Do you want to work less and make more money? Imagine your business being run successfully and generating millions of dollars each year without your constant involvement. Just think about that for a minute…how does it feel? Is it even possible?
OWEN: My guest today is James Schramko and he is the founder of SuperFastBusiness. James, welcome to the show.
JAMES: Thanks for having me Owen.
OWEN: Let’s right in. The goal of this interview is to talk about how you’ve been able to systematize your business so it literally runs without you. You don’t literally have to be there for it to run. It’s basically successful because you recreated systems and all that. Let’s share one mind-blowing result that you now experience as a result of going through that process of systematizing and automating your business.
JAMES: I think the thing that continues to blow my mind is that I could generate millions of dollars in sales each year without having to be involved in the large parts of my business. I think that’s truly fascinating.
OWEN: That’s awesome. I think you also mentioned how you don’t have to exchange time for money. Now you sell resource for money. Explain that just so the listener can understand where you’re going with that.
JAMES: There’s two main economies where people derive their money from it. One them is the well-known job economy, which is where you exchange time for money. Say you’re a taxi driver. You’re driving your taxi around. You get paid when you turn up. Or you work at McDonald’s and you’re flipping burgers and you’re getting paid per hour. That’s the very common economy that people like to sell their labor. I figured out that I’d rather sell results for money. Let’s just say a result could be in our case a website. Someone comes to our business they say I’d like a website, they pay the money, and then we build the website. But by we I don’t mean I, I mean my team. My team will take that order, and they will liaise with the customer, they will develop the website, load it up to the customer’s hosting environment and say “Here’s your website.” And the customer says, “Thank you very much.” Somewhere along the way that all happens in the background, but me the business owner I might be asleep, surfing, or working in a different part of the business. So it really is a more leveraged way for the owner is to, in simple terms, I can buy time, I can buy other people’s labor and resell that for a profit.
OWEN: Awesome. We’re going to ask you a question to basically find out specifics about what your company does. I’m wondering how is your company right now been transformed as a result of you systematizing the business?
JAMES: The main thing is it’s transcended me. When I started the business it was just James Schramko and I had a 180 hours a month to put to the business and I ran out of capacity. By having systems, and scaling, and bringing in people who could follow the systems, who actually have the business create its own identity. So now SuperFast Business is the prime website and that’s the brand that a lot of customers know, and some of them might not even know me but they’re dealing with the business. It’s like when you fly on a Virgin United airplane flight. You don’t necessarily know who the pilot is. You might know who the founder is but you definitely know the brand name of the company.
OWEN: That’s awesome. I want to give the listener some insight as to how your personal life too has been transformed as a result of systematizing the business.
JAMES: Personally, I used to be in a job and then I started this business part-time online after work. It was basically 9:30 at night, or 2 or 3 in the morning every day. That’s great but it doesn’t scale, These days by having been able to bring in teams, for them to be able to follow the structure I’m really able to choose the bits of the business that I want to work on. So there’s parts of the business that I’m still quite active in which is the coaching side. But the services side of the website development and search engine optimization, it’s really team-run. That allows me a great amount of customization compared to driving a desk for a living. It’s a mail job. I was pretty much going to the same place of business every day from 9-5, or 9-6, or 8-7 almost every day of the week. I’m driving to work thinking this is not right. Why am I sitting in traffic, why am I sitting in someone else’s business all day long? And then I go back to my family and my kids are asleep, etc. it’s not living. So I understand my people talk about retirement and that one day this will all end and they’ll have a big bucket of money and they can now live. I thought, Screw that. I don’t want to be 65 by the time I can enjoy this.” So I rearranged everything to let go of the job so that my business was my income source, and I developed that so that it was very profitable and systemized. Now I can just call my own schedule, and in particular I really only choose to do customer facing or external type activities, say, recording a podcast like this. I do this only 2 days a week. Then one day I wake I ran a mastermind and then the four other days I don’t have any scheduled activities. So there are literally three days for me to do what I want.
OWEN: That’s awesome. Since now the business itself runs without you successfully, what would you say has been the longest time that you’ve been away from the business?
JAMES: Probably due to bad internet it forced a little bit of a business absence. I went to the Dominican Republic about a year and a half ago. The internet was just so bad that it almost kind of worked at 4 in the morning when everyone was asleep for about 20 minutes. I just emailed my team and my customers and said, “Hey, I’m just going to be off the air for a couple of weeks. I’ll catch up with you later in the month.” I think it worked out about 12 days. So I just had no internet and therefore no connection to my business which is completely online business, there’s no physical aspect to it. I’d say 12 days. But another aspect to this is there are parts of my business that I don’t revisit for at least 12 weeks or 3 months where I go and meet with the managers and talk about that division every 12 weeks. But in between that I won’t touch part of the business because it’s very highly automated and running smoothly.
OWEN: Yeah, I think you also mentioned that you’ve been able to travel 6 weeks at a time without any interruption as well during the pre-interview. That is awesome. We’ve kind of shared with the listener, given us some insight as to what you currently experience now that the business is systematized. Let’s take them back to the point where it wasn’t systematized as it is. What will you say exactly back then was the… Before we even do that, I realized that I’ve not even asked you exactly what the company does because the listener what’s to know that. So let’s go ahead and talk about that specifics about what your company does and what big pain do you solve for your customers.
JAMES: I would give good context as to what we’re talking about.
OWEN: Yes, I’m just so excited jumping into the… Go ahead explain [Unintelligible 00:07:23]
JAMES: It is a pretty exciting business. It’s called SuperFastBusiness.com. There’s two main sides to it. There’s a services side where we build websites and we provide SEO services. That’s very team intensive. There’s a lot of people in that side of the business. Then there’s the other side, which is the coaching and information side of the business which is where I have two communities. I’ve got a coaching forum that’s quite accessible for people called SuperFast Business membership, and then I’ve got a high-level one which is a pretty, VIP sort of master mind called Silver Circle. And that only requires a very small team. It’s like 3 or 4 people in my publishing division who help me post podcasts and re-arrange content and training modules. And I run a live event each year for those as well. That’s really the sum of the two main parts, and that all adds up in terms of size, scale, and profits I can’t tell you that we generate several million dollars a year in sales revenue. We clear a 7-figure profit. And my personal contribution in the business is around about a 20-hour target workweek on the computer. I don’t like to spend more than 20-hours on the computer at this stage in my business. I know that I could probably make more money if I spend 40, 60, or 80 hours. Let’s face it, when you’re starting an entrepreneurial venture almost always you’re going to spending a lot more time in the business in the beginning all this sort of stuff out. But as things become smoothed out, automated, and run properly you can retract a little bit and the thing still runs because you’ve built this machine. That’s where I’m at, at this point, and we’re coming up to about 9 years from when I started the business.
OWEN: Besides the coaching program where you have different levels of coaching, I think you also have a division that’s building a website and SEO content, marketing type services, right? Correct me if I’m wrong.
JAMES: That is correct. We do especially WordPress and Shopify development for a lot of my customers in the coaching side. Invariably they’ll have a website and they’ll need help with it. That’s pretty much how the services has started. And they just continued to grow around our customer’s needs. But the key element is that for the whole business we really have one main type of customer who needs most parts of the things that we sell, and that makes it very effective because we can run it from one website.
OWEN: That’s awesome. Just to give the context as to how many full-time employees you have, what is that?
JAMES: We have around 50 people in the business and I’m the only full-time person in Australia. There’s one part-time contractor in Australia and the rest of them are in the Philippines.
OWEN: That’s great. I guess all are working virtually, right?
JAMES: Everyone works from wherever they want. We don’t mandate where they need to be. We don’t have an office for them apart from the headquarters here where I have a studio for creating content and focus computer time, that’s it.
OWEN: I like that. I got ahead of myself and jumped right into asking you to take us back to when the business was not systematized. Now, I want you to take us back when the business was not systematized and automated like it is now. What was wrong with it at that time?
JAMES: The main thing that was wrong with it was I was doing everything. That’s the problem. You can’t do that for too long until it gets a little bit boring. And you also cap your income capacity. Most solo-preneurs are going to max out at say a million dollars a year if they’re lucky. If they’re an expert keynote speaker. But the reality is most people are going to hang-up their boots at around $100,000 to $200,000 a year. It’s actually quite easy to make a $100,000 a year a solo-preneur. It’s much harder to make $1 or $2 million a year until you start systemizing and scaling your team or re-investing a lot back into paid traffics for example. If you happen to have a very light business model it doesn’t need a lot of staff, which is pretty rare. Most business models need some kind of human labor input.
OWEN: So initially it was just you and then eventually you ran out of capacity. I’m curious, what will you say was the lowest point in the business at that time and describe how bad it got.
JAMES: I think low point has been I’m falling asleep at my computer at 3 in the morning as a solo-preneur. By day I was a general manager with 70 staff and by night I’m just sitting there starting to shiver because I ran out of energy. I’m completely exhausted. My dinner from 8 o’clock at night’s worn-off. I literally start shaking in the cold at 3 o’clock in the morning thinking this isn’t working out so well. Because you’ve got these great dreams, aspirations, and hopes that you put on your business. You’re seduced by a lot of the marketing material that explains how easy it is to be extremely wealth with minimal effort online. It’s not really panning out in reality. Writing an article, to post e-zine articles. Or trying to figure out what a CSS is for my website so it could look nice. It was just slow progress in the beginning.
OWEN: I think during the pre-interview you mentioned how it took months to make the first sale. That was one of the big issues the other one was finding an offer that convert. Can you talk about that?
JAMES: I think that’s really the Holy Grail online. Everything talks a lot about traffic, tools, and stuff. But at the end of the day the whole goal is to find an offer that he can take to the market that creates real value that people are happy to pay for. Once you find that everything builds around that. That’s when you can scale, that’s when you can grow it. That’s when you can put some effort onto it, refine it, boost it up with some advertising, work out your customer service delivery so that you can have good reputation. It all revolves around the offer. And small conversion changes make the biggest difference, because traffic is freely abundant. It’s easy to get traffic. It’s much harder to work on the conversions aspect. And then behind that of course are all the aspects of the transactions, like the dollar amount, the frequency, and then the margins. You got to tune those things to make the real profit.
OWEN: Do you remember the breaking point when you realized back then that you just needed to systematized and automated the business? Do you remember what happened specifically?
JAMES: I brought to my business a whole history of systems and people, which why I had such a stark contrast. It was very obvious to me that by day I had everything figured out in someone else’s business, and by night I’m way back to medieval times. It [Unintelligible 00:14:28] it was immediately obvious to me. From day 1 I was documenting everything that I did. And it was just that little mental hurdle of starting to calculate the return of investment of my time versus the activities. And it all hinged around finding something that converts. Because when you find something that converts now you start to get some cash, the cash that you can reinvest. The biggest struggle really is just waiting until you have enough money to reinvest. I started my business from zero, without any funding, without any outside help, without any loans. It really started from that first $49.25 commission and built up from that, which I then started to reinvest into things such as support and article creation for content.
OWEN: I’m also wondering, at that time, realizing that you didn’t have an offer that works, or you didn’t have this engine that you could drive traffic into and turned it into customers. But also knowing that you needed to bring on people to hire. How did you deal with that challenge, that mental sticking point that you knew you had to hire somebody even though at that time you didn’t have that engine that converts people into customers.
JAMES: I just know that historically in my life it’s always been exactly the same. When I start something new you get beaten up. If you go and play a video game with a kid you’re going to get slaughtered because they know all the tools, they know the levels, they know what’s happening in advance and you don’t. When I started competitive sailings I used to get smashed around by the boat, thrown out, ditched over the side, and washed away by waves, there’s gear breakage. You come last before you come first. It’s a trial and an effort. So the challenge is what motivated me. I remember saying to myself. It can’t be this hard. Surely, someone of reasonable intelligence who’s dedicated to making his work can get there eventually. It just took a long time, it really was. As one of my very wealthy, Mercedes Benz customers explained to me, he owned most of the residential building blocks in an entire suburb of Sydney. When he started he was dirt broke. And he said there’s just phase when you’re starting out where you’ve got to eat beans and crawl over broken glass.
OWEN: I like that.
JAMES: That’s really what prevents people from getting to the other side, is they’re not prepared to crawl over that broken glass to get to other side. And they’re not prepared to eat beans for a while, which means just be humble and accept that you can’t have the champagne lifestyle while you’re doing the [Unintelligible 00:17:22] stuff. You’ve got to just be used to this delayed gratification in the beginning because most of these business models require an element of discipline. There’s two main things you have to do to get these results. You have to do the right things. You have to be doing and you have to be doing the right things. If you can get that combination right then you’re set. That’s really an ethos from Peter Drucker that I’ve embraced for my entire business life.
OWEN: Getting back to that point where you had some of these lowest point you mentioned I want to give the listeners the insights as to the very first step you took to solve the problem. I think you’ve mentioned that you wrote down everything you did an A3 notebook, talk about that.
JAMES: Yes. I’ve always been good at taking notes through my business career, whenever I was in meetings or consuming books, I’d strain them into notes. So I would take an entire book and turn it into a 5-10 pages of bullet point notes. When I started my own line journey I was making a lot of maps, mind maps. I was basically putting the information that I was hearing from cassettes and reading online into my brain, percolating it, and then purging it back out onto paper so that I could visualize it, see what it looks like. I still got my notebooks from 2005-2006. I had some very complex things. We tend to over-engineer stuff. But I documented everything that I did and I ended up turning that into Excel spreadsheet which had checklist for everything. Building aside it was like buy a domain, point to server, create a [Unintelligible 00:19:04] server, and I had the specs for the server. Develop site, change this file name, adjust the CSS setting, rename images, publish to server, index by getting a back click. All this, it was just a comprehensive list, and then it turned into this kind of dashboard where I would start at the beginning and move all the away across the columns, and I’d end up with a completed website. I ended up then publishing that into information products which what became my first product that I sold. That was the tipping point at stage 2 when I went from doing this stuff, to documenting it, to then publishing and for other people to do. So the system was so good that it worked for everyone else.
OWEN: You also mentioned the second step you took was teaching hires to do the same by using that systems that you documented. Let’s talk about how you did that, the actual training based on what you talked about.
JAMES: The first SOP in our business is that if you’re going to do something more than once you create an SOP. We do have standard operating procedures for everything that happens over and over again. We also have a fundamental rule that there’s always two people that can do any of the jobs in the business. Everyone has a backup and we call them a Noah, Noah’s Ark 2.2. When someone new gets hired it’s completely automatic now. Now someone can come to the business. We’ve got trigger points when we need to hire. We’ll run the advertisement, we’ll do the interviewing process, it’s all documented. The candidate will be accepted. We’ll have an induction process, which is all directly learned from working in my city’s best dealerships. And then they’ll have a training buddy who goes through a training system, which is the I, we, you method.
OWEN: Can you explain that because I think that’ll be nice for the listener to know what you mean by I, we, you method.
JAMES: It’s just a simple method where if you want to teach someone something. Let’s say it’s teaching someone to tie a shoelace. Let’s say you’ve got a kid and you want to teach him to shoelace. The first one is I. So I will tie the shoelace. We’re going to learn how to tie a shoelace. Watch me as I tie a shoelace, and I’ll tie the shoelace. And now let’s do it together. This the we part. Now, you do it together. As they’re doing it you might move their hand, or show them a different way to put the string, and then they do it together. Then I’ll say, “Okay, no you do it and I’ll watch. And I’ll see if you’ve got this.” Because you don’t truly understand how to do something unless you can teach someone else. So it’s the I, we, you method. And that’s worked really well, very simple formula.
OWEN: You know what, just so the listeners know. We do pre-interviews just to get these stories that we can share with you. I have in my notes I O A U method. I was like, “What is that?” So it’s I, we, and you, that’s what you mean right?
JAMES: That’s exactly right.
OWEN: I’m glad you clarified that. You do it first then the other person who you’re training do it together. And then you give them the opportunity to do it on their own. That’s how you train them.
JAMES: In the online world it would typically be a screen share. You might be on Skype with a screen share or go to a meeting. We actually need to go to a meeting in our business for training. It’s permanently set-up as a training desk. And any of the managers or any other team members can go and train. They know we’re on this. They’ll log on, they’ll be sharing the screen and say, “Okay, watch me do this” so they’ll do it. And then they’ll say, “Okay, now, let’s do it together. You try it and I’ll just make corrections. Now you do it.” If it’s done correctly it should follow exactly the standard operating procedure, which is step, step, step… They might have the standard operating procedure on half of the screen and they’re actually doing it on the other. It’s really this competency based training where the trained can observe the student make sure that they’re following the standard operating procedure. Within a week or so, maybe 2 weeks, the standard operating procedure pretty much become come completely autopilot habit. They’re unconsciously competent by about 2 weeks with the processes that they’re doing.
OWEN: Going back to the story. The first thing you did was you documented everything you were actually doing. And then when you started bringing on people you follow this I, we, you method to actually train them, show them how you did it, and work with them to do it together, and get them to do it themselves. Eventually you started hiring more people and offloading more tasks to them based on this I, we, you method. I’m wondering was there any other steps you took then to solve this problem that you have back then. Anything else come to mind besides these things?
JAMES: There’s so many elements to having a team and a business. We got quite a lot of systems for everything, including where we store files, how we communicate between each other. We have systems for meetings. We have systems for auditing our financials, subscriptions, cancellations. When someone wants to change a credit card, there are a lot of elements that crop up when you have a business about volume. But everything has a standard operating procedure. If something happens for the first time, and this actually happened yesterday. In our weekly manager’s meeting I’ll actually call in the people who are required to be involved in the new procedure. We’ll talk about what happened. We’ll talk about why that result was not the result we wanted. Then we talk about the result we do want and what would have to change for that to happen. We document the procedure, and then it’s shared to everyone in that call.
OWEN: That’s awesome. So even back then I’m wondering, because it’s like you’re trying to work on several different things at the same time. How did you prioritize what order of steps to take, which systems you start with first. Do you understand what I mean?
JAMES: We’re always looking for the thing that’s going to have the absolute biggest impact. Part of being a general manager is you have to be making decisions all the time, all day long. Every 5 minutes someone would come into my office and ask me to make a decision. There might be a customer out there wanted to buy an SL 500 and is made an offer. I have to make a decision whether to accept or decline that offer, or whether we negotiated, or if the deal’s too far down the track, of if there’s other competitors, or if the trade-in valuations are correct, or if it’s very generous. We make all these decisions on the spot. I believe that I’ve built-up my decision making muscle. I always see to eliminate decisions if possible. If there’s even a decision I need to make right now. If not, I’ll just cross it off. If it’s absolutely critical and it’s going to make a huge impact in the business then it will get prioritized. I like to just focus on one thing at a time. I’m a simple guy. I like the idea of single tasking. I’ve usually kept 2 notepads near my desk. One would have checklists on it for things that need to happen. And then the other is whatever I’m working on right now. So I keep the checklist to the side and out of my view. If I keep thinking of things I’ll just chuck it on the checklist. But generally I just want a blank piece of paper and one thing that I’m working on. It might be a white board or it could be a document opened on my computer screen. But just figuring out what is the most important, or the highest value use of my time right now, and that’s what I want to focus on.
OWEN: I like that. And also you’ve already clued us on how you actually documented some of the procedures. You say you started by writing everything down initially and then you went into creating spreadsheets to create kind of a dashboard of step by step of everything you’re doing. I was trying to see if there were additional tools that you use. Besides those two that you mentioned which is Google docs as well as spreadsheets, what other tools did you use at that time to try to document procedures for the business? I think during the pre-interview you mentioned something about Evernote. I’m wondering how that plays into it.
JAMES: Yes. It’s also evolved a lot in the last few years. I think that made it better for people to do the sort of things we’re talking about. One of main tools I use is a whiteboard. It’s very analog. It’s something about connecting my hand to a pen and put it on a whiteboard. It’s easy for me to plan things. Free hands will draw. I like that. But in terms of notes I’m using Evernote to just store stuff. It allows me to organize notebooks into topics, and I could just record. Every time I’m doing coaching call I just make bullet point notes. That allows me great information to re-purpose. But every time I talk with that person I pull up their note and I’m running a file on them. So it’s kind of like a CRM, like a digital filing cabinet. It’s so searchable, even images is searchable. And I can use it anywhere in any device. It’s a very hand tool, and you could drag pictures in. So after I’ve done the whiteboard I’ll just take a photo of it and drag it into Evernote. I’ve got everything in one place. I really like that. For my own checklists I’ve been using Apple reminders app. It’s just a very simple tool where you can… I think it’s designed for to-do’s. But where I used to write stuff on a pad, now I just add them to Apple and I can very quickly brainstorm a process. Think of every possible step that needs to happen, add them into this tool and drag them into order. Now, if I want to setup a new mastermind or I setup a podcast, or I want to run a live event I just open up the checklist and start at the top. Book a venue, book a videographer, organize catering, get merchandise, communicate to the customers, etc. It’s all there step by step by step.
OWEN: That’s awesome.
JAMES: Of course the team use Google docs for the standard operating procedures. And in our business we’re using Slack to communicate with each other, which is probably the best tool that we’ve got for anything.
OWEN: That’s awesome. At the time when you were actually working on systematizing and automating your business, I’m wondering what tools or mentors played a role and an influence on you at that time and why?
JAMES: I’ve been a prolific reader. I’ve got lots and lots of books, well over a thousand books that I’ve read since. I was 12 years old. They’ve always shaped my mind. I read something, I think about it, and I see how I can implement it. When I was running the dealership one of the good books that I read was Instant Systems by Brad Sugars. He was explaining good exercises you can do to allocate tasks and eliminate processes. He talks about having a procedure manual. So I’ve always been aware of this for several decades. That was a really good book. Also, Dan Kennedy has a book, No BS Time Management for Entrepreneurs. And that’s really about blocking your time. This guy’s though he’s a fax machine. He’s very inaccessible to the public.
OWEN: I hear he doesn’t use emails. He just uses files.
JAMES: Does he? And it’s someone who’s now spending about an hour and a half a week on Facebook. I can relate to that. I think people are far too accessible with technology devices, and social media. They’re destroying their productivity, maybe not even aware of it. So this is very important. That book just gives you a good dinosaur perspective on how to block your time. In a similar way, The Ultimate Sales Machine with Chet Holmes talks about having closed door time in your office and having minimal meetings, stand-up meetings, 10 minutes at tops. So using some ideas from that I started to develop my own style of leadership and getting the best results from the team. Even little books like One-Minute Manager helps you understand how to unleash your team’s personal power by letting them know they’re doing a good job, praising them when they do great work, letting them stretch a bit and giving them some free reign rather than micromanaging them and constantly belittling or deriding them, which seems to be a very common management technique that’s not perfected.
OWEN: Yeah, just keep shouting, and when you’re not shouting then they know they’re doing good. We only talked about what you did and the steps you took without talking about the challenges you actually experience while you were trying to systematize the business. We don’t give the full picture. What will you say was one of the biggest challenges that you experienced when you initially to create the systems, and how did you solve it?
JAMES: There’s always this delicate balance between the effort and training requirement to get someone on board versus the cost that they bring to the business. You’ve got this balancing act of return on investment. And that’s why I think a lot of people skip on training. They skip for a few reasons. One is they think, “What if I train this person up and they leave?” But the flip side to that is what if you don’t train them and they stay. That’s a big problem. The other aspect is it can be very frustrating when you think you’re the world’s greatest person at doing one thing and no one else can do. And then you try to transfer this knowledge to someone who’s keen, eager, and probably has the right attitude. It’s going to take a few attempts. I remember when I started handing over my podcast editing, the return on investment was obvious because if I’m doing three podcasts a week and I have to listen to the back to edit, that’s three hours of editing a week, over a year. That’s a lot of my time. So it’s worth having someone else edit the podcast. But then you think will cut it at the same place, will they remove the umms and ahhs, and make it sound better than I really like I do. Will they pick the right part as the intro, will they be able to blend the two sides just right. You’ve got to work on how much of perfectionist are you versus what’s the pay-off. After a few redo’s finally your style and your minimum standards sets in. I believe one of my managers taught me it’s always a good idea to bounce work back a few times when you first hand over new task just to make sure that that bar is really set like the level you need it to be to be extra firm in the beginning. I think I handed my first podcast edits back about four times. And so it came back at a level that I was happy to publish. Occasionally I’ll listen to a podcast or I’ll listen to a comment about something in a podcast that’s not quite meeting the standard. I’ll send it back and I’ll have it re-done. The team doing the podcast knows that if it’s not to the standard that I set as the minimum it’s going to be asked to be redone. So they might as well… When they’re editing and they’re just thinking, “Should I bother redoing that or not?” They’re going to say, “I’m just going to redo it because if I don’t he’s going to ask me to do it anyway. That’s really where you set the standard. So I think that’s probably the most challenging part, deciding on what to get out of your head. Accepting that there’s probably someone else who can do it as well as you. That’s the first mental barrier. The second thing is working out the finance side. Is it positive return on investment? The third thing is now I’ve committed to this. I’m going to go through all of that effort and do the training because if you do it right in the beginning and you put in the effort, later on you’ve got this compound benefit. So it’s been 2 years since I handed over my audio and video editing. And that means that I’ve probably saved somewhere around 5 hours a week for 2 years. That’s 500 hours of my life.
OWEN: That’s right.
JAMES: How much would you pay to have 500 hours back of your life? If you’ve got to the end of your life and someone said, “Owen, you’re going to have 500 hours more”, how much would that be worth to you? I bet you’d pay more than what it cost to have someone editing podcast for 2 years.
OWEN: That’s a great way to look at it. I’m also curious, back then when you were also trying to systematize the business. What would you say was another, especially the second biggest challenge that you experience. I think during the pre-interview you mentioned how tools that you’re probably trying to use don’t work as they were advertised. Talk about that.
JAMES: People get very excited when they’re making sales copy for things. But it doesn’t always work out that way. A perfect example, if you go to someone’s basement or attic you probably see one of those ab crunchers. They sound pretty awesome at 3 in the morning after you’ve got back from the pub. But they’re probably not going to get you that ripped abs because… Maybe they do work people tend not to use them and they’re maybe not eating properly as well, and all the other things that it says on the label. It should be used in conjunction with the thing. I never bought one so I’m just sort of guessing at this. But when tools don’t work the way that they say they work it can really cause you a huge expense, a lot of complexity, confusion, and not get you the result you want. So we’ve had a few tools not working properly that’s just taking us off track that have caused us to retool and start again with a better tool later on. Or we had a tool that works all right and it stops working. That happened an awful lot in industries like SEO, especially things like keyword tools or whatever. You have the greatest tool and overnight the API stops working, and it doesn’t do what it’s supposed to do anymore. This means that everything else comes to a halt. For that reason we have tool redundancy as well. We’ve got a tool checklist. Is this tool the best tool in the industry? So we always compare versus what’s out there. And then we make sure do we know how to use this tool. Because it’s great having a tool but a lot of tools do things that you don’t know how it works. They think of a blender or a microwave. There’s probably a million functions of my microwave. I don’t know how to use this. I’m just power, hi, 3 minutes or 1 minute. I’ve got very basic understanding of how to operate the microwave and that gets me by. But I actually get a lot more joy from my frying pan, or the griller. It’s much simpler. One dial, on or off, how hot… Sometimes the really simple, effective tool can do a much better job for you. So don’t get convinced that you need all these great Swiss army knife features. Sometimes you’d be better off with a very focused, specialized tool. I’m not afraid to have the right tools in our business but some tools just really hit the mark and transform the business. And other tools, a waste of time and money.
OWEN: Given all these challenges that you’ve mentioned so far, why did you still stay committed to the goal of systematizing the business, or even how did you do it. Because it’s like you’re trying to solve the issue and at the same time moral challenges come up as a result. So I’m just trying to understand at that time, what was the thing that kept you committed to this goal.
JAMES: This is like what I was saying before, you have this period of crawling over broken glass and you just accept it. The last 12 months I took up the hobby of surfing. When I started I was getting smashed. At age 42 decided to be a surfer, it’s pretty uncool in a way. You get belted by the waves. You have no idea about anything. It’s hard to balance, you fall off, you get hit by the board, you half drown, you swallow water, it’s physically exhausting. There’s a lot of reasons why it’s a difficult spot. But one year later I can go rip on these 7-foot waves out the front. I feel half profession now. And it’s just from doing it 500 times. I just know it. Life constantly teaches me that it’s usually more difficult in the beginning. And if you keep going forward with the right intent and you work on your process, and you focus on the most important thing. And when I’m surfing I focus on one thing at a time. At the moment I’m at the point where I’m focusing on where I look. With my eye and mind I’m looking down the wave. But it’s not something you can do when you start. When you start you think the most important thing is actually paddling to try and catch the wave. Then after that it’s like trying to stand up. As you progress in the business there’ll be a new thing for you to focus on. Just accept that challenges will come, and it’s what stops other people from being good. It’s all these barriers to success. The reason why I kept doing it is because I couldn’t have what I have now which is a really manageable schedule with a highly profitable result for the time that I put into the business. And it’s doing work that I feel good about. I feel creative and energized by the things that I’m doing and I feel much more alive than I did if you go back 10 years ago when I was working for someone else in an industry that was getting a little bit tiring. It was definitely limited in terms of the amount that I can earn. There was certainly a lot more hours involved and a lot less reward. I feel fortunate that I took on some of the big challenges, especially quitting a $300,000 job. That was probably the most challenging part of all of this. But that was the point where I committed to believing that I could do it. And a commitment to always innovating and developing systems and taking the knocks on the head as they come.
OWEN: You’ve shared with us what did you did back then, the steps you actually took to systematize the business. I’m wondering, at what point in time did you feel like the business had reached the point where it was systematized and it could run without you successfully. Do you remember?
JAMES: Yes. Like when you go to the little hurdle off the first few hires and you get them trained and embedded in. So for us it’s probably when we hit around about 6 people in the business and they’ve been there for over a year. That’s when we got really good routine. We’re able to have a real culture. And when people come in there was an induction program. We also had established tools and systems that could take us to the next stage of growth. By the time we hit 12 people we were almost completely automated in terms of how we could grow where we literally have a trigger point. We calculate things like throughput. We say, “How many jobs have we sold, how many hours are involved in that job? And that gives us the capacity requirement.” And then we say how many people have we got in the business and how many hours does that add up to. If it’s not enough then we probably need to hire. So we figured out these automated triggers that showed us. According to sales we’d scale it. There’s one point where we went from a team of two in our SEO division to 38 people within 6 months. And I think we did $7,000 in the first month, up to $86,000 per month just from that automated scale.
OWEN: That is awesome. I’m curious, just so the listener can get some insights. Now we get to reveal the behind the scenes of how the different parts in the business and the systems that you come and you have in each of them. So I know you have different divisions. The SEO, the website duty and all the other ones. So you can choose any of the division that you want to talk about. Imagine the conveyor belt where on one hand the potential customer has a problem that needs to be solved by one of the divisions of your business. On the other end of this conveyor belt is that same person has been transformed into a raving fan telling everybody, “Hey, if you want your links to rank high on Google you go out to James and his crew. They know how to do it.” That transformation happens. But behind the scenes there are parts of the business that make that happen. I just want to give the listener the behind the scenes of any division in the business you want to talk about.
JAMES: That actually happens a lot. See on Facebook groups someone will say, “Where do I get good SEO?” And people will point them to SuperFast business in that cast even before the person hits our website there’s a system happening for the content creation, so that people can actually be aware of us. So my team will be scanning news. This is an SOP. They’ll be gathering information and collecting. Then they’ll create content around that and they’ll actually publish it. So it might be an infographic for example where they’ve collated the best of 12 different sites. It’s something I used to do manually. I used to go and look at all the sites. I look at to my backyard. I make a video of the SEO and publish it. But now the team can do this. Then we see the contents. As soon as they’ll say on the other site, well then post it to social media, and then email our list. That will bring people to the site. The customer will probably join our email list because they like the news and they’ll probably get some emails whenever there’s new content so over time they get in this constant news updates. If they’re a perfect match for our product then they’ll probably, eventually go to our buyer’s page, product page. If they don’t buy then we have a system that kicks in that will follow them up. Because we have a card abandonment sequence, and we also have a re-marketing cookie that allows us to reach out to them perhaps on social media or search. If that fails, then we have a system to find out why they don’t buy. They’ll get sent an email to say, “Hey, just wondering why you didn’t buy and they might tell us. We’ll see if we can answer that. I might actually see, “Okay. Thanks for sharing that with me. We’re aware of this. In this case how about we put together this package that’s not on our website.” It gives us a chance to… The current industry used to say re-tuck. It’s like when someone falls out of bed we get to put them back in bed and tuck the sheets a little tighter. If they do buy then there’s a whole system for that. It’ll create the receipt for the customer from our gateway. It’ll have a support ticket created where we manage the job from our help desk. And that’ll be put into our internal system, which is on Google docs for the job to be performed. They literally have columns. Tick this, done this, done this, and then completed. And we’ll make a note of their support ticket number. The team leader will manage the team. They’ll do the work, update it, re-update the ticket, the job’s finished, the customer’s happy. If we’re lucky it’s a recurring billing job. Our recurring billing system is a whole other system. It’s where we order twice a month to make sure that the billing is not failed, unsubscribed, or suspended, because that happens a fair bit with things like PayPal. We’ll create a card, people change their card, they run their balance a bit low. So we have a system for that. If it’s one-time job then we close the ticket and that creates another system where we’ll follow-up later and we’ll continue to send the news. So each step for this has little systems. A lot of them are automated through software and there’s quite a few human systems which is where standard operating procedures and back-ups are really handy.
OWEN: I like how you just did that. You just took us behind the scenes to see how everything was coming together. The customer has not necessarily seen all that. They just know that they’ve become transformed. I have this problem and on the other end they have that problem solved. But behind the scenes you guys are making all that become a reality by systems like procedures and processes, as well as using software to automate the different parts as well. I’m trying to see what system do you have in place that enables your employees to know exactly what they need to do. I think during the pre-interview you talked clear task description. Talk about that.
JAMES: Yes. I think we’ve touched on the main elements. We only hire when we need someone. We recruit for the exact, right person. When they come on board they have step-by-step checklists that describe what needs to happen, and they’re guided through that by someone else with the I, we, you method. We have reporting systems that makes all those things happening. We’re constantly checking things like our throughput. We have team leaders, we have a daily activity reports and we know what’s actually happening. We can very quickly pick-up if there’s something not right because we’re bench marking within the business. We can bench mark people who are doing the same roles against each other for productivity. Then of course we meet face-to-face every 12 weeks so that we can communicate in a whole new level. I strongly recommend that for anyone with a virtual team. Get a face-to-face interaction happening. It lifts everything up.
OWEN: That’s awesome. I like how shared some of the things you do from the reporting standpoint. That way you interact what the results people are delivering. Since you now have more free-time in the business, which areas of the business do you focus on and why?
JAMES: The main thing is I’m looking after the managers because they’re the ones running the teams. The whole system we’ve described before, not only is the customer not seeing it, I’m not really involved in it either, which is great. What I’m saying is numbers on a spreadsheet and getting the occasional interaction from a customer. But the main roles in my business are to check the numbers, to make sure that it’s charting properly, just like an airline pilot who would be keeping an eye on the dashboard of the plain. He’s not necessarily the engine, but he’s keeping an eye on the direction of the business. I split my time between content creation because that’s the area I can offer the most value. Bringing in customers, and delivering content especially in the information side of the business, where I’m coaching business owners and explaining to them all the things we’ve just talked about for their own business. That requires my attention and I have a system and a structure around the way that I deliver that information that’s leveraged for them in a financial basis and leveraged for me on a way that I can leverage my information, by group sharing for example.
OWEN: Just so the listener can get some insight as to what is the next stage of growth for your business and what you’re planning to achieve next, and why?
JAMES: I’d say that next stage is more of what I’m doing. I like to do what’s working. I most definitely want to surf every day that it’s good weather. That’s a high priority for me now. It’s very soulful and it’s a good time to reflect. A lot of my good ideas come when I’m floating around on the Pacific Ocean on a piece of fiberglass. And I think more business owners should disconnect from all the tech and get away from the computer more. In my case just trim a couple of hours more off my work quick. Power up and leverage the things that are working for us. Refine the conversions. Offer better results for customers is our highest priority. Because we’re able to do that I don’t need an affiliate program. I don’t need a big paid advertising budget. I don’t need huge launches. I don’t need to do a lot of things that other business owners are doing because we just keep the same customers over and over again. I just want to continue to…
OWEN: Create more value for them, right?
JAMES: Yeah. I wanted to support my team and my managers. Because if I support my managers, they support everyone in the business, they support the customer to get a result, the customer results support the business which eventually pays the owner. So it’s sort of the circle of life for the business. It works really well. If I just try and do the least amount of things possible that I can, and that I do them really well, and do them with the right intention I think that’s the winning formula for us.
OWEN: Given everything we’ve talked about so far, can you summarize for the listener what they should do in order to transform their business so it runs successfully without them?
JAMES: I’d say document everything that’s happening in your business right now. Put it all in a huge whiteboard or a bit of paper. Map every system or process that you have. It usually starts with looking at where someone comes into your business and what happens to them after that. Then you involve all of the people who somehow relate to that. Maybe all of the people is you at the moment. But until you document it, there’s no chance it’s going to be someone else doing it because it’s in your head. The key to freedom is actually to get the process out of your head, onto a system that someone else could follow. Literally, you want to create a checklist that someone could pick up and be able to follow with minimal instruction. That’s the goal of this. You also want to see which steps or business plans, or effort you’re doing that are just completely useless and stop doing. Probably in any business 4% of things are getting 64% of the results. If you 80-20, the 20% of things that are getting you 80% of the results. That means 4% of the things you’re doing are getting 64% of the results. There’s a good chance that half the stuff that you’re doing is a complete and utter waste of time. So to eliminate that you start with only focus on the most important stuff. I call it, it’s like the Buffet mentality. If you go to buffet dinner there’s this enormous table with every possible food you could have but you only have one plate. Walk the buffet, do a little bit of reconnaissance. Figure out which is the best selection on the entire buffet. Maybe it’s the prawns, maybe it’s the filet mignon, maybe a vegetarian and some exotic pasta with all sorts of quinoa and weird things that hippies grow, maybe it’s that. But pick it out and just load your plate up with the good stuff and forget the rest. There’s no point. So focus on the heart of it and document the steps that are involved in making this happen, just like an airline pilot or a hospital nurse would to make sure that you’re reducing errors. And then set about getting the best tools that are going to make this work for you because tools will form a part of it. You’re only going to go so far manually. For us a communication tool is probably the glue that binds it, tie these things together. It’s done more for our business than just about anything else.
JAMES: And then it’s done. Do little things that you can do to measure how it’s going. But one of the things we’ve done is put a traffic light system and that is each managers just tells me every day the color. They just say green, orange, or red. And I know how stressed out, how loaded up that department is by that color code.
OWEN: Yeah, I like that.
JAMES: We’re looking for green lights and the occasional orange. When we hit red though that means we need to hire or fix something. Something is broken, it’s not right, and we need to relieve pressure from that area. It’s way of founding out where the constraints are in your business so that you can put energy towards that.
OWEN: I like that. What will you say is the very next step that the listener should take in order to get started today with transforming their business. Is there something specific that you wanted to do today?
JAMES: Just figure out what’s important to you. What is the actual goal of this. I coach a bunch of different business owners. One of my students is in the face where he’s in his late 20’s. He’s very driven. He has a pretty strong ego, he’s about conquer the world. He’s investing a lot of money into some pretty big missions. He’s working very hard, and he’s piling in the millions of dollars. But he’s in a different phase than where I’m at. I’m in the phase where I’ve got my system working, very happy with the profit that comes in versus the hours that I’ve spent on the business. I’m mellowing out a little bit at my age. I’ve traveled the world several times. I’ve run a $100 million business. I just want to chill a little bit more and just do good work. Don’t take someone else’s goal. That’s the most important thing. It’s very sexy to talk about businesses that run without you but for a lot of people that isn’t even the goal.
JAMES: I’ve got a friend who’s a keynote speaker. He loves going to conferences, meeting delegates, talking passionately about a topic that’s close to his heard and creating change face-to-dace, and watching it from the front row. He likes that, and for him the goal would not be to have a business that runs all that stuff. Think about what you want very carefully. Pick and choose the elements that you’d like to do, get someone else to do the other stuff or don’t do it at all, and enjoy life.
OWEN: That is awesome. I wondering, now that we’re coming to end of the interview, is there a question that you are wishing I’d ask you that I didn’t ask you. If so, compose that question and the answer.
JAMES: I’m happy with the questions you asked. They’re great. Sometimes people ask me what’s your word of advice or a good tip that I’ve used to get through business. One of them is question everything. That’s been a pretty effective idea for me, to just not take things at face value all the time. Just dig a little bit deeper, be curious, query stuff like why do we do things this way. It’s like that story of the lady who was making the baked dinner and she chops the legs off, puts them separately in the pan. The daughter says, “Why do you do that?” She goes, “That’s how my mom did it.” They go and find mom, say why did you do that? She said, “That’s how my mom did it.” They go and find grandma in the nursing home and I say, “Why do you cut the legs off when you put the rest in pan?” She’s says, “We had a very small pan and it didn’t used to fit.
OWEN: I like that.
JAMES: They’ve handed this down like 3 generations.
OWEN: Without questioning why.
JAMES: No. This is just because they’ve always done it that way. I think that story really illustrates the idea that we want to be a little more flexible in our thinking and be open-minded to change. If there’s one thing to master in the online world especially, it’s the ability to deal with change. For that reason even things like standard operating procedures need to be able to cater for constant change their fluid document, their dynamic. They’re not set in stone because you can be pretty sure that we’re doing something a little bit differently next year just like a ship that changes 1 degree of its course every nautical mile, it’s going to end up in a completely different destination. The small, little changes are going to create vastly different outcomes. Be open to change, and a great way to find out that is to just question everything.
OWEN: That’s awesome. What is the best way for the listener to connect you and thank you for doing this interview?
JAMES: Head over the superfastbusiness.com, there’s a stack of podcast and there’s plenty facility to interact and comment. I do answer my emails personally.
OWEN: I’m speaking to you now the listener. If you’re listening up to this point, I’m sure you’ve enjoyed it I want you to do is go ahead and leave us your honest feedback on iTunes. To do that you go to sweetprocess.com/iTunes. If you have an Android you’ll be able to do that by going to sweetprocess.com/stitcher. Leave us a review so we get your feedback. By getting your feedback we’re encouraged to go out and get more entrepreneurs like James to come on here and share how they’ve been able to build a business that runs successfully without them. If you know another entrepreneur who’s going to find this interview useful pleasure share. And finally, if you’re at that point in your business where you’re tired of being the bottleneck and you literally want to get everything out of your head so your employees know step by step how you get tasks done, sign up for a free 14-day trial of SweetProcess. James, thanks for doing the interview.
JAMES: Thanks for having me here Owen.
OWEN: And we’re done.