185: How Licensing Helps Serve the Queen Bee Role + Stop Keeping up with the EntrepreJoneses with Mike Michalowicz

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You because it is the entrepreneur Joneses. There's so much bullshit going on. There's so much, so many people. Their stuff is just chalked up with ego and artificialness and maybe not even with negative intent or harmful intent, just with proud full intent. And then the next person says I gotta do that plus some. And then it's such a dangerous trap.

This is your time. How can we earn twice as much in half the time with joy and EAS while serving the highest good? That is our guiding question here at the Freetime Cafe, your home for heart based business. I'm your host Jenny Blake. Join me for conversations with authors, friends and fellow business owners as we explore ways to free your mind, time and team to do your best work. Now onto today's show.

Welcome back Free Timers. I am excited to bring you an episode from the Pivot Vault today. This is a conversation with one of my longtime friend tours, Mike Michalowicz, who I have learned so much from over the years. This episode in particular keeps bouncing around in the back of my mind. This is when we recorded on February 5, 2020 and the episode launched on March 20, 2020. In fact, the last group gathering that I attended before everything shut down was Mike's in person Fix this Next workshop at his office in New Jersey on Friday, March 13. Boy, was the world about to get weird. We recorded this and it released in a limbo time and it was just so many gems of advice and things that I've carried with me to this day that I wanted to share with you here on FreeTime. A few quick notes before we dive in. We recorded this on Zoom so the audio quality might not be quite what you're used to. This was a live book club call for my private community for heart based business owners. That is one that's been going strong for over eight years now. @ the time of this recording you'll hear us reference it was called Momentum Momo for short and it has since transitioned with the launch of freetime to bff. We meet twice a month with a community forum for exchanging ideas, feedback and best practices, and we have a private podcast feed where I release bonus content every month. Recent bonuses include how to develop your own unique decision criteria, a special guest workshop on trademarking and protecting the IP in your business, and how I've been experimenting with ChatGPT to help me draft podcast episodes. If you want to learn more and join us, we would love to have you visit itsfreetime.comBFF and if you apply promo code podcast, you'll get 50% off your first month. That's itsfreetime.comBff promo code podcast at the time Mike and I had this conversation, he was just releasing his book Fix this Next. He hadn't yet re released, revised and expanded, but you'll hear us mention Clockwork as well and we talk about his process for writing. So his writing partner AJ Harper also had a book come out. It's fantastic. It's called Write a must Read Craft a book that changes lives, including your own. I'll put that in the show Notes other juicy topics that we talk about in this conversation how to identify and serve the queen bee role in your business and why it's not you yourself. The cliffhanger phrase that freed up even more of Mike's time to write and speak how he serves his qbr his very unique approach to IP licensing around the books that he writes and publishes, guinea pigging or testing new book ideas how to avoid trying to keep up with the entreprenese, one of my favorite phrases and the secret to publishing eight books with several more on the way in the last 15 years. Last but not least, a little bit about Mike in case he's not already on your radar. By his 35th birthday, Mike Michalowicz had founded and sold two multimillion dollar companies. Confident that he had the formula to success, he became a small business angel investor and proceeded to lose his entire fortune. So he started all over again. Driven to find better ways to grow healthy, strong companies. Mike leads two multimillion dollar ventures as he tests his latest business research for his books. He's a former small business columnist for the Wall Street Journal and business makeover specialist on msnbc. He is the author of so many of my favorite business books, including Get Different Fix this Next, Clockwork, Profit First Surge, the Pumpkin Plan, the Toilet Paper Entrepreneur, and even a children's book, Money Bunnies, which I also adore. Without further ado, let's dive.

In.

What the essence is and the Kind of the secret behind the scenes here. Every book I've written is something that I get inquiries from readers about. This is the big. And I also need for my own business, like, I needed to figure out how to be profitable in the worst effing way. I needed to figure out how to run a business efficiently and implemented it. And what I found is when you write a book like you wrote pivot, when you write a book like you got to live by those principles, otherwise you're seen as a.

Charlatan.

Right. Maybe that's not the right word, charlatan. But like, if I'm not doing clockwork, people like, why could you imagine? I don't use profit first my own business. But yeah, everyone else say that I don't like, I live by every book I write. So it's become this ultimate enforcement mechanism for fixing the things I need to.

Fix. I 100% agree because the book kind of chooses you at the same time. It's a soul thing. And you just sign up for that front row seat to whatever that topic is. If you thought you were an expert when you started writing the book, just wait and see what shows up in life and business during the book writing journey. Because that's when it really gets locked.

In. It's so bizarre. I'll be writing and then I'll have to start researching things. Because you need a story.

Right? On that note, you researched beehives.

And. Yeah, I.

Did. In Clockwork, the central metaphor is a beehive. But more specifically, finding one's own queen bee role. What's the role that you and only you can do? Your unique genius. And I love how you say in that book the queen bee role is a role. It's not a person. It's not. So I, Jenny, I'm not the queen bee. Even though it feels that way of my business. I'm in the queen bee role, similar to you, of thought leadership and big ideas and smart simplified systems and strategies that really make a difference. So we're very similar in that way. And I've watched you on this journey in more recent years. You've recognized that your queen bee role that you're serving is really ideas and books and specifically ones that have super practical tools that help eradicate entrepreneurial poverty. I'd love for you to talk about making that transition for you as a business owner and how you've structured your life and your work to honor that role for.

Yourself. So the queenview role, you nailed it is not a person and it's not even There our own individual zone of genius. It's really what the organization's zone of genius is, which in a small business is typically the owner. So they run the parallel. But a certain point, if we want to leave our business in respects to having as a job and be a true owner, the business needs to own that zone of genius. By the way, it's called biomimicry. Biomimicry is where you look at mother nature and you translate what she's done back to business or some aspects of your life. And the argument the power of biomimicry is mother of nature has spent billions of years figuring out something. Instead of spending 10 minutes shooting from the hip, why don't we take billions of years of research and employ that? Bees are very efficient at scaling. And the critical role, or the queen bee role of a beehive is the production of eggs. That's what matters. And the confusion with queen bees and also in businesses, oh, that means the queen bee is the most important bee, which she's not. She's just serving the most important role. If she fails to produce egg, they will spawn a new queen bee and get rid of the prior one. So in my business, as I do this for myself, you know, you're written a book, you're held accountable to your own book. We looked at our queen B roll to identify what is the promise of your brand? What's your company promise to the world? It's got to be a singular promise, the biggest promise, the guarantee, the commitment or whatever you want to say. And so as an author, for me, I realized that my commitment is to make entrepreneurship simpler. Simpler to simplify the journey. So entrepreneurship made simple. I even have that on my website now. That promise, I asked of all the things that our organization does, what one activity and the QBR is always a singular activity, what one activity most supports that commitment to our clients? And for me, it's writing books. I need to write books that make entrepreneurship simple. Now, just like you, I use public speaking. I do podcasts, we send out drip campaigns with videos and a little bit of content here and there. All these things are contributing to making entrepreneurship simple. But of all of those things I do, only one can be the most important. And so I could say it's writing books. I could say screw writing books. You know, no one really reads anymore. I'm really going to crank up my speaking engagements. I'm really going to be just speaking all the time and I'll write books, but it'll be crappy because I'm not going to spend time on it. I would argue in that case, I've now compromised my qbr. I'm saying let's not produce eggs anymore. Let's just live in the beehive. I will start to very quickly get a reputation as a bad author or poor author. Like, oh, these books are hack jobs put together. Yeah, he does public speaking, but his books suck. And my career, my business over time would start to degradate and then die out. So the QBR provides the survival mechanism for the organization or the thriving mechanism, but the flip scenarios too. I could say I'm going all in in the book actually. I'm going to stop speaking. I'm not even doing more podcasts. I'm going to write life changing books. Every ounce of my energy there. I'd argue my business may not scale the same way, but because I've devoted myself to writing excellent books, the heart of the organization stays constant and therefore the organizational sticker ran out. So it was that realization of the importance of books. There's one last part is I've also realized I paid myself in the corner because I'm the one writing the books. And if I'm the one writing the books, the day I stopped doing it, the organization stopped delivering us qbr. So I can make two choices now. I can continue to write the books myself or I can find a way to do it alternatively. And one option is ghostwriting, but meaning you hire someone else to write your books. But it's just so inconsistent with who I am that the authenticity would be lost and the books would not be quality. So that option's out. I discovered another option. There's these book series, like the Four Dummies series, for example, and they're written by different books but under one genre. So I'm like, oh, I could write the four Entrepreneur series. So I gave him my first stab at this. I wrote a book called Profit first, as you were talking about earlier, and now there's three or even four published derivative versions of Profit First. There's Profit first for attorneys, Profit first for contractors, Profit first for E commerce providers, written by different authors under my brand, but required 1/1,000th of the effort because it was just giving them a little bit direction on an outline and they're Officer Races. But I still derive the core deliverable. I'm still benefiting a community now a specific community is still expanding. The brand is still generating more revenue. I don't have to do the work myself. At the end of the day, we have to make a choice. Once we identify clearly what the QBR is, do we want to serve it ourselves, which keeps us trapped because you can't grow beyond that. The company is stuck. Or are we willing to release the QBR for other people to.

Do? This has been so interesting to watch in your journey, at least from what I've seen the last few years where you almost now have these sub.

Businesses.

Yes. So there's a Clockwork business, there's a profit first business. And now I see you shaping the fix this next business. And I know you, Mike, have a shell company called Obsidian.

Launch. I.

Do. But what's it like running all these sub businesses? Or have you taken yourself out so effectively that other people really own them and you have some kind of revenue.

Share? I have in the different businesses, to different degrees, have removed myself. I will tell you the ultimate shortcut to do this, but may I say that's a cliffhanger. It's actually just a changing of one word which has been of the greatest impact on me and how my businesses operate. Literally just changing one word. So I'll share that as my big cliffhanger. My business is I don't operate them. For every business there is a president, including from Obsidian Launch, which is just a simply a shell company. So I wrote a book called the Pumpkin Plan. They're the company that acquired the rights and gave me a licensing fee for that and then paid me a percentage of the revenue. My sole responsibility back to that organization is to sell as many Pumpkin Plan books as possible because the greater the awareness from the Pumpkin Plan, the more consultants they bring on private first. The exact same arrangement, a little bit different. I actually have equity in that business, but that was just how we had to structure it. But there's a president for that company and that person's responsible. His name's Ron is responsible to grow prop first to its greatest effect. And I share in the revenue. And Clockwork, which has been the most efficient, no coincidence there, but the most efficient transfer of a business. The license for Clockwork is acquired by Adrian Doris, entrepreneur in Florida. And they'll run like Clockwork, her own organization around the license and their first full year into it, achieved a million dollars in revenue by providing training classes around Clockwork. They did. They buy the license, there's a front fee, and then pay me a percentage of revenue in perpetuity. And my job is to simply promote the books because on the more the platform grows and the more awareness is around by that stuff, someone reads a book but then the first question people have after reading a business book is am I doing it right? People read profit first. Okay, I read profit first, but am I doing it right or am I even doing it? I read Clockwork. Am I doing it right? So these training companies and consulting organizations become the atlas for it. And the last step was with Obsidian, which is the holding company for all the different books and licenses in certain I call pet projects or guinea pig projects because I'm writing a new book now and we need to start guinea pigging it today. And so Obsidian is the test bed for it and we're doing activity around that. That company has a president, her name's Kelsey Ayers and she runs the company. The day to day operations, the hr she leads all of. Here's the cliffhanger. So I used to call myself an entrepreneur. My favorite word, it still is my favorite word in the English language, but the word entrepreneur has become so bastardized with hustle and grind and hard work and sacrifice and all this stuff. It's become the perception of entrepreneur is the polar opposite of what it was. An entrepreneur is someone who organizes the resources around them to achieve a vision. So they organize their employees. If you have some, your clients, your vendors, your technology, all that stuff to achieve an outcome that you have set. And that since this now has turned to hustle and grind, I'm like, I don't want to be the person carrying the business on my back. I've taken on a new label and a shareholder. This is what I'm now challenging entrepreneurs Jenny to use. And I challenge you too, Jenny. Next time you're like a cocktail party or something, don't say I'm an entrepreneur or an author or any of these things. Say you're a shareholder in a small business and watch that person spit out their tequila gimli going, what.

The hell's that? And my response when I started saying this was the same. Like, I don't even know what I was just said. But what a shareholder is like, I own stock in Ford. When Ford sends me a distribution check, I don't go back down to Ford and say, hey, I got to work for this. I got to work a few hours. What I do with Ford as a shareholder is I simply render my opinion through votes and then they send me a distribution check. Well, that's what my business is. That's what I want my businesses to do, that I render influence over them. Direction, ideas, thoughts, boats. And then the business returns a paycheck to me. I don't want to be working within my business. At all. And so that by changing that term, I've started to behave more and more consistently with that. Now, one last thing. The beautiful thing about being a shareholder in a small business is you have the right to insert yourself in the way that gives you joy. And I love to write books. I love doing the call we're doing right now. I hope people are getting value, but I just love bullshitting and talking about this stuff. And so as a shareholder, I have the freedom to do what I want, when I want within my business, but I'm not beholden to support my.

Business. That's such a powerful change. And I can see exactly how you've made that transition. And even how you define financial freedom is that you've accumulated enough where your money makes money. And that hustle, grit, grind, as you call it, trying to keep up with the Entrepreneur.

Joneses. Are you like.

That? Yeah, I loved that. I laughed out loud like, oh, Penguin wanted to cut that out.

What? That's not funny. I think we had the same editor. Yeah. Writing your book. So the funny thing is, they're a wonderful company. I love them. And my editor was extraordinary. The thing is, they're not entrepreneurs. So when I saw that, they're like, no one will know an Entrepreneur Jones.

Is. I'm like, oh.

Good. I'm like, it's this need that. This necessity we have as entrepreneurs to keep up with more than just our neighbors. It's the other entrepreneurs you can never satisfy. Like, you don't get that or. No, we don't think anyone will. I said we're freaking keeping it. So that are like 10 to 15 things that I fought for to.

Keep, thank goodness, because those little bond mats or make your books so funny and personal. And Entrepreneur Jones is. We talk about this in momentum all the time of looking at what other people are doing and trying to pull back from other people's launches or best practices.

Or. Oh, my God, it's the worst thing to.

Do.

Yeah. Because it is. The Entrepreneur Jones is. There's so much bullshit going on. There's so much, so many people. Their stuff is just chalked up with ego and artificialness and maybe not even with negative intent or harmful intent, just with proud, full intent. And then the next person says, I got to do that, plus some. And then it's such a dangerous.

Trap. I don't have to tell you. You wrote profit first and you say it again and fix this next, that the definition of profit is cold, hard cash that the shareholders. There's that word. Can use for themselves. In any way they want, such that using it will not negatively impact the continued healthy operations of the business. As a long thing for me to weave in to say that so much of the entrepreneur jones is people are reporting top line revenue, not profit. Look what happened with we work. You can earn $1 billion, but if you spend 2 billion, you have no profit. You're in the red. And that does not get clearly stated on a lot of these online.

Businesses. Of course, I know it literally is that simple. It's the revenue and the money left over to the profit. And we think there's a lot more complexity. But if you make one bill and you spend two bills, you're done. Stick a fork in you. Where I think also is people don't understand. I didn't. So let me. When I say people, I'm talking about me. I didn't understand that sales translates directly to stress. And here's what I mean, here's the effects. I'll tell you how it gets there. So the more sales your organization has, the more stress out the owner is. Inevitably in the most cases, if they haven't mastered profit. It's a short thing. Here's the reason. Sales translates to organizational responsibility. The more stuff my company sells, the more responsibility put on my organization. You know, I have to deliver on the goods or services now. Well, the more goods or services I have to deliver, the more weight the entrepreneur carries because most entrepreneurs are in the grind and hustle mode. So more sales, more organizational stress, which means more owner stress because they're the superhero swooping in and which means the owner is going home having near heart attacks. And we're literal heart attacks. The problem is we're ignoring profit. And many businesses think that we can sell our way to profit, which is even worse. We're saying we can stress ourselves out even more and one day some profit will magically arise. So I'm not impressed. I used to be. But I'm not impressed when the company says I do 1 million or 10 or 50 or 100 million. Actually, I just had someone in my office, I go with $3 million company and listen, I don't roll my eyes and say, ooh, like, you know, I don't think they're bragging. They just told me the fact. But I'm like, I asked him, I said, hey, what's the real number? It was funny first and says, I just. $300 million coming, like, oh, that's great. I said, I'm really curious about the real number. How profitable is. They're like oh, it's a shit year. We're not doing so good. I'm like, oh, okay. So the reality is you have a business that's not doing so good. Now that's something we can work with and resolve. But if we hide behind the gross revenue, it's just a fog, it's just a smoke.

Mirror.

We'll be right back just after this.

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I had this aha when I was reading Clockwork. But you really said it explicitly in Fix this Next and in Fix this Next you say, you know, the DNA for all businesses is nearly identical. It's the same problems with the extra zeros at the end. And you said when it comes to marketing and branding, different is good. But in the basic structure, all businesses have the same.

Biology. That's.

Right. Now, 2019 was my big year of stepping back, restructuring, creating more systems, more scale. Clockworking. Right with EMYF revisited. Built to sell Clockwork. You know, I had this really powerful combination of books and I have to say, Mike, I got a little deflated at one point because I'm like, I've been here struggling for eight years to do something that is already outlined in every single one of these books. That my business is not unique, it is not different. What the hell have I been doing for these last eight years? And I was just kind of honestly embarrassed that I worked at a company that is one of the most successful in history. Why couldn't I figure out these departments for my own business? I was frustrated. So now you're turning into my business therapist. But I know you shared a story, a similar one of a guy that been in business 13 years. That was like, yeah, why do we struggle if all businesses have 98% same.

DNA? Yeah. So you're very human. That's the label. We all do that. And the reason we struggle is it's human nature to throw complexity at difficulty. So when we are not achieving a result we want and the time we want, we will throw complexity at it, saying, oh, I haven't achieved the solution, where actually we just haven't had the persistence or patience. So a lot of businesses throw complexity. The second thing is it's human nature to get into routine, which is then habit. And habit is a very comforting thing. There's a phenomenal book by Charles Duhigg called Power of Habits. He talks about this click whirl process we go through and basically we'll do a behavior repeatedly because there's always a reward, even if the reward looks like a negative consequence. Like, so if someone smokes, I think she used that example. Everyone knows if you're a smoker, the consequences ultimately you're demise, you know, in potentially a horrific way. But the reward, of course for smoking is not the long term considerations, that is the near term. It's like, oh, a little bit chill, but relaxed maybe cool. Whatever the psychological benefits are, there's always a short term reward. So in business struggle, there's a short term reward. A lot of us that are in this kind of superhero mentality where we swoop in and do things. You get that pat on the back from someone in the office or you give yourself a pat on the back, wow, I swooped in and saved the day again. So worst thing you do for your business, long term because it's so dependent upon you. I swooped in and fixed the day again. So I give myself a pat on the back. So many of us get stuck in that pattern. Then to get out of it, we say, well, I've been stuck here so long, if I want to get out of this can't be a simple change, it has to be complexity, because we always default to complexity. So the only way to support complexity is by saying, well, my business is so different, so odd, no one can figure it out. And that's why I haven't figured it out. And so put all these justifications and reasons, what I found in my research, both anecdotal and technical, that I would say 99% of businesses, all businesses are identical. So you could take a pizza shop and you could take a proctologist and you could take a manufacturing plant, and I would say 99% of the process is the same. They're all actually manufacturers. All of them are taking an input of ingredients. Be the patient, could be the dough, it could be the items. It's going through a sequence of activities and then delivering an end product or emotion. So the end product for a consulting business, like if I'm an accountant, what I'm delivering at the end of the day is maybe not a physical manufactured product, but I'm definitely creating an emotion of confidence, of direction or whatever the sensations are. And it's the 1% that is unique. But unlike humanity, if we did the biological makeup of me and you and a thousand other people at the most molecular level went through all of us, we'd see that we're not going to percent the same. It's only the 1% that we see the difference. Oh, male, female. Because you can see the external effect of that. You can see the skin color, height, weight, but that's literally the 1% of the difference. But that's the visual outward facing part. If the businesses are the same, when we look at em from outside, we see the 1% different, the weight, the sex, the skin color. And we place this judgment of that's a very unique business, it's very different. And even internally say we're very unique. Every person's unique. And the reality is that's bullshit. People aren't that. I mean, we are unique in the 1%. There's a massive amount of differences there. But when it comes to the essence of the human makeup, we're the same. When it comes to the essence of business makeup, we're all the same. And the advantage here then is for humans, medicinal care for the same. If you have a headache, everyone can take an aspirin or an ibuprofen. Like it works for basically everybody. And the reason is because we're all made the same. Could you imagine each person was unique and if they had a headache, they had their own medicine would ever work. This is true for business too. When a business has its proverbial headache, the medicinal solution is the same. It's aspirin or ibuprofen, it's the exact same thing. So we just have to be careful about how jaded we are about what we see on the skin of a business and really appreciate that we're really all.

Identical. Momentum is a community for heart based business owners. And so I talk about the difference. Oftentimes our businesses are not started with scale in mind, ultimate scale or even being a shareholder. It's a personal need connected to a personal mission. And at least in my case, I was delivering services for the good first half of the business prior to pivot coming out. I was coaching, I was speaking. And as you said, even though I couldn't say this at the time, all those sales translated to me delivering more rather than working on the business, which is what 2019 was.

About. You know what's so funny is many businesses are founded with an ideology. Maybe that's a version of a heart based business, yet we skip to that component. So in fix this next I had those five levels of the business hard group need. And I would say when it comes to that ideology, we're talking about the impact level, the legacy level. But before that comes sales and profit and order. And many businesses skip that. Now in the most common or traditional definition of a ideology based business, I think of not for profits and we want to eradicate cancer, we want to help homeless people. And they have this ideology. Well, they skip this impact they're having on their community right away. But they ignore sales which were not for profit is donations funding, right? That's like sales. They ignore profitability. And I've worked with not for profits. It's astonishing how they don't grasp they have to be profitable, that that is their sustainability. They got to run a business that actually is able to retain money to support the doors, the doors being open in the future. And they don't work on efficiency. What they try to do is they build this massive ideology and it's like building a structure. If you're going to build a five story structure and you start building this massive fourth floor, but there's no foundation and there's no first, second and third floor to put it on. When you drop the fourth floor on thin air, it comes crashing down and everything smashes. And that's why the failure rate is so high for not for profits, but that's why the failure rate's so high for profits because they also go in with an ideology, ignoring the necessity of sales and profit and organization order. I would argue these hard based businesses, the impact you're having is so important. But you can't do that without these other elements. They're a necessity. And the greater the impact you want to have, the greater you have to be at sales and profit and order. And if you ignore those components, stick a fork in you, it's just a matter of time, it's just a matter of time before it's going to.

Collapse, right before it'll collapse or you, the founder are burnt out and resentful. You know yeah, absolutely. And it's not sustainable. The business hierarchy of needs is a pyramid that Mike has translated from Maslow's hierarchy to your business. And just to recap for listeners, in order, it starts with sales. Without that you don't even have a business. Profit, order, impact and ultimately legacy. And what I love actually related to this is that the first question of the whole pyramid is lifestyle congruence. Do you know what the company's sales performance must be to support your personal comfort? Not just to survive and live paycheck to entrepreneurial paycheck, but to support personal.

Comfort? Yeah. I got a call from Jacob Limmer. I don't know Jenny, if you do this when I'm working on a book, I invite in my readers toy gratis. I mean they gotta pay for their travel, but invite them in for a day or two even workshop. I tell them I'm sure my most raw thoughts and ideas and, and I want you to be guinea pig and experiment with them. So it could be good, it could be disaster. I want your critical feedback. So I did this as I was writing Fix this next I think about 30 people showed up and Jacob Limmer is sitting there in the back. He owns a roastery which ironically he I mentioned in the book. He mocks the name of roasteries even though he owns one. He makes coffee and he owns two coffee shops in South Dakota and they've been around for I think it's 13 years. And I talk about this lifestyle congruence and the necessity to correspond the sales of an organization back to the founder or owner's needs. And my argument is the reason business owners start a business is typically for two reasons, either one or the other. In most cases I found it's a combination. One is to do something that brings them joy. So as a heart based business, you experience joy as you are of service or of impact to others. You get joy out of the work you do as you experience it, as you see the effect it's having. Second part for most or all business owners is then the impact on their financials. The definition of that could be financial freedom where we don't need to worry about day to day survival. So it could impact or to be of service and to experience financial freedom. And I said to you, to ensure this financial freedom component, you need to know what do you need for your base survivability? The base level of comfort actually. So you're not worried? I'm not saying like if you could make all the money in the world, how would you spend it and all the things you do with it just to support your current lifestyle as you define it as comfortable, what is it? And Jacob being such a great student, he goes, you know, I'm going to do this. I don't believe in it. And he reported it back. Just his thoughts about hemming and hawing and like, this is bullshit. And they go, I've been in business for 13 years. I really have to figure out how much I have to make at home. But every time he went through to fix this next analysis, it kept on pinpointing, you don't know what you need for your home. And he came up with what he called the Midwest lifestyle. He lives in the Midwest, South Dakota and in that. And he's got a family, I think of two or three kids, $4,000 a month as adequate to support a lifestyle of base comfort for him and his family. Roof over the head, food on the table, enjoying the basics of life. And they call that number Midwest comfort. You know, in New York City, probably a different number. But he goes, that's my number. He goes, once I had that. And then I correspondence to sales. He's like, oh my gosh, our sales are actually at the right number. Like, we have enough sales to support this. I'm just not extracting the profit. So it gave him clarity by doing that first step in the sales level. He then realized he had no other sales issues before this. He kept on simply saying, I need to sell more. I'm not making up, I need to sell more. Once he realized what he needed truly to make, then he realized the sales are adequate to support it, but the profit isn't there for some reason. And he moved towards the profit level and subsequently resolved.

That. And as you said, when we mistakenly think sales are the problem, it actually creates a tremendous amount of more work for the entrepreneur and for the business. And.

Complication. It's the most common response, instinctual response, that owners say, I need to sell my way out of this. And that's what my gut's telling me. And what I found is that our gut is a really bad compass for a business. For our own self preservation, I think it's actually very effective. But for business preservation it's not. Because if you look at it from our own vantage point, like you are neurologically wired into yourself. Like you, Jenny Blake, if you're walking down a dark alley and all of a sudden you feel the heebie jeebies that you're going to get murdered, please turn around and walk out. Because your senses, sight, smell Touch. All those things are triggering to give you this emotion saying, you know, fight or flight. Well, go. But we're not neurologically wired into our business. So when we get the heebie jeebies about a business situation, we are neurologically wired into the business. So we make this assumption. And the easiest assumption is we need to sell more. Not profitable. We need to sell more. Not efficient enough. We have more sales. It bring about efficiency. Not having enough impact on sport. We need to sell more. Entrepreneur after entrepreneur reverts to selling more, which adds more organizational stress and actually puts the company in a more dire situation than a healthy.

Situation. I want to open it up to Kevin, who's here at Live in our Momo book club. Over to.

You. My name's Kevin Joseph. I'm the host of the podcast Talk Burnout with Kevin Joseph, where I talk to experts about ways to avoid and overcome burnout. My favorite parts of the book were the case studies using the Omen method, which I thought was a very practical way of looking at business problems. Talk a bit about how you came up with that method. Omen is a consolidated version of Smart, but smart was designed to encompass also personal goals. And this is about specific business goals, where there's a team element in smart, which stands for specific, measurable, think, attainable, realistic, and timeframe. So Omen was designed for consideration of a team. Here's what it is. Once you pinpoint the vital need of your business. We're having a problem with our conversion. We get enough prospects, we should have enough prospects, but they're not converting. We have a conversion issue and to making these prospects clients. That's the problem. Then you do Omen, which is the objective. Well, the objective is to increase the conversion, but we would give it detail. So say I'm getting one new client a month. I want to get five new clients a month because that would put me in congruence with my sales objectives once I understood my lifestyle ruins. So I need five new conversions. That's the objective. The M in Omen stands for the measurement. How are you going to measure it? And I already kind of specified it. As I was saying, the objective, which is five new clients, we're going to find it by a client. But you give it more specificity. Now once the client makes the payment. So five new clients who've paid, that's the clear measurement of the result. E stands for evaluation. And it's really just getting a frequency. What I found in some businesses is we don't set it frequency to check in on Our numbers. So it's arbitrary. It's like, oh, how are we doing on sales? Like, that's literally the conversation periodically or randomly. So with the evaluation method, we're gonna say every week or every day or every hour or every month is the frequency. We're gonna check in on it. And maybe for this, where we're looking at how many clients we engage a month, maybe monthly is the right setting, but for something like website traffic and you have a thousand visitors a day, maybe checking every hour is better. I make a change within the first hour. Should we start seeing the impact that has. If I wait a month or two and that change was not effective or is negative, well, holy cow, I'm in trouble. So E stands for evaluation, frequency, and then N. Nurture is the involvement of the team. How can we allow ourselves or how can we get insights from our team to drive better results and give ourselves the flexibility to set new objectives or new measurements? One problem I see people do is they write the company's going to achieve a million dollars more revenue this year. And they arrive at it, however, and then the business is clearly not making that well. They then just say, well, we didn't achieve our goal, the nurture goal. The nurture objective is to say, well, hold on, we're not trending toward a million. Why? What's going on? Is there something wrong? Or maybe something right is the way it should be. We need to set a new measurement. Maybe say that million dollars additional revenue was not the right setting. It should have been 250. And we realized because this reason and setting the new goals, a lot of these goals are so static that the result is either we achieve it or we abandon it. And that's a problem. It should be either we achieve it or we determine why we're not achieving it and then reset it. And that's what nurture is about. So it came out of studying these other goal setting methods. And this I found to be the best way to involve a team and to simplify goal.

Setting. Thank you for going through the Omen method. And you also mentioned something I just want to pull out and highlight, which is the whole point of the book. Fix this next is about identifying the vital need. And you say the weakest link in a chain. If one link is about to break, the whole chain is going to snap. And that's often what's happening in our.

Business. It's pointing to the weakest link. So I talked to one company. They were a $25 million revenue company. They were a. I think a $6 million in profit. Right? That's the number that matters. That's a 20% profit. So it was impressive. And they were just trying to fix everything at once. And I taught this process to him and the owner, his name was Mike too coincidentally came up and said, oh my gosh, we gotta find our weakest link. And he then emailed me the next day and just determined it was in concept of role alignment. I talk about that in the book too. Of getting everyone matching their talents, their capabilities to the tasks that need those talents as opposed to matching people to titles. Your reception, your president, your sales. No, matching people to their talents. And the impact has been extraordinary on the top line. But also just the engagement of his employees where before you try to fix everything, it's just back to your point. It's that one link, that one resolve will strengthen the entirety of the.

Chain. Absolutely. And I'm with you. I say on my team I don't want anybody doing work that drains them. If you don't have the work, I'm not going to take it personally. Let me know. We'll solve the problem. We'll delegate it. We might get rid of it all together. Yeah. There's no reason to have talented people miserable.

We'll be right back just after.

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Sarah Santa Croce of the gentle business revolution submitted a question. She said I loved the book and especially the last part on heart least promoters. It's the only way forward. I'm curious, what are your thoughts on the company of one? That's a book Paul Jarvis wrote and do his systems to your systems Mike apply to that concept. What do you do with people who want to stay small and company Company.

One. I have to. I have never that book. So shame on me. I have to presume it's about solopreneurs just based on a title. Pretty micro business.

Right?

Yeah. So I think the size of a business and the size of impact has no direct correlation. And shame on me if I ever felt that way. I believe the Smallest physical size business is going to have the greatest impact. And you've seen this, right? You've seen this in individuals that have this heroic impact. I'm just taking arbitrary names and no religious focus but Gandhi or Mother Teresa. And you know, I would argue that Mother Teresa probably ran like 100 million to a billion dollar practice fair in collecting donations, serving the poor, serving a community. So they were business people, but their operations, at least very rudimentary understanding of the impact they'd done and how they did it was an individual, but they all had one big component and it was a big mission, a big purpose that others wanted to be involved in or supported. There's a lot about leadership. Everyone's a leader. Everyone and their mother is a freaking leader today. But I would argue that we all really thirst to follow. I do, and I think we all do. And I don't mean that in the negative contents, which sadly is perceived like a follower. Oh, you're sheep. Like, oh, you get pushed around. No, I want to get involved in something that speaks to me, but without having to create it, invent it, support. I just want to contribute to the way I want to contribute. And so when I started this, when I really got clear on my own purpose, which is to eradicate entrepreneurial poverty. Entrepreneurial poverty is that gap between this perceived success entrepreneurs have and the reality of the struggles. A gap that I call entrepreneurial poverty. And I committed to close it. As I speak more and more about that and do more and more work around it, there are more and more people who are getting involved in supporting it. Last Friday I did a keyNote on profit first, yet I think seven keynotes on profit first were delivered that day because there was other people speaking on it. Two clockwork presentations were done by Adrian Seaman and so forth. Some of us people were speaking on Punctual Plan, the work I was doing, but they've taken ownership over it because it's not about Mike's book, it's about this mission to eradicate actual poverty. And these people want to follow in a system that's already been developed. They don't want to recreate the wheel, but see it. Part of their life's calling is complementing this arena. They want to complement it by leveraging the system that's out there. So to answer this question a little more succinctly, hopefully, is it's not about how big the business is, it's how big the product purpose is. And that has great impact at the.

Purpose. I've always wanted to stay small, but Mighty. And sometimes systems and a team actually help serve that.

Purpose.

Yeah. And so it doesn't have to be overly complicated like growing just to grow or just to keep up with the entrepreneur joneses. But for me, at least I did hit a point where I just wasn't able to have the impact and scale and reach without getting a little more sophisticated. In infrastructure, when we say we.

Want to be small, because I said that too, it translates brilliant to an emotion. There's something behind that. It's really not the size. It means I don't want to be stuck in a bureaucratic.

Situation. I was just thinking.

That. Right. And clicks. I don't want clicks. That's when I said I don't want to be small. I don't want clicks. My biggest business had 30 employees, which is a very small business. But once we passed about 10 employees, they started getting clicky like the two factions and stuff. I never want to go there again. And that was one of clicks, like.

On. On a URL or.

Something. Oh, no, like click, like right. So I didn't want to click. So I've been saying I want to be small, I want to be small. But then once I started to investigate, oh, the reason behind it, no, I don't want to be small. I just don't want clicks to occur. I don't want to ever be in a position again where I need to generate. The stress of generating money just to cover payroll was so overwhelming that my focus was just panic about payroll. We did $200,000 monthly payroll and I remember like, gosh, if I don't get $200,000 of business in this week, I can't go payroll. I don't want that. So those are the definitions of it. And that started changing. My mentality is I want to have great impact under these parameters where there's no panic about payroll. So cash flow has to be addressed the whole way and prop versus doing that now and no clicks. And so we are very selective of how we hire and how we engage our team to avoid clicks. Now we only have 12 employees today, so we're not to where it was before, but we're click free as far as I can tell, and staying there because we've been very disciplined about it. So that's the challenge I found for anyone that wants to be small. You don't want to be small. You don't want certain things to happen. And define those clearly is also.

Reassuring for me to hear you say, having had 30 employees at one point, the stress of payroll. I Feel that as well. Even with only me on full time payroll. And I'm like, oh, I've got to make payroll every month. And it really changed something once that happened. I love hearing about those of you who have so much experience with different businesses scaling back. Like, you're always sort of toggling and.

Adjusting. It is comforting, right? So I like to hear those stories too. There's this misperception, it's a human default that I have is looking at a person and filling in their backstory for them. So I'm having dinner with Dave Ramsey in next month. And I had the whole backstory, like, here's this billionaire guy. And, you know, it was easy, but it's not really the story. And he's not always crushing it. Things aren't always flowing. There's struggles and mistakes. But I filled in the backstory and I just pick his name because I think a lot of people recognize his name. But it's true for all people I meet. But we've all go. These ebbs and flows. So here's something I've done, and I have this on me right now. And I've had it on probably for the last two years when I had this realization like this, to me, this was my big realization about humanity. It's like, oh, my gosh, that infinity sign is the human journey. Like, we keep going in as Figure 8, and all of us are on the same pathway. And while one person at the moment seems to be successful and one other person is down on their luck, you know what? They're exactly the same. We're looking at each other from different parts on this infinity loop. And we can both serve each other. We're just in a different part of our own journey. It's all about sharing. And so I'm much better now than filling in the backstory saying, oh, life was handed to them and they didn't struggle to realize. Everyone's had their own version of struggles. And there's something to learn from everybody. Everyone I meet, even if they look like they're down or like, now they got something to share, or if they look like they're successful, now they have something to share. All this. Have this.

Pathway. Love the infinity loop as well. I've thought a lot about it on the creative journey and even the business building journey of super intense productivity. Focus, flow, momentum, work, flying. And then sometimes after a launch, there's total and utter retreat, rest, sometimes burnout, where you just what Penny and I call a goose state. You've written at least a Lot of your recent books with a writing partner, aj, who you thank and acknowledgement. Can you just give us a quick snapshot of what's it like to write with a partner? What's your process? I think a lot of people don't want to write alone or they can't find the motivation to do it. And you've been so successful at.

It. There's this third option, so you can write alone. You can use a ghostwriter who writes for you. The co writer is someone who writes with you. And we do it iterations. So I write the first version of the book, and it's not even a book. It's just this ugly vomit of text. And then we'll talk about it. AJ will compile it into this much more cohesive flow. And then I'll write stories. And back and forth, it starts ping ponging back and forth. I'm sorry. The process is arduous. So for me to write a book, the average book takes me five years. So like people like, how do you turn on a book every year or two if it takes you five years? Well, I'm reading four books right now, so I have all these books kind of queued up. But AJ and I go back and forth writing on it. And you know, AJ's job is she's an extraordinary writer, better than I am by far. So she can take, When I write 10 words, she can communicate that in six words as better. Also beats the drama on simplicity. I mean, to the point of like, I want to pull my now thinning hair out. And she's like, mike, we gotta make this simpler. I'm like, oh my God, you cannot make it simpler. Like back to the drawing board. So she forces me back to the drawing board over and over again. If a concept is not simple enough, it holds me accountable for that. And we've agreed and it's appropriate that she's not going to be an author of the book. So she's not a co author or author of the book. She's a writing partner. And I give her accolades and attribution in every single book. And she's built a business. She doesn't do it just for me. She does it for other people too. Has built a very successful business doing this. So yeah, AJ Harper, amazing human.

Awesome. I love hearing the details of you do the first messy first draft. And she simplifies. I want to end with a quote from the end of your book. You say your business is the greatest platform for self expression and to be of service. It is a Powerful force that, when channeled, will deliver the most miraculous experiences to you. If you could leave listeners with one piece of homework or something to try when they stop listening, what would it.

Be? The greatest thing I think they could do is really get clarity on purpose. So I didn't include this in any of my books yet. I don't know if I ever will. But one of the interviews I did, I don't recall the person's name. As a psychologist, I was asking her, I said, how do you find your life's purpose? Because I was trying to figure out how you translate life's purpose into a business. She goes, oh, it's the big T or the little T. I said, what are those? And she said, the big T is a big trauma in your life. She goes, sadly, for many of us, we've experienced big trauma of physical or sexual abuse or financial trauma, something to that fact. And she goes, that moment, when you look at it, is a defining moment that many of us will say, I will never allow this to happen to myself or anyone again. Because that is a qualitative purpose to fix this for others and ourselves. So then there's a little tease. I'm like, what's the little tease? Because that's the drip assault. It's like, you know, you're picked on in high school or grade school over and over again. And just at a certain point, that building drip campaign of trauma becomes this moment of, I will never allow this to happen again or I will fix this, resolve it. There's one other element that can happen for some people, too, is the childhood dream. Like, the one day I will. So that comes from a purpose, too. For me, it was financial trauma. It doesn't have to happen in your childhood, by the way. It can happen any time in life. But the financial trauma happened to me. And that was the moment I said, oh, my gosh, I'm never going to allow another entrepreneur to struggle like I did. I'm never going to allow myself to struggle like that again. And I realized it was more than just financial. It was always other areas of working my ass off and those other things. I was sacrificing life itself to store a business. So I just encourage everyone, spend time finding your purpose. And it's not, at least for me, it wasn't like, oh, the next morning I woke up and I got it. I mean, it took years and years of thought. But if you start investing time and thinking about your purpose, and maybe you already know, but if you start thinking about it and then you build your business around that purpose, you become unstoppable. Someone with wealth will exhaust their funds. Purpose is unexhaustible. That is someone that can't be.

Defeated. Amazing Mike. Thank you so.

Much. Jenny thank you. This was so much.

Fun.

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