Eradicate Entrepreneurial Poverty
What's so likable about Mike is he tells "our" story unabashedly - the story of the fool's journey we entrepreneurs embark on. Big dreamers and victims of incredible highs and decimating lows, Mike tells the story of how he crashed and burned - losing everything, and the humility of his young daughter bringing her piggy bank out to help save the family. Ouch...
"The most afflicted community for depression is entrepreneurs." Mike says. I find myself nodding as he talks about his mission - to end entrepreneurial poverty starting with "Profit First." It's a brilliant system setting up your widget, service - whatever you're selling - so that you see profit FIRST from your very first sale. He employs "Parkinson's Law" where you only spend what's available. If you set up separate bank accounts to allocate your money into separate accounts, for example, "Operations," "Taxes," "Inventory" "Dividends," and "Profit," you can distribute the money so you're not mis-spending. So if your widget sells for $100, let's say $40 is how much it costs to make, then you have $60 to allocate toward your separate accounts. Gamechanger thinking for me - you'll hear my wheels turning in this interview as we touch on my company Vermont Chalky Paint and I've already started setting up my accounts this way. I asked Mike when he started to catch his stride in business and his answer had him reveal some juicy tidbits of what his next book will focus on - realizing your calling.
3 Stages of Business
Realizing your calling, seemed little more than fluff initially to me until Mike started mapping out the 3 stages of business - Survival to Shelter to Self-Actualization. I love when he breaks out business as an entity needing Oxygen (Sales) Nutrition (Profitability) Balance (Time). Once a business' basic needs are met, it can transition from Getting to GIVING. It made me eager to read his next book and re-read some parts in both Profit First and Clockwork. You definitely don't want to miss his "Profit First" podcast, he's had some wonderful guests including marketing queen Kim Walsh Phillips - (I'm a HUGE fan of hers.) she's the marketer for Shark Tank's Kevin O'Leary.
Angel Investor A-Ha Moment
I've pitched a few times to investors and until hearing Mike, I'm ashamed to say, I really didn't know what to ask for. I kept getting the advice, "get as much as you can because it'll get harder and harder to get the money later on." Or, "It's gonna take a half million MINIMUM to get you going." but I never really mapped out exactly HOW MUCH is enough? As Mike speaks, author of the "Rich Dad, Poor Dad" series Robert Kiyosaki's words were in the back of my mind - "It's not what you make, it's what you keep."
He also offers that "Angel Investors don't bet on the horse, they bet on the jockey." They want your proven track record and clarity on how this money will give them their ROI back. He offers," The best use of Angel money is to fund something that's already working."
Mike goes on to say that as a business owner, "I'd rather have a company that does $70k a year if I'm taking home $50k, than a company that does a million dollars that I'm taking home $40k!" Now you can write a business plan that's actually meaningful instead of throwing spaghetti at the wall.