¶ Defining Success, Role of Failure
Welcome to the Big Success podcast , cutting edge conversations on business and personal success , as well as how to level up . Here's your host , number one business coach in the world , brad Shokers .
You're going to love today's episode because Mike just drops idea after idea , after idea after idea . There's so many little things . It's like I'm sitting here thinking , oh my God , I can cut this into a million reels because he's just dropping little notes on nuggets .
Get a pen and paper ready Now to give you a background , mike , all the books he's written , profit First , his Profit First Systems Amazing , it's used across the world . Clarkwork , his new book , all In On Teams .
He's built and sold companies , sold them out to Fortune 500 companies , sold them out to that young entrepreneur of the year but amazing teacher who has a passion for helping entrepreneurs achieve their success . Let's dive in and talk success with Mike . So , mike , first question what is success in your mind ? How do you define it ?
I think success is being joyful in our experience in life , and so to me in part , is achieving goals I've set for myself . That I think will bring that joy . It's funny I thought back in the day success will translate directly to money , and I no longer believe that .
I believe that I do have certain lifestyle standards or something that I want to achieve and that money is a component to it . But at the end of the day , if I had a successful day , do I feel joyful and satisfied Ultimately ? Ultimately , the biggest measurement I've noticed for myself is a measurement of my impact on others .
Did I put my best out there that was of service to other folks and that honestly feels like the biggest success of all for me ?
Yeah , look , I go back to that early days thing because there's a lot of young people on the podcast and they're in that mindset and they're like well , it's easy for you to think about joy , You've already made the money type thing . How did you transition from the money thing to the joy thing ? What led to that ?
I found there's a certain point . So I was the greed is good guy . You know , making money gives me joy , man , I'm going to make all of it .
Let's read the title of everyone on Mike's books and see if he likes money Profit first yeah , exactly so .
Money is a necessity to support the impact you can have in the world and a lifestyle you want to achieve . I do know this . The lack of money is problematic and I have experienced that deeply when I didn't have money . I needed money to support a basic lifestyle .
So unless you achieve a basic lifestyle but I've also have experienced far more than the money necessary for a basic , comfortable lifestyle and found that the joy factor starts to fade away .
It then becomes oh , it's about having impact on others , oh , money is a source for impact and when you've impact on others , a positive impact on others , more money will come through that , when structured properly to support more impact , and becomes this kind of perpetual motion machine .
So I agree , there's a basic level you need to achieve , but at least for me , it wasn't millions or billions which I thought it would be . It was actually a much lower level before I shifted to . Success is impact .
Yeah , it's kind of crazy because , like just here in the US you've got I think it's 82% of people will never make more than at this stage , not making more than 100% a 100 grand a year , and you've got 66 or 65% of families not doing more than 100 grand a year .
And I think that if people can get to 100 , 200 grand like , they're way above the average bear sort of thing . You know . So when ? When do you feel in your life you chose success ? Was it as a young man ? Was it ? Where did success become ? Yes , I'm going to be successful .
Very early on , but not in the entrepreneurial sense . I just I just felt compelled to to live a certain standard of life , and I'm not even saying quality of a house or something like that , I'm just saying like a certain standard that I a reputation almost , and that came early on . I never knew the pathway would be entrepreneurship .
In fact , I thought I'd be a career person for a large corporation . I just couldn't get the job , and if I did , I bet you I'd still be there today doing that work . The definition then changed , though . So it was about in the early stages I wanted to have impact , but I wanted to have a certain standard , and I thought money was the only vehicle .
It's over time that at least my thoughts have expanded .
Oh , it's not about that , it's about all these different aspects of life I didn't exercise , maybe 10 years ago , called the life wheel you may have done this where you rate yourself financially , rate yourself physically , health-wise , and if it's unbalanced , you're unbalanced , and I was like , wow , there's some areas I got to take care of spiritual , physical and once
I started doing that , the expansion wheel of success expanded out .
Yeah , look , I think at some point and I'd be getting your interest on this at some point we realize that chasing money doesn't lead to money . Delivering value leads to money . Delivering great service , delivering all those things .
What's the Mike formula for success , like how do you see that success happens for someone , or even how did you make it happen for you ?
So I'm going to rip one off from Pitbull , the lyricist of the century . He says ask for money , get advice . Ask for advice , get money twice . And I'm like , oh , that's it , man , that's it . Or the impact we can have comes from a desire , a thirst to learn , Observe and then repackage . So all the work I do , admittedly , is nothing new Profit first .
The system is nothing new Clockwork . I've taken all these ideas . I consider myself not a great creator as much as a great curator . Then , when I think of all these ideas , I'm like OK , I'm presented in a new way that's digestible to people in a more efficient way , or whatever , and repackage it .
And that has amplified all of my , or many aspects of my success wheel , if you will . So that's what I invite people to do If you're seeking success . How can you be of great service to others by being a great gainer of knowledge , a great curator , and then repackaging that to serve people in a more efficient , better way ?
What's been your favorite way to learn and grow ? Is it mentors ? Is it books ? What's your favorite way ?
Probably my favorite is masterminding one-on-one I shouldn't say one-on-one , peer-to-peer groups . So this is where there's no guru or genius in the room . Everyone has equal say and you put a challenge on the table and then you have five or six people tackling this challenge with different perspectives .
I found that the more diverse the group is , the more diverse the backgrounds . The more diverse their religious beliefs , the more diverse everything that you actually get better ideas . I don't want eight mics in the room saying this is what we should do , because it's just confirming what I already know to be my truth , but not your truth . I want perspective .
That's always been the best for me .
If they all agree with you all the time , one of them is useless . I think that's a definite factor . That's true In your mind . What's the relationship between failure and success ? How do they work together ?
Failure sucks , but God , is it necessary for success ? It's yin and yang . Some of my biggest failures I wouldn't wish upon my worst enemy and yet in retrospect I'm like that was the most important experience of my life . I did this exercise called the lifeline . You draw your life in the highs and lows .
I noticed that many of the lows at the moment have become my biggest highs , because that became profound awareness for me , or a whole new realization . I remember the analogy someone told me the best way to help someone who smokes to stop smoking is for them to have a heart attack .
And they said the reason that's the most impactful is everyone knows that you shouldn't smoke . We all know the harms , but until you experience it yourself , do you see that you can be impacted by it yourself ? Yeah , so those proverbial heart attacks , those failures , have been so important to achieve success .
So what mindset does it take to make that a reality , though ? Because there's some people that they have the failure and then they define themselves that way . How does the mindset , how does your mind work that it leads you to success ?
I think , ultimately , for me , it came to be saying what else could this mean ? So in the moment when I have failures I collapsed a big business , I lost all our money , all those things In the moment I'm like I suck , I'm not even worthy of being on this planet .
You know , it's always like negative things , and I think , first of all , it's okay to feel that , it's okay to let that emotion roll through . At a certain point , though , we have to make a decision , saying okay , I'm done lamenting myself , there's nothing else that's going to get any value out of this . That's out .
Can I look back at this situation and say is there something to learn or gain from this ? And for me it doesn't necessarily happen like the next morning . It could be months or years later or maybe a decade or a decade . But when we start looking back at these stories , there's lessons there , and sometimes there's multiple lessons that come out over time .
So just what else could this mean ? What can I learn from this ? How can this be of service to me ? Sometimes , at least for me , I find the answers there .
Yeah , and I sometimes find it takes an outside perspective . Have you had to use outsiders to help you get out of your own head and what's your experience there ?
Yeah , I have , and that's painful sometimes because they're saying the honest truth I don't want to hear .
¶ Martyrdom, Profit First, and Recruiting
I remember once I was on a call with a mastermind . I can't remember even what the struggle was , but something didn't work out . I didn't acquire a client or something . Her name was Christina Harbridge . She stops the call . She goes hey , mike , she goes , are you done ? Being a martyr yet ? And I'm like what do you mean ?
She goes I've seen you in these situations and you simply are a martyr and it was brute . She slapped me in the face . She goes listen , I mean verbally , but she goes . You actually are getting some kind of satisfaction by saying oh , I failed again . Look at me , what was me ? She goes are you done ?
Because that's holding you back , and that's the first time I ever faced it say oh my God , I use martyrdom a lot as a tool to protect myself , but I'm not moving myself forward , I'm not serving anyone , I'm just building a nonsense story . So that was a powerful way of opening my eyes .
Got to love mastermind groups when they actually pointed out straight black .
Oh my God it was the orphan in the room and other people were afraid to say it . That's the power of diversity . Not everyone's gonna be comfortable saying their observed truth of you , and that's okay too , but if you have a diverse group , someone , it's gonna trigger them enough to raise their hand and say you're done . This is the problem .
And the rest of the group is sitting there nodding saying yep , mike , that's you , that's you . I'm like why doesn't anyone tell me this ? They're like we're telling you now , it's you . And so I've tried to scratch it off my list of go-to metrics .
You're on the Big Success podcast . We're gonna be back in just a moment . We're gonna talk about clockwork , getting your business to run without you . Profit first , and leadership and team .
Serious income . Success for you will come through Brad Sugar's scaleability event , massive business growth and understanding how you turn your business into a commercial , profitable enterprise that works for you , so that you don't have to Visit BradSugarcom to attend this program as a standalone or as part of Brad Sugar's entrepreneurial university .
And we're back . Mike , I gotta ask you wrote profit first . You talk about permanently profitable . Give me the inside track . What are the top things I gotta know to make sure profit is the thing that's happening ?
Yeah . So profit first is a cash management tool and the essence is what we need to do is set up accounts at our bank . To behavioral intercept when I speak with entrepreneurs I'll ask how do you manage your books ? Do you use your accounting system ? Do you use a spreadsheet ? And they say , well , not really .
My method is I log into my bank account and if I have money I spend it . I don't I panic , I'm like , okay , that's normal , that's what I do too . We need a system at our bank . So , profit first we set up multiple accounts where we allocate money to its intended use . It used to be $1,000 came in , I got $1,000 to spend . No more $1,000 comes in .
We're gonna move some of it to profit , some of it to pay you a salary which is different than profit taxes , so forth . Operating expenses Now you realize , for your operating expenses you don't have $1,000 at deposit . You may have $500 . And that's what you must live off of . It's the envelope system applied to business .
That's how profit first works , essentially .
You know . So when you think about that , it takes some discipline , though . What's the mindset to get to that discipline , or is there an automated way of doing that ?
Yeah , you can automate it and this is very pluggy of me . But there's a bank we work with I love . It's called Relay . It's an online banking platform . You can go to banklikemikecom . I set up a short URL . So that's my pluggy part , if you wanna check it out .
But I think everyone , every business owner , should start by doing this at your own bank , if it's easier , and do it yourself . I have a technique . I say start slow and let it then grow . Meaning start by saying one account In the profit , first deployment .
We suggest multiple accounts , the foundational five and so forth , but it can be overwhelming if you've never done anything like this before Starting today . Allocate 1% of any deposits into a brand new account called profit , because you won't have any negative impact on how you're currently operating your business .
It's 1% , but you'll see profit accumulating that 1% over time . Maybe come two or four or seven , whatever it'll grow and then you'll deploy the whole system and then you can go to banklikemikecom and set it up .
So to get great profit , though , we need great people . One of the things that I love the way you teach about recruiting and retaining , and how retaining starts right at recruiting . Tell us more about some of the things that a great business does to recruit and retain the best .
So I have invested the last five or six years researching this out and I have a brand new book coming out specifically on this technique , but I wanna share it now Is most businesses do interviewing and the results are atrocious the results of finding a well suited employee . So I said , okay , that's not working great .
We , most of us , know interviews kind of suck . What's the alternative ? There is a near trillion dollar industry that recruits differently and it's very successful . It's the sports industry . And what the sports industry does is they run camps and weekend for our business too . I'll give you an example , a personal example . I played sports in high school .
I wasn't necessarily a particularly good athlete , but I played lacrosse Well . I went to a camp , a college camp , that was teaching these 300 students to get better .
As we were being taught , a few of the kids not me , but a few were tapped on the shoulder and were brought to another field because they were the better athletes and were demonstrating skills which could be enhanced even further . Ultimately , some of those kids were tapped on the shoulder and recruited to play at that university .
The beautiful thing is the university it was called Hope Art found their two or three best players and all 300 of us got better . I ended up playing in college in part because of that camp and what I learned there . We can run a camp for our business . Everyone gets elevated and you cherry pick the few and I'll give you just a real quick business example .
Home Depot does this . Next time you see one of their build a birdhouse , workshop or whatever . It's a recruiting camp . What they do is go there with some kids . You start building a birdhouse During the experience . Hopefully you get ingratiated with Home Depot . You like them , you wanna buy from them .
Additionally , they have coaches there , home Depot employees who are watching the greatest participants , who's showing the most interest , who's helping other parents ? They will tap you on the shoulder to go to the other field and say , hey , would you ever consider working at Home Depot ? You show such a talent in this space . It's a recruiting platform . Run a camp .
Yeah , I , one of my great friends in Australia , steve Acre , has for 30 years run the best hairdressing school in Australia , purely because he has 150 hairdressing salons , and it's like how do they get a job ? Well , we have a hundred percent recruitment . If you pass , you know 100% of our students get placed in a job . It's brilliant .
It's brilliant , you know . When the mindset shift , though , between hiring and recruiting , talk to me more about that .
Yeah . So recruiting is where we are attracting an audience . Hiring is where we actually make the transaction to commitment . So a really cool Recruiting mechanism is deployed by a company called audible and I featured that in the book too . Audible is doing a thing called return ships not in the turn ships , but return ships .
They went out to a community that said if you have been laid off from work or not been active in work because of health concerns or something for an extended period over a year but want to re enter the workforce , we have a program called a return ship .
Recruiting is speaking to a community that you may be able to ultimately hire from and speaking to their specific needs . They said we're gonna Retrain you on on new professional standards and so forth . As people go through these return ship programs . Then they go into a hiring mode . They say if these people go into this program , who are best suited ?
Let's meet with them , see what they need for an offer and what we can structure . And they do it . So recruiting is community engaging a community . Hiring is selecting the right fits from that community fantastic , fantastic .
So that then leads me to another theory . Another Mykism is , like you know , stop doing , stop managing type thing .
Yeah , tell me more about that Philosophy and how business people can succeed by doing that you know , brad , when I'm on stage I'll look at an entrepreneurial group and I'll point random . I'll say the number one job you have . The number one job of entrepreneurs is not to do the job , it's to create jobs . And this comes out of statistic .
About 20 not even 17% of the population ever starts a business or builds a business , but only 20% are successful on a sustained basis . That means 20% times 17% . 3% of the population runs a healthy , consistent business . 97% of the population is looking for a good job with a good company .
So our job as business owners is to create good companies and to give the opportunity to 97% of the world who's looking for a good job with good companies . There's not enough good jobs out there . There's not enough good companies out there . You're one of them .
So your responsibility is not to do the work , it's to give the work to people who want the work .
Yeah , I , I know people With us at action coach . One of our key metrics is job creation . You know the businesses we coach . How many jobs did they create during the year is a key metric of ours . We love that . That's a big thing . So how does a business person transition from doing to managing ? What's the mindset shift they got to have ?
Yeah , so we have to learn the proper form , delegation . But most of us don't know delegation . We often revert to one of two standards it's micro management or abdication . Micro management there's a Hindu goddess named Kali Brad and , and this Hindu goddess is one figurehead with eight arms , and that's what .
I'm business .
Yeah , and that's what most businesses become . It's one person , the business owner , making all the decisions , and that's why most businesses will never have more than two , maybe three employees , because all decisions float through one spot . That's micro management .
¶ Delegation, Selling Businesses, and Scaling Up
Abdication is you assign something to someone , say just take care of this , and we come back and we're frustrated because it didn't achieve the outcome Expected , because we never defined the outcome . Proper delegation is outcome assignment . Basically , it says here's where I think we should go . Do you , my colleague , agree ?
This is where we should go , what's the reason we should achieve this and what's the way to get there ? Now you , as a corporation , will have best practices . Our job is to tell our colleague here's the best practice to get here . But you must navigate the path , even if it's not find your best practice . It's particularly if you find a new way to get there .
Just get us to the outcome . The last thing is this , and the best part about delegation , or the most important part , is when you assign an outcome and you've agreed upon it , have that employee teach the system . They then are implementing back to another colleague at the company within a few weeks of being assigned this outcome .
The reason is the best student is always the teacher . When you know that someone that's assigned with an outcome can teach it , you know they've mastered it .
Dang . We build all that . You've done it a couple of times how most business people ultimately are aiming to at some point build something they can either pass on or sell . Let's focus on the cell just for a second . What are some of the keys that you've learned in selling businesses to get a great transaction or to build something that is Sailable , at least ?
you know , the number one thing is if it needs you , it ain't sellable . It's not a high valuation because think about the transaction when I sold my companies the people acquire my company knew I didn't want to be in the business anymore to some degree , because I was selling it . I wanted some form of out .
So they're saying , okay , the guy who the company depends on is leaving . Oh , there's no value to this company . The number one determinant of a value of a company is that it does not have dependency on the owner . And then here's the irony if it has no dependency on you . I've been going , admittedly , to McDonald's pretty frequently .
When I travel , I've been asking the cashier may meet with the owner . The owner's never been at any of these McDonald's I've gone to , which makes it a very Viable acquisition target , because if I buy at McDonald's I don't have to worry about the owner . It's plug-in play .
So the number one thing is , if it depends on you , it's not necessarily sellable , at least not for a good valuation . And the irony is , if it doesn't depend on you now you have a cash ATM You're not motivated to sell , which increases the valuation further because someone really better persuade you .
The second component is proven profitability if your business what are in quarter out has sustained growing profitability on a cash basis , meaning that just a recasted accounting firm Form anyone can recast that . Enron recasted their accounting to be profitable even when they're collapsing .
But if you can show on a cash basis accumulating profit , that's another definition of a cash . Atm Increases your valuation . Those two things together is the best way to increase any businesses valuation .
You're on the Big Success podcast , Mike McCallowits . He's our guest . We're going to talk scaling up when we return .
Mike McCallowits is the entrepreneur behind three multimillion dollar companies and is the author of several business books , including Profit First , clockwork , the Pumpkin Plan and his newest book All In . To learn more about Mike McCallowits , please visit mikemcallowitscom .
And we're back . Big Success is coming your way , Mike . What's the difference between a business that does good and a business that goes great , that scales ?
Inevitably the businesses that do great . From my observation is they become a specialist in something within their business . I think of Zappos right away . Yeah , Zappos delivered shoes , and so does so many other businesses , but Zappos had a theme of delivering happiness . I think really they only did about one or two things differently , but they did it perfectly .
They would set an expectation your package of new shoes will arrive on Friday . When you order on Sunday , and then they fed extra overnight and you get on a Monday or Tuesday , you were delighted because you got something earlier than expected . It was expectation management and they became so good at it the company exploded .
Every business I see that's successful figures out something that they're going to be the world's best at and delivers on that .
So when you look at the difference between a mindset , then a company that goes for a million dollar goal , this company goes for a hundred million or a billion dollar goal . What's the difference in that business only ? You've coached a lot of people through that . What's the difference in mindset ?
Yeah . Well , the million dollar business owner often says , well , I'm a key part of this , it depends on me , and they become a crutch for the business . The biggest mistake I see , brad , is these businesses owners say well , I'm a free resource . The second you see yourself as a free resource .
You've put a crutch into the business , a artificial dependency that will never free the business from that . You are not a free resource . You are an employee just like everyone else . You just happen to also own the company , but the company must be able to pay you accordingly .
These hundred million dollar companies simply say how do I serve a need without me actively doing it , and how can I do it on a replicatable basis ? How can I duplicate the solution over and over again ? So the only way to properly duplicate a solution is if you have the same problem .
They focus on a specific need that has the same solution needed over and over again , and then they just put it on over speed or overdrive .
Let's dive into that replicatable just for a minute . When I see massive companies , they're not a billion dollar one location company , they're a thousand million dollar locations or that . So dive into that replicatable thing for me . What's the key factors around that ?
Yeah , the fact that Gerber talked about this in his work is every business should follow a franchise model , and so we referred to McDonald's earlier . What's so impressive about McDonald's is the exact same thing over and over , and as one location grows , it actually serves the other locations , because that awareness propagates .
Well , that's what we need to do with our business is say how do we treat this as a franchise ? If someone else was to come in and buy a location , what are the systems and processes they would need ? If there have to be a franchise , just use that franchise concept .
Yeah , so let's think about , then , allowing ourselves to think that big . All right , there's plenty of people you've met who've thought this level . What's the difference between someone who thinks at that level and someone who allows themselves to think at that hundred or billion type level ?
Right . I wonder if it's the same for you , because I see it's almost everyone . It's purpose , but big purpose . I'll show you something on my screen here . I don't know if my camera will come unplugged , but there it says eradicate entrepreneurial poverty . I'm in my office right now . I have that in my house . I have it everywhere I go .
It is a calling for me and what I did is I looked back at my life's history and there is some painful parts around business and I call it entrepreneurial poverty now where I was putting myself out one way but I was really experiencing something else and that gap of wanting to be successful and not I call it entrepreneurial poverty .
It was so painful I said to myself I will never allow that to happen to myself again or anyone else that I can come into contact with . That became a calling and that becomes very motivational for many business owners as they grow . There's a certain point where you are satiated in your financial income or the other tangible aspects you want .
I can't satiate that purpose and that's why it just keeps driving me and driving me . So I invite everyone to explore their life history , see what purpose you can reveal , deploy that through your business and then you become unstoppable , in my opinion .
Yeah , I know , with my team at Action Coach , when we wrote the vision of world abundance through business reeducation , it just became a thing . And it's like we work in co-operative with guys like you , everyone , because we all lift , you know , everyone helps lift the entrepreneurial spirit and the success . Buddy , quick , short , sharp question . Short , sharp answers .
What's the key to success on these things ? Number one health . What's key to success in health ?
Wake up early and exercise with no excuses . No one has an excuse for not working out at least five minutes per day .
Key to success on self-development .
Curiosity , my God . If you just leverage curiosity , you will constantly learn .
Key to success on goals achieving your goals .
Make them big and crazy and then break them down into smaller incremental components . This is a shoot for the stars hit , the moon approach .
Key to success on relationships .
That you will get back what you put into it . So be the first to boldly love your partner or support that relationship , and that will be reciprocated .
Key to success in having fun , enjoying life .
I found that it's truly being expressive of who I am . I love to be goofy , so when I go to my old college football games I dress up like the biggest clown . My God does that give me joy ? It tracks like-minded people . So , to be your natural self , people will revere the fact you're being that way .
Excellent
¶ Advice and Quotes on Success
, love it All right . Final question what is the best advice you ever got on success or the best quote you ever read on the subject of success ?
Me , the best quote is attributed to Oscar Wilde Be yourself . Everyone else is already taken .
Love it , Love it . Author of Profit . First Clockwork , the New Book All In , Dive In , Get To the Show Notes , Read Everything , Study Everything . Mike , thanks so much for your time today . Oh , and , by the way , share this with any of your friends who you know are up for success . I'll see you next week on the Big Success Podcast .