Tropical MBA: Entrepreneurship & Founder Lifestyle

#739 The Three Horsemen Holding Your Business Back from Breakthrough with Mike Michalowicz

Jan 25, 2024

Dan interviews business author and entrepreneur Mike Michalowicz, discussing the power of prioritizing profit and specialization to scale effectively. They explore the three horsemen that keep businesses from breakthrough and the importance of finding and mastering the core function in a business. Mike also shares insights on founder trust issues and the benefits of taking a four-week vacation for personal rejuvenation and giving the business a break.

51:22

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Episode guests

Mike Michalowicz

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Quick takeaways

Implementing a profit system, like Profit First, is crucial for business success.

Business owners should aim to remove themselves from the day-to-day operations to enable growth and improved efficiency.

Identifying the best clients and high-profit products is essential for success, attracting premium customers and securing long-term profitability.

Deep dives

The Three Horsemen of Success

Most businesses are on the brink of success constantly forever. The three horsemen preventing success are: lack of a profit system, owner dependency, and failure to focus on the best clients and products.

Choose the premium provider for life-altering services

00:29

Mike’s Consulting Structure- 5 year profit share. Then returned to owner.

01:51

Introduction

3min

Focusing on Best Clients and Practical Approaches

15min

The Importance of Finding and Mastering the Core Function in Your Business

4min

Delivering on the Promise of Family Fun

2min

Founders' Trust Issues and the Superhero Syndrome

3min

The Power of Taking a Four-Week Vacation for Your Business

2min

The Pumpkin Plan: Growing Your Best Clients

22min

Dan interviews business author and entrepreneur Mike Michalowicz, delving into the transformative concepts from Mike's books — "Profit First," "The Pumpkin Plan," Clockwork", and more.

They explore the power of prioritizing profit and why most small businesses are often “crushed” by the owner. Mike discusses his concept of the Queen Bee Role and advocates for specialization to scale effectively.

Stick around as Mike reveals the three horsemen that keep businesses right on the brink of success, often never finding breakthrough.

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Show Notes

(00:00:49) Intro
(00:07:10) Take profit first and hide it from the business to force it to run within expenses
(00:13:35) Profit First case study: What happened to the Savannah Bananas
(00:17:44) The most important function in a business is the one that supports the brand promise
(00:23:53) Owners try to be the “superhero” instead of stepping back and building structure
(00:29:33) A minority of customers represent the majority of profitability
(00:30:20) Focus on becoming a specialist in your market
(00:35:50) Each stage of growth requres different levels of management and leadership
(00:38:03) Over-selling can lead to organizational death
(00:41:50) Three common causes of businesses not achieving success

Links:

Past guests on TMBA include Cal Newport, David Heinemeier Hannson, Seth Godin, Ricardo Semler, Noah Kagan, Rob Walling, Jay Clouse, Einar Vollset, Sam Dogan, Gino Wickam, James Clear, Jodie Cook, Mark Webster, Steph Smith, Taylor Pearson, Tommy Griffith, Justin Tan, Matt Gartland, Travis Jamison, Ayman Al-Abdullah, Tynan, Lucy Bella Simkins, Brian Balfour, Nick Huber, Dana Lindahl, Anthony Fasano, Adam Palmeter, Carrie & Dave McKeegan, Mike Michalowicz

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Business Basics: Revenue Durability, “Small” Goals, & High-Leverage Meetings

Non-Obvious Ways to Grow Your Business + Favorite Moments of 2023

End-of-Year Brainstorming, Goal-Setting, and a Mexico Meltdown