How to Start a Business from Broke with Mike Michalowicz

.Starting a Business with No Money

Speaker 1: Alright I’m on with Mike Michalowicz, he is the author of four absolutely amazing books that are going to impact your life. Speaker 2: Well I just want to address one of the most challenging issues that most businesses have; a lack of resources. You lack money, you lack contact, you lack a network, you can’t find the employees. What I found is, actually "lack" is your best tool, your best advantage, but you don't know how to use it. So I explain how that adversity of not having, you can leverage and springboard from your competition. Speaker 1: So you teach contractors and business owners in general how to start with absolutely no money whatsoever and then to grow their business. But what they are learning while they are starting with no money, is how to survive but, then you take it in the very next book, The Pumpkin Plant and you go hey, you know what? You grew, you started. It’s time to stop surviving and it’s time to start thriving.

Pumpkin Plant

Speaker 2: Yeah, exactly and Pumpkin Plant was for entrepreneurs who have said, all right I’m in the business, now I really want to explode and grow. So I studied of all things, pumpkin farmers, and found that there’s a small faction I know you know who they are, they grow those colossal pumpkins as big as a car, and what they did, what’s interesting is this, it’s only a small shift or change from what you’re doing now. I thought this class of growth required everything to change and that’s not true. It’s a small five percent change; you have to fire bad clients, it’s courageous but bad clients, getting rid of them avails access and availability of new clients. You need to clone your best clients, once you identify a client that’s great, how do you get more of them? Just certain steps, five percent of change they all documented in The Pumpkin Plant, to grow colossally. Speaker 1: The riches are in the niches. 2: That’s right, that’s totally right.

Refine Your Profits

Speaker 1: Plain and simple Mike, when you really want to refine your profits, that’s where you go to do it. You’re going to find your market, you’re going to refine your market, then you’re going to dominate your market. If you focus on building up your weakness, you will become mediocre at best, but when you focus on your strengths you will dominate, and that’s what The Pumpkin Plant talks about. This Profit First is the only book that actually gives you the system, it doesn’t talk about creating a system. Mike, you actually have now trained instructors on how to create a Profit First system.

Profit First

Speaker 2: Yes, it is a step by step sequence. This, hands down is one of my most popular books, and I’ve been very blessed. My other books are doing extremely well but this book I think, is the game changer. Maybe it’s the most important book I’ll write in my lifetime. Here’s the idea, most businesses run their business based on what's called bank balance account. We look into our bank account, we log into our iPhone or something, we see what our bank balances are, we don’t read the income statement, cash flow statement or the balance sheet, we don’t do KPI's. We know about those things, but to run your business every day and understand that, it is too difficult, so we revert to getting our bank balance. The problem is, you don’t know what money is available for what purpose. So what I did in Profit First, was I took the envelope system, something my mom actually did. When she got income, she would separate some for food, some for the apartment she rented, and then when she went food shopping for example, she only worked with the food envelope. The same opportunity exists for our business what we do and I explain it all in Profit First, is you go into your bank account and set up multiple accounts with predetermined uses. Some money needs to be reserved for your taxes! Right, shouldn't your business pay your taxes?

Paying Yourself

What about paying you, as an owner of the business? Reserve your owner's pay, profit. We have to run the business, of course. Taxes. So we set up the different envelopes in your bank account. Now before you access your money, you know what it's pre-allocated to. And you work in a much more frugal but also innovative manner. The business that takes their profit first and then run their business off the remainder, inevitably are far more profitable than any other type of company. Speaker 1: I actually have a Profit First bank account set up after reading your book. Surge, tell me about Surge, your latest and greatest work.

Surge

Speaker 2: Yeah, it was just released. For Surge, I studied the phenomenon of being in the right place at the right time.  One of the readers of my past books approached me and said "I love all these philosophies but, man if could just be in the right place at the right time on the lottery winner, I’ll explode. How do you do that in business?" Well, that question intrigued me for years and I’ve been studying for years, and I found the formula now there is no perfect solution, I can’t guarantee you will be the next lottery winner but I can guarantee you can improve the odds significantly. Now of course this isn’t playing the lottery, this is building a business in the right place at the right time. Surge is an acronym, it's the five steps you need to take to put yourself in the position for explosive growth. S is for separate, pick a niche community. U, unify with what that community's need is. R, rally cry, have a message that is consistent with what that community wants so they can enable and market for you. G, gather knowledge as you cater to that market and get critical feedback so you can improve your offering, and E is expand. Once you have those first four steps mastered now you can expand explosively, but the interesting thing is, this expansion can take two paths. You can be bigger but bigger isn’t necessarily better. You can take that path if it suits your objectives, or you can expand in your niche and dive deeper. Sometimes there is more wealth there. Surge explains it all.

Profit First Podcast

Speaker 1: Yes, Mike we had and I want to encourage people to go to the podcast. We just recorded a show and we cover this in detail. Absolutely phenomenon show, Mike, I want to thank you for being a guest on. People that are going to go there, they should also go check out your website and check out his podcast, the Profit First podcast. Mike interviews amazing people but you also get small doses of Mike, every show and this guy is brilliant. Speaker 2: I speak quickly too.  It’s a lot of information packed in one minute. Speaker 1: Thanks for watching. God bless you, love you guys.