How Business Systems and Processes helped Mike O’Hagan grow his company to 400 employees and over $23M in Annual Revenue!

In this interview, Mike O’Hagan Founder and Owner of MiniMovers Pty Ltd reveals how the lessons he learned from a previous business experience enabled him to start his moving business and have it systematized from day one!

You will discover how he started his moving company with only a $200 investment, grew it to 400 employees and over $23m yearly turnover. You will also discover how having the right business systems and processes played a big role the rapid growth of his company!

Mike O'Hagan Founder and Owner of MiniMovers Pty Ltd

 

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In this Episode You will Discover:

  • How Mike created a 28 point system and training program before he even launched his business.
  • How Mike took inspiration from the McDonald’s model as he was creating systems for his business.
  • How Mike discovered that his employees didn’t read the operations manual.
  • Why Mike broke his operations manual down into 20 minute videos.
  • How Mike was able to bring his operations manual online.
  • Why Mike has had to overhaul his business software over time.
  • Why Mike believes that his systems need to adapt to new technologies.
  • Why Mike believes the key to succeeding in the service industry is to create happy customers.

 

Episode Transcript:

OWEN: My guest today is Mike O’Hagan and he is the founder of MiniMovers Pty. Ltd. Mike, welcome to the show.

MIKE: Hey, glad to be here.

OWEN: Awesome. This show is getting entrepreneurs in here who would be able to systematize their entire business so it runs successfully without them. And the goal of the interview today is to just basically how you’ll be able to that in your business. First of all, what are some mind blowing results that you’ve now experienced as a result of systematizing and automating your business?

MIKE: My main business I’ve had for many years called Mini Movers which does short just furniture moving. I started that business with $200 and utility drug. Today, I’ve got 450 people we’re turning over just under $13 million a year. It’s building and growing, and we can’t achieve that without systems and processes. We simply can’t do that. Systems and processes hold it all together. That’s what creates the continuity for my customers. That’s what creates the ability for me to have it run without me being there.

OWEN: Awesome. How has your company been transformed as a result of systematizing the business?

MIKE: From the very first day I started Mini Movers it was always going to be a bit coming. That was always my intention. It’s a people’s business. It’s a service business in the service sector. The only way you’re going to do that is to systemize it. I also remember I think I had one or two trucks right at the very start. Computers just come out. I was sitting at the computer one day and I was typing, and my father who was a farmer, he came in and he stood behind me and said, “What are you doing?” I said, “Dad, when we do the furniture moving jobs we seem to do the same stuff over and over again.” So I was sitting and I taught what I now call the set system. And MiniMovers, every time we do a job there’s 28 things we do exactly the same way. Those 28 points is what I typed in that computer 28 odd years ago when I started the company, that was the start of what we call set system. From the very start I start systemizing it out. Nowadays, it’s a little bit more than a Word document with 28 points on it. It’s become a very, very electronic and very, very systemized process during the capitals and everything else, but that’s how it started. From the very beginning I started and from there I just kept growing and adding to the system.

OWEN: So it flows down into that because the odds are these people they don’t usually start the business from the beginning as being systematized. Was this based on the prior experience in the different business that we decided that this business we have started from the beginning are they beginning to be systematized?

MIKE: Yeah, exactly. I started my first business when I was in my mid-20’s. The second here dealing buying and selling stuff. I did it because I was waiting for a large corporate company at the time and I’d applied to be a trainee manager and they put me through a psych test. They put me in a classroom with a whole lot of people, put me through a psych test. And yes, I was the first one that called out of the room and so I wasn’t suitable for management. And I always thought that was a bit of a joke for many years, it kind of worked out. Now, I’m not suitable for management. I always want to make things better and improve things. One the basis of that I started in my business because I wanted to be my own boss. And I started second hand dealing, buying and selling stuff. I was a very, very good second hand dealer. I could buy stuff cheaper than anybody else. I knew how to find stuff cheaper than anybody else. I knew how to find stuff cheaper than anybody else. I grew that business up to three shops and it was a thriving business. Yes. I was very successful. I was the head of the local secondhand dealer school. We’d made representations to the government. It was fantastic. Everything looked great. I had a nice new car and I started paying the house. There was a tiny, little problem. The problem was that my shops are open 7 days a week. I was working 7 days a week. In fact I was working a 90-hour week and only having 2 days off a year. I was working those tremendous hours. I was really only earning right about the same amount of money as my staff running with 40 hours a week. I think that’s close to the definition of stupidity and it took me 6 years before I worked out that this was crazy. What am I doing this for? Why am I working all these hours to only earn the same amount of money as my staff who worked 40 hours a week, that’s just crazy. And it was then that I started to think for the first time in my life what is it actually I want out of life? I’m in my mid-30’s and it’s amazing how you just go through the education system and you’ve fallen to a job and you just do a job. And at no state do you stop and really thing, what is it that you actually want out of life? What’s the why in your life? In my mid 30’s for the first time I realize I actually love the idea of big houses, fast cars, big bugs and a jet sail lifestyle. I actually loved that idea. We see that in the TV box all the time. I love that idea. I started thinking that through and I thought what do second shops, they’re never going to give me that. For me to have that lifestyle I need an awful lot of money every week and not have to work. I started to focus on the lifestyle and to feed the lifestyle. It was very simple. I wanted to find something that could bring in an awful lot of money every week. For me, 30, 40, $50,000 a week and for me not have to work. It doesn’t mean to say I don’t work, I don’t have to. In the morning when I get out of bed I can do whatever like.

OWEN: Awesome. I like that. I just want to give the listeners the understanding as to why this other business that you have started up being systematized from the beginning because we have to give them full context. It was based on the prior experience and you’re going to this business from the ground up and you’re not going to repeat the same thing. It has to be systematized. Moving forward to your current business now, how has your personal had been transformed as a result of systematizing your business?

MIKE: I live probably an amazing lifestyle and most people nowadays… Right at the moment I’m living in Mania, in the Philippines. I still have a home in Australia. I have businesses in China, Hong Kong, Manila, and Australia. It is my lifestyle that I set out to achieve, I manage to achieve. MiniMovers I still own today, 100% out right. It’s down to probably about 1 hour a day online for me, that’s it. You can’t do that unless you’ve got systems and processes.

OWEN: Awesome. And since you have systems in your business that allows it to run without you what will you say has been the longest time you’ve actually been away from the business?

MIKE: It depends what you call away from the business. I’ve always no matter what even on holidays at least get my weekly report. Every Tuesday at 1 o’clock a weekly report comes off that has all the numbers on it. I’ve always looked at that. But having said that I recently spent 4 weeks wandering down the Mekong River in Asia. I just swim around, doing whatever I like. I just had to answer the question, how have I ever been away. I’m virtually not working my business now. I’m just doing whatever I feel like every morning.

OWEN: Okay, basically, working mostly on it, not necessarily in it as much. Okay, good. So the listener gets some context as to what your company is about, what exactly does your company do and what big pain or problem do you solve for your customers?

MIKE: Okay. I actually got several businesses but the moving business just simple does short distance, direct door-to-door moving. Most people move less than 5 or 7 miles actually. And that’s a market that we tap into. We grab our full service. We come in. We can pack if you want to pack or you can pack yourself with the boxes. We come in, we pick up all the furniture, just mail it and pick it all up, move it in, put it together, unpack if you need to, or just do whatever. We get you help and we charge an hourly rate. The more you do, the less we do, the less it’s going to cost the customers.

OWEN: Earlier you said you have over 400 employees but I’m wondering all of them from Australia? How does that work?

MIKE: No, I’ve got teams all over the place. At the moment I’m operating six businesses so the MiniMovers business is just over 400. It’s got probably about 30 to 40 staff in the Philippines as well.

OWEN: Okay. And so this very company we’re talking, the moving business, is the company profitable and what is last year’s annual revenue and probably what do you expect to generate this year? I’m just wondering?

MIKE: I think this year’s growth is slow, markets have been sluggish but there is growth. We’re probably running around 25 million at the moment. It’ll be slightly up on last year.

OWEN: Okay. Can you give us a range of what you’re doing?

MIKE: It’ll be about 25 million. I don’t know the exact number because I don’t dwell on it and look at it every day. It’s roughly 25 million and it’s probably increasing by one or two million this year.

OWEN: Okay. Here’s the thing, typically most of the guests we have on the show they talk about the business that they had and how it was not systematized, and how they ended up working it out so that it was systematized. But in your case, this very business we’re talking about, you said you started it from the ground up so that it was systematized. Take us back to the very beginning of this very business that we’re talking about right now. How exactly did you set it up so that it was systemized from the very beginning? What precisely did you do?

MIKE: I started by typing out what we call that 28 points which is our set system. I then expanded that and right in between each one of the points, a little story about each one of those. I then discovered that employing experienced people was a trap. They tried to do it the way my competitors we’re doing so I then started to focus on employing only inexperienced people. And I turned that set system that I just talked about into a training program. I looked at McDonald’s. I think McDonald’s is a phenomenal model of systemization. I looked closely at McDonald’s. I worked out that it’s really not that clever. It’s very, very fundamental. They employ unskilled people, kids, and they have a set system where the current person currently doing the job teaches the new person how to do the job using the structured checklist. And fundamentally that’s how I grew it out. I’ve developed a checklist system now. And then later on we [Unintelligible 00:10:48] that. There’s now a system inside tablets and it has videos backing it up as well. So that was the training system and how to deliver the product. The more we were doing it, we also systemized the customer end of things too. From the input of when a customer first comes through, for every step of the process to allocation, to doing the job right through. And that is one computer program. I actually hired a coder 15 years ago. He’s still working for me today, and we wrote what we call the MiniMovers program. It’s hard coded, it’s written, and it just controls everything. Nowadays, we’re just one enormous, great computer program running everything.

OWEN: Awesome. I’ve got quite a few things that I wrote down and just because this is not the typical interview where we’re talking about how they took a business that wasn’t systematized and systematized yours. You hit the ground running systematized. I’ve got a few points. I’ve got 28 point system that you created. And then the need for you to hire inexperienced people. And the training program was based on the 28 point system. And then you’re using McDonald’s as a model. And then you also had a mentor training program where employees were training other employees. And then you had a checklist system which eventually you turn it online and then you now also systematize the customer experience. I want to go into each of those great points that you highlighted so that the listener can really dive in deep with this. I guess you were selling user parts or something in your prior business, right?

MIKE: Yeah.

OWEN: Okay. Now you moved into a moving business. This 28 point system that you developed, did it come from the other business, or… How did you  go into this new business know what those 28 points were going to be?

MIKE: By accident I discovered that furniture could be moved using an hourly rate. In those days it wasn’t being done. That was a pure accident how that happened and a friend asked me to move them in a hurry and I did it and charged them an hourly rate. They said that’s fantastic, nobody does that. I looked around and realized nobody did it. There was an opportunity there. And I literally hired a couple of experienced people at the start and taught them to go and do the move. And as I observed them and watched them I realized that when they do the move they do the same things the same way every time. You give the job sheet, you look at the details, you get in the vehicle, you check this and you check that. You drive out to the job, you park out the front. You go in and you introduce yourself. You ask what’s to be seen. [Unintelligible 00:13:16], you explain this, you explain that, and at the end of the day you get your conditions signed, you go back out and you locate the truck. There’s 28 steps that we do at every job. The day that I wrote on that computer right at very, very start.

OWEN: So basically, what I think I got from that is you got some people who are experienced in the field already and have them go and do jobs while you just sit back observing over what’s going on. And over time by observing them you saw that there were literally 28 steps in the workflow of how you deliver the job. Is that how it was?

MIKE: Absolutely. In my mind I’m struggling, how do I do this, how do I build a system? And I started to observe they did the same stuff each time. I’ll write down what they do. And that’s how I started the system. Nobody taught me how to do it. It just came to as common sense actually. And that’s how I started there. I started by putting in the 28 steps that we do in every job. And from there we just grew it out.

OWEN: So that point really just hits on. Look at your business, figure out what the recurring things you do over and over again if you really want to systemize. And then that’s how you now come up with a recurring pattern. They say, okay, for this work for delivery. This is how we do it over and over again. There are the steps. I get that part. The second part was you’ve said how you decided not to go with experienced people, that you wanted inexperienced people. I’m wondering when you started out initially you mentioned that you go some experience so you can see how they were doing the work and you came up with 28 points. But why did you continue with the experienced people, on employees moving forward? What made you decide, “I want experience.”

MIKE: You live from your mistakes and we made some pretty horrible mistakes when we started. We’ve got some very cranky customers screaming at us. When a customer screamed at me I was able to see the big picture rather than the micro picture and I realized that it was the behavior of the guys and the behavior of the guys were coming from an industry behavior that they’ve inherited by working at my so-called competitors.

OWEN: Can you give us an example?

MIKE: They just had a very structured way of doing it. The industry works on quoted prices. When you do quoted prices you move quite slowly on the job because there’s nothing to drive you to go faster. We were charging an hourly rate. We needed to do the jobs a lot quicker. The customers are very aware of how fast they we’re moving, if they’re moving too slow then they got quite cranky about that. It was the habit. I had they were coming in and they were just going slow because that was their habit, that’s the way they’d always done it. And I realized when we got new guys that had never been in the industry before they naturally started moving a lot quicker. I’ve just observed that that’s the way we wanted to go. And I realized the problem was the habits from the industry, I needed to break that, and I needed to get away with it. I was almost at that stage very much studying McDonald’s. I was reading all the McDonald’s books and I was thinking very, very carefully about the McDonald’s picture book story. That’s when I realized that McDonald’s are a little bit like me to duplicate it and grow very rapidly, and I needed to tap into a pool of easy labor. It’s much easier to tap into a pool of unskilled labor than it is to tap into a pool of skilled labor. The two things came together I suppose. The bad habits from the industry and they needed to scale quickly. And if I could scale quickly I needed to have a way of generating good quality work that’s faster and just will make sense. Build a system and train unskilled people.

OWEN: The listener might be listening to this and say I get all these things but going on experienced people because most people they typically think they want to go after someone who’s experienced. And as you said, you’d rather go with the inexperienced because if you want the habits from the experienced coming into the new thing. But there’s also this whole thing of, now the inexperienced they go into the work, how do you get them hitting the ground running. And that’s when you’re talking about the training program you created. Let’s talk about the details about the training program you created at that time?

MIKE: The first part of the program was I wrote an operations manual. So off the 28-step system each one of those steps were started writing a story about it. That turned into an operation manual. A nice, big, thick manual that any corporate would’ve been very proud of. I discovered very, very quickly that nobody reads them.

OWEN: How so?

MIKE: They don’t. The employees coming in… People that are going to move furniture do not read operations manuals. It was the clash of the two ideas, it just didn’t happen. As I looked at that I thought, we’ve got to do this a different way. I was playing with video in those days, and it was very early days with video and I had some friends playing with videos. So we started videoing the story, I suppose the operations manual. We looked at it, we broke the operations manual into about 12 videos, short 20-minute videos. And each video is [Unintelligible 00:17:57] how-to video. I suppose it shows you how-to. The interesting thing about it though is we didn’t use it to actually train, we use them to adjust it at the end. Because what was happening is if you’re using checklists and you’re getting an existing employee, skilled employee teaching a new employee with checklists. If they teach them the wrong way then the new employee learn the wrong way and he’s going to teach the next person the wrong way. It’s like a Chinese whispers problem. And I was looking at that and we had a few instances that that happened. Then I realized they didn’t read the operations manual. Then I built these videos. We played the videos at the end of training not at the start of training. We trained them up and trained them very effectively. And then we played the video. So they sit down and they go, “That’s not the way I was shown to do it”, then go, “That’s the result we want to get.” The videos are used like an operations manual to make sure everybody’s on the same playing field, everybody’s doing it the same way. They’re not used for actual training. Training, we still use an experienced person teaching a new person.

OWEN: Let me see if I get this right. The training was two parts. Somebody was training them, and the after the training they now go and watch the video. Did I get it wrong?

MIKE: Absolutely

OWEN: And that training from somebody, I’m sure that’s like a mentor. Was that on the ground training with that mentor actually doing an actual job, and the person being training was just following them to see how they did it? I’m just wondering.

MIKE: Yup, it’s all on the job. There is a small component that’s off the job nowadays at the start, very, very small fundamental stuff. And then all the trainings on the job is for doing the job.

OWEN: Okay. Let’s talk about that mentor training mentor itself. What were the specifics of it? Because you mentioned there was a mentor, trainer. Is it just only them just working on the ground while the person is doing their job? Is there something besides that that the mentors had to do?

MIKE: Yeah. What they do is they have a book which have a lot of different points in it. As a mentor trains a new person he signs off against each thing. Where they point is very, very important, well I think that two or three different mentors to train them in the same point and not sign off. And on the last column when they go out the last thing they have to do is go out with somebody completely new they they’ve never been out with before and then the trainee explains to the mentor what they learned and what they understood for each point. And signs off that they understood what they were taught. So it’s a combination of experienced people teaching them and it’s a combination at the end of an experienced person on the job checking that they understood what they were shown and taught.

OWEN: Okay. Let’s dive into that checklist system. What exactly was the checklist system that you built?

MIKE: The checklist system is everything we do on the job. We’ve got massive [Unintelligible 00:20:58] list of everything, and we’ve turned it into training points.

OWEN: So is it like as they’re doing the work they’re just checking a list of steps as they’re doing the work?

MIKE: it’s done in the cab and the truck where they’re rolling in between the jobs. So when they’re rolling in between the jobs I’ll pull the book out and they said they might have moved to piano and I go, okay. Now I deal with six or seven points to how to move a piano and they’ll just talk through each point. We’re not actually moving the piano, they were shown how to do it on the day when they’re out there of course. And then when they’re on the truck they just discuss the two points. There’s six points and they just sign off that they understood the six points and they’ll move the piano.

OWEN: Okay. I think I kind of get it. So basically you’re just like they’re doing the work. It’s like they go through a checklist system where they’re checking off all the steps and the works. And I’m assuming that back then it was kind of like a paper checklist system. But then you said eventually you took it online. Talk about how what that transition was like and what exactly did you do to make that happen?

MIKE: I had many attempts at this, many failed attempts. I brought in so many IT people and all sorts of different people to electronically systemize our manual system, it wasn’t funny and failed at most of them. I thought one day I hired a company and insisted that they only give me one coder. I took one of my operations managers and I put the operations manager in a room with a coder and told them come out when it’s finished. And then we built a very good system. So I took somebody who really knew our systems forward, back, or upside down. I took a computer coder with the skills that we needed. Locked and set, got them sit together, work through. And what we want you to do, because we didn’t want to change the way it looks and feels to us. We just want to take it from paper to electronic. And the electronic people of course were getting smarter. They were out thinking us and saying, “We’re clever. We can do it a better way for you.” And when we look at it we couldn’t understand it at all. We’re going, “Hey, that’s not the way we think. That’s not the way we do it. We just want to do it the way we do it.” We do that now. That’s evolved. Fifteen years ago we started doing that and today I’ve got coders in the Philippines. We now use up tablets. We use Nexus tablets so we can lock them down and nobody else can get into them. And we can control everything that’s inside them. And a whole system and processes now appears on a tablet screen.

OWEN: That’s awesome. What I get from that is when you’re trying to basically digitize your procedure, your checklist system, or workflow of how you do your work is essential that when you’re working with the designers of the program. There’s somebody in house who knows how the work… Basically, someone’s very experienced of the workflow and how it’s done. They shared the knowledge with the developers so that when the developer does what they do to try and digitize your system. They’re essentially copying what exactly the experience should be like so that when it comes back to you guys you guys have a digital version of it but it’s easy to use and it’s very much in line with how you guys do your work.

MIKE: Absolutely. The best way to electronically systemize it is to get somebody who’s actually doing it to sit with somebody who writes computer code and between the two of them they build it and keep it on the flow. You needed to look the way you expect it to look. You get lost when it’s completely foreign to you. You don’t want a coder working on it on its own without understanding how it actually works. You need somebody experienced to do that with them.

OWEN: So far we’ve been talking about how you systematized the operations or production side of it. But then you mentioned one of the finer points earlier was how you systematized the customer experience. Can you talk about specifically what that was?

MIKE: From the moment a customer comes into our system, whether it be by ringing us on the phone or whether it be going on to our website and filling out a form, or whatever way it is then they enter an age structured set system. And when you go into the website you fill out a form which is a form [Unintelligible 00:24:53], they’ll ask to give you a quotation if you want to use those words. Believe it or not when you ring out our call center they’ll fill out the same forms no matter whether you’re doing it online or you’re doing it with our telephone person, the information is going into a form. Then that goes through and compares stuff. It gives you a quotation of course for the service. Then you agree to purchase a service and we put more information into our system. And then that confirms the booking. It sends out the booking details and all that sort of stuff. It allocates it into time slots which marries it up. The same with employment, we have a massive machine around employment, 400 people working for us as you can imagine. That’s all fully systemized as well. From the moment they apply for a job, coming through the interview stages, into acceptance, into actually starting and entering the system. And then when your availability, that lines up to the job in the computer system. Allocates the two together on the day to go and do the job. On the way out the thing appears on the tablet. It tells the tablet the guys in the trucks where the job is and what to do, what the details are, going through the whole process of doing the job, billing the job up at the end, and payment systems is all done in the same process right through. All of that’s in one computer program. So employment, customer flow, and then obviously into accounts and finance, and all those things. It all flows together in one program.

OWEN: And I assume all of these now is built over the years. It wasn’t all done together. Back then, how did you even prioritize what other steps to take? How did you decide what systems or processes, or even automation to create in the business back then? We’re trying to understand the things behind the scenes that went into it.

MIKE: Exactly we built it, step-by-step. And we built it step-by-step as it flows. So the very first thing we did was build a form on a computer. In those days we didn’t have websites so we built this form on the computer. So when people rang up we were populating a form on the computer. And that’s when it started. From there it grew through. It did undergo some evolution because a couple of times we get trapped by the type of software we were using I suppose and discover we couldn’t expand. And so we had to go back and rewrite it again in a new program. In fact I’ll share it [Unintelligible 00:27:09], right now we’re completely rewriting the entire program again. We’re doing…

OWEN: Why is that?

MIKE: Because the core of the program is 15 years old. And one thing you don’t understand about developing a process or program like this, it’s not a project. There’s no [Unintelligible 00:27:26] finished state. It’s ongoing forever because we’re always adding new bells and whistles to it. A few years ago we added this automatic SMS into our system so that all of our employees talk like an hour afternoon, get an SMS telling them what their starters or whatever their status for work tomorrow is. They respond to an SMS and it automatically goes into the system. For us to add that in we have to do some major operations and creative solutions to get it to work because the core of the program is very old and it’s not able to do that. We’ve reached the stage now where we’d simply, from a software point of view, we just got to rewrite it. We’ll rewrite it, it’ll look exactly the same, it’ll feel the same, and it’ll just be in a more modern code environment to make it easier for our cloud solutions that we’re not using today. So we’re just rewriting it.

OWEN: What I get from that is the whole thing of systematizing the work that the employees have to do manually as well as automating the things that the machine can do as part of the engines you have behind the scenes. It’s just basically an ongoing improvement where you build the minimal rival version of it and get that running. And as you go you begin to iterate and improve the different parts as you go. That’s what I get from that. I’m wondering at that time when you were initially trying to automate and systematize the business what books and mentors had the most influence on you and why? I think you mentioned how McDonald’s had an influence on you but I’m wondering which other books and mentors had an influence on you besides McDonald’s?

MIKE: Start Small Finish Big by Fred DeLuca it was a book that changed me a lot. It made me realize that it’s all about evolving and things constantly changing. You got to be very careful with structured systems that you don’t freeze them too much. That’s the guy with Subway. The difference between Subway and McDonald’s was that in Subway they take the worst selling sandwich off the market every month and replace it. If you understand that principle it means that your product’s always evolving and staying with the market. Where McDonald’s recently got into strife and the reason it got into strife was it was so systemized and so processed that innovation left the system that weren’t innovating anymore. I think Start Small Finish Big by Fred DeLuca’s one. All of the McDonald’s stories have been a great read for me.

OWEN: Awesome. When you were doing this back then for this very business, if we just talk about what you did and not talk about the challenges you faced we would not give a full picture of what really happened. What would you say was one of the biggest challenges you experienced when you initially tried to systematize this business that you started from the very beginning and systemizing. How did you solve it?

MIKE: Computerization was my biggest challenge by far and I burned and lost so much money in there it wasn’t funny.

OWEN: We’re talking about 30 years ago that you’re trying to do this?

MIKE: Yeah, 20 years ago we were doing this. Twenty years ago we were starting to computerize the system. We get the equivalent of an Excel spreadsheet with a little, young kid that knew about computers. Don’t forget we don’t know what we’re doing either. We built a system inside an Excel spreadsheet which was fine until he disappeared one day and none of us can do anything with the sheet and fix it up. I learned a lesson. When one starts with little people doing things and they disappear. I’ve been to a large company and got this amazing quote for hundreds of thousands of dollars which I agreed to pay. I was going to borrow the money and pay it off as stupid as it may sound. We got into that about three months into that contract and we realized that they were on a completely different planet to us. The way it brought they were doing and the way they were talking was just completely foreign and we didn’t understand anything that we’re doing. And we pulled out of that. I had to pay some money to get out of that contract but thank goodness I did. It was a good challenge. The whole computerization thing has been the biggest challenge to us and it still is today. It’s always evolving and changing all the time. As I said, your systems and processes they continue to evolve and continue to change. It’s not a project. There’s no start and finish. Like I said we put SMS and that makes sense. We’ve now introduced tablets. Why? Because tablets didn’t exist a handful of years ago, now they do, and they’re a good device for us. I don’t doubt for one second that some new device or newest thing is going to come out the next one or two years, which is going to, again, change how we do it. And we have to evolve and change with that. Part of my role today is to be on the leading edge where the changes are coming from and working out which ones are going to be serious and continue on and we should adapt and which ones we should ignore because they’re not going to take the market. As an owner of a large company that’s a very important part of the process of being an owner.

OWEN: What I really get from this very business that we’re talking about as a case study is that yes, it’s a service business where you actually have people doing a service for people. But you have a lot of automation behind the scenes that for those things that can be automated has to be done by somebody. The system itself gives those people a means to understand what stage of the workflow they’re on and lets them know what it is so nothing falls through the cracks.

MIKE: That’s exactly right. It’s just that’s what’s it all about.

OWEN: Awesome. Now that we’ve talked about how you hit the ground running by systematizing the business from the very beginning and the challenges that went through there. This very business now, let’s talk about the different parts of the business because I guess that would make this clear in terms of the question. Think of your business as a conveyor belt, on one end is somebody who’s thinking of moving to a new location. And at the other end is somebody who has used your service and raving about it and talking about how they love you guys, and referring you guys customers. But behind the scenes that parts of your business have specific systems in place that’s making that transformation happen. Just give the listener like quick run through of that conveyor system behind the scenes that are working in your business..

MIKE: You’re talking about the process when the customers entered the system and…

OWEN: I mean if you can even go maybe a couple of steps even before they enter into the conveyor belt. If you can talk about that too that’ll be nice. That way they can hear what happens before they even become a customer, probably how they hear about your guys all the way to you guys…

MIKE: From a marketing perspective when I’m selling the service… Most customers in a service come from word of mouth, they come from other people saying, “You’re going to do that, you need to use these people here.” So, the key to my industry or any service most customers in the service come from word of mouth. They come from other people saying, “You’re going to do that energy you see these people here. The key to my industry or any service sector is to get well customers raving about you. That’s why I have all the systems and I have all the employment things in place because my goal is to generate by far the best removals I can get, the best movers I can get, and I do that by creating them. So the idea is that the guys create happy customers, they talk to others about us, and most of our work today, over 70% or 80% of our work today is referred to us by previous customers.

OWEN: Did you mention the referral so that it happens consistently on a predictable basis? How did you do that?

MIKE: We do that by generating fantastic people doing a great job. That’s what it’s all about. The only reason I built the system and processes was to be able to deliver an outstanding product to my clients. And to be able to do that with continuity I had to start with inexperienced people and skill them up and teach them to do it my way, which is a fun and happy way. We teach them step by step exactly how to do it. That’s what it’s all about. It’s not just teaching people to move furniture, it’s teaching them how to wow the customer.

OWEN: I get how having top notch, quality people who can actually do the work can lead to referrals. I was wondering if you have some extra engineering in place to make sure that that referral actually happens. But it seems that that’s not the case. Continue with the conveyor belt.

MIKE: To generate workers that are going to create wow customers you got to instill right into them. Our employment processes are all designed to try and pick up the guys with the right personality, basically able to move the stuff, live in the right areas, physically able to move the stuff and got the right personality to generate the customers. Those are the three boxes we tick when we start somebody, which has got a whole lot of things missing out of it. Experience is missing out of it. Fundamental skills is missing out of it. We teach them all that. We teach them all. That’s what the set structure training program is all about. We take somebody that’s got the right personality and we turn them into somebody who’s going to make customers go out and rave about us and talk about us over and over again, because that’s what we need. We also use a goal system. We have one single goal. Everybody’s goal in the mini movers is to create tomorrow’s customer. Why? I want to wow this one so he tells other people about us. And we instill that into them. We absolutely instill in them. So it’s not a sterilized training program. It’s a training program to create a person a personality in itself the company I suppose, very much like Zappos in a way. Where Zappos have done a personality thing and got a ra ra ra, happy thing that’s dragging the customers inward, manage to do the same with moving…

OWEN: I get that. I get the system that is the training system. When that customer gets in, granted they’ve been trained by the employees who have been trained. I’m trying to understand how you’re moving that customer through the different parts of the system you have behind the… Yeah, that’s what I’m trying to say.

MIKE: Alright. Nowadays, they go online and book. Thirty percent of our customers do everything online. And the first thing we notice when the boys turn up… Or they call a call center. My call centers are on the Philippines now. I’ve managed to train Filipinos to do sales and sell moving jobs very, very good. I’m very good of that. That’s part of what’s the back end it’s in the Philippines. It’s a great country to deal with, great, friendly people. They train up very, very easily. It’s very, very cost effective as well. We do that. That training and all the different processes there’s a very structured sales system that they follow where they go through and collect what we call the three W’s, when you’re moving, where you’re moving, and what have you got to move. Once we have that then we tick those three boxes, then go and explain how we do it and how we go about doing. That’s all very structured scripts, structured answers to everything. They’re working through that process and populating the computer screens. They’re doing all that. And then going through and going for the close of the sale and the traditional way that you would normally sell information, explain the product, and then close the sale which we do. Once again, or sales people are employed with no experience whatsoever and trained from scratch. Why? Because there’s only one way to do it. My way and no other way. And I’m [Unintelligible 00:38:45] in the system.

OWEN: The sales person then gets the person sold and the customer is now technically a customer. So there is a production part. How does that funnel part of the system work?

MIKE: It’s a call center with a computer screen. As they’re going through each part of the move and discussing when they’re moving, where they’re moving, and what they got to move. They’re also gathering the information, that connecting with the customer and they’re having a conversation with the customer…

OWEN: What I mean was that when the sales people are done with their stuff they collected the fee. They made the customer pay for the quote. Now they hand it over to the production people who are actually on the ground doing the moving. I was trying to understand the hand off and how that works.

MIKE: That’s all completely computerized.

OWEN: Okay.

MIKE: Nobody touches it. Once the job’s put in the system by the sales people nobody touches it. It’s allocated automatically the next day by the computer. The day before the techs go out the computers allocate the work to who’s going to do the work. And then the computer send text to their phone saying are you available to an 8 o’clock start, yes or no? They respond for that. The computer picks all of that. They come in in the morning into the depots and they pick up the… The computer screen tells them which truck to get into. The tablet and the truck tells them where to go. The whole thing’s computerized. There’s nothing in the middle.

OWEN: Awesome. I’m wondering, even after they’ve done the work now, I guess when they go into the work, they’re doing the work, they’re following your computerized checklist of how to do the work while they’re at work. After they’ve done the work and the work is delivered do you have systems in place to make sure that they actually deliver the work correctly? Basically, just trying to get feedback from the customers after the service. I’m wondering if there are systems in place for that.

MIKE: With our systems payments on completion not at the start. We charge an hourly rate which a different in how others do it. We go out and we provide… We don’t have any deposits or anything. We simply go out and provide the service and when the job’s finished the customer then pays it. That’s done on the tablet. The calculation’s done on the tablet. At that point the customer answers a couple of questions as well to indicate if there’s any problem. There is a very structured process in place if anything goes wrong. Obviously, we’re moving furniture, obviously pre-existing damage is an issue. We use the cameras in the tablets to take care of that problem. That’s all part of what we do. It’s all systemized and recorded. We can record any of that back anytime and look at it. So when the job’s finished, if the boys haven’t done a good job the customer’s not going to pay them. When this is finished then we say, “Okay, that’s it we’ve finished this and how much it is” and the customer pays us. We can process that payment right there on the spot standing there with a tablet on their hand. The customers signs up on the tablet if they do. And answers a couple of questions then that’s it. We do have a little bit of marketing back to the customers a little bit later but it’s very vital in what we do. We just check that there’s nothing left out that we need to do. But once again, it’s all automatic. The whole it’s completely automatic.

OWEN: Awesome. We established earlier that the business is systematized and runs without you and just literally don’t have to be the person who doesn’t a business systematized like yours. Since you have that most free time which areas in the business do you now focus on and why?

MIKE: The GFC taught me a lesson that…

OWEN: GFC, what is that?

MIKE: The financial crisis.

OWEN: Oh, okay.

MIKE: The financial crisis in 2009, 2010, 2011 taught me a big lesson in business, and the lesson in business is I need to diversification. Since then I’ve been very much focused on diversifying my businesses. Like I said, I have a manufacturing business in China that does drop shipping from China. I have a couple of businesses in the Philippines. One of them involved in teaching Western businesses how to do it in the Philippines. I run business learning tours and a think called Mike’s Manila Tours. Lots of American’s come over. Americans, Australians, and all Western businesses coming in here every second week or so. They spend three days with me and I take them around and show them how offshoring works, how it’s evolving, and where the likeliest opportunities are in it. And how some of the early stuff that was done, so called outsourcing stuff was…

OWEN: I might need to sign up for that class.

MIKE: That’s my absolute are of expertise nowadays is I’m an off shoring [Unintelligible 00:43:31]. That game has changed a lot. What was 5, 6, 8, 10, 20 years ago with outsourcing has evolved into what we call off shoring where we’re building our own teams and our space, and getting some amazing productivity. I teach all the different ways you can do it. I teach traps for and against each way.

OWEN: And just so the listener gets the difference and correct me if I’m wrong. Outsourcing is when you getting some other company or entity to do the work, but off shoring is you actually go in there and building your own base, your own employees that are located in the Philippines, and basically training them the way you want them to be trained. Is that kind of what it is here?

MIKE: There’s actually seven different ways you can do it. You can start with Upwork of course which is individual virtuals at home. And you can work through all the different ways. Outsourcing is the big corporate model. There’s a small, middle business outsourcing. Outsourcing is when you give a process to a third party and they just give you the result back. Typically, most business would outsource their accounting, and typically you would deal it to a local account. You just give your local count and takes your work. He runs the process and gives you the result back. That’s outsourcing in a simplistic view, but it can get bigger than that where you can outsource a lot of your processes in your business. That has big problems with it because your process is unique to you and it’s unique to what you’re doing and it’s hard for them to adjust to that. What’s grown out of that, I think the big boom at the moment in off shoring, off shoring is when you can actually develop your own team in a common space, and that’s a big one compared to virtual home base workers. Your own team in a common space and you can work processes and systems with them. And also of course with… and this is how business is generally grown since it was started and ever again. It’s a group sharing, developing test of knowledge and sharing it. You get that out of group learning things well. That’s the big boom as well. And also of course the specialized services that you can hire. You can hire special marketing services, you can hire networking computer services, you can hire accounting, law, a whole lot of specialized services you can hire as well. What I do is I run a 3-day intensive business learning tool where I teach all of those different ways of doing it. I do it for pre-startups, people, people wanting to get ideas for a new business, commonly come up when I do it. They all get lots of ideas from my tours doing that. I do it for small, medium, large, and quite often even get publicly listed companies coming and I deal with that trying to learn how to get around this whole problem of off shoring and make it work properly for them. Because so many of us did it in a small way using Upwork and those sorts of things that had all sorts of tremendous problems and didn’t quite understand what we were doing. That’s what I teach. I teach it and I’m very good at doing it.

OWEN: Awesome. As we come to the end of the interview, I’m wondering what is the very next step that you think the listeners should take. They want to be in your situation where they started the business from the very beginning with the intention for it to be systemized. What would you say is the very next step for them to take?

MIKE: I think it’s all in your mindset at the very start. My mindset at the start was to grow a lifestyle for me. I’m in business not for my business, I’m in business for my lifestyle. My lifestyle that I want, the one that’s inside me, and it’s different in everybody. It involves big houses, big boats, and fast cars. That’s my lifestyle, that’s my choice. And because that’s my ultimate outcome, because that’s my BHAG, my big hairy audacious goal, I’m focused on my business as being a machine. And therefore if you focus on being a machine you would automatically systemize it because it makes sense. My passion is not what I do, my passion is in making money.

OWEN: Awesome. What will you say is the best way for the listener to connect with you and thank you for doing the interview?

MIKE: You can just Google me. I’m happy to put my email address out there, it’s mike@ohagan.com.au, or you just Google me on my LinkedIn in, all those pages you’ll find me very easily there and communicate that way, no problems at all.

OWEN: Awesome. Now, I’m speaking to you the listener. If you’ve enjoyed this interview all the way to this point I want you to do something. I want you to give us your honest feedback and a review on iTunes. To do that go to sweetprocess.com/iTunes. If you’re using an Android then you can leave a review on the Stitcher app. To do that you go to sweetprocess.com/Stitcher. If you’re at that point when you’re tired of being the bottleneck in your business and you want to get everything out of your head so your employees know what you know, consider signing up for a free 14-day trial of SweetProcess. That’s it. Mike, thanks for doing the interview.

MIKE: Thanks for having me, mate.

OWEN: And we’re done.

MIKE: Okay.

 

Noteworthy items Mentioned in this Episode:

  1. Start Small Finish Big: Fifteen Key Lessons to Start – and Run – Your Own Successful Business by Fred DeLuca & John P. Hayes

 

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Here are 3 Steps to Take After Listening to the Interview:

  1. Determine what your lifestyle goals are.
  2. Focus on your business working like a machine.
  3. When you’re focused on having your business run like a machine, systematization will be a natural extension of that.

 

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