is if the QBR is protected, go into your primary job function collecting nectar, defending the hive or something like that. Well, the QBI can. The Queen Bee role is the function that allows or as most important in the survivability and thrivability of the hive. QBR stands for Queen Bee role. It is the function of Lang eggs. So beehives, their thrive factor, if you will, is on egg production. If bees aren’t producing eggs, BCI, it very quickly there’s a real issue. So they need to be constantly producing eggs.
Mike: Well, this trailer is a business. Within every business there is a singular most important function or activity that must be protected because it is the most important. And you know, just by definition of the word most, there can only be one of those. So every business has a singer, most important function. Sadly, I’ve found almost no entrepreneur knows what it is. They say everything’s important. That’s what I said. I’m like, I gotta do everything for my business. It all needs to be humming along well. If we take FedEx as an example I have in the book, if you take FedEx, FedEx has a promise that makes us customers. Facts, promises to deliver packages on time. Now, FedEx has many things they do. They have print shop, some they do packaging for you and et Cetera, et cetera. But their core function is delivering packages on time.
Mike: That’s what their reputation is, is, is you know, bet on right? Every business owner needs to know what is the biggest promise you make. What are you known for? And if you don’t know, you’re known for either, you can define it and say, starting today, this is the one thing that I want to be known for. Or you can ask your existing customer base and look for the common thread. Say, why do you buy from me? Ask a hundred customers or 10 customers and you’ll start seeing a common thread of why they buy from you as an author, as an example, my biggest promise is to simplify entrepreneurship. That’s what I do, and yes, I promise other things, but that’s my big promise. You read my books, I will simplify the entrepreneur journey for you. Once you know your big promise, the QBR, the activity that’s most important, your business is the function or the activity that makes that promise a reality.
Mike: Now, FedEx has many things that ensure packaged delivery. The most important thing they do though is logistics. The tracking and movement of packages. That’s it, and therefore FedEx knows that logistics always has to be humming along. If tomorrow FedEx said, you know what? Let’s not worry about logistics. Let’s focus on customer service. That’s an important component to their business. Always be super friendly and wonderful and just forget the logistics. We’ll let the pack just find their own way. Just fast forward five or six days, the headlines will break. You know, FedEx, super nice, but they don’t know where the freak your packages are. They’re going out of business. It would, it would literally be a joke and FedEx, FedEx, a $1 billion business would be out of business. Now, here’s the funny thing. If FedEx tomorrow says, you know what, turn off customer service. We’re not going to do that.
Mike: The one thing we do is we’re gonna concentrate on package delivery. Every package gets delivered on time no matter what. What happens five days from now, there’ll be murmurs and Ho and, and, and people talking about, you know, FedEx, not the friendliest coming, can’t even get ahold of them, but packages delivered on time. They will be compromised. They will not be out of business. The lesson here is this, if you don’t know, your QBR is logistics making entrepreneurs summit simple, and I do it through writing books. So that’s my activity. Writing books that deliver my promise, make entrepreneurs simple. If I don’t deliver the QBR very quickly and FedEx doesn’t, the businesses will crumble if you deliver the QBR, but the other places are simply in the ballpark. Your business will still thrive if you’re just adequate everything else, but you crush it in your core competency, you will do very well.
Mike: Sadly, most businesses have no idea what their QBR is and they think everything’s equal importance, and that’s why the vast majority of businesses in our world take two steps forward and three steps back. They’re constantly wondering, why is the business not growing? How come we’re struggling? It’s because you don’t know what your core competency is and you haven’t mastered it and focused on it.
Trent: Suffer an ecommerce store owner who sells, you know, whatever widgets. Yeah know they like how this is. Is there a QBR all kind of kind of be the same and that I want to sell the highest quality product at the lowest price ship quickly?
Mike: Yeah. Great question. No, it’s not necessarily the same cause it starts off with your promise. So what do you want to stake your reputation on? Now you could say, I want to be known for delivering the highest quality products.
Mike: If that’s it, then we say, well, what is the single most important activity? There’s many things that support high quality products. What’s the single most important activity? And they, someone may say sourcing, finding the sources, other ones may say, uh, I will, uh, I can’t remember the term of finding inventory that’s been abandoned and then repackaging it and selling it. There’s a, I can’t remember the term arbitrage arbitrage, right? You, I can do arbitrage a to source this stuff. So there’s different activities that could support it. So first what’s your promise? And then what activity do you do that delivers on it. But some people don’t wanna deliver the highest quality product. They may just say this product is the lowest price point. That’s a choice too. Or we have the best education behind our products. So even though we’re selling the same products everywhere, I’ll start.
Mike: We’re the one who back it with the best education. In fact, there was a, uh, a reseller of iPhones, iPhone. Uh, if you sell a new iPhone, you are required by apple, the manufacturer to sell a certain price points. You can’t compete on price. The quality is identical cause reseller by phones is selling iPhones. Um, what they did is we, I mean it wasn’t the iPhone, actually there’s a different smart phone, but what we did is we packaged training with it. There was all these different hacks for the iPhone equivalent that they had figured out. And so we said, we’re going to package in this training and we’re going to give you the most information to support the use iPhone, which ironically allowed them charge more because no longer were you buying just an iPhone. You’re buying the iPhone hack system, which included an iPhone and all the hacks around it.
Mike: So they packaged it and they wanted to build a reputation on education. So even though we’re all in the same space as an Amazon reseller, for example, you can pick what you stake, your reputation on customer service, extraordinary communication, best value or whatever it is, and then look back one level, what activity most drives that forward. That’s your QBR. Other activities have to be adequate and stay in the ballpark. We’ll gotta nail it on activities as that’s driving that promise.
Trent: With the size of the audience that you’ve, you’ve grown over the years and you keep getting emails from them because you encourage them to email you. Yeah. What is the, what are some of the top challenges that these folks are asking you about over and over and over again?
Mike: Yeah, that’s a great, you know, it’s funny. No one’s has ever asked me that. Um, so one of the things that come to mind is there is a resistance to the ideas I proport in the book and that the shocking resistance I hear over and over again is it can’t be, it can’t be this easy. So my most popular book currently is Private First. A home soon it will be fixed. This next, my next book I am, I hope it will be because I’m so proud of the concept, but fit private first and most popular book. I’m extremely proud of that book. What I said is if you want to be profitable, every time revenue comes in, Amelie take your private percentage is profit first hideaway for your business and run your business off. The remainder is that simple. It’s the pay yourself first principle applied to business and it forces you to run your business appropriately with the remaining funds is your business will speak to you saying, here’s how much we’ve money.
Mike: We truly haven’t spent. If you want to be this profitable, you have to, uh, rub work within these expenses. So it comes very clear and the resistance, I guys, it can’t be that easy. Now this is business. It’s complex like we gotta have. What about EBITDA and what about cost of goods sold and what about warehouse Dah, all these things. And um, there was a thing called, there’s this things called razors them, I think it’s called, uh, or razors oculus. Somebody that, which basically says the simpler the solution, the more likely it is the right solution. Like that’s the argument. And yes, human nature, the field is necessity for complexity. Um, and I’m not even sure I’ve got to research out why. There’s this compulsion for that, but there’s this compulsion. So the most common question I have is this, this, or challenges, this can’t work.
Mike: It’s too simple. Um, the second challenge is, uh, there’s a fear to try something new. You know, if we do a certain routine or process over and over again, even if it’s not working, for us at least it’s comfortable. We know the routine and process try something new, it’s pretty scary, even if it’s, if it’s nothing like in private first, except to start off by saying one account at your bank and transfer money to it. But even that scary so well I found for that is when people feel overwhelmed in the transition, is to reduce the steps, always get the first step of make it smaller and easier, smart, easier, and take small incremental steps forward and said big leaps forward.
Trent: Okay. I’m wondering though if you, I’m wondering if you really answered my question though. Okay. And I’m, and I want to press you on this because as I was listening to you, I’m thinking to myself, how is what Mike said really actionable to me and maybe I missed something cause I was also typing my next question. Um, but you basically said you want to make, if I, if I heard you correctly, um, you want to make the first step of whatever change it is you’re trying to make.
Trent: As easy as possible. And it’s entirely like we folks, what you don’t know is Mike and I didn’t do a pre pre interview for whatever reason. And so I’m having to come up with some questions on the fly.
Mike: On the fly. Yeah mate. Listen and prepare the same time. Not Easy.
Trent: So if I missed your point on that, apologies to the audience and to you, but I felt like we didn’t satisfy the, the gut of the question.
Mike: Yeah. I mean, the question is, I understood what you said is, you know, I get always emails in daily, like what’s, what’s the biggest questions or challenges people have? And the challenge identified is that when something is presented as simple, it becomes,
Trent: That’s right. The people who [inaudible].
Mike: Yeah. Less digestible, less believable, right? Yeah. There’s the believability sack. It’s too easy. It’s the too easy factor. So that’s the challenge. I guess. It’s too easy. And I found that I can’t convince people, I can’t say yes, this works. And this is true, Trent. We have over 150,000 businesses doing profit first we have 3000 documented case studies. That’s not enough evidence. Like I don’t know what else to show people. But here’s what I found out about other people and myself is when I prove it to myself, when I believe it to be true, that’s what I believe to be true.
Mike: And the only way for me to believe something to be true is ultimately to do it. So the solution there is these micro steps is if someone doesn’t believe something to be true, and I tell them we’ll take the take the leap of faith anyway. It’s like, no cause I don’t believe to be true. I’m gonna this is going to crush me. So I say, well how small can we take this step for you to feel that you’re still safe? But our moving toward essentially challenge your own thoughts. So with profit first and clockwork, it’s always these micro steps. First we say, just have one account your bank allocate 1% of your income to profit and it won’t hurt your business. Can’t hurt your business in any way cause it’s so innocuous. A thousand bucks comes in. I’m saying take 10 bucks. That’s 1% put into a profit account. When you’re your business, 990 bucks a week, it won’t hurt you as long as they agreed to that and they start that process then then they say, oh my gosh, I can take profit first. What if I do 2% and 3% and they start naturally convincing themselves. Um, this is true for, for any work I do is simplify and reduce the first step so much that it overcomes that fear of trying something up. Hopefully I nailed it on that one.
Trent: You did. And thank you for, uh, taking the host going a little slower cause the host is trying to ask questions and write questions at the same time. But you hit on something there, which I think is so unbelievably important for would be entrepreneurs, micro entrepreneurs, and even seasoned entrepreneurs is there’s this new thing I got to do and it seems like this overly large task. And so I keep kicking it down the road and kicking it down the road and it never gets done at a perfect example of that is content creation. Writing an article for example, which can be, have wonderful SEO benefits. And you know, anyone who’s been at this online thing for a while knows that the more content that you create, the more eyeballs that you get, the bigger the audience you have, the bigger the audience you have, the easier it is to monetize that audience and put money in your bank account.
Trent: But it all starts with, you know, hey, I got this ecommerce store and I don’t have any SEO traffic, so that means I got to go and write all these blog posts and I’ll never get it done and I’m too busy and I don’t know what to do. But what you said and what I’m, the reason I’m repeating this back is it’s real for me as well with my software company is I’ve got to do the same thing. So rather than saying, well, I’m going to devote four hours on Friday, you know, to write a blog posts, which you’ll probably never get to develop the habit instead of 15 minutes every single morning.
Mike: Yes, that’s exactly it.
Trent: In your first day, all you’re going to do is come up with your sub headlines for your title of your article. And the sub-headlines. Okay, cool. Now I know the f the skeleton of my article and, and anybody can do that. That only takes maybe 15 minutes to do. And then the next day, well I’m just gonna write, you know, the, the three or a hundred words that go in under subhead number one. Yup. And then day two, I’m going to write the next three. And, and once you’re done, all of that, read it all. And now you can write your introduction because right at are split, I’m speaking to writing specifically obviously because that’s something that I have to do is that writer’s block is, you know, if you’re starting off trying to write the introduction before you’ve written a whole article, it can be again, overwhelming.
Mike: You know, we, we, humanity is biologically wired to spend as little energy as possible and the biggest burn of calories, energy is thought. So we’re actually wired not to think unless it’s a necessity. So it’s a survival mechanism. So this is no fault of us, you know, people aren’t lazy necessarily as much as their mind diverge to what’s the lowest energy burn. And when we see something daunting for hours of blog writing, our mind goes, holy, that’s a lot of energy. That’s exhausting. Let’s not do that. And we divert to a lower path. Your suggestion of small increments. Now our mind says, oh, it’s low energy burn, I can do that has impact, okay, go cause I can relieve ourselves. But then we start getting this momentum effect in place. You realize that as you get more efficient at something, the energy burn becomes less.
Mike: It’s kind of like, um, exercise. You know, I, uh, I run regularly. I’m not a fan of running. Like, I’m not, like, I don’t love running. I love the impact of running. But when I first ran, you know, I, I would be lucky to do half a mile and it’d probably take me about 10 minutes. The next, you know, over months. Now I’ve been doing for years. I can kind of belt out a five mile run and probably do it in, you know, pacing at eight 30, maybe even under eight minute mile. Um, but it’s not like you don’t start there. Like your body just becomes more efficient at doing the process. So it’s just a point of start very slow, very small, but do not skip the smallest step and start building from it and your, your mind starts kind of rewiring itself to, to achieve higher levels of output.
Trent: And that whole, that, that one little phrase there, your mind starts rewiring itself. If I could pick just a couple of sentences to describe the journey of an entrepreneur, that one dude would be a big one. I remember, you know, years ago when I was, everything seems so hard and so impossible and your confidence is so low and you just think, oh, how could I ever do that? For years I wanted to have a software company for years it was just this seemingly unattainable goal. And eventually, because I would, I never gave up on the idea, you know, I was able to make it happen. And, and the belief systems that change as a result of consistent action and results, although not always the want, the result you want, but results just the same. I really want, I guess I’m saying this for, because I want the new entrepreneurs who are listening to, and it’s probably even hard for them to grasp because they haven’t been down the road yet, but man, oh man, you’re thinking is going to change so much if you’re only willing to just start devoting time and energy to the pursuit of whatever lifestyle business goals you have.
Mike: Yeah, it’s funny, when I became an author, um, Eh, I’ve discovered is the stick to Agnes. So my awareness about me has really grown in the last year, year and a half. And I’m still not even scratching the surface. The vast majority of your viewers have no clue who I am, nor should they. Um, and, but if we rewind, uh, three, four years ago, no one, and we rewind 10 years ago, I mean minus, don’t meet my own mother, didn’t know my own existence. I think so. Well, I found, yeah, is the only difference from now, uh, today versus 10 years ago and 11 years ago when I started is the stick to witness. I had all the reasons not to keep writing books. I could, I could back the information financially. It’s not viable for me. Um, I wasn’t getting results. It wasn’t driving the impact. I, I, you know, all of these reasons not to do it.
Mike: We’re there, except I do know this, that if I stick with it, the likelihood of success only amplifies. Here’s an example I was talking to, I have a, a a wealth manager. His name is Ron and I was talking to them a few days ago. He says, the most fascinating thing. I said, Hey Ron, I’m thinking about changing, uh, my, you know, stock in cash position, so forth and don’t we talk about, and he said, here’s one thing that’s interesting, Mike. He goes, 90% of wealth is made in 10 days every year. And I said, which today’s, he goes, if I knew that, uh, I would be the world’s greatest investor. He goes, as a stock market changes, there’s usually, it’s the 80, 20 rule, 20% of the movements effect 80% of the gains. So he goes, there’s over the year the stock market, on average, there’s 10 days that represent the 80% of change.
Mike: And wealth is. Then he goes, the key is that you’re in the market when those 10 days happen, because I wish I could tell you when those 10 days are, but those 10 days happen. So the awareness is whatever industry you’re in, whatever business we’re in, we’re not going to have, you know, that concept of, you know, tomorrow’s going to be bigger than yesterday. The concept where people say, I made 100,000 the first year, 200002nd year, now I’m turning into 400 which means I’ll make 800 next year, then 1.6 million, 3.2 Bubba, within 10 years I’m making $1 billion. And I’ll tell you, that is bullshit. That ain’t going to happen. And I’m sorry, but it’s a reality what the spikes were or those good days and business was never on that trajectory. Or rarely do I see that hockey stick kind of thing that people talk about is these ups and downs.
Mike: But I know none of this will happen if you’re just not sticking with the prior assets. So particularly in the beginning, you’re gonna have probably more of those down days. We’re going to have a few of those 10 up days, stick with it, stick with it, stick with it. And it’s that longevity. I think that is the most underrated component to success. It’s just the stick to witness.
Trent: Oh God. Yeah. Now, you know when we were talking earlier about that conference that I got invited to speak at, when I discovered that people wanted to buy us ops, I had missed that one day. I would have made $1 million less profit. I didn’t last two years. That is a life changing sum of money that as life happened because of one day.
Mike: Yeah. Uh, it was it woody Allen says it, you know, 80% of success is showing up. You most days in Entrepreneur, the entrepreneur journey is a tough day or down day. Right, right, right. But if you have the fortitude to stick with it, that positions you have to update. If you say, oh most of the days or down days, therefore I shouldn’t be doing this. You’ll miss all those up moments in made up moment for you is once a year or twice a year that has happened. But it it it’s gonna happen and you gotta be there to cling onto it.
Trent: So your, the books that are behind you, the ones that are on the higher shelf. Right. But you’ve read, I want to shift a little bit and we obviously didn’t talk about this at all in the preinterview cause there was no preinterview.
Trent: Every entrepreneur, e you and everybody listening has days when we just want to not get out of bed.
Trent: Just want to cry, whatever because shit is not working out the way we had envisioned that it would work out. I have days like that on a regular basis and there are days when I think, Hey, I’m super smart and there are lots of times when I think I am just not smart enough. I am not smart enough to get to the level of success that I want, which is obviously not helping my cause.
Trent: So on those days, I’ll journal, I’ll write gratitude, I’ll listen to interviews with other entrepreneurs on other people’s shows. I’ll try and do something to put some good food in my head so I can get the garbage, the self-induced garbage. And that’s garbage out of my head. What do you do? And, and what now?
Mike: Now I know why you’re so young and why I look so old. So I’ll drink, I’ll drink tequila, I’ll watch like a horror movie and I’ll sit with, you know, grumpy with my arms crossed and say my life sucks. Um, not too often, but occasionally. Um, I journal too. And that’s so funny. Like that you said that I kind of snickered. Journaling has been probably the most powerful way for me to relieve stress. And um, what I thought journaling was, was the concept of a gratitude journal where you just write down, Hey, I had a bad day, but by woke up this morning check and you know, like I’m exercising, at least check. That didn’t work for me. I found there was something for me better is to actually write down why it was such a crappy day. Like I didn’t do this and I’m pissed at this and I hate the world about this because what that allowed me to do finally was to vent and alleviate the steam or stress of my own self hatred, my repute, my anger at the world.
Mike: And by releasing that, I had moments of clarity. Um, sometimes, and I went through a really tough bout when I was first writing my books cause it was such a struggle. I was journaling actively and um, found that by just writing stuff down, even though it’s garbage stuff, I’ll never read again. Probably I had clarity for five minutes or five hours or five days. But wherever clarity I got, I was back to work and focus again. And then the, the negative thought starts with soup c a seatback in as back to the journal. And, uh, that’s been probably the most powerful tool to get through the dark phases.
Trent: Yeah, it’s, I s I found that journaling is the world’s cheapest and for me, most effective therapy.
Mike: Yeah. No Dude, I’ve started going to a therapist journal, nothing. It, my therapist journal beats a therapist. There’s no question about it.
Trent: We live in a world where business magazines are covered with, you know, the founders of Unicorn companies and everybody’s getting funded and everybody’s getting rich. And so, you know, we small entrepreneurs, it’s pretty easy to feel stupid and inferior relative to all of those headlines. But what you have to remember is that that is what a tiny slice of the, of the top of the population. And what you also have to remember is, is there’s a l there’s luck in everybody’s story. Mine was to be on stage that day, right?
Mike: Yeah, yeah. I, you know, my second company, we got the Enron trial and people said, uh, how do you get the end mantra? So I had a computer forensic investigation firm and they say, how do you get the Enron trial? It’s like freaking lock. Like, dude, I was in the right place, right time call. I happen to answer late at night. And it’s the law firm defending Kenneth Lay, Andrew fast out and like, we need to hire someone. And I’m like, we’re ready. Um, if I wasn’t there, you know, luck is a massive factor. What would upsets me about the cover of the magazines is many of those magazines are trying to quantify luck. Hey, you want to be the next Elon Musk, you know, start a gigabyte factory for Giga storage revenue to clot thing and do this and do that and do the Elon Musk is lucky. Now listen, he is deserving also what he’s achieved.
Mike: He is a remarkable human being.
Trent: No question.
Mike: There’s no question. And to achieve what he did that is a necessary component. You need to be remarkable. But being a remarkable human being alone does not get you that there are these factors of luck, these outside elements that are outside anyone’s control. I suspect if we analyze every human being, this planet, Elon Musk is not the only genius out there. Uh, not the only one with the same amount of drive, not even the only person with that combination of intelligence and drive and charisma, there’s others like that. He also happened to have luck. He was born in the right place at the right time. You know, and, and, and these other elements came in. So to replicate someone else is impossible to say, I’m gonna be next to Elon Musk and you can’t, we can’t formulate that luck. We can learn from these people. We can take their best elements that, that we can see in ourselves and absorb it. But luck will have to present itself and we’ll need to be in position to grab onto that, like cling onto luck when it presents itself.
Trent: I want to coach this, these comments on luck though by also saying, I believe that you can create luck for yourself.
Mike: Yeah, I agree
Trent: To a certain degree because if you’re just sitting on your couch watching TV, playing video games, hoping to be lucky, well good luck to you cause they didn’t even [inaudible] are going to happen.
Mike: Yeah. That’s the showing. I agree. Like, yes. So luck. You have to be ready to grasp it. You gotta be showing up and you guys seek it out and sniff it out. Um, but there’s this algemeen this, this, uh, this combination of outside of, enters that movie called the butterfly effect, right? A butterfly flaps its wings in Africa. There’s a hurricane tearing through Bahamas today because of the butterfly. And I’m not saying that’s the case, but this movie argues how there’s this kind of rolling ties of events. Stuff is outside our individual control. We can’t control the things that are gonna be coming shooting by out of nowhere. We can just control what position we’re in when it comes by and you want to be ready to, you know, grab onto those things. But you gotta be out there. I 100% agree. We can create luck by being in the position to capture the uncontrollable events outside of us.
Trent: Yup. I’m going to ask the audience a quick question here. So audience, who’s listening, this conversation I’m having with Mike is really kind of going the way. Like Mike and I were sitting on our own in a coffee shop sharing thoughts that two entrepreneurs would share. And what I don’t know the answer to is, are you guys still digging this part of the conversation? So if you’re still listening and you dig it, cause I can do this more on future episodes with my guests and I need to know whether I should. So make sure you comment on the, on the comments or on the social feed or wherever you see this thing. Some way to let me know, hey man, like I was, I was really digging the conversation you guys were having. Okay. Mike, you currently run, I think you said three businesses, right? Same as me. So what are the, what are the three?
Mike: Yeah, so, uh, we have a membership organization for accountants and bookkeepers and coaches is called profit first professionals 400 plus members, international presence. We’ve offices in Melbourne, Australia, uh, office in the amas forts. Now the ones in here, uh, in the U S in New Jersey and a y I really should say I’m a shareholder, so I’m a spokesperson, very organization. I give a strategic direction. Um, my business partner in it, Ron, he operates, he runs the organization. I have a, um, another tr training facility for business efficiency. It’s called run like clockwork. Um, I’m an equity member of it, but it is Adrian Dorsen who runs that. Uh, um, I also have a, uh, coaching organization called the pumpkin planners. That’s after my book. Don Aligns with that. I, so there’s more companies. I, I’m a Kohner and an augmented reality company, shareholder, I should say.
Mike: Uh, give it a sit on the board of that organization. And recently was invited to be on the board of another company. So I participate in these companies more and more. It’s about strategic direction, vision, and kind of putting these puzzle pieces together to support each other and less and less about, you know, the operative side, the, the operations, the Administrivia stuff. Okay. And these opportunities are coming your way because of the books that you’re writing in the following year. Yeah. Right. And that it’s funny how things work. Like I found my passion, like, you know, my career is, I’m an author, I’m a small business author. That’s all I am. And what’s come of this is you, it builds readership and some people approach me and say, listen, I love your books. I want you to be part of my business. Like I want, I want to hear, hear what you wrote in the book.
Mike: I want to hear from your voice. Okay, some people want that. Can we work a deal? And it’s just, you know, an equity position. I was a coner in a manufacturing business for and years. I sold my interest in that for a long time because of the books I wrote. Other ones are my own, my own concepts. So when I wrote profit first it was very clear there was a need for professionals, accounts and bookkeepers to be able to take this concept to entrepreneurs and coach them through the consequences and in bookkeeping and accounting when implementing profit first. And I had that idea, I said, okay, I love this idea. I, I don’t want to run. This idea is not within my wheelhouse. So I found a business partner. He runs that and I, um, I become a spokesperson for that. So they’ve come about in different ways.
Trent: Yeah. So out of the 12 months that are in a year, how many of those months are you actively working on writing a new book?
Mike: Um, so okay, I did all 12 months, but there’s different stages. So actively writing, meaning I can fingers to keyboard three months a year, I’m researching and playing with concepts, uh, probably eight months a year and then one month in just ideation. And it’s not like, it’s not that blown out that way. It’s all over the place. Yeah. But I think one aspect that, uh, I don’t think a reader would just consider from the Gecko is when I write a book, it’s not like I sit down and I just start writing. Um, so most of my books take me five years to prepare. Uh, and, and what it is, is researching out concept, come up with a thesis. I researched it out.
Mike: I actually, we have a training facility here. I’ll invite readers in free. I’ll send an email, blast out the weirdest time, like, you know, three o’clock in the morning on Sunday saying, first 50 people respond, your my guests for free. I’m going to brain dump crazy shit on you. Um, you guys tell me what sucks and what resonates with you. And I start my Guinea pig process. So my newest book, it’s called fix this next two years ago we started Guinea pigging it. Um, and the manuscript now is almost complete. It’ll come out in 2020. So that’s a big part of authorship I think that many people don’t consider is testing thesises hypothesis, playing with concepts, making sure that they’re practical in the world, fully testing out, then writing it, then rewriting it than crying cause like my rewrites tucked in writing again. And then finally, yeah. You know, submitting the manuscript publisher.
Trent: So in to a certain degree that, that sounds to me a little bit like a prelaunch of a product. You’re, you’re kind of peeling back the curtains for a relatively intimate group of people to really find out, do you guys actually care about this stuff? Is this going to add value to your life to test out your thesis as it were?
Mike: That’s right. And it says, yeah, that’s exactly right. And it’s, it’s a very interesting thing because I don’t want, yes men. I don’t want you to come like, oh, I love your stuff. Whatever you do is amazing. That’s the worst. I want people to say. I’m curious, I’m suspect, but still may sell me on it. And, and um, and I want them to give critical feedback. So, you know, the, this group of 50 people I came and ended up putting my most recent buck really ended up being two people. So it was men and women, different type businesses all over the place was two people that got really invest in this process. Uh, one guy was named Jacob Limmer, he’s in South Dakota, he owns cottonwood coffee, this coffee shop and this guy give you feedback and feedback and took this concept that was not clean and over a year and a half just helped me really condense it down.
Mike: There’s another guy named tertiary visit. He’s in Savannah, Georgia. He owns icebound HVAC systems. They are an HVAC integrator. Same thing. Was willing to just play with this concept between those two eyes alone, not class down. These two guys. We’ve got the concept down and then I did another test, another a hundred people roll it out, tested it, feedback, came in solid, then tests it through coaches. So I brought some coaches on board and said, listen, you can coach a whole new concept but your job and you can have a free, but your job is to come back to me and tell me what worked and didn’t work. Rolled it out there some more tweaks while did I get in? Like, Oh, we’ve got it. And then that’s when I started documenting the process.
Trent: Okay. We’ve been awhile. I want to finish up with one last question. Tell me about a day in the life of Mike. What is your typical workday look like? Typically?
Mike: Okay. So, uh, I guess that would be typical. So, uh, you know, I, I’m really regimented on exercise, uh, and, and because I understand to some degree a little bit about my own behavior because.
Trent: What time, what time do you get up in the morning?
Mike: Ah, run six. I never use, no, I’ve never used an alarm clock in the last five years except listen, have how you had your flight two in the morning. I used one o’clock, but I wake up usually around six, sometimes five 30, sometimes six 30, but by six I’m up six 30. I’m either in the gym or running. And uh, I do that. I, I’ve used it. I have the watch on now. This, um, Iwatch, the best, the best tool. Like there’s, there’s, I can’t, I have no excuse not to. I tried to track it. There’s no, there’s no, I can’t convince myself I worked out when I did.
Mike: Yeah. Um, then I, uh, I would go eat oatmeal. Almost got probably the week. I love oatmeal. I love oatmeal so much that when, uh, when my wife and I, we went out for breakfast recently to this restaurant and I look at the menu and I ordered oatmeal. She goes, Mike, cause that’s all you freaking eat. Why did you, Oh, I’m like, I love it. I love oatmeal. So it was kinda weird. So I’m likely eating oatmeal. Um, then I will, uh, we start with a morning huddle here at our office. Um, due to my nature of my work, it’s not necessarily always typical. I’m traveling a lot so I can remotely connect or not, but we have a huddle. It starts at nine o’clock in the morning or nine oh one. Actually I know one, we have our meeting and there’s 14 of us around in a circle and we report what our big intention is for the day, what our accomplishment was, the big accomplishment from the prior day and give a personal update like, you know, how are things going and talk about some new corporate mission, how we’re moving, go over some metrics.
Mike: But the huddles don’t last more than 11, 12 minutes all standing. And then a, I go through my ritual of having coffee and for me it’s very important to socialize my team and I purge that too. I really, the bonding and trust factor that builds out of communication. I think I used to ignore, I wanted my employees to work, work, work, no, I want my employees to spend time. We will sit and have coffee. I’ll have a meeting with one or two employees almost every day just to learn a little more about what they’re doing, to give some insights, a real cheater cheerleader for the business is as I see my most important role here. And then I’ll work on a strategic project, um, be at the new book B, we’re rolling out a and some new software here. I’m involved in that project, um, meeting with my partners, uh, discussing our strategy and plans and then, um, and, and then some communication usually toward the end of the day with readers and fans, um, to keep that going and, and interviews, you know, I think Trent, I gotta thank you for doing this. Like this is, I’m honored to be on your show and it’s a tremendous way for new people to discover the work I’m doing. So I’m flattered and I actively participate in things like this. That’s a typical day and usually I’m done. Usually I’m done you five 30 or six. Um, other days. Other days I’ll, I’ll interview late, I’ll do some calls with Australia tonight. So I was gone until eight o’clock. But usually you know at 36 and I’m heading home.
Trent: Okay. So for people who want to get your book, obviously if they just go to Amazon and type in clockwork, they’re going to find it. It’s a, I’ll put a link to it in the show notes. It’s a blue book with white writing on the front and Mike’s name right into that. Okay.
Mike: That’s one way to find it. Yeah.
Trent: And there is other average rating is five stars. So you must’ve done something right.
Mike: Oh awesome. Awesome. Yeah, so I um, one alternative to if, if I may be so bold is up, my website is MikeMchalowicz.com here’s the shortcut, it’s Mike motorbike.com because no one could spell them Calloway or pronounced motorbike like motorbike there.
Trent: I should do that, cause I have a horrible last name as well. And that’s why I use bright ideas as my,
Mike: Yeah, I would do like, I would do Google, go to some domain by get bent on Trent. Like you know, these, these rhymes or pneumonics are very easily to remember. And so you know, go to Benton on trent.com like I will never forget that now, shockingly a bitch, a domains not owned so go get it. But Mike Motorbike was my nickname in high school so I and I’d never driven a motorcycle. So go to Mike motorbike.com that that forwards you to my website. All my books are listed there. You can get every book, I think two or three chapters. Minimally a as free downloads. I used to write for the Wall Street Journal. Those articles were there. I’m a podcaster and a blogger and a oyster dudes. Click on, get the email@example.com and it gets you access for free to all that stuff.
Trent: All right. Awesome. Mike, I’ve thoroughly enjoyed you. I would love to be able to hang out. Yeah, I wish she lived closer. We got to.
Mike: Yeah, I know. Well next time our paths will cross. We got to do that.
Mike: Yeah. It’s throwing back Tequila. You’ll be drinking water. You’re flowing hair. My Bald head. It will be a real joy.
Trent: I’m going to be drinking water dude bod cause my drink.
Mike: Oh there. Okay. Okay. All right.
Trent: Well here, here in Idaho we have this thing called huckleberry vodka. I have not been able to find it in any other state and it absolutely tastes delicious and you don’t get hangover, which is great.
Mike: Oh, all right, next time we get together huckleberry vodka is Samantha, Matthew and Idaho. Um, next time I’m out that way, which I get up there, so.
Trent: All right, cool. Well thanks very much for coming on the show, Mike.
Mike: Thank you Trent.
Trent: To get to the show notes for today’s episode, go to bright ideas.com/ 282 if you enjoyed this episode, I have two small but very important requests. Number One, help another entrepreneur, another entrepreneur, discover all of the golden nuggets by sharing this episode on your social profiles or wherever else you would like to. And then number two, if you would take a moment and head on over to the bright aqua rather to the iTunes store and leave us a five star rating along with your comments, man. Oh Man, I would be eternally grateful for that. Thank you so much.
VO: Thanks very much for listening to the broad ideas podcast. Check us out on the firstname.lastname@example.org. All right, show’s over. I’m tired.
Questions Asked During the Interview
Today’s interview with Mike is a little more free form that many of the interviews I do and rather than spoil the surprise, I want you to image you are eavesdropping on two successful entrepreneurs sitting in a coffee shop talking about what is working and what isn’t.
Mike Michalowicz is the entrepreneur behind three multimillion dollar companies and the author of Profit First, Clockwork, The Pumpkin Plan, and his newest book, Fix This Next. Mike is a former small business columnist for The Wall Street Journal and regularly travels the globe as as an entrepreneurial advocate.