Mike Michalowicz Followup: How to Expand When Everyone Else is Shrinking in Fear

Welcome back to Real Estate Team Builders. Lars Hedinborg, the founder of Real Estate B School. And this episode comes off probably one of the coolest interviews I've ever done. Mike Michalowicz, who has written I think like seven or eight books, his sort of most popular books in my mind is It's Profit first and then Clockwork, which he chatted about on our last episode, an expanded and revised edition. And I wanted to have a conversation today, you know, following up on that conversation where in the book Clockwork, which you have to grab a copy of the book. I think his new edition launches August 2022. So depending on when you're listening to this and the audible versions of his book are really amazing. It's Clockwork Life. And the conversation I want to have today is looking back on my journey in business. Not so much that it's the Me show, right, to talk about me. I just think we're getting ready to go into a 2, 3 plus year shift with the economy and the real estate market specifically given a whole bunch of factors. And I think it's worth talking about. And I'm also launching a new venture where I'm looking for a hundred agents to help scale their businesses to a million and beyond in the next three years. And I'll cover that more here in a second. So I liken it to. And I was having a conversation with someone before I interviewed Mike Michalowicz because I'm like, this is straight up bromance. I met him at an event and I've got this picture with him and he's just a really smart dude. His mission in life is to eradicate entrepreneurial poverty. And. And I think that runs rampant in the real estate industry. Poverty, meaning it could be you're poor on time, you're poor in terms of your finances, you don't have a lot of monetary gain to show for efforts. Or you could just be sort of depleted in your energy or your physical body or depleted and poor in your relationships. It could stand for so much. Wealth is not just monetary, although it does help in many, many ways to sort of check that box. But the conversation I want to have today and this conversation I was having with a buddy of mine, I said, you know, what Mike has done with his books is he sort of takes what Michael Gerber in e Myth Revisited, first business book I read back in 2007 when I got into real estate. I think Michael Gerber planted a seed in me that got me to what now I see as the 10 yard line so from like the 0 yard line, you know, 10 yards out of the end zone. And Mike McCallowicz sort of takes takes the rest of the way. The pumpkin plan, Profit first and clockwork are sort of the trilogy I would say in terms of surge is also awesome. And then fix this next is really, really good as well. So there's a bunch of really good, good ones. But I want to have the conversation in terms of the vernacular in e myth and then sort of sprinkling some of the things I've learned from from Mike in my journey. I left my corporate job in March. It was actually 3-5-2007. I sold 27 homes in those first 10 months and then 44 in that first full year and then 58 and in 2009 and the end of 2009 is when I formally started my team hired my first assistant in February or March 2008. So about a year into the business. So in emyth they talk about the technician. Most businesses fail to scale and don't give the owners any freedom because the owner stays in the technical work. That's the technician. Right. A couple. Actually about four or five episodes ago, I went a little bit deeper into these different definitions. So if you listen to that, this will be a good follow on to that. So that was 2007, 2008, 2009. It was me first a part time assistant. Then she demanded more money and demanded two weeks in to go full time. So a full time assistant where I was able to sell 58 homes, which is what probably in our average was seven homes. So like eight times the average agent in our market. And I was selling two to three times more homes than the top producers. And I was part of a remax at the time. And so you know, how does, how does that happen? And especially in these are like the great recession years. So I think we're going to go through something like that and I want to give a little bit of advice and also invite some of you to take this journey with me here in a minute if you want to grow and scale your business in these weird times that we're going to see. But the advice I would give someone that's looking to sort of get enough momentum to even think about bringing leverage into your world in terms of building systems and having some help, some people help a team member come in and run those systems is that I was so hyper focused on new business development. It's the only thing actually two things that mattered for me. I was building marketing and lead generation systems. So I would have a steady flow of leads coming in and then I was obsessed with new business development and then lead follow up systems. It was all front stage work. Like I wasn't worried about how to fill out a contract. I wasn't worried about like if deals are blowing apart because repair negotiations were wonky or you know, rates were going up. And you know, I just wasn't worried about anything past getting someone to agree to do business with me. So sign a buyer loyalty agreement or sign a listing agreement and then once they got under contract, you know, I handed it off to my assistant and I was just gone. I'm not saying it's the best way to do it, but that's the way that I did. I was all front stage focus. So if you're failing to get to the point where you're selling two, three, four homes a month, you're just not spending enough time in, in the like super dollar productive activities. And that's new business development, which is conversations with buyers and sellers that you've never spoken with before or lead follow up. Lead follow up is a second different activity. But three to five hours a day you're doing new business development and lead follow up. And it's simple. 50 minutes on and 10 minutes off. 50 minutes on, 10 minutes off. You're not going into email, you're not texting, you're not on Facebook, you're not running an errand, you're not working on a deal that's under contract. You're, you're focused on moving the business forward from a revenue perspective. That's what allowed me to make the shift to doing more of the manager work. That's the second personality in the E myth vernacular. And you're going to find that all of Mike's books fit all of this and they give you a lot more tactics. This is just easier for me to kind of go through my journey. 2010 to 2012 for me were what I call the manager years, the manager and all of these, technician, manager, entrepreneur, they all exist in the same person. And so the manager in me now had to step out of the technical work and say, this coincides with us having our second child. And it was like the pressure was on. I was missing out on our first son. Anders was I guess two and a half when Kendall was born. And I was like, I cannot do this. I'm working seven days a week. I although Sundays was by appointment only. I was still working deals and working, you know, even if I wasn't physically out of the home 2010. We did 118 transactions. So in 2009, I was making the shift from the technician to the manager. I was building systems. I had my buyer system basically documented so other people could come in and run that system. I had a showing system, a showing agent system built out. So I had buyers that I was technically working with, but I wasn't showing them home. So I was able to drop some of the evenings and weekends to 118 homes in 2010, 178 in 2011, and 248 in 2012. That's the year 2012 that I did one of those 248 transactions. And so a lot of manager work was building systems, where in the clockwork vernacular, it's like clockworking your business. And the clockwork challenge, this is Mike McCallowitz book that he's relaunching is it's sort of predicated on challenging yourself to step out of your business for four weeks at a time. There's baby steps. So you do 7 days, 14 days, and then 28 days, but you're totally out. You hand your cell phone, you, you change your email passwords, you change your social media account passwords. You completely check out of your business. And it's not, it's going to be hard for you, but it's not because you just want to sit on the beach and drink my ties. It's because the business demands that it has a life beyond you. If you're building a business in a responsible way, right. That, that it can live with, with without you having to lift it all the time. Right. And trusting your team members and building out real processes that other people can run in the business. So that's the manager in you is the. Is the personality. We have all these multiple personalities, you know, as entrepreneurs. They're the one that's clockworking the business. Right. So they're identifying the key pieces of the business that are, you know, have to happen no matter what, if you're there or not. That's called the queen bee role. If once you read the book, that'll make sense. And the goal is to protect the queen B role in a real estate team. It's bringing in new business. I would have to guess that that's the most important role in most real estate businesses is either to generate an opportunity or convert someone into your world. Has to be one of the critical roles that that happens. So that's 2010 to 2012. And then really during 2010 and 2012, while most of my time was I was fully out of buyers in that time period. And I was completely, by the end of the time period, transitioned to 100% of listing production. But some of the time in that three year period was spent giving the inner entrepreneur in me breathing room and some downtime and white space in my calendar to dream about. What could it look like, how, how little could I work in this business and still have it deliver on this amazing promise of helping buyers and sellers at a, at a level, you know, with a world class experience that they just couldn't possibly imagine being any better? That was sort of the promise. And so 2010 through 2012, I was spending some time as the entrepreneur. 2013 through 2020, a full, I guess that's eight full years. I was literally in the owner's seat and, you know, working. 2014 and beyond. One day a week in 2013, I think it was started at three and it went down to two and then 2014, one day a week through 2020. I exited my real estate team in November 2020 when I launched my exp revenue share team. You know, that has grown tremendously and the value proposition in there is astronomical. But all of these moves require that I at least have an awareness around where I'm spending my time. And, you know, am I too heavy in the technical work where I'm not building any systems that are going to ultimately help me fulfill this vision of selling more homes in less time with less stress? So I thought that was just a good overlay into, you know, over this conversation with Mike, which was just awesome, and then my journey. But here's what I see happening right now is that I think what happened for totally different reasons, but I think what happened in 2008, 9, 10, that was the great reset, like the really bad years of real estate, at least in my market. Other markets, it shifted a little bit earlier. But in our market, June 2007 is when inventory shot straight through the roof. And then for probably three years we had like 16 to 20 months of inventory. It was horrible. But I grew every year. I just made a decision that I was going to grow every year no matter what. And 80% of that was psychology, my mindset around growth, and only 20% was tactics. The tactics aren't very hard, right? It's meaningful conversations every day, making sure in the given market that your message matches the market. We'll talk about that here in a little bit in the new thing that I'm launching. But I just, I want to make sure you understand that the agents that are sort of buying into all The I call it FUD right F U D fear, uncertainty and doubt. That is going to paralyze. And Mike talked about this on our podcast episode. He went through the business crisis trend where it's going to stage one. It's shock, where business owners, real estate agents, they startle and they freeze up. Stage two is desperation, where they stampede, overreact and then they do a bunch of first it's inaction and then it's wrong actions. And then stage three is eventually they get around to sort of assessing and evaluating where they're at and then there's this sort of deliberate action and recovery. So our job, I didn't have a choice but to double down. I left a cozy corporate job in 2007 and shit hit the fan. And I just committed to doing whatever it took to have as many conversations to generate the right type of leads and have as many conversations as I needed to have to be able to provide on this big vision I had for my family. The big vision I have for my family didn't include my market going from 15,000 agents to to 5,000 agents. My market now is at 18,000 agents. And I think we're going to see the same reduction. I would venture to guess that we're going to be under 10,000 agents as this economic. There's a bunch of things happening. There's a big technology shift, there is a sort of a 50 year cycle, 80 year cycle and there's like a 250 year cycle in terms of just changing world orders. That's happened forever and they're all converging at the same time. So I think it's just going to be really interesting. It's not just the US economy that is in inflation. Ours is really, really bad. But most countries are even worse. I think it's like 71 of the world's central banks have had interest rate hikes the same way that we're going through. So this is a global reset and a global economic reset that I think we're going to see. But the thing I want to give you so much comfort around because I'm fired up and ready to go. This is going to be where I was listening to a podcast the other day, where this is where you can add a 0 to your net worth. So if your net worth is 100,000 in the next three years, we're going to take it from 100,000 to a million. Because in real estate, you know, we're going to lose probably two thirds of the agents and then maybe half of the Other third are going to be in complete sort of inaction and sort of just paralyzed with the fear, uncertainty and doubt. At least for a period of time. At least for a period of time. And so I don't want that to be you. And so what, what I've done here is I've launched a program, I think I mentioned I want to partner with 100 agents that want to build a business. So you have to have a business mindset to a million GCI and beyond in the next two to three years. While most of the agents are getting out of the industry, I already see it coming. I was able to do it myself. I've coached hundreds, probably over a thousand top agents and team leaders over the last nine years, since 2013. And I think I am uniquely positioned to guide you through this next shift. Not just to make it through it and sort of protect what you have, but to completely expand what you have and take advantage of the FUD that we're going to see. So what the FUD is going on is that it's getbusinessfoundations.com it's getbusinessfoundations.com where you're going to have not only me training you once a week on everything that's relevant that you need to be doing right now, but to sort of achieve in what's going on. But you'll have access to every tool and system that I built, all my lead gen levers, all of my lead conversion systems, all of my productivity and time management tools, all the client care systems built out in Trello, all the tech tools that we recommend and how to build them out, all the tracking tools. If you hire an assistant or a showing agent, all of that stuff's included so nothing is left out. You also get coached twice live every week by Stacy Peterson, who was the first ever person to pay me to coach them back in 2013. And she tripled her business, exited production in six months, ended up tripling her business and exited that business for a seven figure valuation in a market Sioux Falls, South Dakota, where that's never happened before. So she is coaching you twice a week live. I'm training you once a week. You have access to every tool and system that I've ever built, all of our foundational tools, every past digital summit and workshop we've ever put together, all of our weekly specialist trainings and production masterminds, everything you could possibly need to crush this shift is going to be available to you. Go to getbusinessfoundations.com and I'm looking for 100. No joke. I want to take 100 agents. The real requirement that because we have a higher level coaching program as well, the requirement is that you're doing under 500,000. So to at least double your business. If you're doing 250,000, I want to I want to quadruple your business. If you're doing 100,000, I want to help you 10x your business in the next three years. So go to getbusinessfoundations.com we'll see you over there. Hopefully this conversation around about my journey in the Great Recession will lift you up in a way it wasn't meant to introduce more fear, uncertainty and doubt into your world, but to give you some comfort that you too can crush this shift storm that is coming. We'll talk to you guys soon.