The 80/20 rule and How to Systematize your Business, Maximize Profits & Live a Location Independent Lifestyle! – with Jonny Gibaud

Do you want to free up more of your time from working in your business to travel?

In this interview Jonny Gibaud Founder of Emergency Food Storage UK reveals how he applied the 80/20 rule to his business and how it enabled him to systematize it so that it runs without him successfully!

You will discover how he maximized his profits and how he is able to live a location independent lifestyle.

Jonny Gibaud Founder of Emergency Food Storage UK

 

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In this Episode You will Discover:

  • How Jonny was able to 80/20 his business based on Tim Ferriss’ lifestyle business model.
  • How Jonny was able to build a business that allows him and his business partner to free up time to travel.
  • How Jonny was able to systematize his business from day one.
  • Why Jonny’s systems fell apart when his business started getting publicity.
  • How Jonny generates sales with SEO and PPC advertising.
  • How Jonny prioritized systematization in his business through experimentation.
  • Why Jonny had to try to get his business partner to understand the value of systems.
  • How Jonny uses a master document that enables his employees to know exactly what they need to do.

 

Episode Transcript:

OWEN: My guest today is Jonny Gibaud and he is the founder of emergency food storage. Jonny welcome to the show.

JONNY: Thank you very much Owen, good to be here.

OWEN: The goal of this interview is to get entrepreneurs in here who have been able to systematize their business and talk about how they did it. Before we get started I want to know, what are some mind-blowing results that you now experience as a result of going to the process of systematizing and automating your business?

JONNY: I guess the biggest one is I’m Skyping at the moment from the foothills of Table Mountain in Cape Town. I’m British for anyone listening. I’ve been living out here for about 6 weeks now and I have another 6 weeks to go. This is the 8th country I’ve now lived in. And I sent 50% to 75% of the last 5 years travelling and living around the world basically as a result of systemizing and automating the business. I guess that’s as mind-blowing as I can make it.

OWEN: That’s awesome. During the pre-interview you mentioned how in 2009 you 80-20’d your business. What did you mean by that?

JONNY: In 2009 I read a book, which I guess a lot of people listening to this podcast have read, by Tim Ferriss called The 4-Hour Workweek, and one of the chapters was about Pareto’s Law of the 80-20 Rule. I kind of heard about it before but having him explain it and what he did with his business I thought, well, I have a similar type business, let’s try and do it on mine. And so I did. The results were pretty astonishing. After 80-20 my business I found that actually the law… I was a bit dubious at the beginning but I found that about 80% of my revenue was coming from about 20% of my customers. I sort of did exactly what Tim Ferriss did, ditched all the guys that weren’t working, focus on the guys that were. And then my business partner and I initially moved to Thailand in 2009.

OWEN: Let’s talk about in more detail about what actually did regarding the 80-20. But I’m curious, how has been your company been transformed as a result of systematizing your business?

JONNY: In terms of being transformed the company was always built to be systemized. I had a company a few years beforehand which I developed without a system and it collapsed because it didn’t have a system. I was somewhat scarred by that. Therefore the second company I started built with systems in mind. In terms of being transformed because of those systems that’s allowed me and my business partner who owned the company to spend a lot of our time travelling because a lot of our day-to-day stuff was taken out. That almost all of the day-to-day tasks of running the business are actually removed, which has really helped free of our time.

OWEN: Good. How has your personal life been transformed as a result of systematizing your business?

JONNY: Again, same way. Because I don’t spend 100 hours a week on my business, actually in the last couple of years I spent 2-3 hours a week on my business because of that. And the personal life obviously benefits from that. That’s not to say I don’t work. I work on other ideas, other businesses, and other things. But in terms of not being stressed as I know a lot of the people can be in 100-hour workweeks then that’s basically the core isn’t it? Once you removed a lot of your day-to-day through systems then your personal life definitely benefits from that.

OWEN: So I guess based on the way of business is you get to travel quite a lot. I was going to ask you how long have you been away from it but it seems you already answered that. Typically, you’re travelling over and over again. That’s good. I’m curious, so that the listener understands, to get some context as to what your business is all about. What exactly does your company do and what big pain do you solve for your customers?

JONNY: We’re in food insurance. We do emergency food and survival supplies. I guess the big pain or problem that we solve is when we started the company it was aimed at a particular set of people which ultimate happened not to work out. We aimed at the Mormon originally and then got banned by the Mormon Church. That kind of failed miserably. Now we move on to a higher asset profile people who have second homes and who have ski chalets and they want to stock it with food so they can continue to ski. We have people who just want to be prepared in case of flooding in London or a disaster. And then we have some slightly larger companies like the UN or the UK military who basically require us to build custom made systems of emergency supplies, [Unintelligible 00:05:15] bags, that type of thing for all of their guys that are around the world and all the different hostile environments.

OWEN: Basically disaster preparedness kind of thing where in case of any survival situation and basically store in food and having it available. That’s how it works, right?

JONNY: Yeah, exactly. Everyone from emergency practice and the American survivalists, to just people who have home and car insurance and now want food insurance as well.

OWEN: Awesome. How many full-time employees you have?

JONNY: We don’t actually have any full-time employees. I have a lot of part-time employees that come in and out of my system. When we started the company we didn’t really want to get involved and bogged down with all the legal side of full-time employees and we really didn’t need it because it was such a simple business concept, it was just a simple drop ship company. Once we built the system on the backend, computerized system to automate most things. Realistically we didn’t need that many people to run the core section of the business. I try and keep it to a minimum. We have between 3 and 5 part-time people that come in as and when we need them.

OWEN: You mentioned during the pre-interview something about having a warehouse, a small one and a large one. How does that play a role in this?

JONNY: Yeah. We have two warehouses. We have a larger warehouse which I rent or use their systems. And then we have a smaller, more boutique warehouse which we own. That’s where it’s highly-systemized. Basically I store a lot of my stock in a larger warehouse and I transfer it to a smaller warehouse, and that’s where my systems already get going.

OWEN: I guess from time to time you hire interns and part-time people as needed to meet demand, right?

JONNY: Yeah. It started off when I first started the company. I hired local guys from my gym, students, people like that, because we had a very good set of systems that could train them up. So anyone that really needed a part-time job, or just needs some cash flow coming in and wanted to be quite flexible, we just hired all those guys.

OWEN: Is the company profitable and what was last year’s annual revenue, and what do you expect to generate this year?

JONNY: The Company has always been profitable from week 1. It’s been a very fortuitous company to set-up. It fluctuates wildly depending on world events. Obviously, if there’s certain disasters like Haiti or the like then people get primed and we make a lot more money. Last year was very, very low. We made about a quarter of a million dollars. Our average is about between 400,000 and 600,000. We probably expect to make that again this year and maybe a little bit more. But it’s really difficult to tell because, like I said, it fluctuates so much depending on global events.

OWEN: Okay. Take us back to when the business was not systematized or automated as it is now. What was wrong with it at that time?

JONNY: Like I said, it was never not systemized. I’m a very systemized person so it was always built from scratch to be highly systemized. But that said, the first year of any business is always hectic and you’re always running around because you don’t really know. To be able to systemize something effectively you have to know what’s important and what’s not. And in the beginning of the business, no matter how businesses you start or how good you are it’s very difficult to know what’s important and what’s not important. So you spend most of your time running around like a headless chicken trying to work out what works and what doesn’t. The first year or so was long days, long hours, a lot of wasted time, primarily because we just didn’t know what we were doing. You just have to put in the time to work out what you’re doing and basically just stop being stupid for want of a better phrase.

OWEN: Okay. Back then it was more of trying to explore or figure out what the business is going to be about. And then that way you can figure out how to really systematize it. Back then at that very point what would you say was the lowest point and describe how bad it got?

JONNY: I guess the lowest point was about 12 months after we started the company we hit a dry point. Some of my systems were falling apart. A lot of the things that I set-up for the automation were just now working as effectively.

OWEN: What was falling apart? I just want to give the listeners some kind of context on exactly what was happening specifically.

JONNY: Sure. What happened after 12 months we hadn’t realized the effect of getting newspaper articles covering you. Because as soon as newspapers cover you then your sales go ballistic. And the problem we had was our systems. Obviously, we don’t have any full-time staff and we only have certain numbers of people. That’s fine for most times. But when sales ramp up then you just can’t bring people in and do it quick enough. So that sort of causes problems. Products are delayed and everything else. Primarily because I got a bit lazy and I haven’t looked at hiring relief staff, that kind of thing. In the first year just like for most businesses, you’re not profitable and you have the usual hectic ridiculousness of a start-up. You have mistakes and you got to cover all those mistakes. I guess that first 12 months because you’re trying to work out all these things and trying to make it super systemized. You don’t really know if it’s going to be worthwhile. A lot of the time that you’re doing it you’re just thinking to yourself am I just wasting my time? Should I even be doing any of this. That can be quite a low point I think.

OWEN: At that point what would you precisely was your breaking point where you just made that decision that I have to change everything around and make sure that this business… Granted at that time you didn’t know everything about it but you made a decision that you’re going to systematize and automate everything.

JONNY: I guess it was basically those themes, same patterns that happened with my first company which failed for the same reasons. We started quite strongly, we have a good product that sold decently and then we didn’t build the systems behind it to support the growth. As we got more successful things became more strained and the whole thing kind of collapsed in on itself and sort of imploded. And I started to see the exact same pattern exactly in the second business. After about 12 months I sat down with Brandon [Unknown name 00:11:54] and I was saying the same thing is happening to the first one. And if I don’t change something quite drastically all that’s going to happen is I’m going to have close this one down again in 18 months to 2 years after I started it. And then I would have to start another company. So I guess that was the big wakeup call is having already failed the first time.

OWEN: Following the story, when you now realized that you’ve seen a pattern within the first business and the second one and you had to change things around, what was the first step you took to systematize the business. And this is going back to you saying you 80-20’d the business. Let’s dive into this in detail.

JONNY: Sure. Definitely the biggest part was 80-20’ing it. So we had a lot of customers coming in and we always tried to keep our products small. The number of products we had was very small but we started, as always you add more products you add more customers. You’re not as focused on shifting out the quality from the less quality. And so 80-20’ing was the biggest part because I could look at it and realized that most of my profits were coming from this very small percentage of people. So by doing that I was able to then say these guys are spending the most money. What is it they’re buying and why are they buying it? How can I serve them? And the guys that were taking up 80% of my guys’ time… I outsource all my call centers and stuff, and I found that the guys that were calling up the call centers is the most with guys who ordering less than 100 pounds. But the guys that were making most of my money were the guys that were ordering about a thousand pounds at a time. And once they ordered that they never called back. Whereas the guys under a hundred pounds constantly called me. Once I did that I realized we’ll just ditch every product under a hundred pounds for the time being and we focused on products over 400 pounds for example. And that really made a huge difference because we basically cut our actual number of sales significantly. But the amount of revenue that we made only dropped by a very small fraction. And over the next year as we put those resources into that small fraction of our people that were making most of our business, you’re then able to surpass what we’re already making, but again, at a very smaller amount [Unintelligible 00:14:13], if that makes sense.

OWEN: What was the second step you took to systematize the business? I think you mentioned something about using PPC and SEO, I’m curious.

JONNY: Yeah. The bulk of almost all of our sales, roughly 90% of our sales come from our position on Google because we created an algorithm. A friend of mine developed the way of doing Google analytics that we thought would work. We basically prioritized that as a way of bringing in the market. All that we did, when I was building I looked what other people were doing and then I just did 10 times more than what people said they would. So I typically ridiculous level. When I was doing it in the first year instead of looking for a hundred or a thousand keywords I looked for 10,000 keywords.

OWEN: Let me get this write. You guys are primarily using Google Adwords, pay-per-click to drive traffic to the site. This is where you bid certain keywords. And so you went ahead and when you started you had 10,000 or so keywords to drive traffic to your site, right?

JONNY: Yeah. I systemized the thing. People say you’ve got to think about it logically and work out what people want. I just said, “Let’s just pretend I’m stupid and I have no idea what people want. So I just did 10,000 keywords close to what I think people might buy. And then I just used that over the next year to filter it down to about 2 keywords that I now actually look at, at any given time. And about 21’s that actually convert in my industry that literally make money. So if you put a pound in you get 20 pound back. I just make sure I’m number 1 on those 20. And I don’t care about any of the other ones. But that takes time.

OWEN: Basically, you apply that same 80-20 rule to your SCM, PPC strategy as well.

JONNY: Yeah. Realistically there’s 99 and 1 because we went from roughly 10,000 keywords down to really only 20 that convert.

OWEN: What are the steps did you take to systematize your business at that time?

JONNY: I guess it wasn’t until I systematized the business per se. After we’ve done the 80-20 and once we started setting up checklists for our guys in the warehouse, the biggest step forward that I did was I started hiring people for myself. My business partner and I split our time. He was running it and I was doing all the marketing and everything else. But then what I decided to do was start using things like Elance.com and hiring a personal assistant, designers, and coders who worked for me personally so that I could still put the time into the company that was deserved for 50% shareholding. But actually myself, didn’t have to do as much in terms of putting the hours in. I could just run my own mini team separate from the company.

OWEN: Let me see if I get this right. Your role as the 50% owner, you basically systematized and hired people to handle your role, but you are not actually the one handing it is kind of what you’re saying?

JONNY: Exactly. That’s what I did on the second. So we streamlined the business and then I decided I still didn’t want to put the kind of time that was required in. So I built a separate business around me personally.

OWEN: I get that. Now it’s making more sense when you say you’re not working not that much in it but obviously someone is doing the work, it’s just not you. How did you prioritize what’s the order of the steps of where to focus in terms of which parts of the business to focus on, creating systems for at that time? How did you prioritize where to focus first?

JONNY: I guessed quite frankly. To be honest I had no idea really what I was doing. I’m not going to pretend I did. I just read the book and I thought, “That’s make sense.” And I tried that, and then I thought this one makes sense too so I’m going to try that. Really, I just focused on whatever was easiest at the time which I know is not the general business thing. But it was really just a combination of luck, experimenting, finding what works, ditching what doesn’t, re-experimenting. And then through that process and that iteration of making those mistakes then I guess I got to where I thought maybe I should focus on. It was no more complex than that.

OWEN: I understand, especially since you said when you started it’s more of an exploration. Trying to figure out how this business would even work. So exploring and systemizing your way as you explore it I guess. How exactly did you document procedures and processes for the business. What tools did you use at the time?

JONNY: I’m not very good with tools. There’s a thousand great tools out there and I know a lot of people use them. I don’t use tools personally. I set my tasks for the day and note edit in Apple and I use pagers and just create basic tick box checklists in my company. We have a couple of Excel sheets but nothing really more complex than that. The back end of our website’s pretty well coded and it’s quite complex. But as far as what our guys see I try and keep it as simple as possible. The only real tool that I guess we use is Dropbox. We have shared files and folders of all our procedures. If I change things then other people could see it and vice versa. But other than that I don’t really buy into this whole whatever the newest app is to use. Because the problem with that is you have to change it every year because something new comes along later on, and then it messes everything up. And that wastes more of my time so I don’t bother doing it. I find checklists to be perfectly ample.

OWEN: Okay. At the time when you’re working on systematizing and automating the business what books or even mentors had the most influence on you and why?

JONNY: The two books I give out to people all the time, there’s one Tim Ferriss, The 4-Hour Workweek and that guy needs no more free marketing but it is a good book. Because basically reading it, it’s just basically talking around and it said, “Look, wake up, there’s a better way of doing life.” I actually reread it last year which is about 5 years after the first time I read it. Although I like Tim Ferriss I didn’t actually think the book was very good. Having done a lot of what he talked about in the book I found there were much better ways of doing things. But that’s not to say you shouldn’t read it. Because if you haven’t read it then it definitely is your wake up…

OWEN: It lets you know where to start.

JONNY: Exactly. For me it just said, “Look, there’s a different way to do it” which I never even thought about before. And then once I’ve done it there’s actually even a better way to do it. I wouldn’t actually use most of the advice that he puts in that book but it’s a great book to get you started. And on that thread the other one mainly on finance and business is Rich Dad, Poor Dad, and those series of books by Robert Kiyosaki. Again, it just changed my thinking on money and how a business should be a series of systems and how businesses should be run. Another book by Darren Hardy which is called The Compound Effect which is just about the habitual nature of habits and how they compound to create effects over time. The power of habits, he’s probably got the best… There’s nothing new in it if you’ve done a lot of research into this but it’s a good primer like the other two books.

OWEN: What was the biggest challenge that you experienced when you initially tried to systematize your business and how did you solve them?

JONNY: Biggest challenges were probably to get my business partner on board, because he’s not really a systems guy. He likes to be in control, he likes to know what people are doing. He likes to know all the passwords in his head. He’s that kind of guy. He’s a brilliant organizer and manager but he doesn’t like creating systems. So trying to get to him to use the systems that I create and come around to my way of thinking, it’s quite frankly been the bane of my existence.

OWEN: Way to throw your business partner under the bus, huh.

JONNY: Like I said, he’s an absolute brilliant manager and brilliant guy, and we wouldn’t have a company without him. But he and I think very differently in terms of systemization.

OWEN: How did you solve that problem?

JONNY: We’re getting better. He’s teaching me a lot about his way of running businesses and he’s coming around to my way of thinking of systemizing things. Because as things start to work and run then we just continue implementing those into it. I guess trying to keep things simple is tough for anybody. Whether it’s me, my business partner, or anybody. So we really try and keep things very simple, keep checklists… We don’t want to do anything fancy. That’s the best way that I found to work things through my business partner because he hates anything that’s too complex. So that’s worked pretty well for us.

OWEN: Did you have any other challenges as you try to systematize the business that you can think of?

JONNY: We have massive mistakes. I remember a couple of years after we started I wanted to completely remove the effort I was doing into SEO so I hired a top SEO firm in London who then proceeded to mess everything up because they were just looking at the wrong numbers. The thing about systems is about not knowing what’s important. Within 3 months handing it over they flipped everything on the head and they came back to me and they were full miles and saying how much traffic we were getting, and they quadrupled that traffic. But if you actually looked at the numbers they’ve halved our actual money we were making off each sales, in fact, about a third even though they quadrupled the traffic. So they made more work and made me less money. And they couldn’t see the importance of that. So I fired those and then it took me another 6 months to fix the problem that they created. These little problems with business happen all the time.

OWEN: Given all the challenges that you were experiencing at that time with the goal of systematizing the business, how did you stay committed to this goal? Why even?

JONNY: I had to really. I love travelling. I love my freedom. Obviously, I’m living here in Cape Town, it’s an incredible place. It’s always sunny, beautiful skies, I like that stuff. And therefore as a requirement I can’t work 100-hour weeks necessarily, or at least I would then do in my 20’s. Maybe in my 30’s I’ll change my mind and I want to build an empire. That will change things. But part of the reason for systemizing everything was because I enjoy the freedom of being able to live the life that I want.

OWEN: At what point were you able to systematize your entire business and have it run without you successfully?

JONNY: Probably about 2 years after we were launched. Obviously, nothing is completely out of your control. You still have to put some hours in. But probably after about 2 years we were able to drop down to maybe 4 or 5 hours a week. And now we’re down to maybe 1 or 2 hours a week. We took a good 24 months.

OWEN: One of the things that we always like to do is give our listeners a behind the scenes as to the different parts of your business and how they function together. Imagine your business like a conveyor belt. On one end is probably somebody who’s looking to buy food product in bulk for some kind of disaster relief or whatever. And on the other end is that same customer raving about you guys, talking about how you guys are great service providers to them. But in between all that, that transformation is a bunch of different parts of your business working together to make that transformation happen. What are the different parts of your business and specific systems that you have in place in each of them?

JONNY: Okay. You kind of stole my little idea from me, from the beginning of the conveyor belt. I definitely see my business as a conveyor belt. We have the engine that’s driving it. And then the main driver is…

OWEN: The main engine? The PPC and SEO, right?

JONNY: Exactly. PPC and SEO drives almost all of our traffic. And that’s the thrust of the conveyor belt. That’s what moves it along. As I move through the system our website takes over and that handles the majority, probably about 70% of all the actual ordering and getting them sorted. Then maybe at the end we have a couple of guys that actually finish off packing and dealing. And we have an outsourced company that just keeps everything moving so we have good customer service and everything else. So I guess the warehouse and procedures are what keep the whole thing moving and we just add oil as when it’s needed to make sure everything moves and doesn’t rust up because that’s important. If you just leave something completely… That’s why I don’t think anything is completely automated. If you leave anything it rusts, it collapses, and it stops.

OWEN: So there’s maintenance of it. It’s like a car.

JONNY: Exactly. If you don’t maintain a car and it just sits there it’s going to collapse. Nothing is ever fully automated but just automate if you can. A little bit of oil here and there. A little bit of check-ups, a little bit of this and that. And you can keep the whole thing moving fairly smooth once it’s built.

OWEN: I’m assuming that you outsourced the fulfilment and shipment, is that what happens?

JONNY: We did, except the quality failed. And with the kind of costs that our customers pay, that’s why we bought a small warehouse, so I could bring these guys in and actually control the quality. Because outsourcing it is great and it really does reduce almost everything that you do. I’ve got some friends of mine who’s built a company around padlocks, he does exactly that. But with my product, because it’s quite large and the value of it is quite high, there’s a particular service that people require. I wasn’t happy with what we got from the [Unintelligible 00:27:53] company so I brought it back in-house, which adds a little bit of work but not a huge amount.

OWEN: Okay. What systems have you set-up that enables your employees to know exactly what they need to know? I think we’re alluding to this earlier about that. I think this was one master document that shows all the procedures?

JONNY: Sure. We have like a master document on Dropbox. Basically anyone who comes in to our business, whatever they need to do, everything’s systemized in the back end of this website. So whatever they need to do, print invoices, package up, whatever the products are they can actually download the checklist. It’s step-by-step really like for dummies. “Step 1 do this, step 2 do this…” And they have to take it off and all of that gets sent back into the system and that’s how we control everything. I read a book a few years ago about how all the airline pilots use a simple checklist.

OWEN: The Checklist Manifesto?

JONNY: Yeah. I thought to myself. If they can fly a plane with hundreds of people and all that lives just from a simple checklist then that should be fine for my business. That’s literally what we do. We just have a lot of checklist for anything you can imagine and people can just bring it up when they want and they just go through it. That means that we don’t have to have many layers in management and everything else.

OWEN: But I’m curious. Do you have a custom software that people use to handle on the back end as they take orders and try to fulfil them? Is there a custom thing that they’re going through, something that’s checklist-based?

JONNY: Yeah, exactly. That’s what we spend a decent amount of money on and built it over the last 5 years and constantly improving it. We built on a core product, back end website, content management system. But then we built it to what we needed. They go on to our backend of our system and they can pull up everything they need from that back end.

OWEN: Okay. How do you track and verify the results being delivered by your employees?

JONNY: I don’t.

OWEN: Why?

JONNY: I know I should. I guess people would say it’s a smart thing to do. I don’t. I trust people a little bit. I have a very simple business. We haven’t had any problems in 5 years. If we have some problems I’ll probably change my policy on that, but I’m not saying it’s a smart thing to do. For me until something goes wrong I’m not going to look into that. My employees have done really well so far.

OWEN: Since you have all these free time and be able to travel as much as you do. I’m curious, which areas of the business do you focus on now and why?

JONNY: I focus primarily on new business. The last 18 months actually I’ve been focusing on being a writer. I’m doing a lot of writing, which for anyone listening is an absolutely terrible way to make money. So I wouldn’t recommend it. It’s just an absolute, complete [No audio 00:30:50] a lot of business ideas. That’s the thing, a lot of people look at one business. I had one home run in my 20’s which was EFS and I’m just coming out of my 20’s now. I started 10 different companies which all failed. So most of my time goes on to starting the next big home run that makes me the money. The thing is I love working hard. I love working long hours, but I just don’t want to have to work, that’s why I systemize things.

OWEN: Yeah. What is the next stage of growth for your business. What do you plan to achieve next and why?

JONNY: At the moment I’ve been looking at the next big business and the next big thing to get my teeth into. I’m actually reflecting back on looking back into my current business because it’s far easy to expand on a business that’s already running. We’re probably looking into how we can strategically increase the product, create our own product ranges and niche markets within what I already dominate in the UK. I’m building whole new businesses and brands based on that.

OWEN: Around what you’re already doing, not necessarily moving out of that vertical?

JONNY: Exactly. I love taking on new challenges but as an entrepreneur, the chances of you failing at that is extremely high. So I try and balance that by doing things I can control and doing things that I can’t control.

OWEN: I’m curious too, if you’re going to expand on what you’re currently doing wouldn’t that mean eventually you will have to bring on employees and end up growing the business if you try to grow it this way.

JONNY: Exactly. That’s the thing with automation and what I don’t believe you can never automate anything. At the last 3 years I’ve been spending a lot of time on this business. It has been making me money and it’s being growing slowly, but it hasn’t been growing exponentially. Because that required time that we put in to create new products, to create new things, to focus on new relationships, and create new partnerships. That requires you to spend time on your business to hire people to build… I’ve had a very light tough philosophy to business. I’ve made enough money to live happily anywhere in the world on a very simple business model. That’s been great for my 20’s, now I’m moving over to my 30’s. My philosophy is changing…

OWEN: Let me see if I can summarize this. Initially it was like a lifestyle but it’s systematized, right? Now, you want to go into the growth phase and you’re probably realizing that you’re going to have to grow and there may be different changes if you go into the growth phase.

JONNY: For sure, I don’t think you can systematize growth. I just don’t think it’s possible because there’s too much innovation required, and that requires creativity, man hours, time, you have to be in your business.

OWEN: Can you summarize the entire process step by step that the listener should go through in order to transform their business so it runs successfully without them?

JONNY: Sure. If you already got a business at the moment then you’re ahead of everybody. If you’re just starting a business it’s still the same process but it’s a lot easier if you already have something that’s moving and you’ve got sales because that’s the hardest part. But realistically, first of all you got to read a lot of books based on processes and enjoy it. I like systems and numbers, I’m sad like that, it’s my thing. You got to get comfortable of having a world view of creating systems because it’s different for every business. It’s hard to give any specific advice on business. You’ve just got to be able to see systems at work in any business.

OWEN: Good advice. What is the very next step that a person listening to this interview should take in order to get started with transforming their business so it runs successfully without them?

JONNY: If you have a business already 80/20 the business. Go in and have a look at over the last couple of years where most of your money has come from. Look at what the top 20% of people have generated. If you’ve got a few hundred customers or a few thousand customers, brilliant, just 80/20 it, that’s what I did. The results are shocking. And then have the courage that if you’ve got 40% of your customers are only producing 5% of your revenue, just ditch them. That takes courage because you’re still throwing away money in the eyes of some people. But I was encouraging people that you’re not because you can really reinvest that time into your main customers and you will make more money. It’s just hard for business owners to turn away business in order to focus on more profitable business. You just got to be bold on that.

OWEN: Are there are any questions that you feel will add more value to this topic or conversation that I have not yet asked you. And if so, say the question and the answers.

JONNY: I guess, systemization, with entrepreneurship, with everything. The thing I like to say to people when I give an interview is that even though it sounds like retrospectively I knew what I was doing all the way through. I really didn’t and I still don’t. I have a better idea but when I was doing it… When I look back I can gloss it up and say, “I did this, I did this, I did this because I knew what I was doing.” But quite frankly I didn’t. When I was in the fray I was just acting on my gut hoping for the best, being strategic in what I took on what I didn’t, and doing things smartly, or as smartly as I could with the knowledge I had at the time, but I was just really taking risks and being bold. And to anyone who’s listening to this and thinking, “I can’t possibly do that because this guy knows what he was doing.” Now I know a little bit more but I didn’t at the time. I’m moving forward to my new businesses. I’ve made 10 times as many mistakes [Unintelligible 00:36:33] successes. Because the home runs only come when you’ve swung 20 times and missed the ball. So it’s just kind of getting out there.

OWEN: So be willing to get in there, roll up your sleeve, make your mistakes, and make  improvements as you go?

JONNY: Exactly. That’s the only way to do it. Go in, get a bit dirty. Just know that you can wash off later on and just get stuck in. Because if you try and hit that home run first time out of the plate you’re just not going to do it.

OWEN: What’s the best way for the listener to connect with you and thank you for doing the interview?

JONNY: When I was doing the writing, even though it’s a terrible way to make money, I did actually manage to get some success. I’ve published a full-time eBook which they can find at my site which is jonnygibaud.com. And that actually led to a publishing deal which I’ve got at the moment. My agent [Unintelligible 00:37:28] Twitter and be more effective Twitter, and I hate Twitter. So at the moment I’ve got a campaign to have as many people follow me on Twitter as possible. So if you want to help me out you can follow me @jonnygibaud. I’m trying to put out some decent content, but just know that I hate Twitter and this is purely me trying to get as many… I think I have to get some arbitrary number like 5,000 followers or something for my agent to be happy. That’s my goal at the moment.

OWEN: No problem. I’m speaking to you the listener. First of all, thanks for listening to the interview all the way to this point, and if you found it useful what I want you to do is leave us a positive review. To do that go to sweetprocess.com/iTunes. And if you’re using an Android phone you can leave us a positive review on the Stitcher app by going to sweetprocess.com/Stitcher. If you know another entrepreneur who will find useful please share this interview with them. Finally, if you’re at that point in your business where you’re tired of being the bottle neck and you want to get everything out of your head so your employees know step-by-step what you know, well, sign up for a free 14-day trial of SweetProcess. Jonny, thanks for doing the interview.

 

Noteworthy items Mentioned in this Episode:

  1. Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki
  2. The Compound Effect by Darren Hardy

 

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

  1. Read a lot of books that teach you about processes.
  2. Get comfortable with the idea of creating systems for your business.
  3. Apply the 80/20 rule to your business; look at what your top customers are producing and reinvest your time into them.

 

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