Episode 99: Helping Entrepreneurs Live a Life of Joy with Mike Michalowicz – Transcript
Rennie Gabriel 00:09
Hi, folks. Welcome to Episode 99 of the Wealth On Any Income Podcast. This is where we talk about money tips, techniques, attitudes, information, and provide inspiration around your business and your money. I'm your host, Rennie Gabriel. In past episodes, we spoke about how to understand the numbers from your business, how to measure the level of pleasure based on where you spend your money, how to track your money in 5 - 10 seconds, what determines how close you are to Complete Financial Choice®, and how to run your business without being in your business. And last week, we had Sam Wilson talking about buying commercial real estate. Today we have as our guest, Mike Michalowicz. Mike is the author of Profit First, with the subtitle, How to Transform your Business from a Cash-Eating Monster to a Money-Making Machine. And the author of three other books, including, The Toilet Paper Entrepreneur. He's a former columnist for The Wall Street Journal, a TEDx speaker, and a popular keynote speaker, and his columns have appeared in Entrepreneur and the Harvard Business Review. Mike, welcome to the Wealth On Any Income Podcast.
Mike Michalowicz 01:25
Rennie, it's a joy to be with you. Thanks for the invite.
Rennie Gabriel 01:28
Oh, thank you. Well, let's get right to it with some questions. So you talk about business and how it can create profits. But why do you do what you do?
Mike Michalowicz 01:40
Oh, yeah, I'm on a very clear, I guess, mission is the right word, for myself. I remember once I was with a friend, and we were walking through a campus, I was going to speak there, and he pointed to a classroom and said, 'Oh, there's the best student'. I ignored him the first time. In the second classroom, 'Oh, there's the best student'. And I said, 'Who are you pointing to? The person in front, the one taking the most notes?' He said, 'No, no, the teacher. The teacher is always the best student.' I was like, 'Oh, yes.' It's interesting, the stuff we teach is the stuff I think we need to learn. So I write about business subjects because it's a passion of mine. I also own businesses This is stuff I need to learn. And when I discover something like Profit First, for example, and works in my own businesses, I want to share with it everyone else that could benefit from it.
Rennie Gabriel 02:23
That makes so much sense. And I agree completely. I've been teaching at UCLA for over a quarter century.
Mike Michalowicz 02:29
The best student. There you are.
Rennie Gabriel 02:33
Exactly. I learn more from the students than I do, from, you know, anything I've done on my own. So I'm one of the students and one of the best ones because . . .
Mike Michalowicz 02:43
Yeah, for sure.
Rennie Gabriel 02:44
I've got 30 people feeding the new stuff.
Mike Michalowicz 02:47
Yep. Yep. And you have to be masterful in order to share. So we're digging the deepest into the material. We understand it more than anyone else. A student may read a book, once, and they skim through it, the professor maybe reads it 100 times to see the nuances and the elements that they can leverage.
Rennie Gabriel 03:03
And studying it and testing and making sure those things work.
Mike Michalowicz 03:08
Rennie Gabriel 03:08
Perfect. Well, now, I donate 100% of the profits from the work I do to charity. So I lead by example. So, tell me about a cause that's important to you and what they do.
Mike Michalowicz 03:20
Yeah, well, there's two things going on right now, the long-term contribution is to Kiva. Kiva is an organization . . . Oh, you're familiar with it.
Rennie Gabriel 03:29
I'm familiar, but please, our listening audience might not.
Mike Michalowicz 03:32
Maybe it's new, okay. So these are entrepreneurs throughout the globe, usually in positions where they don't have access to funds, and they want to start a business, often with a very meager budget. Someone needs 100 US dollars to purchase and feed their first cow, and they're gonna sell milk. So you have very fundamental businesses, but these are entrepreneurs. And what's interesting about their organization is the donations you make, they aren't grants to these individuals, these are loans, and they have to have a process to pay it back and then the money is refunded to someone else. So it keeps this upward spiral going. But most recently, I've been involved in supporting individuals in Ukraine. Specifically in the city of Lviv, it's kind of the great last cities of the west coast, where people who are escaping the horrors of war have lost, in many cases, their husband, and so these are women and children. This is a landing pad for them temporarily before they can exit the country. And I and others have contributed to helping put up buildings there for temporary housing, with food and supplies for these people.
Mike Michalowicz 03:32
Oh, thank you, thank you for what you're doing and bless you for that. Let's, now we'll talk a little bit more about the business kind of stuff. Who would you say are your target markets?
Mike Michalowicz 04:47
Well, currently I serve I call the market Micro Enterprises. So you know, the term small business can . . .
Rennie Gabriel 04:56
You mean aside from from Kiva you're talking about?
Mike Michalowicz 04:58
Yeah, exactly, aside from Kiva. But you know, there's a term small business gets kind of confused. Small business, defined by the SBA is a company, that's $25 million in revenue or less, it's actually my company, perhaps it's yours. It's probably many of the listeners. But when I meet small businesses, they say they're big business, they say, Well, I'm doing 500,000, I'm a big business now, or I'm doing 2 million, I'm a big business. So under the qualifications according to the SBA, they're small. But when I explained micro enterprises, most people see that as a sub-million-dollar company. And that's really my sweet spot. I work with and I actually own a business that that's a multiple of that. But, I love that market. Because often, if you're a sub-million, that you start the entrepreneur business yourself, that means you're likely not funded. You likely have a handful of employees, maybe you're a million, you have like two or three employees, maybe four, and you're looking to grow, perhaps beyond that. The other thing too, is I also really helping people, I want to help people are seeking their joy, not size. I don't think bigger is better. And it's promoted a lot like, you know, become the next X - fill in the blank, Amazon.
Rennie Gabriel 06:05
Mike Michalowicz 06:06
And I don't know, I think we should be the first "us", and you fill that in, you know, what, what resonates with you. And I'm trying to help entrepreneurs, live a life of joy, and one that brings them the financial viability, personal freedom that they are seeking.
Rennie Gabriel 06:20
Thank you. And one of the things that I respect is that you have actually used your books to build a business. And I know you've created an organization of accountants around the country who follow your Profit First concepts to help more and more clients. So it's really, you've tossed a pebble in the in the water, and it is expanding beautifully.
Mike Michalowicz 06:43
Yeah, hopefully, the wind catches it, and those ripples become waves. So I actually have written now eight business books. I have a new one that's releasing pretty soon. And for five of them, I have entered partnerships, Profit First is one, but for the other books, too. And what we do is we offer either a membership organization to empower and in the Profit First case - accountants and bookkeepers to teach the methodology and become certified in it. In other cases, it's just an educational platform. So one of my books is called, Clockwork. We have an educational platform that teach people how to bring efficiency service. And what I think is working for this model, for me is, I'm not a great one-on-one teacher, far from it, but I think I'm an effective author. And that's where my joy is. So I write books, I like to do public speaking, and cheerlead the business along. That's basically my three competencies. The other stuff I'm weak at, but I've partnered with people who are great educators, who are great at running organizations and collectively, we build something that hopefully is turning ripples into waves.
Rennie Gabriel 07:45
And it's funny too, because the quote I created was 'Wealth creation is a team sport, not a solo sport'. And so what you're talking about is bringing in the people who are experts in other areas, and that's the team approach and that's what really creates that success.
Mike Michalowicz 08:02
I love that. Yeah, even in my little author business here, there's now nine employees, and I'm the 10th. So 10 employees collectively, and we've been able to have extraordinary impact, I believe, in excess of many of our contemporaries, because of the team effort. I think, really with authors, it's often a one person endeavor.
Rennie Gabriel 08:23
Mike Michalowicz 08:23
I think... I admire like a Stephen King. But I envision Stephen King is he just writes a book, and he puts it out there and it changes the world. And he goes to his cabin writes the next book. When I explored even like a Stephen King, oh, he's got about 50 people around him: the editorial teams, the marketing teams, all these people. And that's the reason his books continue to be so successful. No question, he's the inspiration. He's got extraordinary talent, but that talent would go left abandoned if you didn't have a structure that's supporting him.
Rennie Gabriel 08:54
I'm so glad you brought up that example, because I often talk about the difference between a visionary and an execution master in growing a business.
Mike Michalowicz 09:03
Rennie Gabriel 09:03
Stephen is, would be the visionary and he's got a team of people who are executing on that vision.
Mike Michalowicz 09:10
That's right. That's right. Even here at our office, I consider myself the visionary and I still use another term called codifier. I'm able to take ideas and kind of accumulate them and assemble them. But I'm really poor at being the executor behind it. Now here's the funny thing, is I think I'm good at it. But I really know I'm not. I think, 'Oh, I have an idea, I can see this through.' I so oversimplify the execution in my head that I abandon it usually only partially-baked. So we have the integrator here, her name is Kelsey, she's the president of our company. And she'll take these myriad ideas I have, package them down to the few that complement each other and then empower our team to play them out. An idea I think that can take 10 minutes, probably takes 10 weeks, and she has the wherewithal to put the plan in place, and ensure that we execute on it. But all also to discard my countless ideas that are not of value.
Rennie Gabriel 10:04
You're absolutely right. And there was a book I read recently called, 4000 Weeks.
Mike Michalowicz 10:10
Oh, I haven't heard that.
Rennie Gabriel 10:11
Yeah, it says it's time management for mortals. And one of the things, it's funny too, because I taught some of these concepts years ago in a program, but there's three to do lists that you can have. And one of them is to do now, another is to do later, and the third is to do never. It sounds like Kelly makes sure you get some items on the to do never list.
Mike Michalowicz 10:39
Yeah, there's the majority of my list. And the other nice thing though, is she allows me to express them, so they don't stay bottled up. In the past, I would just have these ideas in my head, and I'd sit on them and it would become a distraction. 'What was the idea?' Now I'm able to expel them, and we play with them. And some of these ideas spawn new ideas, many of them are discarded. But either way I feel relief, because I've been able to express them and seek out new ideas.
Rennie Gabriel 11:05
Beautiful. Well, let me ask you a little bit more on the personal side questions. What would you say was your biggest failure, whether it was personal or business, and then what was your insight from that?
Mike Michalowicz 11:18
Well, to me it's very clear, because this just changed the trajectory of my life and triggered my work as an author, was I lost everything. So just to kind of set the stage is, I built a couple businesses, I started my first one in my early 20s, right after college, and I was able to sell two companies consecutively at a private equity exit, I had a fortune 500 acquisition. Robert Half International bought one of my companies. And I was like, 'Oh my gosh'. Rennie, I was so full of myself, I was like, I am a genius. I am so great. I'm just going to keep doing this. So I started a third business as an angel investor. I didn't know what I was doing. I should call myself the angel of death. I was so bad at it. I was actually destroying businesses. And I remember my bank account depleting so rapidly, and logically, I could see the account dwindling, but emotionally couldn't accept it. I was like, 'Oh, I sold businesses before this one will sell too, or someone will swoop in and buy this or the big opportunity is just around the corner'. But it wasn't. And at the end of day, I wiped out all my business finances, I wiped out all of my personal finances. I lost my home as a result. I lost everything except for my family. And I remember the wake up call was I had to come home and say we're losing our house. We lost it 30 days later. Now, they - my wife and children - were shocked because I had lied to them at that point, by omission. Everything's fine. I got this.
Rennie Gabriel 12:35
Mike Michalowicz 12:35
And my daughter ran to her bedroom, grabbed her piggy bank, came back to me, I'll never forget it. She goes, 'Daddy, you can't support our family. I'll start doing it'. It was the gut punch. It was the gut punch of the century. But it was a wake up call. I am ashamed and embarrassed about that because it just pointed to how ignorant I was about finances. I thought I knew everything and I knew nothing. Today I realize I know less than 1% of what entrepreneurship really is. And that's why now I'm so committed to learning and sharing what I discover. So it became a transformative moment, but it was my biggest failure in life.
Rennie Gabriel 13:11
Thank you. And the beauty of that is your family, your daughter who comes to you with her piggy bank to help out.
Mike Michalowicz 13:19
Yeah, she was nine years old at the time. And it's funny, she's now 23 years old, and I met with her recently. She's actually just started working for our company. She worked for another business. And then our president interviewed her and brought her on board, but it feels like nepotism, I swear - but it's not the intent. But she came on and I said, 'Hey, remember that day when you put the piggy bank in front of me? I remember to the moment, so vivid'. And she was, 'What are you talking about?' And first of all, that was hurtful, that she couldn't remember such a pivotal moment. But then I realized, 'Oh, for me, that was a pivotal moment. For her, that was her nature'. Someone struggling? Their family? Help them out. Give away your life savings, your piggy bank savings. I think that was also a big awareness I needed, that the moments that define us aren't the same moments that define others.
Rennie Gabriel 14:08
Yeah, that's absolutely correct. That was pivotal for you and nothing to her.
Mike Michalowicz 14:12
Yeah, normal for her.
Rennie Gabriel 14:13
Yeah. That's beautiful. Well, let me ask you this. I'm sure people who are listening will want to get a hold of you whether they go out and buy the books or whatever. But is there some valuable free resource that they can find to connect with you or you to connect with them?
Mike Michalowicz 14:28
Yeah, thank you for offering that. So I used to write for the Wall Street Journal. And I have 10 of my best performing articles that you can buy through the Wall Street Journal, or you can get through my website. I just have a website. It's mikemotorbike.com. You can actually go to mikemichalowicz.com. But no one can spell Michalowicz. Oh, I'll leverage a nickname from grade school which was Mike Motorbike, which by the way is the only G-rated nickname I got. The other ones are so . . . So I think I bought that domain. So, mikemotorbike.com You go there, click on the free resource button, it's the first thing you'll see. And you can get all these free articles I wrote for the Wall Street Journal. And what they are about is instant, impactful hacks. I don't like that word so much, but that you can employ in your business. How to, for example, make it profitable, but how to hire when hiring is so hard like it is now. Those type of things all available for free.
Rennie Gabriel 14:47
Oh, beautiful. Thank you. Thank you so much, Mike. I know my listeners will appreciate that. Because, you know, stuff that's free is great, and these sound like articles, that'll, you know, if someone uses them can transform what they're up to.
Mike Michalowicz 15:38
That's the idea. That's the idea.
Rennie Gabriel 15:41
And well, last question. Is there a question I should have asked you, that would also give some great value to those who are listening?
Mike Michalowicz 15:50
Sure, I think kind of the "what's next" question for any of us, if we want to transform our business, what do we do next? And I think the mistake most entrepreneurs make is we try to fix everything in our business. We try to transform everything in our lives. So the analogy I use is a chain. So, Rennie, if there was a chain between me and you, so all the way from Los Angeles to New York City. And our job is to make it stronger. The mistake would be trying to fix every single link. 'Oh, I'm fixing everything'. It won't be stronger until we, by happenstance, find the weakest link and fix that one. So instead, first spend thoughtful time on what is the choke point in your business or your life. That's the weakest link. If you just improve that one link, one link in that huge long chain between here in Los Angeles, New York and Los Angeles, we improve that, the entire strength of that chain has been elevated now, and the next weakest link, we fix that it gets elevated again. The sequence of how we do things is absolutely critical. And I focus on entrepreneurs. Sadly, most entrepreneurs just fix the next thing they see. They're fixing every link. Take the time, be thoughtful on what's choking your business now, make that link stronger, your entire business will take a leap.
Rennie Gabriel 17:05
That's so great from the standpoint of the importance of sequence.
Mike Michalowicz 17:10
Rennie Gabriel 17:10
In finding the weakest link than the next one and not just whatever's in front of you. Mike, thank you so much for being on the Wealth On Any Income Podcast.
Mike Michalowicz 17:23
Rennie, thanks for having me. And congratulations on the 99th episode, and 100 is right around the corner. I'm so excited for you.
Rennie Gabriel 17:29
Thank you so much. And to my listeners. Thank you for tuning in. Next week, we're going to have yours truly doing the 100th podcast episode, and I'll be speaking about the Three Secrets of the Wealthy that took me from a broke 50-year-old to a multimillionaire in eight years. And that's what allows me to donate 100% of my profits from my books and programs to charity. You can listen to the Wealth On Any Income Podcast on your favorite platform. And please rate, review and subscribe. And if you'd like to know how books, movies and Society programs you to be poor and what the cure is, then log on to wealthonanyincome.com/TEDx. You'll hear my TEDx talk and can request a free 27-Page Roadmap to Complete Financial Choice®, and receive a weekly email with tips, techniques, or inspiration around your business or your money. And if you'd like to see how you can increase your wealth and donate to the causes that touch your heart, please check out our affordable program, Wealth with Purpose, on the wealthonanyincome.com website. Until next week, this is Rennie Gabriel, requesting you to be prosperous. Bye bye for now.