THE INSPIRATION PLACE PODCAST
I am so thrilled that you are here. Today I’ve invited a guest expert on how to structure and run your business. In this podcast, you’ll discover why becoming more productive is not the answer; why it’s essential to create systems in your business so that you spend less time behind the computer and more time in the studio, how to add help to your art business, believe me, you do not have to do everything yourself, so that you can spend more time creating. But before we get there, I wanted to tell you about one of the tools that is indispensable in my own art business, the Artwork Archive. Artwork Archive helps you easily organize and manage your artwork. I use it to create a visual database of my art, my contacts, the galleries I’m in, the sales, the shows, and more. This one tool saves me time by creating invoices, creating inventory, and with a click of a button, I can print out all my contacts to produce mailing labels. If you’re interested in checking it out, they have a deal for $10 off just for my listeners. Just go to schulmanart.com/archive or go to today’s show notes at schulmanart.com/13.
Now speaking about saving time. Our next guest, a former small business columnist for the Wall Street Journal, is the author of the Surge, The Toilet Paper Entrepreneur, The Pumpkin Plan, and Profit First, and now has a new book fresh off the presses called Clockwork: Design Your Business to Run Itself. Today’s guest has built and sold several multi-million dollar companies but what he’s most proud of is how his books have impacted entrepreneurs around the world. He’s made it his life mission as a full-time author to eradicate entrepreneur poverty, otherwise known in our world as the starving artist. Please welcome to the Inspiration Place, Mike Michalowicz.
Mike Michalowicz:
Miriam, thank you for having me. Actually you are right, it is the starving artist syndrome and I am here to fix that.
Miriam Schulman:
Thank God, right?
So a lot on this podcast I’ve invited lots of experts like yourself but also artists who are making 6 and even 7 figures in their art business because I wanted to make sure people understood that not only is it possible to be successful as an artist but it’s actually quite common, as long as you have the types of practices in place that we are going to be talking about today.
Mike Michalowicz:
I agree. It is the key to understand that it is very doable and that you don’t need to do all the work.
Miriam Schulman:
Absolutely! In fact, I don’t know a single successful artist who does everything by themselves.
Mike Michalowicz:
Yeah, true, very true.
Miriam Schulman:
Yeah. In fact my first guest, Ashley Longshore, actually has 20 employees but that’s because she runs her own gallery. But whether somebody has their spouse working in their business or they have just a full-time assistant, all the artists I know who are making a living from their art have help because nobody can do it by themselves.
Mike Michalowicz:
Yeah, I agree. It’s funny. This reminds me of my own business. My first business, which was in the technology space, instead of hiring a cleaning crew to clean the office, I said I’ll do this myself to save money. It did save money but it’s taking so much time. I ultimately recruited my parents. They were my cleaning crew for a while. God bless them.
Miriam Schulman:
It’s like my husband. We’re talking on how to save money because my youngest is going off to college and he’s just like should I start ironing my shirts again. I was like, well how much do you bill an hour and how much does it cause you to like get the shirt ironed? He’s like, you’re right I don’t think I need to be ironing my own shirts.
So also, I invited you on because I have actually read most of you books and listened to them cause I really enjoyed your speaking style. It’s probably because I’m from New Jersey also. You sound like every guy I went to highschool with. I get all the New Jersey references, like Long Beach Island…
Mike Michalowicz:
Oh yeah, LBI. Best place on the planet right?
Miriam Schulman:
That’s where we went after the prom.
Mike Michalowicz:
Yeah, me too.
Miriam Schulman:
You did? Yeah. So I live in Westchester now and the kids here go to the Hamptons. Not my children, but yeah.
Mike Michalowicz:
We were definitely not that sophisticated.
Miriam Schulman:
No, no, no. And when I first started working, before I was an artist I actually worked on Wall Street for a hedge fund and I definitely got schooled in that Jersey Shore was not the place to go. And that I should consider somewhere else to go if I wanted to maintain my, I don’t know what I was maintaining.
I first learned about your book when I was at an artist’s retreat. So other professional artists are already using and benefiting from your systems. So I’m really happy to have you on today to dig in on some of your other books like Clockwork and The Pumpkin Plan because I think all these books are kinda interrelated. Don’t you think?
Mike Michalowicz:
Yeah, totally. That was my intention. The entrepreneurial journey from solo practitioner, solo artist upto whatever size business with employees, resources and found out that we follow Maslow’s Hierarchy of Needs. I think there’s an application of that to business. So that Maslowvian hierarchy, that has an entrepreneurial version. And that is what these books kinda walk you up. The base level by the way is sales. I think that’s the oxygen for our businesses. You know if people are not buying your art, it doesn’t matter what you are doing, there is no inbound revenue. That will devastate you because you have no source of income. So first you need to make sales. What a lot of people don’t realize is the next level up is profitability. This means you can make every sale in the world but if every penny that comes in goes out the door, that’s not sustainable either. So the next layer up is profitability, that’s why we’re Profit First. The next layer up is clockwork. Clockwork is about time. Once you have sustainable sales, once you have permanent profit, now we realize working 24 by 7 may not be the best thing to do. Maybe we should have a more balanced life.
Miriam Schulman:
Yeah. In fact I had a guest, his episode might come up after yours even though I’ve already talked to them, Alex Pang of the book Rest, his whole philosophy or his research really has been about how people are more productive when they work less hours.
Mike Michalowicz:
Yeah. I just read an article, the 4-hour workday, so instead of 8 hours a day, maybe more productive than an 8-hour work day.
Miriam Schulman:
Yeah. Exactly! That is his whole thesis, 4-hour workday, 4-day workweek. And he has examples going all the way back in multiple disciplines, Charles Darwin, you know, scientists, an artist, writers that you can’t sustain more than 4 hours of productive creative time. You just can’t.
Mike Michalowicz:
Yeah. And I think we also have to focus on our genius, our super skill and apply that time there. I think the problem is we apply maybe an hour a day there. I don’t know the numbers but modicum of our time and the rest of our time is splintered all over the place which actually drains us from our ability to do our zone of genius work. So it does undermine us.
Miriam Schulman:
Right. And when people say, “Oh, I wish I had more hours in a day” but the truth is that even if you had more hours, you don’t have more energy and you really have to save your energy not ironing shirts. And one of the things also, I think the main thing I learned from your book, The Pumpkin Plan, is how sometimes we spend a ridiculous amount of time on things that are less profitable. I see that in some of my colleagues that they will spend so much time designing, let’s say a magnet with their art on it. I think, “What are you doing? How much are you gonna sell this for, $5? How many do you think you can sell? Why are you wasting your time on this instead of working on a canvass or your next commission or trying to find that next client?”
Mike Michalowicz:
Yeah. We need to prioritize both the product and the client. You know there’s this thing called the Pareto Principle which is the 80/20 rule. Twenty percent of our profitability and our revenues comes from 80% of our customer base but 80% of our profitability and our revenues is coming from 20%. So who’s that small customer base that’s buying most of our stuff? Then another question is what’s the stuff that they buy that is profitable. And to your point. My own photographer, I go for studio photography. I was talking with him recently because he has one customer. He says, “I can’t stand them. They come in and they complain about the final product. I put so much time into it, they’re making me redo the work. I edit, I spend exhausting hours on here and they won’t even pay me. They’re so frustrating.” I said, “I hope you got rid of them.” He said, “No, but they’re revenue. I need to keep them.” And I’m like, oh my gosh, you’re spending an enormous amount of time on somebody who’s costing him money.
Now on the flip side, this might apply to some of the folks listening in right now, I said, “who’s your best customer?” And he goes, “there’s this one guy that came in and we were talking about his family lineage and he was an elderly guy. He wanted to transfer his story to the next generation but not in a traditional way so we thought up this idea. We took a portrait of him where I actually, with microtext, inserted his life story in his clothing. You can’t see it but if you go to the magnifying glass you can read his story. This is a good way for my future grandchildren and their children to revisit me, to see my picture but then to explore their story that is embedded in me. And it began this whole new approach.” I’m like, this is it! While he went on to do this micro embedded stories, I don’t even know what the term he came up with, and he dictated a massive premium because it was unique. He catered to his best customers and sure enough there are others like that best customer that now came to him. So the key here to Pumpkin Plan our business is to identify our worst customers and have the courage to say no to them and then focus on our best.
Miriam Schulman:
But also sometimes I feel that if you set appropriate boundaries, they’re bad customers because you’ve allowed that to happen.
Mike Michalowicz:
Oh, yeah.
Miriam Schulman:
So I used to have that with some of my portrait commission clients. I would be spending a lot of time with them, and somebody finally said to me, “Well are you charging for that time?” I said no and they said, “Well, that’s your problem. You need to put in your contract that the consultation is 30 minutes and if you run over it then it’s $150 an hour or whatever it is you wanna charge” And once I started doing that, guess what? Nobody was running overtime with me.
Mike Michalowicz:
Yeah, right. You also became very efficient.
Miriam Schulman:
Exactly!
Mike Michalowicz:
That’s classic scope creep. An artist experiences that constantly to be very clear of the boundaries and then you have to enforce it. When the boundaries are impeded upon, and that customer asks for extra hours and just throws “just give it to me for free”, say “No. I’m sorry but that’s the agreement.” So you have to charge them. And once they feel that burn in the wallet, they’ll line themselves. And the customers who say, “This is outrageous, I won’t pay an extra penny”, they are the cheap shoppers. They are looking just for the cheapest price and you don’t want them to be your customers anyway.
Miriam Schulman:
Yeah. And the truth is I don’t find that that actually is what happens. I find that they respect, they really respect that you value your own time.
Mike Michalowicz:
Yeah, I experience that mostly too.
Miriam Schulman:
So I wanted to dig a little bit more into the book, especially the chapter five where you talked about hiring because a lot of my audience and my students don’t feel like they have the money, the starving artist mind-set. They don’t feel that they have the budget to hire somebody but I think you gave the perfect advice in your book. So would you like to share that and we can discuss that.
Mike Michalowicz:
Yeah, yeah. So in Clockwork, sometimes the book is Design Your Business to Run Itself. And one of the elements is to have a business that can run independently or at least the majority of the business can run independent of your zone of genius is to bring on the best people. And when people hear the best people, they instantly say that’s expensive or the best is always expensive therefore I can’t bring on anyone, and that is so not true. Let me start with this story because it really plays on what you can do. Because I thought when it came to making a business run on automatic, at least for artists that’s impossible, for a business that is brick and mortar like a bank or something, you hire employees and accountants and pizza shops; but an artist, it’s all in your touch. It can’t be done. So I found this story of a guy named Peter Lely. He was a Scotsman, he moved to England in the 1800s and went on to be the most prolific painter of the 1800s. One of his famous portraits series was called the Windsor Beauties.
Miriam Schulman:
Hmmm, I don’t know that artist.
Mike Michalowicz:
Oh you gotta check this guy out or you can read Clockwork, it’s all in there, either way. Here’s what he did. He realized that his capabilities was to make images of people’s faces so perfectly that it was photographic quality in the 1800s. Additionally, portraits have about 10% of the canvas space was the face and 90% was the background, scenery, the body, and so forth. He was painting the whole thing and I don’t know how long a painting would take him but an exorbitant amount of time. He then had the realization that what if he just does his strength and his own genius, paint the face and let other people do the remainder. So he went back to his studio and he painted like ten body poses in different outfits and ten background sceneries, and literally would come back to his shop and say ‘okay, I did the face for this woman. Throw in body three and background four Jimmy.’ I mean, that’s literally paint-by-numbers instead of people.
Miriam Schulman:
Okay. So there are actually quite a lot of examples of artists throughout history and today who have done that. Andy Warhol was known to use apprentices, Rubens was known to use apprentices and my guest on episode 1, Ashley Longshore, she actually also works with both a graphic designer so she might decide this is what I want to like and somebody else will pencil it on the canvas. So anything that is mechanical in process, they do have other people do. But beyond that, you know, I don’t want other people doing that because I enjoy that, there is so much Mickey Mouse work that happens to get that artwork whether it’s on the internet and listed on your website. It can be done by anybody.
Mike Michalowicz:
Yeah. Invoicing. Collection. And you can find very affordable people who can do this.
Miriam Schulman:
Absolutely.
Mike Michalowicz:
I talked about this in the book. We were working on an ad here, we were a small firm with 10 employees. Three to four people make $10 an hour and I’m very proud of that. Not that I’m taking advantage of people, that is very fair. It’s not even that the work they’re doing is exceptional, it’s fair for their lifestyle. Some people take a job because they need to make $10 to $15 an hour or $17. You know, pick a job based on how much they can make. Other people are looking for a lifestyle over pay. So we have employees here who said, ‘’I need super flexible hours.” Actually one person had to leave today for a personal situation. I said “no problem, just go”. We set the work environment to be very flexible. And in our ads, what we say is here’s good news and bad news about our company. Let’s start with the bad news, pay sucks. If you’re looking to support your lifestyle, we are the worst company ever on this planet. But there’s good news, we have a lot of fun here. On your first day you will be equipped with a Dharkon because we have weekly Dharkon fights. We’re very flexible on our time and so forth, and we list all the benefits. And we’ve had extraordinary people come here. I think the key is to show what your true advantages are. If you try to compete on price, you’re competing against these mega corporations who just overpay everybody and will out pay and take away people.
Miriam Schulman:
Okay, so let me interrupt for a second cause I wanna bring it back to artists and also introduce to our audience into what I have done in my own business. So I think it was about 5 or 6 years ago, I started off hiring the summer intern. It’s a highschool student for $8 an hour because they haven’t even graduated highschool. Now granted this was some years ago, so now if I were to do it I might pay them $10, competing with babysitting jobs in the New York area. But you know, $8 an hour for someone who hasn’t graduated highschool because it doesn’t take long to show them that this is how you enter something into Instagram. And guess what, not only can they do it, but they’re gonna do it better than me. Because they’ll be like, ”then you add an emoji and you add a hashtag”. So all those things can be done by a highschool student, so I did that for a few years. And then one year, I said, “you know what, September would come around and I would still need help” because you know they would come for the summer and then they would leave. So that’s when I hired a college student, so I upgraded to a college student. I still paid her the same thing. And now this college student is still working for me two years post-graduation, She’s up to $20 an hour and I’ve trained her so she is able to do so many things in my business and she loves it. She loves it. I’ve asked her what are your friends doing. Oh they work at Starbucks, and they’re college graduates.
Mike Michalowicz:
And I think the key is you didn’t have to untrain her first, you brought someone in without experience. The one thing we can give employees is experience. We can’t give them attitude, energy, drive, commitment, cultural fit but you can give them experience. I found the best thing to do is we hire highly inexperienced people and we train them in our method so that they master our method, and then the approach is perfect. I’ve in the past hired these people that are very expensive that walk in with experience and so I have to untrain them. And say, I know that’s how you did it, we do it in a different way and there’s confusion. I love that you did it.
Miriam Schulman:
I haven’t really thought of that. And right now I also have a customer service person, speaking about what you said about not everybody’s looking for a full-time job. So the second person I have, she is someone with three children and it’s a dream job for her to come between 10 am and 1 pm. She can work-out in the morning, she can eat lunch with her friends. So it’s like a limited number of hours which works great for me, that I’m only paying her 10 to 12 hours a week. And it’s perfect for her because she can still have her personal time and her family time, and now she has some mad money on the side that she can do whatever it is she does with that.
Mike Michalowicz:
And here’s the great hidden secret. It goes back to what we were discussing. I can’t remember if we’ve quoted this before or not, 4-hour workday versus 8-hour workday. Part-timers, we have a few people who work here literally 4 hours a day, they’re producing the level of 8-hour a day or more. So that’s the greatest irony, less time=more productive and they’re expecting less pay and is all we can afford. So it becomes this perfect match.
Miriam Schulman:
That’s right. And for my assistant, I pay her a bonus. I teach online classes so I give her a bonus based on my online class launches. But when I do take her to art fairs or I take an assistant with me to an art fair, you can always also pay a commission on your sales which gives people an incentive to feel a sense of ownership inside the business which I feel is always really important.
Mike Michalowicz:
Yeah, we do it too. You know one of my books is Profit First. So every quarter, we do profit distribution now for 30 consecutive quarters and so every employee shares in the profit distribution. So same thing, they are engaged in the business. They’re motivated to be both frugal but not cheap. Frugal for the business and innovative for the business. They find ways to get things done. And they’re a little bit out of the box because they’re sharing in the success of the company.
Miriam Schulman:
Yeah. And one thing I wanted to make sure we touched upon is that this whole thing is not about becoming more productive or getting hacks for productivity. So why do you feel that’s so important?
Mike Michalowicz:
Yeah. So I discovered that productivity means we’re seeking ways of finding ways of getting more things done in a compressed amount of time. So less time to do more. But what happens is when you do more things in less time, you have more time to do more things. What happens is we start piling on stuff. It becomes actually impacted, we pack in more and more stuff and we get overwhelmed. God forbid, one thing gets a little bit out of alignment on a packed-up ultra productive day, it ruins everything. It’s such a monkey wrench in the engine of what we’re trying to do. So productivity is a no-win game where we’re constantly taking on more. Now I’m not saying productivity is bunk, I mean we have to be productive. I’m just saying it’s not a solution to a business that can run independently of you or without full reliance on you. It really is about organizational efficiency. Other people, part-timers, contractors and other resources choreographing them to work together towards that common goal.
Miriam Schulman:
And Mike, what would you suggest to somebody would be the first thing that they should be delegating?
Mike Michalowicz:
Well the first thing that’s the easiest to delegate and/or is the most boring or just arduous for you cause then you get an early win. So even though you may delegate something that saves 10 minutes a day but the fact that you never have to do it again. “Oh my gosh, I can delegate that. Let me try something new.” The things that we find to be the most arduous and time-consuming and frustrating, delegating those, it alleviates us from that distraction and the weighing down that they can put on us, taking us away from our zone of genius. So whenever you hate to do something you can delegate that first. Delegate it because it’s an early win. If it’s easy to delegate, you know, it’s a very simple process. Delegate it. This is so you can get it off your plate. Keep that process going and use it to gain your momentum and you start delegating a lot of stuff.
Miriam Schulman:
Yeah. It’s kinda like the delegation muscle. Once you start exercising all the time, you’re like “Oh, I don’t have to be doing this myself either.”
Mike Michalowicz:
Yeah. It’s unbelievable.
Miriam Schulman:
But I actually go through a three-step process. So I always say first, does this even have to be done at all? That’s the first question I’ll ask myself. And then, can it be automated? Can it be done by a machine? Is there a software that can do this? And then finally, well if it has to be done by a human being, does it have to be done by me?
Mike Michalowicz:
Yes. So in Clockwork, I call this Trash Transfer Trim Method. First thing is does this need to be done at all? I actually used to write a newsletter every week for our client base every month and send it out. And one day I said, I don’t think people are reading this so I stopped sending it and no one complained. Ay dios mio! The Transfer method is of course to delegate someone else. Why me? The Trim method is there are certain things you have to do yourself because they’re your own zone of genius. Is there a way to do it more efficiently? That’s trimming, that’s the last phase.
Miriam Schulman:
Yes, that’s wonderful! Thank you Mike so much for joining us today. I’ve learned a lot and it was a lot of fun talking to you.
Mike Michalowicz:
Oh, pleasure to be on your show. Thanks for having me.
Miriam Schulman:
So do you have any last words for my listeners before we call this podcast complete?
Mike Michalowicz:
Okay. So yeah. One last word of insane, maybe, decree is I believe every business, artists included, need to declare a 4-week vacation. And hopefully when you hear that word you gasp because here’s what a 4-week vacation is. If you can remove your business for four consecutive weeks and I’m saying full digital disconnect, it forces you to have a mindset of how my business can sustain. Sadly, what most business owners do, is they crunch time. It’s “I’m gonna take off time from work for a week” but they crunch as hard until the day they leave. And the day they come back, they scramble as fast as they can to catch-up. That’s not giving the business independence. But I found that most businesses go through all the elements of the businesses in four weeks. So if you can decree a 4-week vacation, you now need to start looking at your business in a new way of how can I get as many different resources supporting and running my company in my absence. And if you can get away for four weeks, wow, you’ll prove that you’ve made your business as efficient as possible.
Miriam Schulman:
Thank you so much for coming Mike. I had so much talking to you today.
Mike Michalowicz:
Miriam, it was an absolute joy. Thank you so much for having me.
Miriam Schulman:
Oh, it’s our pleasure. Thanks so much. So good luck with your book launch.
Mike Michalowicz:
Alright. Thank you.
Miriam Schulman:
So what date does it actually come out now?
Mike Michalowicz:
August 21st, 6 days away. The panic and nerves are heightened.
Miriam Schulman:
Yeah. What’s your goal for this, like beyond the best sellers list?
Mike Michalowicz:
No, I don’t really care so much about the best sellers list. I do have a very specific goal in the number of books I need to move on the first week which is 10,000 books. I’m already pitching my next book deal with Penguin and so I kinda know where I need to fall in order for this next book to be positioned where I want it to be positioned.
Miriam Schulman:
What’s your next book about?
Mike Michalowicz:
Well there’s two pitches that I’m going to. But I gotta meet with the publisher himself and we’re gonna discuss it. But one of them is about soulfulness in business, like the purpose in business, kinda someone starting with why but why you’re doing this but really for our own internal method and not for the PR component. The other one is about actually hiring, we just talked about hiring strategies. So hiring is much more applicable to what I think my readers need but the soulful thing is kinda the entire framework for everything else. So we’re kinda jousting back and forth on which one it will be.
Miriam Schulman:
Right. Well they both sound fantastic. So can’t wait to read that. And when’s the audio coming out?
Mike Michalowicz:
The audio’s coming out on the 21st. The audio’s done.
Miriam Schulman:
Oh, great! Well thanks for my free copy but I’ll definitely buy the audio.
Mike Michalowicz:
Oh, yeah. I hope you enjoy the book and the audio. It’s definitely a fun one. I drift a lot on this one and included some stories I haven’t shared in the original book too.
Miriam Schulman:
Yeah. Well that was fun. So I listen to Profit First first and then I realize “Well, I really need to get the hard copy because how can I implement things that I can’t see.” But I really enjoyed all the stories inside the book and you have a really great presentation there that makes it a pleasure to listen to.
Mike Michalowicz:
Aww. Thank you for saying that.
Miriam Schulman:
Well thanks so much again for joining us today Mike. You can find links to order any of Mike’s books in the show notes. Find the show notes at schulmanart.com/13. You can also listen to Mike’s podcast, Profit First, it’s super helpful as well as humorous. And we’ve included links to his website and how to get in touch with the Profit First professional in my show notes. So thanks so much for listening. If you found this episode valuable, please subscribe to the Inspiration Place on iTunes so you don’t miss future episodes when I’ll be speaking with other thought leaders and authors such as Dr. Alex Pang on his book Rest:Why You Get More Done When You Work Less, as well as David Burkus, author of The Myths of Creativity and Friend of a Friend. Next week, I’ll be sharing with you my favorite software and tools I use to automate my art business such as Artwork Archive which is the tool I use to manage my contacts and organize my art sales. Don’t forget, you can get $10 off your plan by going to schulmanart.com/archive or go to schulmanart.com/13 to get that link or anything else we’ve discussed in this podcast. Thanks so much! Bye for now.
Thank you for listening to the Inspiration Place podcast. Connect with us on Facebook at facebook.com/Schulmanart, on Instagram @SchulmanArt and of course on Schulmanart.com.
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