Mike Michalowicz is an entrepreneur, business coach, and the author of multiple bestselling books, including Profit First and Fix This Next. In this interview, Mike shares his approach to reinvention and business strategy that supports an unshakable core in your business that will serve you by helping you identify opportunities to increase revenue despite uncertainty and protect your own income as a business owner as well.
John Meese 0:01
Mike, thank you so much for joining me on this podcast today. How are you doing?
Mike Michalowicz 0:05
I'm doing well, John, and thank you for having me.
John Meese 0:06
Oh, it's my pleasure I have. I've enjoyed your writing and your work from afar for years. Read the first edition of profit first and I should tell you now, maybe I shouldn't tell you but I will. When I read profit first and put into practice immediately transformed my approach to business and I remember vividly the first time I wrote myself a $500 profit check. And I remember as I was walking away because I actually had the bank print because I didn't don't usually do printed checks but I was like, No, this one we should actually print. I remember walking away from the bank and seeing and thinking you know, it'd be cool would be if I sent this check to Mike Michalowicz. Thank you. I remember thinking like that'd be cool to send it to him as a thank you.
Mike Michalowicz 0:23
You know what, I didn't do it. I'd be funny. On that zero. Zippo.
John Meese 0:24
Well, sorry, Mike. I've been I remember that my wife at home had been suffering You know, while we've been building businesses, and so I instead took her on a little getaway and it was worth it.
Mike Michalowicz 0:34
That's awesome. And that's the goal. Because you know, when we reward yourself, when you reward yourself and your wife, it starts building the muscle now you want it. And honestly, you spent money means you contributed to our economy, which means you bolstered it. So you aren't you're me. You're serving everyone. So well done, john. Well, good.
John Meese 1:23
Well, thank you, Mike. Well, before we get too far ahead of ourselves, I would love Mike, if you would just take a moment and just just summarize, if you would you know who you are and what you're up to. I'm very familiar with your work, but I know there's people listening to this podcast who haven't had the pleasure yet. So please, who are you?
Mike Michalowicz 1:38
Sure. So I'm an author of Profit First, which was referred to and six other books. My most recent called Fix This Next. I focus on small business, and my life's mission was to eradicate entrepreneur poverty. There's this perception of the day you start a business, you're wildly successful, you make tons of money and sit on the beach. The reality is we're working our tails off, we have no money, that gap a college from poverty. The method is through simplifying the journey. I really believe entrepreneurship could be a million times more simple. And I'm just saying that as like a academic, I'm an entrepreneur myself. I've had businesses ever since college really came through about now 12 years ago, saying, why is this journey so hard? Why did I start my business for personal freedom and financial freedom and achieving neither? What do I need to do? And that's when I started writing, honestly fixed my own challenges, but discovered this what other people need. So for the last 12 years, I've been a full time author, I still own businesses, but I'm a full time author writing on ways to simplify the entrepreneurial journey.
John Meese 2:44
Well, we need to hear more of that. So let's dive in right away, shall we? Yeah, um, so I'd love to know and in your personal life, I don't know about you, but you may be tired of talking about this, but I want to talk about COVID-19 for a minute. Let's just let's just talk about it head on. So I would love to specifically If you could go with me way back in time to, you know, just March 2020, way, way, way back there, you know to another, yeah. I would love to know if you remember the moment or where you were when you first realized that COVID-19 or the related lockdowns were a real threat to business that this pandemic wasn't just another news headline that something was a little different you know that this was out of the ordinary I'm just curious if you remember the the
Mike Michalowicz 3:25
I do remember it actually you can see it manifesting right now see this hair this why I look kind of like a civil war general to be honest with you. I haven't had my hair cut the day I realized that this is this is really
John Meese 3:42
You do look like a civil war general, I'm still thinking about that by the way
Mike Michalowicz 3:46
If you have a a black powder musket you can send my way. I'm okay. That'd be great. I mean the mark. Okay, good to know. I went to my barber and I always go and I have I arrived there early. And I go to the door and it's locked and like I was a strange He must be running late because I got there early. And there was a sign there. It says, closed down due to ordinance for COVID. see yoy in a couple of weeks. And I was like, Oh, and I started walking around. And I'm like, Oh my gosh, like restaurants are shut down. And all these businesses, and I'm like, Oh my gosh, all businesses, at least in the retail space, are gathering points. And like, Oh my gosh, like an event venue is a gathering place. And that's where I go, I speak at event venues and concerts, and that sort of the flood like oh my gosh, lots of businesses going to change. And there's going to be a systemic effect on non retail businesses, non brick and mortars. You even talk about Amazon like now, Amazon while being the juggernaut and providing stuff, all these retailers were the big collectively that Bigger juggernaut Well, they're all shutting down, and some more weights go on Amazon and Amazon starts faltering sorry, we're not gonna ship stuff. Only essential products, there's literally is truly today as we're recording this in June. There's still stuff I'm waiting for that order back in March. And I'm like, I don't even know how to cancel. It's like, it's just I don't even need it anymore. That's when it became clear. From a visceral standpoint that this this was gonna be something big.
John Meese 5:26
Wow. Well, thank you for sharing that. I love hearing the personal moment cuz, you know, we're all humans. We're not just entrepreneurs. We're all humans living through this time, so
Mike Michalowicz 5:34
I can't wait for a hair cut. Actually, I'll show you something. Now now that we're we're digging into this. I got to get a haircut. I took a picture. This morning at the gym. I just messed up my hair. This is what my hair looks like.
John Meese 5:45
Oh, no. So those listen to the podcast can't see that. But we'll have to put that I'll have to ask you for a copy that picture
Mike Michalowicz 5:51
It is an explosion of hair.
John Meese 5:54
Right? Yeah, yes. Oh, that's. Yeah, no, I totally get that. I I Got I've had one haircut so far that I was able to squeeze in in the midst of all this whole lockdown. Well done. Well played sir wagyu and my barber told me and he said, it is a good thing. I don't charge by the ounce. Like Normally I'm somebody I get my haircut like every four weeks I cut, my hair grows really fast. And I and it had been more than four weeks. And so yeah, anyways, but um, well beyond hair, let's talk about as a business owner, yourself and someone who actually, you know, teaches business owners and helps business owners. How did you respond to this to the realization that this was a big deal?
Mike Michalowicz 6:30
So it was fine all that nowaday. Now you brought, I'm looking at that day or remembering. I called we have a small team here. There's their six employees at our office, you know, and so I call Kelsey, she's the president of our little business here. And I said, we got to figure out how this is gonna affect us. And she said, Well, that means survey. We sent a survey out that same day, and we said, what how do you need us to serve you now? And um, what was interesting was Kelsey, our team here is expecting the feedback to be, you know, give us this business tip or this business strategy. The number one piece of feedback was my confidence is shaken. How do I gain confidence back? And that started this program called the recession response is just these really short kind of punchy tips focused on business methods, but all rooted in confidence. A 'You've got this' kind of movement.
John Meese 7:30
Yeah. Interesting. Okay. Well, so so what is is that a paid program? Or is that
No it's free. It's called recessionresponse.com - We bought the domain that day. And it's just a free, no signup or anything. It's just a page for downloads and we're constantly updating.
Wow, that's awesome. We'll make sure to include a link to that in the show notes. I think so. But anyway, let's take a take us a little bit if you could have behind the scenes of your business, how is the economic crisis impacted your business directly? I mean, because you mentioned you do some speaking you do books? Yeah. What else is affected by this?
Mike Michalowicz 8:00
Yeah so speaking books author sponsors events in my hosting my own event. So speaking went to off gone. The what's interesting is in the author community and influence I hate the word influencer by the way but the influences, but the influencer community is they all everyone online Of course. And most of us already giving away their service for free say I'll come on your I'll do your event I'll speak for free. So there's now a surge of presenters do it for free. My thought was, well, free free doesn't put food on the table for too long, right? So this may last for a month but certain point because I can't sustain this way. So my job is that's how I make part of my living is to continue to charge and I'll get rejected the beginning which I did, and now people are like, well, we want you and I said, Well, you got paid for me, right. Okay. So it started now getting coming back to normal revenue. Through speaking districts where people get paid, why cuz they're pretty well for a speaking engagement. The mistake people make is they say, Oh, you speak and you get you know, x 10s of thousands of dollars to speak for one hour, you make so much money one hour. Well, the reality is three days, fly in present fly out, right, your travels, preparation. It's three consecutive days that are interrupted, well, online, I can do a speech in an hour and then do another one Two hours later with this one. Yeah, no, co now I can bang out three presentations in a day with no travel on it. So I just the rates, I'm like, Oh my gosh, if I charge less per speaking engagement, I can still make more per of per day if I run the numbers correctly, so that's what I adjusted. And also your products and stuff. It's interesting. Our online demand for products has actually increased a little bit. Sponsorships have decreased sponsor like, well, you're not gonna host your own events anymore. We don't want to participate in that. All all said and done. We're up. Not much, but we're up. I think the reason is because we surveyed our audience and learn what they needed and started to catering to the new needs are coming about first and foremost, and then looked at our historical offerings like speaking and carved it up in a new way that satisfies customers.
John Meese 10:16
That's interesting. Okay. So I want to dive into this a little bit more, Mike, because I think you I mean, I know the books you write are really about how to build a business that can you know, adapt in times like this even in crazy times like this. So how, how do you feel now about some of the things you teach such as, for example, profit first? I'm assuming you practice that in your own business. So how does
Mike Michalowicz 10:37
Oh absolutly, I'm wearing the shirt man, I got proof.
John Meese 10:39
That's right. You are Yeah, I've got the book right here. Right off camera. You can't see it. But it's
Mike Michalowicz 10:43
I love it. oh, I can see I can see it.
John Meese 10:45
Okay. It's right there. Yeah. Um, so I'd love to know, how does that equip you? or What does that make possible in your business to have practicing profit first in the midst of a crisis like this? What does that make possible that maybe wouldn't have been possible otherwise?
Mike Michalowicz 10:57
Yeah. Okay. So I'll say it. Saved is too strong a word but it's served me right now in this crisis in a way that people are doing prep first will be served. And this is a prediction because recorded before July 15. I think July 15 is going to be potentially a really, really bad day for some small business. So, Profit First, one thing is by being an author and writing something, it's the ultimate accountability mechanism I have to live it. So I live by Profit First, I don't miss an ounce of it. Part of it is reserving for taxes. And I bring the biggest bill associated with the operation of a business that we're least prepared for is our tax bill. It's a massive bill. That's guarantee the more money you make, the more the government's going to take. And we got to be prepared for it. So I have a tax account where as my business generates revenue, a percentage of that excuse me, goes into a tax account, and is reserved. What was happening this July 15. It's never happened as far as I know in US history, is taxes that were due on April 15 got delayed till July 15 to postpone. Taxes that were due before June 15, got delayed July 15. So on July 15, we have two tax installments due. One all the way back to two, q4 of 2019. Another one for q1 2020. And then in September, September 15, we're gonna hit again, with taxes as we get back to the normal iteration, so in 60 days, three tax installments. Here's why I believe entrepreneurs did. They said, Oh, my gosh, and in April 15, when taxes are due, they said "I don't have taxes due" and I think they spent the money? I think they sawit as free money they didn't see it as a delay, they saw it as a as a gift. Yeah. And my fear is businesses are not gonna be ready for July 15. And listen, the government plays no games. It will punch you in the face. If you don't pay. It will come after you hard. It relented because I had Profit First in place. I just paid all my July 15 taxes. Actually, literally yesterday I wrote the last check. All done. Business paid for everything. I'm prepared for September 15. Before that, I wouldn't have the discipline I'd say, Oh, I don't need money right now let me do this, I would start worrying about it maybe about five or six days in advance, and we got to get this money I need right now.
John Meese 13:11
It's a huge bill, you can't figure that out in 5 or 6 days
Mike Michalowicz 13:14
It can be devastating in my past life before implementing proffers my personal life, I was going to pay in taxes, I went on an installment plan. But as the worst, there's interest associated that but that's that's the kids play. It's the penalties that get you, which is basically hidden interest, they can get upwards of 50% interest effectively through penalties. They hammer you, so you can't play that game. And Profit First has protected me, if you will, over and over again for many tax liabilities I pay in advance or a pay right on time. Sure, and never have to worry about it. That I'm just really afraid of July 15 for businesses that are not prepared.
John Meese 13:50
Well, yeah, I'm glad you said that. I hadn't really thought about that in it's full extent. So well, let's talk about your own business just for a minute longer. And then I'd love to talk more about your advice for other business owners but in your business. How are you pivoting to pursue opportunity right now? Are you seeing any opportunity for your business that didn't exist before this crisis? For example, you mentioned the virtual speaking that it's really a win in some ways that you don't have to take three days out of the business, even if it's a lower fee to do a virtual event. So what other How do you really my bigger question is actually how you approach pivoting to pursue opportunity.
Mike Michalowicz 14:21
Yeah, so so it was an email we sent out back in March, how can we serve you now? I am more actively serving my audience and adjusting so I don't do self help stuff. But when people said I need confidence, that kind of got me in the self help mode, like how do you get confidence? You know, is it is there confident people and not confident people? By the way, the answer is no. Everyone has confidence is the application of confidence, like you just took a sip of water, or beer? I don't know what it was,
John Meese 14:49
Mike Michalowicz 14:51
Or none of the above. That's why I went right up and I was like, Oh, that's moonshine. That's freakin moonshine. So what happens is, I suspect you're very confident and drinking coffee. And then the question, of course, is why I believe you like you went through a sequence in your life when you couldn't drink out a copy of you probably spilled over you as a kid, you tried a sippy cup like I did or whatever. How do we gain that confidence to just drink whefre, it's a no brainer. We can map that process, and then everyone has their own recipe, then translate that into a recipe that will work in area we're not confident, whatever. I'm not self help guy. But But my community said we need some version or flavor of it. So I started developing it. The other thing I did is I call it one step back, I was working with a client It was a restaurant. restaurants in the traditional sense are were shut down to reopen under I guarantee they're gonna shut down again as COVID hits wave two. And some people just froze up and said, I guess I'm done. That's the worst response. Other people took desperate response I said I'm going to try everything anything without really planning that's very dangerous because it can Started downward spiral but some of them did one step back and as one restaurants working with said, what happens one step back from my historical delivery I put food on the table What's one step back from that? Well the waiter carries it was one step back from the waiter carrying we prepared the kitchen was one step back we buy the meats and potatoes and all that stuff. Well each step back is potentially a new product offering so they wait wait are carrying through the table can be carry out. And Avi that's an obvious solution. But sadly, some businesses didn't do it. The real opportunity is amplification. It's one restaurant that teamed up with a food truck. a food truck keeps the meals hot, they can bring three meal types and they can go into your neighborhood and you can say you know what, I'm gonna go with meal one or meal two today and they'll deliver right to your door. You can also pre order too. The restaurant is a cooking center. Now there's tourney meal after meal out. One step back is the preparation of food in the kitchen. Okay, why not teach preparation food in the kitchen workshops, classes. So there's a restaurant we're working with here. There's a weekly cooking class with, over zoom, with the community. They're more profitable on cooking classes than they ever were as a restaurant. So we can keep on rewinding back and find new, innovative things that we already have a competency and just package it a new way to deliver it.
John Meese 14:21
That's interesting. Okay, so you just shared a lot, that's really helpful. But I'd love to know, I mean, specifically, I'd love for you to talk directly to the business owner that's listening to this right now. And they're saying, How do I build or rebuild a profitable business in the midst of this? But I think the bigger question is, how do I build a rebuild a profit business in any economy? Because business has existed, you know, we've got this is not the first pandemic in the history of the world. It's not the first economic crisis in the history of the world, but it's probably not the last. So what do we what do we do? How do we how what's your advice to the business owner listening?
Mike Michalowicz 17:32
First, we have changed the label. So you know, in 2008, we called the Great Recession. I'm actively saying this is not the great recession is the great reinvention. And I'll tell you the power behind that and using the words, it changes where I focus my attention, if I say is the great recession, my mind will say yep, and here, look, here's another problem. This is why we're going to struggle, if I call it the Great Reinvention. Now in mind says where's the opportunities, so in turn applies our focus. Once we call this the great reinvention, then the goal is to start asking the one asset no matter where your business stands that you haven't lost and will never lose is your historical client base. You may be out even out of business, you may shut the doors we still had have that sort of client base, contact them. And we guys are asking how can we serve you now? Ultimately, this the bass lesson is once tell you how to serve them is don't actually serve them in that way at all. So I quote, sell the sell to tell. Suggest solutions for what they want. But then ask them to give you money for the idea to put down deposit because at the end of day, he'll speak the truth not through their words, but their wallets. Someone says you know what I need? I don't have time to consume your books anymore. I can't sit and read things are moving too fast. I need you know, you you might deliver summaries of your books that just give me the actual stuff and not the fluff. And I can think that's great. And I could spend day, months, whatever developing to get the perfect thing and say, here it is. And I say why don't want that now. So instead, is I said, you want to prepare a summary of my own books. So instead of hearing what you know, Cliff Notes says about me, I'm going to show you what the essence of my research, and it's gonna cost, you know, $50 for subscription and every month or two books. But if you're willing to be a beta right now, I'll sell it for 25 bucks a month for the first 20 people sign up by putting an offer out there, there I just invested what a minute and come up with that concept. It'll cost me nothing to get it out. And if no one's willing to pay for it, they're speaking the truth to their wallet saying stupid idea. If you're willing to put down deposits here. Now I know I got something people want to buy and now the pressure is on to deliver it. And when I deliver it, if I had 20 betas come up, I have 20 testimonials for the full rollout. So in the great reinvention, we need to sell the tell and you need to trust while it's over words.
John Meese 19:10
Is that what you're calling this right now is the great reinvention.
Mike Michalowicz 20:01
The great reinvention Yeah,
John Meese 20:03
I love that. Yeah. Okay Mike that's so helpful. Thank you I appreciate that and of course there's much more detailed tactical advice and all of your books and on your website and recession response calm right.
Mike Michalowicz 20:12
That's it. Yeah.
John Meese 20:13
So where else can we find you and learn more about you and how you can help us online?
Mike Michalowicz 20:17
Well, if you want to go to the kind of the Grand Mecca that to me, it's MikeMichalowicz.com but John, I'll tell you, John Meese is a lot easier to spell than Mike Mmmaaww. So you can go to a shortcut. It's called Mikemotorbike. That's my nickname and you're welcome to call me Mike motorbike. The irony is I was named Mike motorbike in high school. I've never driven a motorcycle. It was the only g rated name I ever had. So you can you can bastardize Michalowicz.com. So I bought MikeMotorbike.com right when when it presented itself out. And so that forwards to my site. I've written now seven books. You can get chapter downloads for free. I have my own place. podcast called Mike up in your business, you can get access to there. And he served for the Wall Street Journal, all that stuff. It's totally free at MikeMotorbike.com
John Meese 21:07
It's great. Well, thank you, Mike. I appreciate that. And I can personally say that I've enjoyed all of your books. Profit First is probably the one that's most radically changed my approach to business. And so thank you for that. But I have to say anybody that goes to your website, they have to click the little, little icon next to your name that shows you how to pronoune it.
Mike Michalowicz 21:22
There you go. Yeah, yeah. And then, at the very bottom, you're scrolling down and down. You'll see some
John Meese 21:27
Okay. Hey, click it a few times. There's a couple different ways to pronounce Mike's name. I'll just leave it there. Yeah. Well, thank you, Mike. I appreciate your time,
Mike Michalowicz 21:34
John. Thanks for having me, brother.
John Meese 21:35
You got it
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