Legacy Over Profit: How Jim Penman Built a 5,500+ Franchise Empire

Amazing. Jim, thank you so much for joining us on this fantastic podcast. You've got such an inspiring story for all business owners across Australia, across the whole world. You started mowing lawns all by yourself to eventually growing it after first year to 60 franchisees underneath you. And years later you've been taking over all Australia. Over 5,500 franchisees are under the Jim's group, which is just. Which is a phenomenal. Dean and myself, Constantin, we specialize in digital marketing and all we know is meta ads, Google Ads, SEO. But you started your business in 1982, way before we were even born. And we're so passionate about business growth, client acquisition. Could you take us back to 1982, how you got started and what were your initial steps to acquiring your first clients, then your mindset into shifting into the franchisee model and then later, years later taking over all Australia.

Okay, well, to actually take my business right back to the start, I started doing work, gardening work when I was 8 years old. That's back in 1960. All right. So I used to go to the neighbors and I used to raise his driveway and do a bit of cleanup jobs. I did it through most of my childhood. In 1970, gap year before going to university. And I put a placard in the, in the window of the local hardware store. That was actually my first marketing effort. And then over the years since then, I actually kept on doing gardening. And then I bought myself a lawnmower, mainly because I wanted to buy a car so I could drive the lawnmower around. And I started doing things like putting leaflets in letter boxes. Just the little first leaflets were just little strips running off on the university machine. I just put the letter boxes charging so much per hour. $3 an hour originally in those days, and then most lawns, $5 when I was mowing lawns. So I did this all through my undergraduate and my postgraduate. I did a PhD. So I've been doing it part time for 10 years before I even started doing it full time. More than 10 years. What happened was it was a good student job. I'm kind of person who likes working outside. I enjoy it. I like the flexibility. And it was quite good earnings. You know, you could make 10 bucks an hour, which in those days was good money. And then I intended to be an academic. This was a part time student job. As I got to the end of my PhD, I realized that I had no, absolutely no prospect of an academic career. So I decided to run full time. Now at that time, it was just before Christmas 1982 I was completely broke, deeply in debt. Stupidity. I just did a lot of lazy, dumb things and basically what I started doing was delivering leaflets. And that's how I started off a full time career. And then as I progressed I started putting ads in local papers and I switched from. I mowed lawns for a while and then I realized I could make more money by building up and selling lawn mowing rounds. That happened fairly soon which worked okay and it got me out of debt and managed to buy a house. And then I thought of the idea of franchising as long as it wasn't obvious. But what I couldn't understand was what would be in it for the franchisee. Because I knew that once you established the regular run of customers you could look after them properly and you wouldn't need a lot of extra work. That's my experience because I didn't find it difficult to find clients. So I couldn't understand why a person would continue paying franchise fees and I couldn't sell something I didn't believe in. And then a company called VIP came to Melbourne. This was an Adelaide based franchising company. I'd heard about them but they were interstate. You don't worry about them, they're. And they came to Melbourne and I basically panicked. I really thought these guys would crush me. They had hundreds of franchisees, they had all sorts of logos and uniforms, none of which I had. Mine was very primitive, few subbies building up and selling lawn mowing rounds. I raided their show at the Expo that year in Melbourne in 1988 and went up to the stand, asked them interested in vip, tell me about it. So the guy thinking I was a prospective didn't ask me what I actually wanted. I probably would have told him. He showed me, told me about this system and gave me this brochure which all the information found out it was a good system, it had some benefits, but I thought I can do it better. I reckon I could give more advantages than they were giving. I thought I could do a better system. I only had about 15 minutes. Then the state manager came in and kicked me off. He said, that's Jim Pendman, don't tell him anything else. So I had this idea and I thought, okay, let's try it now. I spent nine months basically with lawyers trying to get a franchise contract. I got a hold of the VIP contract. I didn't like it. It was too one sided. It was, you do what we tell you, we'll do what we want. But I didn't like that. I didn't think I wanted to join. So I spent nine months basically arguing with lawyers to a large extent, trying to get a contract that would suit me. Actually. They kept on telling me the words they used. You're being too nice. This is not normal franchising. You're giving your franchise too much power. You need to give yourself. Well, they phrased it more flexibility. In other words, more control. But I said, I want something that they would, that a prospective franchisee would consider to be the best possible deal. And then I actually launched in June 1989. Somebody asked me at that time how many franchisees I might have if it worked out well. And I said, if it works really well, maybe 100. That was the scope of my ambition. And I wasn't at all sure I could achieve that because I had a much more powerful competitor, better funded, better established, everything. And it was very surprising what happened. I found I had a secret weapon. When I used to sell lawn mowing rounds, I had a real strong practice of looking after the person I was dealing with and making them happy. I would do everything possible to satisfy them. I would give them advice. If they lost clients, I'd replace them. If they wanted to get out of the business sometime in the future, I'd help them, advise them, maybe buy the browns off them. I'd do all kinds of things to make them happy. And I followed the same practice with my franchisees. So that what I used to do when somebody asked me about the business, and basically they would say, well, why would we buy business from you when you're running the business from your basement? And VIP is so much better established interstate? And I said, well, look, there are certain differences. And I wouldn't bag them. I just said, there are differences that we operate, but here's a list of my franchisees, all of them with their phone number. This was decades before the franchise and code came in. I said, what you want to do? Go away, Ring them, ask them, and then get a list from Vip, which was the only other competitor, and ask them, which I knew they wouldn't provide because I knew their people weren't as happy as mine were. And those early franchisees sold my business.

That was like, part of your pitch. If there was, like, an objection, hey, I want to go with that company. And you're like, hey, well, give everyone a call and see and explore it for yourself.

I do exactly the same thing today. I do not bag my competitors. I simply say, here's the list. Ring my people, ring theirs, do your research. Because I Am confident and I'm absolutely confident that we will get a good reaction from perspective, not all of them, not every single franchisee is successful, but the great majority and we never stop trying to.

My second question was going to be around that, I guess in terms of I've used your services many, many times. And I was reading your, your post. I think it was actually last night where you were talking about your competitors and cutting through the market and obviously having, I think it was your competitors said something like, don't worry about Jim's. I think we'll, you know, we've got him.

That was David Mitchell, that was the state manager from vip.

Yeah, sure.

Because Bill, this, the guy in charge of vip, rang him up and said, what's this thing about Jim, Jim is mowing. He said, that's Jim Payman. That was back in. That's right.

The question is, because I've used your services, I know you've got certain values and systems and processes that obviously have probably you've adapted. You know, when you were, you were mowing. My question is how have you actually maintained that and scaled that nationwide? And an example of that is obviously the communication. The before, you know, people rock up to someone's house, you're getting a text confirmation, yes, I'll be there in half an hour and an hour. Have you actually maintain that?

Well, they didn't maintain it at all. What I did was improve it.

Okay.

Now one of the best the metrics that we use in gyms is customer complaints. And a reasonable metric is how many customer complaints do you get in relation to the number of leads now, for example, pre franchise days I had subcontractors, not very good service people didn't turn up and stuff. So about every hundred leads I would get and bear in mind these become regular clients. So I get about 100 complaints. Sure. So pretty bad started the franchise. Now this is different because people own their own business and there were various things in place and we used to encourage them and train them and so forth. And then we started measuring that systematically after a while and we actually had a big improvement. For every hundred leads, now we're getting five complaints. And we thought, okay, that's good, but it's not good enough. So we started doing things with complaints. We started following up and measuring the complaints and sending out warning letters and even breach notices. And it started to improve. And then about 12 years ago, we started doing surveys where we actually sent. Ten days after the leads come through, we sent a survey to a customer by sms. We worked out the way to get the really simple. You get a very simple thing and you just hit G good, that's five stars. B bad, one star. P too expensive, which is not stars at all, it's a different metric. Stop. Really simple thing. About 30% of our clients replied to this. Okay. And then we use that to try and generate more information. We put every franchisee with a star rating and we also used to generate complaints. The great majority of complaints come off surveys these days. Now the actual rate now of people ringing in with a complaint compared to the number of leads would be a fraction of a percent. So we've seen more than 99% drop in the level of complaints since pre franchise days. Now we have some changes going through this year. We've got doing some software called Jim's Jobs which we're going to be, which we're encouraging franchisees to use. This has got some, all kinds of extra features coming in that will drive down it. Remind franchises if they haven't returned the call within two hours, which you request them to, it will send out certain kinds of notifications. It will do. So I'm confident that we will get our complaints down to less than half of what they are now by using this technology. The thing is not so much maintaining it, it's improving.

Would you say it's, it's a cultural thing as well, you know, to get people to do that as well? Oh yeah, because you've got to sort of, you know, you can tell somebody, hey, you know, for you to get the best results, you know, going to the gym, you've got to go half an hour a day. But are they going to go half an hour a day? And I guess it's the same thing talking, talking like this.

There's two things, Dean. There's the system itself which sends complaints out and franchisees get them and then there's an involvement where the franchisor needs to ring the franchisee and say what happened. Complaints can be actually taken off too if we can prove they did the right thing from the beginning, completely the right thing, or if the customer is happy in the end. So there's a big. But there is as you say also a culture element to when people come to training. We have a three day generic training course. We just had a very big impact. It's dramatically cut out attrition right now as we discovered as soon as we did it. So three days business training plus divisional training, which is different. The first talk of the session is myself. I do a two hour talk mostly about Customer service, also about service to franchisees. And then I go through the system and I'm very strong and very passionate about how it works. And I get personally involved with complaints. If a client rings more than once about a complaint, I personally get involved and I would deal with people, insults and why haven't we sold this? What we're going to do? So we push them. We will breach franchisors who don't follow complaints properly. There's constant, constant talking about it. And I'm personally very, very involved in all these things. Customers can contact me directly, not by phone, but by email. And I'll follow it up. Sure.

So throughout the years, the quality actually improved of the service and there's been fewer and fewer complaints.

Yes.

And coming back to that initial list that you were showing, like, hey, if you want to go with my competitor, like, look, I've already got these franchisees, all of them are happy. You feel free to give them a call. Where are you in that? In. In those beginning stages, were you kind of like reaching them out through, through mail? Were you like doing print ads? And how did that transition to find, to find who? Clients or to find clients? Yeah. Was that to you? You grow from 0 to 60 and then from 60 to now 5,500. What has been like, kind of like your strategy?

In those days, the most effective, cost effective was local papers and yellow pages, including the regional yellow pages. They were good for us. It was very simple. We still used to do a bit of leaflets in the early days and less and less with time. Some franchises still use them, we don't recommend it. But local papers, trades, guide and leaflets.

What was sort of like, we're very passionate about like direct response copywriting and like, kind of like the offers and like, what was the offer in the newspaper, for instance?

Nothing. We just put it in name out there.

Yeah, that was good enough back then.

Right. The point about franchising is this. For us, our problem, our limit to growth is not clients. Our limit to growth is franchisees. Okay. We have in the last year we knocked back 240,000 leads. Now at some stages, that's gone to about one third, close to one third of total leads being knocked back because that service is so good. And as we put these better systems in place, like surveys, and that's the complaint that was gone down, the volume of leads has driven dramatically. We are far, far easier to find work than the past. So the limit to our growth is not clients, but overwhelmingly it is franchisees. So our focus is to make sure, our franchisees make the best possible income, best support, best pricing, just best everything. They're our primary client, not even the clientele. You have to look after clients to keep client ventures happy with lots of leads. But our primary client is the franchisees. So what we don't want to do is you price comparisons. And if you look at Jim's advertising, you will not see, you will almost never see any relationship to price. There are certain occasional special offers that are made in certain situations, but generally we do not promote cheap price because we don't want to charge cheap. We actually aim to charge more than the average rate of our competitors.

Yeah, that's, that's, that's incredible. It's also because of the brand, right? Like just everyone knows you wherever you are in Australia. Like you can look in any street. There's like some sort of like gyms in any street pretty much these days.

I saw him maybe eight times this week. I'm down the road, I've got a gym there.

He's been sending me photos.

But the real secret of that is, it's easy to say, but our main focus is not marketing. So we have to market, you have to be there. You have to do your Google AdWords and your Facebook and all the rest of it. But the key is the service that you offer. You offer the great service to the clients. You get plenty of work. That means you offer a great service to the franchisees so they can make lots and lots of money. That's the key. It's not about marketing, it's about service, which is. I know when you're talking about digital marketing, to me, you talk, I'm really telling you. Of course, yeah, it's important, it's vital. It's been very helpful. And you can't explain our growth in recent years, particularly our growth in franchisee numbers. Marketing has been very. Social media marketing has been very effective for that. But it's not the main game and people get confused about that. They think in terms of retail, let's market, let, let's put price advantage. We don't think that way in gyms. We are not. What I say to my trainees is we are not cheap as chips. We are not the cheap. I want you to be making at least 70 bucks per hour. That is our aim for you as a franchisee. Now, some people don't achieve that. A lot of people make a lot more. But an average opera or may I make 70 bucks an hour, which means our average friend. We just did a survey of mowing Franchisees average Turnover Just under $3,000 a week, which means, you know, the average training comes about $80,000 a year. Our people probably on average would make about 110. So you got somebody who doesn't have any education, doesn't have to have a degree. Very small amount of capital, 25,000, and they can make something like well over the median Australian income. That is the power of what we do.

That leads us into our next question.

Which you wanted to ask, which is very powerful one. Let's say you start all over. You got no brand, you got no Equity, you got 75 bucks in your lawnmower and you're competing against Jim and other big franchisees. Like, what would you do in 2025, into 2025 with all the digital marketing to get started? You wouldn't.

I wouldn't do it. I wouldn't compete against Jim's. If I was in that situation, I would actually start a new Jim's division in some different area. Look, the difference is this, seriously. But I wouldn't communicate McDonald's either. Sure. This is what you got to understand. You got against someone like McDonald's. They are very good at what they do. I mean, the food is disgusting and healthy. I don't eat it. I want my kids to eat it. But as a franchise organization, they are superb. They are brilliant at what they do. They're brilliant at marketing. They've got economies of scale. You can't compete with an entrenched competitor like that. What you need to do is to find the niche. The difference between back in 1989 and now is that we are spending some millions of dollars a year on software development alone. We can invest in a way that nobody else can. We've got systems in place. We are very good at what we do. It's like what Warren Buffett once said. He said, people ask, why did you buy Coke? And he said, if you give me a blank check for any amount of money and say, take away the leadership of the, of the soft drink world from Coke and Pepsi, no limit to that amount of money, he said, I'll give it straight back to you. It cannot be done. This is what his idea of a moat is. You know, the principle of a moat, it's a gap that stops people getting towards you. We have an immense moat. And I would say to be very difficult, even if you had, like, even if you had hundreds of millions of dollars to actually come in and try and take us off our pedestal, I think it'd be very difficult if we lost the plot possibly, but it'd be very difficult to do it, I guess.

Yeah. I mean also you can look at the question a few ways. The question isn't to take over gyms. If you were like obviously, as you said, if you're just a small business getting started, it's probably easier to join.

In and get that way. Look, the realistic. Starting a new gyms division, for example, is an exceptionally great deal because you get in, you get all the brand. Like my daughter and son in law had just started Jim's removals as a division which is now it's not going to be franchise going to be total. They're going to make a brilliant business of this. Why? Because they've got this brand which is phenomenal. Now I was going the other way. I was going through looking at all their leads. They received every single lead. They'd use some other gym service. One had used several.

Yeah.

So you've got, you've got this brand, you've got systems operation, you got advice. I mean, I'm sorry, Sylvia Sparlos obviously they get pretty good coaching all the time. All the experience we've learned, all the systems of software, everything, it's all in place. The ways we allocate leads, the way we deal with disputes, the way we follow up with franchisees who all this stuff is all developed so they've got.

A fantastic opportunity and it's pretty proven across so many industries. Right.

I would lay even odds bet that their business is going to be making a million bucks year for each of them within a couple of years.

Yeah.

Can I ask because they're a great young couple and they've got a great system. You can't compete with that. From the outside we're actually very open about our systems. We've had people come to our training courses, franchisee course, franchise all course go out there, launch their own franchise in competition. We don't stop anybody doing it, we make it totally. If you want to come in, learn how to franchise, you come do all of our training course. It'll cost you fifteen hundred dollars, complete the whole thing. We'll tell you all of our trade secrets, all, everything, the videos, everything. And you can go out and try and do what we do and guess what, you will not succeed. Because we are too good at what we do, we're too entrenched, we've got too much advantage in the marketplace.

Yeah, that's a super interesting thing because obviously the people that are going to be watching this, you know, would be either weighing up, do I join A franchise. Do I. Do I give this a go and turn on a Google Ad and Facebook ad and see where it goes? And I think it's more complicated than that.

Yeah, it's the timing. The Sun Tzu, one of the war generals from ancient China, he mentioned, like. Yeah, you always have to look at your competition. If your competitors are so strong, is it better to do something else or divert or do in a different direction?

Find an area where we're weak. That's my advice. Look at what Jim's doesn't do well and where you can do better. That is the secret of it. Yes, gotcha.

And you did mention McDonald's and I wanted to maybe touch on. I think you're. You obviously have a lot of conversations about health. You know, one of your podcasts, I was watching you, you're talking about intermittent fasting. My friend actually introduced me to that as well. You know, not eating till 12 o', clock, I think. What do you feel that it takes, you know, besides, you know, I guess, communication and customer service to be a successful business owner? And how does sort of health and dieting actually play into being successful, whether you're at your level or if you're just starting out a business?

In my experience, a lot of what Jim's is about is to do with ethics. For a kind of business like ours, which relies on franchisee goodwill, you've got to be very, very careful at every stage that you are doing the right thing, even if it costs you in the short term. So it's more than systems. But in terms of health, a lot of it relates to mental attitude. Why do people fail in business? This is a huge concern for us. We're always going to know what makes people fail. Some people have not got what it takes. We have a screening process which we push very hard. Not everybody keeps to it, but franchisors are supposed to. Where you knock out people who are obviously not suitable. For example, young man, early 20s, parents buying a business, absolute. No, I'd use an extreme example. So you try and make sure the people coming in are the right kind of people. Why do people fail? Okay, they fail because they don't listen, they don't learn. The kind of person that says, I know better than you, I'm not going to listen to you. I'm going to do it my way. And they do it wrong and they fail. But the other thing that goes wrong, and this is quite common, is that they lose heart, they get demoralized, and business is great and I love business, but You've got to have a. You've got to be persistent in the face of problems, because in a business for yourself, you haven't got a weekly fortnightly pay coming in. You can get discouraged very simply. So what you've got to do is to have a style of life that maintains morale. And there are. There are certain key principles behind that. First of all, dieting, as you say, food is important, okay? If you can keep your weight under control, then that's a big advantage. Secondly, even more relevant, exercise, you've got to keep fit. Now, that's not a problem for most of our people because they're out there mowing lawns and so forth. And they do have a physically active lifestyle. But without that, when you get past that stage, you've got to be physically active. And what you find too is people who say, retire in their 50s. I'm 72 and I am bursting with energy. But you can find people in their 50s who retire, get physically active, sit down in front of the tv, play computer games all day, and they become really slow and old very, very quickly. So physical activity, really, really important. Also important is you've got to have a community. The people you're with, there is no substitute for that. People these days are more lonely, they're more anxious, they're more depressed, they're more cut off from the world. You've got to have a network. You've got to have people that you're close to. Now, my family is, first of all, I have very fortunate, wonderful wife, 23 years, so we crazy about each other. That's a terrific start. I've got 10 kids, really, really great children. I see them regularly. I've got my church. I'm involved in a leadership position there. So I've got church networks going on. I've also got relationships within gyms, people, friends that I catch up with. A lot of people, you know, like. Like Joel, for example, I would see as a friend. Yeah. And we talk about all kinds of things. So social network, you've got to have a sense of meaning and sense of purpose in your life. What are you doing it for? What's your reason for getting up in the morning? And that's why married people, men with children, tend to do a lot better than those who are single, because you've got to work, you've got to look after your family, you've got to pay your mortgage, you got to pay your rent. You can't let your family down. So purpose now, to me, purpose is beyond family. It's got to do with a research project which continues from my PhD work, which I'm funding about $3 million a year currently. That's a purpose to me. It's a reason.

Could you tell a little bit more about the books that you write and also this project that you're funding about the research?

I did a PhD in my 20s, which is trying to understand the reason for the rise and fall of civilizations. And I came to the conclusion that basically these were biological patterns in some ways something to do with biology rather than culture as such. Intended to be academic, my work was far too radical to give me any sort of poster. It was way out. I had did a history PhD and half of my PhD wasn't even about. It was about psychology, anthropology, about biology, all kinds of things. Okay. So totally outside the academic possibilities. So I decided I need money. And that was my original idea. I had to become wealthy enough to fund a private research institute into these very technical scientific. All to do with neuroscience and genetics and everything else which I wasn't skilled in. So that was the basic idea. And even in the early days of gyms, when I was out mowing lawns and so forth, I would still keep on working on that, studying. I used to go down to Monash Library and read up on different things and try to pursue the ideas. And then about 10 years ago, I approached a academic at La Trobe University and launched a research project. And that's now gradually developed and we've got a separate research thing going.

It's all about purpose.

But that's very inspiring that throughout the years the research has been really being the driving force for even this business. And what you're doing, it's, it's, it's funding that and you get a little joy and purpose from, from the research you're doing. I think, I think that's incredible.

Yeah, I think the other interesting thing that, that from the other podcast that I watch is sometimes it's just a mental game. I feel like from what you said, you fasting till 12 o' clock is just that discipline aspect as well, you know? You know, you can eat anytime you want, but it's the act of getting yourself in a particular routine.

Exercising too. I get up in the morning and I do wait listing and I run halfway on the treadmill and I'm going to play squash with Joel this afternoon too, which is fun. So you've got to, I mean, everything's about discipline. Like, I don't find it easy. I'm writing a book right now about the collapsing birth rate, which I think is going to do very well. I'm getting a lot of advice and help. Learned a lot from past lessons, but that's hard for me. It really is hard because it's very demanding work. So I've got to have a discipline to myself to sit down and do this. And part of that too, I was having real problems getting going. And my life group, my church group helped me. They helped me accountable. Yeah, they asked me. I've got.

How many pages did you write, Steve?

Well, my aim is to do some work every day because I know if I start, I'll finish. The hard thing is to get started. So if I know I have to report back to my life group that I'm doing it every day, I'll tend to be more easy to do it. My son does the same thing too. My 15 year old too. He wants to get more exercise. So his aim is to run the treadmill 10 minutes a day. And he said, dad, hold me accountable. So now I ask him, have you done it? That's his request. And we also do fasting ever since he was 8 years old. We do a church fast once a year, which is where you can't eat certain foods or you restrict, you decide what it is. So you set these patterns of self discipline. Achieving good things in life is mainly a matter of just doing the things that you ought to do rather than things you immediately want to do. It might be easier to stay in bed or watch TV or play a game or do something like that. But you've got to think, okay, what should I be doing? What does God want me to be doing? And then you've got to make that point. And you know that if you do that, you'll be better off. It's like anything. It's the same thing. It's like taking cocaine. Okay. Which is the opposite. All right? You can do a thing that you really might want to do right now because it makes you feel good. But if you've got any sense, you will know that's going to make you a lot worse down the track. You're going to get a boost. It's going to go way down. Well, doing exercise and devoting yourself to things that matter is the opposite. It's doing a thing that might make you feel a bit worse in the short term because it's not. But then much better long term.

You answered these questions so well, like around the health and the family, because we had like a chain of kind of questions around purpose and family and, and Staying healthy, I found. Yeah, you, you've answered it incredibly well. I have a bit of an interesting like other topic around the kind of the educational system and now with AI, where all of the information is, is so incredibly available to us in, in pretty much like in, in a snapshot. You studied the PhD. I've studied aviation engineering back in the Netherlands and my whole game plan was to come to Australia, work for Boeing. But none of that, none of that ended up working out. I was picking bananas and avocados in, in the fields in Queensland. So there was a huge disconnect for me and it created a lot of frustration and it just not nothing made sense. Do you think in today's world it's smart because a lot of young people struggling with the purpose and they're trying to understand what am I supposed to do? Would you say the conventional educational path is still a thing or would you see. So would you try to identify a problem that should be passion solving and try to make it become like a trade around that?

Okay, look, our system of education has serious problems. One of them is that the way we assess and the way we hire teachers is ridiculous. Teachers are basically unsackable, which is ridiculous. They're also, in my view, underpaid and they focus too much on unimportant things like classroom size. If teachers were paid better, if they were held accountable and they could be fired, you'd have much better education. Teaching is one of the most important jobs in the community. It's not recognized as such. People should be able to become very well off if they're great teachers. So the education system's got really bad problems. Having said that, you've got a problem in Australia and every other western country except Israel, where you have really declining productivity now, despite the huge advances in technology. If you look at statistics, our productivity per individual is not going up at all. In some areas, it's going backwards. We are worse away. What we do, what we're actually facing is a decay of character, which is to do with the ill discipline. It's to do with the wealth of the society. And it's a classic problem. It's what's causing the fertility drop. It's what's causing the decline in public spirit, in sense of community, of altruism, of religion, of all the things that really make a society great. We're losing it. Our character is going down and it's going down fast. And this is what my book is about that I'm writing right now. So no matter what the governments we have this idea that governments are incredibly powerful. Yeah, you're the government. You're the hundred pound gorilla in the room. No, you're pathetic. Governments have so little power. They can gum things up. Okay? They can really mess things up. Like the way the government interferes in the economy and the multitude of regulations, the stupid regulations that we're faced with, the requirements to do, licensing to do certain professions, which only has one effect or two effects. It makes it more expensive and it makes it poorer service. And we know that. So the governments can certainly mess things up. And they do and they try hard, especially in Victoria, I might say get the worst, worst government of any state in the Commonwealth. At the same time, governments are far less powerful than you think. Now you take China. China's government is powerful compared with ours, isn't it? I mean, I mean it's 10 times. They don't have any elections. You can't object to their policies. You can't do anything. They have power over individuals. They can do social scores which actually put pressure on people. They have the Communist Party and all the. They have enormous power. Now, let's have a look at one particular area that I'm very interested in, the birth rate. Chinese government put this idiotic, stupid policy into one child policy because they thought they were going to run out. They had any sense, they'd made any history. They know it would never happen. Wealthy country, the birth rate always dropped. They put this stupid policy in place. One child forced abortion, forced sterilization, shaming all the rest, okay? And then they start to say, hey, we've got some problems with this. All right, let's ease this. So let's. You'll have two children now. Okay? All right, now guess what happened to the birth rate. They were all expecting it's going to more and more children. No, the birth rate went down. So they permitted people to have two children when they forced them to in the past. Powerful government, the birth rate drops. Then they say, okay, this is really too much. Let's make a new policy. Let's want you to have, let's encourage you to have more.

Two children.

They make this policy change. You know what happens? The birth rate goes down. So this is the most powerful, effective, controlling government in the world. And they try and influence this one simple metric. And the opposite happens. Governments are not nearly as powerful as we think. People, individual people, individual attitudes are changing. And you want to know why? We've got problems with productivity. There's a very simple way of measuring that. You look at what people say is important. In a job now, we've been doing things like people since the 1973 thing called the General Social Survey, which is started in America, gone to other countries. You ask questions like one particular one. You ask them about attitude towards family. What's important to you, what values are important in life now? If one simple answer, how does family feel? In the past, family went very high. In recent times it's gone way down. Wealth, status, success, leisure, all gone way up. That's why the birth rate is dropping. You also ask about attitudes. What's important to you in a job now? You go back 50 years and at least half people would say the value of the job itself, the actual meaning of the job, having a worthwhile job that I can contribute to. You ask the same question, young people now, same age group, and they will tell you no. The important thing is money, leisure, not getting fired. So the work ethic, the actual interest in doing a job well for its own sake has dropped dramatically. That one question tells you what's going wrong. Yeah, you can answer the question about attitude towards family. That explains why the birth rate's going down. You ask questions of attitudes towards work and that explains why the work ethic is going down. And you can see it in other ways. More of the rate of disability is rising dramatically. More people are so disabled they can't work. It's an epidemic. Why? Because we're losing the work ethic. It's a change in character. And all the governments do basically they float on the surface of the and they reflect what goes on. Why can't governments control. Why are we going further and further into debt? And now you can say it's stupid government policy. No, it's not. It's government positive. Listen to what people want. People are saying, yes, we want the government to do two things. We want more services and we want less taxes. And that short term thinking is the same thing that's going on in society as a whole. People are thinking what's good for me in the short term and they're not thinking about the long term. Even back in the 80s, people used to have more part of the national debt. Howard and Costello did that in the late 80s. That was in the 90s actually, wasn't it? That's a change that based on a population being disciplined. We're losing that. We're changing as a people. We are lazier, we are more short term thinking. And the government can't do anything about that. It's an individual thing.

Yeah, that was just a really amazing answer to be Honest with you. Because I think the way you just put it just, you know, it really is up to the individual, to how successful you are in business, in your life.

It's values, it's character. Everything is about character. Forget about qualifications, even forget about experience in a certain way, focused on character. What does a person, like, the kind of person does well in business is not somebody who's got some great MBA from some prestigious university. It's the person who looks at what they do, and it could be cleaning a house or mowing a lawn or pest control or. Or washing a dog. He looks at and says. Or she looks at it and says, how can I do this job better? That is the attitude. I care enough about my work. I care about doing a great job. I care about doing it efficiently. That is what it's all about. Everything else is. Is froth and bubble.

Yeah. I have a question. I don't. Obviously, a bit more of a personal question. You have sort of, obviously, 10 children. Do you, like. I know some people, they, you know, they might not want to send them to school and they might want to have them homeschool. Do you feel like there's different parts of the system that, that you put. That you encourage your. Your children to participate. Participate in. And also maybe exclude them from.

Sorry, exclude them in what sense?

In terms of obviously, like, say, like. Like schooling.

Right. Like we just sort of spoke your kids. Yeah, yeah, sure. Why not? One of my oldest son, actually, who's got a wonderful, amazing wife, too, and they've got two kids and one on the way. Very strong Christian family. They are considering homeschooling the kids. Yeah. Because they're actually in Taiwan, where Eva's from, and the education system is very, very nasty, very high pressure, and they don't want that for their kids. So they've either got to come to Australia or they've got to homeschool their kids. There's the options. So, yes, in some situations, I think you can look so much of it about culture and ideas too. Like, we send our kids to Christian schools.

Sure.

Which hasn't always because it's really not much to do with the quality of education.

More the values.

Yeah, more the values.

Yeah.

And we want. And even then it's very difficult because there's so much corruption of values in society as well. They get it from their peers. I mean, my kids could go out and buy marijuana, anything they wanted to. This is for a Christian church school.

Yeah.

But it's with the kids and, and.

And, you know, and you also Mentioned that. You know, I watched that full podcast of the new division. I think it's the moving division.

Yeah, like removals.

Yeah, yeah, removals. Yeah, that's right. And how do you find, sort of is. Is that your first child who has. Who has owned a franchise? Do you have any other children that have.

Yes, actually, yeah. Sylvia with my first child. She's my number 2, 3, 4, 5, 6, 7, 9th, 8th old, 8th child.

Yeah. And how do you find. Some people say, like, you know, you shouldn't, you know, this is a really controversial one. Like you should maybe do business with family or have family involved. How do you find that relationship and the dynamics?

Oh, I'm quite happy, I'm hoping. Look, I'm very concerned about what happens to gyms after I'm gone. Okay. Probably got 20 years. I mean, about as perfect physical mental health as you can be. I'll probably last into my early mid-90s. Gyms is one of the purposes of my life. And one thing I would really be horrified by is the idea that somebody should come along, some multinational, and buy it out and rip my franchise off, which could be done. You could massively increase profitability in the short term if you did the right attitude. I am very concerned actually arranging a arrangement where the. It's run by a family trust, which is basically funding the research institute and giving certain help to my children to buy houses and so forth as they. As they get to that age. So that's what it's for. And there's actual clause in the contracts that says the controlling share of Jim's group cannot be sold to anybody without the written consent of a majority of franchisees. So as far as I possibly can, I'm trying to keep control and. And a family business where the family members don't have a massive incentive to grab money from the system, but it can be comfortable for them. What I really want is heirs, hopefully within the family who can keep the system of ethics. And the great thing about Sylvia and Danny is that they're not only they're very great business people, they're very sharp in business terms, but they're also very, very ethical, really honest. Got great values, as most of my children do actually.

And I think we obviously, you know.

And I want them to run it one day or some of them other my children, but great. I've got some great kids, I got some great partners. One day I hope there'll be members of my family at least to keep an eye on things and make sure people look after.

I guess I Mean, that was just to sort of pull it back. This is a new division and we sort of spoke about if you want to sort of start again and you are sort of starting this, I guess, new division. Right. You're not starting again. You've got the brand name from. From one of the podcasts. Obviously what was being spoken about is, is the leads are coming from other divisions being recommended to removals. What are your plans to sort of.

What are the.

The future strategies to really scale past just getting referrals from other divisions or will it stay.

No, we don't get referrals from other divisions. What happens is somebody is actually used a mowing service or the cleaning service and got a good response and they think, who am I going to get?

That's what I meant. That's what I meant.

Yeah. It's not a direct referral, but it's simply the recommendation had a good experience and most customers have actually used more than one service and some people use a lot. They just use this automatically for everything. Yeah, because the experience is so good. It's not always good, but that's the problem too. If it was always 100% good, we'd even do them better. Yeah.

It is a competitive space or removal space. I know because I've done a house move. Like, do you have sort of plans? Like, what's the sort of strategy?

Okay, let me tell you the key strategies. We are going to be the best removals company. I'm actually in partnership with them. It's not a normal friend. Okay. I've actually put some money in. I'm in partnership. We are going to have. We're going to have the best removalists doing the work. They're going to be paid well above the normal for the industry and we're going to give brilliant service to customers.

That's the strategy.

That's the strategy. Okay. That's as simple as that. We don't intend to compete on price.

That's right.

But. And we don't need to. We. We charge a competitive price. As time goes by, as the demand rises, they'll probably actually charge a bit more than the moment they're just hitting for the going rate. Got shot.

It's incredible how Jim reads our mind. Like, especially like the pre. The previous answer. It's around. It's around the legacy that you wanted to leave behind. So you've answered that. My question is we've got like this emerging technology, artificial intelligence. We've got like chatbots, we've got even AI dialers with kind of almost human people that are able to reply, book appointments, do sales calls thus far. How have you guys been able to adapt this technology in your business? And where do you see the future.

Going where AI is concerned? You really want to talk to Joel? Quite frankly, I've only dabbled with it and the stuff that I've seen doesn't impress me a lot. You ask. You ask, for example, an essay on a certain topic. I've used Chat VT for that. And it gives the most generic, most boring, most uninteresting results you could possibly imagine. And whenever I use Google, I don't actually pay my attention to the result. I want to go what the individual people say. I always go to the sources. That's just like. And you look at who they are and what their credibility is. So, yeah, where it really is helpful is in things like social media, it's in things like programming. That's a big thing because we spend millions of years on programming. So any of those areas that we can actually get help with is. Is. That's where I see the biggest.

Biggest, I guess, response rate.

Right.

Like, because obviously there's AI chatbots now. Do you do feel like that might be something you guys would look to incorporate? Say you get an inquiry, your lead comes through and obviously you have a system that people call.

No, no, no.

That's not something we actually.

We actually. I know it's going to sound strange, but we really don't control cost as much as you might think. Okay. Our primary goal is always service.

Yes.

What's the best service to customers? All right, so for example, we have a call center. It's just there. It's in Australia.

Yeah.

Australian people answering the phones. In fact, when you answer phones in New Zealand. New Zealand people answer the phones. Okay. It's. By most normal standards, it's grossly overmanned because we want to answer calls mostly on the spot. Every day our aim is to take a call within 13 seconds on average of the end of the compulsory message. 30 seconds. Okay. I go down there every day to check what's going on. I look at the numbers on the board and look at it. If it's gone over that level, I say, okay, what's happening? What's going wrong? What are we doing? Why is this happening? I don't take it hard, but mostly they're well under that figure. So we are wanting to give customers the best possible experience of the call center. And as an example of the opposite, I bank with the Commonwealth Bank. I had occasion to need to ring Their so called customer service helpline got on the phone, I was told it was a half hour wait. So I thought, okay, it's just a bit overload, try again. Half hour wait, Somebody says to try after hours, try after hours. I actually had to wait half an hour before I got it and somebody answered me, which took me about a minute and a half to solve my problem after that half an hour on the phone. Now every time I drive down the road and I see this big yellow sign, we're the best, we're the biggest, I say, you idiots, take the sign down and save your money and, and start giving good service to your customers.

Customers.

And that is the whole principle. People are too focused. You know, big problem with business is when people have been run by accountants. That's the problem. When you're controlling cost is the biggest thing. You look at someone like Jack Welch, there's a wonderful book called the man who Broke Capitalism. Now Jack Welch was the most admired CEO in the world probably in the end of the 20th century. If you ever look at what happened to GE since then, it's an utter shambles. It's really gone down because he was so focused on short term results, on manipulating results, on cutting back on research, on firing experienced workers to go pay less. It's just completely. Its value is a fraction of what it used to be. And the people that have gone from what you were trained by him, gone to places like Boeing which is completely stuffed up. And the same thing, they focus on money, money, money, money, money.

It's about the shares. And Boeing used to be the highest kind of quality control ever existing.

And now 737, the airliner, you can trace that wreck to changes in culture or you look at simple thing. Why did the, why did the American car companies lose leadership to Japan? Okay. And all these advantages, why? There's a wonderful book called the Reckoning. It's pretty old now by a guy called David Halberstam who talked about that process and the, and the thing was in America, the car companies run by accountants in Japan, they were run by car nuts. People who cared about quality and process. And if you have a look at a guy like Elon Musk, and I know he's a controversial figure these days, but there's a wonderful biography. Walter Isaacson also wrote his book called liftoff about SpaceX. This is a guy who is focused passionately on the product, on what he makes, on rockets, on cars, on doing things really well, really efficiently. Amazing. That's what you need. You need to Focus on the quality of what you're doing and not worry about the money. We never put the money first. Service is always first. Always first. If you put the service first, you have a great product, you'll make money. And it doesn't matter whether you're making cars or rocket ships or you're mowing lawns or whatever you're doing. You put the service first. Who is your primary thing? Your customer, in our case franchisees, workers, people who work for you. These are our primary goal. Keep a reasonable control of costs. But you never compromise. Never. And I see this mistake made all the time, this short term trivial thinking, this greedy attitude that people have in business. I'm going to cut costs. Accountants getting cut here, cut there, cut there, cut there, and before you know it, you've got a really stuffed product. We'll never do that. Look, I don't make anything like the money I could out of gym groups. It'd be easy to come, make some changes and double profitability. Honestly, apart from the fact that I'm giving away 90% of my joint, the personal net income from the company, which I could use very usefully to build my wealth. But what's the point of it all? What are we in business for? We're not in business to make money. I don't care. You know, the BRW tried to get me to go on their rich versus 250. I said, you're gonna be joking. I'm not even close now. Maybe I will be one day. But who gives us stuff about that kind of stuff? Yeah, it's stupid. You know, who's got the biggest bank account, who's, who's got the fanciest car, who's got the best house? You know, I never, never owned a new car in my life until at least for my own personal use, until I turned 70, because I want an electric car. Okay? I just don't care. You know, if I took my shoes off, you'd find there's holes in my socks and I wear them until my clothes fall apart. My wife tends to throw things out. But still, the point of it is what matters to you in life. And money is a terrible measure. It really is. It doesn't create happiness, it doesn't create purpose, it doesn't create meaning. And there's also studies to prove that. For example, lottery winners. Good example. Somebody wins the lottery, they've got millions of dollars they drop down in 12 months time. How happy are they? The same as if they never ran it. And actually it works the other way. Around people become accustomed to things that matter to happiness. Money is helpful. Money is great for happiness. But you know, what you do with it to make yourself happy? This is science. You give it away to a cause that you're involved with, which is what I do. So in a sense, I'm the greediest person out. I use my money to actually do something that I think is profoundly worthwhile, could change the world that is actually creating happiness for me. Now, it's not why I'm doing it, because if you actually, if you aim. If your aim in life is to be happy, you won't achieve it, but your aim in life is to do something worthwhile with your life, to be connected with other people, to do something that matters, and then you'll become happy as a secondary result. It's like money, the same thing. You never put it first. You don't put happiness first. You don't put money first. You put purpose, meaning first. And then the other results will come. The money will come. Look, I'm quite astonished that I've got a business that makes, tell you Honestly, about $10 million a year, that's pretty good. All right. But I didn't expect that. I honestly didn't expect it. And it was never my primary goal. People often ask me, what are your goals? You know, how many franchises we'd like to have? And I said, I really couldn't give a start if I had never had more than five and a half thousand franchisees. But I tell you what my goal is. I want a goal that every single one of my franchisees is happy with every aspect of their business. And I want every client to be happy with every aspect of my service. Those are my goals. That's what I measure. I don't measure other things. Now, guess what, though? If I achieve that, I'll probably make good money. Hmm.

Yeah. I mean, that's. Often we speak with business owners and they're putting the money first.

Right.

You know, and I think you've got a completely different framework where, yes, it is about the money. You need money to survive. Money can buy you options. But for you to be able to get the money, it's everything else needs to be perfect. The service, your purpose, health.

It's as if we in the society, we shifted from having money as a secondary consequence, we focus on money as a primary goal. And even now, you see all the neighbors that have fought throughout the history that was all around pretty much money or resources or a little bit piece of land.

That's right. And you can See it in these surveys. You can see over time, even in recent decades, more and more and more people are shifting towards money, status, wealth. At the same time we're doing that, you look at things like mental health statistics, deaths of despair going up. The more people focus on money, the less happy they are, the more miserable they are. Screwed up they are. People can be mentally wealthy, can be totally miserable. Yeah, it's actually quite. And look at a country like Israel, for example. Israel is a country. It's a very. It's an amazing place. I've just been reading books like the Genius of Israel was no. 1 I just finished. Or Startup Society. There's this wonderful book written about Israel. Israel is the only wealthy country that has a positive fertility rate. Every fertility rate is about 3.1 children per woman. Average OECD 1.6. Okay. Very different society. And you know what? They are so communally minded. They care about each other. They have very strong groups at every level. At school, in the army, in the workplace, in their associations. They're very intensely bonded. They've got very intense family ties. They do it much, much better than us. This is a country that. Where rockets are raining down, where you have murderous terrorists coming in from next door and slaughtering and raping people and butchering babies. You have buses exploding. You know, this is a country under constant threat. You know, it's one of the happiest countries in the world. One of the happiest one up there with peaceful and prosperous Scandinavia. And this is based on individuals saying that way. It's also got lowest. Its rates of death, of despair is about a quarter of ours that people dying from overdose and stuff. This is a good attitude towards life. Our pursuit of wealth, of individual status, of greed is making us. It's making us miserable and it's making our society sick. It's not a matter of the society, though. It's not the government. It's not somebody. It's us individuals, what we do, what we think, what values do we have.

Yeah.

You know, and I go to church and you do not get messages from church that says regularly, every Sunday. It's not all about, hey, you can be more happy, you can be more successful. No, that's garbage. This is what God wants you to do. You need to try harder. You need to do this. You need to reach out to people that you know to help them. You need to be a better citizen. This is. This is the message that we need to achieve. That is happiness. And if you look at it, people who are attending and it doesn't matter. It doesn't have to be Christianity. It can be anything. People who are engaged in faith communities are significantly happier than those who are because we understand that being greedy, number one, is not the way to achieve good life.

Yeah.

Wow.

I have to rewatch this a couple of times. There's so many golden nuggets and so much amazing life advice that you've given us today. Jim, we're so incredibly thankful for you having us and allowing us to ask very out of the box questions.

It's good, Good to have you. If anybody wants to know more, you can go to jims.net and you follow Ask Jim. And there's, there's all kinds of stuff about.

We'll put the links in the description for you down below.

Thank you so much.

All right. Okay. There you are.

Thank you.