Latest / The SmallBizChat with Melinda Emerson / Making Profit First Work in Your Business with Mike Micholowicz

Transcript

Making Profit First Work in Your Business with Mike Micholowicz · The SmallBizChat with Melinda Emerson

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  3, 10, 1, 0, ignition, liftoff,
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  Ending small business failure.
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  Welcome to the Small Biz Chat podcast with a number 1 small business expert Melinda Emerson.
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  Bolinda's goal is to end small business failure, and she'll give you the information
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  you need to succeed and live the life you've dream of.
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  Now here's the small biz lady herself.
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  Melinda Emerson.
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  Hi, everybody.
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  I'm Melinda Emerson, the small biz lady.
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  I wanna invite you to enter the small business chat podcast giveaway contest for the next 30
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  days starting today.
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  You'll have the chance to win amazing prizes if you subscribe to the podcast.
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  All you need to do is take a screenshot after you've subscribed to the small fish chat
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  podcast and tag me, small fish lady, on Twitter or Instagram.
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  Once a week, I'll select a winner and you have a chance to win one of my autograph books
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  become your own boss in 12 months or fix your business or you might even get a chance to win
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  one of my limited edition small business chat podcast t shirts.
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  Don't delay.
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  Subscribe to the small business chat podcast today.
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  Hi, everyone.
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  I'm Melinda Emerson, the small business lady.
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  Welcome back to small business chat.
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  My boy Mike McCallowatts is here.
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  His brand new book clock mark comes out next week, and he's giving us a sneak preview.
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  Of how to build a business that will run itself.
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  Now Mike has written several books that have been huge.
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  He started with the toilet paper entrepreneur, Then he wrote the pumpkin plant.
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  My favorite line in the pumpkin plant is it's all about seed selection.
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  Alright.
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  He can talk to you about that.
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  And then he came back with this book profit first, which has created a profit first
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  revolution all over the country.
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  Now small business owners have a profit account, not just a operating account, not just
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  an expense account.
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  They have a profit account.
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  It's because of what Mike has taught us.
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  And now he's back with clockwork, and he's gonna give us a preview and really just talk
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  about, you know, how we all can run better businesses that are gonna stop stressing us
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  out.
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  Y'all know I believe in that because that's why I wrote my book, fix your business because I am
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  tired of folks dreading going to their business every day.
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  So, Mike, welcome, welcome, welcome.
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  You know, I wanna point out that I'm I'm rocking these colors tonight because of you
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  because, you know, these are Virginia colors, and we are Virginia tech of love.
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  So I had to wear it.
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  And I'm wearing this shirt.
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  Like, on my calendar show, I'm like, I am getting out of the suit for once, and I am
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  throwing on the alumni shirt.
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  Go hokies.
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  Yes.
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  Go hokies is right.
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  Right?
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  They are proud of us little love.
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  We are here doing our thing, wrapping the stool.
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  So listen.
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  Let let's talk business.
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  Tell me what are the top 3 issues that you think cause most small businesses to struggle?
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  Well, the first thing is the entrepreneur thinks they need to do everything themselves.
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  Right?
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  I mean, they just plug away, plug away, plug away, and the entire burden of the business is
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  on the owner's back.
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  And the day they're sick, the day they can't work, the business is out of business.
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  You know, a lot of people say their business relationship is parent child relationship.
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  That's bull.
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  It's not that way.
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  You're not growing a child that's gonna one day walk on his own and feed you back.
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  We are conjoined twins We share critical organs, vital organs.
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  We share legs.
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  We need to surgically separate ourselves so the business can run on its own.
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  That's the number one thing.
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  The number 2 thing is going into a vocation that we have experienced knowledge about, but
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  not a vision about.
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  You know, it's being the technician.
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  Oh, I know how to bake pies.
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  Therefore, I'll start a bakery, but what's our vision?
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  That's the bigger thing.
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  And the third thing is people don't focus on profit.
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  They focus on sales.
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  You know, they think that we can grow into profit, but profit I'm sorry.
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  Sales represents stress.
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  The more we sell, the more responsibility we have to deliver.
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  Therefore, more sales, more responsibility, more stress.
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  We have to focus on the other element, which is profitability.
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  Alright.
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  So what is the first thing a small business owner should do if they're trying to create a
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  profitable business strategy.
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  Yeah.
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  So what I say is counterintuitive, but take your profit first.
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  Actually, I dedicated a book to this.
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  As you know, You know, when we have a sale, immediately take a predetermined percentage of
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  your profit and hide it away from yourself, run your business off the remainder, What we're
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  doing is we're flipping the formula.
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  We've been told for years for actually since the invention of accounting that sales minus
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  expenses equals profit.
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  We're told profit comes last.
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  And when something comes last, it never happens.
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  What I'm saying is that sales minus profit equals expenses.
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  Take your profit first hide it away, then you are now reverse engineering that profitability
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  and have to assure you can get there through the remainder.
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  I love it.
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  I love it.
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  No.
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  You're absolutely right.
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  Now you believe that, you know, it's all about people not putting profit into their business
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  model.
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  So is it just about taking this percentage, or is it looking at what you sell, how much you're
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  selling, how much you're charging.
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  I mean
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  Yeah.
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  Yeah.
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  So what it is about is not reinvesting or plowing back profit.
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  So a lot of business owners tell me, oh, I had a good year.
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  I had some profit.
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  I said, well, what did you do with it?
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  And they said, well, I plowed it back into the business.
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  I reinvest it.
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  We pushed it back.
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  Those are all very soft terms for saying it's not profit.
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  It's an expense.
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  You see, we as small business owners have built a business to achieve financial independence.
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  Financial independence is where you get a salary representative of the work you're
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  committing, a high level employee effectively And as the equity owner of the business,
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  meaning you started the business, you are getting a reward.
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  That's the profit distribution.
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  So when the profit comes out, you celebrate with it.
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  And you define celebration.
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  Maybe it's a nice dinner out if it's an small profit.
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  Maybe it's savings for your future or maybe it's something magnificent.
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  But you must reward yourself and the business must master the discipline of living off of
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  what's really available for it.
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  The true expenses.
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  I love it.
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  I love it.
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  Are you tired of struggling in your business not thinking of paycheck, dreading dealing with
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  your business in the morning?
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  Are you regretting even starting your business in the first place?
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  Well, I know you're tired, and I also remember what that kind of tire is like.
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  But the good news is it's time to stop feeling that way.
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  Stop.
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  I'm Melinda Emerson's small business lady, and my new club to fix your business is a 90 day
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  turnaround plan to get back your life and reduce chaos in your business.
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  I've been in business nearly 20 years and let me teach you how to build a business that works
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  for you.
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  Grab a copy today.
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  So your new your new book clockwork is you say it is possible to build a business that could
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  run itself.
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  Yeah.
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  Yeah.
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  So listen.
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  I I spent the last 6 years researching this out.
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  I I think I'm in a unique position.
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  I I've had the good fortune of building and selling a couple companies.
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  And I operated a third one now.
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  I'm on the board of an augmented reality company, a tech company, a manufacturing
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  company.
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  I own a membership.
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  2 actually, 2 membership organizations.
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  As is I've experienced a lot and and mostly through failure.
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  Right?
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  I've lost tons and tons of money and and actually put myself into poverty.
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  What I have found throughout this process is that when I tried to elevate the business off
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  my own effort, they failed when I was able to have the business run off of other people's
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  efforts, it was successful.
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  What I believe every business owner needs to do, and even if you're a solopreneur, We need
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  to find ways for other people and other resources to move the business forward and
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  break free of it ourselves.
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  We must move to a visionary, a strategic, and a technical type of person, and we should not be
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  the doer anymore.
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  That's why I wrote clockwork.
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  I love it.
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  I love it.
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  Alright.
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  So talk to me about the queen b roll.
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  Oh, you know what I'm talking about.
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  When we were back in college, we were talking about this.
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  I always, yeah, kid about it.
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  We were dating for a little bit.
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  It was just a short stint.
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  But you know what?
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  You need to stop telling that lot.
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  I know.
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  I know.
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  You get killed.
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  You get so fired up every single time Would you stop that, Mike?
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  One day, you'll believe it was true, my fancy will.
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  Oh, dream, Milan, the day did you?
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  Dream, Milan,
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  You owe your my queen bee.
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  Here's what the queen bee role is.
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  The queen bee role is the core function of every business.
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  I took it from beehives a beehive has a a specific role as laying eggs that keeps the
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  beehive surviving.
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  The queen bee happens to be serving that every bee knows they need to protect that role.
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  I am not saying the queen bee is the most important person air quotes for a beehive, but
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  I'm saying that role of laying eggs is most important.
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  Every business has a singular most important job function that the business hinges its
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  success on.
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  Here's how you find it.
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  What is your brand promise?
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  What are you known for?
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  FedEx is known for delivering packages on time every time.
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  Now peel the onion back one layer the core function, the laying of eggs that supports that
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  is logistics.
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  FedEx knows they must invest everything in making the logistics work the day that copper
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  is compromised, the entire company is compromised.
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  In our businesses, what's the one thing you're known for?
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  Peel back the onion.
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  Determine what's the one function that's delivering on that protected?
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  Every employee must know it needs to be protected.
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  If it's slacking, the business is dying.
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  I love it.
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  I love it.
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  Alright.
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  So what is the 4 d mix?
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  4 d mix.
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  So I discovered that there's four stages of running a business and they're all d's.
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  Versus doing.
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  Entrepreneurs start their business or doing the work.
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  The next stage is actually called deciding.
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  Deciding.
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  And you've been there.
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  You hire an employer contractor.
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  You tell them to do something come back a second layer of questions and you make
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  decisions for them.
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  It can be very frustrating.
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  Actually, some entrepreneurs say, you know what?
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  These employees are idiots why do I have employees?
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  I wanna go back to doing and they get stuck between doing and deciding.
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  The next level up is called delegating.
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  Delegating is not what most people think it It's not the assignment of tasks.
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  Delegating is the assignment of outcomes.
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  It's time my employees, here's the expectation of your job responsibility, navigate the way
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  there.
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  And when there's problems, Find your way through it and innovate new ideas.
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  That's the assignment of outcomes.
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  The final d is designing.
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  That's what the entrepreneur needs to do.
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  Designing is where we specify a very clear vision, the intention for our organization,
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  then on a weekly, monthly, daily basis, we're making tactical strategic decisions to move our
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  resources, our people in alignment, we orchestrate our team to get to that vision.
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  Alright.
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  And then Tell me about the ACDC ball.
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  See, this is a little bit unfair because I've got a chance to preview your book and other
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  people have it, but I I I tried to pull out some juicy stuff.
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  Tell us what is the ACDC model?
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  Yeah.
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  So nothing to do with the band, but about just as awesome as the band.
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  ACDC is the flow every organization goes through.
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  Again, you could be a solopreneur.
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  You could have a 1000 employees or anyone between you can be in any type of business and
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  we all go through the flow of ACDC.
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  A stands for attracting prospects.
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  You must must do that.
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  The next stage is the c, which is converting prospects into clients.
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  You must do that.
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  D stands for delivering.
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  It's delivering on our promises, either a product or a service and the last fee is
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  collect, collect the money due to us.
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  At any business, at any given time, one of those is the biggest challenge in our business.
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  So look at your current business model, look at the flow of the ACDC and say, where are things
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  getting stuck now?
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  Fix that component and the entire business elevates then a new problem will present itself
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  in 1 of the ACDCs.
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  It's a very quick and easy way to analyze our business, identify the area of a problem, fix
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  it, and elevate the entire business.
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  Alright.
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  Now tell me, what is the best advice that you can give a business order today?
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  Like, what is your best nugget you got?
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  Alright.
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  This is this is gutsy.
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  I want you to take a 4 week vacation.
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  And I know you might be having a heart attack just hearing that, but here's the deal.
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  When you declare a 4 week vacation, and I'm saying physical disconnect and a digital
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  disconnect.
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  You must align your business to make that a reality.
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  Why?
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  Most businesses go through all cycles of business in 4 weeks, collections, hiring,
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  firing, getting new prospects and clients, If you declare a 4 week vacation, you will have an
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  instant mind shift and say, oh my god.
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  How am I gonna pull this off?
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  Then you have to start aligning your people, your teams, your contractors and resources to
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  make that a reality.
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  I'm not saying go on a 4 week vacation tomorrow, but I'm saying a year and a half to 2
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  years from now, That better be in your calendar.
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  You better commit to your children and your friends that you're making this happen.
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  And sure enough, you'll start aligning your business with a business that can run itself
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  and not be dependent on you.
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  Alright.
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  Clockwork comes out next week.
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  Where can we get it?
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  Anywhere.
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  That's the beautiful thing.
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  Amazon's got the best price always, but you can get at Barnes And Noble's, any bookstore,
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  airports will have it, but I suggest Amazon to get it right now.
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  And if you wanna get it early, go to clockwork.life.
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  That's clockwork.life, and I got free resources, free stuff there right now today.
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  Awesome.
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  Awesome.
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  Awesome.
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  Well, listen.
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  Mike McCallwich, you know, I love you two pieces, and I love it when you come out with
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  some new dropping knowledge on folks, so I cannot wait to help my audience get copies of
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  clockwork because Thank
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  you.
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  I know it's gonna be a smash.
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  And listen, can't wait to see you next time and remember this.
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  You never lose in business either you win or you learn.
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  We'll see you next time.
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  Thank you for listening to the Small Biz Chat podcast with Melinda Emerson.
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  For more resources and small business success strategies, visit succeed as your own boss.com.
• 13:37
  Subscribe to this podcast wherever you listen to the podcast and join us next Wednesday.