Profit First: Mike Michalowicz's Revolutionary Method To Engineer Immediate Profits From Your Business And Move The Bottom Line To The Top

Hey, this is Brad Costanzo. Welcome to bacon wrap business. If this is your first time, big virtual high five to you. I hope you enjoy it. And if you're listening on itunes, hit that little subscribe button so you don't miss a single episode. But if you are back for another episode, or as I call them, epicizzles, you're in for a smoking hot one today. I am telling you that after I just got off the phone with my guest, so I can I am absolutely sure that this is one you will not want to miss. Before I go into that introduction though, I want to tell you that this episode is brought to you by everwebinar. If you do any types of online evergreen marketing events such as webinars, then and Maybe you use GoToWebinar, maybe you use a lot of these, then you're going to want to listen very closely to this former guest on the show. Mike Filsaim has just recently released or it's out of beta, a brand new service to do automated webinars called everwebinar. Now you may be familiar with Webinar Jam Studio where you can do live webinars using the Google Hangouts framework. And it's really amazing. If you use that, you absolutely have to get everwebinar. It is something that I've been using in my business, that of my clients, it's very easy to use. It's proven to work and I am happy to have have them as a sponsor. In fact, if you go to baconwrappedbusiness.com everwebinar you should see 25% off. So go to baconwrappedbusiness.comeverwebinar for that 25% off. And now back to the introduction. So a previous guest named Sarah Shaw, who many of you have listened to and if you haven't, it's been one of the most popular guests that I've had in a long time about how to get your products in the hands of celebrities. We recommended today's guest to me as an interview. What's great is I'd already read a couple of his books. His name is Mike Michalowicz and he's written books several years ago called the Toilet Paper Entrepreneur, the Pumpkin Plan, and most recently Profits. First, I'm not going to go into terrible detail right now about exactly what all those books are about, except that they're all amazing and each one of you needs to put them on your reading list. But Mike is a really interesting guy because he started and sold multimillion dollar businesses in the past. He's got a ton of experience there. But that's not what I'm going to talk about with Mike today. In fact, we're going to take this in a totally different angle. And it went in an angle where I learned quite a bit. I had some epiphanies, some mental shifts where my forehead got red from slapping it a little bit. And I really think that Mike has got one of the most important messages out there for business owners and entrepreneurs about profits first. And he's on a mission to. To cure what he calls entrepreneurial poverty. And that is the case where you as an entrepreneur, you may be grossing, having sales a million, 2 million, 10 million, $20 million, but you look at what's in your bank account, you look at your profit, and you look at how much you're taking home, and you realize that your bottom line is not really that great. And that if you've ever been jealous like I have, or envious, I should say, of another business owner or entrepreneur's top line revenues and. And man, he's doing $50 million. I wish I could do that. There's a very good chance that that entrepreneur is experiencing entrepreneurial poverty. However, Mike has a solution for this. And it's counterintuitive, but it is so logical. It makes so much sense. And I love the fact that he's on a mission. He's starting a movement to really change the way entrepreneurs do their everything from their accounting to their financial planning. And none of that. What I just told you is a dry subject because what I'm about to tell you is going to be appropriate for you whether you are already running a very big business or you are just starting out and trying to figure out how to do it the right way. I guarantee if you listen to this show all the way through, because I've already done it, you're going to have some shifts of your own, just like I did. And you're going to hear me go into some details about some businesses that I'm working on right now where I plan on doing this profits first philosophy. So without any further ado, let me switch over to the interview.

Okay.

Okay. So let's bring on Mike Michalowicz. Mike, how are you?

I'm doing well, Brad. Thanks for having me. Cool.

Well, you know, it's really great to meet you on here because I've read your books, or at least three. How many books have you written?

I do three. So you nailed them all. You have the whole library. Cool.

I'm actually, I gotta admit, I'm probably about halfway through your most recent book Profits first. And I want to dive into this and really talk about some of the concepts. But before I do, it's always good to give the listeners a little bit more of a kind of a quick back story on this. I don't like to go too much into it. I don't need to know what your favorite food was when you were in eighth grade. Blueberries.

Love blueberries.

But let's talk about a little bit more detail about kind of your background and then we'll segue into some of the. Some of the really unique concepts that you've set forth with this prophet's first philosophy. Because it's much more than a book, right? It's kind of even somewhat of a movement. It sounds like.

Yeah, it's become a movement. So I'll tell you how I got started. Entrepreneur after college, not by design, but by just happenstance. Fell in love with it over time, but not right away. It was very fear based as running a computer network business Sam computer networks and just would hustle anything just to survive. But over time I started to fall in love with the impact that business could have. And the company started growing as a result. And from my learning and so forth, I sold it to private equity. And then my second company was in computer crime investigation. A lot of it was the right place, right time. I didn't realize at the moment, but it was. And that got acquired by a Fortune 500. And I think the interesting part of my story is after two quote unquote successful full cycles or exits as they say from business, I got full of myself. I was like, oh my God. I knew everything about entrepreneurship. I am a rock star entrepreneur.

The golden touch, right? Yeah, I got the golden touch.

We had Midas, right? So everyone's like, oh, you got the Midas touch. And I believed it. I believed it. I started 10 companies as an angel investor. Private investments of my own. All of them collapsed. Actually one got through the Meijer, but every single other one collapsed to the point where I was paying bills and those businesses were out of business by still covering bills that they had due.

It got to the point where I was wasting money and spending good money after bad that I actually lost everything I had made during the sale of my two companies. I mean a lot of money.

Went through depression unfortunately. Too many people can relate to that. I hope no one.

I can absolutely relate to it. You know, I just to briefly rabbit trail there. Like I had lost all my Money twice. But I did this kind of before, before I started the businesses that I'm in now. It was back when I was still at a day job, but I was always doing other stuff on the side. Like, I started to invest in, first of all, had a bunch of money, had saved up in my career, lost it all in the stock market back in, like, 2002. Because I. On margin, I was like, oh, let's gamble, right? So I made it back. I did some really wise real estate investments, and I made back. I made like $150,000 in six months off of that. It was great. And then I put it all into an oil and gas well because somebody told me that I was gonna make a bunch of money, and I lost it all. And I was like, it doesn't matter if it's $10 million or 100,000. When it's everything you have, it sucks.

Oh, my God. It's devastating.

So I get it.

I get it because, you know, you know what the other side looks like, you know?

But also, maybe more significantly, it impacted my beliefs. I thought I knew everything, and now I had to face the fact I knew very little. And a friend of mine, I was going through depression, and this was not deep depression. It was functional depression. I kept on working.

Entrepreneurial depression, also known as Wednesday.

Exactly. I wasn't hanging out with my friends. I was constantly in a morose, if that's the right word, and just. Well, a friend of mine came to me one day, says, mike, you know, you got a dark shadow around you all the time, this dark cloud. He goes, why don't you start a journal? And I'm like, I am not starting a freaking diary. That is the cheesiest, sissiest thing. He's like, no, I'm serious. Write. I said, what do I write? Like, how happy I am and nonsense. He goes, no, no. He goes, you write what you feel. And he goes, the goal is not to. To have a record. The goal is simply to have an.

Outlet, Someone unclog your brain from all that crap.

It works.

Yeah, I do it. I absolutely do it. Yeah. So interesting. All my life, I never really consistently kept a journal unless I was in a. That morose. Like, I was depressed. Maybe I broke up with a girlfriend, or maybe I was lost a job or lost money or whatever, and I was just depressed. And I would write it, and it just gets it out of your brain, and it's. You know, you write like nobody's ever gonna see it, and hopefully they don't. But interestingly. Over the past really year, I've been trying to keep up with a very much shorter. But starting my days off my like, morning rituals with kind of a gratitude journal as well. I'll write like three things I'm really grateful for. Three things that I plan on doing, three things that are going well and just doing that, like something positively to get me in that mode. But yeah, dude, you're right. Like, it is such a cool outlet, but keep going. This is great.

All right. So I start writing this journal and it starts alleviating some of the mental junk. But what's fascinating is as I'm starting to write it, I start challenging my beliefs from my businesses. I said, well, you know, it takes money to make money. And I'm like, that's bullshit. And just writing these thoughts to myself. And then I started realizing, wow, there's a lot of beliefs I had that I don't know if they're true anymore. And that journal seeded a book, the Toilet Paper Entrepreneur, which I wrote. And it's kind of an irreverent look at business, but started kind of the thematic writing I do, which is contrarian. I look at established beliefs that I have and I believe many have, and then say, no, no, maybe it's 180% wrong. So it takes money to make money. Belief and to grow. You think of venture capital, all that stuff. I challenge that and say, actually greater success comes from bootstrapping. And wrote why I found that to be true. Then my subsequent books. The Pumpkin plan is a unique strategy to grow that's contrary to what most people believe. And then profit first. I looked at the market and for me, profit always came last. We even say it's the bottom line. It's the we use terms. And I said to myself one day, I said, you know what? What's really important to me, I wrote the word health. I said, I'm going to put my health last. And I said, hold on, hold on. Whenever we put something last, that's the worst case scenario if I want to get healthy. Health comes first. So why, if profit is important, are we saying it comes last? That makes no sense. Profit must come first. And that was the other aha. And I started studying this, experimenting with it, and wrote a book about it. Why profit comes last is the worst thing you can do for your business. It's devastating financially. And if we look at it in a whole new way, pay yourself first. Apply it to your business, how the radical positive impact it can have on your profitability. And that's Where I am today, now I speak, I write, I travel, I've formed organizations around this. But my predominant thing is writing and speaking about looking at your business in a whole new light.

Yeah, so this is my take, so I'll repeat back to you because I always like to, when I'm able to repeat back something I've learned, it either integrates it better for me, but then also you can tell me if I'm getting this right because it really is a pretty revolutionary concept, although it's pretty simple.

So with one of the things that I was always raised when I had a, as a kid and when I had a job and I would always try to take just 10% savings before I did anything else. Before I went and had fun, I would just take 10%, put it in the bank and save it. So pay yourself first. But that always just applied to the world of entrepreneurship. I'm not sorry of just employee being an employee. So what you're saying is as a business owner, and correct me at any time if I mess this up, but as a business owner we're often, you know, we make our revenue and then we, you know, we obviously have our fixed and variable expenses and you know, if we make money, that's cool. But we know, I mean it's part of, you know, part of being in business is that oftentimes it'll take a little while before you're really making money because there's startup expenses, et cetera. But all too often as business owners, we continue to sink all money into new expenses because growth is everything. We have to grow, have to grow, got to get bigger and bigger and bigger. So we look back several years down the road and we realize we are still scraping by, living on credit cards because we may be running a $20 million company, but the take home pay is as much as somebody else who is, you know, we may be making $50,000 a year because.

Growth is the, is the most important thing, not profit. Right. So what you're saying, correct me here if I miss this, is get your revenue, like understand what you, what you're trying to, what you, what you need to make, what makes it worthwhile for you, like you say, is what do I kind of need to make, what do I want to make and pay that first and then grow and pay your expenses out of the difference.

Yeah, that's exactly what I'm saying. Now the insidious truth is there are more million dollar plus revenue businesses where the owner is on the verge of collapse.

I see them all the Time in my consulting business.

Yeah. And no one wants to admit it, right, Brad? Everyone's like, oh, I got a 2 million dollar company. Look at how successful I am behind the scenes. Their house is simply a shell and they have lawn chairs and furniture and they're struggling to get by. Most business owners are trying to grow to get more sales to cover expenses. Because more expenses means I can invest in growth, and investing in growth means I can make more sales. And it stays in the cycle of selling to cover expenses. We literally sell to pay more expenses. And so we say, well, what's the end game? What are you trying to do? Well, I'm trying to make money for myself. Well, if you're stuck in this cycle trying to make money, what if we took that money for you first and see how you run your business? Now this plays into a behavioral principle called Parkinson's law. And if you understand this one principle about human behavior, you will master profitability. You can master actually many things in your life. And this is the principle. The old economics model says that as demand increases, supply increases. Right? The more consumers want something, the supply will increase to meet it. Sky Parkinson says, nope, total lie. It's the reverse. As supply increases, demand naturally increases. Perfect example. You look at a full food plate. The more food you put in the plate, the more of it you will eat. The bigger you're serving. You may not eat all of it, but you'll eat more. And in fact, they found the best way to lose weight if you want to control your intake of calories is simply reduce the size of your plate. You'll be forced to serve a smaller portion and you'll eat a smaller portion.

I loved this analogy in the book, by the way. So keep going.

Oh, thank you so and here's another example. And I'll just drive it home with money. My favorite example of all time is with toothpaste. Imagine tonight you go to brush your teeth and you get there and there's a full tube of toothpaste. Well, what do you do? You know, you use a long lavishing bead of toothpaste on that tooth. You pour water on it to get your toothbrush stamp. And if that toothpaste falls in sink, you're like freakin that's disgusting. Dude. I am not diving into that sink with a bacteria and phlegm. No way. I got a new tube of toothpaste. But when that tube of toothpaste tonight, if it's empty or almost empty, our behavior changes radically. Now we bend the toothpaste over the corner of the sink, we bite on it. And now with that, you know, one little doblet, by the way of toothpaste is enough to brush your teeth. And that toothpaste falls in the sink. Now it's like, well, I know there's bacteria down there, but that bacteria makes my immune system stronger. And we dive in after it and scoop it back out. That's Parkinson's law. Our behavior changes based upon the supply. Our use of the available resource changes based upon supply. The key premise is, if you understand that, and hopefully that toothpaste concept resonated with you, is that the same is true with money. The more money we see available to our business, it is our natural propensity to use a longer lavishing bead of money.

In this case, yeah, I can, I can take on one new employee, I can take on a new office, I can upgrade this, you know, So I don't know if he used the Parkinson's law as it applies to this, but he may have in Tim Ferriss's four hour workweek. But he talked about it as it applies to time. How the amount, you know, the more time we give ourselves to, to do something, the more crap we'll fill it in with versus if we have, you know, that's why cramming late night, you know, for exams or the, you know, when it's, when it's down to the wire and you only have a certain amount of time, you get so much more productive because you're weeding out all the other crap and you're just doing what needs to happen. If you, if you give yourself eight hours a day, you know, okay, you're gonna fill it up with stuff. But if you knew you only could work two hours that day, you're going to get the most. So it fills up to meet the amount of supply that you have.

That's exactly it. The funny thing is, you ask anyone, how do you perform under pressure? I perform the best under pressure. Almost everyone says that. Yeah, Parkinson's law, you have to. You have to. Right? So money is the same way. The more money that we see available to our business, we will. It's all subconscious. Like you don't sit there at the toothpaste tube and say, oh, I'm going to use more now. You don't say, oh, I'm going to be a sloth in working because I have so much time. Oh, I'm going to speed up now that I have little time. It's just a subconscious response. Money is the same way we See an account full of money, whatever that we define as full of money. Our deposits are in there. We will find a way to spend what's available if we take our profit first. And this is the core concept. Deposit comes in, take a Pre described percentage, 10, 15, 20%, allocate it out and hide it away from yourself. Now you have to live off the residual, and very quickly you'll adjust your behavior to survive off that residual.

But you'll probably be smarter. You'll probably work smarter because you have.

To and more efficient. And people go to be, oh, Mike, but if I take my profit, I'm not profitable yet. How can I take any profit? Because you're not working smart. If you start taking your profit first, you are forced to be innovative, you're forced to be efficient. You're forced to find a new way of achieving this number. It's the ultimate way of reverse engineering your profit.

Yeah. So this, as much as it sounds like you, really, really the best idea and extremely wise. It's got to be hard for a lot of people who are entrenched, even myself in one way of thinking, to make that flip. Have you find it, have you found it hard for, like, some of your clients or people that, you know, you've helped with this to make that flip?

Hell yeah. People are like, oh, my God. So the normal response is, I love this idea. Holy cow, it's a game changer. But it's not going to work for me. I blame Mike. I've been running my business for 10 years now. I've been surviving check by check. I've proven that this won't work over the last 10 years. I can't do it. Here's one response I say to people. If you've just been surviving check by check, up to this point, you've proven you know how to survive with the money that you're making. You've proven it. So if we take some money off the table, I'm sure you've had times where your business has been more lean or more fat, and you've proven you can be able to get through it. Clearly you have the guts to do it and the capabilities and the intelligence. Can you do it now? So I first point out that they already are living this way. They just don't realize it. The second thing is a principle that I've taken from Chip and Dan Heath. They wrote multiple books. Switch, decisive, made to stick. But it was in Switch, they proposed this concept of lower the bar. And I love this concept. And this is how we get folks started. Literally, the folks listening in today can get started with profit. First using this one principle. When it comes to achieving a goal, most of us are told to raise the bar. Hey, you want to lose weight, you better run a marathon. Jog five miles a day and you're going to burn calories and get fit. The thing is, the failure rate is extraordinarily high because it's such a massive transition from where we are behaving now to the new behavior we're trying to achieve. So the failure rates greatly high. You know, right now, the New Year's right around the corner, millions of resolutions, and they'll be broken before the month is out.

Yeah, so because everybody's every eyes is on the six pack. By summer I'm gonna have the six pack.

Yeah, fine. This is the year, right? And it's a big goal. And to get there, I gotta be working out. I get jacked, you know, five days a week or something. Well, in the in switch, they said, no, no, that's a high failure rate. Instead, lower the bar. And the study was phenomenal. So I'll give a brief summary. They asked, people are looking to lose weight. They took half the sampling and said, okay, go run five miles a day. The other half they said, hey, do you watch television at all? And almost everyone said, yeah. They said, are you willing to stand while you watch television instead of sitting? The acceptance rate was very high. 99% people said, of course. It's so easy. Lower the bar. The success rate, or compliance as they call it, upwards of 95%. Almost everyone did it. A month later they checked back, yeah, it's so easy. People are standing. The people, by the way, they were asked to start running. Failure rate was around 80 to 90% already at this point. Yet the other group, 95% success rate. That group, they said, hey, now you're standing watching television. You're kind of used to that. Are you willing to walk in place? 95% success. A month later, go to that same group, now you're kind of marching in place. Are you willing to start kind of doing jumping jacks every couple minutes? I'm already walking in place. Why not? That turned into walking around the block. Six months later, they were running the marathon. Huge success rate. Here's how this translates to profit first, don't do. In my book, I set up like five major accounts, allocate 10% to profit, reserve your taxes, make sure your pay is reserved, make sure this and that's reserved. It's too much, too fast. If you're tentative or you think it's not going to work, or you're just plain old scared.

Okay, we had a quick little audio drop off there, but Mike, you were talking about how sometimes creating five different accounts and going jumping into the profit first method, full bore can be a lot to bite off. But there's a way that you can start off by lowering the bar and taking smaller steps.

That's right. So most businesses when they reprofit first, they hear all these different accounts you can get set up, all these different steps you can take that will have the most impact and it works. Problem is it's overwhelming for most folks, so they just abandon it instead. Please don't do that. Lower the bar. And here's what you could do. And you can do it today. Literally. Listen to this podcast. Go to your bank, set up one account, a checking account, nickname it Profit. Now, allocate a simple 1% of every deposit into that account. So literally a check comes in for say $1,000. You take $10, move it to your profit account and $990 stay in your operating expenses or your income, your checking account, whatever you call it. The thing is, you won't feel the impact if you can run your business off a thousand dollar deposit. I'm sure $990 is almost no difference. You'll find a way to run your business off of it. The money will start accumulating in your profit account if you do this consistently. Now, the beautiful thing is you're not going to get rich overnight, but you are going to have confidence overnight. You're going to find a new way of accumulating profitability. Then as you move along, Slowly ratchet that 1% to 2%, 2% to 4, 4, 4 to 6 or 8 or whatever. And over time you will adjust your business slowly by lowering the bar to a very profitable business.

I love that concept and I'm a big fan of also of the kind of small victories concept. I was actually just on somebody else's podcast today and he was asking me when I started off, when I didn't know anything about when I started my first online based business. And I was trying to figure it out and a lot of people give up because you don't have success immediately. I mean it was probably a year before I ever pulled any cash out of my business into my own account. I just kept on putting it back in. Now granted, I had a little bit of a savings there so I could do that at the time and I didn't know anything about profits first. However, the analogy here where it parallels is that I said the reason I did it is just because mentally I focused on these small little victories. I set up my first webpage, I drove my first click from paid media. I did this, I got my first sale. So everything I did, I celebrated that as a victory. And all I did is I kept my eyes focused on. I said, okay, I know this business will work, but that's out there. I've got to just do the next step and one foot in front of the other. And every time I did that, I would. I knew it was a little victory. And I think that's what forced, you know, that's what got me over those times of hyper, confusion and everything else. So that's very much the same thing. You're just saying, do it with your accounts, with your business. Don't try to make a leap all at once and try to turn the Titanic on a dime. Because oftentimes it doesn't do that.

It never does. Right? Yeah. When you try to go for the big win, you're setting yourself up for disappointment because it's so hard to get there. If you acknowledge and position yourself for a small victory, it builds momentum. It's almost like a snowball effect. You have that first victory and say, wow, hey, I actually allocated 1% of my money and it didn't affect my business. Then you ratchet up to 2 or 3% and then you start looking at your business in a new way, saying, listen, this is working for me. How do I become more critical of my expenses? Or what am I doing in my business that's working and bringing profitability that I can amplify? Or how do I increase my margins? The interesting thing is, as you build this up, the goal first is not to get rich. It's to build a rich feeling of confidence. When once you have that confidence in place, then the innovation kicks in where you find better and better ways to run your business more efficiently and more effectively.

Yeah, now this makes insane sense. And I want to. This is a good segue into. So there's two types of businesses that can do this. So there's obviously the established business and then there's the startup, you know, so. And I don't know, first question, what do you think is more challenging? Because I was trying to think of this on my own. So if I have an established business that I've been doing all this stuff one way, is it more challenging to switch when I'm. When I'm already, you know, moving forward? And got momentum in the way that I'm doing it, or is it more challenging when you're starting up and you maybe either don't have revenue yet, you've only got a little bit and everything. Like you got to put fuel in the fire to.

Do this. What have you found? Is it more challenging? This is my first question.

Yeah.

Is the startup or switching courses once you're already going?

Switching courses when you're already going. So the conversation is challenging with both. So the small businesses, I need every penny I got. The big business says, well, I've proven it doesn't work because look where I'm not profitable yet, I need to be profitable first before I can be profitable. Which makes no sense. But so the small business, I say, listen, it's a percentage based system. So 1% of a business say you make 10,000 the entire year. We've only allocated 100 bucks to profit. Could you run a business off 9,900 as opposed to 10,000? And the answer is yeah. So the small business is pretty easy because it's only a small percentage of a small dollar volume. So basically every penny is still flowing out to growing your business. But the small business, they become very appreciative of the power of this system very early on and then they get momentum fast as they start growing. The they can take more profitability. The more established guy. It's very hard to break or change habits.

Instead of a habit change, it requires that we put guardrails around our existing habits. Most established businesses, and this is true for multimillion dollar companies, a lot of them don't know how to read a P and L, tie that to a cash flow statement and tie that back to the balance sheet. Most people have no idea how to read at least two of the three main sheets. And I'm saying that's okay. If your habit is to log into your bank account and do a gut check on where things are, what we're going to do is put guardrails around. That is you're going to keep checking your bank account. But the bank account that you're going to check is the only one that's available for operating expenses. And the other stuff is going to be already allocated out for other purposes. So the big business, it's just challenging to get them into this new flow. But we have success when we don't try to change their habits and teach them something new or that they need to do something different. We try to kind of put these guardrails or limiters around the way they're already behaving right now.

Do you see people? So here's just a thought that kind of comes into my head. Like you're saying, you don't have to start big. You don't have to start with saying, okay, I'm going to take a huge amount out. You can just take a small percentage, 1%, 5%, et cetera. Do you ever see people kind of cheating the system saying, okay, I'm only going to take a 1% and thereby never. And not really scaling it up and never really seeing the, you know, seeing the results of it. Because I could totally foresee doing that. And here's the reason. Because the big thing is I would.

Naturally, I just have this in my gut. I feel this like, man, I'm robbing from my business's growth just for selfish reasons to pay me. Like, this is. This is a feeling. And I know intellectually I'm wrong, but I could see a lot of people having that exact same that gut.

Yeah. So shockingly now we have about 2,000 documented companies. We've walked through this. So shockingly, that happens very rarely. And I'll tell you why. The resistance happens right away, like, I can't do this. It won't work. If we can get them to agree and try 1% at the end of the quarter, we do a profit distribution. And so with profit first, as your profits accumulate in that account, the money comes out. And the one rule we have is when the profit comes out, it is not to be plowed back into your business or reinvested. Those are all simply pretty terms saying, I can't run my business efficiently off my expenses, therefore I need money from somewhere else. So when the profit comes out, we tell people, the sole rule is that you use this for your own purposes. It's to celebrate your life. You start your business for financial freedom. This is your first little taste of it. Your business is supporting you.

And if you do, put it in to other investments because you've covered your monthly nut and your fund expenses, put it into an investment that's not your business, something personal investment.

Yeah, yeah, right. Yeah.

Some people put it into real estate, put it into stocks.

Yeah, yeah, exactly. And so now what this does is start changing the relationship from what I call the Frankenstein, where your model where you constantly feeding your business money, feeding your business money gets bigger and bigger, but it just keeps chewing your soul along with your money.

We all know how that feels.

Yeah. So this changes the relationship that on a quarterly basis, there's a positive reward. You're getting money out. And even though 1% in a small business, maybe it's a distribution of a couple hundred bucks, maybe it's a really nice dinner out. But now they get the addiction. They say, wow, it's the first time in my life I've ever taken a quarterly distribution from my small private company. And they're encouraged to increase it. So that happens very rarely. That someone says, I'm going to keep it at 1% forever because I need them to grow my business. Because when they are taking that 1%, they still find ways to grow their business. That's. They have to be more innovative. Where I do face a challenge, though, is on the flip side, where people go in too hard, they have some success, and they say, holy crap, this is working. I should take 50% of the money for profit, 40% to pay myself, the rest pay taxes, and I'm going to find a way to run my business on, you know, 0.1%, and.

They don't have any money left for expenses. And then that devastates a business. The idea of Profit first is to force you to focus on the 20% of your expenses that are driving your business forward and to be critical of the 80%. That's not the objective of Profit first is to find the 20 or 30% of products or services you offer that generate the vast majority of profit and those other ones that are the just these kind of leeches that are sitting there to eradicate them. But some people get too intense about it, and that's where the system collapses. It's like taking a frozen mug out of the freezer and. And then you put it in a steaming hot oven. That adjustment so fast it shatters the glass. So we tell people, if in doubt, we are going to start slow and we're going to build momentum over time. We don't want to start big because we never want to rewind.

Yeah, that's. That's powerful. That's really powerful. My brain's going a million miles a minute on this.

What do you. What do you find?

So you've got your book, I assume you do consulting. I know you've got the profit first professionals. And I want to talk a little bit more about that.

But I kind of want to go back to what is the frame of mind.

That a business owner is typically in that makes them.

Either seek you out or, or just listen to you and say, okay, I've been doing this for this long, or whatever I need. Mike, is there a.

Let me reframe this, because I'm getting a little tongue tied on this. But what I'm saying is I could say, what's your perfect demographic? Client, whatever. What's your avatar of your perfect client? I don't really like that because I think it's a very simplistic version that a lot of people mix up, but most people buy. Most people make changes when they're in a state of transition anyway or a state of pain. And what is the state of mind that the ideal, we'll call it a prospect client for you, is when they're like, I think Mike might have the answer here.

Yeah, it's when that company, that entrepreneur says, I give up, it's just not working anymore. This is never going to happen. You know, they have to. I hate to say this, but they. In many cases, they have to go through the burn. And so how it starts off, the entrepreneurial dream is, I have a great idea that's going to make millions. Right? Then they start the business and say, God, this is a huge effort and it's making nothing. But then they say, if I keep on growing this at certain points, going to make money, and they hustle to sell, sell, sell. Then they say, gosh, this is exhausting all my personal funds, and I got to refinance my house for three times to cover payroll. It's not working. And then they get to the point of exhaustion where they say, I hate this freaking business. It owns me. It freaking owns me. This is the antithesis. It's a nightmare. That's the day when Profit first is the most successful because they're willing to say, I had it wrong. I'll try something new. Those folks, it's a tough spot to be in because they're at the point of desperation in many cases. And saving someone that's in desperation is very difficult. We implement. So we have to start off very slowly. The ideal client just says, you know what? I'm not profitable. I just need to find a new way. But they're not desperate yet. Those are the easiest, but unfortunately, the most frequent is points of desperation.

Yeah, that's the most frequent times when people make decisions to make a change. Because if it's. If there's not some kind of a pain, they don't necessarily do that. So do you get the objection of. Because you're telling people to take more money off the table in a couple of ways, which is by distributions of profit or by payroll. So from reading your book, it looked like a. You're telling. Look, most business owners pay themselves crap to get away with lower taxes.

Oh, my God. Yeah.

And then they'll take all their profits in the form of distributions after they've just completely milked the personal expenses into the company, et cetera, et cetera.

So do you get much resistance on, man? But I'm going to pay more taxes. I'm not optimizing my taxes by doing it like this. Is that. Yeah, I would think so.

Oh, my God. Yeah. And that's a big behavioral response. It's called loss aversion.

Yeah.

Here's an example. If I gave you like $10 in singles and said, hey, hey, Brad, here's 10 bucks. And I said, oh, but give me four bucks back. Then you're like, Huh, I just got $10, I gotta get four back. Well, at least I have six. But I didn't give him four back. Conversely, if I said, hey, Brad, here's six bucks, enjoy it. And that was the only transaction. The net effect is. Exactly.

You're so right.

So tax causes a sense of loss aversion. We go through extremes to prevent loss aversion. It's just a strange but true behavioral response. We will go to extremes to save that 30 or, you know, that 3 or 4 bucks by spending 10 bucks to save it. And an accountant supports. Accountants say, oh, spend money here, spend money, do whatever we can to spend money. And we take on expenses that we've never psychologically taken on, but emotionally we take on because it reduces our tax consequence. So the goal of profit first then is not to only reduce taxes, consequences, which you should. And a good accountant, especially a profit first professional accountant, no plug there, should guide you through, but is actually to navigate loss aversion. And this is how we do it. Set up another account with your bank. We call it the tax account. And when money comes in you immediately, before you ever really see it, take a percentage of that money and allocate the tax. Now, we are legal, legally we are agents for the government for sales tax, that's obvious. But also for income tax, you're effectively an agent for the government. You've collected income, but you're legally obligated to reserve this money. You have to pay the government. So what we do is have the business reserve the money on your behalf. Then when your tax bill comes due, it's not you writing out that tax bill, it's the company writing it out on your behalf. That avoids the sense of loss aversion. It brings back clarity and logic. And now we're not aimlessly spending money to, you know, we're not spending ten bucks to save three. We're acting much more logically.

That's. Yeah, that's great. You summed up the entire thing, too, with the whole $10, $6. Because I just started laughing. I'm like, yeah, one of them would suck. One of them is great. Hey, thanks for six bucks.

Right? Right. It's bizarre.

The other one is like, how come you took four? Why don't you take two?

But, you know, the lesson is this. It's nearly impossible to change our behaviors. It really is. So everything I did in Profit first and everything, when we look and when you examine yourself, don't try to change your behaviors first. Instead, look, are there ways of managing or putting guardrails around the way you naturally behave? They'll actually make that behavior now a very positive thing.

Bats. Bats. Profound. Yeah. Okay, so here's where I want to take this conversation. Now. I want to do two things. One, you mentioned this, which was the Profit First Professionals. And it's a. I want you to explain what that is. And then I want to ask you, as we talked a little bit offline on this, I am personally in the process of a startup business. We are pretty coffee.

Exactly.

We are pre revenue, and we are getting everything. Like, I am currently in the place where I am doing this, like, paying the expenses out of just my normal consulting company. You know, I have not even gone, you know, gotten the legal documents yet just because it's still. It's in the extreme startup phases. But I plan on doing this right. So I want to circle back. And anybody who continues to listen to this, you know, pass the plug for Profit First Professionals, I want you to tell me how, if I was to work with you and your group even more, what that would look like, especially from a startup phase. And people kind of get an idea of like, oh, this is kind of cool. I see the way this works. So we'll go, what is it? And then talk about how it would work in a real situation.

Yeah, I love it. So Profit First Professionals came about. It was unanticipated, but when I wrote my book, because I had a couple books out there, I circulated this new book with some of my most rabid, if you will, readers and said, hey, I can give you a peek at this book in Advance. There's about 100 folks that got it six months before it went to publishing and printing. And the feedback, the first person's feedback blew my mind away. They said, love Profit First. Such a simple concept. But my accountant doesn't get it. Who do you suggest should be my accountant? And I was like, huh, I didn't think about that. A couple emails later, comes in, says, hey, who's the bookkeeper that supports Profit First? I want to hire her. And like, oh, within the third email or one of them was a phone call too, I'm like, oh my God. There should be an organization of professionals that support this. So very quickly. And I very quickly also modified the book to support it is I formed an organization called Profit First Professionals. It's a member organization of accountants and bookkeepers that have become certified in the Profit first methodology. Now, what makes them distinct is if you own a business, at some point you're going to need bookkeeping. Maybe you're doing in house, maybe you outsource it. You're going to need an accountant. You need the service anyway. But wouldn't it be cool if your accountant or bookkeeper had a methodology to enhance the profitability in your company and to not only advise you on this, but guide you through the process?

You don't have to try to teach your bookkeeper or accountant, hey, go read this book. And here's how I want to do it. I mean, there, I could just imagine that would be a nightmare.

It's a nightmare. It's a nightmare. I encourage anyone listening in, go to your account and say, hey, I want to start doing profit first. Can you support me? Chances are your account is going to look at you half eyed and go, what the f is that? No. Profit always comes last. Look at your income statement. Profit last. That's who I am. I'm a profit last professional. Like that's.

They haven't drank the Kool Aid yet.

They haven't. The axiom is so entrenched in society that the established accountants and bookkeepers out there, 99% of the population, is teaching you a system that doesn't work. Profit comes last. So you'll get, I find you get resistance from the professionals you already work with.

The thing is just to add to that, CPAs are not designed. The best CPAs and accounting companies do this and they do a great job. They take a proactive approach to what is the best practice. But most of them are not set.

Up to do that.

They're there to make their money by servicing you in the standard way they've always done it. And you know, I say, you know, CPAs count the beans. They're not necessarily telling you where to go plan them and to make more.

Right.

You know, so this is, this is cool.

So the ultimate test of an Accountant or bookkeeper is go to them and say, can you help my business be more profitable? Almost all of them will say yes. Then say, hey, what's the methodology you follow?

Yeah, I'll tell you where to find the most tax deductions.

Yes, yeah, exactly. Reduce your taxes, cut costs. Okay, but what's the methodology? So that's what our organization does. So you need a bookkeeper accountant. Anyway, if you want one that drives profitability, you can do that. And we have a website. If you just search for Profit First Professionals, we'll make an introduction for you. If we were talking with your business specifically, how we start off with any business is we go through an assessment. If they're an established business, we call it the profit assessment. Or if it's a newbie business, we go through a profit from projections. Where is your business looking like it's going to go? Then we set up the initial structure, the five core accounts, we call it. We set up the five core accounts with your bank. It's very simple to do. We start the allocation percentages then on a periodic basis. Usually in the beginning, we check as cash starts flowing in about once a week. It's a simple five minute check in. And then quarterly we start adjusting the percentages to perfect it. Because every business has its nuances. Not every business can follow the exact same percentage formula, even though we have, we call them taps or target allocation percentages based upon studies we've done. But we start adjusting and kind of tweaking the dials, if you will. So the system is perfected for your business and then they're the accountability partner. Because there will come a day where you're like, I can't pay my bills. This is ridiculous. I got to take over my profit account. That's when your business is basically screaming at you and shaking you, saying you can't afford to run the business this way. Find a more innovative way. And it's kind of an ice bucket challenge. It's a scary moment. But our first professionals then guide you through this. We go into our database of the 2000 plus other companies that have gone through and say, how have other folks navigated the situation? What do we do here? What other companies do we have in the coffee business? And actually we have a large distributor in Australia and India that we work with very closely. Company that's gone through Profit first very successfully, but not without the challenges. So we just use that kind of resource of past experiences to help you navigate situations like that.

That's beautiful. So the Profit First Professional, these Are individuals.

Yep.

Correct me or who. They don't work for you, but they. Yeah, but they are certified by you and they understand it. And I imagine there's that you interact with them and keep them up on like you guys probably all have some kind of a cross talk with each other.

Conferences. So we meet face to face. That's awesome. We do one on one coaching with our members. So literally our little office here, there's five of us, there's two folks that are on the phone every single day walking our members through nuances. Because when a new accountant or bookkeeper comes on board, first we make sure that they implement it successfully in their own business. I mean to master something you got to to teach them, you got to master. So. But then the second thing is, you know, they may run into a nuance that's brand new. We may have an accountant that's working with you and says I've never worked with a coffee business. You know, tell us how it works. And then we are facilitating the connection with our other member to have navigate that situation. So there's just a lot of it's a high touch kind of business.

Nice. Now you also because I'm on the website here, so you have a couple of options for people like hey look, find these professionals to work with or become a professional. So if somebody's listening out there, what types? So bookkeepers and accountants, is there anybody else who this is ideal for to go through your certification in order to be able to do this?

Yeah, business coaches, that's the triad. So it's funny, just before our call here, I had a call with one of our business coaches and that helps. See when it comes to profit, there's three consequences. One is how do you manage your books on a day to day basis? That's what bookkeeper does. How do you address the tax consequences and the financial strategy? That's an accountant. But then how do you also address the business strategy? That's a business coach. So we had a client of one of our members who manufactures garage doors and they found that there's a particular niche that they're serving in the commercial industry that's more profitable. Thank you. To their bookkeeper. Well, their bookkeeper said, you know what, to really deep dive into that niche, you need a business coach. Well, they turn that bookkeeper turned on that client to one of our profit first professional business coaches who's now navigating them. But they're all speaking the same language about profit first. And then we design the structure around ensuring profitability. And enhancing profitability.

That's great. I know there's a lot of business coaches listening to this. I don't know if there's as many bookkeepers, probably not. And accountants, but there may be. But that's really interesting that you say that. This is because certifications are great, especially when competition is tough out there, especially for business coaches. Because I know it's a very competitive field. People are trying to stand out. Having a methodology like this behind you does make you stand out. It's definitely unique. I mean you don't come across this all the time.

And.

When I say unique, I mean this is in a great way. It's a very unique service advantage that, that you can provide people. Okay, so.

Well, I'll share one more thing I just found. And this is regardless if it's something to consider or not. And I, I realize I'm plugging because I'm a plug it.

I.

Well, I'm on a mission here to eradicate entrepreneurial poverty.

Yeah.

And that's my life's mission. And in that this business, it's an epidemic.

And it's. What's funny is it's a. It's an invisible epidemic because everybody talks top line numbers. Only I got one of my best friends is we do like every other day, I think we, we do counseling sessions with each other, talking each other off the ledge. Right. So.

And he's like, oh man, I'm just a. I'm a loser. That guy over here is doing $10 million. I'm only, I'm only doing two. I was like, yeah, but you only see the top line numbers. And I've, you know, I learned this a long time ago. Never be jealous of somebody's top line revenue.

Never. Never.

And especially so I know that a lot of people who listen to this show are very familiar with the entire information get rich on the web market. Whether some of the listeners probably sell this stuff themselves, they've all probably bought it. And it's really, really easy to fall in the trap to say, hey, this guy just launched his product and he did, you know, a million dollar in a day. Don't realize that he may have lost money on that.

Right, right. Do not be envious.

And multiple years of his life.

Exactly. And the unfortunate reality that's more frequent than not.

Yeah, it is. So you're on a mission to stop this. We'll call it this invisible epidemic. I think that you can use that in your marketing.

Thank you.

Trademark. I will transfer the ip.

So. So let me ask you this let's go into the real world situation. I am, as I said, I am pre revenue. I am, which I love. I got that off Shark Tank. But.

I am in those early stages and I am struggling constantly with. You see, when I first start, when I started my first couple businesses and I was a cowboy toilet paper, it was dirty toilet paper entrepreneur, right? I was just, you know, winging it as I went. Made a billion mistakes and I willed this thing to profitability and eventually an exit.

And I remember thinking, man, I would do so many things over if I could. So for the past three years, my business model personally has been a lot simpler because it's a pure consulting based model and a mastermind that I run. So.

I don't have a large operation that I have to, to deal with. I don't really like large operations. I like to work in the areas that I'm really good at. So the thing that I'm starting now is required. This is another real business. And.

I know I've been up late at night thinking, okay, here I am. This is like, I've got the knowledge, I know what to do and I know all this other stuff. And I've been advising my clients and things to do this stuff.

Don't drop the ball, do this right, don't overlook, I don't want to overlook a lot of the key components just because I'm in that stage that a lot of us startup entrepreneurs get where you're just in the build mode, you're in the moment of creation. And yeah, as I said, hair is on fire.

Moving a million miles a minute. Half of it's fun, half of it's scary as hell, but it's in those moments where things get overlooked, right? And I am looking to set things up correctly and yet not overcomplicate things. Because I also believe that oftentimes, and I know this for a fact, a lot of people are just starting their first business. And I did this. We go to LegalZoom and we get the LLC and then we register here and we do all this other stuff. And I did this stuff like 4 months before I had a sale of anything. It's like some of the stuff you can wait, like just go get a sale, get somebody to give you money.

Whoops, we just had to get cut off there, but picking back up where we're at. So Mike, to recap, I personally am in that early stage phase of getting this all ramped up and I don't want to make mistakes and I actually am looking to do best Practices. From reading all this stuff, from talking to you, I do personally feel that what you're doing is probably best practice, especially because I've been on the other side of it. So I want you to walk me through what it would look like if I was working with a Profit first professional and using this methodology kind of from day one. Because there's probably some people out there who are either in my exact situation or in pre launch or launch mode or they just started their business and they are overwhelmed with growing it and all of this other stuff and they probably the last thing on their mind is profits because they probably assume, like most of us do, that profits are only going to come after maybe a year or two in the business where, you know, once that kind of comes up. So walk us all down the path of what that would look like.

And you're right, most people think, oh, it's going to come one day and it never comes. So the first thing a Profit First Professional would do with a brand new business is discuss your business model, what your projections and so forth, what you think coming. But the biggest thing, and you've already done it because I know we spoke offline, is niche specialization. There's certain aspects of niche specialization that provide such efficiencies and benefits to profit that.

It'S almost dumb not to specialize in a niche. And what's so powerful about that and what a Profit First Professional will walk you through is when you pick a category you're catering to, the marketing becomes a lot more efficient. You're marketing to one community repeatedly and there's fewer ways to market to them, which means less cost. They congregate typically in less areas than the general market. But the other thing is the solution becomes very consistent. There's less variability in what you need to do. So they discuss, well, what are the coffees and other things you're developing for this community specifically? And at the same point, what are the things you don't have to do? We were talking about that rifle shot coffee or whatever the other one was. Clearly whatever they're doing with their coffees are not a fit. So now you reduce your variability in inventory, you have fewer things delivered to a smaller segment of the market, meaning more consistency. That inherently bleeds profit. So it's a beautiful thing. They'll get a sense for your business. Stage two, they'll say, now that we understand it, let's get you set up with your custom accounts. They go to your bank, actually you would do it, or they could do it on your behalf. And you'd set up the core five accounts. Income, profit, tax, owner's pay, and operating expenses. But additionally, they would set up additional accounts for specific reserves. You're an inventory based business. You need to get those beans and grind them up. You may need capital purchases for equipment to produce or package this stuff, or maybe you're outsourcing it. They get an assessment for that and then set up the accounts accordingly. You may need a capital account to make these purchases of equipment. You may need an inventory account. You may be selling direct to consumer, or you may be selling through the channel. If you're selling through the channel, they'll maybe set up accounts for large purchases that drip in, meaning a client may buy 50,000, maybe, hopefully a million dollars of coffee from you in one purchase. But that needs to be delivered over a year's period based upon certain delivery parameters. And they would set up accounts for that then. And this is the biggest thing, they get the account set up, they start testing it. As you run your business, they monitor it first initially on a weekly cycle, then quickly they can adjust to a monthly and then a quarterly cycle. But they determine what percentages are working for you, what are not, and they start adjusting the dials, if you will, to get the cash flow machine running perfectly and fluidly. At the end of the day, every quarter, they're the ones calling you up, saying, hey, Brad, it's time to take your profit distribution. Congratulations. And then you're going back into it and seeing if you can run your business even more efficiently and better next quarter and keep that momentum going.

Nice. I love that. And then these are people who.

So these are professionals out there that are in your circle, that are certified. How do you choose who's best for somebody?

It's a quick question. So we.

Know. Well, actually, let me say yes for the very opening. You know, when you start a business, you don't know what you don't know. So our reach out was, hey, does anyone have the cojones to try out our system and put this as a shingle on your business? Because no one else in the world has done it yet. You'll be the first. And it's kind of scary. It's like we called it Washington's army crossing the Delaware take on the British. They're better equipped, they're a more sophisticated army. There's a whole different mentality out there. But we want the few risk takers that are going to come on board. So week one of our business was thrown against the dartboard and we had The Inaugural eight, we call them the folks that just wouldn't take a risk. We learn from them what makes a great profit first professional. And sadly, some folks we asked to part ways because they didn't make a great profit first professional. The first thing is this. An accountant or a bookkeeper that has implemented it in their own business. If they aren't running this system themselves, they don't understand the system well and they don't understand the emotional consequences of the system. We want our accountants and bookkeepers to to go through the pains of not having enough money to pay bills and having profit first helping them navigate it. So that's stage one. Stage two is they have to have an excellent service reputation because this is no longer data in, data out. This is consultative. So you have to be able to communicate effectively with clients and dumb down.

The accounting talk. A lot of people don't know what an OCR metric ratio is and how to tie that back to a balance sheet and why it's even important and.

Quite whatever, dude, everybody knows that.

Okay, okay, that's a good point. Everyone knows that one. But beside, most people don't. And so they need to be able to talk in the entrepreneurial language, the real simple stuff. So much so that the word profit as defined by an entrepreneur is defined different in accounting. To me and you as entrepreneurs, profit means how much money is left in my pocket at the end of the year.

Exactly.

An accountant says, what's the dispersion between your expenses and your income on an accrual basis, regardless of the cash consequence? That doesn't mean anything to me. But I do know accounting profit I got to pay taxes on even though I don't have the money to pay those taxes. That makes no sense. So we need to translate. And our accountants and bookkeepers have to understand how to speak the entrepreneurial version of profit and these other words. Once they understand those concepts, they've mastered for themselves. They're excellent at communication with clients and have an excellent service reputation. And they can speak the entrepreneurial language. That is the foundational stuff to become a member.

That's great. That's awesome. So how many people do you have in your network now? Are they as of this morning?

Yeah, it's growing. As of this morning, 102.

That's great.

We track it every single day. Actually, I take it back. As of tomorrow morning It'll be 103 because we had someone sign up as a new member a few hours back. So we really track this. This is our key metric. We track this Every morning We are 18 months old and now we're starting to get momentum. We're starting to get recognized in the industry enough that people are calling saying, hey, I've heard about you, or my client is an entrepreneur and read your book. And I want to consider this where 18 months ago, even 12 months ago, it was like, who are you guys? What are you doing?

Yeah. Well, so now let's talk about from the flip side, because there are pro. I mentioned this earlier. There's probably business coaches and maybe some other professionals who would want to be certified. Tell me about, you know what, what's involved with that? So I go there and I say, I want to be a certified profit first professional.

Yeah. So you get a. So you go to our website, profit first professionals.com. you fill out the apply side. Because two people visit that site. People that want to hire profit first professional, they click on the find button or someone wants a coach who wants to become a member will click on the apply button. You fill out a little form. It goes to, we have two team members that work on Aaron and Ron. It goes to one of them, they do a quick evaluation. And what we do is we send out literally an eight page letter that says, here's the reasons why you probably aren't going to make it and probably why you're not gonna want to do it. And it sounds crazy, right? To say, here's why it's probably.

Yeah, well, it works very well. And it sounds kind of schmuckish to be doing this, but we, we don't want people that are trying because they just want to become a member of an organization and just hang a shingle or hang a name on the board. We want people that do it because initially we were kind of horned ourselves out in the beginning. We're like, oh, we'll take anybody. And we had people that use the name, but then gave a bad reputation to the name.

Yeah, you can ruin an entire business like that.

Yeah, it's like we're far from anything like McDonald's. But I like to use that analogy because it's such a recognizable name. McDonald's has millions of locations. But if you go to McDonald's and you eat a hamburger and it has botulism or something, that doesn't hurt just that store, it hurts the entire McDonald's brand. So they inform force making a hamburger, albeit a bad hamburger, without botulism. So us, we know we're only as strong as our weakest member. So we cannot afford to have weak members. So you get this eight page letter that says, here's the reasons you probably don't want to do it and probably not a fit for you if you pass that acid test. After you read this whole thing, click on this button and we're going to schedule a call and we're going to interview you. And likewise, you're going to interview us. We may love you, but you may think we're a bunch of schmucks. So we want you to interview us and ask any question. And then we say at the end of that, then we're going to want, if we think you're a great fit, we think you're a great fit. We're going to want a commitment. And a commitment simply says that you're going to proceed if we accept you in after giving us three references. Conversely, we're going to give you three references of ours and that if you want to proceed with us, we are committed to proceeding. So it's this kind of cross check through references and it's basically a verbal commitment or an loi, a letter of intent. And then the references happen. We do our follow up, our members, prospective members, as a follow up and then it's go time, we get it going and then they go through intensive training for about three months, implement in house and then within six months they're rolling out the coin clients with our guidance.

Oh, beautiful. Well, I love to know that you're actually putting a lot of time into that, not just selling a certification to, you know, up the price because, you know, there's a lot of that out there right now, which is become a certified X and it's really just glorified. Yeah. Hey, do something to hang a shingle. And it sounds like you're, you're doing something really good here and I would hate to see it. Yeah. Ruined by that. So I commend you for, you know, doing that. Thank you. Yeah. So this, I mean, this has been an amazing conversation. I've learned a lot. It's, you know, the stuff that you talk about, the concepts of philosophies, it's not, you know, sometimes I feel like, okay, I'm just, I hear a lot of stuff that's rehashed over and over and this definitely isn't. And it's really refreshing and something I'm definitely going to look at pursuing here. So now's the time in the show where I like to ask you, you know, what's a, what's a nut you're trying to crack? Whether, whether it's a resource you're trying to get a person you're trying to, you know, hire a position you're trying to hire, a strategy or a challenge you're trying to overcome. Is there anything that.

You'Re trying to do right now that you could use some help with, whether it's from me or maybe one of my listeners here? And it's like, man, I got the perfect solution for you.

So I'll give you one that I suspect a lot of people could share some insights. And if it's okay, I'll give you two. There's one that's really kind of unique and niche. The first one is classic scalability. There's five employees here. The biggest company I ever had had 25, 26 employees. And while I've been through this cycle before, just because I was through it before doesn't mean I'm good at it. When it comes to scaling, there are certain things that I enjoy doing that I realize it's now time to give them up. So this stuff to give up and delegate that I don't like doing, that's the easy part. Now, there's certain things that I like to do I'm good at, but there's other things that is more important that I'm doing, and I'm also, I would argue, enjoy doing those things.

Cool. Now I'm real curious. You got to tell me an example of that, because that's something you don't hear a lot about. You hear a lot about, man, I just need to outsource all this stuff that, you know, I hate. But when you realize, and that's. That's actually a really smart thing when you realize you have to delegate some things you actually do like doing if you want to get to the next level. Well, give me an example.

Right? So here's the. I love public speaking. I do maybe 50 events a year, but profit first, knock on wood, has enough attraction that I can't do all the speaking gigs to the point where I, with some of you already say, hey, is this day available? Oh, no, I'm already speaking that day. I can't do another one. But to get the momentum going for profit first, I want other people speaking on it. And I love the speaking. And yes, other people can speak on it, but, gosh, they're not going to do it Mike's way, I feel. So it's speaking. I love to do it. There's just only so much time. And I know it's a detriment to be declining speaking opportunities for profit first and not giving it to other people that do.

Okay, so kind of finding a way to get people who are, even if they're 70 or 80%, as effective as you by just getting more people out there preaching the gospel.

Yeah, exactly. And here's the irony. Maybe, maybe they're 110%. Maybe they're more better than I am. I just don't want to admit it.

Yeah, exactly. That's true. Let me ask you a question about that. So the 50 or so speaking events you do a year, what's a typical. What's a typical person that would hire you to come speak? Like, are you speaking at conferences? Are businesses bringing you in to speak to their internal events?

Give me.

Give me an example of some of the. What the average is.

The most common is an association or organization. Very infrequently, is it a corporate speaking engagement. So normally it's like the Plumbers association of America, the Windows Cleaners association, the Bowling Proprietors association, which all those conferences I spoke at, they actually exist occasionally. Well, maybe now almost with balance, there's organizations. So the Entrepreneurs Organization, the Young Presidents Organization, the Women's Presidents Organization, where it's groups of entrepreneurs are inviting me to speak.

Okay, excellent. So that's one. And then you said there was another one that you're looking to potentially.

All right, so this is the niche one I found. The greatest platform for spreading the word has been television. Not that television yields a massive amount of leads, but it brings instant credibility and it furthers exposure. So I've done makeover shows on MSNBC and so forth. I've actually piloted two shows for two major networks, but both are duds. I have studied. There's a wonderful show that perhaps you heard of I love, called the Prophet. Oh, yeah, I love that show.

Yeah, it's good.

I've been contacted by producers of that television show, that network and other shows to do something, but they've all fallen flat. Meaning I've done the pilot and then the pilot died. Maybe I suck. Maybe it wasn't the right timing. But selfishly, I know that that level of platform of exposure can help me serve my life's mission of eradicating entrepreneurial poverty. If I can get there, it's more powerful than even speaking from the stage. How do you get a television gig permanently in your own television show? Not out of my selfish ego interest, albeit I know it's in there. But the real interest is I think I can have the greatest impact in serving what I want to serve in the world.

Excellent. In that area, people who would be perfect for you is anybody who has experience producing or.

They have, I guess, direct relationships with, whether it's networks, cable or traditional network that's looking for something like that. And if they're listening to this show and it resonates with them, that could be an opportunity as well. I've got a couple of, got a couple of potential contacts.

Who I know a lot more people in that space. So my friend Nick Nanton, I don't know if you know, Nick is a. This may be actually interesting for you in a couple ways. So Nick's specialty is really helping people build authority through things like books and TV, etc. But he's an Emmy awning. He's an Emmy award winner winning filmmaker. He just did. Do you know who Peter Diamandis is? Founder of the X Prize. I recognize his name. Yeah. So if you're, if you've heard of the X Prize, which was what?

Sure, sure.

Yeah, exactly. So Peter Diamandis is one of the, I guess one of the founders of the Ansari X Prize and he just did a big documentary on him that's gonna be released and I know he's shopping it to the networks as well and he's got a lot of exposure there. I'm actually going to be going to the X Prize Christmas party in LA with Nick and this will be a lot of fun in a couple weeks actually.

Really? Cool.

Yeah. I have a feeling though that I need to go out and make a billion dollars in the next couple weeks just so I don't feel like such a loser. Because there are supposed to be multiple billionaires there, so.

Well, yeah, but they're not profitable.

Yeah, exactly. You know, you'd be probably surprised at all.

Yeah, maybe, maybe.

The point being that I know he has a lot of good connections in television and I might know a couple other people, so I'll put my thinking cap on. And if there's anyone out there listening to this, who this resonates with and they want to help you out as well. What's. I mean, obviously you got multiple websites, but what's the best way to like explore more?

Yeah. So Mike Michalowicz dot com. I know that name's a doozy. Here's the show notes.

It'll be in the. If they're listening.

Show notes.

Yeah, exactly, exactly.

The nice thing is on Google, I've got enough position on Google now if you type in Mike and then Mick M I C, I become a drop down.

Nice.

So it's a shortcut to find me. Cool. I will promise you this. If you go to the website, there's free stuff, whatever, but it is the most different website you'll ever experience. That's my promise.

Which one is that? Yours?

Yeah. Mike Michalowicz. You'll experience things on there. Oh, my God.

I know. I went there.

Just do some mouse overs on the homepage and you'll see.

Yeah, Okay. I gotta go back, start playing around. I think I remember going, I didn't go there today. But yeah, I've been to this site. This is really cool.

Oh, cool.

I like it. I dig it. It's very, very neat. All the various pictures and stuff.

Yeah, yeah. And then you'll find it, like hidden goose eggs. Like, there's a speaker on there. If you click on it, it starts saying some funny stuff.

That's cool. Yeah. Awesome. Well, Mike, I really appreciate this. Thank you once more. It's always fun when I get to interview people that I have this really authentic curiosity for what they're doing. And this is definitely that case. I look forward to helping you eradicate entrepreneurial poverty.

There you go.

And hopefully preventing my own. So that's good.

We'll make sure that happens for sure.

Absolutely. Well, Mike, thanks for showing up for the show and delivering all that you've done for my listeners out there. Go buy the books. I mean, Mike's. All three books that I've read. The toilet paper entrepreneur, the pumpkin plan, and now profits first have been amazing. Every single one of them you will love. If you're anything like me, you like to read the same stuff I do, then this will be right up your alley. If you are loving the show, if you're liking what we do here, there's a couple ways you can reward me. A send me bags of unmarked bills to Monica.

That's a good one. Yeah.

If you aren't gonna do that, then you can leave a review on the itunes machine. It can be complicated, but it's not really that hard. Just go over to itunes. If you're Apple subscriber, click, you know, leave a review. I read every single one of them. And also there may be a chance that I could help you. Whether it's connecting you with a resource, giving you an idea, potentially working with me one on one in a kind of a client consultant kind of a role. I'm open to that possibility. I don't have an agency. I don't hold myself out there as that anybody can hire me. But I do like to work with other entrepreneurs who are looking to grow their business and looking for a lot of unique but proven strategies to do that, whether they be online, offline, you name it. And you can always request a conversation or a consultation@askbradaconrappedbusiness.com and we'll go from there. Otherwise, if you enjoy this show, do me the other favor and share it on social media. Share it with your friends and talk about it. Ask people if they've heard that bacon wrap business show. It's so good. So planting that in your brain. Mike, thanks a lot for joining me once again, and I look forward to continuing to connect with you here.

Likewise. Thank you, Brad.

All right, brother, talk to you soon. And you guys, see you on the next episode.

Bye. Bye.