Mike Michalowicz's Blog, page 74

Episode 68: Imminent Need and Profitability with Jonathan Royce

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Show Summary

This week we had the privilege of interviewing Jonathan Royce, founder of Hustling Hoagies – a brand new business that delivers hoagies to Univ. of Michigan football games and other local events. Join Mike Michalowicz and Chris Curran for a journey with Jonathan as we discuss where he’s making money and where he’s not, as well as the concept of imminent need. We explore where Jonathan has spent money which was of no value, and the technique of using Profit First to pre-allocate money toward profitability AND his own pay to determine how much money is truly available to infuse money back into his business. Welcome to Episode 68 of the Profit First Podcast!

 

Our Guest 

 

Jonathan Royce is an individual with multiple talents and interests.  He is an owner of a new food venture Hustling Hoagies, is the author of the children’s picture book Detective Dwayne Drake and the Alphabet Thief, has worked professionally as a model and commercial actor, was a three time  All American Athlete at the University of Michigan and is an inductee into the U of M Hall of Fame, and has coached at both the high school and college ranks. Additionally and most importantly he has worked in education and with children for many years.  He earned his bachelor’s degree from the University of Michigan and received his Masters in Educational Leadership from Eastern Michigan University. He is currently an assistant principal at Ypsilanti Community Middle School.

 

Show Links

www.facebook.com/HustlingHoagies/

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

Why You Can’t Trust An Experts Opinion (Including Mine)

Need advice? Experts (me included) will be glad to share! Unfortunately, there is a problem. The experts (me included, again) are often not qualified and can be very wrong in the advice they give. I get it, I need to walk a fine line here, since this article itself is an expert opinion, but hear me out.

First, let me tackle the main problem with experts today. Everyone seems to be one. Don’t believe me? Go ahead and try this little test for yourself. Stop the next 5 people you come across and ask them what they happen to be an expert in. You are sure to get an expert in social media, an expert life coach, an expert in home remedies, an expert in marketing, and, my personal favorite, an expert in coaching experts.

Now, please don’t get me wrong, experts are needed. The next time my dishwasher breaks, I will want an expert in getting the thing fixed. And sure, if my business is struggling in marketing, I will want a marketing expert to help me. The thing is, you need to separate the good from the bad by watching for these 5 warning signs:

1. They Haven’t Been There & They Haven’t Done That – You want a coach or expert who has actually done what you are doing. While a coach may have training in your field, nothing can top hands on practical experience. Look for a coach that has actual, direct personal, real life experience in what you need advice about.

2. Big Words, Little Action – It is easy for an expert to gain credibility by writing (hey, look who’s talking, ahem… writing). Many experts quickly dominate the blogosphere with sage advice. But the reality is words means nothing if you can’t execute. Look for coaches who both write about what they do, and do what they write about.

3. Render Advice, When They Shouldn’t – Ever ask an expert what they think about your product or service and they then go on to tell you why it is a horrible or great idea? I don’t care if you have 100 years of consulting experience, if the expert is not the end consumer of the product or service his advice is wrong. The consumer knows what she wants. Listen to her. Tip – if you want to quickly qualify an expert, ask them what they think about your offering. If they offer advice, without qualifying (or disqualifying) themselves based on their consumer experience, they are likely giving you bad advice.

4. Don’t Have A Coach Themselves – If a coach doesn’t have their own coach, red flags should be every where! This indicates that the coach you are hiring doesn’t believe in coaching himself. It may also indicate that the coach feels she has nothing left to learn. Another major red flag.

5. Doesn’t Learn From You – An expert doesn’t mean having knowledge of all things. It means having superior knowledge and hands on experience in one category. To apply this knowledge, they must learn and understand your business. If they aren’t thirsty to learn about your industry and seek your direction, you may be getting a “one size fits all” solution, which at the end of the day, is not a real solution.

Experts don’t always have the best advice. You can ask five experts in the same field for advice, and end up with five completely different answers. When you need an expert in a certain field, be discerning when seeking them out. Remember, you want someone who knows what they’re talking about, does what they talk about, is constantly learning, and doesn’t seek to solve all problems with one easy-fix solution. Be cautious and you’ll find an expert who is knowledgeable, experienced, and gives some great advice!

Why People Talk About The Weather

It seems like many conversations include dialog about the weather.  Too hot, too cold, too wet, too dry, too windy, too still or just right.  There’s not much else to discuss. So why do we discuss it?

Because it is something we all experience.  No matter who you are talking to, they know and you know that you both have experienced some form of weather today.  The weather is something in common you both can discuss, and that is why you do it.

Us humans are designed to bond with each other through the “courtship of commonality.”  We look for ways that we are similar to each other.  The more similarities we find, the more we like each other.  Imagine if you found out that I grew up in the same town as you, went to the same college as you, and your best friend is my best friend too – let the love-fest begin. Commonality builds bonds.

Discussing the weather is the first dip of the toe into bonding.  So the next time someone asks you how the weather is in your part of town, be grateful they asked.  Then ask them who their best friend is.

What Not to Look for When Hiring: Experience!

In the market to hire someone? If you are like most others in business, you place a high priority on the amount of experience that an applicant has. Everyone looking for their next hire seems to look for the “best” employee, as defined by their experience. Obviously, someone with 10 years of experience is better than someone with two years, right? Not so quick, bucko!

What Counts

Realize this – the thing that you can give someone is experience. You can provide all the skills and experience that you want to. But there are other things that you cannot give them, which makes those things far more important than just having experience. What are those things? Glad you asked! The things you should be looking for in your next employee are:

Work ethic. A person’s work ethic is going to impact how they feel about their job, which in turn will impact how well they get it done. If they have a strong work ethic, they will be honest, accountable, and responsible. These are all things you want in an employee, or at least should want.

Attitude. Someone’s attitude is a big issue if you are bringing them in to work with you, or with a team of others. Attitude is how they convey their feelings, or disposition. The last thing you want is someone with a bad attitude who you are afraid to challenge.

Energy. How upbeat are they when they answer your questions? If it seems to take a lot out of them to respond, it will also take a lot out of them to muster up the energy to get the work done. And when it comes to energy, they can also have an impact on others they work around, for better or for worse.

Intelligence. Even if someone has a degree, that doesn’t guarantee that they are intelligent. Having intelligence means having the ability to learn or understand things. It also applies to how well they can adapt to new situations. You want someone intelligent, so they can grasp the essence of your business and do what needs to be done.

Values. This comes down to how well they promote what you consider important for your company. If you value good customer service and honesty, you want to make sure that your employees do, as well, as they will be the ones carrying out that mission.

So, when you are hiring someone, look beyond how much or how little experience someone has. Instead, ask questions that explore what they really bring to the table. Find out what they are like in terms of the important factors listed above. There are many other things you can do to also find out who they are, in this regard, such as conducting a background check, and investigating their use of social media.

And if you call to speak to any of their past employers, be sure to inquire about their work ethic, attitude, energy, etc.

Latching On

After doing this type of investigation into the person you are considering hiring, you will know if you have found the right person. Once you do find a match, hire them. Then you can focus on giving them the experience. But you will know that you have a solid match for who you want to have on your team. Experience is something that can easily be gained, if they have these other attributes.

Having qualities like a good work ethic and a positive attitude are far more important than work experience. After a year on the job, your new employee will not only have the great skills you are looking for in a team member, but will also have experience. That sure beats hiring someone based on experience and, a year later, they have another year of experience and an expensive habit of pilfering your ink cartridges for their home printer.

Episode 67: Cash Reserve and Profitability with Robin Robins

Also Available On

 

Show Summary

This week Mike Michalowicz, Chris Curran and Kristina Bolduc welcome guest Robin Robins who took her business from $0 in 2003 to $10 million in revenue in 2015. This episode is chock-full of insights including why niche specialization helps grow your business (even if your niche industry collapses), the “enough is enough” stage, how to have a personal cash reserve and a business reserve, and how to diagnose the different products offerings you have and determine individual profitability for each one. Welcome to Episode 67 of the Profit First Podcast!

 

Our Guest 

Robin Robins is the IT industry’s most in-demand marketing consultant, sales trainer, and author who specializes in highly effective marketing strategies for VARs, Systems Integrators, MSPs, Solution Providers, and IT consulting firms.

Robin is the author of the Technology Marketing Toolkit and Million- Dollar Managed Services Blueprint. To date, over 7,000 IT business owners from all over the US and in 23 different countries have learned and implemented the marketing systems she has developed to create hundreds of millions of dollars in NEW sales, NEW opportunities, and NEW revenue streams for their business. Robin has been voted a #1 speaker at many industry events such as BreakAway, System Builder Summit and VAR Vision, ASCII’s boot camps, CT Summit, and SMB Nation. She has been published in VAR Business, eChannelLine.com, Sales and Marketing Magazine, Selling Power, and SMB Partner Community Magazine.

Robin is a true “marketing rock star” for small IT business owners and currently commands over $1,500 per hour for her consulting services with a 6-month waiting list.

In addition to her extensive experience with IT service firms, Robin has developed marketing strategies for over 1,200 businesses in 14 different industries across North America, Australia, and Europe. This includes both online and off-line marketing strategies for computer training schools and universities, franchise organizations, software companies (Novell, Surf Control, AVG anti-virus, and Microsoft), financial services, seminars and events, member organizations, and a variety of consumer products and services. This vast experience has given Robin a broad knowledge of hundreds of marketing and sales tactics used by some of the most successful, sales driven organizations in the world.

 

Show Links

Website: robinrobins.com  

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

The Business Innovation Technique Of Blending

Entrepreneurs are natural innovators, but even the most forward-thinking people sometimes need a little nudge to help open their minds to new possibilities for growth.

One of the best ways to think outside of the box is to start asking “what if” questions. Here’s a “what if” question I’ve been kicking around lately: What if we took two disparate businesses and blended them to make something new? I’m not talking about merging or partnering with another company; I’m talking about blending business methodologies from two (or more) industries to create a new business, or dramatically improve an existing business.

A classic example of this is Commerce Bank. Founded by Vernon Hill in 1973, Commerce Bank blended two industries: fast-food restaurants and banking. The owner of a fast-food restaurant franchise, Vernon Hill’s bright idea was to bring the convenience and perks of fast food to banking.

For example, fast-food restaurants are open everyday, and they start early and close late; Hill implemented extended hours at Commerce Bank and kept the doors open seven days a week. No other bank had done this before.

Hill blended other systems from his fast-food franchise when he launched his blended business. He installed a “Penny Arcade” coin counting machine in his lobby, which had the same effect as video games in family restaurants. Kids could count money and win a prize, and the adults loved it too.

One of my favorite examples of Hill’s blending genius is when you use the drive thru window at Commerce Bank you get a treat for your dog, just like the toy in a kid’s meal. Is it any wonder people call it “McBank?” By blending two industries, Hill created the fastest growing bank ever.

Commerce Bank grew from one to more than 400 locations and the franchise sold for $8.5 billion in 2007. See what a little game of “what if” can spark?

What if you blended your business with hallmarks from another industry? Start thinking WAY outside of the box, looking at winning concepts from industries that may seem to have nothing to do with your business. (Of course you do have something in common with business in ALL industries: customers.) You never know— you just might make billions.

Consider yourself nudged.

That Problem? It’s Always Been There, You Just Noticed.

That employee who just quit? They were giving you hints for a long time now. It took them quitting for you to notice.

That client who just left you for your biggest competitor? They tipped you off multiple times. It took them leaving for you to notice.

That “I can’t this anymore” moment you just had? You knew it all along. It was just now that you decided to pay attention to yourself.

That problem? It’s been there a long time. Pay attention to the small things and you will notice it before it forces you to notice it.

Ripple Innovation In 4 Steps

When businesses get stale and lose their creativity and ability to innovate they do one of two things. They order in doughnuts or bagels and lots of coffee and call a staff meeting. Then they sit around a conference table, sweat and worry a lot while they brainstorm the same old ideas, hoping someone comes up with something new. Or, they hire a consultant, who usually knows less about their day-to-day routines than they do, and then they hope he (or she) finds a new way to innovate.

Neither way works very well. Why not? Because innovation is really about paying attention and seeing things you never noticed before, and in a new and different way. Brainstorming regularly falls into a ineffective loop of the same five ideas. And most (but not all) outside consultants bring an innovative approach, but fail to make the change stick.

If you’re feeling like your innovation generator is stuck and you are having trouble getting traction, use the four steps of ripple innovation to grease your inspiration and feed your creativity and jumpstart your innovations.

I call this four-step process “ripple innovation” because it expands out from the initial splash of thought in rings, just like the ripples that form when you throw a rock into a pond. The biggest wave is near the center, and the farthest reaching wave is on the outside. Start with your splash, what you want to innovate. Then follow these for ripples to find it:

Ripple 1 – Find The Solution Inside Your Company

What are you currently doing in another part of your business that you can use to drive the innovation you need in this part of your business?

For example, UPS used one little innovation to speed up their delivery times. They looked for existing drivers who were completing their routes faster than average each day (look for what’s working, not what’s broke). They found that certain high performers wouldn’t put their keys in their pockets when delivering a package. Instead they would have their truck key hanging off their pinky finger.

When they got back to the truck they didn’t need to fumble through their pockets looking for their keys. The 3 or so seconds it saved on each delivery added up. The 3 seconds times the 30 deliveries a day, times 200 times a year saved about 5 hours a year per driver. Not bad when you realize that UPS has 240,000 drivers. That little pinky innovation is saving UPS the need to hire 600 additional drivers to cover the lost time.

Ripple 2 – Find The Solution Inside Your Industry

If you can’t find the innovation inside the first ring (your business), you then go one ring out.

Ask yourself: What is your competition doing that you can use to innovate in your business?

Sam Walton was once said, “I believe I am Kmart’s best customer. I have visited almost every one of their stores.” He constantly evaluated other retailers and copied what they did best. Among the many innovations he extracted from his competition was the centralization of the checkout process. Instead of having a checkout in each department of the store, he centralized everything to one checkout line at the front of the store. Walmart leaped forward and set a new standard that we see everywhere today.

Ripple 3 – Find The Solution In Any Industry

If you can’t innovate from within your business or your industry, go another ring out and examine other industries serving the same customer need. Vernon Hill, the founder of Commerce Bank, which ultimately sold to TD Bank for $6 billion, wanted to make banking ultra-convenient.

Banks were notorious for being anything but convenient for their customers, so Hill looked outside his industry. He found that fast-food restaurants had a lock on drive through convenience. He took their best innovations and made them the new standard for banking—late hours every day, open 7 days a week, and he even copied the happy meal trick, by putting a treat in for the most common passenger in the car coming through the drive thru… the family dog.

Ripple 4 – Find The Solution In Nature

When there’s not a solution inside your business, inside your industry or even inside any industry, it’s time to look at the widest ripple in the innovation splash—look at the entire world around you. Nature is the ultimate innovator and inventor.

Case in point? George de Mestral. Mestral invented Velcro after he found his dog covered with burs. Curious about how stubbornly the burrs clung to his dog’s fur, he took a closer look. Then he replicated Mother Nature by making Velcro. The rest is entrepreneurial history.

Remember, innovation is just a matter of looking at the world and your business differently. Instead of innovating out of the thin air, start with ripple innovation. The innovations are all around you already, you just need to seek them out.

Episode 66: New Membership Organizations and Parkinson’s Law with Erica Wernick

Also Available On

 

Show Summary

In Episode 66 of the Profit First Podcast, Mike Michalowicz, Chris Curran, and Kristina Bolduc welcome guest Erica Wernick, founder of LA Bound: a business that helps aspiring TV and Movie Actors/Actresses/Experts achieve their goals in Los Angeles. In this episode we learn what a new membership organization is like. We discover the essence of Parkinson’s Law: that every penny made is also spent. We guide Erica through her first step toward Profit First in setting up different allocation accounts, including running a basic profit assessment. In this episode we also explain cost vs. investment.  Make sure to tune in for a future episode where we invited Erica back after she implements Profit First!

 

Our Guest 

Erica Wernick is a Graphic Designer for television, and Founder of LA Bound: The Ultimate Guide to Moving to Los Angeles. You may have seen her work on hit TV shows like “Glee”, “The Office”, “Entourage”, or “The Middle”. After working on over 20 TV shows, and developing an obsession with wanting to help anyone struggling to land their own LA dream job, Erica started her business, LA Bound. She probably would love long walks on the beach, but LA traffic makes it impossible to confirm.

 

Show Links

Website: www.laboundguide.com

Facebook: facebook.com/laboundguide

Instagram: instagram.com/laboundguide

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

Sammy Hagar: Red Rocker To Red Hot Entrepreneur

Anyone who has been paying attention to rock music over the last couple of decades can’t help but know about Sammy Hagar. He has proven that, in the music world, he is a force to be reckoned with. But what many people beyond his large fan-base don’t realize is that he is also a savvy businessman with an impressive record as a serial entrepreneur.

Establishing His Roots

Hagar has been making music professionally since 1973, when he got his start with Montrose. Since that time, he has been like a cat with nine lives, coming out on top in every area in which he has gotten involved. From his successful solo career, to producing such hits as “I Can’t Drive 55,” to making rock history with Van Halen, to being inducted into the Rock and Roll Hall of Fame, he has had a career that most only dream of. Twenty years ago, he branched out, adding “entrepreneur” to his resume. He went into business with other celebrities and opened the first Cabo Wabo Cantina, a small Cabo San Lucas restaurant that serves up Mexican food and entertainment. He took full ownership not long after, when the others bailed because the company wasn’t making money. He had found a love for the area, a place where he could hang out, live his lifestyle, and enjoy life with a business of his own.

Lesson 1: If at first it doesn’t succeed, change the formula. And So It Grows

Little did people know, back when the Cabo Wabo Cantina opened, that it would go on to experience such success and growth. While Hagar, in this time, could have expanded to a lengthy list of locations around the world, he has been content not to “water down his brand,” as he says. To date, in addition to the original Cabo San Lucas establishment, he has only chosen to expand into the choice locations of Lake Tahoe and Las Vegas.

Lesson 2: Keep your brand pure and untainted.

But he hasn’t limited himself to the Cabo Wabo Cantina. Rather, he has gone on to open Sammy’s Bar and Beach Grill in McCarren International Airport in Las Vegas, with plans to open locations in other select airports. And then there is the story of Cabo Wabo Tequila, which he started because he wanted something authentically “Sammy” to serve in his establishments, after he tried and fell in love with premium blanco tequila. While tequila sales were steadily climbing, reaching 147,000 cases in 2006, he sold 80 percent of the company for $80 million. In 2007, it was reported that Cabo Wabo Tequila was the second-best-selling premium tequila in the country. Using his rocker image and lifestyle, Hagar has taken an outspoken route to fueling his tequila sales, mentioning it in interviews and performing the song Más Tequila, to get people pumped. It was reported that, in 2007 alone, Cabo Wabo Enterprises earned roughly $60 million.

Lesson 3: Be shameless in growing your brand’s exposure – offering products (songs) that exposure consumers to you other products (tequila). Success and Beyond

If there is one thing that Hagar sets a fine example of, it’s how someone can turn their passion and lifestyle into multiple revenue streams. He has been a successful business owner for decades, trying his hand in various areas. While he rocks the stage, he is also leaving an imprint on the tequila, restaurant/bar, and entrepreneurial worlds. Moreover, at the age of 63, he is now the lead singer for the rock band Chickenfoot, proving that age really is just a state of mind.

Lesson 4: Passion fuels persistence. Persistence fuels success.

So, how about you? Are you ready to write your own “red rocker” success story? Perhaps, like Sammy, it is as simple as committing to your own dream and letting your personality shine. Whether or not we realize it, we often have the keys to entrepreneurial success locked up inside of us, just waiting to take center stage.