This week’s video is about what entrepreneurs need to do to reclaim their time. It comes from Mike Michalowicz’s and my Facebook Live show which is always on Wednesday’s at 12 noon EDT.
We’ll be talking about Mike’s new book and why it’s so important for you to systematize your business. Especially small business. I can promise you two things. You’ll have fun watching and you’ll learn something useful you can use in your business.
Josh: Why the book Clockwork? What is it? Why do we need to pay attention to it?
Mike: The reason I came up with Clockwork, it was the next need that my readers – people that were reaching out to me, had. The book a wrote prior to it is Profit First: Bringing Profitability to a Business. People were saying, “Now that I’m achieving profitability, which is a great relief, I don’t have the relief of time. I am working like an animal.” I think the foundation for an entrepreneur is sales. If there’s no sales coming in to an organization whatsoever, the organization will die. That’s the oxygen for the organization. Once we have profit, now is the capture of time. I think that’s the next level up this hierarchy of needs. Once we have enough sales for sustainability, we have profit which brings about perpetual existence. It can go on inevitably with sustained profit. Then, we want to re-capture time. That’s why I wrote Clockwork, is to find ways to re-capture time for the business owner.
Josh: That’s great stuff. You’re saying this in a different way for the exact stuff we’ve been talking about with people for 22 years now.
Mike: You’re saying this is rote, old established stuff [laughs]?
Josh: Well, no, no, no. It’s not so much that. It’s that nobody pays attention to it.
Mike: I know.
Josh: Especially, I think, the business owners that are most attracted to what you do are the companies with less than 25 employees.
Mike: Oh, no question. No question.
Josh: Those folks are a hot mess when it comes to running their business. The only thing I like about the E-myth, there’s only one thing I like in the E-myth and that is Gerber’s statement that business owners are typically technicians who have had an entrepreneurial cramp. It is a great quote because it’s so true.
Mike: I agree fully. I had dinner with Michael— this goes back about five years ago. I challenged him around E-myth. I said, “Listen, E-myth is a fabulous book but the one challenge I have is that it comes across– he doesn’t even say this, but it comes across it’s almost like it’s a switch. Like that famous saying, “Don’t work in the business, work on the business.” I think that’s how entrepreneurs see is that one day – one day, we’re going to stop this manic working inside of our business. Now, we’re going to be an owner of the business and it will all be strategic work, but the reality is it’s a throttle. It’s a throttle.
And so, that’s why I tried teaching in Clockwork is how to throttle through this transition of being that technician, working in the business relentlessly and becoming a true entrepreneur which is a person that allocates resources and people to get the work done. An entrepreneur is someone who sees a vision and outcome they want to achieve and then works and leverages other people, other resources to actually get the work done. They’re not the ones doing the work. That’s the fallacy that so many small business entrepreneurs have. They feel they need to do the work. And that becomes a self-fulfilling prophecy. They prove that they need do the work because “no one can do it as well as me.” They work their butts off. They work harder and harder and say, “Well, the business is growing because of my hard work, I need to work even more.” And they stay stuck in this trap of working in the business until the business ultimately fails.
Josh: There’s a point, they will never get their businesses past 25 employees if that’s their belief system.
Mike: They won’t get past three employees.
Josh: Now, look, I’ve seen a bunch of businesses built to 15 or 25 employees where the owner has a bunch of helpers.
Mike: Oh, I agree. Many businesses, I think around 95% to 98% of small businesses have than three employees and the owner is always flopping between “I need to do everything myself” to “For God’s sake, I just need to hire some people to do this. I’ll make decisions for them” and then back to “I’ll just do it myself.” They keep flip-flopping for the entirety of the business.
Josh: Right. Of the 28 million businesses in the United States, 22 million have no employees.
Mike: Oh, yeah. There you go. Yeah.
Josh: Yeah. It’s an unbelievable number. I always find this really interesting. Here’s where I find – and I call, what you’re talking about, operational irrelevance where the owner becomes operationally irrelevant in the day-to-day operations of business and I find there’s a couple of roadblocks that get in their way. I just want to bounce these off you. One is, the owner will not tolerate mistakes by anybody but themselves.
Mike: Right. Isn’t that funny?
Josh: Yeah. Well, it’s really true. And, two, they don’t trust their employees.
Josh: Have you read the book The Trust Equation by Charles Green and–?
Mike: I actually have not.
Josh: Oh, it’s a great book. In there, there’s this formula which is the whole book as far as I’m concerned, which is reliability + competence + intimacy / self-interest tells you how much trust somebody else is going to have for you.
Mike: Oh, yeah.
Josh: And it also tells you how much trust you have in others. Where I see business owners falling down on the trust factor is they have a poor belief in competence in those they delegate to. The truth is most of these owners, when they first learn how to delegate, they don’t delegate, they abdicate.
Mike: Oh, my God, yeah. And myself, the king abdicator. I’ll tell you how frustrating it was for me. I hired an employee to do something. They say, “What do I need to do?” I say, “Social media – take care of our social media.” That was my abdication.
Mike: Now, they’re running. They come back to me and the work is, according to me, crap. And they said, “Well, what did I do wrong?” I said, “Well, you didn’t do what we needed done.” They said, “Well, what do we need done?” I’m like, “Social media.” Right? [laughs] I’m not giving them the explicit instruction. I’m not even giving them — is it called complicit instruction? I’m not even giving them kind of the outcomes that we’re looking to achieve. I’m just saying the one edict but it’s all in my head. I believe that what we need to do is extract that.