According To Mike Michalowicz, Bestselling Author And Entrepreneur, Here’s How Every Small Businessperson Can Put More Money In Their Pocket

by Micah Solomon (that’s me). Originally published in Forbes.com. The author is a consultant, influencer, keynote speaker, and trainer in customer service, customer experience, customer service culture, and hospitality. (Here are three ways to reach Micah:email, chat, web).

Watching Mike Michalowicz bound onto a stage to deliver a keynote (he is a top business keynote speaker, in demand across the U.S. as well as overseas) is enough to make me ache in several joints. A bundle of energy, passion and age-inappropriate physical fitness, all of which he brings to the stage and everywhere else he engages his audience and customers, Michalowicz (pronounced Mih-KAL-oh-wits) is the bestselling author of multiple books, including, most recently, Clockwork (2018), with another on the way, Fix This Next, in 2020. He’s also a small business consultant and the Johnny Appleseed of the “Profit First” movement that has swept a corner of the small business world. 

I wanted to find out more. Happily, Michalowicz is known for his generosity in sharing lessons that he’s mastered along the way. 

Micah Solomon, Forbes Senior Contributor, Customer Service Consultant: You are a man of several hats. What are those hats currently? 

 Mike Michalowicz: Mostly baseball caps. One fedora. Seriously, I have one "big hat" and the rest are all connected with it: I am a small business author first and foremost. It speaks to what I believe is my purpose: To eradicate entrepreneurial poverty. There is a mix of companies that I have co-founded, businesses that take the ideas in my books and propel them further. As such, I am a co-founder of Profit First Professionals, the organization that certifies accountants, bookkeepers and coaches in Profit First, my cash management system that leverages the natural way entrepreneurs manage money, through their bank accounts, to bring consistent profit and increasing financial health to their businesses.

I am a co-founder in of Pumpkin Plan Your Biz, the group of coaches helping clients through The Pumpkin Plan. I’m a co-founder of Run Like Clockwork, the company that trains entrepreneurs in the Clockwork methodologies. And I am in the final stages of launching a new business that will certify coaches in the Fix This Next methodology, based on my upcoming 2020 book by that name.

Solomon: Tell me how you got here. 

Michalowicz: I started two companies in rapid succession and sold both of them. I became a millionaire in my early 30s. But with that came arrogance. I thought I was so smart, and better than others, oh and did I say how smart I was? I was not. And I proved it by losing everything (except my family). When I was at rock bottom I decided I would pursue a dream and fix myself in the course of doing it. I became an author–to figure out how little I knew and fix it, and to help other entrepreneurs avoid my own dumb mistakes. 

Solomon: One of your books, Profit First, has grown into what feels almost like a movement. That’s got to feel good. 

Michalowicz: Yes, but let me tell you a story. I actually remember the moment that I realized it. I was invited to be the closing keynote speaker at a conference for eCommerce sellers. I arrived early and sat in the audience to listen to the speakers before me. When I sat down the guy next to me elbowed me and said, "I don't think we met before. What do you do?" I started to say "I am a business author and I will..." he cut me off. He then said, "There is a book you've got to read, called Profit First." 

My big fat ego blew up. I couldn't wait to say that was my book. As I started to say, "Well, what a coincidence, I actually… " he cut me off again and said, “The author is Cyndi Thomason." 

And with that, my big fat ego deflated as fast as a balloon that you let the air out of. 

Cyndi is a certified Profit First Professional who is delivering Profit First services to eCommerce providers, but, of course, she didn't write my book. Then my ego started to climb again. I realized that Profit First was no longer "me" it was now "beyond me". I realized I was just one of the cogs in the movement. And I realized the idea was now standing on its own, and I did not need to be alone in pushing it. It was clear in that moment that my intention to "eradicate entrepreneurial poverty" was something that could actually happen–because other people were carrying it, and leveraging it. 

The greatest feeling is hearing people have conversations about Profit First, seeing social media posts and chats, seeing YouTube videos about it, seeing all this chatter and conversation about the idea of Profit First without me involved or even being aware. I can't wait to see where it is next year, and the year after, and the year after that.

Solomon: Any stories that are close to your heart about folks who have benefited from Profit First?

Michalowicz: I remember a business in a remote part of Australia raising and selling a particular type of workhorse that used Profit First.

 Solomon: Those are some pretty smart workhorses–or is Profit First in fact that easy to implement?

Michalowicz: I was warned about you, Micah–and you’re welcome for that setup. Anyway, though the horses were clearly exceeding expectations, the husband and wife team who owned the business were struggling to keep it afloat. They were so overwhelmed with the financial struggle that it wasn't just crushing their business, it was doing the same for their marriage. They implemented Profit First as a last attempt in desperation... and it worked. The business for the first time ever was profitable month after month. Their marriage strengthened too. In fact, the subject line of their email was "you saved our marriage."

Another story: There’s a minor league baseball team that used Profit First to achieve profits in an industry that "can't make money." They then used The Pumpkin Plan methods and Clockwork to bring growth and efficiency. Their success is off the charts, and it is surely due to the owner and his drive... I am just proud that my books were a small part of the journey. The team is the Savannah Bananas. If you haven't heard of them, do a quick Google search. I think you will be blown away.

Solomon: And, if you don’t mind, something silly you’ve done in business and come to regret (so my entrepreneurial readers don’t have to repeat your mistake!) 

Michalowicz: Here’s one ridiculous thing I did years back: I decided to hire "salespeople who really wanted it!" So I ran interviews at 3:00 in the morning. My logic, if you can call it that, was that if a candidate had the drive, they would be there, regardless of the hour of the day. But apparently the only people up at 3:00 in the morning are drunks and one guy getting off the late-night shift at UPS, because that’s all who showed up. I learned that "rainmakers" were getting a good night’s rest, so they could make it rain during normal hours.

Solomon: You're always so generous with your advice. Any words of wisdom for my entrepreneurial readers who may not have yet cracked open one of your books? 

Michalowicz: 

1. Better is not better. Different is better. Seek ways to stand out from your competition instead of beating them. And by standing out, chances are you will beat them.

2. Take your profit first, always. The belief that profit is a year-end concept is bunk. When something comes last that means it can wait or is insignificant. Instead take a percentage of profit, immediately, from each deposit. Transfer that money into a dedicated profit account, and run your business off the remainder. It is the “pay yourself” principle applied to business.

3. The less you do the better you will be. This is all about being a specialist - serving a narrow community (niche) with a narrow offering (specialty). The less variety in the types of customers you’re serving, the more you’ll be able to be on the leading edge of the solutions that truly serve them. This is where the big money is made. 

4. Book a four-week vacation to be taken within the next 18 months. If doing this feels laughable or impossible or both, then you have a business that is in trouble. That means the business is dependent on you. But when you book it, you will find that your thoughts will immediately change from "how do I do this work?" to "who will do this work?" And that second question is what builds businesses to run on automatic. That's what you dreamed of right? Me too!

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Micah Solomon is a customer service and customer experience consultant, speaker, trainer, and training designer. Micah was recently named “the World’s #1 Customer Service Turnaround Expert” by Inc. Magazine. Reach him directly at [email protected], visit his website, or check out his new bestseller: Ignore Your Customers (and They’ll Go Away) (HarperCollins Leadership).

[Originally published in Forbes.com. The author, Micah Solomon, is a customer service consultant, best selling author, influencer, keynote speaker, and trainer in customer service, customer experience, customer service culture, and hospitality. (Here are three ways to reach Micah:email, chat, web).]