Posted on: October 01, 2018

In today’s episode, we have a real treat for all our listeners. Tom interviewed thought leader, keynote speaker, prolific author (he has written 5 books so far), and successful entrepreneur, Mike Michalowicz.

While currently running his third million dollar venture, Mike’s journey to success has not been linear. After founding and selling two multi-million dollar companies, he became an angel investor and ended up losing his entire fortune.

After starting all over again, he eventually discovered effective and innovative strategies to build strong companies and ensure profitability at the same time.

If you are ready to challenge your beliefs, see things from a different perspective, and take your business to the next level, this is one episode you can’t afford to miss!

Key Takeaways

  • One of Mike’s most profound observations when it comes to business
  • Why profit should come first
  • The Profit First system in a nutshell
  • The importance of setting business parameters
  • The advantages of embracing the Profit First philosophy
  • What Profit First Professionals is all about
  • How lack of industry knowledge can give you a strategic opportunity
  • What his new book “Clockwork” is all about
  • The 4 levels of activities businesses participate in (The 4 Ds)
  • The difference between deciding and delegating
  • How to support true delegation
  • How to know when to delegate
  • What true delegation is all about
  • What customer cloning is
  • What a vendor well is and why it’s important
  • The key to growing a colossal business
  • The importance of continuous learning
  • Why you should seek knowledge outside your industry

RESOURCES:

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Episode Transcription

Cody Hofhine: Hey, welcome to another episode of Wholesaling Inc. The number one real estate wholesaling podcast, and I just wanted to jump in here real quick and give you a reminder, a very important reminder that our wholesaling summit is coming up fast, and you absolutely don’t want to miss this event. The event is happening on October 15th, 16th, and 17th and will be hosted in beautiful Asheville, North Carolina. But why? Why is it so important that you attend this event? That’s a great question and I’m going to tell you right now. We are going to be sharing the most cutting edge wholesaling strategies. I’m talking about things that are working right now so you can immediately implement these things into your business, and start making more money the moment you leave the event.
Some of the most successful real estate investors in the country will be going deep on everything they’re doing in their business right now, and we’ll be giving it to you so you can explode your business. Yes, we are not holding anything back here. You’ll get to learn from and actually meet and network with some of the biggest names in the industry and pick their brains. How awesome is that? So to get your tickets now, go to www.wholesalingincsummit.com again, that is www.wholesalingincsummit.com. And for the first time ever, this event is open to the general public. So it’s not just for tribe members this time around, but you need to hurry. There are only a limited amount of seats available and we are almost sold out. So www.wholesalingincsummit.com, and we’ll see you there.

Tom Krol: Hey everybody. Welcome to another amazing episode of Wholesaling Inc. I am more than excited to be on today’s show. Today actually of all of our shows, it’s got to be the most exciting. I have a man who may not know this, is definitely my mentor in a lot of ways. When I first got started in 2012, I still have his book here, Toilet Paper Entrepreneur, which has is completely head to toe with notes and highlights and bookmarks. And I can’t tell you how excited I am to be interviewing Mike Michalowicz. He is just a thought leader, and you guys once in a while somebody comes along who has this profound vision and perspective that just changes your worldview. And to me, Mike, that has been you in so many ways. Absolutely. So I can’t thank you enough. You know, you guys we have people, you know, Robert Kiyosaki comes on and tells you your house is not an asset and it changes everything.
And Mike Michalowicz, through this book, and I’m not going to interrupt him, because he’s the man. But you know he came along with this whole new perspective that your business, where everybody is, they make money, and then they spend their expenses, and then they take profit for themselves. Mike is a thought leader who taught us all that, it’s not that way or it shouldn’t be. It is income minus profit for you first. Then you have to make your expenses fit into that box. And it’s so simple, but it’s so profound and I just… It’s changed everything for us. So Mike, I’ll let you, yeah, if you could tell us a little bit about who you are, and what your specialties are. We’ll kind of get the ball rolling, and I’ll ask you a few questions but I want to pick your brain on a few things.

Mike M.: Awesome. Yeah, we’ll dig into Profit First, and thank you for such kind words Tom. I very much appreciate you.

Tom Krol: Absolutely.

Mike M.: So for anyone that doesn’t know me, which is probably the majority of people, my name is Mike. I’m an author. You can see from the video, if you’re watching a video. I strategically positioned all my books behind me for marketing, but what I’m doing is I’m an entrepreneur too. I’ve grown multiple companies. I had some successful exits, but they were not successful businesses, and there’s confusion around that. People are like, “Oh, if you sold a company, everything’s fantastic.” I wasn’t successfully profit-wise growing them, but they weren’t profitable. They were very strenuous. And I was able to exit out, because of really good luck and good fortune. I’ve also had a lot of disasters. I became an angel investor for a period of my life.
I call myself the angel of death, because I was like so bad at it-

Tom Krol: Right.

Mike M.: You know? And so when I became an author, I started reflecting back on my belief system around entrepreneurship. What it took to be successful financially, happiness wise, time wise, and all the elements of what I believe define a happy entrepreneur journey? And I challenged my beliefs. One of them, and you know, if we’re going to talk about Profit First, I think this has become the most profound observation that I’ve had for myself was I’ve been told for decades that profit comes last. We use terms like it’s the bottom line or is the year end, and like yeah, it’s the year end. How am I going to do at the end of the year? And I realized whenever I put something last in my life, it’s not important today. It means it’s never important. It’s the perpetual Manana syndrome.

Tom Krol: Right.

Mike M.: So literally Tom, I go to my accountant, look at my income statement at the end of the year. He say, “Oh, sorry, not profitable again,” or there’ll be an accounting profit, which meant there was a number on there, but it wasn’t a real cash.

Tom Krol: Right.

Mike M.: Which is the worst. I would get so upset and say, “Wow, maybe next year.” And literally delay the consideration of profit for another year. So what I do in my books, the newest books, Clock Work, Profit First, all my books, I look at what the established beliefs are and I say, “Are they perhaps wrong?” And if so, I’ll write a book about it and challenge it. And profitability, I am adamant now, profit does not come last. Profit comes first. It is not an event or an eventuality. It’s a habit and we need to bake into every transaction of our business.

Tom Krol: I love that idea and you know what I love about it is, it’s immediately implementable. It’s something that somebody like me who you know, I have some businesses and I don’t really know a lot about some of the detailed work, but I can understand and expect for my team profit first. So it’s something that I can implement, and we could use, and it immediately increases the bottom line, and your happiness factor goes through the roof. And I love the fact, what is most appealing to me about your philosophy is that you don’t have to use… I was always having this struggle like discipline around budgeting, discipline around budgeting. But when you say, “Hey Tom, you’ve got $15,000 to spend this week, because that’s what’s left.” I can make it fit because I’m a toilet paper-

Mike M.: Yes.

Tom Krol: Entrepreneur, right? So I could-

Mike M.: I love it.

Tom Krol: I could make that work if you give me those parameters. But when you start throwing out all these terms and you know, there’s no way, right? It’s all future and what was in the past, and where are we going? But that is what I think is it removes that hard work of trying to discipline yourself through budgeting. It’s just hey, this is what we have to work with and that’s it.

Mike M.: You know, if you and I are going out for dinner for example, and I said, “Hey, why don’t you pick the place and here’s a credit card, whatever we want on it,” we will behave differently than if I said, “Hey, let’s go out to dinner.” I say, “Here’s $15 we have to share.”

Tom Krol: Right.

Mike M.: The decision making is radically different. Now, the funny thing is both ways we will eat, there’ll be enough food for us. And actually we can put $15 between two of us. We actually may eat very well and enjoy the experience. But when we don’t have that parameter set up upfront, we consider everything we choose. Whatever is the most convenient or whatever comes first to mind. There is no financial decision making until after the fact, and that’s the problem. And that’s how we run our businesses. Our businesses we spend and then we say, “Oh, can we pay this?” Because at the end, after all, profit doesn’t matter. That’s a future consideration. If we have any form of money or credit, we’ll spend it.
So what we do in the profit first system, as money flows into your business, we immediately take a predetermined percentage of that money out as profit. We hide it away, which we intentionally now reduce the amount of money available to run your daily operations. We are reverse engineering profit by the way here. So the money that’s left over is the actual money that you really have to spend. But now it’s like that dinner. It’s like saying, “Oh, here’s the 15 bucks we have. Let us get some food for the two of us.” Here’s what your business has. The business must survive and live off of this, by taking our profit first. And the beautiful thing of course, is we’ve now assured our profitability because it’s tucked away. And that comes back to you, the owner, the one who had the courage, the [cojones 00:08:43] to start and build a business. This is a reward for you doing what is truly miraculous, because most people on this planet will never start a business. But you and the folks watching, we did. That’s a reward for being a shareholder in your own business.

Tom Krol: I love it. It’s so simple and it works and it just works. I don’t know what else to say about it. I don’t want to… because I know a lot of people… You guys, if you have not purchased Profit First, buy it today. I’ll put a link in the show notes to that book in all of Mike’s books. But Mike, for the business owners who want to go out and find a bookkeeper who is specifically designed or knowledgeable about this, is there a reference somewhere? Or how can people find out more about that?

Mike M.: Yeah. So very quickly on, when I wrote the book, I realized, oh my gosh, we entrepreneurs want our accountant or bookkeeper to know this process. Be even our business coach. So I’ve an organization, it’s called Profit First Professionals, and the website’s profitfirstprofessionals.com. You can click on find one, and we’ve a matching system, kind of like Tinder, if you will…

Tom Krol: Okay.

Mike M.: Where you can find someone. You know, the traditional mindset used to be like, oh, I want someone in my neighborhood. Does that mean they’re a good bookkeeper? Not necessarily. You probably want someone that is certified in the process, is knowledgeable in your industry, has specific expertise that they can bring to the table. So they’re not just crunching numbers, they’re giving you proactive decision suggestions saying, “you know what, if we do this with their business, we can increase profitability. You know, other people in this industry don’t even do X. You’re doing it. Maybe we can cut that,” so that’s what Profit First Professionals do. They are accountants, bookkeepers and coaches. We call them the ABCs, who will guide you to permanent profitability and hold you accountable to it. So it’s profitfirstprofessionals.com, and then click on the find one option and we’ll make an introduction.

Tom Krol: You guys, I can’t stress enough. I mean we learned, you know Marcus and [Limonus 00:10:24] know your numbers, know your business.

Mike M.: Yeah.

Tom Krol: You guys, when you start… What you appreciate appreciates when you can get this down to this level and get granular with it and start watching your numbers. If you don’t have a bookkeeper, go to this resource. If you do, I would check it out. It’s a world of difference. Your whole entire world changes when you have this worldview. So I got to tell you Mike, that you really have impacted thousands and thousands of people in our tribe.

Mike M.: Thanks.

Tom Krol: And one of the things is that we got… I’m just going to show you from Toilet Paper Entrepreneur. This was early on guys. A lot of people ask us where does this whole idea of progress, not perfection come from? And it really comes from the Toilet Paper Entrepreneur, on page 12, and I had this like highlighted and marked and asterisk. It says, “I’m not ready.” And it’s one of the reasons that, you know, we all use is, I’m not ready, I’m not ready.

Mike M.: Yeah.

Tom Krol: And we came up with progress, not perfection. It says, “I agree you’re not ready. You never will be.” And then it goes on to you guys check out Toilet Paper Entrepreneur. But I just want to say this whole attitude of-

Mike M.: Yeah.

Tom Krol: Progress not perfection, of just getting out there and getting results. What we find is that the guys and girls with the most results win. It’s not the guys and girls who get it right. So I just wanted to thank you-

Mike M.: Yeah.

Tom Krol: Yeah, for that too.

Mike M.: Yeah, well thank you. And it’s actually the people with less practical knowledge. The people who are less ready, who often challenge the industry norms. Like if you went into the author business, and you never authored a book before, you may just break all the rules. You may not know that on a book, you know, putting flashing LED lights. No one does that. That’s the rule everyone knows. But if you’re the first one that does that. You’re now walking through the Barnes and Nobles and there’s a light flashing in front of me, you’ve got my attention.

Tom Krol: Right.

Mike M.: So it’s the lack of knowledge about an industry that actually gives us a strategic advantage, and that we start breaking the rules. So anytime you feel you’re in lack, there’s also an upside to that. And that’s what I wanted to teach in the Toilet Paper Entrepreneur.

Tom Krol: Yeah. I mean this book is really… Yeah, I have so many different marks on sections. I can’t even go through it all. Thank you for this contribution. I mean this has been a lighthouse for me in an industry, in real estate investing that you know, I really needed to have a guidepost. So I appreciate that. So I want to talk about Clock Work. What is this new book about, because I didn’t even know that there was a new book, so I’m super excited. So what is that all about?

Mike M.: Yeah. And thanks for asking Tom.

Tom Krol: Absolutely.

Mike M.: So Clock Work literally… As we’re recording, this came out one week ago today, so it’s brand new. Here I got a copy just so I can show you on the screen here. So Clock Work, the subtitle is design your business to run itself. And what I studied was as entrepreneurs start growing their business, what do we have lacks of? Well, lack of sales. We need to have more sales. That’s why I wrote The Pumpkin Plan. Lack of profit. We just talked about profitability. Well, lack of time. You know, it’s funny, the outside world, the day you start your real estate business or whatever industry you’re in, the day you start, all your friends think you’re a millionaire instantly and that you don’t work-

Tom Krol: Right.

Mike M.: And the reality is you’re struggling to make money, and you’re working your tail off.

Tom Krol: Right.

Mike M.: So you know hopefully Profit First addresses the making money part. Clock Work I designed to recovering time. The goal is to design the business to run itself. It’s a step by step process. It’s actually seven steps to slowly but consistently extract you from the business. So you’re not doing the work in the business. You’re designing the outcomes you want, and having other people and other resources make that stuff a reality.

Tom Krol: I love… I mean this, so you guys, as you know, this is our blue ocean, right? This is where we’ve been going, is we know how to make money. We’re all in there. We’re doing deals all the time. But how do we stop trading our most important commodity, time, for the least important commodity? So, that is super exciting. I mean, can you give us like a few little tidbits, just like right out of the gate-

Mike M.: Oh, totally.

Tom Krol: Is it secret? Okay.

Mike M.: No, no.

Tom Krol: So, yeah-

Mike M.: The books out there. So I’ll give you three tips.

Tom Krol: Okay.

Mike M.: First was called the four D’s. As a business matures, there’s four levels of D’s or activities that a business participates in. All necessary, but us as the entrepreneur need to navigate our way to the highest state. So the foundational needs called doing. Doing the work. Every business does work that delivers value to the customers, or is work that supports the delivery of valuables to the customer. That’s the doing work. So it could be helping renovate a home, which is, you know, very direct. It could be invoicing, which is an activity that supports it.

Tom Krol: Okay.

Mike M.: That’s the doing work. The doing level. The next level up is called deciding. And we as entrepreneurs need to start moving up this chain. The deciding phase is where we start bringing on people, resources, whatever, and we start giving them direction. So Tom, you may hire me, I’m doing work for you, and you say, “Hey Mike, I need you to handle the invoicing for us.” And I say, “Well, how do I do this?” And you give me some details, 10 seconds later I come back to you and I say, “Should I sort people by their last name or first name? I’m not sure.” You give me direction, come back to you a second later like, “Should I bill in project increments, or should we put hourly.” And you give me decisions? The thing about this phase is we become kind of this mastermind for all the different arms of our organization-

Tom Krol: Right.

Mike M.: So we are constantly distracted answering questions for our colleagues, which at a certain point becomes very frustrating. It’s like, aren’t these people smart enough to figure it out on their own? You know, it’s like, it seems like I’m hiring idiots. And so many businesses will revert… Entrepreneurs will revert back to saying, “You know what I am so disappointed in their performance. I’m just going to do everything myself.” And we get rid of those people. Then very quickly become overwhelmed doing all the work again, and we hire, and we flip flop behind between doing work and deciding for others about work.
The only way out of it is to navigate to the next level, which is called delegating. Now, delegating is different than deciding yet many entrepreneurs confuse these two. Deciding is task rabbiting. You tell me, “Hey Mike, do X, Y, Z,” and I come back to you with questions. Delegation is not the assignment of tasks. It’s the assignment of outcomes. So Tom you’d say to me, “Mike, you know, we need to invoice clients on a timely basis. We need to collect money and needs to be accurately collected. You know, it means to be accurately documented.”

Tom Krol: Okay.

Mike M.: “Your job, Mike, is to follow our best practice. We have an invoicing process that we follow now. Follow that process. But when you have questions or you hit a decision point, your job is to make decisions around it. I hired you for what’s on your shoulders. It’s your head. Do what you feel is in the best interest of our business to move us forward.

Tom Krol: Wow.

Mike M.: That is the assignment of outcomes. Now here’s the key as the entrepreneur, to manage that when I make decisions, right or wrong, that’s the key or wrong we need to support the decisions. So I make a decision and it’s actually a mistake. I bill clients in a way that’s not the way you want it. I come to you and instead of saying, “Mike, you idiot for God’s sake, couldn’t you figure this out?” Instead you say, “You know what? It’s not the outcome we wanted, but that’s okay. The fact that you made a decision that you felt is in the best interest of our company, I am so proud of you and I support that, Mike, keep going. Fix this the problem, get us moving forward. Good job being a leader.” That is how you support true delegation.

Tom Krol: Right.

Mike M.: Where you’re empowering decision-making, right or wrong. And if you do that, it will elevate you to the highest level that every business needs. It’s the design phase, and what designing is, it’s clarity on the achievements and outcome we’re looking for our business. The vision, and this is something the day before you opened the doors, every entrepreneur has such a clear vision of what we want. We want a billion dollars in revenue. We want to serve the world. We want to be the greatest company ever, but then we open the business and day one we go into straight into doing. Putting out fires and panic, and we never think about that vision again.
The design phase is getting clarity on that vision, maturing it, molding that clay. Then as importantly, perhaps even more importantly, making strategic and tactical decisions to orchestrate our company’s resources to make that vision a reality. So every day, every week we’re saying, what do we need to do to keep on target to that goal we’ve set for ourselves? Who do I need to move around? What systems are failing us? It’s really a person that’s orchestrating resources. That’s the four D’s and we need to get to the design level.

Tom Krol: That is amazing. So it’s so timely that you’re coming out with this, because this is a question, this is our blue ocean, is okay, we’re making money, but now how do we stop trading time for hours? Let me ask you-

Mike M.: Yes.

Tom Krol: A question Mike. How do you know when it’s time to start delegating some of your tasks? Is that something that you’re suggesting, hey, right out of the gate or-

Mike M.: Right out of the gate. Right out the gate.

Tom Krol: Okay.

Mike M.: So most entrepreneurs think, oh, when I hire that full time employee or when the next employee comes on, and that’s the mistake, because then we get to this point where I can’t afford them. I have to work a little bit harder, which pushes us back into doing. We get tired and frustrated and say, “I don’t even have the time now to teach this person.” I barely have enough money, and we never get to it. The key is to start delegating right away. Now, here’s who we start delegating with. You already have a team around you. Every company does, even if you’re solopreneur. And what that team is, is your vendors. Like you definitely have some vendors, you know you can delegate tasks to them. You can say, “Hey listen, you do X, Y, Z for me. Can you also do Y, is that possible?
And some of them will say, “you know what, we already do that. Happy you asked.” And so they can start taking over some of your responsibilities. Then I’m a huge fan, a huge fan of part time employees virtual health, huge fan. We have a small company here it’s 10 of us. More than half our staff are part-timers. And I love it because here’s the magic. I give a part-timer, eight hours of work but I only give them three hours to do it, because they’re only here for three hours a day. They get all eight hours of work done.

Tom Krol: Right.

Mike M.: Right?

Tom Krol: I love it.

Mike M.: So they’re highly efficient. So I start delegating to them. The discipline though is the delegation phase. So even this morning, Amy, one of our part-timers came in and said, “I have some questions.” I said, “Before you ask me these questions, what decisions have you made?” And she says, “I haven’t made any.” I said, “Then we’re talking to prematurely. Make a decision, go about it and then report it back to me.” And you get that deer in the headlights sometimes. But that’s delegation. If I let her come to me and ask questions, and I give her an answer, I’m sifting back to the deciding phase.
Now here’s one trap of the deciding phase. Most businesses revert back to this because it’s easier and more protective for the employee. If my employee comes to me and asks me to make a decision, I make it for them. If I make the wrong decision and there’s a problem, it’s not their fault anymore, it’s my fault. So it’s very easy just to come to me for the quick answer and there’s no guilt. But as an entrepreneur, it’s also very easy to make decisions for the other person, because it’s just fast. It’s like, oh, I just go, go, go. I already know how to do this. And it fills our ego because we’re very needed. So we got to kind of break through those barriers to get to the true delegation phase.

Tom Krol: I mean, I think what you just said was brilliant because you’re so right. I think it feeds our ego when we’re superman, and we’re wearing that cape.

Mike M.: Yes.

Tom Krol: 100% I’ve been there, I know that and I think it’s empowering-

Mike M.: Me too.

Tom Krol: When I can just let… You know delegate and let these guys do their own thing and I love it. So it’s really based on the result. So right out of the gate we are delegating and you know guys, I was just, as Mike was speaking, I want to just bring it into our industry. This is where when we talk about dispositions on who is going to be selling these contracts, or these houses let your title company… They can play a big part, whoever your closing agent is they can play a big part in dispositions. So yeah, Mike, is one of the things we do is we put a house under contract and then we sell that house or we sell the contract depending on the exit strategy. But a lot of our industry people are hiring people to do that. But this is something that you can definitely-

Mike M.: Yeah.

Tom Krol: Lean on a vendor. So brilliant, brilliant, brilliant. I love it. So the book is out and it’s available now?

Mike M.: Yeah, the book came out August 21st so-

Tom Krol: Okay.

Mike M.: Amazon, Barnes and Nobles, it’s at airports, local bookstores, Kindle Audible, it’s out there. So if you’re interested in checking out, just go to one of the sites, wherever your favorite bookstore is, type in Clock Work and you’ll find it. That blue book, looks like this with the words’ Clock Work, and the gears on it.

Tom Krol: That is awesome. I love it. Good. Good. All right, so it’s four books total. Is that right?

Mike M.: For me? I’ve now my… This is my fifth book-

Tom Krol: Okay, which one am I missing?

Mike M.: So probably Surge. So Toilet Paper Entrepreneur is my first. Pumpkin Plan was my second. Surge, was my third, and admittedly not the most, most popular book, even though I love the book. It’s just I took a different path, it’s more of a theoretical book and a less of an action oriented book.

Tom Krol: Okay.

Mike M.: Then Profit First, and now Clock Work.

Tom Krol: Awesome, so Surge, okay… And so another book, and we’re not even really touching on it guys, is The Pumpkin Plan. And you guys this book… I mean that book is like that’s another-

Mike M.: That’s my favorite.

Tom Krol: Yeah, that is like another complete total game changer because-

Mike M.: Yeah.

Tom Krol: If you could give us a brief summary, I mean I know the book in and out-

Mike M.: Yeah.

Tom Krol: But you’re the author, so if you could tell us a little bit. Yeah.

Mike M.: So it’s a story that happened to me. I was… My first business I was struggling to grow it and I wanted to grow healthily and organically. My business coach, his name was Frank, Frank came to me and said, “Mike, you guys study pumpkin farmers,” and I was like, what? He’s like “colossal pumpkin farmers.” He told me that what happens in nature happens in business. The parallels are uncanny, and it’s absolutely true. So I studied colossal pumpkin farmers, found the sequence of processes they follow, and we can use it to grow our business.
A couple of this… I’ll touch on a few elements. First, there’s a thing called seed selection. Most businesses are going after obvious solutions. They try to be better than the competition. One of the components of a class of seeds, there’s actually three, but one of the components is actually distinguishing yourself in the market. The more different you are, the more you stand out. That is the key. Client cloning. Sadly, most companies, entrepreneurs focus on their worst customers, not because they want more bad customers, but because that’s the squeaky wheel, so they oil it. And those bad customers tell their friends who are likely also bad customers, “You wouldn’t believe it. There’s a company who takes such great care of me and I don’t even pay them.” They take advantage of us and we attract more people like that.
So I talk about in The Pumpkin Plan, customer cloning is where we pick our best clients and there’s a process to identify who they truly are. And then follow a sequence of steps to replicate them. And then there’s hundreds of tips. But one last tip I like to share is the vendor well. The greatest opportunity for growth in your business is not necessarily through your customers alone. It’s the vendor network they work with. So you may be working in the real estate, but what about the plumber, the electrician, all those other people? If you have relationships with them, they can introduce you to more clients, like your best client. So building that network of other vendors is very, very important.

Tom Krol: I will tell you, and you guys just referencing back to The Toilet Paper Entrepreneur, I’ve mentioned this to Mike when we started. There is an electrician outside of my office putting heat in, so that’s what that noise is that we’re hearing in the background. So, but we are moving forward. So you know, one of the things about The Pumpkin Plan to me that I was really struggling with, and I know a lot of people in real estate investing struggle with is growing one pumpkin. And this is like-

Mike M.: Yeah.

Tom Krol: The number one thing that if you want to… I mean for us to take away you know, you guys read The Pumpkin Plan. It is absolutely mandatory reading for our investors. And here is the deal, the guys who we see struggling the most in the business consistently as soon as we start to have a detailed conversation, we find out, oh there’s 17 pumpkins on the line that they’re trying to prioritize between.

Mike M.: Yeah, and that’s when you stick a fork in them… The analogy I use, and it’s funny, I just delivered a pumpkin plan speech in Chicago on Saturday. As I’m out there talking to people, I said, let’s get real clear here. Next time you drive down country road, I want anyone in this room, if you see this to call me immediately. If you drive down country road and you see an ordinary farm and there’s miraculously this colossal pumpkin or vegetable growing out of nowhere, tell me, because in world history it’s never happened.
You see the ordinary farmer spreads all their energy, effort, nutrients, all over this massive field because they’re in the quantity game. That’s what we do as entrepreneurs. We’re spreading ourselves out. Now we don’t call them pumpkins or vegetables, we call them opportunities. Oh, is an opportunity here, is opportunity there. Opportunity, opportunity, opportunity. All these opportunities get spread out, which dilutes our attention, dilutes our energy and it absolutely prohibits colossal growth. The key and the only way to grow a colossal vegetable and a colossal business is to cut off all those opportunities. Focus on that one core competency. Serve it so well that it grows explosively.

Tom Krol: You guys, how many of us have actually even used a term in conversation, we’re drowning in opportunities? So I am so excited to hear that directly from the horse’s mouth, so to speak, because it’s so key guys. It’s laser focused on the one thing. The best word is colossal, which Mike keeps using, which is so key. Even and you reference this in The Toilet Paper Entrepreneur, it’s just become a specialty, one being laser focused on that one thing, so that’s awesome brother. Thank you so much for going over this and I am buying Clock Work today. I’m going to go to Barnes and Nobles.

Mike M.: You are the man.

Tom Krol: Oh no, man, I’m telling you I can’t wait.

Mike M.: And thank you.

Tom Krol: And I’ll check out The Surge.

Mike M.: Yeah, The Surge is a good one. And surge, it’s more theory based. But what I studied was, what is the best way for businesses to go rapidly and healthily without any marketing effort? And what he found is in Surge is we can capture these things called market movements, every community, every niche, anyone we serve, there’s movements in the market. There’s a way to spot and identify an upcoming movement, and then you place your offering in front of it. I call it the imminent wave, and it will push your business forward. Explosive growth because you’re now in front of the demand. So Surge is about getting yourself in front of the demand, capturing the momentum of that wave, riding all the way into the bank shore. Riding all the way to the bank actually.

Tom Krol: That’s awesome. So I’m going to go pick those up right now and if they’re on audible I’ll download them there. So this way-

Mike M.: They all are.

Tom Krol: Yeah. So Mike, thank you so much. And let me ask you, we have a lot of people… So we are in the real estate investing niche and you know, there’s a lot of people who want to get in, they know real estate is the best way to make a fortune in this country.

Mike M.: Yeah.

Tom Krol: Is there anything people who are kind of just getting started opening their own business and getting started in a business, like any kind of parting pieces of advice that you give to new entrepreneurs?

Mike M.: Yeah. It’s weird. It’s almost a hypocritical or paradoxal. I said earlier, the less you know, the more you’ll break the industry rules. The more you know, the better you’ll do in moving your business forward quickly. So you want to break the rules, but at the same time you want to go quickly. So anyways, getting into this space, the golden lesson is to seek out learning.

Tom Krol: Right.

Mike M.: But never lose the sense of who you are, so you can be different in the market. So listen to your show, Tom podcast. Read as much as you can. I’m an avid audible person. I wrote listen, now 2.5X just so I can blaze through books, constantly learn. And the one last thing that I found a great way to learn but also challenge your industry is also seek knowledge outside your industry. I just went to a cleaning conference, for cleaning companies that do carpet cleaning and stuff. Nothing to do with authorship, nothing to do with what I have to do, but such great insights into my own business. So I would say at least once a year, go to a conference or subscribe to a podcast for another industry that’s not yours. And you may find ways to break the industry rules.

Tom Krol: I love that advice. I agree with it and it’s so true. I found myself… I found this to be true for me is you know we listen to… I listened to a marketing podcast once and I learned so much. That’s awesome.

Mike M.: Yeah.

Tom Krol: Do you have a podcast? When is it coming out?

Mike M.: I do. Profit First podcast. All the, yeah. [crosstalk 00:28:25]

Tom Krol: I’m downloading. That’s awesome you guys. So Profit First, go and subscribe to that podcast right now if you want another one to listen to. That is the one, Mike is a thought leader. He’s changed the game for so many of us in this tribe and across the country. So Mike, it’s a total honor to have you on this show. You have really inspired us. You’ve moved mountains in my life, in our real estate investors lives, thinks that are so difficult to get around. So thank you for the perspective and it’s good stuff, brother.

Mike M.: Thank you. I just love your energy, and just thanks for being a supporter Tom. Take care.

Tom Krol: Absolutely. 100% have a great day. Thanks again.

Mike M.: You too.

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