EP 16: Mike Michalowicz - Using Profit First to Increase Business Value

Mike Michalowicz  0:21  
Edwin, thank you so much for inviting me. 

Ed Mysogland  2:27  
You know, it's it's a delight to have you on the show. And I had read Profit First I had I had

I got introduced to you by Ray, the ray Edwards show. And it's so hard to to figure out where to start because you have such an extensive body of knowledge. But I know that the books and the things that you're doing in your practice, you know, they've all been road tested. So can you kind of give us a little high level overview of of how you got here? Because I know it hasn't always been great. Oh, no, no. And I guess that's the human journey. Right? It's probably I don't think anyone's had the perfect life. But I've been an entrepreneur for the entirety of my adult life, ever since college college actually a job for a short period. But realize I'm not suited for that, and have been an entrepreneur ever since. But it was about 11 years ago, that I had the great epiphany, it was kind of thrust upon me that even though I had built and sold Now, a couple of multimillion dollar companies, five, fortune 500 acquisition a private equity deal to I knew nothing about entrepreneurship.

Mike Michalowicz  3:35  
My journey, how I covered the tracks of kind of the struggles I had, I was never profitable running those businesses. And it was just some brutal times, tearing my hair out just dying to cover payroll. And realize I didn't know much about entrepreneurship. And I endeavored on this particular moment that I would really understand what makes an entrepreneur successful, what makes the journey simpler, and became an author to do that. So for the last 11 years, I've been a full time author devoted to small business owners to entrepreneurs. And I tried to look at every element of business to fix it. And honestly, every book I've written, whew, I know, we're gonna talk about profit first. Every book I've written, has been really nearly ruined my own struggles. I did not know how profitability worked. I thought I did. I studied all the books, I had a finance degree, but I had no clue on how profit really worked. And so I created a system for myself, implemented in my own businesses, my businesses I own for now. They're all guinea pigs of mine. I implanted and sure enough, I found a solution 11 years ago, tested it and rolled out other companies and five years ago started writing into a book and I've done the same thing with business efficiency, sales. And my newest book is is working, I think on one of the greatest dilemmas entrepreneurs have. So that's a

Uh, that's how I came in author. Well, you know, and it's a great segue because for the five books that I mentioned in the introduction, you seem to be looking at the entire lifecycle of the business. So toilet paper entrepreneur focuses on starting and keeping a business running. That's right, the Pumpkin Plan teaches you how to be a first class company. That's right clockwork teaches you to move from operator to investor. And then Profit First is about maximizing profitability. So you almost have the complete lifecycle now that this show, and what I've dedicated 30 years of my my life to is, is toward the end, and, you know, intrinsically all of your, all of your work helps business owners increase value, I think, just by virtue of of deploying what you teach, does that, but what are your What are your thoughts on valuation in the work you're doing? And how, how does this translate? So here's why I think the most valuable business in the world is one that you love so much, you would never sell it, because that becomes the prettiest girl because

I've been through two exits, and I went through one exit, and wasn't in a weak position, because I didn't need to exit. But I felt that desperation because the business wasn't functioning well. And that's when it's hard to negotiate. But another situation where the fortune 500 approached us and say, Hey, we want this, and now you become desirable. But when you really have no interest in selling,

Ed Mysogland  6:29  
you become highly valuable. But now, subcomponents, why wouldn't you want to sell? Well, if you create a cash ATM, that machine is running on automatic? Why would you ever want to sell it because it's making money for you? And that's becomes very valuable business? If it gives you joy, and it gives you satisfaction in life? Well, why would you ever want to get rid of it, that brings more value. So I think if you want to have an extraordinary exit, just create a business that's extraordinary for you, that you love every component of it, and that will position you super well. And that was funny, I was at a conference.

Mike Michalowicz  7:04  
It's called gathering of Titans. Honestly, between me and us, sometimes it's like gathering of egos. But it's, it's you know, there's some really successful businesses. And there's household name businesses in there. And I joined this conference 15 years ago, to invite only 100 people that go have been going for 1516 years now. And we had a VC come in once. And he's talked about selling. And he says, Who hears sold a business. And these are some of your household names, maybe 20% of hands went up. And that is the odd scenario. You know, if you ask 100 entrepreneurs random off the street who sold the business, I bet you half of a hand goes up when alligator claw like most businesses will never sell. So we shouldn't have this pipe dream that if we build it, they will come. We should build it. So we wanted to come there every single day. And that way, if that potential inevitability comes that you can't sell your business. Well, congratulations, you've built it around what brings you joy and brings you a cash ATM anyway, so you're golden. Yeah, but to have this kind of pipe dream that you'll sell a business. And it'd be in this desperate mode. That's super dangerous.

Ed Mysogland  8:14  
Yeah. And the statistics are dismal. I mean, it's it's 25 30% success ratio of actually being able to sell the business. And that's what we always we teach, you know, holding on to the business, that's an exit strategy. And that's what I think the wonderful things that you you're teaching in your books, is build it for yourself. And yeah, somebody will view it as a valuable asset, when you go to exit it, you know, but at the end of the day, that's your business, you design it the way you want, and let the chips fall where they may, but just do it on a conscious level as opposed to letting the market dictate your value, you should be able to identify the owners value so to speak, you know,

you know, this desperation, me another word, but this may be overwhelming desire is a better word to sell a business often reverts to shortcuts and ignoring business fundamental. When I was wanting to sell a business, I went to this mode of like, Wow, we got to, we got to pump this thing up, we got to get some real sales rolling in, because we gotta show a sales trajectory to prove a trend. And, you know, they're gonna look at our bottom line, so we better cut costs, and let's go bare bones. And so now I have a business that is trying to grow aggressively, but I'm cutting down the infrastructure as I'm trying to build up a sales number, which puts us in a real precarious position. sophisticated investors. Actually any investor because they're spending their own money, it's gonna be probably pretty cautious. When they see that in the last year before selling the business. You've gone for this sales trajectory and growth and you're cutting costs. They know the game you're playing. These people aren't stupid, and they know that they're buying another The business, I think one of the craziest risky strategies that owners take is carrying the business on their back. You see us with small business, you know, the sub $10 million businesses, the owner does everything the entire businesses in their head, they work ridiculous hours, they can answer any situation, and are the superheroes swooping in to save the business yet again, as the worst valued business ever, I do not want to buy a business that has any dependency on the owner. Because the day I buy if that owner is sick, or decides not to show up, I'm screwed. So the value isn't a business that's truly turnkey, that the the owner is, is just the owner. When I go, this has been a research project of mine recently, I'll probably include this in a future book. I admittedly go to McDonald's when I travel, and I'm not proud of that fact. But it is awfully convenient. But I started this research products will project when I go to McDonald's, I'll ask the cashier, I'll say, Hey, man, speak with the owner briefly. I'm impressed by your operations want to have a conversation with them? I have. I've done over 100 times, I've yet to have one single visit, where the cashier says, Oh, hey, let me grab the owner. The owner is not in that glorified closet. They call it an office, that's the store manager. The owner is not flipping burgers or cooking fries, and they're not running the cash register. I went to one cashier, and I said, did they speak with the owner? They said, I don't I don't know who the owner is. I went to another one once he said, Oh yeah, I met the owner two months ago, they came in to pick up the money. Like that's the job of an owner is to create a system that's so tight, that it has no dependency on them. And kudos to McDonald's as a franchise model. The system has been created and you can buy into the system. But we should all aspire to have a business where our only responsibility is to come in and pick up the money. That is a very valuable business.

Yeah, you know, the funny thing is that when it's in, it's not funny, and it is the challenge that every business owner owner faces. And I, I've received a number of emails because I don't want to minimize this. But some of the guests have said, you know, this is what you need to do. And their response is, okay, I get it. How am I supposed to not be the owner? How do I, you know, how do I get through that valley from owner to investor and an overseer? So how do you do that?

Mike Michalowicz  12:24  
Yeah, so I devoted a book this process a clockwork right. Sometimes design your business run itself, I will tell you the path, but I also tell you is not a switch. I met with my author hero. About three years ago, we shared a mainstage in Mexico. His name is Michael Gerber. He wrote the book E Myth. And he shares a simple concept don't work in the business work on the business. And I sat down with him. I said, Michael, your your book is the authority read on systems by so there's one problem that I think I have had, and I think my readers have with this concept of on end is that I thought it was a switch. I thought if I worked in my business long enough and hard enough, one day, I could just step out of it to finally be working that way. And I we had a discussion on this. But really what the conclusion is, it's a throttle, you extract yourself from the business. And in fact, there's a terminology that we often uses entrepreneurs saying that we have a parent child relationship, I am the parent of my business, my business is the child, I will nurture it and care for it and grow it and a certain point of its own legs under itself, and they will come back and return to me it will serve me and I call bullshit on that term. I don't think as a parent child relationship, I think we are conjoined twins with our business. And, you know, we share critical organs, our veins and arteries are connected, we share a heart we share a soul. And therefore the separation of the owner from their business is often a very careful, careful surgical process, just like conjoined twins, you don't do this and just kind of separate the two, you have to be very careful not to sever arteries and critical organs, you must be very selective, surgical and focused and do this over a period of time. Well, the same is true for our business. What we need to do is first own a new title. So this is the pathway to get there. I love entrepreneurship. Every book I write about entrepreneurship, I sadly I'm starting to get a little bit of a distaste for the word or title entrepreneur. And the reason is, it's become so bastardized recently, entrepreneur has been equated to this hustle and grind mentality, which is the worst mentality in the world. hustle and grind which says, you know, you got to show up and crank every single day if you want your business to be successful. Well, that's the epitome of growing a business that carry is being carried on your back. That's the epitome of a business that is of no value because it's fully based upon the entrepreneur sweat. Now, I understand the sentiment of hustle and grind. It doesn't it's this is not an easy job. You have to work for it. But the goal is to be very smart about it not to be muscle your way through business growth, it is to be very tactical around this. And so I believe that what we need to do is choreograph the resources around us organize our people, the systems, we have our clients, even our vendors, to move us toward a common outcome. That's our vision for our business. So it is much more of a strategic role as opposed to a muscle role. So to do this, we need to change that title. So this is the first step. For God's sake, stop calling yourself an entrepreneur. And I've done this recently, this was a it's hard to do. But the next time you're at a, you know, a dinner party or talking with from friends that don't know you, and so well yet and say, what do you do for a living? Please don't say you're an entrepreneur, because that translates internally to I worked my tail off. I actually say I'm a shareholder. So when people say, what do you do say I'm a shareholder of for small businesses? And they say, Well, what does that mean? And now as a well, you know, a shareholder, just like, if you own public stock, that means I render a vote in my business, I dictate it as high in direction, but I don't work for the business, I manage the business. So I say I'm a shareholder, that puts me in the mentality of acting like a shareholder, giving a strategic direction, voting for maybe even sitting on the board, but not doing the work. Now, I'm not saying tomorrow, you're not gonna do any work. But at least you guys are owners mentality, a micro business needs, all the resources you can get, and you may be the resource, but realize you are serving a temporary role. Your role is to be acting like a shareholder, first and foremost, and to fill that role, as long as it's healthy for the business by hiring other people and putting other people in that position. So the goal is, again, this, that's a very overarching simple thing you can do, Amelie, but I'll have a major mind shift for you. I found extracting ourselves from a business that we're ingrained in can be done for most businesses, and under two years, maybe a year and a half. Most businesses, we can extract ourselves out. And as we do this, we will rely more and more on the systemization of the business. Just like McDonald's isn't anything else. One last thing that just came to mind, I want to share. I've interviewed now hundreds of entrepreneurs that have gone from doing work to extract themselves. And one of my favorites is this guy, Mike adularia. He ran a electric electrician ran this electrical contracting company, which he sold last year for $28 million dollars, cash on the barrelhead. And he started off in one van. And I said what was one of the most strategic things you did now? He started by working in the business. He said, I changed questions. One day, I woke up after working another 12 hour day installing electrical panels and lights and stuff. And he said, instead of asking how am I gonna get the work done tomorrow, I'm gonna ask who is gonna get the work done tomorrow. And it started for him to dis shift of, of, of empowering a labor force start off with part time apprentices and so forth. But he very quickly started to think of who's gonna do the work. The second strategic thing that Mike did was, he said, as he started to grow his shop, and now he had like 20 contractors, or 20 employees and 40 had hundreds, when he sold the company. He made the strategic decision of not having an office at his office, he says, I'm never gonna work from there. Because every day that I'm at the office, I am, I'm the guy that they can go to and ask a question, and I have a sense of obligation to answer it. So I became this kind of work Knowledge Base, where people come to me as ask questions question, because the reliance on Me remained, just inside me actually, plugging in the outlets, I was giving people a direction on how to do this. So he said that was Pratt trap. So I no longer had an office here. And they became self reliant. And those two elements moved him down this pathway to a business that ran himself. And business, everyone self says, you know, is his storytelling is is a very valuable business.

Ed Mysogland  18:48  
And I think that one of the challenges is fear, you know, that it's, I think a business owner can get their arms around, around the concept that this is what I need to do, but the fear associated with doing it, or I'm going to lose income, or I can't, you know, I can't see that far that this will benefit me. I mean, you have any thoughts on our Have you ever coached or consulted with folks, you know, this just got to get over this hump. So the first step is, like you said, you know, just just do one thing. Well, okay. How do you see how do you see past that?

Yeah. So first of all, really what that's rooted in. So I am a amateur. That's even the right word, researcher on behavioral psychology, it is a passion of mine, on how our mind operates, and we have this cognitive bias. It's called primacy effect. And what the primacy effect is, is that when something is immediate in front of us, we put more value in than when it's far distance away. Maybe not a good example, but if I put a lollipop in front of you, and you put in your hand, or I have one that's two blocks down the road, and I tell you sitting there, you're more likely to eat the one that's in your hand because it's easily accessible. but probably a better example is money. If I say I can give you right now, I will put, you know $5,000 in your hand, or you're willing to wait a year, I can give you $10,000 5000 hours cash right now in your hand, no questions asked. Or if you're willing to wait a year, I'll give you $10,000, most people will revert to the $5,000. When in fact, if I gave you $6,000 Next year, that is way more valuable than 5000. Today based on current interest rates, so 10,000 is an absurd offer. It's the better choice, but are the primacy effects as a burden hand is worth two in the bush. And so we're very oriented toward this immediate gain. So when it comes to work, we say if I simply take this one action today of answering the questions my employees have doing the work myself, it's just one day, I will get more gained from it, I make more money if I just do this just today. But the thing is, you'll do just tomorrow, and just the day after and it becomes a Groundhog's Day, we start repeating the same decision making, I'll tell you two ways get past this. One way is to look at your history. And if you have been in the mentality that if I just grind it out for a day, that my business will finally grow, how ask yourself how long honestly, if you've been grinding it out, and if you've been grinding it for more than a year, you've proven you've proven that you can grow a business by grinding if you're still grinding, because that shift in a year, you should be able to resolve itself. So your history will prove it. The second thing is to do a compression of rewards. And so I teach us in profit first. I know that if I tell myself Mike just muted myself now Mike, you gotta wait 10 years, and there's gonna be a million dollar check waiting for you is actually so far out, that is hard to believe. And I can't take actions immediately. I also know if I say my here to get 10,000 hours in hand today. But we're done that that is really damaging. So what I do is I stage or compress the time. So I say Listen, $7 million, out 10 years from now on the stage rewards. So every quarter, I'm gonna give you a portion of that reward. And I'm going to give you growing momentum. So it's a little bit complex, but it's how it works with Profit First, because it's simple. My business collects its profit. First, every time revenue comes into my business, we merely take our profit, cash profit, reserved away, so I'm killing profit all the time. That's the mentality of the profit first system is the pay yourself first system simply applied to business, now of profit accumulation account, every quarter, I go into that account and take a portion of it. So I'm rewarding myself quarterly. But I don't take all the profit by make sure that the business is based on his trend position that the next quarter the profit will be bigger. And I've done this system for myself now for 11 years. And the very first time I took profit for my business, it was $8 Which by the way was my probably the most exciting profit disruption I ever took in my life. You have small businesses take quarterly profit distributions, I still got $8 in cash, I made sure the bank teller didn't all singles, I felt like I had a wad. And then I went to Starbucks and spent it. But then I also knew I had more than $8 saved up in my profit account for the next quarter. And I'd even contributed to it well, next quarter came out. And the money was about $16, which I do a comparative my hay last quarter, only 90 days ago is eight, I got 16 Well, that became 32. And it kind of kind of this doubling effect for a period time, I'm not going to share just because I think it's it's personal information, the profitability is extraordinary. And the next one as of As of recording day is less than 30 days away, I take more profit out than I ever have in my life. And it is substantial. And the next quarter already is positioned to be more than that. So what I've done is instead of requiring myself to have to defer the benefit for so long, that I'm actually disciplining myself in a negative way, you know, anticipating anticipating, I'm giving myself this trickle effect that's growing. And every time we get more and more excited. So that's this compression of time, where you're kind of dripping out rewards to yourself, and it builds this positive behavior toward what you want to achieve.

Yeah, that's, that's interesting. And And the funny thing is, we're not when I look at the the formula, so you have the typical formula sales, less expenses, equal profit versus the methodology today, which is sales, less profit equals expenses. So when I'm looking at it from a value standpoint, and as we're positioning from a sale standpoint, we're looking at multiples toward your earnings. Okay, so So you have your earnings multiple, but where you get your biggest bang is in the operating expenses, where you start, essentially de risking the company, and I'm trying to and what I'm trying to reconcile because I know we're running up against some time constraint is how, through this methodology that you are, either intentionally or unintentionally, de risking the company so you're not only improving your value with your means that is increasing, but you're also de risking the company. Because you're you're more deliberate in basing your operating expenses. That makes sense.

Mike Michalowicz  25:09  
Yeah. And you're and you're introducing efficiencies. So there's this fascinating trickle down effect. Let me give you some numbers. First of tobacco I'm about to share. So Profit First, I introduced the book, five years ago concept I developed 11 years ago, is to book five years ago, started an organization of accountants, bookkeepers that actually are out there supporting businesses in this process. As of today, we have over 150,000 businesses globally that have implemented Profit First, are trending toward to over 200,000 By the end of 2019. And we have 3000 documented case studies on the Profit First process. Here's the fascinating things we found from all this research and experience. Now, when a business takes his Profit First, it forces the business to channel round the things that make profitability. So you take your Profit First, there's less money to spend on expenses. So you have to cut expenses de risking the business, you have to focus on the stuff that bring true value. So it's not arbitrary anymore, used to be $100 came in, I would say, I have 100 hours spend, hey, let's do this Facebook ads, everyone else is doing it. But now 100 Rs comes in, I'm taking a predetermined percentage of profit, and allocate mine to other purposes, I realize the true operating spend I have is not $100, it may be $40. Now I'm like, Well, I don't have enough money for that Facebook. So you start cutting costs, but you start becoming selective in what costs have a true ROI. If I spend something here, am I guaranteed to return so that's part of it. The second part too is these businesses realize over and over again, that when you take your Profit First, you have to run the business more efficiently to maintain the profit that you already took. So build an efficiency. And the ultimate way to achieve efficiency is through repeatability. repeatability is where you serve the same lesson, if I had one client, ever, that asked for the exact same thing, every time and the problems were exactly the same every time, I would know how to solve it very quickly, and I could become so efficient at it. So that should be our goal. Now, it's not realistic to have a single client, but we can clone clients. That's called niche specialization. So businesses that take profit first have to feel efficiency, they start finding that if they focus on a type of client, that they have repeating problems, and therefore they need a smaller set of solutions, and a specialization to solve it. And they become more masterful the process because they repeat the same process kind of go heart surgeon focuses on just heart surgery. He's not he's not doing you know work on your foot or on your brain. That doctor she's just working on your heart. And, and the consumer, the more heart surgeries successfully a person does is willing to pay more. I don't want a heart surgeon says hey, I've never done this before. This is my first attempt, as you call it that I want heart surgeon says I've done 10,000 These operations, and all successfully. Are you in I'm like, yeah, and I'll pay premium for that shoe for our business too. When we specialize because we've taken our profit first become very efficient. Clients will start paying a premium because we are the proven solution provider.

Ed Mysogland  28:04  
totally get that. No. I mean, that is exactly it that and the funny thing is, you get you get double bang for the buck. I mean, you it's one thing to have earnings, but when you can increase your multiple as a result of less risk. Oh, my goodness. I mean, that's the best of both worlds.

Yeah, and there's no question. You know, a lot of valuations are different approaches, they'll look at EBIT da, and do a multiple of that some do it on revenue. But most Neva, what I found is business data Profit First, build one of the most important assets actually the most important asset in the world, which is cash in the bank, you'll look at Apple, I think they have 5 billion of cash that gives you such power of flexibility to grasp opportunity. So you go into a sales situation, you're sitting on tons of cash, but you're in a position of strength, don't need to sell it. You're your own bank, and it's proven now to the acquirer that you have a cash creation system. So they'll give you a multiple of EBITA plus assets. So it really positions you for high valuation. Totally agree.

So, a couple more questions. Do you think today's business owners are more interested in lifestyle or legacy?

Here's the crazy thing I actually hope more are interested in lifestyle but I gotta define lifestyle. I, my mentality, you know was was the greed is good to the Wall Street shows, again, that movie Wall Street where you grow, grow, grow and drive around and expensive car. That's what I aspire to originally, and then when I lost all my money had a reset in life. I found that that wasn't what lifestyle is, to me. Lifestyle equates to joy. Like I just want to be happy and accumulation of wealth. I've been on both sides. I've been totally broke. I've been very wealthy. And I'll tell you being very wealthy is better than being totally broke. I can attest to that. But it's only Eat an asset when you're in a joyous state, you can be a miserable, you can be living a miserable life and make tons of money, your life will not become better. In fact, I found money is an amplifier of your state. So if you're miserable, actually more money can bring more misery, you can just research on these lottery winners of people that are at a very difficult life. And then they felt miserable in their life, they made money and actually amplified problems for them. So lifestyle, I think, is joy. And I see more entrepreneurs going to business, not to make tons of money, but are making a business that brings them internal satisfaction, they can see the impact they're having, it brings them wealth, but it's rooted in joy. Interestingly, I find that is translating into legacy. Now how I'm defining legacy is that we are leaving a long lasting impact, perhaps something that can live the centuries or decades past our own existence, existence on this planet. And that's the state, I believe I'm fully in now is that I've built businesses that bring me joy, I love working. I mean, just absolutely love it. I see the impact I'm having. And I'm positioning now that when I leave this planet, be it tomorrow, or hopefully not for a while. But we'll see that there. The businesses and the work I've done can now live beyond me. So living, living joyfully puts us in a position to have a long lasting legacy, I believe.

Totally agree. Two things. First, is your next book fix this next is in process. So yeah. So what's the book about? I mean, I kind of have an idea. But yeah, when's it gonna be released?

So I am so jacked about this book, I went like, I can't tell you how I, this may be the most important book I've written to date. Readers will will tell by simply by did they love it or not. But I am so proud of this. I've pinpointed what I think is the biggest challenge facing businesses. And the biggest challenge facing entrepreneurs is that they don't know what their biggest challenge is, is identification problems. Most entrepreneurs I've studied, and I've experienced myself, focus on apparent issues, there's always something that needs to be tackled. Sometimes it's when you open your email in the morning that that prioritizes other things, it's the first person that yells the loudest, but there's always issues. And so we're in this constant fire extinguisher mode just running around. But that does not move a business forward, most businesses take two steps forward, and three steps back. And so what fix this next is, is a tool I developed to pinpoint where the next vital need is in your business that must be resolved that next big roadblock and bust through it, and then you go through this process again, to identify the next need, it's a way to really put an order of the things you need to do next. The challenge I found is with this kind of arbitrary approach to growing business is that entrepreneurs are overly reliant on instinct. And I was to I will say, I trust my gut, my gut says this, here's what I found, is our gut, our instincts are very valuable for self preservation. Like if you or I are walking down a dark alley, and our spidey sense says, This is dangerous, I'm going to kill us, please, please turn around like someone likely is to kill you. Like we are neurologically wired into ourselves, our senses trigger that and it's an extremely valuable asset. We are not we are not neurologically wired into our business, yet we behave like we are like, Oh, my instinct says this is wrong. My instinct says we're losing prospects. So we need to, you know, run those Facebook ads or whatever. But we're not neurologically wired in. And so our instincts can misfire or misdirect. What we need is some kind of validation, a way to analyze the data, some compass that can complement our instinct. And so fix this next, which to your question comes out in April 2020. The manuscripts and it's done is this big stream, mainstream publishing takes us time that this book is a compass to complement our instinct and navigate through the journey of entrepreneurship, you know,

and I'm so stoked that you're you're doing, you're doing that because, you know, the people that we consult with, either, you know, they're disappointed in the value and they say, Alright, I'm gonna go back and work on work on the business and, and most of them choose to, you know, I'm gonna go at it alone, or then they turn around, they say, you know, I screw that out, I want to sell it. So those that go back to the drawing board, you know, they, they need that roadmap, they think that they know so this is this is a real timely thing, because you know, there's so many exits that are that are going to occur in the next decade or so. That Oh, my goodness, the to help a business owner determine what they need to do to amplify that value. Oh, my gosh, that is that that's going to be a big win for them. Yeah, yeah, I hope so. I bet. So how can someone work with you. Oh,

well, thank you for let me share so I have kind of the starting point for different access points. I I've been so blessed. I do a lot of mainstage keynotes nowadays and I have coaching organizations I actually coach myself and one little surprise I do for my readership is, well once sometimes twice a year. I'll just do a blast. Some weird time, maybe three o'clock in the morning on a Sunday to saying first 50 people that respond I'm inviting you just to come to my office and we're gonna spend a day together no cost no nothing. Just get out here. And we explore all the newest research. So the starting point for all that is my website Mike McCalla. wits.com Here's the deal. No one can spell McCalla wits, my wife still struggles with it. So I have a shortcut. It's Mike motorbike.com. And the little joke is my nickname in high school was Mike motorbike because of the rhyme, the ironies, I've never driven a motorcycle, I've no aspiration to. But I'm Mike motorbike. So go to Mike motorbike.com that forwards you to my website. And on there, you'll see an option says get the tools you can immediately get this chapter is my books all for free. I send this one page with all these different links to every resource I have to get you started. And and plus, you'll be on my list to get invited out. I mean, we get some time to work together one on one.

Fabulous. Well, I'll make sure that's in the in the show notes. So the last thing, the last thing I wanted to ask you is, if you had one piece of advice that you would give the listeners that would have the most immediate impact on the value of their business, what would it be?

Oh, well, if you want to create the value of your business, it is profitability. First. It's the first stage to getting you extract new from the business. That's that's goal number two. But if you want a business that other people thirst after starting your Profit First, and we laid out the system already started, but you can set this up, but with the next 60 minutes, increase the value of your business. Next 60 minutes, go to your bank, whatever bank you work with, say if you enjoy working with them, keep working with them. Step two is set up a savings account at that bank and name it profit. And then the final step is start allocating, I would start with a small percentage one or 2% of your income very small. So there's no negative impact on how you currently operate the business. If you do 1%, if $10,000 comes in today, I'm saying take 100 bucks, that's 1% and put it into this profit account. And that means you have 9900 to operate the business. There's no consequence on how you operate and how you're spending your cash. But the serious consequences now you have profit, cash profit accumulating, and you'll start establishing this habit. And when it comes to the valuation of your business, if you have a proven profitable business, I see a business that's consistently cumulant profit, you have a far far more valuable business. And literally now you know the system you can start it today. It takes little effort and you will start accumulating profit and I know because we so many businesses doing this now, over time that one person will become two or five or 15 or whatever it will grow. But start small but start today.

Right on. Well Mike, I can't tell you how much I appreciate you being so generous with your time and experiences and you know helping business owners maximize their value. And thank you for joining the defenders of business value podcast. If you're preparing your business for sale, visit legacy transition advisors.com or text exit to 35 893 to begin your journey to maximum saleable value. If you want more episodes packed with strategies to transfer maximum value in your business visit defenders of business value.com better yet subscribe now so you don't miss the future episodes.