#335 – The Art of Business Systemization: Lessons from Josh Fonger

#335 - The Art of Business Systemization: Lessons from Josh Fonger on Building Efficient Workflows and Boosting Productivity Speaker 1: Welcome to episode 335 of the AM-PM Podcast. This week, my guest is Josh Fonger. Josh is a systems implementation expert. You know, a lot of us start off as single operator entrepreneurs and as our company grows, We need to hire people, we need to set up systems so that we can quit working in our business and work on our business. And Josh is one of the main consultants for a system called Work The System. It started out as a book published about 15 years ago and now he is consulting lots of small businesses, everything from e-commerce to restaurants to you name it. And today he's gonna be sharing some strategies and tips on how to adjust your mindset and start developing systems for your business. Enjoy. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Here's your host, Kevin King. Speaker 1: Josh Fonger, welcome to the AM-PM Podcast. It's so glad to have you here. Speaker 2: Hey, Kevin. Great to be here. Speaker 1: A lot of people probably never heard your name. Sometimes on the AM-PM Podcast, some of the names are familiar to the audience and sometimes I'm introducing new people. You're one of those new people that I bet the majority of the folks listening right now have no idea who you are. And, you know, it's something, by the end of this talk, I think they're gonna know who you are and hopefully some of them will actually probably reach out to you to get a little bit of help in their business. Because what you specialize in is helping small businesses and large businesses, both, anywhere from $100,000, I think, on up to, I think you've worked with hundreds of millions of companies doing hundreds of millions of dollars, actually come in and either fix the systems they have or set up systems to actually systemize their businesses. Do I have that right? Speaker 2: Yeah, that's right. You make me feel bad that no one knows me, but that's OK. Unknown Speaker: No, no, no, no. Speaker 1: So you've been doing this for a while. The way I understand it is it's called Work the System and it was developed by a guy named, I think, Sam Carpenter, about 15, I think the book came out about 15, 16 years ago, something like that. And then you went through the course and then you partnered up with him to actually do all the consulting and helping people implement everything. Is that correct? Speaker 2: Yeah, yeah. So I was a business consultant kind of traveling the country for several years and I bumped into Sam Carpenter up in Bend, Oregon. He just released his, I think, second edition of the book, Work the System. Now it's in its fourth edition in a bunch of languages. And one thing that you definitely want to do if you're just tuning in is check out the book, Work the System. It really can transform your life, transform the way you see business and your life. But basically when Sam and I started working together, he said he wrote this book about how to get freedom and to grow your business simultaneously. And he said, now that I have this book out there, people keep calling me, keep emailing me and they want help with their business. And he said, I don't want another job. I don't want to be a consultant. And so at the time, That's what I was doing was business consulting. And so I said, well, maybe I should take on some projects. And we did a few projects together, hit it off. I think that was around 2010, 2011. And ever since then, he and I have been working together. He's still my mentor. He doesn't have to work, but he enjoys the work. And I just do all the coaching, all the consulting, all the certifying of other people who want to learn how to work the system or develop their business in a way such that it scales and grows where they don't have to be there all the time, where their business and them are separate. And we do that using Sam Carpenter's methodology. Speaker 1: It's a thing in the Amazon selling space where a lot of people start off small. They start off five, $10,000 maybe. They're a one-man operation, wearing a lot of hats, doing a lot of things. And then as they grow, they start to hire a few people, maybe a few VAs, and they often reach a point where they either are getting close to burnt out or they just can't grow it anymore. And by setting up systems, it's one of the keys to actually helping you actually grow your business, get a better multiple forward if you sell. And people always say that the more valuable you are to your business, the less valuable your business is. And so, and work the system, how is it, you know, some people have heard of like the e-myth, that was kind of a similar thing. How is work the system different than something like the e-myth? Speaker 2: Yeah, I get that question all the time. So, people refer to Sam Carpenter's book, Work the System, as the book that Michael Gerber never wrote, or that he should have wrote next. And it's very much a how-to book on how to actually not just theorize about having a company organized and documented and run on systems, but actually how to go about doing it. And it takes you through a story, CM Carpenter's story, where he was working 100 hours a week and living at the business. There was an answering service up in Oregon and how he was able to separate the pieces of, you know, the separate components that made up his business And he was able to document not only strategy, the principles, but the procedures that made it the business. And, um, while he did that, he watched his work time go down, uh, eventually down to two hours a month and his income go up 20 times. And that's what he details in the book, work the system and you know, how to, how to actually do that in practical terms. And, um, yeah, I couldn't agree more. I mean, once you do it, you know, of course the value of the company goes up. The mistakes go down, the profitability goes up, the speed goes up, quality goes up, you can raise your prices. I mean, there's so many benefits to getting this work done, but it's the work that is, you know, it's not as exciting as some other works, you know, it's most people like the, you know, kind of the creative, Risk-taking new ventures. This is very much a focused effort on the parts of your business that are happening now and getting them better, getting them so good that they can almost run autopilot. And it's hard to get entrepreneurs slow down enough to actually focus on their systems. And, but once they do, they realize that, you know, there's kind of, there's gold in their business. We'll say they have to mine for the gold that's already there. They just never saw it. Right. They think that the opportunity is something new. They think the opportunity is some new innovation, some new product, something new that, that hasn't been tried before. And that could be true. There's, there's a lot of risk with that, a lot of potential, but if you just make what you're doing now that you already have customers for, you already have a product or service for, run better, that's risk-free and there's likely way more potential and revenue and profit there that just hasn't been realized yet. And that's what we really push business owners to get focused on. Speaker 1: So it's a big mindset shift and that's difficult for a lot of people that either like the control or think that they can, they're the only ones that can do it right. So how do you, how do you start this process? How do you begin the process and you got an entrepreneur that's, that's doing well, he's working the 80 to 100 hours a week and you're like, all right, he's, he says, okay, I need to systemize this. I need to get out of working in my business and work on my business. How do you, how do you start that process and make that shift? Because it almost seems like it's a lot more work in the beginning because you're still running your business with your hands and everything. And you're at the same time having to go through And set up these systems, so it seems like it might be a lot more work in the beginning to actually work less later on. Can you walk us through how that process works? Speaker 2: You're totally right. That's what usually prevents most people from getting started. They are already working hard and so they would prefer just to stay stuck and do things the way they have always done them and they plateau, right? They plateau, they burn out and then their company goes out of business or they, you know, they just barely make it and they continue on and on and on. And that's the story for most small business owners. So we really only work with those who are They're ready to grow by multiples, 2x, 5x, 10x, they actually see a future of selling their business or opening up new locations or really expanding. It's those with the bigger vision, the bigger future, they are willing to change, change their mindset and change the way they operate. But if people have a small goal for the future, they have a small vision. They tend to just stay stuck, you know, sending out the support request emails and, you know, packaging the boxes themselves like that. Those people that, um, they've already capped their future and it's just a matter of time until someone else goes into their space and runs a better business and puts them out of business. And, uh, so that's, that is true. And now in terms of the hours. Very practically speaking, there's a couple ways that I'll strategize with an entrepreneur. If they have some extra cash, but they don't have any extra time, then it's about developing the systems to bring on some help to do more of the work so that they can free up more time and they can scale because they have extra cash set aside. You know, if they don't have the cash, then it's about building more time. And there's two ways they can build more time. One is doing less of what they're doing now. So either temporarily or permanently reducing their work week. And I have a systematic way of structuring their day to find that time, or it is to work more hours, right? Which is also a possibility. And some people, they just say, Hey, you know what? I'm going to grind it out. I don't have any kids yet. I don't have any family. I'm just going to work an extra, You know, five hours a week or 10 hours a week. And I'm going to put this infrastructure in place, which is going to free up time. And I'm also going to bring this team on and they go that way. So there's a lot of ways to slice it. Um, but in the end it comes down to, are they willing to see their business as a separate entity made up of systems or is the business them and the business is them. It's our, it's going to just stay at this maxed out level, whatever that level is. And so they do have to have a mind shift about it. Speaker 1: A lot of times, everything is in their head. So you've got to get out, like you're saying, if they're doing the support tickets, or maybe they're doing the customer service, or even if they're packing the boxes, they know, oh, this zip code is wrong, or this address is wrong, or there's some strange question that comes in off the customer service. So just getting everything out of their head and into like an SOP or into something that someone else can manage and do is probably a laborious project, right? Speaker 2: It's a very labor intensive and it's not super complicated or difficult in terms of what entrepreneurs like to challenge. It's not a big mountain to climb. It's just lots and lots of small steps. And so, um, I try to, if I can bring on some sort of support person along with an owner or operations manager. Um, or administrative assistant or an online business manager, somebody with them to help them, you know, extract the data, which is going to either happen through, you know, a loom video, um, or a Snagit video or screenshots or an audio recording or video recording, some way to kind of capture the work, how it's happening and then help them document the work. And sometimes my team does that for entrepreneurs and document the work and And then save it in a place that people can find it or people can update it or people can use it for training and cross training and onboarding and things like that. And so it's, it's, If you just have a couple of procedures documented, it's not going to be very valuable. But once you have 10, 50, 100 procedures documented, then it becomes very valuable because you have this portal, this place where all of the work that happens in your business has been already figured out, it's been mechanized and now it's about finding people to do the work. So, let's go talk to the owner because the owner is the only one that knows how to do it. And it does take some time. It takes some time to unravel that from the owner's head, but it has to be done, right? So, you're going to start it now or you're going to start it in six months or you start it in three years, but eventually it needs to happen. And so, it's better to just develop a strategy and a culture and a practice of doing it as opposed to waiting to the perfect time. There really is no perfect time. The majority of my clients come to me after some major disaster happens, either quality control, a staff lease, health issue, family issue, like a disaster happens. And then they say, Hey, Josh, I need to finally take my business serious because like these disasters keep happening and I can't afford another one like this. And then they finally wake up. And so I just typically wait on the sidelines until that disaster happens because it's hard to cajole and push someone into doing it until some of those near fatal shots happen first. Speaker 1: What about someone that's robbing Peter to pay Paul? They're on a shoestring budget and like the example you gave earlier where they're the ones packing the boxes and they're like, you know, if I'm packing these boxes, I can do 50 boxes an hour. If I hire some guy, he can do 10 an hour. I'm going to be paying him X amount of money and then half the day he's going to be sitting around maybe doing nothing. Their mindset is, I can just do this better, faster and more efficiently and actually keep that money to myself. How do you get someone to shift from that, especially if there's financial constraints on it? How do you walk them through that process? Speaker 2: Yeah, well, that's there's always constraints time and money, it's always going to be a constraint. And so I always examine everyone's business model, first, make sure their model is actually going to work, right? Like they actually have an effective model. So if everyone in your space is, let's just say using foreign labor, whether it's in the Philippines, or Mexico, or whatever, But you're using labor from San Francisco, then I'll have a college degree. Well, your model might be set up to fail, right? Like you might just be organized in a way that's just not going to profitably work. And so I always analyze a company's last two years financial statements and balance sheets to see. Like, where is the money going? How is the money coming in? And does this model even make sense? Because sometimes your model is set up in a way that, of course, is frustrating you because it's just not going to work. You know, your labor costs are too high, your shipping costs are too high, your, you know, whatever it is, your pricing is too low. And so it's always part of the shift is that if we're going to build A system to scale your business. Let's say you're, you actually have a good business to build. And, uh, so, you know, based on what you're saying, it could be a number of things. The pricing could be too low or the labor is too high. Like you're, you're trying to find high on labor to do boxes. And I, uh, you know, I had a company that was a shipping company and we, we brought in, um, You know, juniors and seniors in high school to do the shipping, right? So instead of having maybe costly labor, they had labor that came in a couple hours, a couple days a week to do boxes. Okay, that was simple enough. So, or you can do it, maybe a third party shipping company that's inexpensive. So there's a lot of ways to slice it, but in Amazon, you can't overspend for labor or you're gonna be in trouble because it's very competitive. Speaker 1: Do you see any differences? I know you work with clients in all kinds of fields and you've done some work with some Amazon clients and you even said one of the guys that you trained took the system and actually took it to help aggregators in this space actually learn how to systemize the businesses that they were buying. Do you see any differences between like the Amazon e-commerce seller and say a restaurant or a shipping company like you said? Speaker 2: You know, every industry has, I mean, every vertical has their, their nuance to it. So, um, I don't know. I mean, right now I've got a guy who owns multiple tennis facilities. So it's about, you know, making the best product to get the most youth tennis stars out of there. And they're all about how to maximize what they can charge and maximize the utility of their space. Right. And I've got another client who does own a restaurant and we're working on lowering food costs by having really dialed in recipes, you know, exactly how much, how many grams and how many ounces of all different food products. And Making sure that the way they sell is for top dollar in terms of how they sell and how to maximize the capacity of their space. So in the end, it's money coming in and money going out. So you do have to analyze those things. And in the end, every business is made up of systems, components, and you want to maximize each one of those components for efficiency and speed. Maybe the only thing with Amazon is that there would be nuance to the industry that, again, I'm not an Amazon expert, would be that it's moving fast, right? So it's dynamic. You don't set the rules because you're selling on someone else's platform. Whereas if you're selling on your own website, if you're selling in your own real estate, then you can set more of the rules yourself. And I would also believe that on Amazon, it might be difficult to price, I could be wrong, depending on the market, at the premium price points that you can in other more localized business situations where there is It's the internet, right? There's a lot of options for people and if you are not competitive on price or differentiated in a very big way, it's probably more difficult for those people on Amazon. So yeah, I had a client a couple of years ago that sold automobile parts and they were on Amazon and they also had their own e-commerce store. They just weren't set up right strategically when I met them. And they just got buried because they could not compete on price. And when people are buying these car parts, price matters. And they can search with one click of the button and choose someone else. I've got another guy who sells cigar products and humidors. You know, the only way they're competing on price is they're private labeling their own products and they're building a premium brand and they're trying to get people to buy consumable products from them that they have to buy on a regular basis so they can engender some loyalty to their brand. But it's all business 101 stuff, but I think Amazon just, you don't get to set as many rules that you want to set and the competition is probably fierce, right? Once people realize that a certain product is selling well on Amazon, then anybody in the world, because it's a low barrier to entry, can decide to sell a similar product and cut you down. Speaker 1: Is one of the goals, it sounds like you've mentioned this a few times in Work the System, to actually try to shift to more of a premium pricing model? Is that whenever possible? I mean, like you said, sometimes it may just not be possible, but is that one of the goals? Speaker 2: It is, it can't always be done. I've got a company right now that I'm working with that does construction striping and construction security equipment and they always, they're doing 10 million a year, but it's a, it's low price bidder. So whoever's low price bidder gets the job and so they have to be efficient and they can't really be price premium. But whenever you're systemizing your company, you want the work and the effort and the investment you're putting in to the assets you're building, those systems to align with the strategy. And what do systems do? Well, They tend to improve your quality, they tend to reduce mistakes, and they tend to make the workers that work in your business just do things better, right? So whether that is speed and responsiveness, or that's producing a better product or service. And so naturally, when I have clients who do that, I got an accounting company I'm working with right now, they're producing a better service. They shouldn't be the low price, they should be the high price, right? And so that's part of what we try to do is say, hey, if you're going to be more responsive and have better customer service and higher quality to what you do, because you're training, you're onboarding, you're staffing, you should also charge a premium price because of it. Now, with some of the Amazon sellers, that might not be possible. And so for them, they might have to, I don't know, pick a different avenue. But I'm always, if it's possible to be premium prices, I would prefer to be premium and to figure out a way to make that part of the unique selling point of what you offer. So that's what I do. Speaker 1: So when you're working with a new client that's wanting to systemize their business, what are some of the bigger things you get pushback from the client on? You know, like you need to do this, this and this and like, why do I need to do that? Or no, that takes too much time or it costs too much. Or what are a few, like two or three of the big stumbling blocks, I guess, for them that you have to work through? Speaker 2: Yeah, there's usually a lot. If there's multiple owners or partners, it's getting buy-in. That tends to be a difficult thing as people, they get in habits and they don't like to change. And so getting one person changed is hard, getting two or three different partners to change, that's even more difficult. And so getting able to align by a new way to operate their business is always a challenge. We take people through an exercise called writing a strategic objective or essentially writing your business plan. Like what is your business going to do? What is the goal of it? How it's going to operate? What is the objective of your business? Because you want alignment. And so getting people to actually write that strategic document is difficult because they don't always know where they're going. And they don't like to put it in writing. They prefer to be nimble and flexible and reactive. And I'm trying to say, if you want to stay the course and build a team and build infrastructure that's going to actually pay you back, then you have to actually have a clear written down strategies. That's usually where you get pushback. And the other pushback is on the staff. Because if you are used to having a chaotic operation, you probably have staff that knows a lot in their head, but they are great in environments of chaos, that they're just good at being responsive, they're good at putting out fires. And so that's your team. And now you're developing a business that prevents emergencies from happening, that prevents problems, where people can just go in, do the work and leave. And they don't have to be stressed on the weekend about jumping in and solving a problem. And that's a different kind of mindset and culture. And the staff that's really good at handling emergencies, doesn't always like the shift. They kind of like things loose. And so you have to get them to buy into this and give them new challenges to tackle. And typically you can bring in less trained, less expensive, less educated staff to work the systems you document. And they just like to come in and do consistent work and they're usually really good at it. And so your staffing might be not exactly aligned with this new way of working either. Let them know that's part of the part of the growing pains towards growing an organized business versus a business that's, you know, driven by the seat of your pants. And those are some of the problems. The biggest problem ultimately is The documentation part, people will really like the idea of, hey, we should write down how we do this so others can do it just in case someone gets sick or they leave. But doing it does take some time, it does take some focus. And what I try to show people is that if you take that focus, you're going to find that the money you didn't know is there. And one of the clear examples that I share is a small parts factory that I was working with in Michigan. And so they would produce these small parts and they had been in business for, I want to say like 40 years, a long time, long time. And he said, everyone kind of knows what they're doing here. We've been doing this for a long time. They don't really think this is going to be valuable. I said, just humor me and write down a procedure for something that you do every day. Just write it down. And so he wrote down the procedure for how they change shift from first shift to second shift. They had 20 employees in the first shift on the machines, 20 in the second shift. And so they wrote a procedure for how to change the shift. And I said, so what'd you find out when you wrote this procedure? And he said, nothing really, we've been doing this every day for a long time. And I said, let's look through each step and could we do this better? Could we do this faster? Could we do a handoff a little bit quicker, you know, recalibrating the machines between the handoffs? How about the communication between the first shift and second shift? And we come to find out that the first shift and second shift had a 15 minute overlap Every single day. And this was, you know, they're paying for this. And I said, well, based on this, how long do you think it'd be? And he tested it out. It was a five minute overlap of time. And so instead of having basically 40 employees overlapping 15 minutes of payroll time, people you're paying as an owner, it moved to five minutes. And so I said, well, what's that worth to your company? And he said, he did the math and he's like, well, that's $100,000 of saved money that I was spending on people. Not really being productive. And now that's saved. And so he's like, I wish I would have systemized that one process a few decades earlier, because that would have saved me a lot of money. And just he never really taken the time to look at something like that. He didn't even know that it saved him time when he wrote it down in the beginning. It was pushing him to his strategy. And then why don't you take that benefit and translate it for five or 10 years because this system It's going to hopefully not become obsolete next six months, but actually be effective. And once he did that, he realized how much money was wasted. And then he, of course, was more excited to Right. More systems, right. And find out what other things were being done inefficiently. Speaker 1: So when you go to employees and you, you say, Hey, well, I want you to document what you've been doing. Do you get a pushback from the employee? Like, why would I do that? I'm just setting myself up to be fired or to be let go so that someone else can just step in and do my job. Um, so what, what, what kind of pushback and, uh, problems exist around that? Speaker 2: You're, you're right. Some of them can see right through it and they think, okay, this is not going to work out well for me, especially if they've already. I have a bad attitude and I haven't been doing quality work. There's a couple of different strategies. Again, it depends on the industry, the company, the owner. But if the owner is saying, and it's true, we are growing, look at the last six months or year, and I have big ambitions for the expansion. And I want to take you with me because you're a good person. And people are excited to document because they're like, okay, good. I can actually expand my career potential here. I'm going to move up the ranks. And this is a necessary part of growing a stable quality business. Those people buy in because they see that it's necessary to do it. The other strategy is that you just make it part of what everyone does. As in, hey, we work with outside vendors, they document, we work company-wide from top to bottom, we're all gonna do it. It's a major initiative for this year, so everyone's doing it. So you don't pick on one person or one department, you just have everyone do it. All right, that tends to help because then they don't feel like they're being targeted to be removed. So the expansion and then the everyone having to do it. And then also what helps people buy in as incentives and in terms of negative and positive ones, as in, if you get this done, you'll get a bonus. If you don't get this done, you can't work here, you know, like negative and positive. And so if there is a clear timeline for getting your initial package of procedures done, let's just say each employee has maybe 20 they work on or within. So if they realize there's an incentive and a goal and a timeline that usually gets them focused to do it. But there always is that concern is a bigger concern when the company is going down. And the employees know that then they get more nervous if they're documenting what they do. But you still want to do it. Like when I, when people know they're being laid off soon, my goal is to at least get some record of what they do. And so that just might be screen recordings, um, audio recordings, video recordings, or it's, um, you know, having somebody shadow them for a week, just someone shadow every single thing they do and write it down. Again, it's very obvious that the person's going to be like, Oh, but if you can get Some of it, it helps. So best case scenario, your company's growing and then people are excited to be a part of it. Speaker 1: Typically, how long does it take from the time someone says, okay, I'm ready to systemize my business And to actually having it up and running where they can step back. I know it's probably depends on the industry and the complexity, but what's just like a rule of thumb or a general, uh, how long does this process take? Speaker 2: Yeah. Well, you kind of stole the words out of my mouth. Yeah. It depends on a lot of factors. Um, but for those listening, the more simple your businesses and that's what I try to do is simplify companies. Um, the simpler the businesses, uh, the easier it's going to be and the faster it's going to be. Um, but you don't have to feel like, The benefit happens once I'm done. The benefit happens once you start. Once you start, every system you put in place is going to be a packet of productivity that's going to help your bottom line. And so you can see each time you get a new system documented as an accomplishment and as a success to a project, you just have lots of little projects to work on. And I really try to push people towards a culture of continuous improvement, as opposed to, let's just get this done. So the more you can make it a strategic shift, a cultural shift, and you can celebrate the wins of each system being documented, the less, I guess, painful it is because you don't feel like, well, it's just gonna suck at working for the next six months until we get this done. And I'll say that some departments, they do it really fast. Like I've had departments get every single thing and documented their whole department in three weeks, two weeks. Um, other companies, it takes, you know, six months that they go slow. It might take a year. Uh, so it kind of depends on, um, how, How much urgency they push with a particular initiative like this. Companies that push too hard, too fast, and I've seen this happen, they end up falling apart because there's not enough time for them to really think about each system in terms of making it better and to train their team on the new ways of doing it and then to let it actually play out. And so I prefer like a, a middle of the road pace where you're, you are making constant improvement. You're getting a feedback loop on how the new systems work. You have the chance to update that and it's not distracting from your core business. So this is kind of one of those things that just, it's happening in the background. It's not like the front burner, it's a back burner, always happening in the background, part of your business and that's ultimately what you want to set up for your team. Otherwise, they will rush, get it done, they'll forget about it, they won't use it and then three years later, You'll say, Hey, all these things are obsolete and no one's even using them. And that's what you don't want. Cause then you have to do it again. Speaker 1: So, how does it work? So, work the system, is it more for established businesses that are already up and running so you can go in and actually document what people are doing or what if I'm new and I don't have system, I'm new, I don't know every single little thing yet that someone needs to do, I'm developing that, I'm figuring it out as I go. Will this, will work the system work for a new entrepreneur as well as someone who's got an established business or is it more for something that's already established? Speaker 2: You know, I've worked with all kinds. I've worked with a lot of clients that are pre-revenue. They just have an idea, but that's more rare. As long as you have money going in and expenses going out and you've been doing what you do for, I don't know, several months at least, and you've tested out the business concept, the business idea, and you're like, yeah, this is going to work. People are buying what I'm selling and I have ambitions to grow it. Yeah. And then that company is at a point where we can work with them and start to document their systems as they grow their business. Oftentimes we work with companies that have been around a while, but they've hit a plateau, right? They've gone as far as the owner can take it. They've gone as far as the team can take it. And they say, you know what, you know, just keeping it in our head is not working any longer. And so now can you help us grow our business even further? Um, but I've had companies that, uh, you know, they already know, Hey, this model is going to work. Actually, I just got a new client who has a pool company, right? And he's launching his pool cleaning company next month. And so we already got engaged. Because he knows he wants to run this pool company in a very systematic way where he's personally not washing and maintaining any pools, you know, vacuuming them, but he's set up the system so that he can have teams of people do that work. And it's not a, it's not a risky business model. It's been around forever. It's not something that's. So unusual that we don't know if it's going to work. We do know it's going to work. There's pools there. There's a lot of pools there and somebody needs to clean them. So it should work, but we do need to actually develop the systems along the way. And so that's what we're going to do. Speaker 1: Some of the businesses you work with are probably yo-yoing back around. Can you tell people what that is and what are some of the tactics to actually help those type of businesses? Speaker 2: Yeah, so a yo-yo business would be one that is tied to a string, right? It's never going to go anywhere. It's just going to kind of go up and down, up and down. And if you look at their financial statements over the years, you realize that they've hit a ceiling, a plateau. So the owner will realize the numbers are low. And so they'll busy themselves making new sales, maybe they'll focus more on advertising, marketing, getting out there, generating new business referrals, and they'll grow the business. But then it'll grow, so they'll have to service the business. So they'll be out there actually, you know, delivering those products and services based on new sales. But while they're doing that, no one is doing outside sales and advertising and marketing efforts. So as soon as they service those new sales, it starts going down again. And then it gets to another trough and then they have to go out and generate new business. And there's some endless cycle of trying to get new business, trying to service the new business, trying to get new business, service new business. And they don't see a way out from that because they are, you know, they are the business and we call that a yo-yo business. And so when I see financial statements where they really aren't going anywhere, they're just stuck, I'll let them know they have to actually They can't be the driver of every effort in their business. They have to build up a team. They have to enable that team with a strategy and systems and then they have to actually have a place of driving towards instead of just trying to make it as in how much do we have to make to survive? Let's do that much work. It's that's different than the question of how much like where do we want to go and how what systems we need to build to get there and that could be you know multiples of where you are now and so really is it a shift of thinking? That's going to allow you to get out of that yo-yo business model. Speaker 1: So a lot of a lot of businesses, it astounds me how many of them do this. They work really hard to get a new customer. And get new customers into the door and then they ignore them after they service them and they take care of them for whatever that issue may be, then they ignore them. And it's so much easier to sell a past customer on something than it is to get, and cheaper in most cases, than to get a new customer. So does work the system help these businesses identify those opportunities and those strategies as part of systemizing everything? Speaker 2: Yeah, yeah, definitely. That's one of the systems we work on is certainly we call it growth systems. And so we'll take companies from the start to the end of a typical client lifecycle. And then we'll look at where those areas where they're actually generating new revenue based on that client and then develop additional systems where they could maximize that either through raising the price, additional services, referral work, repeat work, residual work, you name it. But the whole point is you already have systems in your business, but how do you maximize them? So if your client comes to your business once every six months, is there a way to make it so they come once every three months? If your client's average transaction is $2,000, is there a way to make it $2,200? And so everything you're currently doing, the idea is let's look at that system and see what we can do to improve and expand it. And you're right. A lot of people, they don't go back to previous clients. I had a dental office and that was the biggest way to grow their year was they were always trying to get new dental clients. And I said, have you ever called or emailed or reached out to your previous clients who had diagnosed treatment plans, whether it's cavities or root canals or bridges or braces or whatever. And just said, Hey, we haven't seen you in. Do you want to get that treatment scheduled next week? Have you ever done that before? I said, no, no, we've always trying to get new clients. And so all they did is called previous clients who had diagnosable treatment plans to Denver, got them done. And they had the biggest year yet by far. Um, it was not much effort. It required no risk. It required no direct mail required, no advertising, just Call them up and schedule it. And that was it. And so I think that people, they do forget about the amount of value is already built up in their current roster of clients. And I'm sure Amazon is the exact same way, especially if you have a consumable product, how do you get them to consume it again and to figure out unique ways of doing that. Speaker 1: Sometimes it's as simple as partnering with other companies or cross-selling or giving them something else along the same lines that they want, but it is a little bit more difficult in e-commerce because especially selling on Amazon, you don't always have the customer data, but there are Innovative and creative ways to actually do that. So I know you've been doing this for a while and you come in and help a lot of other businesses, but I think I read somewhere, maybe it was on your LinkedIn or something, that you also take this beyond just helping businesses. In your personal life, you actually try to systemize and Increase your productivity. Do you have any tips for entrepreneurs out there that on ways for on their personal, the personal side of things that they, even if they don't want, they're not ready to implement, you know, systems and go through this process with work, the system, what are some things they can do on a personal level to actually just make themselves more productive? Speaker 2: Yeah, great question. And it's always the easiest spot to start is that, hey, you're the number one worker and your employee. So if you can be more productive, It's going to help your company. So how do you, how do you do that? And most people are already saying, Hey, I'm already working as hard as I can. So how do I be more productive? And I'll take them through an exercise of writing down. It's quite tedious, but it works is writing down every single thing that you do for two full days, like from the second you wake up to the second you go to bed and then analyze each of those particular things, whether it's go out for breakfast or get some gas or drive your kids to school, or, you know, Call, you know, call it a sales call or call your operations manager or you're on your Slack channel, whatever you're doing, every single thing you do, all of it. And then look at each of those itemized things and say, could I do this better? Could I do it faster? Could I do, could I delegate this? Could I automate this? You know, do I even need to do this anymore? And make notes next to every single thing you do. And how much time it's taking you now, and how much time it could take if you made a shift, if you made a shift of delegating, if you made a shift of optimizing something, if you made a shift of a technology upgrade. And it's that, it's really shifting those things. So if you're driving your kids to the soccer game, and you realize, hey, you know what, I could actually carpool and do this twice a week instead of four times a week. And that saved me some time. Or you're, you know, you're driving, I had one guy who was driving a long ways to jujitsu every morning and then driving back and I said, Hey, it's taking you about two hours a day just to do your jujitsu thing in terms of getting ready. And I said, is there a better way to get an exercise faster that would solve that problem? And yeah, like there is, you could probably, and so we developed a system that required a half hour instead of two hours. Now, it wasn't the same, he didn't get to do his jiu-jitsu, but the point is you have to really analyze every minute of your day to figure out how do we batch, reduce, separate and divide up our time to be most productive and so I shift owners' schedules around all the time because they really They're not nearly as efficient as they think they are. And oftentimes they're doing the difficult, hard, complicated work in the afternoons when they're burned out, instead of in the early mornings when they actually have the energy and the fortitude and the focus to get some of those major projects and initiatives done. So I try to get a blockout time every week and make sure that's in the morning and make sure that they batch their most difficult things early in the morning as well. And so there's a lot of shifts you can do, but, Be really meticulous about it, like, what did you eat? What did you drink? When did you go to bed? Every single thing. And you'd be amazed, you'd be amazed how many hours a day people waste where they think that they're working and they're not. Probably one of the biggest time suckers right now is people being really stuck, well, social media is obvious, but stuck on tools and platforms and project management tools and platforms. Where there's lots of chatter and lots of communication happening, which feels like work, but they're not actually moving any projects or initiatives to completion. And it's because they haven't actually had time to To meet with their team in a real face-to-face like we're having right now to solve things through to completion. Yeah, halfway done projects, projects that are done 80%, 90% but are never really, really done, kill business owners, especially ones that are small because You don't get the utility and the benefit out of an initiative or project until it's 100% done. So a lot of companies, they don't push things to the finish line and so they don't get there. So that's a rambling of a few things, but I try to make it situational to each of my clients because they all have. Speaker 1: And one of the things I do on personal productivity is I look at the opportunity cost. And that could be either how much money could I be making in my business or time spending in my business versus doing this other thing? Or how much free time could I have? And what's that free time worth? Or whether it's spending time with my wife or Or doing something else. So, and some people might consider these luxuries, like we have a personal chef and we have a personal trainer. They both come to our house and cook. He cooks and the trainer comes to our house to train us. I don't go to a gym. And I pay, like the trainer, I pay him $25 extra to come to our house three times a week and work out myself and my wife. And if I had to get it, stop what I'm doing, get in my car, drive to his gym and come back, that's an hour wasted right there. My time is worth more than $25, whether I'm doing business or whether I'm spending time with my wife, it's worth more, an hour with my wife is worth more than $25. So I'm willing to do that. And then like on the chef, we looked at it like both of us would love to cook, but we just don't have time and we're not good at it. And if we're going to cook dinner and lunch and dinner every night and eat fresh food, it's going to take a few hours of our time. And versus having him come and do it, we get that time back. Without him, we might be just ordering Uber Eats and actually spending $40 to $60 on a delivery or something. And that adds up over time. So I look at sometimes on personal productivity, those types of opportunity costs and what could I be doing that's more productive than those things. Speaker 2: Yep. That's definitely meal plans, meal delivery, uh, any way you can systemize groceries, food, trash, like all the common things, the lawn, landscaping, uh, you should really should outsource as many of those things as possible. Personal training, fitness, we do all those things too. And it's, it's, uh, each one of those things sucks up your energy in terms of trying to focus to get it done. And then if you're going to have to do it yourself, like exercise, it's way more effort to figure out how to exercise yourself. And just have somebody force you to do it and do it in a positive way. It's way easier. So yeah, all great ideas. And if you're an owner of a company, you've got to maximize yourself and the way you eat and exercise is a key part of it for sure. Speaker 1: Well, Josh, I really appreciate your time today and you coming on and sharing this. If people want to learn more about Work The System or about you or maybe get a little bit of help on this, how would they go about doing that? Speaker 2: Yeah, they can just go to WTSEnterprises.com. I guess there's no video, but I'm showing the book right here, Work the System. You can get a summary of the book, Work the System there and also some other resources and get a business systems assessment. So yeah, go to WTSEnterprises.com. Speaker 1: Awesome. Thanks again, Josh. I really appreciate this. It's been great. Speaker 2: Thanks, Kevin. Speaker 1: Setting up systems in my business was something that I struggled with for a long time. And once I started doing it, it definitely made a difference. And I know the guys at Helium 10 that founded Helium 10, some of you go back in time to remember when Manny and Guillermo actually founded Helium 10 back in 2015, 2016, they actually were working in the business and they I remember they went to a war room mastermind and something there just gave them a total shift and rather than just being them, they started to actually hire people and set up systems. And within two years, they were able to exit the business for a huge, huge multiple and set themselves up for life. And that was because they had set up a system and a good system at that. So don't be afraid to venture into this and to do this. It can make a huge difference in your business. Before we leave, I just got some words of wisdom, the traditional sign off words of wisdom for you. You know, I'm not really interested in whether the glass is half full or whether it's half empty. What I'm interested in is figuring out how to fill the dadgum glass. Yeah, I'm not interested in whether the glass is half full or half empty. I just want to know how can I fill that dadgum glass. See you again next week.