Character Is Everything | Jim Penman

Stand up for righteousness. Stand up for justice.

Stand up for truth.

I truly believe that thoughts are the greatest vehicle to change.

We do not care whether the cat.

Is black or white, as long as it can catch mice. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard. Victory in spite of all terror.

Victory, however long and hard the road may be.

To those waiting with bated breath for that favorite media catchphrase, the U turn. I have only one thing to say. U turn if you want to. The ladies not for turning.

It is better by noble boldness to run the risk of being subject to half of the evils we anticipate than to remain in cowardly listlessness for fear of what might happen. Is a quote from the Greek author of the first great narrative history produced in the ancient world, who is often referred to as the Father of history, Herodotus. I thought this was an apt quote for our guest today, a student of history who with the spirit of entrepreneurship, started a part time gardening business that has gone on to be one of Australia's most well known brands. Our guest is Jim Penman, Founder and Chief executive officer of Jim's Group, Australia's largest franchising family with over 4,500 franchisees across more than 52 divisions, including Jim's Mowing, one of the largest and best known lawn mowing businesses in the world. He is also an author and social theorist exploring the physiological underpinnings of social change and its probable effects on on civilizations. Hello and welcome to another episode of no Limitations, a show where we speak to elite world class performing men and women and unlock the secrets and influences that have shaped their destinies and that you could apply to your own life. For our first time listeners from all over the world, please don't forget to follow on your preferred podcast platform and share with your friends and colleagues. And for our listeners in Andorra, Mexico and Japan, a big hello. I am your host Greg Robinson, Managing Partner of Bland and Partners, Executive Search and Board Advisory. In a candid conversation, Jim brings to life his remarkable story of noble boldness and entrepreneurship, his tenacious approach in looking after the welfare of people he deals with and the constant push to raise standards. Lastly, Jim touches on his view of society and the reform needed to address our current challenges. So sit back and enjoy. Character is everything. Jim, welcome to the show.

Good to be here.

It was two weeks before Christmas 1982. I was 30 years old and a failure. I had failed as an academic not only were there no prospects, but after eight years of work my PhD thesis had been rejected. Now I had failed in business, lost my house and become saddled with a $30,000 debt. Behind it all was my laziness, my arrogance and stupidity. What was going on, Jim?

I don't know. I'm a man of many weaknesses and that was me at my worst. I just got above myself. I mean look, the failed academic career. I can't blame anybody else. I went to do a PhD in history. If you want to be an academic, you've got to be specialist. You've got to be the, you know, you've got to study one particular time with world expert in that. And I wasn't just interested in one. I wanted to know about all of human history, not just human history, but how it relates to cross cultural anthropology and zoology and even into genetics and so forth. So it was wildly unspecialized and I should have known I had no prospect of an academic career. I wanted to pursue it but nobody's going to give me a job. But being lazy, that was just me. That was just my stupidity. I was sort of engaged and very distracted and just up myself. I just sat around my beanbag and borrowed money via my parents and it was the most terrible mess. I can't believe I did it. Maybe I've learned a bit since then, but I can be very lazy at times, I really can.

So where are you from, Jim? Because I understand what. Mum was a teacher. Was dad an academic in some form as well?

He was an engineer.

Okay.

He used to, he worked at a university for a while and then he worked for Carlton United Breweries. He was the chief engineer there before he got basically fired for being an ornery which goes in the family. And then he became a consultant which suited him pretty well. He used to do neat things like work out how people got murdered and whether they were guilty or not and whether somebody was guilty of drunk driving. Got some good stories. My dad used to being home all sorts of stuff and set fire to it on the lawn just to see whether it would burn. It was very colorful.

So how does that sort of set the stage for someone who's going to build a fairly entrepreneurial career?

I never thought of being in business. I had no concept ever, ever at any time in my life that I would be in business for a career. I was going to be a doctor or a vet or you know, you know, typical academic, middle class family, all those kind of things. And they went to university. I was going to be. I was going to be definitely an academic. That was my idea there, I must say. At one stage I wanted to be a science fiction writer. Yeah, I've failed sadly in that area. I've never written anything that's any use or I tried, I just backed. Anyway, look, the only thing I could say is that I am very creative. I'm very unusual in my way of thinking. And the whole thing that came to my academic career was that I just have to think things differently. And, you know, I had a different idea about everything, you know. Why did the second World War take place? Well, I've got a totally different reason to anybody else. Why the First World War? Why do societies flourish and decay? My reasons are totally different. So that kind of very, very ultra original thinking. I applied to business when I had to, when I had no choice.

Okay, so you got no choice. And what was it, $24 in the pocket?

Yeah, yeah. The amazing thing is my situation was worse than it had ever been. But I did better than I ever had. And that was because I. Look, I was married. I had my rent to find. I wasn't living at home anymore and I just had to make a living. I had to support my family to my wife who was a student, so she wasn't working, so I just had to. And when I had to, I did it. So even though in the best situation before I failed when I had to, it just shows that it comes from within. People don't succeed and fail because of external circumstances. They succeed and fail because of what they do and how they approach things. And that was the lesson to me.

Okay, so you're facing an enormous circumstance in your life. So you're going to have a sink or swim, I guess I put it in that way. And you go away and make some calls. What was the sort of the beginnings of the business and what is it now?

I used to mow lawns as a student. In fact, I've been gardening since I was 8 years old. I used to go and do some work for a neighbor, Mr. Tapley. I used to go and grip. I got two shillings a week back in those days. That must have been about 1960 or something like that. So it was enough to buy a box of chocolate. It was not too bad. And I've done it for most of my life. I did it as a student and I just gradually built up. I. I started off gardening, a dollar fifty an hour and then I. And then I got a lawnmower, which was great because I wanted to, to pay for my car, which I thought might help me with the girls, which it didn't. And so, so the end result was when I, when I failed to get my PhD, which I did eventually get later, I, I, that's the only thing I knew how to do. I knew how to mow lawns and I was pretty good at it. I did have very, very high standards though. That's one thing I would say for myself. I really, really was fanatical about making the job look fantastic and never letting clients down. It's just an emotional thing with me. I hate letting people down or hate. I used to love my clients saying things like, I never knew my lawn could look that good. That was a real satisfaction. I still try and teach my guys how to cut long grass. I just had a complaint today about a franchisee. Client complained he didn't pick up the grass clean because it was wet. So I wrote back to him and said, that's not a valid complaint. You should pick it up clean. This is how you do it. You overlap, you cut with the right hand of the mower. You, you keep the, the, the catcher from getting too full, you know, and then, and then I said, so I'm not going to wipe the complaint, but next time you go there, do it properly and then text the client and after she's happy now, then I'll delete the complaint. So I was still fanatical about that kind of thing.

Well, was it every customer's a raving fan, isn't it? Isn't that your.

Well, I actually personally. Look, we survey our clients about 1 in 30. I personally read every poor review that comes through to the system and I'm the only person that can wipe them out if that satisfies the client. So I'm very focused on customer service. It's like an emotional driver. People are always saying to me things like, jim, just lighten up. Come on. You're causing mental health issues by pushing all these complaints out. But no, because you've got to be fanatical about customers because that's the only way that you can have work. You know, when we started off gyms back in the early days, I used to have teams of campuses knocking on doors to find work. The latest figure is 38% of our leads are unserviced. The demand has been over the top, incredible, extreme. Why? Because our services got so much better over the years and the better we get, the more the work floods in. We have a system where every franchisee pays 140 bucks towards advertising now, in some areas, some divisions, like mowing and fencing particularly, we cannot spend that money. They're too busy. So we give it back. We've given back more than a million bucks in recent times to franchise because we can't spend it. So people get too focused on advertising, on marketing. If you give incredibly fantastic service, that just really tends to work well. And I got to admit, even though I'm fanatical about service, I'm surprised at how big the effect is.

What word of mouth you mean or what do you mean by how big the effect is?

Word of mouth a lot of people now use. Because we have multiple services, as you know. So a lot of people use us for one. They use brothers or they spread the word. They tell somebody else. That's what happens. Or the franchisees who give great service, they get a lot of work themselves directly. So after a while, most of them don't take very much work. So it's that kind of policy. It's amazingly easy to get work if you look after customers and make them into. Into raving fans.

Well, yeah, but didn't you early days. This is before you set your business up. I'm sure if I read this correct or not, were you out there trying to sell encyclopedias?

Oh, yeah. I was terrible at that. I am the worst in the world.

Were you the old door to door, were you or what happened there?

Yeah, door to door, knocking on doors. We used to do it. We used to do it in the way you actually you. You were giving away. Because they were 500 bucks in those.

That's right. Expensive stuff.

And back in 1970, you just about.

Buy a house for 500 bucks easy credit. Surely you're selling easy credit.

It was terrible. But. But the point of. Is people would love these encyclopedias. It was, it was. It was these Colliers. They used to be. So we used to go door to door and we're taught to say we're giving away sets of encyclopedias. Isn't that great? You know, you educate your children for nothing. But then all we want to know is you're serious about doing this. And so therefore, obviously you want to keep in touch with the yearbook and you want to get the information service and that costing the 500 bucks, there was a spiel. I was terrible at it. I spent two weeks knocking on doors and didn't sell anything. I was a real complete failure. I have no people skills, so it's not surprising I was so bad.

So when it came to setting up your business, you have obviously chosen something you enjoy and you're passionate about. I guess that might be why you one of the very first lessons to learn. But the second thing is you're starting up your business. But were you out there selling then or not? Or did you actually recognize I can't sell and I'm going to have to bring people in really quick to do it.

When you're in the service industry, you don't have to sell because fundamentally service is so terrible out there that if you come out there and just people call you, you ring them back, you turn up on time, you do a decent job, you come when you're supposed to. It's incredibly easy in the service industry. You wouldn't believe how, how bad you have to be to fail at that. Just the most basic stuff. I'm returning a phone call, coming when you say you will. How difficult is that? And you've got to be careful when you say you're going to turn up. You give at least a two hour window. We do this kind of stuff. If you ring somebody, you can't get through, you've got to text them. We teach our franchisees to do these kind of things. The great majority do give great service with the right training and support. It's not difficult. You don't have to sell to be good at that sort of area for the audience here.

Jim, can you explain the actual business model? Because it's a very interesting business model. And across Is it 50 businesses now?

Yeah, a bit less actually, I think. I'm not talking about the business model. We have franchisees, we have divisions. So you have like dog wash, mowing, cleaning, pest and tag, pest control, all the rest of it. You have a franchisor which for quite a few cases is us, the national office or usually somebody different. And they go and they actually recruit franchisees and they organize the advertising and the leads go to the franchisees and then they go out and do the work. And we have a system of, you know, we register complaint, we survey customers, so we have systems of making sure the jobs are done correctly and as we've tightened them over the years, their services increase and so have the leads. But actual fact, the thing about Jims is that's peculiar is that we don't consider our customers number one franchisees. Actually our franchisees are number one a priority as franchisees. And that's the great secret. If you look after customers first, well, how can you get great people? But if you get great people, then the customers tend to get looked after. So that's, that's always been. And that's the hardest thing actually finding, recruiting, maintaining, keeping franchisees.

Yeah, well. And ultimately the franchisees is putting their, I guess the life on the. Or the savings in your hands in some regards, aren't they?

We have a moral obligation in a way that we don't to a customer. A customer gets their lawn mowed badly, well that's not good, but it's not disastrous. Somebody puts their savings and most franchise expenses, you know, a typical mowing franchise might cost you 30 grand with equipment which is really not a big investment for something that could, could make you a living. But at the same time if they fail, that can be very damaging to individuals. It can be hurtful, it can hurt them financially, it can hurt them emotionally, it can cost them their marriage. It's a very big sense of responsibility and you know, terrible things happen. We've had, we've had franchisees commit suicide. You know, in 33 years only one franchisee has ever died on the job from a chainsaw accident which happened just last year, which was terrible. But we've had several commit suicide. So that sense, you've got a sense of pastoral care in a way. So we do a lot of stuff in that area. Like for example, we have every franchisee gets a fridge magnet with all the emergencies. We ring them regularly, at least every month and ideally every week. We have regular meetings. It's for business, but it's also personal side. We have a psychologist on traps, anyone wants to talk to them. We have volunteer franchisees who volunteered to talk to franchisees who need to. There's a whole, we train our franchisors in mental health. There's a whole lot of things we do. So it's a very heavy burden and responsibility. One of the things I often say is that I would not sell gyms because if you did then you get some blood sucking corporate monster come in and start pulling more money out like retail Food Group did. That destroyed so many great businesses and so many lives. And it's horrible what these companies do when they're focused on the bottom line. So Jim's is 100% owned by me. I might sell a share to help expand but I would not, not, not give up control.

Okay, so you're not going to. I thought at one stage there was the possibility of a float.

Yeah. But I never was never going to lose control.

Okay, you want to retain control?

Yeah, yeah, I'm going to go retain control. I would never sell a majority share. We don't really need to. We don't need capital very much. We've always been profitable.

Okay, now you break it down and you make it sound so reasonable. If it's so reasonable and everything else, why can't every Tom, Dick and Harry build another client focused, customer driven organization?

Look, a lot of it's emotion. It really is. People are always telling me to lighten up, lighten up about customer service. I get this all the time. I had an email yesterday from a franchisee complaining about what we call lead fees, where we charge a lead fee for every lead. And he said, I don't want to pay the lead feed because if I don't get the job, it's not fair. And I said, well, the whole reason for that is the lead fees are there to give you the focus and the incentive to follow that lead up, to look after that customer. Now he wants to change that. And I said, look, I told you this in induction training. The first course, the first morning I went through and I told you about this. Here's a link to the thing, read it. But I get this all the time. People say I'm causing mental health issues, I'm causing people to lose sleep, and then don't get me started on looking after franchisees. I get on Franchise wars and we send them bridge notices and they get really upset and angry and stuff because I said, you're not ringing your franchisees often enough. You're not holding meetings. So always people are saying, lighten up. There's always this pressure and I am just a fanatic. I will not lighten up. In fact, as time goes by, we raise and raise and raise and raise our standards. And that is an emotional driver that I've got. And I do think that's obsessional nature. I do listen to people, but I don't get sidetracked from my core aim. It's not a rational thing. I don't think if I let this thing go, the whole business will fall apart. But I just can't stand to have a franchisee unhappy when I can do something about it or something can be done. You know, every franchisee in Jim's group has my phone number and my email address.

Yeah, I read that actually. Is that actually true?

Oh, yes. Yeah. And they contact me often. I get several calls or emails a day from franchisees, all kinds of issues and often it's things they want to complain about that I'm not going to change, I'm not going to modify the system, but cheaper, sometimes they really have problems. And now look at this. What went wrong? Why did this happen. What's wrong with our system? I love keeping in touch with the grassroots. See, the thing is, Greg, I'm a lousy manager. I really am a terrible manager. I'm terrible at marketing, I'm terrible at finance. I'm really bad at doing most things. But I'm really fanatical about my people doing well. That's my core job, keeping in touch, making sure customers are happy, making sure franchises are happy. And then when something goes wrong, come out, do something about it.

Well, where do they normally get it wrong? You know, they've obviously invested. They don't, they don't want to get it wrong. They want to get a return on their business. Is it, Is it They believe they can eat. It's an easy. Is an easy step. Everyone can do it. They've misunderstood it. They don't put the work in. It's probably all of the above, but is there a common thread?

Look, if there's anything I could say about franchisees who get it wrong, it's the attitude that says when something goes wrong, it's not my fault.

Yeah, right.

That is, that is the biggest thing. When something goes wrong, it's no good blaming everybody else. A franchisee gets a complaint. They say, well, that's an unreasonable client, or your complaint system is too rigorous or you're not treating me fairly and I should be treated more gently and this kind of thing. And they just. Whereas a good franchisee, a good businessman in general will look at and say, okay, what did I do wrong? Okay, the client was unreasonable. The client wanted this extra work done. Okay, but why did they want it? Because maybe what I should do in future is write down in detail what I'm prepared to do. So I'm doing a vacay clean, for example, what's exactly included? Or I had one just a couple of days back where the client was complaining that the carpet cleaning franchise, he hadn't cleaned the rugs. And he said, well, I didn't quote for the rug, but I said, did you write that down? And he said, well, no, I didn't, because anybody. I said, no, I wouldn't understand that. I would think that if you're going to come clean my carpet, you clean the rugs too. So he was blaming the client and he was blaming the system. But in reality, what he's got to learn is you go in and you explain what you're going to do in writing. And if there's a difference between what you think should be done and what the client thinks should be done, if you can't prove that you're right, then you do whatever they say. You go back and clean the rugs. And when you've gone back and cleaned the rugs, then you text the client, ask if they're happy, send me a response, then I'll delete your complaint for you.

Old fashioned thing called accountability, eh?

Yeah, yeah. And if I look, if I look at one thing that in my business career, and that goes back from many decades, every day of my working life and even my non working life, Christmas Day, Easter, it doesn't matter, holidays. Not that I take holidays anyway, I hate them. But every day I'm asking myself the question, how can we do this better? That's the one question, how can I improve? How can I do better? Every day, multiple times a day, always that question, how can I be better? And that is the sign of somebody good. You don't have to be good looking, you don't have to be smart, you don't have to be good at anything. As long as you ask yourself that question, how can I improve and what did I do wrong?

Just on that. When you do ask those questions and you give yourself some time, that sounds like a couple of times a day, or when you're driving your car or going for your walk or whatever you're doing, where do you get the ideas from? Is it from your franchisees? Is it from you going to visit customers face to face or the second customer?

I don't talk to customers face to face, no.

Okay, so where do you get your ideas from?

Well, I listen all the time to my franchisees and my customers all the time. There's constant input. I'm listening to my staff, I'm wandering around the office talking to staff every day. I just go and see what's happening, what's going on, just chat with them. How are we going? What are your figures like so forth. You do that all the time. Also, I read a lot. I'm a voracious reader. I read probably on average or listen to about three books a week. Now. This could be anything. This could be anything at all. I've just finished One called the 48 Rules of Power, which is about a handbook for Mac for psychopaths about how to seduce women and become power hungry and like quotes Machiavelli a lot, this kind of thing. I'm currently reading one called the Rise and Reign of Mammals, which is about evolution. But I read lots of books about motivation, like atomic habits, like thinking, psychology, all kinds of things. Just read one about economics in One listener. Psychology of Money. I love books about everything. Biography, history, social science. Things like Everybody Lies. Those ones about the Internet. There's some fantastic books around. I'm a great fan of Amazon. I'm one of their best customers. I must be in the world. I just always borrowing books and downloading them and I read the Economist or the Atlantic or the Australian or one of those things and get ideas for books and then borrow it and I'm reading it five minutes later. I love it, it's fantastic. And I'm exercising, I'm working on my farm, I'm driving, I'm listening all the time, all the time, talking books.

When do you switch off then? Or do you.

Well, sometimes when I'm asleep.

You probably still dream about something then as well, I assume.

Well, I have dreams, and often frustration dreams, I must say. I'm dreaming about something, problem or something I'm trying to solve in my sleep.

So what's the key to growth?

Just fanatical. Fanatical about doing it better, improving things. Look, the people thing that amazes me is people think they are so much better than they are. We don't realize how terrible we are. I mean, you look at me and you think, here's a guy who's reasonably successful. I'm a lot more famous than I'm rich, I can assure you. But I'm doing all right. But I look at what I'm doing all the time and say, that was a mistake. I shouldn't have done this. That was bad, that was wrong. This doesn't work. This isn't right. All the time, looking around me, I see people who are fairly ordinary in what they do and they can't see it. They say, it's not my fault, it's your fault, it's his fault, it's the economy's fault, it's the government's fault.

Yeah, right.

I'm not averse to blaming the government for things that they do, like our beloved Premier Chairman Dan. But all the same, what could I do different? How can I change things? It's that. It's that relentless focus. I mean, you have to be a bit of a nutcase, and I suppose I am, but I'm very intense, I'm very driven.

And so I guess in me having that intensity, it's all about the right thing. Getting things wrong as part of the journey, I guess.

Oh, yeah, yeah.

It doesn't worry you. You get smarter.

The next morning, my wife says I'm like one. You know, those. Those plastic things with the weight in the bottom, you knock them over and they spring back. She said, I'm like that. I just. Something goes wrong. And I say, okay, well, that was a mistake. Okay, what was the mistake I did. What did I do wrong? Like, we just hired a CTO and it was a really bad decision. Really bad decision. There's some bad results that come out of that. Okay, so what was the mistake? Okay, how did we choose the wrong person? So we did another series of interviews. When this guy fell over and we went, we did it more thoroughly. We actually investigated more carefully. We got some outside consultants to help us. We did thorough series of interviews. Interview after interview. We prepared to pay a lot more, like double the amount of money. So, okay, it was a mistake and it was bad, but we learned a lot from that mistake and we won't do it again.

When did you set up? 80, 82. You got going?

Yeah. Well, in a sense, full time. Yeah.

Okay, so you've been at it for some time now. So during, if you stand back, is there much fundamentally changed in the. In the art of business?

Well, the basic psychology is the same, the basic idea. You're fanatical about service and you're fanatical about changing everything you do. That doesn't change. What. What's changed dramatically is the IT revolution. That changes everything. Everything is different now. Advertising is totally different from what used to be. Used to be so simple, you know, you had your yellow pages, you had your local pages, you had your leaflet drops. That was it. That was how it worked. These days it's all online. You've got all these social media and you've got the Google AdWords, and you've got the. You've got to be SEO. You've got all this kind of stuff too, which fundamentally is way over my head. I didn't even look at social media. I don't understand it, but I've got people who do.

But you're out there youtubing, are you?

Not me personally. I have somebody do. Every now and then he says, give me some more social. So I write things down, I write all this stuff and he puts them out. I don't even read it, actually, I'm afraid. So.

What do you think of marketing then?

Well, it's a lot more complicated. It's a lot more complicated, a lot more difficult than it used to be. That's the thing. It's a very specialized area. Look, as I said before, Greg, I don't know much about anything, including marketing. I just have this fanaticism and then I find people who can do it for me. I've got fantastic people who work for me. You know, very dedicated. My CFO, who doesn't look like she's, like in her 30s and she's a. She's a lady and she's not very tall and she's. She's just wonderful. She's just really dedicated. I've got. I've got this wonderful general manager, Rocky, who just was one of our franchisors, actually, and came to the office and he just proved incredible. My wife runs a lot of marketing stuff, social media. Joel, who you probably had a contact with, he did fantastic on social media, too. So I've got Megan, who runs. Who runs a. We call Jim's plus, which is. Which is selling our surplus leads and so forth. I've got some great people and that's the key to it.

Why would I want to work with a zealot if I'm the Australian out there and I'm coming in on Jesus? You're a bit worried about this bloke. He's going to push me pretty hard, or whatever the case is. Why would I want to work with you?

I think you have to be the right kind of person, not particularly corporate. The great thing about gyms is that it's very flexible. Things are changing all the time, and if you've got an idea and you think I should do this, well, yeah, let's do it, let's do it. Let's give it a try. So I tend to give people a lot of latitude. I'm always talking to them about what they're doing, but I give them a lot of freedom and they can grow. Like, just as an example, I mentioned before, this lady called Megan. Now she actually. She's a single mother in her 40s. Before she came to work for me, she'd never had a raise in her entire life. She'd worked basic administrative jobs all the time. But you see, coming into gyms, I get to talk to her and say, what are you doing? So I put her in charge of a department, just as an experiment, because she was pretty good at what she did. I recognized her, that she'd done good work, put in charge. She's proved to be an incredibly great manager. Who would have thought it? She's never been in management. She's got no degrees, got no nothing. But she's a fantastic lady who loves what she does and she's so enamored of the. That fact figures. And she. And she's great with the staff. She's just a wonderful person. So you find gold. I mean Joel, as you've met Joel. Joel came in doing a administrative job, part time, basic and then jobs. But he was good at what he did and we transferred to somewhere else, actually worked for insurance and then I would go and talk to them and he'd have ideas about how you could promote insurance and improving the website and stuff. And he got interested in things and because of that, because I knew him and knew what he was doing, he was able to progress. See, people can do things in gyms they can't do in a corporate environment. We don't have a rigid hierarchy. You know, I talk to everybody. If somebody's got an idea here, have a go, try this job, change to that job, do something different. We actually do that. So for the people who have that kind of mind where they like to take what you might call them entrepreneurs, they actually flourish because it's not rigid. We have people who start in the call center who now do all kinds of jobs, which is wonderful because we've got some amazing people who were just answering phones and that's just sort of fairly dead end job. But no, not with us. They can do anything in gyms.

Character's important, Jim.

Character's everything. Character matters more than anything. I do not have much truck by qualifications. I think they're mostly pretty much garbage. I don't think you learn much from anything. I have to say that, including business courses, I really don't. I think that experience does matter and it's good in certain areas, but character trumps everything. And I'd rather have a person with a great character who knows nothing, no qualifications, nothing, but is just great at what they do, you know. One of my most successful franchisees was a high school dropout, went to work for McDonald's, got good training, has a great attitude, really looks at what he does all the time and works. And he's taught me a lot of stuff too.

How do you assess someone's character, Jim?

I wish I could interview them. If I had, if I had any wish, Greg, it would be some sort of a light that I could shine on somebody and know their character and that'd be fantastic. But in a practice, what you tend to do, you try and make your best hope and look, I'm a hopeless interviewer, I really have no confidence in that at all. But when a person actually starts working, it becomes very obvious whether they care about what they do. And that's what you want because I mean, we're a small company and I Sort of know people pretty well. So you don't get lost. I don't want people who play politics. I can have two people come into the office. One of them is just looks so good and so impressive and it's a complete bust. And somebody who looks, you wouldn't think so. You wouldn't think they would. And they just, they're just amazing when you see what they do and come with the ideas to come with how much they care about their job, that that's what matters.

You're listening to no Limitations with special guest Jim Penman. In our next episode, our 100th episode, I sit down with Kathy O', Connor, Chief Executive Officer and Managing Director of O Media.

In any sort of business and team, not everyone's the same. And so you're going to naturally relate and work with some more better than you might others. But you need that diversity across the team. You need people with good brain for process and data. You need good creative thinkers, people that are ideas driven. And then, you know, all the soft skills, you know, some will be stronger than others. So. And all of that is influenced by the leader.

Be sure to join us on our next episode. And now back to the show. Hey, look, rewind it back with that. You know, the start of the show when we, When I read out that quote from one of your books, it must be a pretty tough time, you know, like, obviously you're facing into, you know, the future here. Can you talk about character, anything else? Where was your confidence at that point? Because, you know, that's. And then I guess the second part of my question is, Jim, when did you start seeing the light thinking, okay, I can do this because as you said here, I'm 30,000 in the red. I failed. I wouldn't have thought the confidence would have been booming at the time.

I don't even know how to answer that exactly. Look, when I did my research project, what I came to the conclusion of the ideas that I have could potentially change the world, change society in a really fundamental way, could deal with all kinds of problems like drug addiction, alcoholism, like poverty, like all kinds of issues.

Why didn't you get it over the line there?

Nobody will listen to me because it's so wildly different to anything that anybody says to me. It's blindingly obvious. Some people do accept it actually is taught. There's a few academics around the world who are teaching this stuff, but it's not widely accepted. It's wildly, wildly, wildly different to anything you've ever heard. People don't like strange Ideas. So what I realized was the only way I was going to be able to get this theory going was to actually do a research institute and actually develop treatments that would do what I say they do, which I'm doing now. We're spending a couple million dollars a year in a research project through La Trobe University in Melbourne.

Do you want to tell everybody what your theory is?

It's a theory that everything in society that matters, including war, peace, economic growth, everything depends on character, the character of individuals. And the character that matters is that which is associated in animals with mild food restriction and other kinds of food restriction. So it's a reaction, it's something built into our mammalian heritage, which means we react to the environment in a way that adjusts our behavior to different conditions of food restriction. And what society, civilization basically is a character which is associated in animals with mild food restriction. And that sounds weirdly bizarre, but what mild replacement restriction does? It actually changes your body in all kinds of ways. For example, it turns on and off certain genes. There's a thing called epigenetics, which I didn't know about back in the 70s, but it's a big thing now. So we're identifying the genes. We're also looking at pheromones that affect it, because we found that the pheromones for mild counterreached animals actually affect other animals. We're doing it in rats, but I'm putting together things that don't belong together, like I said. Why did the First World War take place? Well, it's because of a thing called a lemming cycle, which is the same reason as the American Civil War took place, is the same reason as the Napoleonic War. And it's to do with the way that the same thing as animals at lemmings, they have these cyclical population boom and bust things where they grow and then they decline. And there's a biological reason for that. And we have them in humans, but they take about 300 years, somewhat variable, so you can identify it's a wildly different pattern. You look at everything that's ever written about history, about economics, about politics, it's totally, totally, wildly different from anything that anybody thinks. The only way that I believe we can show that this is correct is by developing treatments that are really, really effective, which I believe we will. And people are going to have to listen. They're going to have to say, well, I know this sounds lunatic. It's against everything that I know and I believe and I understand about how the world works, but this stuff works. But then that's the point. Back in 1982, I had this theory. I knew I had to develop it, and I had to, because that's my whole purpose in life. And the only way to do it is to become rich. So I decided I was going to become rich. That was basically it.

So to fund the theory and to do what you really want to do, you set up this business.

Yeah, exactly.

That's it, is it? So it's in reverse.

Yeah. I could not fail. I could not. I never thought for one second I had any option to do anything else. I had to do this thing because the whole future of society. I know that makes me sound like a megalomaniac, but that's why I felt about it. I could not not do it. I didn't have any choice. I knew I would just have to keep on going until I made this work. And it doesn't matter what anybody else. It doesn't matter. The whole world says you're wrong. I don't care. I have to do it.

All right, You're a man possessed. Are you going to pull it off before your days come to an end?

I will.

I will.

I absolutely will. I'm confident we will. I've got some very advanced stuff happening through our research program. We've got some really, really interesting things and the recent advances in things like CRISPR for epigenetics. I read an article in New Scientists just the last week where they're actually using CRISPR to change one particular gene, which is to do with the metabolism, cholesterol. They are actually using this kind of stuff. And I showed to my team, I said, we can do this. We can turn these genes on and off. And I believe once we do that, we're going to get some big effects. I think in the next two or three years, you will see some really significant changes. And I'm not going away anywhere soon. I'm just turned 70 on base of life expectancy. Looking at all my health and fitness and exercise and all the stupid things that I do, I'll probably live to at least about 95. So I've got a lot of. Of time to go to achieve what I need to.

All right, we've got a good 25 years to get through this. But how were you traveling through Covid? Now we are. Now we are traveling, as you said, with Victorian government.

Okay. Taking me started on Beloved.

You know, that might have changed some of your theory, I might have thought, you know.

No, no, it's just. Look, it was just stupid. It was. It Was it was pure politics and it's absolute grimiest work. You know, the original departments from Health and Human Services said sole operators, mole mine, contractors alone, pool care, working by yourself in a yard, no danger to health. You continue. Our beloved Premier gets on a press interview a few days later and says you can't get your lawns mowed and your houses clean. Now, note that he doesn't say you can't go out and do it, because he wasn't thinking from the point of view of the people who were doing it, he was thinking of his rich mates, the elites, the inner city, smug, self satisfied people who can't get their lawns made. Oh, big deal. But what about the hundred thousand plus Victorians? Now, what was his reason for that? I don't even believe he knew what his own guidelines were about. And then when he found out that the guidelines were different, he would have just backtracked and changed the rules. And then what I've said ever since is, what was your reason, Dan? Why did you knock my people out? Where's your expert report? How can a person who mows lawns by themselves in a lot have no contact with clients? How can they possibly spread inspection? Particularly when you have teams of council gardeners doing the same jobs. They're apparently no risk of infection. So where's your reasoning behind it? Now, we have taken him to court and we have said to him, we want your reasoning because we're putting a claim, financial compensation on a test case. It's gone through vcat, which is the Victorian Small Claims Tribunal, and they actually fought it, they had a big thing, experts come in and stuff, but they haven't given us any reasons. Now actually, VCAP basically has come back and said, you can't. They don't have to tell you any reasons, they don't have to give you information, they don't have to tell you why they did this. So now we're appealing to the Supreme Court.

Yeah, well, I thought government's for the.

People, not this government. Not this government. It was just pure cynical politics. There was obviously no justification, there was no reason for what they did. But for the Premier to back down, yeah, sure, I would have saved a few hundred thousand, Joel, but I might have appeared weak. That's an easy thing. So he wouldn't back down, he wouldn't admit he made a mistake. If he'd done that, I would have backed off. He said, look, we had a look at it, there was no real reason for it. I made a mistake. I misspoke at the Conference. A decent, decent human being might have done something like that. Somebody who cared about Victorians, somebody who cared about the welfare of their citizens. So there was no justification. I misspoke. I made a mistake and I would have taken my hat off to him.

So what's your thoughts, Jim, on the bigger picture too, in regards to just business in Australia and the engagement with the levels of government?

Look, I have to say Australia is an amazing country right now. We are incredibly rich. We have got so blessed with resources. We are facing a few headwinds and stuff. I think they're going to have to raise the rate of interest and that's going to cause a recession, which doesn't worry us at all as a. As a franchise, because we do better in recessions, because it makes it easier to recruit franchisees. I think there's a general decay in character in the population. It's part of my theory. It's part of the reaction to wealth and urbanization. And I think there's a general decline in work ethic in the sense of initiative. The thing that makes, I mean, let's face it, look at one thing. Technology is going ahead. Technology is amazing. The productivity improvements that we've seen in gyms based on technology are extraordinary. Yet we're not getting any richer. Why not? Because I think character is declining and we've got to come to grips with the aspect of character. And this is where my research is going to. Because I think we can do something about this.

Okay, so when you say character is declined, in what manner?

Work ethic, the ability, just the willingness to work hard, to take initiative, to care about what you do, that kind of attitude. We employ an awful lot of Asians, actually, I must say, a lot of areas we find they've got a stronger work ethic, but even so, it depends where they come from. We find, for example, the Asians from the diaspora, Chinese diaspora, tend to be better than those from China because China has become very corrupted, because they destroyed all the traditional values with Marxism and there's nothing. There's a big vacuum in its place. It's just a search for money that's very destructive of character. So character is everything. And when character decays, the reason that some countries are rich and others are poor is not to do with politics, to do with economics. It's to do with character. You have the kind of character that makes you rich. You will become rich and you lose that, then you will go down. We've got to reform character.

You're not a fan of crypto, are You?

No, no, I'm not. The problem with something like bitcoin is it's pure gambling. It's something that's not got any inherent worth, except, I mean, look, I gotta say, if you're a drug runner or a pedophile, it's a great currency to have, so you can do it secretly. All right? But apart from that, I cannot see the value of a currency that has no. Has nothing behind it. Now, the technology of crypto, the ability to be able to do contracts and this kind of thing, and to have, you know, wonderful ways of transferring money at a set rate, you know, stablecoins kind of thing that has some real value, crypto for itself. And I've said this again and again on social media. You know, crypto is just gambling. Don't do it. And I said this a few months back, deluge of people having a go at me and how bad it is and everything else. I'll tell you what, if anybody listened to me in those days, I would have been a lot better off because they would have sold their bitcoin and avoided all these losses. Look, gambling is a bad idea. If you're going to invest in something, invest in something that has real value. Don't gamble. Gambling is. Gamble is a mugs game. And if you're gambling in crypto, you're against people who are actually going out there. They're manipulating the market. What they do is they buy into this thing and they hype, hype, hype, hype, hype. Get the price up and then they sell. And the people who buy. Stupid.

Are you doing that when you're flogging franchises as well?

Look, let me cut you some figures. Let me cut you some figures. If you look on the Internet and I guess you do this at the failure rate of a independent gardening or cleaning business, the chance of you being in business at the end of the first year, between 5 and 10%. Now, you can look this up.

Yeah, no, that's general. I know that. Yeah.

This is a service business, not a retail. We're talking like ours. Okay, I can give you the figures for us, our chance of. If you buy a Jim's franchise, the chance of you being a Jim's franchisee in 12 months is around about 88%. Not 100%, but it's 88%, which is a bit better than 5 or 10%.

Am I making profit or I'm just keeping my head above water?

Okay, well, according to our latest survey, we anonymously survey franchises every year, most here to get support we ask them the question, are you making income that's good, satisfactory, or poor? Okay, good. The Last figure is 52% for good. The rest, satisfactory poor is 7%. Now poor is. That's not zero. But we measured this. This is anonymous surveys. Franchisor doesn't even know how they vote. We just aggregate the figures together. It's 7%. Traditionally it's been about 10% this year. Last year was 7% this year. We haven't got the figures yet, but that's. That's huge. But the interesting thing about that, Greg, is that the 7% is not at random. What you find is the people that do fail and leave have much worse customer service records than those succeed. Those who report poor income tend to have worse service customer service records than those who report satisfactory or good income. So a lot of it depends. So what we do is we train people and we monitor them and we badger them and we even cause them mental distress by going after their complaints to say, you can do better, we'll help you to do better. You know, we know this works because we have a training session which is three days training session. There's one running this week, actually, just right now. And the first session on the Monday morning, I get up there, I talk for two hours. Most of it's about customer service. Now, I know that works because during the lockdown in 2020, we actually had to go online and we had this system where you could watch a video of the session and then you could ask us some questions. And we know that they didn't watch it because the levels of customer service in new franchisees, so many of them was absolutely terrible. So after that, we said, if it's online, you've got to do a zoom call. So we got to know you're watching. You can't just watch a video. So actually the control experiment by seeing people who hadn't done this aspect of the course actually had dramatically worse customer service. I mean, to give you an idea, we have a scale of an Average rating between 0, between 1 and 5 stars depending on the response. The average in gym is about 4.7. There's quite a few people that got 5.0 these days, more and more. But the of the average person who leaves in their first year is 4.2. Now, 4.2 still means that like three quarters of the clients are happy, but to us, that's a pretty poor rating. That's a shockingly bad rating, 4.2. So when we had this system go through and we and some people hadn't listened. We had ratings like 2.3 or this kind of stuff. That was shocking.

So Jim, is it effectively a process and just do the process well?

Yeah, of course.

So cut that lawn well and then just do it. And guess what you'll get. Repeat business. Go over and above and again, guess what? It might get passed to the next door neighbor and you'll pick up that business as well.

Of course you follow processes and sometimes not obvious too, like when you ring somebody and they don't answer the phone, which is very common in a service industry, what are you going to do? You've got to text them to say it. Because people don't listen to voicemail. So you've got to text them. In the text, you've got to say, I tried to call you. We show them how to put this message in. Hi, this is Bill from Jim's Carpet Cleaning. Tried to call just now. Please call me back on now. If you call and you text within the two hours, which is maximum we give you, then if the customer doesn't respond, then I'll wipe the complaint. But usually they will. If you're going to be late to a job, you let the client know. If you can't get through, you text them. When you send an email quote, you, you don't just email it, you text it. Because emails get lost. There's processes all along the way. When you're going to give a quote, you give a clear, detailed written quote, you say what you're going to do and there's processes and there's a client's happy, there's a process. So yes, it's all process, but it's a process driven by passion too.

So, Jim, you know, in your business then, if you're gonna open up another product line or another business, does the majority of the time, does it come from you or do you get people coming in and say, jim, I've got on, you know, like Mr. Branson and his business, you know, I might wanna creative business, maybe doing brides or whatever it's going to be. But I'd love to have your backing or support or your skills in marketing and opening doors. How does it, how does it come about?

Mostly people come to me.

Yeah. Do they.

They just email me directly. I'm very easy to reach. That's one thing. I clear my email box every day, several times a day. So anybody wants to reach me, they can. Jim@jims.net you've got an idea for a business email? Jim@jims.net if I give you, my phone number. You can't find me. You can find me because you're the media, but you can't phone me because I won't do that. But I will listen to an email. You've got an idea, I'll respond to you. And that's actually how they mostly come about.

Just say, I have that idea. Yeah, all right. Okay. And I'm going to. And you say, that sounds like a good idea. Let's meet or what are we going to do? Or zoom or what are we going to do? Talk me through your process. How do you evaluate me?

Well, first of all, I want to know what you've done, because I want to know. Like, for example, we had somebody. A latest division is called Scratch and Dental. Now, that was an easy one in a way because the guy who did it used to be a franchisee and a franchisor of ours way back. And he's a good guy, a guy called Jason. Now he's left Jim's and he went on to greater things. He built a business that does scratch and dent. He built a very major and successful one, become a real expert in the industry and sold that out. And now he's going to do it through Jim's, which is a process he understands. Now, this is great because I know Jason. I know he's a great guy. He's got really good experience. He's got a success.

Why does he need you?

Because the brand is so powerful. Look, we had somebody interested in that. We did a survey for Jim's Glass in Adelaide some years back. We did a survey for Jim's Glass. We actually showed them the customers. We showed them a number of different brands. We showed them a couple of local glazing companies. We showed them o', Brien's, which is the number one in the country, as you know. They're huge. They're all over the place. And we showed them Jim's Glass. And o', Brien's, not surprisingly, did somewhat better in customer recognition than the local ones. But Jim's Glass was by far the best recognized. When we asked people who they'd use, oh, Jim's Glass every time. Now, the funny thing about that, there was no such thing as Jim's Glass didn't exist. It was a survey just to find out. So what we've got is fantastic customer recognition. So we put the brand out there. It's so easy to find work.

So just on the brand. So the putting the brand out there, how do you. Is it done through the interaction by your franchisees? Majority of the time winning the business or is it done by new fandangle ideas through marketing?

How do we market?

Well, what I'm sort of saying, you say the brand's out there, right? How do you keep getting that brand out there?

Well, you've got to be where people are looking. This is the big difference in the modern world. You go to where people are looking. So what you've got to do is you've got a website, and the website's got to be very well managed. It's got to have SEO on it. And that's, as you know, it's quite an art. We've got people who specialize in that. We're still learning how to do it. It's got to load quick. It's got to look good when you get on there, it's got to appear and having all kinds of information. We're setting up a how to channel in Facebook, for example, to get people to come and have a look. And then you put good stuff on the. The. On the website that causes people. So when people go in there, they keep on having a look at things so they stay there. So Google recognizes that as being good. And then you use various forms of social media, like Facebook and all the rest of it to get people to identify with you and then use things like Google, AdWords and stuff and so forth. But whatever people are looking for, you got to be there.

Okay. And the brand, what I'm seeing right in front of me is a picture of a bloke with a beard and a hat on.

That's me.

That's you, that's me.

That's what I used to look like.

And that's interesting. As well as the leader, you're gonna pop. You're gonna use yourself as the brand.

Yeah, well, it's very helpful from that point of view, having my name on the company, because everybody knows Jim's and that's me. So I can speak for the brand.

Okay, now you don't know me this time around, and I forwarded in an email to you, and I've got a product or an idea, whatever, and so we've never crossed paths. It makes a little bit of sense. How are you going to put me through my paces to sort of get me in your mind and get it over the line? Think this makes sense? I'm prepared to trade my brand and bring you one, et cetera. Just talk us through.

Okay, well, first of all, I have to look at whether it's feasible for us. We don't get into site Based franchises, we're not good at that sort of. So we understand a business where somebody rings up what's the service done and we go and provide it. That's basically our medium. It can't conflict with an existing division in any way because our contracts have what we call territory rights built into them. So if you have the right to do, say, carpet cleaning, I can't have somebody else come and have that service or even service that could overlap with it. So it's got to be feasible. I would then have a look at who you are and what you've done. What do you know about that business? What have you done personally? Have you done it yourself? Have you? What Aldi rates have you had? How did you market it? I would just be grilling you about what you'd done. And you know, look, it's not that difficult. Now, if, if I find that you've got what it takes, we'll then put you through training. There's a three day generic training course and then there's a franchisor training course, which is two days. Now, part of that is an assessment process. If you don't do well, you will get knocked back. We had one franchisor training last year, but we knocked back most of the applicants. They just didn't have. Because when you, when you do franchise or training, it's very close. Franchisee training could be, you know, 60, 80, 100 people, but franchisor training is just a few. So you get to know them and then we have dinner with them and we get to see them. We had one particular case where one franchisor, potential franchisor, was rude to a staff member. We just failed them because that was a terrible personal attitude. It was just shocking. I mean, he wouldn't even be suitable to a franchisee. In fact, I told my staff members in our conference center where they said, if anybody, if any franchisee is rude to you or difficult, I want you to let me know because that's not the person we want in the system. So we look at their character, we just try and get to know them. And we're not always right. But by the time that process has gone through, we generally have a fairly good idea how good you are. And again, it's experience, but it's also character. I'm going to ask the questions. When I do part of the franchise or training course, I'm going to ask you questions. How do you respond to them? What do you say? Not simple franchisee training. You actually tend to give a lot. Franchisor you ask a lot. You know, if you're a potential trainee, I would ask you, okay, why would you select franchisees? What benefits are there in being selective? Why don't you just accept everybody who comes? Now, in practice, if you do that, you tend to do a lot worse than if you select. But why? Why is it that being selective is so valuable? And I want you to tell me what you think is the reason and I want to see your reasoning behind that. For example, if you have poor franchisees, if you don't select, then it tends to drop the level of customer service. Therefore, other franchises get less work. That's a good reason. Also, the very fact of being selective is attractive in itself because it shows that you care about the person you're dealing with. You want them to succeed. So that's an indication of ethics, which attracts the right kind of people. So there's all kinds of things. So I'll ask you your thinking. I'll try and work out how you're thinking about things. Character is everything. Character is what you've got to try and do. But in the case of a new division, we also need to know experience. People are always coming up with great ideas for new divisions. And I say, what's your experience? I haven't got any. I just think it's a good idea. Come out and learn some experience and then come back to me and then we'll talk about it.

Who do you bounce ideas off, Jim? If you're, you know, you're thinking, have you gone through your career, as you said, you weren't business trained initially. Oh, you were. You started off as a young bloke, you said, eight years old, learning, you know, business in two bob a week type thing, you know, did you bounce or did you go and go and see people? Did you travel the world to get some advice from other business leaders or just leaders? What, What? You know, I know you read your books, as you've said, you keep yourself informed, but have you actually got in the sense of personal. You bounce ideas off.

Look, not a lot in the early days. These days I tend to talk to my key staff. I will, I will wander down to the office at half past five or six o' clock and have a chat with people like Joel and Rocky and others and Cynthia and just stick around longer. So we just, we just toss around ideas and come up with things. Look, in the early days, not, not so much, actually. I'm not a very social sort of person. So the book, the best lesson I ever got in business, though, was Was from somebody who run a advertising agency. And this was way back before I franchised, when I was struggling to try and sell lawn mowing businesses, which is what I used to do before I franchised. And I was terrible at selling. And I went to see this guy who had an advertising agency I knew from my church, and he spent half an hour telling me about how to advertise and how to run, you know, what the principles were, advertising. And then at the end of it, he said, you don't really need an advertising agency. Just go and do what I've suggested. And when I walked away from that interview, I realized that I completely sold on his business. And I was trying to work out why. And I thought the reason was because the only concern that he had was my welfare and the welfare of my business, and therefore he sold me on his business. So then what I did was try and apply this to selling lawn mowing grounds, which is how I started. And I was very bad at it. In the past, I used to have a professional salesman trying to sell lawn mowing grounds for me because I was so bad. I was so unconfident of sales. But as soon as I got this idea the first time somebody rang me, instead of talking about my business, I started asking questions. I said, tell me, do you know what the cut of a lawn mowing round is? And a cut is each job done once. If you've got 100 clients, 60 bucks each is a $6,000 cut. Anybody knows that in the industry. People coming in didn't know that. So I start talking about the business and how to advertise and what kind of work to do and what to charge and what equipment you needed. I just gave advice. And when they came to see me, I did the same thing, Just gave advice. And then people would actually ring me, and they would actually there was. So I must have made a good impression because people would ring me and they would say, look, I've been given a business in my area, offered one in my area, which is better, that one or yours? Asking me to advise them on whether to buy my business. And I would ask them the questions, and then I would actually say to them in several occasions, that's a better business. Go and buy that one. So I stopped being concerned about my business and. And started being concerned about their interests and their welfare. And you know what? As soon as I did, this pathetic salesman became super gen. And that was the basis of everything I've ever achieved. That single idea. If you focus on the welfare of the person you're dealing with, irrespective of anything else. You will tend to be. You'll tend to be a good salesman because it's genuine.

It's real creativity. And the canvas of Jim's business, it's giving you the creativity louder, the flourish throughout your career.

Yeah, yeah. Creativity is everything. Look, I'm a great believer in experimentation. I have made more mistakes than anybody I know, and I still continue making them because I'm always trying different things. If something goes wrong, if something's a problem, you don't just think of one way. You think of three or four different ways to deal with it. All kinds of different approaches. Just keep on trying and trying and trying different things. And the one thing I know about business is that nothing ever, ever works out the way you think it will. Most things work out substantially worse than you think. Some things work out much better than you think. But you've got to try stuff all the time. Constant, constant innovation, which I love. I find it really exciting. Some people find it a bit wary. I come into the office and I've got another book and I put it on Rocky's deck. And Rocky rolls his eyes. I've just never finished the last one yet. But this is ideas that I want. There's wonderful, wonderful stuff around. You just keep on trying stuff.

New idea. Jim's plus. That initiative. Am I going to be happy with that if I'm bought into you? Or what's the story behind that?

Jim's Plus. This is the one. We've got this. Hundreds of thousands of unserviced leads every year.

That's right.

And we are trying to do something about it. Look, it's the same problem. One of our biggest customer service issues is not so much the poor work. We get the fact that we can't provide service. If you go and look up Jim's Fencing, for example, you'll find terrible reviews. Most ecosme cannot look after them because it's like 60, 70% unserviced. So it's damaging. And the sole lesson, if you go into a retail store and they don't have what you want, what does a good retail store do? They'll always say, look, I'm sorry, I don't have it. But down the road you can get it there. That's just good business principles. Okay, so that's the idea behind Jim's Plus. We actually identify and we find contractors who are in business already and we pass the work to them. And then what we do is we measure them, we charge them three Leads free and then they got to pay a certain amount per lead, only what they take. And then we measure results. We use our survey system. Anybody who doesn't do particularly well get dropped very quickly. But I'm proud to say that the actual service given by Jim's plus is very close to Jim's franchisees. Not quite as good. It's about average, about 4.5 stars where Jim's 4.6, 4.7, but still much, much better than just saying, no, we can't help you. So that's the idea. At the moment we running it, we've got about only about one in three of our surplus clients going out because we keep on knocking people off. So it's not that easy. You've got to find the good ones. But the great thing about it too, some of them actually. There was one guy at franchise training this week I was speaking to who actually came in through Jim's plus because we gave him leads. Through Jim's plus there were great leads. It's not like hypages where you get six different quotes and you go the cheapest. Jim's plus, you only get one person. We give you the lead. You're the only person that's got it. You go and quote it if you do, but just amaze the client. So we had one. This guy decided he liked our lead so much he decided to buy a franchise. That's not uncommon these days.

Different dynamic, Jim, family and business. Not easy.

Yes, well, unfortunately I've got an amazing wife that I totally adore. I'm crazy about, still in the honeymoon phase after 21 years who happens as an extra bonus to have very good business skills. Leah's actually a lot better than me. She's a much better manager. She gets involved, she learns how to do something. She gets into the nitty gritty. She learns how to do SEO. She learns bad link is and how they're done. She's great at that. She's running the marketing and so forth, which is very positive. She's been very helpful. She's helped set up my finance department. Getting it run well, helped me find Cynthia, which is my wonderful cfo. Downside as we argue a lot, we always fighting. We had a discussion. We were out in the way to have a nice date the other night and she proposed something. I didn't like it. So she. We had this cold hostile thing right through dinner. It was a terrible date, I can tell you, but I adore the pieces. She's wonderful. I love her. But you know, there's challenges in being married in the business, that's for sure.

What do you think of the future? Yeah, in the next couple of years like you said, we've got some downwinds coming. We've got inflation, we've got interest rates, a bit of uncertainty over there in geopolitics and we've got a new government, federal government. What's your thoughts?

Look, I don't think. I think Albanese is doing a decent job. I got a lot of respect for the guy. I'm not a rusted on liberal supporter. I actually tend to be in favor of things like carbon taxes and stuff so I'm sometimes a bit left of center. But being small business, you know where I sit. I think he's a decent man. I think he's trying hard. I think he's trying to be competent, looking after the economy best he can. I think you can't crack inflation without causing an economic downturn. They just can't do it. And we have to crack inflation. We cannot have prices getting out of control again as they did back in the 70s and they should jump on it faster and get the interest rates up. Look, it's a lunatic. Look at this way. What's the current rate of inflation? What, it's 5, 6%. I'm borrowing money at 3%. The bank is paying me to borrow money. That makes no sense whatsoever. Now it's easy for me to say because Jims is very profitable. If interest rates went to 10% it would hardly worry us but it would hurt a lot of people. But that's what they have to do. They have to put the interest rates up. They have to cause some sort of a recession. They have to crack the back of inflation and they've also got to do something about the debt too. We just can't keep on borrowing all the time because in the end the chickens will come home to roost. So there's some very hard decisions to be made. I give all credit to the government. I wish them all the best and in making the tough decisions I think they, they probably will. I hope they will.

And for Jim and his business, does he see you see opportunity in all this coming forward?

Yeah, yeah. Look, it's going to be wonderful for us. I mean, look, I don't want to sound callous. Recession is terrible. I think one of the wonderful things about economy right now is that is that labor is in short supply. People can go and get a job anywhere and they can be treated decently. And I like that. I think it's good I like the fact that the demand for labor pushes up wages, you know, raising wages too, like anybody else too. So I think that's great. I don't like it, the fact that all the money goes to the owners of capital and then the workers get stuff all. But at the same time, look, I want, I would like to be prosperous. I would like for my fellow Australians to all have jobs and be well off and everything else. But at the same time, from the point of view of Jim's group, a recession is going to be very good news because look, we are growing now. We shouldn't be growing by all the standards because labor is so tight, people don't need to go out and start a business. But back in the Keating recession in the early 90s, that was incredible for us. We had 1000 the beginning of the year and 1400 franchises at the end of the year. Oh yeah, it was, it was the best growth ever. And that was because there was a recession. People would come, there's failed builders, all kinds of people, great people people, great business enterprise. And they come to us because we've got work. We've got hundreds of thousands of under service leads we can't cope with. We've got work for anybody. So as the economy goes down, it's going to be very, very good for us. And I don't want to sound callous, if I could wave a magic wand, I would have no recession because it's, it hurts people. But at the same time, from our point of view, we're very well, obviously we're very optimistic. Other businesses are not so good. They've got a conference center for example, which is going to hurt. But the great majority of our income comes in from franchising. And what we desperately need is franchisees. We've got so much, we've got so much surplus work, it's painful. So we really need how much, how.

Much you got, what sort of percentage you got over the top.

Latest figure so far this year, 38% of all leads unserviced.

38%.

38% of all leads unserviced. And that's cutting back. Advertising, growing fast, doing everything we can. 38% unserviced. It's the worst it's ever been. The year before last year was like 33%. Then it used to be 20. It's growing and grown and grown. Every time we improve the level of service, the level of unserviced leads comes up. But also the other thing too, that figure I gave you before, that 7%, that's also the best we ever had too. 7% poor income. In reality, for most divisions, you just simply turn on the tap and the leads come out.

Now is that across all your businesses or in particular some areas?

Oh, it's very variable. For example, the extreme one is fencing. We could do with another 200 fences tomorrow. We could make you sure. Fencing is the toughest one. They tend to get so many referrals too. So you do a fence, you do three fences, you've got three or four neighbors, all of which we've got one good fence and lousy fences. You just drive. So they get so much work. Mowing is very, very busy. Most divisions are busy. The only ones that we sometimes struggle with a bit of things like it, I think I was looking at the figures. Something like about a third of our IT people are actually reporting poor income, which is the worst of any division. So they have to go out and do promotional work. We have a system called pay for work guarantee where if you're not making a certain level of income, pretty about a thousand to fifteen hundred dollars per week, then you can, you can promote yourself and the franchisor pays you to do it. Now the franchisors, I was one franchisor franchise yesterday was writing to me and he was a problem. He's income. The trouble is he's not getting enough leads. He's had like in the last fortnight he's had like something like 16 leads. It's not as though he's getting nothing, but it's not enough. So what I'm saying to him is you've got to go out and you've got to do this promotional work. You've got to promote your own business. You can't just rely on us. And I talked to the franchisor about it is he won't do it. This guy is desperate. This guy's really doing pale. I don't know, we may just give him his money back because he only started a fortnight ago because he just doesn't have what it takes. So in businesses like white collar businesses like it, bookkeeping is a similar one too. You've got to be prepared to go promote yourself and that's a bit harder. Even something like test and tag, which is a great division, you've got to actually proactively approach people. Those businesses, if you don't do your promotional personal work, which will pay you for it, you can get into trouble. But most divisions like, you know, cleaning and dog wash and fencing, mowing, all those ones, we just, the Work is unlimited in effect.

I know you've got a purpose and everything else, but when you bring someone on, are you fairly ruthless? And that is, as you say, if you don't make it, you're upsetting my brand as well. How long do you give most people?

Well, if we're talking about complaints, there's a process involved. We actually measured complaints. If you get four complaints, at least 4% of total leads within six months, then, depending on what the franchisor says, we consult them first, then we'll send you a warning letter. That's nothing in itself, but if it happens again within the next six months, which bear in mind, could be within six weeks, then they get a breach notice and they need to come back for retraining and actually do a course in retraining. And then every complaint after that comes straight to me and I watch it as they keep on getting complaints. We just cut off their work or terminate them. So that doesn't happen a lot, but it's a fairly tough process. And every time there's a complaint come through, the franchise will talk to them and say, okay, what happened? What did you do wrong? And bear in mind these people who are still most of their clients are okay, but there's a minority that aren't. That's the issue. So, look, you have to be ruthless and it hurts. I know, and somebody who's invested in the business and they fail now, they can sell their business. So they've got goodwill. We let them do that, certainly, even if we terminate them. But you've got to think, You've got nearly 5,000 other franchisees that are dependent on the brand. You cannot be too soft on one person because you hurt so many others. And they say to me, they say to me things like, well, these complaints and things you're sending through affecting my mental health. And I always said the same thing. I said, yes, but if we slacken off, you'll have hundreds of franchisees who won't be able to feed their families. And that's got a mental health issue too. So you need to do this, you need to lift up. So, yes, there's an element of ruthlessness. And the same thing with the franchisor who won't look after franchisees. They don't phone them often enough. The franchisees don't like them. We're the only franchise system in the world. The franchisees can vote out their franchisor by anonymous. They can vote them out, you can force them to sell, in effect. And that does happen at times. So that's fairly ruthless, too. Now, mentally, they get to sell their business and they usually make money out of it. But the fact of the matter is, you've got to be hard.

So what do you got? Is it 4,000 franchises?

It's 4,670 last time I looked. So we'll probably hit 5,000 within a few months.

And that's what Australia, Australia, New Zealand and New Zealand.

We've got about six in the uk, but they're more or less Norman. I mean, they're just using the brand. But UK failed. It's difficult to go beyond Australia and New Zealand because the culture tends to get watered down. You've got to constantly push, push, push, push. Great service to clients, great service to franchisees. People always tend to sort of say, yeah, like, I like the gym system, but we're not fanatical like Jim, you know, we're not going to do this because it doesn't. We don't need this here. They used to tell me in New Zealand, you know, we had the complaint system working in Australia and they said, you know, we don't need you, because in New Zealand we give fantastic service. We don't need this Australian stuff. But then when we actually measured the level of complaints, we found they were worse than us. So people get very complacent. They don't think it's bad, they don't think you need to push and they always slacken off. That's, I guess, part of my role in gyms. I'm the gadfly. I'm the one that's always pushing, pushing, pushing, pushing for better service at every level, the franchisees and the clients.

What's the average day look like? What time are you out of bed?

Usually I drive most under school, actually, so I need to get up in time for that. Have a nice cuddler with my wife. First thing, I can't. She tends to get up first because she's busier than I am. Drive my son to school. I do emails. I go through my email all the time. I keep in touch with them. One of the things is, it's very important when you respond to somebody, especially a franchisee. The quicker you do it, the better it is. It takes the same time to respond to an email within two hours, it does within two weeks. But the effect on the person who emails you is dramatically better.

Well, see, that's interesting because you hear everybody else saying, surely you've got better things, not better things to do, but can't you group that and do it later and focus on your work and then get back.

Well, that's what I'll do. I'll actually go through and I'll do with my emails that I've got on, I'll upload. But some of that may include something that I have to do, like a task. I have to write some sort of an account that's part of my. That's part of my system. So I'll write. Just like the other day, they wanted me to write something. We were setting up an office in the Philippines. They wanted me to write some sort of a statement about what Jim's was. So I did two and a half pages. They just did it. I can write fairly fast. I'm very fast typus. So I just. I just do what I need to do. Then what I tend to do is to go. I often have meetings and things, often online. I mean, it might be a podcast like this. I'm meeting with staff or meeting with the IT team or something like that. So I do those and I spend and I just wander through the office, talk to people. I just go to each office in turn, have a chat how it's going on, just say hello to people, you know what's happening, what happened with so and so mentioning something that come up in an email. Just, just, just keep in touch with all that sort of stuff. I do training sessions. Like this afternoon I'm going to do a training session where I go down when we've got trainees in, I actually go around and chat to them as far as possible. I like to talk to every franchisee if I can, because if they, if they've met me, then they're more likely to contact me if they need to. So I really push that and I just talk to them. I'm not natural extrovert, so it's something I've had to learn to do. So I spend a lot of time in just keeping in touch with people, I suppose. I don't have a lot of formal jobs, apart from going through. I deal with all complaints. Any complaint wants to be taken off. I deal with it personally because it's part of. It's keeping in touch with what's going on. It helps me to understand and learn what the mistakes are. So I don't. Look, I don't work incredible hours. I probably work 40 hours a week, I think. But it's difficult to say, though, because, I mean, if I'm listening to a book, a great book, is that work? Well, it's not really technically work, is it? But it Might be the most valuable thing I do all week. And sometimes when you're talking to staff, too, sometimes the discussions can be a bit personal. But it's not work exactly. But is it? Or Lee and I, my wife, we talk about business incessantly. I mean, does that work? Exactly? I'm not sure. That's why it's difficult to measure it. I just know I love what I do. I really, really enjoy it. It's just an incredible buzz, I think. I don't. There's a happier man on the face of the planet than me. I just enjoy it so much. To me, business is like some giant, incredibly fascinating computer game. You know, it's always interesting, always changing, always, always challenging. And you get paid to do it. I mean, it's an amazing thing, business. I love it.

And the ideas, do they come all the time, or do you actually make yourself time to sit back and think, or do you have a notepad beside the bed? Like, what's all the above? How do you operate there?

There's flooding. I get a lot of great ideas from my inbox. Talking to franchisees and franchisors, always. And just going around and talking, just discussing things, and you just, you spark ideas. So just inbox discussions, books, everything. I would come up with new ideas all the time. I mean, there's so much fascinating stuff going on. You know, we're launching an RTO right now, registered training organization. That's something that I find really, really fascinating as an idea. And that's only been going just. That came out of a discussion just one evening in the office with Rocky and a few others. We're just chatting about it now. The great thing about that is what going to offer a course, let's say, in fencing, how to do fences. We're close to having that approved. Okay. Now, why would you come to us to learn defensing? Well, I tell you a good reason. First of all, the course is going to be taught by people who are successful fencers, who are good at what they do in the field. They're not academics, they're not in some institution where they've just taught all their life. These are actual fences, teaching the course. Now, in the process of that course, you're going to send you out on the road with successful fences. You're going to learn how to do it in practice. In reality, you're going to see the kind of money they make. We're going to look at you at the end of that course. There's all kinds of options. First of all, we've got all kinds of jobs opening up. If you're a good worker, you know how to fence. I've got 10 people who want to employ you. So straight away, because we've approved you us. Secondly, we'll show you how to run your own business. We'll teach you that, we'll teach you the skills, we'll teach you the marketing, we'll teach you how to. Thirdly, of course, ideally you come and join gyms because you've already seen how great it is. You know, you can make yourself $3,000 a week, you know, clear, which is good money. Most of our franchisees make well over the average Australian wage. And so you're attempted to join us and we'll provide you with some finance and stuff. So that's just an idea that came up in a discussion late last year. But how good is that? And that can apply to fencing dog wash, it can apply to pest control, it can apply to horticulture, can apply to anything. So we use the RTO to help people to find workers for our franchisees so they can employ, so they can take up the other service work and ideally also so that we can build the franchisee numbers ourselves.

You gonna ever quit or are you gonna stay there till the day you die?

I often say I'll have a retirement ceremony and I'll be the guest of honor. I'll be in a box on the floor or on the dais or wherever you put them in a funeral. I'm not even planning to die in 25 years with the way that medical science is going to I watches. I just finished reading a book called the Price of Immortality about all the different technological developments in terms of medical science. And if there's anything available to stop you getting old and dying, then I'm going to be first in the queue.

Fair enough. Fair enough.

I may die in 25 years. I could die tomorrow. May I die in 25 years. I could live to be a thousand, who knows.

So is that going to be serviced by Jim's funeral service?

Maybe one day. One day.

It's a solid business. It's a solid business, Jim.

Maybe some countries got a background in the industry. Who says? This is the way I've done it, this is the way I run it. How about it? I don't know. Maybe I'll be one of the clients one day. Who knows.

That's exactly right.

But hopefully not, hopefully not for a long time to come.

Fair enough. Hey Jim, look, one last question. If you look back at that gentleman number of years back who was going through that tough time and that self realization. $30,000 in debt. What advice would you give him now?

I would say that the lawn mowing business is a lot better than you think it is. I had no idea. You know, I didn't think that would be. I tried all kinds of different stupid things like holiday resort and different kinds of shops and all kinds of things along the way. So I'd say lawn mowing is fantastic. Get out there, start building lawn mowing rounds, which I started doing pretty quick. This is how you sell them. I talk about the experience I had. Looked to the interest of the person you're dealing with. Get into franchising as soon as possible. It will work for you. I would. Jeepers creepers, if I had, if I knew what I knew now, that I could go back to that person then and tell them I'd have got here in half the time. Less than half. It would have been magic. Look at technology. Start with technology early. It's going to be so powerful, you've got no idea what it's going to be able to achieve for you.

Jim on that I can't ask for any more. Really enjoyed your time today.

Okay, you're welcome.

You've been listening to no Limitations. Ra.