When was your last proper vacation? (Without texting your team)

[00:00:00]We want freedom. There was my driving force. I wanted freedom. Stress is an adult word for fear. It's a rare individual that could put the ego aside.

[00:00:10]If you started your business hoping for a little bit of freedom and then found out that you're working harder than you ever did as an employee, you need to listen to this episode because Mike D.

[00:00:19]Ong is the [music] whiz at turning around franchises that are in trouble on helping people free up their time [music] to actually run a business in the way that they had intended.

[00:00:30]Michael's been doing this for 30 years, so he's probably seen every disaster you could think of. There will be no shame in this episode. So, welcome, Mike, to the Joe Show.

[00:00:38]>> Thanks for having me. So, I really appreciate it, Joe.

[00:00:40]>> I would love you to tell me what listeners are going to learn by the end of this episode.

[00:00:45]>> Absolutely. So, they're going to learn uh to identify where they are and how to escape the operator's trap.

[00:00:51]>> Well, that sounds good. Um I forgot to mention you're also the author of a book. I need to put that in there. Grow smart because that's valuable. But so, let's go back to your own um experience.

[00:01:01]You know, that moment that you first realized you didn't own a business, you owned a job, you know, how did that feel?

[00:01:07]>> Oh god, it was terrible. Uh absolutely.

[00:01:11]Every time I go back to it, it just rips my guts out still. Um, but I I I relive it because you got if you keep it real, then you can maybe help some people. So, um, for me, I um I finally got a manager in place. I thought, okay, I could I could finally have some freedom. That's why I think a lot of us start businesses to get freedom, whoever that means for you, you know, whether that's being home when your kids get home or travel or whatever. Everyone's got a different different definition of what that is.

[00:01:39]And I'm like, I'm going to go on vacation. This is great. I'm going to go to Mexico, which is very popular here in the US. We're just going to like hop on a plane. We're in Mexico in a few hours.

[00:01:48]And um I landed and uh I turned my phone on because I'm an operator and you got to be in char you got to be like, you know, large and in charge, right? And you know, the the gentle breeze is kissing my skin. And remember, I left it was snowing. It was snowing when I left.

[00:02:04]And there's palm trees and there's steel steel drums are playing and there's Bob Marley and I'm like, "Oh, this is what I need." And then my phone rings and it's my manager and she's only going to call me if the place burned down. It's like, I'll only call if it burns down, otherwise I got it. I'm like, "Oh my god, my business burned down. This is this is bad. I don't know if I want to answer this, but I'm going to answer it." She's like, "Hey, the business didn't burn down." I'm like, "Okay, what's the problem?" Uh, well, I just want to let you know I'm I'm I'm quitting, but I'll stay until you get back from vacation.

[00:02:36]>> Like, you had a call. had to build a thing in your brain that says if I take a break everything's going to be a disaster, [laughter] >> right? Uh and then I I had no systems and processes in place because I was like anti- even though I'm an engineer and an aviator, two industries are built on systems and processes. [laughter] And I came out of corporate America, you know, Fortune 500 company, the whole thing, systems and process. I'm like, I'm not I don't need those. So, because I didn't have them, I uh spent the entire vacation on my laptop and on my phone talking to people in my business because they didn't trust her to make a decision.

[00:03:13]>> So, [clears throat] they came to me and everything had to go through somebody.

[00:03:16]There wasn't like a, you know, if X do Y. It was just like, well, ask or if you got a problem, just ask. Don't try to solve it yourself. Just ask. We'll take care of it. I want to just dig into that a little bit because as you say engineer, aviator, you know the value of systems like you drilled into them. What do you think was it that made you think I don't need that? I mean that's >> I think I was I think I thought they were the root of what was making me unhappy in those in those prior careers like oh I have to follow another system.

[00:03:44]I have to follow another process. I have to have another meeting. I have to write another report. Ah I just I don't want this. I'm going to build a culture where everyone's just in charge of themselves and they'll do it the right way and they'll know the right answer. I'm just going to build that and it worked for a minute and then it doesn't.

[00:04:04]>> It's quite not the way to go. It's really just interesting to me that that you had that training and then didn't use it but then understanding why because we want freedom. [laughter] >> We want freedom. There was my driving force. I wanted freedom. Yes. M so finding freedom in the discipline in the end is I guess a way through that.

[00:04:22]>> So when you talk to small businesses now how quickly can you spot somebody who's in the same trap that you were in?

[00:04:29]>> Uh like in a minute how do you do it?

[00:04:34]>> Well like anything is asking questions like what what's what's your main focus every day? How what what are the interactions with your team? Do you have structured meetings? Or I could even lead with this is my favorite. When's the last time you had a vacation? Oh.

[00:04:47]Uh, last weekend I took a long weekend.

[00:04:48]I'm like, "How much of that did you spend on the phone?"

[00:04:52]Oh, just a few text messages and emails, no phone calls. Well, there was It's like, okay, yeah, you're not uh you're not you're not there yet.

[00:05:00]>> So, we always think we need a better idea, don't we? If if we want to improve our business, we just need a better idea, but I guess you would say we need better systems.

[00:05:08]>> Oh, that's so true. I love that better idea looks like, you know, drag people off the better idea. H magic chasing syndrome.

[00:05:18]>> I just love that though. Just this, you know, we get up in the morning, we're in the shower, we have this amazing idea.

[00:05:22]That's our idea. Let's go. Let's go do it. We don't take our second best idea.

[00:05:26]We take our best idea and that's what we're going to Yeah. Uh so I um Well, I'm going to jump ahead a little bit and say you got to fail faster. Just give up on your idea. Like just if the idea is not working, stop doing it. Try something else.

[00:05:39]>> Put the ego aside. But uh >> in building >> I killed one of those this morning myself. Go on. [laughter] That's good.

[00:05:46]That's good. Joe, congratulations. It's actually hard to do. Our egos get in the way.

[00:05:50]>> I know. Kill those darlings. [laughter] >> That's my idea. It's It's an amazing idea because it's mine. I birthed it.

[00:05:56]It's my baby.

[00:05:58]>> Um, so in building the systems, there's there's two parts of the two sides of the same coin. It's one understanding where you are in the three major business archetypes or the the ascent trilogy, I call them. And then from that knowing once you know where you are in that in that archetype then you could more easily I think build the systems.

[00:06:19]And the systems are in this day and age so simple. It used to be like you had to sit down at your computer or your typewriter and just bang the thing out right just hammer away and if this then that and go to this person and now it's like >> not anymore. No. So I say if it has three if it has three steps or you do it more than three times you need a system.

[00:06:40]And how do you build a system? You could log into any one of a million software tools. Loom, dscript, you could take your take your cell phone and you could just record yourself, whatever. Like just make it super >> whatever is the simplest for you >> and just sit down and like if you're if you're ordering something, all right, I'm going to sit at the computer and just talk. It's like, okay, I'm going to this website and here I'm typing the website and then I go to this menu and I go to this drop down button and then I click on this thing and just go walk through everything that you're doing and then hand the recording whether it's online or on your cell phone. Just give it to someone else. Don't look at it.

[00:07:16]Please don't do it. We all hate how we look. We all hate how we sound. It's universal. True.

[00:07:21]>> You don't [laughter] have to fix it.

[00:07:22]You're going to be like, I got all these ums and a's and my makeup wasn't right.

[00:07:25]Like just who cares? just hand it to someone else in your business and say, "Try to do this." And if you you hit a roadblock, let me know. And they usually will. And then you fix it. And then you get it to where it's fixed. And then you hand it to a third person. Say, "Just see if you can do this." And if they can, you built your first system. Then just dump that in your favorite AI tool to write it out for you. Eureka, you have a system. Woohoo.

[00:07:52]>> No extra time.

[00:07:53]>> Chuck in my version of that. And it's literally my AI agent I've built in a way well the main one and then there's a team but I've built it in a way that it can go from any language model I don't have to rely I don't want to get caught on someone else's platform or with their managed agents you know but I've got this rule that if we're going to do something even twice I want it to build a skill and then also we then we have a system on a timer where it goes and reviews the skills you know so >> it's amazing >> it's actually changed my life because I'm the kind of person who needs lists on lists on lists to remember things and cooking the rice remembering not to have it boil over and put it on timer you know like I won't tell you how many lists I have but it's just >> building those systems I just want to I guess endorse what you're saying take anything you do that's going to be repetitive and whatever format works for you as you say whether you flip on your phone and just talk to it or [gasps] >> talk as you're doing something at your desk and you're right don't think about it too much don't >> just do it >> don't pick it apart and analyze Does it just get that system working? And it it's I can tell you it's freeing.

[00:09:00]Everything you're teaching here is so freeing. And so I guess I just want to get on to the next question so that we can get your wisdom your wisdom out there because what you do is so good.

[00:09:09]>> Yeah. Thank you, Joe.

[00:09:10]>> Yeah. So you say also that growing too early uh makes a business worse. Tell tell us about why why is that a problem?

[00:09:17]We all want to grow quickly and fast and >> right. I originally actually had my uh my book titled Grow Fast. I'm like, "No, no, no, no, no, no. You actually have to grow smart." Because if you grow too fast, you're just scaling chaos.

[00:09:31]>> Until you have the processes and systems in place. If you are the decision maker, if everything comes through you, you're already working probably 60, 70, 80, 100 hours a week. You only have 168 hours a week, even in Australia. So, uh, got to sleep during some of those hours, etc. Uh, you you can't you can't scale that. So, you're going to have chaos.

[00:09:54]People aren't going to know what to do.

[00:09:56]They're not going to know what the next step is. They're not going to get their problem solved, etc. So, you have to build that foundation, that solid foundation first. And I I know that through firsthand knowledge. I'm like, "Okay, I'm not making that much money.

[00:10:09]I, you know, my top line is amazing, doing great. Woohoo.

[00:10:13]>> My bottom line's terrible." Like my managers and my wrote rank and file are making more than I do and I'm I'm the I own this thing. Like what the heck? I know. I'll open another location. That's what I'm going to do.

[00:10:22]>> That'll fix it. [laughter] >> Yeah. And I hadn't built the processes or systems. I started to but they weren't all in place yet and I just scaled the chaos and end up working even more hours, sleeping even less and made even less money.

[00:10:36]It's so important because I I I just want to emphasize this because I have seen the inside of what look like successful businesses many times and they preach systems. They're teaching systems to other people. They're running courses and they get into the back end and you ask where theirs are and it's duct tape or nothing.

[00:10:54]>> Yeah.

[00:10:54]>> And it's [laughter] it was a massive shock to me the first time, but I'm going to call it hypocrisy. We don't want to call ourselves hypocrites, but I've seen it many times where people talk it but don't walk it. And I think it shows true in the stress. But I'm interested in why we don't, you know, why [gasps] >> do do you find it hard for people to uncurl their fingers off that holding that tightly? Is it their ego or identity or what is it that stops them from setting up structures? Because the mechanics of doing it are not hard.

[00:11:24]>> Yeah. Why why are we not doing it?

[00:11:28]>> Uh it's a it's a two-pronged answer. And prong prong number one is what type of business archetype are you? And prong number two is uh where do you fit on the six basic human needs. So let's start with the first one and I I call the the business archetypes you know uh you the ascent trilogy you have your GSD you know your get stuff done person you have your architect those are the people that love building systems and processes and then you have your hunter those are the ones that want to uh go out and find the next deal go out and do the marketing do do everything. So, if you are a GSD uh or if you're a hunter, you don't want to spend time in systems. I'm not saying you can't. I'm not saying you don't know how. It's just not your business home.

[00:12:13]It's not where you love to work. It's not where you love to play. So, anything any of us don't like to do or don't know how to do, we tend to avoid, right? And we tend to stick with the things that we like to do.

[00:12:25]>> Like, accountants are accountants for a reason. They love numbers. Business owners hate looking at their books because they're probably not that that's not their thing. They wanna like go they want to do the thing. They want to hunt the next deal. They want to you get the idea. So if you could realize which one you are, if you're not an architect, you probably need to find an architect. If you're not if you're not if you're a GSD person, you need to find an architect and a hunter because you're probably not getting enough deal flow either. It's so just finding out where your where your home is. No, short term, yes, you are going to have to be the one that does it because when we start small businesses, we do everything. We wear all the hats.

[00:13:03]But as you grow, just know that this is a something you need to um you need to hire for sooner rather or outsource or or build an army of AI agents or whatever whatever method you want to use like just like figure out uh it's not you doing it and then so we because doing it something we don't like to do causes stress and stress is an adult word for fear.

[00:13:29]>> Oh, well said.

[00:13:30]>> And uh why don't we do things because we're afraid of them? Well, what are we afraid of? Like, well, if I don't do it well enough, then I people will think less of me. And if they think less of me, then they probably won't like me very much and then I won't feel loved.

[00:13:42]>> And you're like, [groaning] okay, I don't want that. You've just flipped it from it's not whether you're good or bad or whether it's ego and hang on, but just to the type of makeup that you are, the get stuff done person or the hunter.

[00:13:56]>> Yeah.

[00:13:56]>> And that's a really nice way to look at it, just to go, "Oh, okay. That's just not my makeup." And fill the gap.

[00:14:01]>> That's just not my makeup. And then the second prong of that of that answer, the six human needs that they described to me is you have people that really believe like and you you you we all need all of these, but there's usually one or sometimes two that are an emotional home. Like this is this is our our home need, our driving force, >> and those are certainty. You know, we need to have certainty in everything we do. Uh variety or uncertainty, significance, love or connection. loves a higher way to meet that, but these days people seem to be settling for connection and then growth and contribution. If you get the first format, you could usually start working on the next two. So, if you're someone that especially that can't let go, you probably have a high need for certainty >> or you probably have a high need for significance. You know, you can't let this go because it's like >> I'm like this is mine like and if I give it to someone else, they're gonna they're going to screw it up because no one could do it as good as I do. Yeah.

[00:14:59][laughter] >> And then we could work on their mindset.

[00:15:00]I have a process around that, too, that says, "Okay, how can we how can I find someone that's better at this than me and how can I unhinge my identity from that?"

[00:15:11]>> You know, there's been a lot of studies that show the more uncertainty you can you can um accept into your life, >> the happier you'll be, which is again another funny thing because everyone's like, "I love uncertainty." I'm one of those people, by the way, Joe.

[00:15:23]>> But we all like the uncertainty that we like like flat tire on in the rain.

[00:15:28]Yeah, that's uncertainty. Probably don't like that very much. Surprise birthday party. Oh, that's amazing.

[00:15:34]>> So, there's there's there's various levels, but knowing which one you fit in >> helps you to understand like why you're driven to do something the way you're driven to do it.

[00:15:46]>> It's, you know, I think I remember Steve Jobs saying be be uncomfortable with things not being like finished, being half done. uh I can't remember the exact words but you know when a problem isn't completely solved just being uncomfortable with that space in between which struck me you know because I like to have things buttoned up done you know settled [laughter] >> so certainty might be your driving force uh Joe >> quite possibly >> but any of them to the extreme are not good think um if if certainty is your driving force you're like all right I'm going to go to the casino today >> and I'm going to play blackjack and you're certain you're going to and get 21 every single time.

[00:16:24]>> Yeah. Could be a problem.

[00:16:25]>> And you're absolutely right. Eventually that's going to be terrible. So that's why even the most certainty driven people need some variety.

[00:16:33]>> Yeah. True. Very true. Or [snorts] >> you know that there's just there's just different we all need them all. There's just which one drives us the most is going to decide and that also helps us to let go or not let go >> of of >> I knew a business owner once who did let her team build lots of systems but as soon as they were built she would pivot.

[00:16:51]That word has become almost an anathema to me even though we need to be flexible because she would pivot and everything would just be irrelevant completely which always had the team in mayhem and uncertainty. It was actually not a very good working environment even though the intentions of the business owner were good. Um have you experienced much of that with businesses you've seen people just chop and change and tear it down?

[00:17:15]>> Yeah. What what what do we think their driving human need is? Just throwing it out there, Joe. Probably >> probably variety. Exactly. [laughter] Ah, >> this is working great. I'm not I'm not feeling what I I'm not getting the juice I need. We need to we need to change it.

[00:17:31]Yeah, >> that's an interesting one.

[00:17:33]>> Or or people like myself, I would change businesses. I've I've been an engineer.

[00:17:37]I've been a pilot. I've been in operations. I've been, you know, I've owned several different franchises. I know it's a lot of me me. I'm not trying to >> illustration. It's probably a safer way to deal with the need for variety than just tearing a business apart over and over again, isn't it? go and start another one, add to your portfolio or something.

[00:17:53]>> But on one hand, it's given me a lot of great life skills, which makes me better at what I do now. But on [clears throat] the other hand, I've probably left literally millions of dollars on the table. If I would have just stuck with one thing.

[00:18:05]>> Yeah.

[00:18:05]>> And instead of gotten right at the top of the the bell curve, which is where I would normally be, I'm like, I am really good at this.

[00:18:11]>> I'm in I'm I'm starting to head down the bell curve.

[00:18:14]>> I'm bored. I need to do something else.

[00:18:16]Like maybe if I would have taken it all the way down and become like a Steve.

[00:18:19]Okay. I'm not Steve Jobs, but like, you know, where you get like down on the other end where you're like the total master, those one or two percent people.

[00:18:26]>> Yeah.

[00:18:27]>> You know, really focused my attention.

[00:18:30]Um, but you know, that's water under the bridge and I've realized that now. So now I now I stick with things like I used to go every five years. I'm I'm 10 years into this and I'm still loving it, going strong because I realized >> I could find variety in other ways. I could find it in in the systems in the process you know within the business just doing it different but things I letting things go like okay I'm a master of this now I'm going to let that go and I'm going to I'm going to focus on this other area that I'm very uncomfortable and don't like.

[00:19:00]>> It's it's interesting if you you did mention the first thing you do when you walk into a business is ask them when they last had a vacation that wasn't >> Yeah >> a long weekend full of texting on their phone to their operations manager. Um, but as far as the actual systems in their business go, what's the first thing that you would look at?

[00:19:18]>> Do they have any? Literally, do they have any?

[00:19:22]It's like you said, there's duct tape.

[00:19:23]It's just not there.

[00:19:24]>> Do you find that's most of the time or is it >> Oh. Oh, all too often. And then the second thing is it's like, oh, we got systems, we got processes. I'm like, okay, where do they reside?

[00:19:36]and they they can't find the physical binder or the or the you the file on the computer where they where they reside.

[00:19:43]And then if they can do that, okay, I'm like, great. Oh, that's amazing.

[00:19:46]Wonderful.

[00:19:47]>> Then let's go talk to some of your peeps. [laughter] >> Do they know they exist?

[00:19:52]>> It's like it's like, hey, do you understand the process for what you're doing? Oh, yeah. Well, where where is it written down? Oh, I don't know.

[00:19:59][laughter] You just it doesn't take that many questions to go down. And then you know the ones that are doing it's like oh I go here and here it is and I make sure it's the right version and I like this is amazing. All right you have them. But it's it's it's rare.

[00:20:13]>> So when the when the owner has to admit that they're the bottleneck that moment does that conversation look like be quite a significant one. I I think because we we we go into denial and all sorts of lies. We tell ourselves that everything's fine. So what does that look like when you sit down with someone like that?

[00:20:31]Yeah, more times than not, I'm not as direct as we're talking right now. It's a rare individual that can put the ego aside and go, okay, I can see where you're going with this, right? I'm the problem. Like they that's just that's that's rare. Um, and it's beautiful when it happens. But it it's more a conversation on, hey, I see you've built a great business here and you're doing a lot of things really well because they are. They wouldn't be in business and you've built a good team and they have or else they wouldn't be in business.

[00:21:00]but we have some areas where we could bring in some improvements and get you your life back. Would you like that?

[00:21:04]Would you like to have some more freedom? [laughter] >> Would you would would you like some to make some more money? You just start asking questions along those lines and they're kind of like you in sales, right? Building the yes, you get them saying yes to a bunch of things.

[00:21:17][laughter] >> And then you're like, all right, >> if there's one thing that you can give up today, like you just didn't care about, what would it be? And they're usually could have one thing almost always. Some of them will still not give. you have to say like threaten their children or something terrible like that. It's it gets rather dramatic, but that's rare. Um then they're like, "Okay, I really don't like doing this one thing." Like, great, that's wonderful.

[00:21:42]>> We just had a breakthrough. And I celebrate the breakthrough. And at first, after a while, they're celebrating breakthroughs, but when you first start, they think you're a weirdo.

[00:21:48]But you really I'm trying to hardwire like, "This is a good thing. This is amazing that they're letting something go. I want them to get endorphin hits from like when they do it in the future." So, right away, I'm like, "That's amazing. This is this is great.

[00:21:58]You know, let's have a celebration and then we'll figure out like I'm like, "All right, well, let's do it one more time. Let's do it together except we're going to record you doing it and then we're going to get someone else to do it." And they're like, "Okay, I guess I guess that's fine." And then they want to look at the the the recording again. Don't ever do that.

[00:22:16]Don't let them do that.

[00:22:17]>> It's that's a huge tip. Never look at the recording.

[00:22:20]>> Never look at the recording. Never listen to it. Never come back to it.

[00:22:24]uh and and they'll see that you know that the person they gave it to can can pull it off and and oftent times more times than not Joe I found the person who's who they hand it off to a already knew how to do it or or b actually does it better than them >> and that's kind of humbling and then they're like oh okay and nothing broke and I'm still making money and the you and the world's still spinning and and my family still loves me they don't think less of me because I'm not doing anything and okay >> damn let's >> do another And then we just start programming it in. It's like, "All right, if this week, can you can you give me one a day or can you give me two this week or whatever we feel? I feel I could push them on, you know, every every person's different.

[00:23:05]Got to read the room." Um, >> you know, uh, it's it is interesting because it builds. I've I've had, um, one young lady I'm working with right now, um, an attorney. She's amazing. She does wills and trusts and and it's for special needs people like people that have special needs children so that their children are protected you know when they when they pass and and she would take a like 1% of what I said for like the first year I'd work with her but she's she kept making progress so I kept working with her and now we're in year two and usually this takes months not years Joe just so you know but every individual it's up to the person if they want to change >> months not years [laughter] >> it's usually months not years but if they don't want to change. You know, it's sometimes it takes a minute. Now it's it's almost like I don't even finish the sentence. She's like, "I got it. I'm going to do this thing."

[00:23:53]>> Great.

[00:23:54]>> I'm almost like I almost have to let her go. I'm like a crutch now. I've told her I'm like, "You don't need me anymore."

[00:23:59]>> Like, you know what to do. Like, why are we even having these conversations? But it's so it's so instant. She just catches herself and just moves on.

[00:24:07]The two things that really interest me are building a business to suit who you are, not as the templates or the gurus say you should, which you you're doing by helping implement the systems and the freedom so people can enjoy the life which was the reason they went into buying that franchise or building that business. And also what's working in marketing right now and on a on a smaller microcosm of those systems, I often see business owners just doing a bunch of activities, not building a system. And so nothing plays nicely together which I think is really important.

[00:24:39]>> So what do you see on that level in a business? Do you dig down into their actual marketing strategies? What do you see working well in at the moment?

[00:24:48]>> Yeah. So most people I start asking them questions like what's your ROI on that activity? You know, and for some people you really have to get as simple as what's your return on investment?

[00:24:57]>> Yes.

[00:24:58]>> Or or like hey you spent $100. How much money are you getting back from that?

[00:25:02]200, >> 300, a thousand. Like you you have to meet them where they're at. And that's good.

[00:25:07]>> They know.

[00:25:07]>> I love >> I love that not everyone knows ROI and CAC and LTV and you know COGS and KPI.

[00:25:13]Like who cares? There's a bunch fancy names. Doesn't matter. Let's just get down to what the problem is.

[00:25:18]>> Guess what you get out for what you put in. That's right.

[00:25:20]>> Yeah. Right. And and once you get down to that very often, again, um small business owners don't don't know. Mhm.

[00:25:28]>> They don't know or or or or they don't want to know. Like they really enjoy doing this and they hate doing that.

[00:25:37]>> So they do a lot of this but that actually makes some money and that kind of a lot of these conversations Joe.

[00:25:45]They're like but I don't I don't like doing that. I'm like then don't do it.

[00:25:47]Just you know either you're not going to make any money or you could pay someone else to do it or but doing this is not making you money.

[00:25:55]Matter of fact, you can look and see it's actually costing you money every time you do that activity, that marketing activity.

[00:26:00]>> We talk about knowing your numbers, but it can be a very simple number, can't it? Just as you say, what's the return?

[00:26:04]What is the return on investment? If you don't know that, you've got a problem.

[00:26:07]And >> and is it chaotic to achieve that or a systemized way to achieve that, you know?

[00:26:12]>> Yeah. Even if it's just guess like, well, I went and did this thing and I I can't tell how many people came back.

[00:26:17]I'm like, okay, let's figure out a way to so we could tell.

[00:26:21]>> Yeah. Let's just let's just Do we ask them? Do we give them a special coupon?

[00:26:25]Do we like whatever? There's a hundred different ways, as many ways as >> as we could think of. Million probably a million ways, Joe, if we were to sit down and really >> really bang it out.

[00:26:34]>> But like, you have to like give me a guess. And it's interesting um where people are. I had a I had a another business owner I was working with. They have a couple of um um fresh fresh meal shops. like they you you buy a a uh a membership for there and you could always go get a healthy nutritious meal and it's a different menu every day of the week and you get like you could eat in or you could take it home with you for your family and it's especially in the US we eat like crap here so it's like a really great system and I'm like well what's your what's your margin?

[00:27:08]Oh uh we got a we got a 50% margin.

[00:27:11]Okay, oh it's amazing. She yeah but we can't ever make payroll. Oh, I got to put I'm like, "Oh, I don't think you have a 50% margin." So, and we started getting into the like, what does it cost you to build this sandwich? Oh, it's about $6. What do you sell it for? $12.

[00:27:28]Okay. Yeah, I can see why you think you have a 50% margin. Then we'll go and break down every piece of cheese and tomato and bread and turkey and it cost them like $12.50 and they're like, "Oh my god." But it's the same with the marketing stuff. If you can, how much did it cost to go to the event or do the thing or or buy the buy the ad or per click or etc., etc., what did it what did it bring you in? Yeah.

[00:27:53]>> ROI.

[00:27:54]>> So, we'll get practical now for people listening and they're nodding along and they're going, "Okay, I I I might be the problem. I might have to [laughter] admit this to myself." You know what?

[00:28:02]>> It's okay. We We all have a problem.

[00:28:05]We've all been there.

[00:28:06]>> [laughter] >> What is one the one thing that they should do now to sort of start moving in the right direction?

[00:28:16]>> Oh yes, it's so simple and so hard. Joe, >> hi, I'm Mike and I have a problem.

[00:28:24][laughter] >> Damn.

[00:28:28]>> Ju just acknowledge that you you could probably make some tweaks around you.

[00:28:33]Yeah, it's actually one of those Yes.

[00:28:36]embarrassingly simple beginnings that might be hard for people to do.

[00:28:39]>> So hard. It was so hard for me, Joe. My whole identity was wrapped up that I was the guy that got stuff done. I just >> It was a wall. I'd go through it. I wasn't smart enough to look for a door.

[00:28:49]Like I just like I will go through that wall. Let's go.

[00:28:54]I'm gonna make some money. [snorts] Yeah. Yeah. I I I I did so many events one year that I don't I wrote it in my book. I should know the exact numbers. It was around $500,000 uh in events. I'm like, that's I made some good money.

[00:29:16]It cost me like $600,000 when I added all up all the time and effort and payroll and etc. Like I would have been $100,000 richer on my bottom line had I not done those events.

[00:29:31]>> Now my top line look great from my ego.

[00:29:34]Like oh I made almost $2 million this year. Yes.

[00:29:38]>> Why have I have less money than when I made a million? I don't understand what's going on. I can't I can't. And the reason I looked at that particular one the events is because I'm like this is an area I'm killing. So I'll I'll look at it. I'll map it all out. I'll know all of my costs and then I'll be able to repeat that in the systems that aren't working.

[00:29:57]>> And then the deeper I got into it, I'm like, "Oh my god, this doesn't work at all. Oh, I just got nauseous and like $100,000 richer."

[00:30:05]>> Bottom line, if I didn't if I would have stayed home and done nothing, >> it's um >> it's a massive thing. Massive thing with events, isn't it? Unless they're really good uh top of funnel sort of acquiring a customer to sell them things on the back end.

[00:30:20]>> Yeah. I I actually had an experience with a client once who was loving doing the events and the travel and didn't like being in the clinic. When this person was in the clinic, they made a lot of money and they always had trouble getting staff to stay there who would sell as well.

[00:30:37]>> Uhhuh.

[00:30:37]>> And one day I pointed out, you know, when the question came up in the meeting, why am I not making any money?

[00:30:41]I said because you're spending it all on travel and events and hiring rooms and you know and I said if you stayed in a clinic you would actually similar to you would have been about 100,000 better off >> more for the year was we're probably 50,000 a month better off actually when I did the numbers.

[00:31:01]>> Oh that's significant.

[00:31:02]>> Um instead that person fired me [laughter] when I told them to cut costs.

[00:31:08]So that's fine. But um it was >> well that's that that's their choice.

[00:31:12]>> It's fine. It's it's fine and I still respect who they are. It's not a problem and you know the intent's there. But when you look at the numbers as you say what's costing you and is it contributing to the bottom line as you say if you enjoy doing it fine you know but what's the motivation for doing it?

[00:31:30]Is it >> right? Is it attracting new clients that you can then sell on the back end and make the money back, which many events do well. Or is it because you need connection to get out into the community? Fine. But that becomes, >> I guess, more of a hobby, you know, sounds harsh, but >> No, but it's it's so true and it's so real and people don't want to they don't want to look at it and realize it. Um, >> a drill I'll run with people is like, "Okay, if you have a 10% margin and you went and sold a $100 item, how much money do you have profit at the end, net profit at the end?" And they'll be like, >> "Uh, $10." Like, exactly right. That's amazing. So, if we save from the belly of your P&L, the middle of the P&L, the expense portion of the P&L, whatever you want to call it, we save $100 on not buying uh this new thing, how much money will we have at the end of the P&L? And they're like, $10. I'm like, no, we'll have $100.

[00:32:30]It's it's so like every dollar saved is like a mag like a magnitude bigger than if we bring it in at the top end. And so many business owners, myself included, used to fall into this trap. We're like, top end, top end, top end, top line, bring in more revenue, more revenue, more revenue. It will fix everything.

[00:32:47]More revenue. It's all I need is more revenue. And they don't look at the I call it the belly of the P&L. Those all over.

[00:32:54]>> Say that again. That's really important.

[00:32:56]Put that into one sentence. It's so important.

[00:32:58]>> One sentence.

[00:33:00]Topline sales will not save you.

[00:33:04]>> Yeah. U managing the belly of the P&L will make you a wealthy person.

[00:33:09]>> Well, well said. When you talk about building a great team, you know, how do you go about that? If again, I'm thinking if if a business owner is the bottleneck, they're making the decisions. They haven't put that trust out to the team and said to people, you've got the tools, you make the decisions. How do you help them make that shift?

[00:33:29]>> Yeah. uh often they want to look internally first and sometimes we'll find someone that's already there that can that can take one of those other identities the the hunter or the GSD or the architect. Um but very often we we should go outside although they don't want to they want to start inside. Uh it's it's God it's fascinating to me Joe that people want to continue to make this the same mistakes that everyone makes and they can't like it'll be different for me this time. It's just it's almost humorous but but it's okay.

[00:33:56]>> Special special Mike. Yeah, special little snowflake. That's right. Um, all right. So, they they they they they try it internally and uh then they they'll do one of two things. They'll dump everything on them and never communicate and wonder why it fails or they'll micromanage it. Like the person will come to them with every question and they'll answer it. So, so again, they're going to they're going to have a failure.

[00:34:21]>> Um, assuming it is the right person, let's just say it is the right person.

[00:34:26]We'll we'll start there. Uh neither way neither way will work. You have to have a you know a structured handoff. You have to you have to show them uh you have to tell them you have to they have to understand why it's important. You have to like go through all of the steps. It's like when someone does something and or or doesn't do something more often. It's like our instinct is just to get mad at them and in truth it's like okay did I tell you that it needed to be done? Yes.

[00:34:55]>> That's a good first question. Did I tell you when it had to be done by? Yes.

[00:35:01]Did you know how to do it?

[00:35:03]No. Oh, why did you say something? All right, let's figure out how to do it.

[00:35:07]I'll show you how to do it. There's like you just kind of go down a checklist and it's like, yes, I I did know how to do it. Okay, did you have the time to do it? Well, no, because you gave me 17 other things and I didn't know this was a priority. Oh, okay. Well, now I got to re prioritize for you. You can kind of go through a checklist and find out why.

[00:35:23]If at the end like they knew all the reasons, like they did understand it, they did know, they did, and then they still didn't do it. They're giving you the middle finger. Well, that's a different conversation. But that's rare.

[00:35:33]That's rare.

[00:35:34]>> That is rare. Would you rather inherit a team with a really great system, sorry, a business with a really great system and a subpar team or a really great team and a broken system?

[00:35:45]>> Oh my god. Uh, the system.

[00:35:48]>> The system.

[00:35:49]>> The system. because I I could start fixing the team.

[00:35:53]You could say if you got the great team, you could fix the systems. I guess that's true, too. But, uh, those those teams, while they work great, they work great while they're there, and as soon as one person leaves or two people leaves, it it tends to fall apart.

[00:36:05]>> Yeah.

[00:36:05]>> Versus a system is a system. You could just plug someone into the system. You think of a very large corporation or any military throughout the world, you know, this is this is like you are the cog. M >> people don't like to think about themselves that way, but it's true.

[00:36:21]>> Yeah. Yeah. So, knowing that knowing that we all think we're special um when you walk into a business or a franchise and you're turning it around >> Yeah.

[00:36:30]>> How long usually does that take?

[00:36:35]>> Uh the fastest I've done it is about 120 days.

[00:36:38]>> Mhm.

[00:36:39]>> Uh it usually takes 12 to 18 months.

[00:36:41]>> Mhm. And what sort of difference do people see? I mean, talk revenue, I guess, or you know, the goal that mattered to the business owner. Maybe just taking a holiday is a good goal, but [laughter] >> uh a most recent one, uh we started when I took it over, it had uh declining year-over-year sales of minus 12%.

[00:37:01]>> In uh in March of that year when I took it over and by the end of that year, we were positive 53. So, what's that? A 65% increase.

[00:37:08]>> Massive. Well done. Yeah.

[00:37:10]>> Yeah.

[00:37:10]>> Fantastic.

[00:37:12]>> Yeah. the the the pardon me. The um the messy part and the speed part comes in um or how how you how you lead it. Like how quickly do you want it to happen?

[00:37:31]>> Oh, that's a good question. Yeah, because I've had I've had situations where I've come in and you kind of like slowly nibble around the edges.

[00:37:42]Um, and these are ones that I've bought or helped people, but usually usually, uh, you know, they want to nibble around the edges. They want to they want to start and get small gains. Those ones are going to take longer. Those are going to take, you know, the 12 to 18 months. M >> I've also had ones where I've literally like, okay, we have some massive uh breakdowns on how we're dealing with our customers right now. Like, you know, the the metric for this should be 20 minutes, not 26 hours.

[00:38:08]You know, fill fill in the blank whatever the metric is. Like, we're just going to have to like go to these metrics and then the entire team literally quit in a in in a week >> where you have nobody.

[00:38:21]>> I don't recommend that. That's not great. a clean slate.

[00:38:24]>> You're like, "Ah, I got to keep the doors open and the lights on. This is going to be interesting." Um, >> does does the client, the business owner look at you and go, "Great, you you my team all quit. Thanks. Thanks for nothing." [laughter] >> Right. Right. But, uh, so kind of that middle ground, you get some early wins.

[00:38:39]People that really are resistant, they will usually self- select out. Um, often you'll have to have conversation with people. I'm a big believer in working with people and working with people and working with people and finding their why and trying to get them on board. But if they won't, then you know, you promote them to customer uh and you take care of them >> uh on the way out. I think that's that's important also. But um I've had people on my teams that I just I I I love my people, but I mean some people you just love more than you like.

[00:39:10]You don't have a favorite child, but you have a favorite child. [laughter] And you're like, "Okay, I know this person is holding back growth, but I can't I can't I can't ask them to leave. I can't do it. I just I I'm being straight up. I can't do it." Um, and I know that's cost me some time and money in in the in in the past, but uh, you know, when I'm advising people, I'm like, "Hey, here's where I ended up.

[00:39:37]Here's what it cost me.

[00:39:39]>> Um, you can make your own decision on whether you want to keep Joe on the team or Mike on the team." But, uh, but they're a roadblock and you can see it and, uh, you got to decide.

[00:39:52]I like that you don't just come in all guns blazing with systems and say right you're going to put these systems in place but first of all you've looked at you're helping the business owner understand what type of temperament or person that they are and then building to complement that and it's very very important instead of just you know here's the fix and plastering it over everything it's more nuance than that >> it'll almost always fail >> yeah yeah I think so and um I think most of as business owners have probably tried to apply something that wasn't suited to who we are. And so finding that way through is is where the magic happens, you know.

[00:40:30]>> So, I've got some uh just quick questions to wrap this up, but uh higher fast or slow?

[00:40:37]>> Slow.

[00:40:39]>> First system you'd build if you took a struggling business over tomorrow.

[00:40:43]>> The simplest one in the entire building, whatever it is.

[00:40:46]>> The simplest one. I like simple. Don't take the most complex thing and try to systemize it. Let's take something simple like >> we have to say hello when someone walks in the door within 3 seconds.

[00:40:56]>> What's the system around that? And there could be a system around that. Like you have to look up, you have to wave, you have to make eye contact, you have to say hello.

[00:41:03]>> What's the most useful thing you've learned from the franchise system that you wouldn't have expected?

[00:41:07]>> The importance of understanding and and and following the operations manual.

[00:41:12]Whatever franchise system you're in, they built that. That's what made them successful. Don't reinvent the wheel. do what they what made them successful.

[00:41:20]>> Don't you hate it when the obvious answer is the right answer? [laughter] >> Yeah. And it happens. I laugh because it happens all the time. You come in someplace and they're doing none of the things that are in the operations manual and you're like, "Well, why don't we just go do it that way?" Well, that doesn't, you know, doesn't work here. It doesn't really Well, works on the one down the street. Well, my neighborhood's different. Is it, though? [laughter] >> Is it though? What's the one question on a Sunday night that every business owner should be asking themselves each Sunday?

[00:41:48]Uh, do I have to go to work tomorrow?

[00:41:50][laughter] >> Because if you had true freedom, you don't have to.

[00:41:53]>> Oh, that's actually a brilliant answer.

[00:41:56]Do I have to go to work tomorrow? If I if I do, my systems aren't working yet properly. [laughter] >> Yeah. I mean, sometimes it's a choice.

[00:42:02]People get their juice being in the office or in the building and and from people. It it depends what where where you get that from.

[00:42:10]>> Yeah. Yeah. Well said. Thank you, Mike, so much for your time. For anyone listening, you probably need to go and buy Mike's book, uh, Grow Smart, Not Grow Fast. It's called Grow Smart. And we'll put the link in the description.

[00:42:21]And, um, if you want to hire Mike to come and turn your business around, I think that'll be a good move. Thanks, Mike, for your time.

[00:42:28]>> Thank you so much for having me on today. I really appreciate it.

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