May 6, 2024 • 59 mins
Gain invaluable insights from the legendary business guru, Michael E. Gerber, on the latest episode of Contractor Stories with Jim Klauck. Discover how the proven approach of the E Myth can provoke miraculous growth in your small business and why operating a franchise-like system, where you work on rather than in your business, can lead to McDonald's level of success.
Explore Gerber’s unique coaching, mentoring, and Imagineering method, learn about the Eightfold Path, a guide that can evolve your business from a company of one to a company of 1,000, and hear the inspiring success story of Ken Goodrich. This illuminating episode, perfect for both veteran and aspiring entrepreneurs, encapsulates the essence of successful entrepreneurship and highlights the necessity of clear dreams, vision, purpose, and mission.
Take a deep dive into the makings of McDonald's legendary success, learning how foundational principles and operating integrity can stimulate consistent growth and expansion. Delve into the thought-provoking conversation around Gerber’s influential book, "The E-Myth Revisited", and comprehend how a successful business is dependent not just on its products, but also on the system it operates on.
Listen to Michael Gerber’s valuable personal anecdotes and understand the profound impact of a selling system on business objectives. Learn why true dedication, passion, and love are the core elements of a good business, often described as a 'religion' by Gerber.
Finally, get inspired by the groundbreaking realization ‘The sale finds you when you practice’ from the journey of a successful entrepreneur and learn the significance of effective branding. Join us in the dreaming room and contribute your part to the mission - transforming the state of small businesses worldwide.
Get Michael Gerber's Best Selling Book - "The E Myth Revisted" on Amazon.
Contact Michael Gerber - michael@michaelegerber.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey, this is Alan Ferguson, and you are listening to Contractor Stories.
I can't explain it other than to say what you just said.
It was a light bulb moment, and that light bulb moment has transformed the lives
of literally millions of readers of my book, but more important,
(00:23):
tens of thousands of individuals who have done my book.
And that's why I say anybody who's listening to us is absolutely out of his
or her mind if they do not follow what I'm saying here, what we're talking about here.
It is so religiously profound with its impact upon the operation of any company,
(00:50):
any company doing anything whatsoever. ever.
You don't make a sale. The sale finds you when you practice.
Practice what? The settlement system.
This is what you need to say. This is how you need to say it.
This is what occurs when you do.
(01:11):
I learned that. I learned that as a young man.
I learned that as I memorized the forms that I needed to memorize in playing my music.
So I did the very same thing in my first sales job selling encyclopedias.
(01:32):
I answered an ad. I went and saw the manager.
The manager asked me, have you ever sold anything before? I said,
not really. He said, wonderful.
That's the best thing you could possibly say to me. Oh.
Music.
(02:20):
The big question is, is who is Michael E.
Gerber? My friend, Michael Gerber, joining me here on the program.
Hey, Michael, how are you?
I'm fine. How are you, Jim? I am living the dream.
Thank you so much for taking time out of your busy schedule to join me here
on the podcast and everyone else who's listening and watching today.
(02:40):
A lot of people know who you are. You are the small business guru,
they call you, the guy behind the e-myth. For those of you who don't know Michael's
face, you have seen this before.
As a matter of fact, you may have seen this. You may have seen this.
Are we up to 30 books now? Four.
34 books. And by the way, before I forget, if you are a home service professional
(03:04):
who's listening to this, Michael can actually work with you to co-author a book. Isn't that true?
It's true, provided they've applied the E-Myth to their practice.
So what would be the criteria there? There's a whole specialized conversation
to have about co-authors and who they are and what they are and what they do
(03:27):
and how they do it, et cetera, and so forth.
Someone you and I both know, Ken Goodrich from Gettle, has been part of a book
project. You want to talk a little bit about that?
Look, Ken's quite a remarkable fellow. Ben was in the business that he acquired when his father passed.
(03:48):
An HVAC contractor. And Ken then began to operate the business.
And one day, the IRS came to call and told Ken that he had some finished business to take care of.
And Ken was quite surprised because he didn't know anything about the IRS,
(04:09):
nor did really his father ever teach him about the business of HVAC, just the work.
And suddenly Ken was facing this immense expense that he had no idea was due.
A friend of his, a friend of his father's, gave Ken my book,
(04:34):
The E-Myth Revisited. You held it up.
Ken hadn't read any books on business prior to that.
But he figured I'd better read it. And he sat down and read The E-Myth Revisited.
And told me, after he became one of my co-authors, the E-Myth HVAC contractor,
(04:57):
that he read The E-Myth Revisited 37 times.
Incredible. And applied it and applied it and applied it, you might say, religiously.
Penn's company grew from nothing
to what it is today on its way to $200 million annually in revenue.
(05:19):
And he did that by applying the E-Myth Revisited, as I say, religiously,
religiously, religiously.
So Penn's an ideal.
Co-author. Ken's also becoming the co-author of The E-Myth Electrician and The
E-Myth Plumber, and he's on the way to completing his part of those books.
(05:43):
So yes, Ken's quite an unusual man.
I'm so looking forward to these subsequent books because they are great for
the people I work with every day, which are home service professionals.
You have touched so many people in all facets of small business and in all industries.
(06:07):
It's not just in the blue collar contracting world, but I spend a lot of time in this space.
And when I interview people here on the podcast, and I know you're going to
feel really good about this, Michael, but I always ask people,
what is the number one book that influenced you most?
(06:27):
And what book would you recommend to other small business owners in this home service space?
And it is always The E-Myth by Michael E. Gerber.
I mean, it is like probably 75%. Think about that. Three out of four people recommend your book.
(06:47):
And this book was first written decades ago. 1996.
(07:20):
Over and over and over again, it can change your small business.
Not only can, Jim, it will. And it absolutely does every single time.
Anybody who's read the book does the book.
And the does the book is critical because it's a formula that we've created
(07:46):
over the years, working with small businesses,
following my dream, my vision, my purpose, and my mission.
Each of which are separate and distinct from the other.
My dream in 1977, when I founded my first company, the Michael Thomas Corporation,
(08:09):
I was Michael, he was Thomas.
Our dream literally was to transform the state of small business worldwide.
Our vision was to invent the McDonald's of small business development services.
Our purpose was for every small business owner on the planet to follow the picture
(08:38):
that I just shared with you, to have a dream,
a vision, a purpose, and a mission, which were fundamental to the foundation
of our company, the Michael Thomas Corporation.
The first four of what I call the Eightfold Path.
(08:59):
And the fourth step, the mission,
was to lead them through the process to do this, again, as I said,
religiously, because it always works.
It never fails. It always works.
(09:20):
Think about that. It always works.
In a world in which 77% of all small businesses fail in their first year, get that.
Fewer than 5% of small companies started it ever survived.
(09:44):
Fewer than 5% ever survived. Oh, my goodness.
Michael, those numbers are true. Many of us know this, but why?
So if I'm getting into business now, what advice do you give me to be cautious
of? Why would I be going out of business within year one or year three or year
(10:07):
five? Because it's very likely to happen.
It's very, very simple. People start their own company to get rid of the boss.
People start their own company to become their own boss.
And the problem is they're all working for a lunatic.
In short, they're a technician suffering from an entrepreneurial seizure.
(10:32):
They start their own business, and go to work in their business to do the work they set out to do.
And that's absolutely the opposite of what they need to do.
What they need to do is to go to work on their business,
like Ray Falk did at McDonald's, and perfect the system of that business in
(11:00):
order to create a systemic availability that works in the hands of ordinary people,
not extraordinary people.
Again, just like Ray Cronk did at McDonald's.
And we see that with McDonald's and other large corporations that have developed
(11:21):
and implemented systems.
Because when you walk into a McDonald's anywhere in the world,
you're going to get a consistent product, the fries, the hamburger,
but the people behind the counter who are doing the work are not necessarily extraordinary people.
They did not start the business. They didn't create the systems.
They didn't implement the systems. They were trained on the systems and they execute them.
(11:47):
Exactly. But you said something which is very important. You said other large corporations.
You have to understand what I say to become the McDonald's of small business development services.
They say that simply because McDonald's is the most successful small business in the world.
(12:09):
For 40,000 small stores, they're franchisees.
Using the system faithfully, religiously, as I said earlier,
doing it, doing it, doing it, doing it, operating the system that is McDonald's
(12:31):
visually, emotionally,
functionally, financially.
The turnkey methodology, the business format franchise, the most successful
model for a small business ever devised.
I'll say that one more time, Jim, the business format franchise.
(12:54):
And so what I'm really saying is that every small business is a franchise or needs to be.
And if they were to approach their business, the 77% who don't make it through
the first year, as though they were a franchise,
(13:15):
the very first thing they do is to invent the business system by which that company would succeed.
Seed, lead generation, lead conversion, client fulfillment.
The three critical components of the franchise prototype.
Lead generation, lead conversion, client fulfillment.
(13:40):
Michael, would you say that in all fairness, a lot of these individuals who
maybe leave the company they're working for to start their own business,
they call themselves entrepreneurs.
Entrepreneurs, they're small business owners or maybe self-employed.
Are these self-employed small business owners, are they getting in their own
way? Of course, they're getting in their own way.
(14:03):
They're getting in their own way because they insist upon doing all the things
that need to be done in that company.
Selling it, making it, shipping it, handling the money, the books,
on and on and on and on. They drive themselves crazy.
Expecting to do what they don't know how to do because they believe they know
(14:25):
how to do the most important thing, the service that home service company delivers.
So many people want to be so involved. I think about the individual who says,
I'm going to open up a coffee shop and I'll ask why.
And it's not for business reasons per se. It's because they want to have a business
(14:46):
where they can be social and and
serve literally serve people donuts and
coffee but often those little one-off
shops will fail i find because they haven't put systems in place and they really
don't have a business they're really there to entertain people and they're not
(15:08):
approaching business the right
way would you agree they don't have a business that got a job of it, Jim.
And as they say, it's the worst job in the world. They've got a job.
They're doing it, doing it, doing it, doing it. Every single component piece
of that little puzzle they have become responsible for, but they don't know
how to do all the little pieces of that puzzle.
(15:33):
They only know how to do one or two pieces of that puzzle.
They shouldn't do that either. Get it.
What I'm saying is they've got to invent the McDonald's of whatever service
that home service business is intending to produce.
They've got to become the McDonald's of that. In short, they got to do what
(15:58):
Ray Kroc did at McDonald's.
They start their first store, but they don't work in that store.
They open two offices, their corporate office and their first store.
They work in their corporate office.
Store operates without them.
(16:18):
They should do that very simply. They have to bring the people into that store
that operates without them to do what he's designed for them to do.
All of the component pieces of that small company.
(16:39):
In the E-Myth Revisited, I describe the steps that are absolutely critical for
that small business owner to form, to forge,
to organize, to create in order for that company to work without him,
without her, were they to do what I've described, they would succeed.
(17:03):
If they fail to do what I've described, 99% of them will go out of business,
going crazy in the process.
Michael, it's really...
That simple, is it, to purchase the book and read it and read it and read it?
(17:25):
What other resources do you offer my listeners besides your books to be able to dive into the e-myth?
It's very, very simple. We mentor small business owners. It's called coaching.
Coaching is one level. Mentoring is a higher level.
(17:47):
Imagineering is the highest level. Coach, mentor, imagineer.
The process of assistance that we provide to small businesses and have since
I founded my company in 1977.
We created the first business coaching platform ever created.
(18:12):
We invented it to solve the problem.
That we're talking about here. We have worked with tens of thousands of small
business owners to walk them through the process I write about in my E-Myth
Revisited in awakening the entrepreneur within and beyond the E-Myth,
(18:35):
the evolution of an enterprise from a company of one to a company of 1,000.
So we mentor small business owners.
Another thing we do at the very, very beginning of our relationship is to teach
them in what I call the dreaming room.
(18:56):
Understand the dreaming room covers the first four steps of the Eightfold Path.
Dream, vision, purpose, mission.
The next The next four steps are the job, the practice, the business, the enterprise.
The job is your client fulfillment system. The practice is your franchise prototype,
(19:21):
lead generation, lead conversion, plus your client fulfillment system.
What I call the three-legged stool.
The practice becomes the heart of your emerging business.
A business is nothing other than up to seven turnkey practices plus a turnkey management system.
(19:46):
And once having completed the business prototype, the final step is the enterprise prototype.
And an enterprise is nothing other than up to seven turnkey businesses plus
a turnkey leadership system.
(20:07):
Step one, step two, step three, step four, step five, step six,
step seven, step eight. It's very clear.
That clarity, Jim, is absolutely and fundamentally critical to creating a successful company.
First step, second step, third step. You don't go to the third step until you
(20:28):
complete the second step.
You don't complete the second step until you completed the first step.
First, second, third, fourth, et cetera, and so forth.
The Dreaming Room invites anyone who's beginning this process to discover their
dream, their vision, their purpose, and their mission.
(20:51):
Just a quick note here, guys. I want to ask you for a favor.
My guests and I really want to bring you, the home service professional,
the best quality podcast possible.
I just have one simple request.
Would you please subscribe to this podcast right now?
In return for your favor, I promise to bring you the best of the best in the home service world.
(21:14):
Guests like Billy Stevens, Tommy Mello, Ishmael Valdez, Al Levy, and so many more.
Thank you for listening, and I promise to bring you much more just like this.
So people do get in their own way. They need to follow the steps.
Listen up, everybody. I'm going to have great resources in the show notes of
(21:36):
this podcast where you'll be able to reach out to Michael Gerber and you'll
be able to see all the different assets he has to offer you, programs,
books, and so forth, because Michael's been on a mission since 1977.
I don't know if you knew what he was getting into back then.
But he has become the world's small business guru.
(22:01):
I might be misquoting, but it's somewhere in there, right?
He's worth a listen to for sure, worth a read, and worth reaching out to.
I've known Michael for some time now. This book here is my original book.
And since then, Michael has given me some books to give away to people. Michael signed my book.
(22:24):
This is kind of yellowed, but I reference it all the time.
It's not just a one-time read. It's really a reference book.
So if you've read the book, pull it out again and reread it.
And then two weeks later, reread it. It's like anything else.
It's like when you read a book or you see a television program or a movie,
(22:47):
you're like, oh, I didn't see that the first time around.
Do it over and over again. If you don't have the book, there are resources here
in the show notes for you to get a book.
Wall Street Journal calls the E-Myth Revisited the most influential book on
business ever published.
Now, think about that. That's phenomenal. The most influential book on business ever published.
(23:13):
The Wall Street Journal. Forbes.
Eh. On and on and on and on. I don't say that to promote myself.
I say that because I'm telling every single individual who owns a company who's
listening to us right now,
(23:33):
you're absolutely insane if you don't follow the path I'm describing here.
Literally out of your mind if you fail to follow the path I'm describing here.
Because the path I'm describing here, that Jim's introducing to you here,
(23:55):
has proven itself to be the most productive small business development path ever created,
ever, among everything and anyone.
One, every coach, every mentor, every creator, every visionary,
every entrepreneur on the planet.
(24:16):
No one has created anything to even come close to what I talk about in my e-myth books.
So do it. That's all you have to do. Just do it.
And I'm telling you, your mind will be forever blown.
The old Nike slogan just,
(24:38):
Do it. It's been a long time since you wrote the original E-Myth book and revisited
and the subsequent books.
What has changed, though, in the business world today?
And, you know, we know what those changes are. A lot of it's technology.
Would you say that your books still apply today because we're still humans? Absolutely.
(25:06):
While everything has changed purportedly in business, the truth is nothing has changed.
And so effectively, what I speak about in my books is as real and as important
today, this very day, as it was the day I published them. So hear me.
(25:28):
Individuals today who start their companies today will find my books to be as
relevant to them today as they would have been had they started their company as I did in 1977. 77.
It's fundamental to the creation and operation of any business in any market
(25:54):
doing anything whatsoever.
Professional services, blue collar services makes absolutely no difference what
it is you do in your business.
Because the true product of a great growing company is the business itself, not what it sells.
(26:15):
Let me say that again. The true product of a great growing company is the business
itself, not what it sells.
Because ultimately, the end of this game.
Your business will be acquired by someone who is infused by what you do and
(26:40):
how you do it and they'll want to buy it.
And the end game for every single small business owner should be that acquisition.
Ultimately, you're going to sell your company. Ultimately,
you're going to sell your company to someone who's going to acquire your company
(27:01):
for a great deal of money because the company operates insistently, predictably,
systemically in the hands of ordinary people who produce extraordinary results.
Witness McDonald's. Hear me.
Witness McDonald's in the hands of its producing the same result in the 40,000
(27:31):
store as it did in the very first one.
Oh, my goodness.
How would you do that, Ray? And when you think about it, Ray Kroc was 52 years
old when he founded his first McDonald's store.
52. He never graduated from high school. He never went to college.
(27:55):
He was a peddler of multi-mixer malted milk machines.
He didn't even create McDonald's. The McDonald brothers did.
Ray Kroc went to find out how the McDonald brothers were using the multi-mixer
malted and moat machines, they bought in large numbers.
(28:20):
Red Croc wondered, what in the world are they doing with them?
So he went to San Bernardino to see the store,
and he stood outside the store to watch the crowds of people going up to the
store to get their bags of burgers and fries and shakes.
(28:42):
And when he got tired of watching from outside the store, he went inside the
store to ask Ask the McDowell brothers how they did what they did.
And they told him so enthusiastically about the brilliant system they created
to operate that small company.
(29:05):
And Ray was blown.
His mind was blown.
And he asked them the question, have you ever franchised this?
And they said, yes, but it didn't work.
Besides which, we love living here above the store and looking down on the store
(29:27):
and knowing what it does and how well it does it.
And Ray Kroc said, well, if you didn't want to do it, would you give me franchise rights? Do it.
And they said, let us think about it.
They thought about it, and they thought about it, and they thought about it,
and they turned around and said to Ray Kroc, yes, we will, under these conditions.
(29:53):
Ray Kroc met the conditions and said, wonderful, and went back to Des Plaines,
Illinois, to start his first store, borrowing the money to do that.
He opened his first store.
But when he opened his first store, he didn't go to work in that first store
(30:13):
like everybody else would do.
He opened a corporate office. Just imagine a corporate office of McDonald's.
It was called Ray Kroc and Another Guy, and there was the store.
And Ray Kroc would go visit the store every day and manage the store and reinvent
(30:37):
the store to perfect the store before he ever replicated the store.
And once that store system was perfected to Ray Kroc's rigid standards,
remember, religiously, religiously, religiously, he then sold his first franchise.
(31:02):
And then it began store number
one store number two store number three store
number four six 12 15 20 36
97 and on and on and on and on every single one of those stores operating with
the same integrity as store number one did and you see jim it's that word operating with integrity.
(31:33):
It's the secret underlying the success of McDonald's.
Visually, emotionally, functionally, financially, with integrity.
And that's why you'll see the 40,000-plus store countries around the world operating
with that same operating integrity.
(31:58):
And that's what made McDonald's as successful as it's been.
And that, ladies and gentlemen, is what will make you as successful as McDonald's has been.
To the degree you do, religiously, what Ray Kroc did at McDonald's.
(32:18):
And that's what we teach small business owners to do.
And if you don't do it that way, we beat you on the head. We beat you on the
head 37 times. We beat you on the head.
That's why we say, Ben Goodrich read my book, The E-Myth Revisited, 37 times.
(32:39):
Who reads a book 37 times?
Someone who's absolutely committed to follow the lesson in the book religiously.
Why? Because great business is a religion.
It's a philosophical religion. It's a spiritual religion.
(33:02):
It's a technical religion. It's a leadership religion. It's a management religion.
By religion, we mean by the heart.
And that's what Steve Jobs did at Apple. And that's what every great entrepreneur does.
(33:22):
It's a religion. It's a belief system. It's a love, a love, a love.
You got to love it if you're going to create it to work.
Michael, thank you so much for that story about Ray Kroc and McDonald's.
You've got such passion for this.
(33:43):
Question for you. How much were you influenced by Ray Kroc and McDonald's when
you put the E-Myth together?
A hundred percent. So without Ray Kroc achieving what he achieved,
we may not be having this conversation about the E-Myth today.
We wouldn't be. We would not be.
(34:03):
Interesting. I was inspired when I walked into McDonald's between my first two
clients trying to figure out what was missing in their businesses.
I knew that they didn't have a selling system. I knew that because that's why
I was calling upon the very first prospective client of mine.
(34:28):
I was referred to that client by the owner of the advertising agency who said,
you got to talk to Bob because Bob is getting my leads, the leads I send him.
But he doesn't know how to convert those leads into customers. commerce.
Would you visit with Bob and figure out what's missing?
(34:51):
And I said to the guy who referred me to Bob, Ace, that was the guy's name.
He was my brother-in-law.
Ace, I don't know anything about business. Why would I call on Bob?
He said, you know more than you think you do, Michael.
Just do it. And so I said, okay.
And Ace took me to Bob's business, introduced me to Bob, Bob said, Bob, this is Michael.
(35:17):
Guys, I'm going to take off for an hour.
Michael, meet with Bob and figure out what's wrong with Bob's business.
He's not converting the leads I send him into customers.
There's certainly some problem here, and I don't know what it is.
He took off. Bob said, hi, Michael, what do you know about my business? Nothing, Bob.
(35:40):
He looked a little discomfited. of you don't know anything about my business.
What do you know about my product? Less than that, but.
Well, you don't know anything about my business and you don't know anything
about my brother. How can you help me? I haven't a clue, Bob, but Ace figures I can.
The only thing we can do now in the hour that Ace is gone is to allow me to ask you questions.
(36:05):
And as I ask you questions, perhaps we'll figure out what's missing in your business.
And so he said, well, what's your first question? And then I began to ask Bob questions.
And the fascinating thing, the more questions I asked Bob, the more I realized
that it wasn't that I didn't know anything about business.
(36:28):
It was that Bob didn't.
Bob didn't have a selling system in his business.
And because Bob didn't have a selling system in his business,
no wonder he couldn't invert those leads into sales. And that's when I told Bob.
And Bob said, well, can you create this selling system you're talking about? I said, sure, Bob.
(36:56):
So Bob retained me as a business consultant.
To create his selling system. Now, you might ask me, Jim, so what's a selling system?
I've got a question before you go into that, though. Yes.
What were your credentials back then to be giving business advice?
(37:18):
Didn't have any credentials. That's an interesting story. Can you touch upon
that a bit and then get back to your other story?
Didn't have any credentials. I wasn't interested in business.
But Ace figured that because I was so successful at what I'd done,
I sold encyclopedias, for example.
I sold this and I sold that.
(37:40):
And he thought that I could help Bob do the very same thing.
Don't ask. I have no idea why. in
one respect i was the last person in the
world to talk to bob in another
respect i was the best person in
the world to talk to bob so yeah
(38:01):
i went there with absolutely no appreciation for
what i knew until i began to understand what bob didn't you understand the question
what's missing in this picture enabled me to open my mind and Bob's mind to
(38:23):
that question, what's missing in this picture?
Why isn't Bob converting those leads into sales?
Let's find out. Let's find out with an open mind, an open heart,
an interest to find out what the problem was.
And I didn't find you and when I found out I knew what was needed because you understand.
(38:48):
Every time I went to work selling something somebody either had a selling system
to teach me how to do that or they didn't they didn't I didn't succeed.
If they did, I did succeed because I could memorize the system,
(39:13):
the very words within the system, and do it religiously.
Get that word, religiously, emphatically, perfectly, just like my saxophone
teacher taught me how to become a great saxophone player.
He said, Michael, practice these.
(39:37):
That's all. You don't make music.
Music finds you when you practice.
Isn't that, Jim? You don't make music. Music finds you when you practice.
Yeah. You don't make a sale. The sale finds you when you practice.
(40:00):
Practice what? The supplement system.
This is what you need to say. This is how you need to say it.
This is what occurs when you do.
I learned that. I learned that as a young man.
I learned that as I memorized the forms that I needed to memorize in playing my music.
(40:24):
So I did the very same thing in my first sales job selling encyclopedias.
I answered an ad. I went in and saw the manager.
The manager asked me, have you ever sold anything before? I said,
not really. He said, wonderful.
That's the best thing you could possibly say to me.
(40:45):
So I'm going to give you this script.
It's not the whole script. It takes about 15 minutes of the whole system.
I want you to go home and I want you to memorize these first 15 minutes of words.
And I want you to come back tomorrow and repeat them to me without the script in hand.
(41:11):
Exactly like you memorized it. And I said, okay.
I went home. It's exactly the way my saxophone teacher taught me to play my horn.
And I memorized those words. And I went back the very next day and I repeated
the words to the manager.
And he said, absolutely perfect. But now I want you to hear the way I say the
(41:37):
words, the inflection I use of the words.
And he repeated the words, and they sounded completely different when he said them.
And so I mimic the way he said the words for the inflection of the words.
(41:59):
And I sounded completely different as he recorded me saying the words his way, not my way.
And as I did that, I realized something I'd never realized before.
That it sells. You don't. Get that?
(42:22):
Sells. You don't. And I learned that early on, selling encyclopedias,
going door to door, hi, et cetera, and so forth and so forth and so forth. You get it.
But because I'd learned that, because I'd practiced that chair,
I could then see what was missing in Bob's business.
(42:45):
He didn't have anything like that. And so I needed to create that for Bob.
And once I created that for Bob, and once his salespeople learned that with
Bob, everything changed in Bob's company.
But there was something also missing in his company.
(43:09):
And it wasn't until I walked into McDonald's that I saw it. I walked into McDonald's
and I had this sudden realization that I was walking into a business system.
It was a visual system. It was an emotional system.
It was a functional system. It was a financial system.
(43:32):
I saw that intuitively the very first time when I walked into McDonald's,
and I walked out immediately without buying the hamburger I'd walked in for, saying to myself,
Michael, you can do that.
You can do what you just saw. You can create the Michael Thomas Corporation's
(43:56):
visual, emotional, functional, and financial system.
You can do what you just saw in McDonald's.
And once you do it, you can teach small business owners to do it.
And once you teach small business owners to do it, you will transform the state
of small business worldwide.
(44:17):
Why it came to me michael that's
just a fantastic story because almost everybody who
coaches who writes a book who
gives advice gives it from experience
over time yours was
more of a light bulb moment and you're
(44:40):
like you know what i need to help this guy bob i'm
in mcdonald's look at this what if we applied
a system to bob's business and
to mary's business and to joe's business and to tom's business and that's pretty
much how it happened right absolutely when you said it it was a light bulb moment
(45:01):
light bulb i can't explain it i can't explain it other than to say what you just said,
it was a light bulb moment.
And that light bulb moment has transformed the lives of literally millions of readers of my book.
But more important, tens of thousands of individuals who have done my book.
(45:26):
And that's why I say anybody who's listening to us is absolutely out of his
or her mind if they do not follow what I'm saying here, what we're talking about here.
It is so religiously profound with its impact upon the operation of any company,
(45:48):
any company doing anything whatsoever.
It does that. It's astonishing. It's really magic.
But I agree with you when it comes to procedures and systems.
You said, Michael, you were so successful selling years ago for others when
(46:09):
they provided a system that you could plug into and follow.
And you were less successful when you kind of had to wing it.
You know, it's true in everything.
Think of all of the things that we consume on a regular basis.
Amazon is a huge retailer, arguably the largest retailer that we know of today.
(46:31):
Not brick and mortar, but they sell product retail from their warehouses directly to us at home.
You know they must have a plan
they must have procedures to the
nth degree and everything is
boom boom boom boom and that's why they're as big as they are they built their
(46:53):
franchise prototype selling books the very first product of amazon was books
he went to work on his company his internet-based company,
to sell books and to turn the methodology through which they did books.
(47:15):
And in the process, created what we would call his franchise prototype.
He created the system by which Amazon succeeded at doing what it set out to
do. And then what he saw is, wow, this isn't just a book business.
(47:36):
This could be any product, any product under the sun,
because there's no difference between the product provided there's no difference
in the system by which we introduce that product to the world online. mind.
(47:57):
And so he took then product number two and he proved it. He then went to product
number three and he proved it.
He then went to product number four and he proved it. It works.
I don't have to. It works. I don't have to.
Exactly the opposite of what every startup company does.
(48:21):
It's true. So many people think that they're a business owner.
Arguably, they're self-employed because they're doing all these things, right?
Doing it, doing it, doing it. All these different hats are worn by this business owner.
I contend there's a difference between a self-employed person and a business.
(48:43):
I say, you know it's a business when it can run without you for a period of time.
Someone's willing to pay you for it. And honestly, if you drop dead,
it would still run without you. Absolutely.
The difference between being self-employed and owning and operating a business is night and day.
(49:04):
So in one respect, Jim, you don't have a business.
Jim's got a job. Jim gets up every day to do his job. And without Jim,
there wouldn't be be that job.
With Jim, the job gets done.
But you can start this as a business. You don't do this as a business.
You literally do this as a job.
(49:26):
It's called Jim's podcast.
It's called Checker Pro Radio Show. And it's Checker Pro Radio Show Talk to Jim.
Hear me, 99% of every startup company is Jim's podcast.
(49:46):
Absolutely. Doing it, doing it, doing it, doing it. And that's how they start
though. In all fairness, I said, well, Amazon started. That's how they start. Yep.
That's not only how they start. That's how they finish Jim.
Because the reality also is they're not as good as Jim doing what they do.
And because they're not as good as Jim doing what they do, it fails.
(50:10):
But for me, if they were as good as Jim doing what they do, it would ultimately
also come face-to-face with an inevitable problem,
and that's the problem of scale.
The problem of growth, because there's only so much Jim can do to grow unless
(50:36):
Jim's willing to work his tail off doing everything that needs to be done in Jim's job.
But doing it, doing it, doing it, doing it. If Jim don't go, it don't go.
If Jim don't get up, it don't get up.
If Jim don't do it, it don't do it. And the day Jim's sick.
(51:00):
There is no podcast. I hate to use Jim as the perfect example,
Jim, but you know it to be true.
Well, sure. You can also use Taylor Swift as an example. She's a billionaire, billionaires.
But if she's sick, she can't be on stage or be in the recording studio to produce more of her product.
(51:25):
There's professional athletes. I would say most people actually either have
a job or are self-employed versus someone who owns a business that can be replicated
and traded for dollars one day.
In other words, transferred to another entity.
Because when you really think about all the people who are in this country,
(51:47):
many of them, if they don't show up to work that day, don't get paid that day. Yeah.
Well, you use Taylor Swift as an example.
And of course, Taylor Swift's business are the recordings Taylor Swift has made.
And it's those recordings that are Taylor Swift's millions and millions and
(52:12):
millions of dollars that come to her.
It's not Taylor Swift showing up at a concert that does it.
It's Taylor Swift showing up in her recordings that does it.
And that's a very large enterprise because there are a large number of individuals
(52:34):
operating Taylor Swift's company.
That is a corporation in the truest words you used when you spoke about McDonald's.
It's a very large company. She is sort of a hybrid.
If she decided to no longer do what she does, then everything that she's produced
(52:58):
over time could continue to produce income for the corporation.
But she leads it by being on stage and being in that studio.
And she's not a typical head of a company. As a matter of fact,
she probably doesn't run most of the day-to-day divisions.
She is the face of that company for sure. You have to remember,
(53:22):
we're talking about home service, and there are no Taylor Swifts in home service.
And if there are, it's the rarest of rare home service company.
It depends upon the individual to provide that home service.
And if that individual is providing that home service, ultimately,
(53:49):
the company runs out of time, energy, resources.
Imagination, application, and on and on and on and on. It just don't work.
So we're talking about an ordinary marketplace reality that depends upon consistency
(54:10):
and congruence in order for that brand to take hold in that marketplace.
And what is that brand?
And how is that brand shared and communicated and implemented systemically?
Just like McDonald's is, just like McDonald's is, and just like McDonald's has done.
(54:36):
The most successful small business in the world.
I leave the conversation with that in mind. A couple of the things.
You brought up branding, which I think is very important when you're building a business.
Do you believe it's important for the individual who started the business,
(54:59):
the founder, who's driving that business forward to some point say,
this isn't Tony's plumbing?
That's what it is today maybe we should make this a brand that has its own life without me tony.
Absolutely. Just like McDonald's had its own life without Ray Kroc.
(55:21):
Ray Kroc didn't work in the store. Ray Kroc didn't make burgers.
Ray Kroc didn't make french fries. It did.
Get that story that I just repeated to you. It did. I didn't. It did. I didn't.
I'll say it one last time. It did. I didn't.
Business has got to have a life of its own.
(55:43):
It's the brand. I'm not. It's the brand. I'm not.
That's why we speak about e-myth. It's the brand. I'm not.
And because it's the brand, it's got a way of doing what it does consistently every single time.
Michael, we've covered a lot on this podcast today.
(56:06):
What haven't we covered that you would like to end with? Go to michael at michaeliegerber.com.
Go to michael at michael e gerber dot
and we'll enroll you in the dreaming room
and when we enroll you in the dreaming room we'll
also speak to you about the opportunity to become a dreaming room facilitator
(56:26):
and for you to in fact be licensed to deliver the dreaming room and to deliver
the the dreaming room in exactly the way we do.
I have a dream, a vision, a purpose, a mission. What's an entrepreneur?
An entrepreneur is a dreamer, a thinker, a storyteller, and a leader.
(56:51):
The dreamer has a dream, the thinker has a vision, the storyteller has a purpose,
and the leader has a mission.
Once you get that experience, Mr.
And Mrs. Jones, Once you experience the dreaming Once you see the system.
Dream, to have a vision, to have a purpose, to have a mission,
(57:15):
they'll appreciate the profound reason why every small company needs to be started with a dream,
a vision, a purpose, and a mission.
And to deliver that to every small business owner on the planet will in fact
realize my dream, which was and is to transform the state of small business worldwide.
(57:41):
You get to do that. You get to do that. Contact us and we'll describe exactly
how you get to do that and what that will mean to you.
Michael, on that note, thank you so much for joining me here on the podcast today.
Delighted, Jim. Thank you for the time.
(58:03):
Just a quick note here, guys. I want to ask you for a favor.
My guests and I really want to bring you, the home service professional,
the best quality podcast possible.
I just have one simple request.
Would you please subscribe to this podcast right now?
In return for your favor, I promise to bring you the best of the best in the home service world.
(58:26):
Guests like Billy Stevens, Tommy Mello, Ishmael Valdez, Al Levy, and so many more.
Thank you for listening, and I promise to bring you much more just like this.
Music.
Hey, this is Alan Ferguson, and you are listening to Contractor Stories.
I can't explain it other than to say what you just said.
It was a light bulb moment, and that light bulb moment has transformed the lives
of literally millions of readers of my book, but more important,
(00:23):
tens of thousands of individuals who have done my book.
And that's why I say anybody who's listening to us is absolutely out of his
or her mind if they do not follow what I'm saying here, what we're talking about here.
It is so religiously profound with its impact upon the operation of any company,
(00:50):
any company doing anything whatsoever. ever.
You don't make a sale. The sale finds you when you practice.
Practice what? The settlement system.
This is what you need to say. This is how you need to say it.
This is what occurs when you do.
(01:11):
I learned that. I learned that as a young man.
I learned that as I memorized the forms that I needed to memorize in playing my music.
So I did the very same thing in my first sales job selling encyclopedias.
(01:32):
I answered an ad. I went and saw the manager.
The manager asked me, have you ever sold anything before? I said,
not really. He said, wonderful.
That's the best thing you could possibly say to me. Oh.
Music.
(02:20):
The big question is, is who is Michael E.
Gerber? My friend, Michael Gerber, joining me here on the program.
Hey, Michael, how are you?
I'm fine. How are you, Jim? I am living the dream.
Thank you so much for taking time out of your busy schedule to join me here
on the podcast and everyone else who's listening and watching today.
(02:40):
A lot of people know who you are. You are the small business guru,
they call you, the guy behind the e-myth. For those of you who don't know Michael's
face, you have seen this before.
As a matter of fact, you may have seen this. You may have seen this.
Are we up to 30 books now? Four.
34 books. And by the way, before I forget, if you are a home service professional
(03:04):
who's listening to this, Michael can actually work with you to co-author a book. Isn't that true?
It's true, provided they've applied the E-Myth to their practice.
So what would be the criteria there? There's a whole specialized conversation
to have about co-authors and who they are and what they are and what they do
(03:27):
and how they do it, et cetera, and so forth.
Someone you and I both know, Ken Goodrich from Gettle, has been part of a book
project. You want to talk a little bit about that?
Look, Ken's quite a remarkable fellow. Ben was in the business that he acquired when his father passed.
(03:48):
An HVAC contractor. And Ken then began to operate the business.
And one day, the IRS came to call and told Ken that he had some finished business to take care of.
And Ken was quite surprised because he didn't know anything about the IRS,
(04:09):
nor did really his father ever teach him about the business of HVAC, just the work.
And suddenly Ken was facing this immense expense that he had no idea was due.
A friend of his, a friend of his father's, gave Ken my book,
(04:34):
The E-Myth Revisited. You held it up.
Ken hadn't read any books on business prior to that.
But he figured I'd better read it. And he sat down and read The E-Myth Revisited.
And told me, after he became one of my co-authors, the E-Myth HVAC contractor,
(04:57):
that he read The E-Myth Revisited 37 times.
Incredible. And applied it and applied it and applied it, you might say, religiously.
Penn's company grew from nothing
to what it is today on its way to $200 million annually in revenue.
(05:19):
And he did that by applying the E-Myth Revisited, as I say, religiously,
religiously, religiously.
So Penn's an ideal.
Co-author. Ken's also becoming the co-author of The E-Myth Electrician and The
E-Myth Plumber, and he's on the way to completing his part of those books.
(05:43):
So yes, Ken's quite an unusual man.
I'm so looking forward to these subsequent books because they are great for
the people I work with every day, which are home service professionals.
You have touched so many people in all facets of small business and in all industries.
(06:07):
It's not just in the blue collar contracting world, but I spend a lot of time in this space.
And when I interview people here on the podcast, and I know you're going to
feel really good about this, Michael, but I always ask people,
what is the number one book that influenced you most?
(06:27):
And what book would you recommend to other small business owners in this home service space?
And it is always The E-Myth by Michael E. Gerber.
I mean, it is like probably 75%. Think about that. Three out of four people recommend your book.
(06:47):
And this book was first written decades ago. 1996.
(07:20):
Over and over and over again, it can change your small business.
Not only can, Jim, it will. And it absolutely does every single time.
Anybody who's read the book does the book.
And the does the book is critical because it's a formula that we've created
(07:46):
over the years, working with small businesses,
following my dream, my vision, my purpose, and my mission.
Each of which are separate and distinct from the other.
My dream in 1977, when I founded my first company, the Michael Thomas Corporation,
(08:09):
I was Michael, he was Thomas.
Our dream literally was to transform the state of small business worldwide.
Our vision was to invent the McDonald's of small business development services.
Our purpose was for every small business owner on the planet to follow the picture
(08:38):
that I just shared with you, to have a dream,
a vision, a purpose, and a mission, which were fundamental to the foundation
of our company, the Michael Thomas Corporation.
The first four of what I call the Eightfold Path.
(08:59):
And the fourth step, the mission,
was to lead them through the process to do this, again, as I said,
religiously, because it always works.
It never fails. It always works.
(09:20):
Think about that. It always works.
In a world in which 77% of all small businesses fail in their first year, get that.
Fewer than 5% of small companies started it ever survived.
(09:44):
Fewer than 5% ever survived. Oh, my goodness.
Michael, those numbers are true. Many of us know this, but why?
So if I'm getting into business now, what advice do you give me to be cautious
of? Why would I be going out of business within year one or year three or year
(10:07):
five? Because it's very likely to happen.
It's very, very simple. People start their own company to get rid of the boss.
People start their own company to become their own boss.
And the problem is they're all working for a lunatic.
In short, they're a technician suffering from an entrepreneurial seizure.
(10:32):
They start their own business, and go to work in their business to do the work they set out to do.
And that's absolutely the opposite of what they need to do.
What they need to do is to go to work on their business,
like Ray Falk did at McDonald's, and perfect the system of that business in
(11:00):
order to create a systemic availability that works in the hands of ordinary people,
not extraordinary people.
Again, just like Ray Cronk did at McDonald's.
And we see that with McDonald's and other large corporations that have developed
(11:21):
and implemented systems.
Because when you walk into a McDonald's anywhere in the world,
you're going to get a consistent product, the fries, the hamburger,
but the people behind the counter who are doing the work are not necessarily extraordinary people.
They did not start the business. They didn't create the systems.
They didn't implement the systems. They were trained on the systems and they execute them.
(11:47):
Exactly. But you said something which is very important. You said other large corporations.
You have to understand what I say to become the McDonald's of small business development services.
They say that simply because McDonald's is the most successful small business in the world.
(12:09):
For 40,000 small stores, they're franchisees.
Using the system faithfully, religiously, as I said earlier,
doing it, doing it, doing it, doing it, operating the system that is McDonald's
(12:31):
visually, emotionally,
functionally, financially.
The turnkey methodology, the business format franchise, the most successful
model for a small business ever devised.
I'll say that one more time, Jim, the business format franchise.
(12:54):
And so what I'm really saying is that every small business is a franchise or needs to be.
And if they were to approach their business, the 77% who don't make it through
the first year, as though they were a franchise,
(13:15):
the very first thing they do is to invent the business system by which that company would succeed.
Seed, lead generation, lead conversion, client fulfillment.
The three critical components of the franchise prototype.
Lead generation, lead conversion, client fulfillment.
(13:40):
Michael, would you say that in all fairness, a lot of these individuals who
maybe leave the company they're working for to start their own business,
they call themselves entrepreneurs.
Entrepreneurs, they're small business owners or maybe self-employed.
Are these self-employed small business owners, are they getting in their own
way? Of course, they're getting in their own way.
(14:03):
They're getting in their own way because they insist upon doing all the things
that need to be done in that company.
Selling it, making it, shipping it, handling the money, the books,
on and on and on and on. They drive themselves crazy.
Expecting to do what they don't know how to do because they believe they know
(14:25):
how to do the most important thing, the service that home service company delivers.
So many people want to be so involved. I think about the individual who says,
I'm going to open up a coffee shop and I'll ask why.
And it's not for business reasons per se. It's because they want to have a business
(14:46):
where they can be social and and
serve literally serve people donuts and
coffee but often those little one-off
shops will fail i find because they haven't put systems in place and they really
don't have a business they're really there to entertain people and they're not
(15:08):
approaching business the right
way would you agree they don't have a business that got a job of it, Jim.
And as they say, it's the worst job in the world. They've got a job.
They're doing it, doing it, doing it, doing it. Every single component piece
of that little puzzle they have become responsible for, but they don't know
how to do all the little pieces of that puzzle.
(15:33):
They only know how to do one or two pieces of that puzzle.
They shouldn't do that either. Get it.
What I'm saying is they've got to invent the McDonald's of whatever service
that home service business is intending to produce.
They've got to become the McDonald's of that. In short, they got to do what
(15:58):
Ray Kroc did at McDonald's.
They start their first store, but they don't work in that store.
They open two offices, their corporate office and their first store.
They work in their corporate office.
Store operates without them.
(16:18):
They should do that very simply. They have to bring the people into that store
that operates without them to do what he's designed for them to do.
All of the component pieces of that small company.
(16:39):
In the E-Myth Revisited, I describe the steps that are absolutely critical for
that small business owner to form, to forge,
to organize, to create in order for that company to work without him,
without her, were they to do what I've described, they would succeed.
(17:03):
If they fail to do what I've described, 99% of them will go out of business,
going crazy in the process.
Michael, it's really...
That simple, is it, to purchase the book and read it and read it and read it?
(17:25):
What other resources do you offer my listeners besides your books to be able to dive into the e-myth?
It's very, very simple. We mentor small business owners. It's called coaching.
Coaching is one level. Mentoring is a higher level.
(17:47):
Imagineering is the highest level. Coach, mentor, imagineer.
The process of assistance that we provide to small businesses and have since
I founded my company in 1977.
We created the first business coaching platform ever created.
(18:12):
We invented it to solve the problem.
That we're talking about here. We have worked with tens of thousands of small
business owners to walk them through the process I write about in my E-Myth
Revisited in awakening the entrepreneur within and beyond the E-Myth,
(18:35):
the evolution of an enterprise from a company of one to a company of 1,000.
So we mentor small business owners.
Another thing we do at the very, very beginning of our relationship is to teach
them in what I call the dreaming room.
(18:56):
Understand the dreaming room covers the first four steps of the Eightfold Path.
Dream, vision, purpose, mission.
The next The next four steps are the job, the practice, the business, the enterprise.
The job is your client fulfillment system. The practice is your franchise prototype,
(19:21):
lead generation, lead conversion, plus your client fulfillment system.
What I call the three-legged stool.
The practice becomes the heart of your emerging business.
A business is nothing other than up to seven turnkey practices plus a turnkey management system.
(19:46):
And once having completed the business prototype, the final step is the enterprise prototype.
And an enterprise is nothing other than up to seven turnkey businesses plus
a turnkey leadership system.
(20:07):
Step one, step two, step three, step four, step five, step six,
step seven, step eight. It's very clear.
That clarity, Jim, is absolutely and fundamentally critical to creating a successful company.
First step, second step, third step. You don't go to the third step until you
(20:28):
complete the second step.
You don't complete the second step until you completed the first step.
First, second, third, fourth, et cetera, and so forth.
The Dreaming Room invites anyone who's beginning this process to discover their
dream, their vision, their purpose, and their mission.
(20:51):
Just a quick note here, guys. I want to ask you for a favor.
My guests and I really want to bring you, the home service professional,
the best quality podcast possible.
I just have one simple request.
Would you please subscribe to this podcast right now?
In return for your favor, I promise to bring you the best of the best in the home service world.
(21:14):
Guests like Billy Stevens, Tommy Mello, Ishmael Valdez, Al Levy, and so many more.
Thank you for listening, and I promise to bring you much more just like this.
So people do get in their own way. They need to follow the steps.
Listen up, everybody. I'm going to have great resources in the show notes of
(21:36):
this podcast where you'll be able to reach out to Michael Gerber and you'll
be able to see all the different assets he has to offer you, programs,
books, and so forth, because Michael's been on a mission since 1977.
I don't know if you knew what he was getting into back then.
But he has become the world's small business guru.
(22:01):
I might be misquoting, but it's somewhere in there, right?
He's worth a listen to for sure, worth a read, and worth reaching out to.
I've known Michael for some time now. This book here is my original book.
And since then, Michael has given me some books to give away to people. Michael signed my book.
(22:24):
This is kind of yellowed, but I reference it all the time.
It's not just a one-time read. It's really a reference book.
So if you've read the book, pull it out again and reread it.
And then two weeks later, reread it. It's like anything else.
It's like when you read a book or you see a television program or a movie,
(22:47):
you're like, oh, I didn't see that the first time around.
Do it over and over again. If you don't have the book, there are resources here
in the show notes for you to get a book.
Wall Street Journal calls the E-Myth Revisited the most influential book on
business ever published.
Now, think about that. That's phenomenal. The most influential book on business ever published.
(23:13):
The Wall Street Journal. Forbes.
Eh. On and on and on and on. I don't say that to promote myself.
I say that because I'm telling every single individual who owns a company who's
listening to us right now,
(23:33):
you're absolutely insane if you don't follow the path I'm describing here.
Literally out of your mind if you fail to follow the path I'm describing here.
Because the path I'm describing here, that Jim's introducing to you here,
(23:55):
has proven itself to be the most productive small business development path ever created,
ever, among everything and anyone.
One, every coach, every mentor, every creator, every visionary,
every entrepreneur on the planet.
(24:16):
No one has created anything to even come close to what I talk about in my e-myth books.
So do it. That's all you have to do. Just do it.
And I'm telling you, your mind will be forever blown.
The old Nike slogan just,
(24:38):
Do it. It's been a long time since you wrote the original E-Myth book and revisited
and the subsequent books.
What has changed, though, in the business world today?
And, you know, we know what those changes are. A lot of it's technology.
Would you say that your books still apply today because we're still humans? Absolutely.
(25:06):
While everything has changed purportedly in business, the truth is nothing has changed.
And so effectively, what I speak about in my books is as real and as important
today, this very day, as it was the day I published them. So hear me.
(25:28):
Individuals today who start their companies today will find my books to be as
relevant to them today as they would have been had they started their company as I did in 1977. 77.
It's fundamental to the creation and operation of any business in any market
(25:54):
doing anything whatsoever.
Professional services, blue collar services makes absolutely no difference what
it is you do in your business.
Because the true product of a great growing company is the business itself, not what it sells.
(26:15):
Let me say that again. The true product of a great growing company is the business
itself, not what it sells.
Because ultimately, the end of this game.
Your business will be acquired by someone who is infused by what you do and
(26:40):
how you do it and they'll want to buy it.
And the end game for every single small business owner should be that acquisition.
Ultimately, you're going to sell your company. Ultimately,
you're going to sell your company to someone who's going to acquire your company
(27:01):
for a great deal of money because the company operates insistently, predictably,
systemically in the hands of ordinary people who produce extraordinary results.
Witness McDonald's. Hear me.
Witness McDonald's in the hands of its producing the same result in the 40,000
(27:31):
store as it did in the very first one.
Oh, my goodness.
How would you do that, Ray? And when you think about it, Ray Kroc was 52 years
old when he founded his first McDonald's store.
52. He never graduated from high school. He never went to college.
(27:55):
He was a peddler of multi-mixer malted milk machines.
He didn't even create McDonald's. The McDonald brothers did.
Ray Kroc went to find out how the McDonald brothers were using the multi-mixer
malted and moat machines, they bought in large numbers.
(28:20):
Red Croc wondered, what in the world are they doing with them?
So he went to San Bernardino to see the store,
and he stood outside the store to watch the crowds of people going up to the
store to get their bags of burgers and fries and shakes.
(28:42):
And when he got tired of watching from outside the store, he went inside the
store to ask Ask the McDowell brothers how they did what they did.
And they told him so enthusiastically about the brilliant system they created
to operate that small company.
(29:05):
And Ray was blown.
His mind was blown.
And he asked them the question, have you ever franchised this?
And they said, yes, but it didn't work.
Besides which, we love living here above the store and looking down on the store
(29:27):
and knowing what it does and how well it does it.
And Ray Kroc said, well, if you didn't want to do it, would you give me franchise rights? Do it.
And they said, let us think about it.
They thought about it, and they thought about it, and they thought about it,
and they turned around and said to Ray Kroc, yes, we will, under these conditions.
(29:53):
Ray Kroc met the conditions and said, wonderful, and went back to Des Plaines,
Illinois, to start his first store, borrowing the money to do that.
He opened his first store.
But when he opened his first store, he didn't go to work in that first store
(30:13):
like everybody else would do.
He opened a corporate office. Just imagine a corporate office of McDonald's.
It was called Ray Kroc and Another Guy, and there was the store.
And Ray Kroc would go visit the store every day and manage the store and reinvent
(30:37):
the store to perfect the store before he ever replicated the store.
And once that store system was perfected to Ray Kroc's rigid standards,
remember, religiously, religiously, religiously, he then sold his first franchise.
(31:02):
And then it began store number
one store number two store number three store
number four six 12 15 20 36
97 and on and on and on and on every single one of those stores operating with
the same integrity as store number one did and you see jim it's that word operating with integrity.
(31:33):
It's the secret underlying the success of McDonald's.
Visually, emotionally, functionally, financially, with integrity.
And that's why you'll see the 40,000-plus store countries around the world operating
with that same operating integrity.
(31:58):
And that's what made McDonald's as successful as it's been.
And that, ladies and gentlemen, is what will make you as successful as McDonald's has been.
To the degree you do, religiously, what Ray Kroc did at McDonald's.
(32:18):
And that's what we teach small business owners to do.
And if you don't do it that way, we beat you on the head. We beat you on the
head 37 times. We beat you on the head.
That's why we say, Ben Goodrich read my book, The E-Myth Revisited, 37 times.
(32:39):
Who reads a book 37 times?
Someone who's absolutely committed to follow the lesson in the book religiously.
Why? Because great business is a religion.
It's a philosophical religion. It's a spiritual religion.
(33:02):
It's a technical religion. It's a leadership religion. It's a management religion.
By religion, we mean by the heart.
And that's what Steve Jobs did at Apple. And that's what every great entrepreneur does.
(33:22):
It's a religion. It's a belief system. It's a love, a love, a love.
You got to love it if you're going to create it to work.
Michael, thank you so much for that story about Ray Kroc and McDonald's.
You've got such passion for this.
(33:43):
Question for you. How much were you influenced by Ray Kroc and McDonald's when
you put the E-Myth together?
A hundred percent. So without Ray Kroc achieving what he achieved,
we may not be having this conversation about the E-Myth today.
We wouldn't be. We would not be.
(34:03):
Interesting. I was inspired when I walked into McDonald's between my first two
clients trying to figure out what was missing in their businesses.
I knew that they didn't have a selling system. I knew that because that's why
I was calling upon the very first prospective client of mine.
(34:28):
I was referred to that client by the owner of the advertising agency who said,
you got to talk to Bob because Bob is getting my leads, the leads I send him.
But he doesn't know how to convert those leads into customers. commerce.
Would you visit with Bob and figure out what's missing?
(34:51):
And I said to the guy who referred me to Bob, Ace, that was the guy's name.
He was my brother-in-law.
Ace, I don't know anything about business. Why would I call on Bob?
He said, you know more than you think you do, Michael.
Just do it. And so I said, okay.
And Ace took me to Bob's business, introduced me to Bob, Bob said, Bob, this is Michael.
(35:17):
Guys, I'm going to take off for an hour.
Michael, meet with Bob and figure out what's wrong with Bob's business.
He's not converting the leads I send him into customers.
There's certainly some problem here, and I don't know what it is.
He took off. Bob said, hi, Michael, what do you know about my business? Nothing, Bob.
(35:40):
He looked a little discomfited. of you don't know anything about my business.
What do you know about my product? Less than that, but.
Well, you don't know anything about my business and you don't know anything
about my brother. How can you help me? I haven't a clue, Bob, but Ace figures I can.
The only thing we can do now in the hour that Ace is gone is to allow me to ask you questions.
(36:05):
And as I ask you questions, perhaps we'll figure out what's missing in your business.
And so he said, well, what's your first question? And then I began to ask Bob questions.
And the fascinating thing, the more questions I asked Bob, the more I realized
that it wasn't that I didn't know anything about business.
(36:28):
It was that Bob didn't.
Bob didn't have a selling system in his business.
And because Bob didn't have a selling system in his business,
no wonder he couldn't invert those leads into sales. And that's when I told Bob.
And Bob said, well, can you create this selling system you're talking about? I said, sure, Bob.
(36:56):
So Bob retained me as a business consultant.
To create his selling system. Now, you might ask me, Jim, so what's a selling system?
I've got a question before you go into that, though. Yes.
What were your credentials back then to be giving business advice?
(37:18):
Didn't have any credentials. That's an interesting story. Can you touch upon
that a bit and then get back to your other story?
Didn't have any credentials. I wasn't interested in business.
But Ace figured that because I was so successful at what I'd done,
I sold encyclopedias, for example.
I sold this and I sold that.
(37:40):
And he thought that I could help Bob do the very same thing.
Don't ask. I have no idea why. in
one respect i was the last person in the
world to talk to bob in another
respect i was the best person in
the world to talk to bob so yeah
(38:01):
i went there with absolutely no appreciation for
what i knew until i began to understand what bob didn't you understand the question
what's missing in this picture enabled me to open my mind and Bob's mind to
(38:23):
that question, what's missing in this picture?
Why isn't Bob converting those leads into sales?
Let's find out. Let's find out with an open mind, an open heart,
an interest to find out what the problem was.
And I didn't find you and when I found out I knew what was needed because you understand.
(38:48):
Every time I went to work selling something somebody either had a selling system
to teach me how to do that or they didn't they didn't I didn't succeed.
If they did, I did succeed because I could memorize the system,
(39:13):
the very words within the system, and do it religiously.
Get that word, religiously, emphatically, perfectly, just like my saxophone
teacher taught me how to become a great saxophone player.
He said, Michael, practice these.
(39:37):
That's all. You don't make music.
Music finds you when you practice.
Isn't that, Jim? You don't make music. Music finds you when you practice.
Yeah. You don't make a sale. The sale finds you when you practice.
(40:00):
Practice what? The supplement system.
This is what you need to say. This is how you need to say it.
This is what occurs when you do.
I learned that. I learned that as a young man.
I learned that as I memorized the forms that I needed to memorize in playing my music.
(40:24):
So I did the very same thing in my first sales job selling encyclopedias.
I answered an ad. I went in and saw the manager.
The manager asked me, have you ever sold anything before? I said,
not really. He said, wonderful.
That's the best thing you could possibly say to me.
(40:45):
So I'm going to give you this script.
It's not the whole script. It takes about 15 minutes of the whole system.
I want you to go home and I want you to memorize these first 15 minutes of words.
And I want you to come back tomorrow and repeat them to me without the script in hand.
(41:11):
Exactly like you memorized it. And I said, okay.
I went home. It's exactly the way my saxophone teacher taught me to play my horn.
And I memorized those words. And I went back the very next day and I repeated
the words to the manager.
And he said, absolutely perfect. But now I want you to hear the way I say the
(41:37):
words, the inflection I use of the words.
And he repeated the words, and they sounded completely different when he said them.
And so I mimic the way he said the words for the inflection of the words.
(41:59):
And I sounded completely different as he recorded me saying the words his way, not my way.
And as I did that, I realized something I'd never realized before.
That it sells. You don't. Get that?
(42:22):
Sells. You don't. And I learned that early on, selling encyclopedias,
going door to door, hi, et cetera, and so forth and so forth and so forth. You get it.
But because I'd learned that, because I'd practiced that chair,
I could then see what was missing in Bob's business.
(42:45):
He didn't have anything like that. And so I needed to create that for Bob.
And once I created that for Bob, and once his salespeople learned that with
Bob, everything changed in Bob's company.
But there was something also missing in his company.
(43:09):
And it wasn't until I walked into McDonald's that I saw it. I walked into McDonald's
and I had this sudden realization that I was walking into a business system.
It was a visual system. It was an emotional system.
It was a functional system. It was a financial system.
(43:32):
I saw that intuitively the very first time when I walked into McDonald's,
and I walked out immediately without buying the hamburger I'd walked in for, saying to myself,
Michael, you can do that.
You can do what you just saw. You can create the Michael Thomas Corporation's
(43:56):
visual, emotional, functional, and financial system.
You can do what you just saw in McDonald's.
And once you do it, you can teach small business owners to do it.
And once you teach small business owners to do it, you will transform the state
of small business worldwide.
(44:17):
Why it came to me michael that's
just a fantastic story because almost everybody who
coaches who writes a book who
gives advice gives it from experience
over time yours was
more of a light bulb moment and you're
(44:40):
like you know what i need to help this guy bob i'm
in mcdonald's look at this what if we applied
a system to bob's business and
to mary's business and to joe's business and to tom's business and that's pretty
much how it happened right absolutely when you said it it was a light bulb moment
(45:01):
light bulb i can't explain it i can't explain it other than to say what you just said,
it was a light bulb moment.
And that light bulb moment has transformed the lives of literally millions of readers of my book.
But more important, tens of thousands of individuals who have done my book.
(45:26):
And that's why I say anybody who's listening to us is absolutely out of his
or her mind if they do not follow what I'm saying here, what we're talking about here.
It is so religiously profound with its impact upon the operation of any company,
(45:48):
any company doing anything whatsoever.
It does that. It's astonishing. It's really magic.
But I agree with you when it comes to procedures and systems.
You said, Michael, you were so successful selling years ago for others when
(46:09):
they provided a system that you could plug into and follow.
And you were less successful when you kind of had to wing it.
You know, it's true in everything.
Think of all of the things that we consume on a regular basis.
Amazon is a huge retailer, arguably the largest retailer that we know of today.
(46:31):
Not brick and mortar, but they sell product retail from their warehouses directly to us at home.
You know they must have a plan
they must have procedures to the
nth degree and everything is
boom boom boom boom and that's why they're as big as they are they built their
(46:53):
franchise prototype selling books the very first product of amazon was books
he went to work on his company his internet-based company,
to sell books and to turn the methodology through which they did books.
(47:15):
And in the process, created what we would call his franchise prototype.
He created the system by which Amazon succeeded at doing what it set out to
do. And then what he saw is, wow, this isn't just a book business.
(47:36):
This could be any product, any product under the sun,
because there's no difference between the product provided there's no difference
in the system by which we introduce that product to the world online. mind.
(47:57):
And so he took then product number two and he proved it. He then went to product
number three and he proved it.
He then went to product number four and he proved it. It works.
I don't have to. It works. I don't have to.
Exactly the opposite of what every startup company does.
(48:21):
It's true. So many people think that they're a business owner.
Arguably, they're self-employed because they're doing all these things, right?
Doing it, doing it, doing it. All these different hats are worn by this business owner.
I contend there's a difference between a self-employed person and a business.
(48:43):
I say, you know it's a business when it can run without you for a period of time.
Someone's willing to pay you for it. And honestly, if you drop dead,
it would still run without you. Absolutely.
The difference between being self-employed and owning and operating a business is night and day.
(49:04):
So in one respect, Jim, you don't have a business.
Jim's got a job. Jim gets up every day to do his job. And without Jim,
there wouldn't be be that job.
With Jim, the job gets done.
But you can start this as a business. You don't do this as a business.
You literally do this as a job.
(49:26):
It's called Jim's podcast.
It's called Checker Pro Radio Show. And it's Checker Pro Radio Show Talk to Jim.
Hear me, 99% of every startup company is Jim's podcast.
(49:46):
Absolutely. Doing it, doing it, doing it, doing it. And that's how they start
though. In all fairness, I said, well, Amazon started. That's how they start. Yep.
That's not only how they start. That's how they finish Jim.
Because the reality also is they're not as good as Jim doing what they do.
And because they're not as good as Jim doing what they do, it fails.
(50:10):
But for me, if they were as good as Jim doing what they do, it would ultimately
also come face-to-face with an inevitable problem,
and that's the problem of scale.
The problem of growth, because there's only so much Jim can do to grow unless
(50:36):
Jim's willing to work his tail off doing everything that needs to be done in Jim's job.
But doing it, doing it, doing it, doing it. If Jim don't go, it don't go.
If Jim don't get up, it don't get up.
If Jim don't do it, it don't do it. And the day Jim's sick.
(51:00):
There is no podcast. I hate to use Jim as the perfect example,
Jim, but you know it to be true.
Well, sure. You can also use Taylor Swift as an example. She's a billionaire, billionaires.
But if she's sick, she can't be on stage or be in the recording studio to produce more of her product.
(51:25):
There's professional athletes. I would say most people actually either have
a job or are self-employed versus someone who owns a business that can be replicated
and traded for dollars one day.
In other words, transferred to another entity.
Because when you really think about all the people who are in this country,
(51:47):
many of them, if they don't show up to work that day, don't get paid that day. Yeah.
Well, you use Taylor Swift as an example.
And of course, Taylor Swift's business are the recordings Taylor Swift has made.
And it's those recordings that are Taylor Swift's millions and millions and
(52:12):
millions of dollars that come to her.
It's not Taylor Swift showing up at a concert that does it.
It's Taylor Swift showing up in her recordings that does it.
And that's a very large enterprise because there are a large number of individuals
(52:34):
operating Taylor Swift's company.
That is a corporation in the truest words you used when you spoke about McDonald's.
It's a very large company. She is sort of a hybrid.
If she decided to no longer do what she does, then everything that she's produced
(52:58):
over time could continue to produce income for the corporation.
But she leads it by being on stage and being in that studio.
And she's not a typical head of a company. As a matter of fact,
she probably doesn't run most of the day-to-day divisions.
She is the face of that company for sure. You have to remember,
(53:22):
we're talking about home service, and there are no Taylor Swifts in home service.
And if there are, it's the rarest of rare home service company.
It depends upon the individual to provide that home service.
And if that individual is providing that home service, ultimately,
(53:49):
the company runs out of time, energy, resources.
Imagination, application, and on and on and on and on. It just don't work.
So we're talking about an ordinary marketplace reality that depends upon consistency
(54:10):
and congruence in order for that brand to take hold in that marketplace.
And what is that brand?
And how is that brand shared and communicated and implemented systemically?
Just like McDonald's is, just like McDonald's is, and just like McDonald's has done.
(54:36):
The most successful small business in the world.
I leave the conversation with that in mind. A couple of the things.
You brought up branding, which I think is very important when you're building a business.
Do you believe it's important for the individual who started the business,
(54:59):
the founder, who's driving that business forward to some point say,
this isn't Tony's plumbing?
That's what it is today maybe we should make this a brand that has its own life without me tony.
Absolutely. Just like McDonald's had its own life without Ray Kroc.
(55:21):
Ray Kroc didn't work in the store. Ray Kroc didn't make burgers.
Ray Kroc didn't make french fries. It did.
Get that story that I just repeated to you. It did. I didn't. It did. I didn't.
I'll say it one last time. It did. I didn't.
Business has got to have a life of its own.
(55:43):
It's the brand. I'm not. It's the brand. I'm not.
That's why we speak about e-myth. It's the brand. I'm not.
And because it's the brand, it's got a way of doing what it does consistently every single time.
Michael, we've covered a lot on this podcast today.
(56:06):
What haven't we covered that you would like to end with? Go to michael at michaeliegerber.com.
Go to michael at michael e gerber dot
and we'll enroll you in the dreaming room
and when we enroll you in the dreaming room we'll
also speak to you about the opportunity to become a dreaming room facilitator
(56:26):
and for you to in fact be licensed to deliver the dreaming room and to deliver
the the dreaming room in exactly the way we do.
I have a dream, a vision, a purpose, a mission. What's an entrepreneur?
An entrepreneur is a dreamer, a thinker, a storyteller, and a leader.
(56:51):
The dreamer has a dream, the thinker has a vision, the storyteller has a purpose,
and the leader has a mission.
Once you get that experience, Mr.
And Mrs. Jones, Once you experience the dreaming Once you see the system.
Dream, to have a vision, to have a purpose, to have a mission,
(57:15):
they'll appreciate the profound reason why every small company needs to be started with a dream,
a vision, a purpose, and a mission.
And to deliver that to every small business owner on the planet will in fact
realize my dream, which was and is to transform the state of small business worldwide.
(57:41):
You get to do that. You get to do that. Contact us and we'll describe exactly
how you get to do that and what that will mean to you.
Michael, on that note, thank you so much for joining me here on the podcast today.
Delighted, Jim. Thank you for the time.
(58:03):
Just a quick note here, guys. I want to ask you for a favor.
My guests and I really want to bring you, the home service professional,
the best quality podcast possible.
I just have one simple request.
Would you please subscribe to this podcast right now?
In return for your favor, I promise to bring you the best of the best in the home service world.
(58:26):
Guests like Billy Stevens, Tommy Mello, Ishmael Valdez, Al Levy, and so many more.
Thank you for listening, and I promise to bring you much more just like this.
Music.
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