Mike Michalowicz's Blog, page 12

Mastering Profit First: Master Your Percentage Allocations



 

At its core, Profit First is all about flipping the script on traditional accounting and prioritizing profit from day one. One of the key pillars of Profit First is percentage allocation—the art and science of dividing your revenue into different buckets to ensure financial health and sustainability.

Let’s break it down step by step and explore how to allocate percentages using the Profit First method:

Profit (5-10%): First things first, let’s talk about profit—the lifeblood of your business. With Profit First, we flip the script and prioritize profit over expenses. Allocate a percentage of your revenue (ideally 5-10%) to your profit account right off the top. This ensures that you’re paying yourself first and building a financial cushion for the future.Owner’s Compensation (30-50%): Next up, let’s talk about owner’s compensation—the money you pay yourself for your hard work and dedication. Allocate a percentage of your revenue (typically 30-50%) to your owner’s compensation account. This ensures that you’re fairly compensated for your efforts and can enjoy the fruits of your labor.Operating Expenses (50-60%): Now, let’s turn our attention to operating expenses—the costs associated with running your business. Allocate a percentage of your revenue (typically 50-60%) to your operating expenses account. This covers everything from rent and utilities to payroll and supplies, ensuring that you have the funds needed to keep your business running smoothly.Tax (15-20%): Ah, taxes—the inevitable reality of business ownership. With Profit First, we take a proactive approach to taxes by allocating a percentage of our revenue (typically 15-20%) to our tax account. This ensures that you have the funds set aside to cover your tax obligations and avoid any nasty surprises come tax time.Profit First (5-10%): Last but not least, let’s circle back to profit. In addition to allocating a percentage of your revenue to your profit account upfront, consider implementing a Profit First allocation at regular intervals (e.g., quarterly or annually). This allows you to further bolster your profit reserves and celebrate your success along the way.

By following the Profit First method and allocating percentages to your profit, owner’s compensation, operating expenses, tax, and profit first accounts, you can take control of your finances, prioritize profit, and build a financially sustainable business for the long haul.

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Interview with Kasey Compton, Author of In Search of You



 

Life’s journey can be complex – including our business journey. In Search Of You, by Kasey Compton, beautifully captures the essence of finding joy when the usual path falls short. It’s a captivating read that has the power to transform perspectives.

Kasey is a therapist, business owner, and author. In our interview, we talk about, well, a lot. From how we’ve evolved as people, business owners, and leaders to the realization that what our ideas of fulfillment were before we started our business have evolved too. And mostly, how to maintain joy in the journey.

One big takeaway for me from this interview is how much this interview served me in assessing my own mental health and wellness.

I’ve personally experienced the impact of In Search Of You, and it’s a breath of fresh air. Kasey’s insights are not only relatable but also inspiring. The book offers a roadmap to genuine and lasting joy, especially when the usual strategies seem to be missing the mark.

I highly recommend everyone pick up a copy of this book! I think you’ll be glad you did. You can grab it here.

Wishing you health and wealth always.

-Mike

 

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The Profit First Formula Explained

 

Man, do I get hassled about  the Profit First formula. 

Let me be clear, I do believe following the GAAP (Generally Accepted Accounting  Principles) is important so that when the time comes, you  are prepared to submit taxes,  financial statements for investors. However, using the GAAP as your  primary accounting method is the wrong way to grow a  hugely profitable business. 

Replacing GAAP to track spending, enhance cash-flow  management and assess the health of your company makes sense, you may just be afraid to go against what “everyone  knows.” 

Hot tip/reminder – Just because something appears to be true and  “everyone” goes along with it, doesn’t mean it makes sense – and it doesn’t make it true. 

The GAAP (Generally Accepted Accounting Principles)  formula for determining a business’s profit is Sales – Expenses  = Profit. It is simple, logical, and clear.  While logically accurate, it doesn’t account for human behavior. In the GAAP formula profit is a leftover, something that is hopefully a nice surprise at the end of the year. Alas, the profit is rarely there and the business continues on its check-to-check survival. 

With Profit First, you flip the formula to Sales – Profit = Expenses. Logically the math is the same, but from the standpoint of the entrepreneur’s behavior, it is radically different.  With the  Profit First formula, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses. 

Profit First encourages you to continue “bank balance accounting” by first allocating money to profit (and other accounts) so that the actual portion of deposits that are available for expenses and you automatically adjust spending accordingly. 

This principle doesn’t try to change your habits  (that is nearly impossible to do), Profit First works with your existing habits. By first allocating money to different accounts, and then removing the temptation to “borrow”  from yourself, your business will become fiscally strong and you will benefit from regular profit distributions. 

Let’s get into some details:

Profit First Allocation: In traditional GAAP accounting, profit is typically seen as what’s left over after all expenses are paid. But when revenue is allocated into different bank accounts based on predetermined percentages for profit, owner’s pay, taxes, and operating expenses, it ensures that profit is not an afterthought but a fundamental aspect of your financial management.Behavioral Approach: We’re human, and our habits determine our outcome. By setting up automatic allocations and creating clear boundaries for spending, Profit First helps you develop healthier financial habits.Simplicity and Clarity: GAAP accounting can be complex and overwhelming, especially for entrepreneurs without a background in finance. The Profit First methodology breaks down financial management into straightforward concepts and actionable steps, making it easier for business owners to implement and understand.Focus on Cash Flow: Prioritizes cash flow! When you ensure your business always has enough funds set aside for profit, taxes, and owner’s pay, it helps you avoid cash flow crises and maintain financial stability.Real-Time Monitoring: Traditional GAAP accounting often involves reviewing financial statements periodically, usually on a monthly or quarterly basis. Real-time monitoring of finances through regular check-ins with Profit First bank accounts. This provides you with up-to-date information on your financial health and enables you to make proactive decisions to stay on track with your financial goals.

What are you waiting for? If you haven’t already, flip that accounting model and make profit a habit! Your company, employees, clients, heck your dog, will thank you!

Wishing you good health and wealth, always!

-Mike

Join me on the journey: 

Last I saw there was a discount! Get Profit First for you or a friend at Amazon , Barnes & Noble , or any of your favorite booksellers.

Instagram

LinkedIn

Profit First works with your existing habits. By first allocating money to different accounts, and then removing the temptation to “borrow”  from yourself, your business will become fiscally strong and you will benefit from regular profit distributions. – MM

The secret to financial success is to pay yourself first – MM

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The Profit First Formula

 

Man, do I get hassled about  the Profit First formula. 

Let me be clear, I do believe following the GAAP (Generally Accepted Accounting  Principles) is important so that when the time comes, you  are prepared to submit taxes,  financial statements for investors. However, using the GAAP as your  primary accounting method is the wrong way to grow a  hugely profitable business. 

Replacing GAAP to track spending, enhance cash-flow  management and assess the health of your company makes sense, you may just be afraid to go against what “everyone  knows.” 

Hot tip/reminder – Just because something appears to be true and  “everyone” goes along with it, doesn’t mean it makes sense – and it doesn’t make it true. 

The GAAP (Generally Accepted Accounting Principles)  formula for determining a business’s profit is Sales – Expenses  = Profit. It is simple, logical, and clear.  While logically accurate, it doesn’t account for human behavior. In the GAAP formula profit is a leftover, something that is hopefully a nice surprise at the end of the year. Alas, the profit is rarely there and the business continues on its check-to-check survival. 

With Profit First, you flip the formula to Sales – Profit = Expenses. Logically the math is the same, but from the standpoint of the entrepreneur’s behavior, it is radically different.  With the  Profit First formula, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses. 

Profit First encourages you to continue “bank balance accounting” by first allocating money to profit (and other accounts) so that the actual portion of deposits that are available for expenses and you automatically adjust spending accordingly. 

This principle doesn’t try to change your habits  (that is nearly impossible to do), Profit First works with your existing habits. By first allocating money to different accounts, and then removing the temptation to “borrow”  from yourself, your business will become fiscally strong and you will benefit from regular profit distributions. 

Let’s get into some details:

Profit First Allocation: In traditional GAAP accounting, profit is typically seen as what’s left over after all expenses are paid. But when revenue is allocated into different bank accounts based on predetermined percentages for profit, owner’s pay, taxes, and operating expenses, it ensures that profit is not an afterthought but a fundamental aspect of your financial management.Behavioral Approach: We’re human, and our habits determine our outcome. By setting up automatic allocations and creating clear boundaries for spending, Profit First helps you develop healthier financial habits.Simplicity and Clarity: GAAP accounting can be complex and overwhelming, especially for entrepreneurs without a background in finance. The Profit First methodology breaks down financial management into straightforward concepts and actionable steps, making it easier for business owners to implement and understand.Focus on Cash Flow: Prioritizes cash flow! When you ensure your business always has enough funds set aside for profit, taxes, and owner’s pay, it helps you avoid cash flow crises and maintain financial stability.Real-Time Monitoring: Traditional GAAP accounting often involves reviewing financial statements periodically, usually on a monthly or quarterly basis. Real-time monitoring of finances through regular check-ins with Profit First bank accounts. This provides you with up-to-date information on your financial health and enables you to make proactive decisions to stay on track with your financial goals.

What are you waiting for? If you haven’t already, flip that accounting model and make profit a habit! Your company, employees, clients, heck your dog, will thank you!

Wishing you good health and wealth, always!

-Mike

Join me on the journey: 

Last I saw there was a discount! Get Profit First for you or a friend at Amazon , Barnes & Noble , or any of your favorite booksellers.

Instagram

LinkedIn

Profit First works with your existing habits. By first allocating money to different accounts, and then removing the temptation to “borrow”  from yourself, your business will become fiscally strong and you will benefit from regular profit distributions. – MM

The secret to financial success is to pay yourself first – MM

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Get Out of the Survival Trap – For Good

How many decisions did you make for your business last year? Decisions to solve a problem, fix a mistake, decide whether or not to take advantage of an opportunity, add a new product or service to your offerings, or try a new marketing strategy. No doubt you made a lot of decisions last year and put out a lot of fires. Phew.

Now, let me ask you this: Did any of those decisions move your business forward in a big way? Did your company see record growth? Were you able to step back from the grind of doing all the things and let your team run things? Did you make a significant impact in your clients’ lives? In your community? In your industry? If you answered yes, I’m stoked for you. If you answered no, welcome to the common experience of business ownership. Or what’s better known as the Survival Trap.

So, what exactly is this trap that so many of us find ourselves in? Well, picture this: you’re running your business day in and day out, but no matter how hard you work, it feels like you’re barely treading water. You’re just scraping by, living paycheck to paycheck, with little to show for it in terms of profit or financial stability. That, my friends, is the Survival Trap in action.

Let me break it down for you. The Survival Trap is a vicious cycle where businesses struggle to make ends meet, constantly playing catch-up with bills and expenses. It’s like running on a hamster wheel, working tirelessly just to stay in the same place. And trust me, I’ve been there myself.

What makes the Survival Trap so insidious is that it’s not just about the numbers on your balance sheet. It takes a toll on your mental and emotional well-being too. The stress, the worry, the constant uncertainty – it can all lead to burnout faster than you can say “profit margins.”

The Survival Trap is deceptive because it fools us into thinking we are at least inching toward our vision, as if our reactionary behavior is actually “smart” or evidence of our good instincts, and will eventually lead us to the promised land: financial freedom. When it comes to our business’s (lack of) cash flow, we often throw our few remaining dollars at the immediate problems and opportunities, hoping that profit will magically materialize. 

When it comes to our time, we burn out ourselves and our people by working even longer hours, constantly putting out fires, and chasing arbitrary quarterly targets instead of building sustainable systems. And when it comes to fixing the business, we find ourselves patching up the obvious problems, only to wonder why they keep reoccurring over and over again.

The way out is through implementing the Profit First system. It offers a transformative solution to the Survival Trap by prioritizing profit through the allocation of revenue into separate accounts dedicated to profit, owner’s compensation, taxes, and operating expenses. Then, your profit will be a priority, not an afterthought.

This approach to financial management ensures that you won’t have to constantly chase money down and breaks the cycle of seeking cash to cover expenses. You’ll create a sustainable financial foundation that fuels growth and resilience for the long game.

Wishing you tremendous success!

-Mike

Last I saw there was a discount! Get Profit First for you or a friend at Amazon , Barnes & Noble , or any of your favorite booksellers.

Join me on the journey: Instagram LinkedIn

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Get Happy – Play More, Work Less

Those two specks on the right side of the photo? My wife and me in Hawaii. (Notice, I am not working.)

My question to you: Did you take a summer vacation? Did you take a four-week vacation?

Did you know that as of July 2nd, 2022 was half over? No pressure, just thought I’d you know, remind you. Here in the States, the summer is winding down. Kids are getting back to school, and folks are getting back to their routines.

I know that for some, a four-week vacation sounds like a lofty goal. Once upon a time I too subscribed to the old-school mentality that stepping away from my business for even a week was asking too much. Who in the world would run the show as well as I would?

Here’s the deal. One of the reasons to become an entrepreneur is so you are able to walk away from your company for a while knowing that it’s self-sufficient. 

Your business is incredibly important, I get it. Even more important, however, is how you spend your time. Do you feel like every waking moment (and sometimes even sleeping moments) is spent on your business? That’s not healthy, and not giving you the opportunity to live your life to the fullest. My dream for you is that your life is enriched in all aspects – especially personally. 

You can detach from your business. In fact, you must. Not only for your own personal well-being but the well-being of your company. You need to be physically and mentally healthy. Having time off allows you to refuel, and return to work reenergized and inspired by those experiences you had while you were away.

I learned this from experience. The hard way. Over decades of owning businesses, I have found that I must dedicate just as much time to my hobbies, family, and health as I do to my company. In order to do that, I needed to create a system for my business to run itself. After years of research and testing, I developed the Clockwork system, and I have been taking long vacations ever since. 

It starts with having systems in place, and rock-star employees to implement them. This summer, just about every team member went away for four weeks. Half the team went to Europe, while the other half explored new and loved places here at home. How? They created videos and documents that support their systems and tasks and shared them with everyone in the company. (Hint: Share your drive, create videos in Loom and screenshots in Tango – worked like a charm!)

Things will happen in your business that will take you or a team member out of the loop for a while. Be prepared for anything, and create a company that puts the organization’s mental wellness and physical health before all else. You can do it if your systems are established.

Here’s to the health of not only your business but your wellness, too!

-Mike

PS – Want a step-by-step roadmap so you can take your four-week vacation? Check out Clockwork Revised and Expanded to get the latest strategies to make your business work for you with less effort.

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Unleash Your Business Superpowers and Increase Revenue with the ACDC Model from Clockwork Revised and Expanded

Get ready to rock and roll because today we’re diving into the ACDC model in Clockwork Revised and Expanded.

You might be thinking, “What on earth does ACDC have to do with business?” Well, let me tell you—it’s not about rock ‘n’ roll (although that’s pretty awesome too). ACDC stands for Attract, Convert, Deliver, and Collect—the four pillars of business success.

Grab your guitar (ok, air guitar, if you don’t have a real one handy), and let’s dive into each element of the ACDC model to unleash your business beast.

Attract: Rock the stage with your marketing mojo. First, you have to attract—the electrifying stage where you strut your stuff and woo your audience. In business terms, attracting is all about marketing magic. It’s about grabbing the spotlight, turning heads, and attracting potential customers like a magnet. From killer social media campaigns to dazzling advertising strategies, attracting is your chance to shine and show the world what you’ve got. So, crank up the volume, get creative, and let your marketing rock the house!

Convert: Turn fans into superfans with sales wizardry. Once you’ve got their attention, it’s time to work your sales skills and turn those curious onlookers into raving fans. Converting is where the real magic happens—it’s your chance to seal the deal, close the sale, and turn prospects into paying customers. When you convert, it’s your opportunity to show customers why they simply can’t live without your product or service. But before you do, remember you are there to serve clients, not sell, sell, sell. Make sure what you’re offering is what can truly help them. When you come from a place of service, you will build trust and loyalty. And hey, if your product isn’t what they need now, refer them to a company that can help them. It’s just good karma. 

Deliver: Deliver a knockout OVERperformance every time. Now it’s time to deliver the goods and give your customers a performance they won’t forget. Delivering is where you bring your A-game and deliver on your promises with style, precision, and panache. Whether you’re delivering products or services, remember that delivering is all about exceeding expectations, wowing your audience, and leaving them begging for an encore.

Collect: Cash in on your rockstar status. Last but certainly not least, we’ve got to collect—the moment you’ve all been waiting for. After rocking the stage, winning over fans, and delivering an unforgettable performance, it’s time to collect your well-deserved rewards. From invoicing to payment processing, collecting is where you turn all your hard work and dedication into cold, hard cash. So, don’t leave money on the table—make sure you’ve got a solid system in place to collect payment and keep the cash flowing.

So, grab your guitar, crank up the volume, and let the ACDC model be your roadmap to business success. With a little rock ‘n’ roll spirit and a whole lot of determination, you’ll be unstoppable!

Until next time, keep on rockin’ and rollin’!

Ok, ok, I got carried away with the rock n roll mentions. Forgive me?

Wishing you tremendous success – on and off the stage!

-Mike

PS. To get more intel on how to implement the ACDC strategy, check out Clockwork Revised and Expanded here or at your favorite bookseller.

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Unlocking Business Freedom: The Clockwork Strategy for Creating Systems and Processes

If you feel like you’re stuck in a grind and want to get more time to do what you love, I want to remind you about game-changing strategies that transform the way you run your business and reclaim your precious time.

I know we often find ourselves trapped in a never-ending cycle of working in our businesses rather than on them. We’re constantly putting out fires, handling day-to-day tasks, and wearing multiple hats. The result is this leaves us little time to focus on the big picture and design the business of our dreams. And the life of our dreams.

You need to create systems and processes that allow your business to run like a well-oiled machine, even when you’re not around. That’s where Clockwork R&E comes in.

It starts with you auditing your systems and processes, and then documenting them to train your team. This way your business will operate efficiently and effectively without constant oversight from you, the owner. 

It’s about creating systems and processes that automate repetitive tasks, delegate responsibilities, and empower your team to make decisions independently.

So why is the Clockwork strategy so important, and how can it help you reclaim your time and focus on designing your business instead of working in it? Let’s break it down:

Create freedom of time: By implementing systems and processes, you free yourself from the day-to-day grind of running your business. You no longer have to be constantly involved in every aspect of operations, allowing you to step back and focus on strategic planning, innovation, and growth.

Achieve scalability: Clockwork lays the foundation for scalability by standardizing workflows, documenting procedures, and streamlining operations. As your business grows, you can easily onboard new team members, expand into new markets, and take on more clients without becoming overwhelmed.

Empower your team: With well-defined systems and processes in place, you empower your team to take ownership of their roles and make decisions autonomously. This not only boosts morale and engagement but also frees you up to focus on higher-level tasks that require your unique expertise.

Enhance customer experience: Your systems ensure consistency in the delivery of products and services, leading to a better customer experience. Customers can trust that they’ll receive the same high-quality service every time they interact with your business, fostering loyalty and satisfaction.

How can you implement the Clockwork strategy in your own business? It all starts with identifying your core functions, documenting your workflows (we use Loom and Tango), and delegating tasks to capable team members. From there, you can refine your systems, automate repetitive tasks, and continuously monitor and optimize your processes for maximum efficiency.

Remember, Clockwork isn’t just about creating systems and processes—it’s about creating freedom. It’s about taking back control of your time and designing the business and life you’ve always dreamed of. 

Dream on, my fellow entrepreneur!

Wishing you health and wealth always.

-Mike

PS. To get the complete strategy to create systems in your business, you can get Clockwork Revised and Expanded here.

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The Queen Bee Role

The Queen Bee Role (QBR) is the singular most important activity within your business that delivers on your brand promise. That is a doozy of a sentence, so let’s break it down to the critical elements:

The QBR is always an activity. And it is always at the Doing level.The QBR is always a singular activity. You are likely doing many activities that support your brand promise, but only one can be the most important. That critical activity is the QBR.The brand promise of your company is the greatest commitment you assure the customer will receive when they do business with you.This is why the QBR is the heart of your organization – it is the most important activity influencing the survivability and thriveability of your company.

Your brand promise is the pledge, assurance or guarantees you make to your customers about what they will experience with your company. This is the most compelling reason to why clients do business with you. And the QBR is the activity that most makes the brand promise a reality.

In short, the QBR delivers on the promise.

Examples of a QBRs are:CompanyBrand PromiseQBRFedExWe deliver your packages on time.The movement of packages (logistics).Savannah BananasFun. Family. Entertainment.The ideation of fresh, fun family entertainment.Your local doctorAn accurate prescription for your health.Spot on diagnosis.Fast Food RestaurantFood served fast.The assembly of burgers (and other foods) as fast as possible.High End RestaurantRemarkable food.Preparation of food that tastes extraordinary.Mike Michalowicz

(author)

Complex business ideas made simple and actionable.Write books that are easy to digest, empowering and delivers results.Joe’s Lawn CareVacation in your backyard.Landscape design services.

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Top Secret Book Excerpt: The Best Business Solution to Productivity (And it’s not being a workaholic)

I have a confession. I used to be a workaholic. Now, I need to clarify that I am not touting any badge of honor here. I used to think being a workaholic was a good thing. These days, I want to share that I believe we should get a reward for not being workaholics.

I know. You think you have to illustrate that you have amazing work ethic, that you work harder than the rest, that you’re innovative, that you care about your clients. I get it. All of it. But…

If I’m constantly working in my business, what does that tell you? Look, there’s a time to hustle, but not as an overall culture. Work? I still love to work. But I also love to LIVE. And that means to get that freedom of time, I need to work smarter, not harder.

This isn’t new news. When I found that I was burnt out and missing out on time with my health, growing kids, aging parents, and heck, even my marriage, I knew I had to make some changes. So I began implementing systems that would help my business run smoother, with less of my personal time and energy. It didn’t happen for me overnight, but eventually, I got my systems down and created Clockwork Revised and Expanded to save you the trouble of figuring out how to streamline your business, and increase your bottom line, as well as your freedom of time.

Here’s an excerpt from Clockwork Revised and Expanded about the solution to creating the best, and healthiest, productivity in your organization:

The Solution is not the Solution
As is true for many business owners I’ve known, I thought the cure for my workaholicism was better productivity. If I could just do more, faster, I could find more time for my family, for my health, for fun, and to get back to doing the work I really loved. The work that fed my soul.

I was wrong.

You and I both know extremely productive people who work sixteen hours a day. You and I absolutely know the “I do best when I cram” people. Maybe it’s you. Once upon a time, it surely was me.

In an effort to be more productive, I tried it all: Focus apps, the Pomodoro method, working in blocks. Starting my day at four a.m. Ending my day at four a.m. To-do lists. Not-to-do lists. Lists on yellow notepads. Lists on my phone. Lists of just five things. Lists of everything. Back to lists on yellow notepads. The “Don’t Break the Chain” method, which quickly led me to the “Chain Myself to My Desk” method. No matter what hack or technique I tried, no matter how productive I became, I still slipped into bed at night long after I should have, and woke up the next morning way earlier than I should have, with a to-do list that seemed to have magically grown overnight. Maybe I did things faster, but I surely didn’t work fewer hours. If anything, I worked more. Maybe I was making progress on many small projects, but many more new projects were filling up my plate. And my time was still not my own. All my years of studying productivity had given me nothing but more work. It was an epic fail.

If you haven’t tried some of the productivity strategies I rattled off like bad failed diet plans, I’m sure you have your own list. An entire industry is built around the desire to do more, faster. Podcasts, articles, and books; mastermind groups and coaches; productivity challenges, calendars, journals, and software. We buy into the next productivity solution someone recommends because we’re desperate. Desperate to grow our companies by getting more done faster, and managing all our work without losing our minds.

It took me about fifteen years to figure this one out. I actually wore the productivity master’s badge of honor—the workaholic badge. I was a proud member. I was the fastest task-ticker-offer in the land. (What? It’s a thing.)

In my book Profit First, I applied Parkinson’s Law—“our consumption of a resource expands to meet its supply”—to profit. Just as we use all the time we have allocated for a project to finish it, we also spend the money we have, which is why most entrepreneurs rarely earn as much as their employees, much less turn a profit. The more money we have to spend, the more we spend. The more time we have, the more of it we spend working. You get the idea.

The fix to this behavior is ridonkulously simple: limit the resource and you limit your utilization of it. For example, when, after you collect revenue, you allocate profit first and hide it away (in a remote bank account), you have less money to spend. So guess what? You spend less. When you don’t readily have access to all the cash flowing through your business, you are forced to find ways to run your business with less.
And now that we’re talking about time, Parkinson’s Law is even more relevant. Whatever time you give yourself to work, you will use. Nights, weekends, vacations—if you think you need it, you’ll work right through your time off. This is the root cause of the failure of productivity. The goal of productivity is to get as much done as quickly as possible. The problem is, because you’ve prioritized a seemingly endless amount of time to running your business, you’ll continuously find a way to fill up the time. The more productive you are, the more you can take on. The more you take on, the more productive you have to be. Do you see how productivity is a trap?

If you’re like me and most entrepreneurs I meet, you use the time you saved to do more work. And not the work that feeds your soul. Not the work that could truly make a difference for your business. No, you do the next urgent thing. You put out the fires, and then you do the next tasks that will be the next fires until you’re interrupted by some other even more urgent thing that pops up. You keep working your ass off and feeling as though the more progress you make, the more work you have.

Yes, productivity is important; we all need to make the best use of our time. To be unproductive is like sinning against the business gods. (Plus, sittin’ around eating Cheetos and watching ThighMaster infomercials all day isn’t going to move anyone’s business forward.) But in time, I came to understand the real holy grail is organizational efficiency. Productivity gets you in the ballpark. Organizational efficiency gets you hitting home runs.

Organizational efficiency is when all the gears of your business mesh together in harmony. It is the ultimate in leverage, because you design your company’s resources to work in concert, maximizing their output. Organizational efficiency is where you are accessing the best talents of your team (even a team of one) to do the most important work. It is about managing resources so that the important work gets done, instead of always rushing to do what’s most urgent. And it’s about removing yourself from the day-to-day grind so you can make all of that happen.
I have a feeling this is not news to you.

If you know you need to improve organizational efficiency so you can step back from the day-to-day operations, why are you still caught in the hamster wheel?
******

Be the designer of your business – and your life! If you want more intel on how, you can get the steps to appropriately delegate, automate, and LIVE. Get off the hamster wheel. Check out Clockwork Revised and Expanded, and get the free supplemental resources here.

“What are you going to do with your one wild and precious life?” – Mary Oliver

PS. To learn more about running your business smarter and not harder, check out Clockwork Revised and Expanded.

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