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Rich Schefren’s Interview Series With Coaching Client: Mike Filsaime

RICH: Welcome, everyone. Tonight we are going to launch a series of calls where I get

to interview some of my clients and they get to tell you about some of the things that they implemented from my coaching program that has made a dramatic difference in their business. We’re talking incredibly dramatic.

Tonight I’m talking to Mike Filsaime. Mike has got an exceptional story that’s

pretty unbelievable. Mike, why don’t you say hello to everyone? MIKE: Hi, Rich. Hi, everyone. Thanks for having me. I am glad to be here. RICH: Cool. Why don’t we just dive in and get right to the meat of this call. Why don’t

you tell everybody a little bit more about yourself first so they just get a chance to know you a little bit better and then we will just transition into where your business was when you first was exposed to my coaching program and what made you decide you wanted to join it and then we can take it from there.

MIKE: Sure. I’m from Long Island, New York, born and raised. I got into the car business

in 1990 and I put 14 years into the car business and 11 of those years were in either sales management, finance and insurance or general manager - that’s where I ended.

In October of 2002 I was doing some research to put together a training manual

for my sales people and I stumbled across an email that had a subject line that said “Secrets to online profits.” So I clicked on it and I opened it up and it was a video series that showed you how to get a web site online and gave you some resale rights products. I had never even heard that word before. I said to myself, let me bookmark this; I paid for it. Then I waited until the end of the year, right around Christmas time of 2002. I put up my first web site and started from there.

1:55 MIKE: In March of 2003 was when I would say I started taking it a little bit seriously and

I started building an opt-in list in the first week of March of 2003. From there I started just trying to find different ways to drive traffic to my site and I started doing some list building. I would say let’s fast-forward now about a year. I started doing pretty good online. I was making about $10 -12,000 a month online and I was started to equal or even do a little bit more than what I was doing in the car business.

Rich Schefren’s Interview Series: Mike Filsaime

http://www.strategicprofits.com Page 2

I had my own web site, www.mikefilsaime.com with all my different products

there and I guess it was just a matter of time until the owner of the dealership found out that I had these sites because I guess maybe some salesmen in our 13-car order group must have stumbled across it. They told their manager and their manager told the owner of the 13-car auto group. He pulled me into his office and for some reason he wasn’t too happy about it. I tried to assure him that it wasn’t a conflict of interest, but long story short, about three months into it he came up to me and gave me an ultimatum. I think he probably though I was making like $700 a month or $900 a month doing like eBay. He really had no idea of what I was doing.

I think in his mind he made a mistake because he made an ultimatum and he said,

Mike, you’ve got to decide either you’re in business for me or for your own business for yourself but not both. So I asked him pointblank, are you asking me to make a decision right now if I am going to give that up or stay with you? And he said yeah, I need an answer right now.

3:33 So on August 5 of 2004 I stuck my hand out to him and I said, “Well, John, it’s

been a great five years.” I took a leap -- not that I was ready for it at that time, but I took a leap going full time online. I would say I was continuing to make about $10,000 to $12,000, $13,000 -- it was starting to increase maybe up to about $15,000 a month online. Now I finally had the opportunity to start going to offline events because the hours in the car business were grueling.

So my very first event that January was Stephen Pierce’s “Unleash Your

Marketing Genius” event. At that very event was where I saw you and signed up for your coaching program in January of 2005. That’s when things started to really happen where I was able to start taking things to the next level.

RICH: And so when you heard me speak, what was it about the presentation that I gave

that made you decide that this was the right thing for you. MIKE: I think it was how you frustrated me. I think some people here, I think everybody

listening on this call has read the “Manifesto,” and I know that our good friend Brad Fallon said the very same thing. I was going along with you and I’m watching these slides and I’m like, yeah, okay, list building, white listing, double opt-in process and squeeze pages, product creation -- yeah, yeah, I do all that stuff. And you went through them all one by one and I was like, yep, I do that, I do the AdWords campaign, we do this. And then the following slide, when you put it all together out there and it said “You” and it just had these 87 different things that you’re supposed to be responsible for every single day and in different colors and everything like that, it scared me. It said, whoa! This is exactly what I am doing.



5:30 You went on with the following slides to say is this your organizational chart?

You, branching out to three people underneath it and five people underneath that and then you, you, you all the way down, and then you started talking about scalability and things like that and you went through your presentation which many of us saw parts of in the Manifesto, and it just clicked with me. Right there I said -- and I was starting to feel that pressure of so many things going on at once and not being organized, just like sitting in front of my computer and letting my business tell me what direction I was going in every single day based on the fiascoes and the hazards that popped up on Instant Messenger and emails rather than me controlling my business and moving it forward. To me it was a no-brainer. I remember walking up to you, there was like 15 or 20 people standing around you after you spoke and I waited patiently and then got in front of you and I said, “Rich, I want to get in your program.”

You said, “Well, you know, we’ve got to talk to you first. I’m glad you’re

interested but tell me a little bit about yourself.” And I did and even then I still wasn’t in the program. We had to talk one-on-one on the phone to make sure that we were the right fit.

RICH: Right. It was important, especially when I was first developing the material and I

wanted to make sure that I was working with the right people, that you had something to add to the program so that I would be able to make the program work for everybody and so I was really very careful about who I chose in the beginning so that ultimately this program could work for anyone. I didn’t want it to be too heavily skewed in one direction or another and that’s why I really wanted to get to know people before they got into the program. Fortunately, through many reiterations of the program, like now I can comfortably say that it does work for everybody and that’s why this is the last time I’m going to be doing it.

Alright, so we know where you were, you were doing about $15,000 a month and

you saw me speak and you signed up for the program. Why don’t you explain to people what the progression has been for -- shall we fast-forward -- yeah, why don’t we fast-forward to where you are today and then we can go back and talk about some of the key points for you that made this huge leap, because I know where you are today and it’s pretty mind-blowing, although it’s pretty in line with a lot of people who’ve been through the program. So why don’t you tell everybody just about where you are today and the kind of results you are getting?



MIKE: When we first started working together I was working out of my home, out of a

nice office in my home. Today I am working out of an office that’s about probably not too far from home, about six minutes away from home. It’s a great environment here. I made it a home away from home. It’s still focused on business but there is a nice LCD TV and DVD and stereo and a fax machine and desks and office. I have three full time employees that work with me now in the office and am growing as we’re starting to identify different places in the business.

As far as monetarily, when I first started working with you I was just starting to

break that $15,000 a month consistent revenue in my business. We started that program - what? March was when it officially started, March of 2004? Within just one year, now I am making between $150,000 and $200,000 a month and growing. Some of those numbers I’ve shared publicly when I announced the Manifesto to my list. I know that you and I have spoken about that. Some people know I have a coaching program. And those numbers don’t even include what I have put into my coaching program.

9:39

I want to be clear on one other thing in case people are thinking, saying, “Well, you know, Mike, that’s because you’re selling tons of butterfly marketing and everything like that.” But the truth is anybody will tell you that with a home-study course, that all came at the end of January, February and March when those three payments ended and you take that away, the butterfly marketing sales make up a total of about eight percent of the total revenue of the business. So it’s not a tremendous amount, although I am very grateful for it, but it is not a tremendous amount of what’s going on in that big growth phase that we saw when we went from $15,000 a month to $150,000-plus a month.

RICH: Right. Let me point out a few things. First of all, it wasn’t 2004, it was 2005. MIKE: 2005, I’m sorry. RICH: So that’s the first thing. But you said some things that I think are really important,

and that is that you went from $15,000 to $150,000 -plus, and that butterfly marketing only really accounts today for about eight percent of your sales. So people can do the math and that’s like hovering around $10,000, give or take a couple dollars a month. And your coaching program which has how many people in it?

MIKE: Right now we just broke the 150 member mark. RICH: And that’s how much a month?



MIKE: They’re paying $499 a month. RICH: So that $150,000 and you have some partners on that, but you’re not even

including that $75,000 a month in your number at all, not even your share. You’re just talking about net revenue from other activities aside from your coaching that equals that $150,000, $160,000, $170,000, $180,000 a month that you are currently bringing in. That is pretty phenomenal. That is over a ten-fold increase from your primary activities.

11:30

So why don’t we get into what some of those big takeaways were for you. I’m sure there were a lot of them, so maybe we should just focus on a few so that you could really develop them for people so they can start taking some of those steps on their own and kind of see where maybe some of their thinking processes are not really going to lead them where they need to go.

MIKE: Okay. There are a couple of things. I will mention three of the things and maybe

we can touch upon them that really hit me with the coaching. One was to create a vision, and really create a vision. The second one was knowing your metrics. We went over that early in the coaching program. You were saying you can only improve what you measure. I had no idea of any of my metrics. I never knew how much money was coming in or going out or anything like that. I had no reports, nothing was being done.

The third was scalability. We could probably start there because when we were

talking, when we first started and you were trying to get to know me so you knew how to help me grow the business, you basically asked me what I wanted. I said, “Well, I want to work from home and I don’t want to have any employees.” You said, “Well, that’s an interesting statement, Mike. Why is that?” And I said, well, I don’t want the hassle of payroll and people calling in sick or quitting and all that type of stuff. I was focusing on all the negative points of it and didn’t even know any of the positive benefits that could come out of it.

The other thing that you spoke about was when we were finally done, you said,

well, Mike, it seems that it’s not that you want to work at home; it seems that you just don’t want to work for anybody else. When you said that to me, I started thinking, that’s true. What I really wanted was to get away from that grind, that full time job in the car business and I assumed that that meant working at home, not working for myself.

13:50

You started talking to me about starting to treat this like a business, and that is when I said to myself, you know, if I am going to treat this like a business, then let me consider the option of moving from my home office to an office away from



home. It took me about three months until I did that. Once I started having the office away from home, my home life was better, my sleep was better, my hours were better and when I was at the office I knew that it was time to work and when I put the key in the door I went home and it wasn’t time to work anymore. It seemed like when I was at home, I felt like I needed to sit in front of the computer all day long. I was there from the moment I woke up, I took a shower, I sat in front of the computer. My wife was always saying, are you going to come down for dinner? Are you going to come down to watch TV? It always seemed like it was always another five minute, another five minutes. That was putting stress on the marriage as well.

So by getting the office I knew that when I was in the office it was about work,

and it was about being focused and maximizing my time. Once I put the key in the door, I went home and was able to -- and this is an important thing, is to not let your business consume your home life and your family life. So that was a breakthrough for me there.

Then once I started working in the office -- when I was home there was some

weird things, like the phone would ring and I didn’t want to answer the phone. I felt that there was almost like an invasion of privacy. Even though they were customers that were calling, I still felt like they were calling my home and I would let the answering pick up and hope that they left an email address so I could get back to them. And then when we got to the office, we welcomed the phone calls here. We’re about business, we’re about answering the phone, whether it’s with JV partners or people looking to contact us for any reason or support or anything like that.

Just to close out this part of it, when I was here, I started realizing that wouldn’t it

would be great if I got somebody here to help me answer the phone and go through the mail and do my bank deposits and help me break out some reports, which we will get into in the next segment.

And so I hired Michelle and she is actually waving to me right now, she is on the

way out the door. And I hired an intern. His name is Jason. And I hired Tom Beale. He’s my VP of operations. So we get here -- they work Monday through Friday with me here at the office. They get in and we just pump it out. Everybody is laser-focused when we are here and we get stuff done.

16:40 RICH: Yeah, and I think that’s really important for people to understand, Mike. You

mentioned a lot of stuff, so let’s just break that down. One is that you switched from having a home office to a real office. For some people that’s going to be outside their reach at the moment because they just don’t have the financial wherewithal, but people should understand that that is ultimately the goal, that to have a real business, you have to move the business outside of your house - at



least for most people, and it’s my strong recommendation that people do that. It is entirely for those reasons that you just mentioned. You can have an office in your house and have a separate line and all that if you have the wherewithal to push it aside when it’s time to get up and move away from the computer. But I see so many people online who just become totally encompassed and sucked into the Internet and it really does take over their life. You cannot be productive that way. You end up sacrificing hour after hour after hour and there is no clear distinction where your life outside of work begins or ends and when your life in your work begins and ends. When that happens, you cannot be as effective as you need to be to really make the bigger money because you need to have time outside. That’s when you start having some of the “aha” moments or the great ideas, when you are outside of the business. So many people I see on line who are really struggling, they get sucked in and then they are just working all the time and they never really -- they don’t understand that one of the ways to actually make more is to start working less, to kind of move outside. And so I think that is a really important point that you mentioned.

And then also you talked about even just the phone. I know I am the same way.

When I am not working it’s incredibly difficult to get me on the phone. It’s intentional. We turn off the phone in the house, like, I don’t want to be disturbed. That’s because I want to spend time with my wife, with my kids, I want to enjoy my life. I have no problem with the phone going to voice mail and picking up those messages the next day or having my assistant pick up the messages the next day because the whole reason to be in business, to have a business is so that you can have more life, that you can spend more time with your family, you can enjoy yourself. So many people get that equation all wrong. They get totally absorbed and their business takes over their life, which was not the reason, I think, at least for most of us, that we went into business in the first place.

19:12 MIKE: Yeah, and when you are home all the time -- I know this is going to sound weird -

- but there’s no reason to want to be home. There is no reason to crave it because you’re always there. I remember I used to go sometimes three days, Rich, without stepping out of the house. I would get up, I’d shower, and I’d work and then I would go to bed and get up and do the same thing. Sometimes it would be three days before I even stepped out of the house. But when I am at the office, I put my day’s work in and I want to go home, there is a reason to want to go home and be with the family and things like that.

So I think sometimes when you’re home, there is not a clear definition at any

given point in the day, are you home right now doing things at home or are you working on your business. So there is not a clear focus as to what you should be doing. Coming to the office, it’s like you said, I’m there to work or welcome any phone calls that come in.



The other thing about having the office is that it allows me to understand that I

could take a day off, because when I am home, believe it or not, I don’t open a laptop, I don’t keep it next to me at the dinner table, in bed or watching TV and I very rarely use the computer up in my old office anymore. It’s still sitting up there but I will probably touch it maybe once every six weeks. What’s nice is every now and then a Saturday or a Sunday comes around and I’m, like, I’m just going to take the day off. When I am home I’m still off. That means no computer, no nothing, the office is closed and I take a day off. I know this to be true because I talk to a lot of marketers. They work seven days a week almost 365 days a year. They don’t take a day off.

20:55 Sometimes when you know you’re going to take a day off the next day, it makes

you work that much harder this day. You start saying, I need to get all this stuff done because I am not going to be in the office tomorrow.

RICH: Yeah, and that brings up a whole other concept that I haven’t touched upon -- I

know I touched upon with you in the coaching program but I haven’t touched upon it in the Manifesto or the Missing Chapter of the Manifesto. I would like to just bring that up now because I think it’s useful for people and it could be a big takeaway for some of the people that are listening or reading the transcript. That is that in the Manifesto I differentiated between productive time and non-productive time, and a lot of people have a struggle with actually building more productive time into their schedule because of a lot of reasons, either because they procrastinate or they are slow or they get absorbed by trivial matters.

So there is really one of two ways that you can go about building more productive

time into your schedule. Either you get very clear about what it is you want to accomplish each day and you really make it a priority that you are not going to do anything else before you do one, two and three. Those are the three big things that you need to accomplish each day. For a lot of people that works, but unfortunately for a lot of other people, that doesn’t work.

When that doesn’t work, what I have found to be a very useful concept -- I use it

myself pretty consistently. I don’t know if you have ever done this, Mike. I know we talked about it during one of the coaching calls, one of the group calls, but that is to actually do the opposite, and that is to plan out all the fun activities, plan out all the things outside of work that you’re going to do and really limit the amount of time that you spend in work.

22:38 The idea is that if you’re going to shoot for -- and I’m transitioning into this and I

really don’t want this to be the emphasis of the call so I want to go through this fast, so if people misunderstand it, just listen to this a second time or read this section of the transcript over again. Here’s the idea. If you are shooting for 50



percent, let’s say, productive time, there are two ways to go about it. Either you try and be as productive as possible throughout your day to really shoot for that 50 percent mark. The other way is to say, okay, if right now I am getting only two hours of productive time a day and I’m shooting for 50 percent, then I am going to reduce the amount of hours I am working to four hours a day -- or three hours a day so I can boost up that percentage of productive time so that when you get in to work, when you sit down in front of your computer, you are literally forced to be productive because you have to get these things done. It is kind of like you were saying as far as like if you know that you are taking the next day off, you have to get certain stuff done. What I am saying is, take that day off even before you go into work, so now you are even kind of behind. Now when you get into work, you have to get it done because you’re literally forced. If you do it that way, you’ve got to be able to work well under stress. Some people can’t and so this wouldn’t be recommended, but if you do work well under stress, this is an excellent way. And then what you do is you slowly start adding more hours back to your day as you can make them productive. If you are shooting for 50 percent and you have 50 percent, then you add an extra hour. Try and take at least half an hour of that extra hour to make sure it’s productive. And you keep adding hours back until your productive rate goes below, and then you stop. That’s a very powerful methodology that I go over in much more detail when I am working with my clients, but I wanted to touch upon that for anybody who is struggling with trying to get more productive.

24:36 RICH: I know that was a tangent but I thought it was important because you brought it

up and I think so many people really don’t realize that ultimately how they spend their time is really going to affect their income on so many different levels.

MIKE: Absolutely. I can’t say necessarily I broke it down into consciously saying I want

to have more productive time, but I do know that being here at the office I’m pretty productive. Don’t get me wrong, there are times when I will find myself at www.youtube.com for like half an hour just looking at videos and I will say it’s time to get back to work. But for the most part when we are here we’re productive because we know that we’re here to work.

I will move it along to the next thing that we were talking about, was about

knowing your metrics. That was one thing, Rich, I was very poor at. I am talking about everything. I am talking from my tax accounting, I mean, I was a total mess before I started working with you, and I’m sure there are some other people here now, too. When you start working online and you’re making $500 a month, when you make $500 a month and you’re making $50, $100 or whatever the case is per year, you don’t really worry about that money for taxes or whatever the case is. It’s really an after thought. You’re like, well, nobody is going to come after me for that.



But when that money starts becoming serious money, it’s really time to start taking that stuff seriously and many of us, if we came from a job like where I did where we were getting a Web site-2 and all we did was we handed our W-2 to our accountant at the end of the year and they filled out an Easy form, having your own business is a completely different thing. You need to start aligning yourself with a good accountant and your accountant needs the right information. When you are working on autoresponders and you’re working on sales copy, you’re always saying to yourself, all right, I will get this to the accountant tomorrow, I will get this to the accountant tomorrow. Well, it’s time to file for an extension.

Your accountant is only going to follow up on you so much until it becomes a

real, real nightmare that you say, okay, I’ve got to take three days off and you pile -- excuse the expression -- but you pile up a half-assed bunch of papers and get it to your accountant and they basically say, well, what do you want me to do with this? And then the next thing you know you find out you’re writing a check for $100,000 to the government when you shouldn’t have to.

27:07

When I was in the office, like I said, getting Michelle, it’s a lot more than just answering the phones. She actually compiles reports for me every single day based on the stuff that you told me. What’s so great is I only have to come up with the idea once. I will say, Michelle, this is what I want. Every single day I want a daily doc of how much money came in, how much money went out, what portion of that was expense to commissions or salary or whatever the case is. Now it’s great. I come into the office, she is here before me every day, and then right on my desk is a loose-leaf notebook and I open it up and it’s a three-ring binder and it shows me all the income that came in, all the income that went out and it’s broken down by the sale, the product, it’s all put into a spreadsheet if I ever want to manipulate any of that data.

One of the things that you had said was if you start growing your business and

you’re not watching this stuff, what happens if one of your web sites, maybe the payment button stops working? How would you ever know? I don’t know if you said it exactly like that but that was the image that went into my head and I was like, you know what? I could have a dead order button somewhere and I wouldn’t even know how much money I’m leaving on the table. So being able to see those trends and measuring my sites like how many opt ins I’m getting on this site per day and this site per day. I remember the other day I said to Tom, look at this. Based on the reports that Michelle gives us, we went from 150 members per day on Instant Buzz down 101 members per day. It just suddenly stopped. The truth is, Rich, I couldn’t find out why it did, and it went back up again, but we went through a whole month there. So I was starting to wonder. At least it made me think, is this site not working in a FireFox browser? Is the audio button not working? Is there something that happened now with Internet Explorer 7.0 that the audio doesn’t automatically load? At least it made me conscious that I need to



start investigating these things because before that I would just never had known. There is just too much stuff going on in any given day to do that.

Again, it’s not something that I should be doing myself. I have Michelle

compiling all this data for me based on one set of instructions that I’ve given her one time. I don’t ever have to give her the instructions again but it shows up on my desk every morning. It allow me to measure conversion ratios on pages and opt ins and see if there is a trend in money going up or money going down and things like that. That’s one thing that’s really helped. I remember when you said you can only improve that which we measure. That was important to me, and that took me a little while to get into place, too, but it had to get done.

RICH: Yeah, and I think that’s really important because I think a lot of people are going

to hear what you’re saying and they are going to think like, in the program I differentiate between tactical metrics, management metrics and strategic metrics. There are really three different types. I have always run my businesses from one, two or three sheets of paper. I could be anywhere in the world and just from those three sheets of paper I could tell everything that’s going on and everything that’s important.

Everybody online seems to emphasize just the tactical metrics - and those are

important. That is how you improve the performance of an individual web site. That is certainly a very integral part of online marketing, but it gets back to that concept that a web site is not a business. You have to expand the metrics that you are looking at. We spent a lot of time talking about that because if you’re not measuring, and I haven’t met many people that do effectively measure the metrics of their entire business, then you can’t improve it. If you can’t improve it, then you are forced into, one, working harder than you need to for less than you should, and also you’re forced to stay in the tactical, do-it-all-yourself because once you have those metrics, it is much easier to give up control because you still maintain control but it’s easier to allow someone else to do the work because now you have a way of measuring their effectiveness in a very objective sort of way, and for most people that’s one of the obstacles, actually, to getting free of their business is to be able to give up the work without giving up the control.

31:40 MIKE: Yeah, and what this allows you to do—you’re either working in a reactive state or

a proactive state. Going through your program, you had those things about what happens if you’re reactive to problems to come or if you’re proactive and how much effort and time is wasted when you handle a situation that’s reactive when you’re—okay, here’s a crisis I need to handle it rather than putting in a proactive solution ahead of time saying well, this could happen in the business and putting in procedures and being proactive and making sure these different things don’t go wrong.



It was the same thing when I didn’t have those reports or I guess we can move into also having a vision or anything like that. I really had no set purpose. Every single day I was getting up and going to work; I was very reactive. I was just waiting to see what my inbox was going to direct me in, what direction I was going to go. What crisis at the help-desk was I going to react to that day? What instant messages was I going to be reactive too? Becoming proactive was basically to no longer react to these problems at the help desk. Let’s find out what is this problem that we’re having with the software, create a solution, fix it rather than reacting to all these different things. Again, it’s beyond the scope of this call. That was a three hour presentation right there. So we can’t go into all the details of it in this call but basically just that type of thinking is what was able—those types of things that I learned from you is what really helped me be able to start understanding that the business—it runs with processes and accountability. Other than that, you’re just a boat in the ocean just being drifted by the tide and the wind. Kind of like you said in the Manifesto about some people can say, well, you know, this is common sense and you said, well, they always say you should eat less and exercise more and that’s common sense but everybody’s obese. So, some of this stuff sounds like common sense but until it’s told to you in a way that you can understand it and then you start to implement it, you really only understand it when you’re looking back at it, when you’ve gone through the right process that you can really understand what you were doing wrong.

34:20 RICH: Right, yeah, because it’s certainly is very easy to understand but a lot of people

have a very difficult time implementing it. One of the reasons why people even seek out a coach in the first place is to help them do what they know they ought to. My programs a little bit different, we definitely do that as well but we also help people understand what they ought to be doing in the first place because there seems to be a lot confusion about it. It’s really—if you wanted to you could just say, well, the purpose of business is to bring in more than you spent. That’s common sense but then how do you go about doing that and how do you do it on a consistent basis and how do you build scalability and really make it so that you’re working less and less and yet more and more is coming in.

A lot of times it is about mastering the fundamentals in a way that allows you to

really grow and I think people can really understand that when we talk about metrics, for example, that they can understand the concept that everything should be measured in some kind of objective manner including customer satisfaction, including your progress towards your vision but how you go about doing that often takes some insight by someone who’s done it and done it multiple times and helped other people do it as well.

35:46



MIKE: Yeah, and finally we were talking about—the last two things were vision and then the scalability issue. I really had no vision. My company—well I shouldn’t even say—well, it really wasn’t a company back then, it was more of creating products and they weren’t jelled together. There was no cohesiveness to all my sites; nothing was congruent. When you helped us in the coaching program understand why it’s important to have a vision and what you really want, that’s when I took a step back and I said, well, I really need to find a way to get all of these sites to work together. They were all doing well but they were just haphazard, they were all over the place. They served no purpose by themselves. When I started to understand that I need to put everything together in a full circle and we went over the marketing funnel and back-end strategies and just some incredible slides, you know, the leads come in this way if they buy and if they don’t buy and the follow-up and all those different things. I started putting together a process that all of my sites now had a general purpose. Even though they served they severed different things, they had a general purpose into the funnel of my business, where those customer were going to go once we got them. I started to automate some different types of follow-up messages that were congruent and lead all these people into one direction. By doing that, that’s when I started realizing it’s time to bring on some employees because before that, when I told you I didn’t want any employees, I was looking at the negative things. I always looked at an employee as an expense. When I started realizing that if I put on this employee and put into place this process, they’re going to pay for themselves ten-fold; it’s no longer a case of an employee being an expense. Sometimes they’re going to be an expense if they’re just doing tasks like answering the phone and creating reports because they’re not a revenue generating employee but they’re still freeing up time that I used to do that. By taking away the mundane tasks that I shouldn’t be doing like bank deposit slips and generating reports, it allows me to be creative and be a marketer and move my sites forward and continue to create products.

38.25 RICH: Yeah, I mean that’s—there’s only so many ways that you can get leverage by

yourself. Ultimately, you have to bring in the support of other people whether it’s through outsourcing or through employees. Ultimately, you do really need to have some people who are really dedicated to you getting closer and closer to achieving your vision. Until you get to that point, there’s a lot of strategy that you can use to increase your own leverage but you will get to a point where you hit a wall. Once you hit that wall, the only things that’s going to be able to help you get over that wall is really being able to tap into other peoples talents and having them bring to the table what you used to spend your time doing. So it really frees you up to really generate the maximum amount of money per hour that you can. That’s ultimately what you’re talking about when you say spending time as a marketer



because an hour answering your email is an hour that really is not very effective when it comes down to leverage or productivity or the income you make.

The more successful you are, the more you should not be spending your time on those types of activities. There are other people who can do that stuff for you and for some people it’s a challenge to make that leap but there are ways to do it and do it effectively once you know how.

MIKE: Yeah, would you like to talk about my employee structure here, Rich? RICH: Yeah, I think that would be great. I think it would really help people if you can

talk about even just the progression as well of who you hired first and when you knew you were ready and just some of those things. I know you touched on it already but if you could just break it down. I know there are quite a few people who are listening to this who can only dream right now of making $15,000 a month and so they’re starting at a place that’s further behind but maybe even for them. If you can just walk people through how you’ve gotten to the stage of where you are today. I know, just based on our conversations, that in a year from now you’re going to probably have the same level of dramatic growth that you had from a year and a half ago to today; you’re probably going to have that same growth rate going forward because you’ve got bigger plans of what you what to accomplish. So why don’t you go ahead and just walk people through that a little bit.

40:57 MIKE: You brought up a good point. I just want to touch upon that for people saying,

well, when is the right time to start expanding like that. You can’t just go out and just hire a staff of 15 people and things like that. At the beginning it is like pushing that big boulder up hill but you have to know that once you get to the top of that hill and that ball starts to go down you want to be prepared for that. I’ll give you an example of where I was when we first started working together.

When we first started working together it was me, my programmer in Romania, his name is [Ionut] and it was Nancy at my help desk. Now, at my help desk we have—my help desk for all my sites, we have two full-time people and two part-time people. Rich, this is something I think you referred to as out-tasking rather than out-sourcing. This is a relationship that I have with these people. Technically, they’re not employees because I don’t—they’re not on a payroll, they have their own company, I don’t provide insurance or anything like. They basically don’t punch a clock; they’ve just got to get the job done. I pay them weekly and then I cut them a 1099 at the end of the year.

42:21



There are two full-time people and two part-time people and they work in the United States. For me, it was very important to have people that work the hours where my customers are posting help desk tickets and they understand the language very well. There are no barriers there. In Romania, basically what we did here in the office, we did the very same thing in Romania. My programmer used to work out of his house. I paid for an office to get set up for him in Romania and now working with him, he’s the lead—he’s kind of like minny-me out there. He’s now—what we have working in that office over there, we have Ionut, we have another guy named Ionut who’s also a programmer, we have [Katalin] who’s a programmer and we have [Valle] who’s a programmer. So we’ve got four full-time programmers over there. I have a full-time SCO guy, a full-time graphics guy and a full-time server maintenance guy. It may sound like a lot but just to put this in prospective, a well paid school teacher in Romania makes a $150 a month. If you have a very good job, you make like $300 a month and if you’ve like the vice-president of a bank; you make about $500 a month. If your business is growing, to put on employees that you’re paying over there $400 or $600 a month, to them they’re going to be the happiest guys on earth but it’s really not going to break the bank here because again, you find ways where these people become revenue generating employees. Basically, my partner, [Ionut] he gets 15 percent of the business. He’s a well paid little Romanian. What he does, he manages those guys over there, and I pay him through all the employees. I pay him and he has his own company set-up over there so technically, they work for him and he distributes the work to them and their payroll and everything to them. He takes care of all that for me in Romania. I only have one check that goes out every single month. Here in my office are my actual employees. That is Michelle who I was talking about and then Jason, who is my intern, is basically what I call him. And then I have Tom who is really my right-hand guy. His title is VP of Operations. Tom travels with me to more than 50 percent of the events. Tom’s a partner in my coaching program; he sees himself as a partner in the business. Tom gets a salary, a small salary, basically as a perk. Pretty much his entire income is performance based. It’s based on the connections that he makes with other marketers when he goes to events and he basically lets me duplicate myself and be in two places at one time. Tom is the type of guy that I could call up, Rich, as you know we have spoken where I’ll say, Tom do me a favor, I’m on a plane, this email has to get out right now. Write an email to the list and shoot it to me so I can review it when I get off the plane. I’ll get off the plane, review it, make a couple of changes, I send it back to him and he takes care of almost anything.

45:53



Some of these things start to sound small and minute but when you can start—

when you have people that you can trust and they’re responsible and they’re intelligent and you can start pushing off some of these things to them, again, it does either one of two things; it frees up your time to work less or frees up your time to be a better marketer and focus your efforts on the stuff that makes money.

RICH: Yeah, we talk about that in the coaching program about getting a right-hand

person and really why that’s integral to your success long term. You mentioned some other things that I think are really important that I think that we should go back to. One, you mentioned that—where do you start if you’re all alone? Well, one of the places that you start is by really starting to document what are the things that you’re currently doing? My wife and I grew our hypnosis business and for those of you, who are listening to this or read the transcript. You can read the article about that business, we were very meticulous. When we first started we did absolutely everything. We had no employees but we were very meticulous about actually documenting everything that we did so that as we started turning over activities, we were making sure they were being done in the right way and they would be continually improving. That’s important.

Also, when you mentioned the out-sourcing and out-tasking, you really want to

develop those long-term relationships. You want to develop long-term relationships with people who will grow with you. So whether they become partners or junior partners in your entire business or they’re just going to grow their business as they work with you. My [inaudible 47.39] one of my VAs, she has grown a VA business because—well, not just solely because of my work but—that makes it so much easier for me to rely on her because now she’s got a team of outsourcers, right, she’s got a team of VAs. So she becomes the point person and then she can hand it off to this person or that person or the other person.

I still have that key relationship and it keeps me from having to spend time with

lots of other people. So, that’s one of the things when you’re looking to develop these outsourcing relationships, you’ve got to judge that based on your vision and ask yourself is this person the right fit strategically with where my vision wants to take me because if you’re going to do the work, you want to do it very well but you only want to do it once. You don’t want to continually have to do work over and over again and that’s a really important point in any area of your business. Right now we’re talking about the difference between out-sourcing and out-tasking so you definitely want—its hard to find good people, there are definitely some key strategies you can use to find good people but once you find a good person, you want to make sure one of the good qualities of a good person is that they’re going to be able to grow with you whether it’s them specifically because they have the intelligence to or because of the situation, they’re going to be able to get more people to help get the work done under themselves.



In corporate America we talk about hiring someone who can at least move up two levels when you’re hiring them so that if you’re hiring them to work on the floor, let’s say, that they have the potential to become an assistant manager and then a manger, just to use an example. It’s the same thing with out-sourcing. You want people who can grow with you and I think that’s really important because I see a lot of people make that mistake.

49:35 MIKE: Just a couple of things when you said VA, just in case anybody doesn’t know

what that meant that was virtual assistant, right? RICH: Yeah. MIKE: Yeah, that’s a good point what you said about your VA, has she grown with you.

Nancy, started out by me sending an email to my list saying, I am looking for somebody to help me do support with this site. It was one of my first sites and she was a member of the site. So I sent it out to those members. She raised her hand and said, yes. What ended up happening since then, she has her own company called, Pro Support Network. From me, she branched out to do support for Russell Brunton. Then she started hiring her own VAs underneath her and then she picked up through my network, she ended up picking up Gary Enbroughs. After she got Gary Engroughs, she got Brad Calin and then after Brad Calin she got a young man named Keith Wellman and then they got a couple other people, she formed a partner with another guy that was doing support for me. They set-up their own support network and started hiring other people the same way that I hired her. They sent out emails to people. They were willing to work for $50 a week answering small support for different people’s sites so she was able to grow with my company by doing that.

Like you were saying before, out-sourcing and out-tasking, from what I

understand from you, that’s out-tasking. She’s not necessarily an employee but it’s a long term relationship where out-sourcing is posting a project on Elance, maybe never getting the person’s email address, you put a bid, they respond, they give you the product and then you don’t use them again. When you want to do another project, you go and place another bid and either they respond again or somebody else does but that’s out-sourcing where you just use different people all the time. Out-tasking is when you have an ongoing process in your business that you can turn over to an affordable expert that can do it better and faster than you can with your own resources.

51:42



RICH: Right, it’s so vital so I’m glad you brought that up. It really is a very necessary

part of growing your business. I think also, what you mentioned, people shouldn’t just glance over that. Once you start building a list, one of the best places to get or recruit any person for your company is actually through your own list because there’s already been a beginning of a relationship formed and at times some of those people can be your best people.

With that said, are there any additional tips, tricks that you want to share with

people before we wrap this up? MIKE: Yeah, just a couple of things from the Manifesto or part two where you were

saying, sometimes how do you pay for these people? It doesn’t always have to be money. In the beginning it could be a promise of future profits. Sometimes you can get people to work for you, especially in the case of programmers and things like that, you can pay them a little cheaper up front or sometimes nothing up front with a promise or a possibility of a better future. Sometimes it depends on how you post a project. If you tell somebody that they’re going to get part of the profits and you’re realistic in telling them what the project can bring once it’s launched, maybe you can get a programmer to work for you for free if they understand that there’s a potential to make ongoing profits. Then, if you find out that this person does quality work, you can make them a long-term partner.

When I spoke with Ionut and got him through one of the land sites, I had used

many programmers before that. Programmers are very quick to bid and say, no problem, sir, it can be done. They like to finally close out the project and then when you try to get back to them, a lot of times they’re like, well, I took on another project, it’s going to be 14 days and so. Really recommend--when you find the right person that does the job and they communicate well with you and they know things that you didn’t even know existed, try to lock them up. In the case that I did with Ionut, I gave him 15 percent. This goes way back to when I was making $5,000 a month. So I said, hey, 15 percent, I’ll pay him $750, he’ll be happy. The truth is, he’s not going anywhere. He’ll never leave and I don’t want him to leave. It’s the perfect win-win situation. I would love to pay this guy a million dollars a month. At that point, I’m making $15 million a month. It’s never a matter that I could pay him too much because my success is his success and vise-versa.

What I find is he’s very passionate about what he does. Sometimes he’ll do something and I’ll say, hey, that’s cool. Why did you add that? And he’ll say, oh, because what will happen is this gives us another opportunity to make a sale because he now has a vested interest in not only the site functioning properly or the software functioning properly but looking good, being clean, and being profitable. It goes a long way and having an employee like that—just imagine somebody listening to this, if they have a server problem, what do they do? They have to log-in to their server host help desk or either get on the phone and again,



this is taking away from your productive time. When you have a staff of experts around you like that, all I’ll do is send an Instant Messenger and say, hey, Ionut, I’m having FTP problems over here. He’ll go off for 15 to 20 minutes on something that will take me two hours to do but it lets me still focus on the business and the marketing.

55:45 What I would really want for people to understand is its okay to take that first step

to find somebody to work with them. You can do it all by yourself but there’s just only so far you can go, I think, if you’re doing it by yourself. Rich, when I was in Seattle last week, I asked this person, I said, what are you doing right now with your business that he has? He says, “I’m doing about $300 a week.” I said, “Let me ask you a question, what would your business suddenly be like if you were doing $3,000 a day?” We were at a bar and he sat back in the bar on his stool and looked up in the air and he looked at me and he says, “Oh, man, I think I would hang myself.” And that was the answer I knew he was going to say. I said--because based on what he was telling me about his business, the way the orders came in and he was packaging them and shipping them so we started just talking about some simple things, get your products over to a fulfillment company, get your shopping cart to integrate these offers and all these types of things. Those are things that we were talking about before that is pro-active solutions. Don’t wait until your business starts to grow that you suddenly start to create something that you hate. Start thinking ahead; start putting into places some processes that are going to scale with your business so that you can handle the success when it comes.

57:14 RICH: Yeah, I think that’s really valuable information, Mike, and I agree 100 percent. As

we wrap this up, I guess it would be useful for you to just talk to people who are considering going into the coaching program. As you step back, obviously its done dramatic things for your business, what would you tell people as they consider whether they should take this opportunity or not?

MIKE: Well, basically, what I’d want to bring up is something that was in one of your

slides and that’s unconscious and competence. What that means is you don’t know what you don’t know. It’s very hard for us to talk on a one-hour call and explain all the benefits. It’s kind of like what we said before; you don’t really understand it until you get through the tunnel and you look back through and see what was behind. It’s almost a little bit of a blind leap of faith that I would recommend somebody has when we’re telling you this, Rich. You have a proven track record and not only in your business but in being able to teach it and getting the results from the people that you taught it from. Lots of incredible success stories have been left in your trail. What I would tell somebody is if you’re listening and you’re the type of person that doesn’t know where the start bar is



and something like the start button is or what a zip file is, maybe this might not be for you. If you’re the type of person that only doesn’t know that because you just haven’t been in front of a computer that’s okay because maybe you’ve had successes in your life and you connect with some of the stuff we’re saying and you could be a great candidate.

For the majority of the people that pretty much get it and understand—maybe

they’re making a little bit of money online, they understand the basic concept of getting traffic and converting the traffic into money, it’s time for you to stop looking at this as a hobby that makes you money and looking at this as a business because it’s what you want. There’s a reason why you’re listening to this call right now. It’s not by accident, it’s because your are into Internet marketing, you don’t want to continue to work full-time, working for somebody else, they’re buying you wholesale and selling you retail, you want that better life. If you’re the type of person that maybe is working at home right now and you’re making $5,000 a month and you took that leap maybe a year ago and you want to go from $5,000 a month and on, I can’t promise you $5,000 a month or $50,000 a month but I can only tell you based on past performance that Rich has had with his clients. One of the posts that I put in [warrior form] 60:16 I know I’m going on a little long here, Rich, was that—you really can’t look at it as a cost because a cost is something you pay for and you get an object in return. This is about a return on investment that you take with you for the rest of your life. It teaches you how to build a business. It’s something that you’ll have access to over and over and over again in the future to really put the right foundation into place to build a business the right way and the way that you’re going to enjoy your life.

I know I ran on a little bit but I highly recommend--I know there’s people right

now that is listening to this call saying, I think he’s talking to me. If that’s you, then I’m going to tell you to take that leap forward and when the opportunity is there, seize it and get to work with Rich and you’ll know that unconscious incompetence will suddenly become conscious competence. You’ll suddenly understand what it is that you want and how to achieve it.

RICH: I really appreciate you saying those kind words, Mike. I guess I just want to add

one thing to it and that is what you last spoke about is—this progression from unconscious incompetence to ultimately unconscious competence which we are able to do without even thinking about it. I think on my blog I think I go through those stages in more detail and relate it back to learning how to spell or learning how to drive. Here’s the thing and you touched on it, ultimately, the idea is that you want to—just like your unconsciously competent at riding a bike, we want to get you to the point and you should strive to get to a point where you’re unconsciously competent just like riding a bike, to starting a business that’s bound for success.



When you do that, every activity that you get involved in from this point forward will be that much successful and the probability of you being successful obviously dramatically increases.

With that, we should say good-bye. I really appreciate you taking this time, Mike,

and sharing with people your experience. I think it will be helpful for people and I think you have given some great take-away for people to understand some of the main point that you’ve latched onto to really grow your business and you should certainly be proud of yourself to go from $15,000 a month to now $150,000, approaching $200,000 a month, not even including another $75,000 that’s coming in from coaching or the $2 million that you grossed in Butterfly marketing. Just putting that all aside, that makes it even more profound. You’ve been able to accomplish incredible things and I want you thank you for taking the time to share some of those key ideas with people so that they can have that kind of success as well.

MIKE: Thank you for having me, Rich. It’s definitely been a pleasure. RICH: Very cool. Thanks, Mike, and I’ll speak to you soon. MIKE: Okay, bye-bye.

[END TRANSCRIPT]

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