How do you master timing and change in your life and business?
In this episode of the Bean Ninjas Podcast, BN Learning & Community Lead Anfernee Chansamooth interviews James Schramko of Superfast Business. James’ story of building and growing his business and helping others achieve what he has done is such an inspiring one. And this is what we’re going to talk about today.
Learn how you can prepare yourself for uncertain times and move through it by accepting change and seeing opportunities. If you are thinking about what you need to do next or what you can do to pivot your business right now, this episode is for you.
In this episode, we discuss:
[02:30] James’ backstory during the recession in the early ‘90s.
[07:44] His interesting story of how he matched his salary to his business income and how long it took him to do it.
[12:15] Embracing change in life, preparing contingencies and finding opportunities.
[17:35] His transition to the next stage of his business and income.
[19:55] The current business model opportunities present in the market.
[22:44] Implementing and teaching Own The Racecourse philosophy.
[24:25] Tips for taking control of your business.
[28:16] His number one tip for entrepreneurs on improving cash flow over the next 90 days or six months.
[29:30] James’ recommendations on websites teaching people how to go online and sell knowledge.
[31:16] His book “Work Less, Make More”
[32:54] A sneak peek on his upcoming books.
[33:23] The reason why he advocates memberships as a good business model.
[35:07] The right goals you need for your online community.
[39:14] James explains the Effective Hourly Rate (EHR)
[40:58] Key takeaways about mastering timing and change.
[43:11] The meaning of financial freedom for James.
[45:00] Best lessons he wants to teach his kids.
If you just accept change, it's going to happen no matter what. So be ready for it, embrace it, get yourself thinking about the various scenarios. ~ @JamesSchramko Click To Tweet
Transcription
How to Master Timing and Change with James Schramko
Announcer Welcome to the Bean Ninjas Podcast, where you get an all-access pass to see what happens behind the closed doors of a fast-growing global bookkeeping and financial reporting business.
Anfernee Chansamooth:
Welcome to the Bean Ninjas Podcast. This is Anthony Chansamooth, Learning and Community Lead here at Bean Ninjas. And in this episode, I have a really cool chat with our good friend, James Schramko, who is the Founder of SuperfastBusiness.com. And the topic for this particular conversation is a timely one.
It’s how to master timing and change, and we go into different things such as James taking us back to the last recession in the early ‘90s, and what he was doing then, and how he was, especially during that time was when he left his corporate role, his company job, and then, he actually started his business.
And how throughout that time, he learned a lot about preparing yourself for uncertain times like what we’re going through right now and how you can really set your business up in a way that you minimize the impacts of the economy or external forces, right?
So we talked about different business models that James sees as opportunities right now. James shares his number one tip for improving cash flow over the next 90 days. And we also talked a bit about his book, which is Work Less, Make More.
So if you are thinking about the opportunities that are available to you, if you’re questioning what are you going to do next, or how can you pivot your business, or what are some online business models, or what’s there that’s available to you, then this episode is worth a listen. And let’s bring on James Schramko.
Alright. Hey guys. Welcome to the Bean Ninjas Podcast. This is Anthony Chansamooth, and today, we’re talking about how to master timing and change with James Schramko from Superfast Business.
James, welcome to the show.
James Schramko:
Thank you for having me.
Anfernee Chansamooth:
And before we jump into timing and change, you’ve got a remarkable story, which is the reason why I wanted to have you on the podcast. And certainly, right now, we’re going through a period of change and timing and understanding the impacts of preparing for situations like this.
But also, what do we do if we’re not prepared and we’ve found ourselves struggling or just trying to keep our heads above water, which some of our clients are certainly going through, but also people in our community.
So let’s just go back to; I like to go back to the first, well, the last recession because you shared a bit of an insight on a post that I put on Facebook; a question, which was really how are you doing right now. And then, you were kind enough to put a comment there to say, “Well, you learned a few things going back to the last recession, which was back in the ‘90s.”
So do you want to just re-tell that story and give us, the audience here, some insight into where you were, what you were doing and what you learned throughout that period?
James Schramko:
Right. Well, there’s that and there was also a great financial crisis as well in between there. So at that time, in the early ‘90s, I was studying accounting. And there was this recession and it affected my family.
My dad was made redundant. He had a home mortgage. I think the rates were going up to 27%. There was this; the government forced the recession on to us according to him. He had a car payment. So he was basically left without employment having to pay for a house and a car. Then he had to sell up.
Short story – so moved from the big, nice house to a little makeshift shed in the back of my grandfather’s house. It was an old shed that we sort of knocked down and rebuilt with brick and wooden floorboards and a little kitchenette. It was a nice thing, but it was like quite a big shock to go from one scenario to another.
And I also felt an obligation to go and get employment. So I got a job as a trainee account manager in a debt collection firm. So my new job was collecting telephone payments and it was also to set a system; car services through to electrical equipment loans, etc. We had to follow up.
And I learned all about the psychological process involved when people are owing money. I also learned about the legal process and the process of recovering debt. And it really affected me from the point of view that I really had an unusual relationship with debt from that point. It was strange because it was providing me employment, but I could see how devastating it was for the people who were on the other side, I find.
And my next job after that, I actually went out into the field and I was repossessing cars that were overdue. So I repossessed over a hundred cars. I worked for a company called GMAC Finance, which was the finance arm of General Motors. So it was financing car dealerships. And I learned a lot in that role as well.
So, yeah. I sort of worked my way from there into the emerging digital telephony industry. Back then, Vodafone was starting up in Australia in about 1993. I got a job ‘93 and ‘94 and sort of starting to open up and boom a bit.
And then, I went to sales in BMW ‘95 and ‘96 and then Mercedes Benz from ‘97 on right through to 2008. And you could say that was like a boom time; like the luxury car segment was taking off. People were getting sloppy and lazy and developing bad habits, and those that sort of grandiose excess again.
And then, as an employee, I was starting to feel very concerned that I was being paid by one person and I knew I needed to start a business like my successful Mercedes Benz customers. But I just didn’t know what.
And again, my family were now suffering the next time around because they’ve gone into the travel industry and that had been hurt by 9/11. People were starting to go online a lot more. Australia was behind the US market at this point.
But in about 2005, I was teaching myself how to build a website, and by 2008, I built enough income to be able to quit my job, which was a high-paid job as a general manager. By that time, I was earning around $300,000 a year and my goal was to breakeven.
When my income for my online business met my day-to-day income, I would let go. And I quit my job in July 2008 and never looked back.
Anfernee Chansamooth:
Yeah. There’s a few sort of insightful things that come from that story and thank you for sharing that. The one that sort of stands are right now because it’s this idea of you were still in your role; like you were still working for Mercedes leading up to the time where you had the income matched or replaced. How long was that particular period for you?
James Schramko:
Two and a half years. And since I’m starting from scratch, it took me probably six to nine months before I made any income at all. It took me a while to slowly build like a snowball, like $150, $300, $500 a month, $800, $1,000, $1,500, $3,500, $5,000.
I eventually got up to about 10 grand a month and I was kind of stuck. And I went from about $150,000 a year to $300,000 a year within a period of a week or two when I actually flipped the switch on my grand idea, but there was a six-week process that led up to that. And it was kind of mind-numbing now when I think about what I went through back then.
And after I quit my job, that first Christmas, I had a cash flow crunch. And it was because I was so good at driving traffic for my affiliate office that I was promoting that I actually sent the company broke. I was driving so much traffic to them that they couldn’t fulfill, they got really bad reviews, they had to refund or basically collapse under the pressure, and I never got paid.
So I went through this December period just scraping through the piggy bank to try and buy food. And that’s when I said, “Right. I need to turn up my recurring income side of the business.” And I future-proof my business from then.
From the beginning of 2009 to now, I have never had a month where I’ve done less than $100,000 recurring income. If you average out the year, it’s just been so consistent. As a minimum, that would be my absolute minimum point.
And I also have been very conservative when it comes to carrying debt and taking big risks. So I de-risk my business and I intend to do that for all my other clients, too, looking for the pitfalls that bring them down, which would be excess; flying blind without knowing their financials or numbers, which is unbelievably common. And I’m sure you’re aware of that.
Anfernee Chansamooth:
Yes.
James Schramko:
Being very, very single-source dependent on one thing is also potentially extremely dangerous for businesses. Partnerships that break up; all this sort of things; operating on someone else’s platform and getting shut down. You see these patterns over and over again so I help people avoid those.
And what I’ve found is right now, my business is so weather-proof, it’s like actually thriving in this environment. It’s what I’d planned in my mind and it has turned out to be the case by having certain filters in place, making sure that I only deal with people who are in motion.
I deal with people in multiple countries. I deal with people at multiple price points. I deal with lots of people, to start with. I have multiple ways of acquiring a customer through different channels. And I also have so much cash reserve that I could at least, well, I could probably just retire, actually. I’ve got enough costs to pay for the business for at least a decade.
Anfernee Chansamooth:
Yeah. And to give people context here, you’ve got a family; how many kids now?
James Schramko:
Five kids.
Anfernee Chansamooth:
Five kids, right? So when you were starting the business, how many kids did you have at that point in time?
James Schramko:
Four kids.
Anfernee Chansamooth:
Four. Okay. Yeah.
James Schramko:
I had them. They were already sort of active, ranging from 7 through to 15 when I started out. And, of course, three of them are adults, the fourth one is about to be an adult. And that being said though, I’m still caring for three of my five kids. So they’re all still a responsibility for sure.
Anfernee Chansamooth:
Yup. And I met one of your sons at SFB, so that was really cool just to see a sort of mini-Schramko sitting next to me at lunch.
James Schramko:
This one I prepared earlier.
Anfernee Chansamooth:
That was good. You mentioned a couple of psychological observations, right? One was during the time of seeing what was happening of your folks and just what happens when people get crunched financially.
Can you talk a bit about that and how that impacts helped you behave because I find that’s always interesting. Like right now, there’s a lot of commentary about consumer behaviour; eCommerce is taking off. Does that mean people, when they’re in lockdown, they spend more?
So this sort of questions come about. But going back to, I mean, just what you’ve seen over the last 20 years, what are some observations you’ve had around how people view money and how they prepare for or even disregard potential recession?
Because I see like that’s, for some people, they just don’t have enough clue. Like, they just go, “Yeah, we’re fine.” And then, overnight, we’ve got enforced lockdowns, and people, they have to stop shop because there’s no traffic. So yeah, what are some of the things that you’ve seen as a result of your experiences?
James Schramko:
Well, some of the greatest insights I’ve had from a professor friend of mine; he’s a professor of psychology and he teaches forex trading, and there’s a lot of human psychology that goes into that. I mean, he still have a job as a jury duty selector.
Stock markets show this time and time again that people are reacting to emotion. They tend to go through stages like denial and anger and blame. And people are various cycles in that, I guess depending on how much they’re being conditioned and what sort of model of life they have in their head; it’s going to dictate how they react when the game changes. You know, if someone scrambles the pieces.
I made a commitment when I quit my job that I will accept and embrace change, that I will be comfortable with change, that I will thrive with change, that I see change as an opportunity. So I’m always thinking about contingencies.
As soon as I detected some problems happening around the world, I went and stocked up. I’m not talking like crazy, prepper stocking; I’m just saying I had toilet paper and food in my freezer and I’m anticipating what’s happening next. You can rightfully see there’s going to be a run on the shop.
So you can see that there’s going to be people panic-selling things; that freezers are going to sell out of stock. And you look around, you see these Perspex screens popping up everywhere in the post office, the supermarket, etc. You know someone is doing well out of this.
Anfernee Chansamooth:
Yeah.
James Schramko:
There’s a bit of a new industry going on there. You have a look at how much Wall Street flows up and down depending on the latest news update whether it’s a bad announcement or good one, it goes up or down.
And I think most people just haven’t really unlocked themselves much from when they were kids and they’re still running an old software program in their brain. And they could probably update the software to the newest version by taking off some of the factory restrictions that were put there by your parents.
So for me, I went outside my family to books and started learning about things. You can read about Black Swans, you can read about Psycho-Cybernetics, about how people are goal-seeking devices; how we basically attract what we think about.
If people are constantly fear-based and security-based and reacting to every emotion that comes along, it will just push them further into a hole. And with every difficult scenario, there’s a huge opportunity.
I‘ve been enjoying stock trading for the last three or four weeks, for example, where there’s a lot of money moving around. It’s very easy to make a gain by just waiting for it to drop and then riding it up again and then selling off. I’m doing it over and over again.
Those days will stop sooner or later. But for everyone who’s having a difficult time, you’d have to think there’s plenty of people who have seen a great opportunity.
Even when I drive up the road here in what used to be our council’s swimming pool, which is shut, there is a contactless coffee cart there now. Someone has put their mobile coffee cart. They’ve put a milk crater with a payment term and all and some sanitizer and another milk crate where they put the coffee and you shout your order out across the car park.
Anfernee Chansamooth:
That’s great.
James Schramko:
They found an opportunity and they’re moving in in the space where the poor pool worker is out of employment but the coffee cart is on the way up. So it’s a matter of saying, “Okay. A change has happened. Where is the new opportunity for this? And how am I going to deal with the cards that have been dealt?” And you can still win in poker with a shitty hand, you just have to play it better.
Anfernee Chansamooth:
That’s really, really good. Honest to the point. You talked about some of the shift that you’d had to make. So you got to $10,000 a month and then you kind of hit a wall. I see that’s a common milestone for a lot of entrepreneurs.
Like, “When do I get to the six figures and then how do I jump from six to seven?” What is that transition in your experience and why do we get stuck there?
James Schramko:
Well, it’s probably like an airplane’s altitude autopilot. It’s just a comfort level that beyond there, it means we might have to take more responsibility, it means we might be exposed to new pressures if we’re more successful or we have people paying attention to us. So I think breaking that down is good.
In my case, I was just needing to probe for the innovation that would take me to the next stage. But the fact that I expected it and that I looked for it resulted in me finding it, not only once but twice.
I found one innovation through going through some material of someone else’s information and I found one little innovation that enabled me to double the business straight away. And then, I found another innovation when I went travelling and spoke to people who were far more successful than I was. I just picked up a few little scraps of their conversations and was able to just turn it on and ramp it up.
So I think if we’re stuck, it’s really a self-imposed prison and the way out of it is to take responsibility for it, ask yourself better questions and to expect that you can actually move past this rather than give up in defeat.
Anfernee Chansamooth:
Yeah. I think it’s easy to get caught in the what-ifs and go down that path and not take stock of where we’ve come from, right? So we look back and you go, “Ten years ago, I was working in corporate and this is my thing,” or whatever it may be. And then say, “Look, I’ve actually come a long way. I’m starting to buy new people.” Or work in mentors like yourself who can support us.
And I think that these are way you focus your mind and that’s a big takeaway. Ever since I’ve heard you talk and listened to your podcast, like that’s something that’s resonated with me. It’s about where is your mind focused? Where are you putting that attention? Because it can glide away.
Business models that are working right now in 2020
You’ve mentioned the opportunities that are present, in the present, in the car economy. What are some of the business; I know I saw you, I think it was you that posted a question about what are the business models that are sort of working right now or available to people.
What have you seen from even within the Superfast Business membership and your members there or people you’re just talking to? What are a couple or a few of the opportunities in terms of business models that are really available?
James Schramko:
Well, online education is huge. A lot of my customers are 300% or 500% up at the moment. I mean, their best months ever. I would say, three-quarters of my highest level group had their best month ever in April 2020, which is telling. That means they’re in the right place.
So anyone who’s got education courses is going well and anyone who provides a high-level of expertise where people can have a big gain from is also doing well. And I would call that like cashing in on an insurance policy.
I would say that’s why my business is going up at the moment because I’m an experienced person who can help my customers make good choices when the stakes are higher than choices are more valuable.
And then, there’s a limited audience; there’s less competition for me when the stakes are high because I’ve got such a proven track record that there’s very low risk for my customers. In fact, some of my partnerships are 100% risk-free for my partners. Like, they only pay if there’s an uptide.
So that means if you position yourself in the right place; if whether you’re an educator, whether you’re an agency or an expert who’s really good at what you do, there will be a market for you right now of the people who aren’t doing well.
In fact, for all the people who aren’t doing that great or have had a suffering, there’s plenty of people out there right now who are having an absolute flood of spoils they can hardly contain it.
And I know a couple of the people on their highest end; one going on April has already sold more in April than he did for the last quarter before that. And he’s just off the rails busy. Like, he can’t hire fast enough, he can’t keep up with demand, and there’s just layer and layer of demand.
So definitely the people who have courses or training of any kind seem to be doing really well. People who have services are in hot demand right now because I am mainly working with people who are very good at what they do. So the better place in this market environment are going to prosper more. The people with really good reputation and low-risk outcomes for people.
People who have courses or training of any kind seem to be doing really well. ~ @JamesSchramko Click To TweetOwn The Racecourse
Anfernee Chansamooth:
You talk about reputation as; it’s a key, I guess, factor in winning business. And let’s talk about Own The Racecourse and that philosophy, and how; where did that come from and when did you start, first, I guess, implementing and teaching that?
James Schramko:
It was, so initially, I noticed down someone in my old trade was doing particularly well and I wanted to interview him. I was very enthusiastic and I asked him if I could come around and chat to him about how he had somehow acquired a Mercedes Benz dealership and a [Inaudible 00:23:19]. And he said, “Yeah, no one’s ever asked me. Come around.”
And he was the one who shared with me a lot of those philosophes. Probably, a good chunk of the things I use now in my own business and the ones I teach my students came from that source.
And Own The Racecourse is really about not having compromise. It’s about asset ownership where possible or having a good balance of risk and control. So you’re not giving up all the control and taking a huge risk.
But, of course, there are benefits for giving up control like ease. It’s harder to have control in some cases. It’s easy to just give control up. It’s easy to build a Facebook group, it’s hard to build a private forum. But one is riskier than the other; one has more control than the other.
So there are choices you can make along the way. And you can pretty much bet that people who are complaining that they got slapped or swiped or shut down, they probably gave up control and they took an easier path at some point than what they could have done.
Anfernee Chansamooth:
So how can someone listening to this apply OTR or can you maybe share a case study of one of your students who’ve done that really well?
James Schramko:
Well, lots of my students have their own platforms, which is great. The one thing you really want to think about is like can you build an email database; that would be a great way to have some control.
So even if you do have a popular YouTube channel or a Facebook group or an app and it’s going well for you, it’ll be nice to have that email address as well so that you can communicate with that customer if something changes.
If you’re going to log in to your Facebook group one day and it says, “No, your account has been locked,” or it’s no longer available; it’s declined or it’s been deleted, you can at least email them and say, “Okay, we’re over here now.”
So think about how can you contact your database. Your database is probably the same best asset you have. And other than that, whenever you get a choice, think about what will happen if this stops? Just ask yourself that scenario, “What would happen if my group gets shut down? What will happen if my channel gets stopped?”
I have a client right now; he makes seven figures a year from someone else’s website as a publisher. And we’ve been building a contingency plan for the day that that site sends him an email saying they’re going to have his commissions or that his courses no longer fits within their vision of what their business wants to do.
Because it will come. We just assume it will come. And the day it comes, we’ll be ready. Well, we’ll just go email the list down and tell them we’re over here.
And so, have that backup. It’s too late when the news comes and you haven’t taught about it. So think about today. What happens if this stops? What happens if that person leaves my business? What happens if someone starts using my same brand name?
What happens if this whole market segment gets blacklisted as something that the big platforms don’t want to allow advertising for, for example. And you can build redundancy into almost every part of your business if you think that way.
Anfernee Chansamooth:
Yeah. And we’ve seen that, I think it was this week where Amazon just said, “We’re going to cut commissions against for all our affiliates for specific product ranges.” So that was a big hit for a lot of people who rely on that one source for their income. I’m sure you’ve seen that on Facebook and other places as well. So that’s a really good point.
James Schramko:
I always see these ones because I get tagged with them; people saying, “Own The Racecourse.” It’s like, I’ve been sharing this for a decade and some people are still just; when the going is good and it’s easy, they’re not thinking about what happens if it’s not easy. They’re just thinking about how great this is.
And I’ve seen them come and go. Since I’ve been online, people rise and fall, rise and fall. New faces come up and then they disappear. It’s really amazing to see this. And this is where I think I provide a lot of value to the people I’m navigating through as they get successful is keeping some of that money.
You know, I like to take some of my money out of the business and put it away from the business into my own private investment so that no matter what happens to the business, I could just turn it off one day and that will be okay.
But a lot of people just double down and reinvest and reinvest, and they get this bigger and bigger egg basket, and it just gets squashed, which sucks.
Anfernee Chansamooth:
Yeah. You don’t want to be Virgin, what’s it? Virgin Air right now.
James Schramko:
Right. When it’s Branson, he’s not going to bail them out.
James Schramko’s Tips for improving cash flow over the next 90 days
Anfernee Chansamooth:
That’s right. That’s right. So if someone is listening to this right now and they’re going, “Okay. I lost my job or the last business didn’t work out for whatever reason and I’m looking forward,” what would be your sort of number one tip for entrepreneurs on improving cash flow over the next 90 days or six months?
James Schramko:
Well, I’d be looking to see where is the money flowing in the economy? You see, airline pilots are taking jobs in nursing homes; that’s where there’s a lot of employment possibility right now.
I mean, it sucks if you had a job and you lost it because you had a single source dependency; you were getting paid by one person. I would say do whatever you can to get paid by more than one person. If you possibly could get paid by ten people, or a hundred people, or a thousand people, then you are going to have a much more protected situation.
So maybe it’s time to think about if you want to start a business and have a look where people have a huge amount of demand and they’re ready to spend. And I’m sure there are opportunities out there.
But right now, this education site’s adding 8, 10, 20 million users a month. It’s a good time to put your expertise into electrons and get it out there on a course or something like that.
Related: Check out the Bean Ninjas financial literacy courses
Anfernee Chansamooth:
And is there someone that you, either it’s in your circle or that you can recommend who is really good at teaching people how to get online and sell knowledge?
James Schramko:
It’s such a hard one because I’m teaching my kids through this at the moment. First thing I’ve asked them to learn copywriting because it’s an essential skill that will serve them well forever. To be able to sell is more important than pretty much any other of the skills; if they can do that well.
I’ve also asked them to go through the information in the 10XPro Academy because there are courses in there like your own course in a weekend.
Anfernee Chansamooth:
Nice.
James Schramko:
I’ve got them some subscription to my friends, Matt and Joe, have sent one of my kids access to their membership where they teach a lot of the stuff that’s easy to understand. And I’ve got another one is going through an affiliate course right now.
That’s how it started it out. But it’s not a market I specialize and I reckon it’s one of the hardest things to do is to teach people from scratch. I like to let them do all of that. I’ll get them when they’re ready to really go later.
So I was speaking to your founder yesterday; that is my perfect type of customer. Someone who’s just; who gets it and is just [Inaudible 00:30:52]
Anfernee Chansamooth:
Yeah. It’s the reason why the average business takes about three years to get it to that point and then they come and see you. It’s a bit hard from the beginning. But they’re a good couple of tips; I love it; your kids are learning because these skills will last a lifetime.
James Schramko:
Yeah.
Work Less, Make More
Anfernee Chansamooth:
How to sell, how to market yourself, how to spread a good message and good partnerships and these sort of things. Now, you published a book, Work Less, Make More. And why did you decide to write that book when you did? And what has come from you doing that?
James Schramko:
Well, I tried to write that book five years earlier but it was a false start. I recognized it wasn’t going to be able to be done by just me so I paid someone; I think $10,000, to help me. And she just got bogged down and lost in her mind about it and couldn’t produce it.
So years later, I was speaking in an event in the Philippines and Kelly Exeter was sitting in the audience and she loved my presentation. And when I came back down off the stage, she said, “Why don’t you have a book?” And I said, “Oh, I’ve tried to have a book.” I told her the whole story. She said, “I will help you if you want.” I said, “Done deal.”
And she extracted that book out of me. She asked me a bazillion questions. She went through all my stuff and we moved back and forth things. I’d send here audios, she’d send back the chapters; I’d just clean up the words the way I communicate.
And so, they’re all my concepts and all my ideas and all come from my material, but she was able to manipulate the bits and pieces into a sensible format – a really actionable, concise, pleasurable book to read.
And it went out there and it’s been selling really well for the last couple of years. And I’m proud of that book. It was a good collection of my thoughts and a great introduction to the market. And I’m currently working on my next book with Kelly. So once you get a taste for it, I think it’s something you want to do more of.
Anfernee Chansamooth:
Love it. Can you give us a sneak peek of what that’s going to be about?
James Schramko:
Yeah. The next two books will be; one is how to take a six-figure business to seven figures. So that really speaks to my perfect audience and it’s probably more niched than the first one.
And the other book is about memberships. It’s why have a membership, can you have a membership, what you need to do to put together a membership, and how to sell it, how to keep members, how to advance things beyond that? Because I’ve been doing this for 11 years now.
Why Memberships are a good business model
Anfernee Chansamooth:
Yeah. Let’s talk about that because I did have that as something to cover on this call was you’ve got two tiers, I guess, of your membership. You’ve got SuperfastBusiness and then you’ve got the Silver Circle, which is a premium tier. How did you get into memberships in the beginning and why do you advocate that as a good business model?
James Schramko:
Well, I advocate it’s a good business model for me and there are certain criteria that would indicate whether it’s good or bad for you. Like, if you wanted to set up a recurring income and never show up, it’s a terrible business model for you. Like, that’s the failure a lot of people have. They think it’s some amazing magical trick.
My forum started as a bonus when someone else purchased a product from this market at a $2,000 product. And I can see that the product was pretty complicated and I knew people buying it would struggle.
So I said, “Listen. Buy this product from me. I will get a commission, but I will help coach you through the product. I will go through the product with you and I’ll explain what it all means and I’ll make sure you get success. And here’s all the reasons why I’m qualified to do that. I know this guy, I’ve been following his methods, I’ve been getting results, you can see them here.”
And I had 76 people sign up for his program. I got paid the commission, which was about $76,000 and that put them into a membership. And then, I said, “If you want to stay beyond that help period, then you can just pay a monthly rate.” And that’s how it started.
And then, after that, I started speaking at live events and selling workshops. And then people who went to the workshop would get access. And then I started selling it straight up to people who came and I sold it bundled with DVDs. So over the years, it’s been sold a few different ways. But now, I can sell it by itself.
Anfernee Chansamooth:
I’ve heard a lot about people talking about membership sites; also communities is kind of the buzzword right now. You know, go create an online community. But there’s really a handful that do it well and you have really engaged members who are jumping in there every day and commenting and things like this.
What do you think is the difference between going into; like creating an engaged community versus one that’s just crickets. And I’ve seen a lot of those. So yeah, how do you, I guess, let me frame the question a better way – how do you make sure you have engagement inside the community or the membership that you build?
James Schramko:
I’d actually say it’s the wrong goal. I could care less if people are jumping in every day or not. All I care about is do they get a result? So they’d pay the money and get a result. If they could get that result or five minutes of advice once a month, I don’t care if they never come into the membership.
There’s one customer I’ve got; I’ve had him for almost ten years and he’s never made a single post. I know he logs in often. I don’t really know this person but he logs in often, and whatever he’s getting from it, it’s obviously working out for him.
So the main thing is can you get a result? And it would be a mistake to think that the goal is to have the most engagement possible and you’re going to end up thinking, “Oh, I should use Facebook because everyone is there and they will be so engaged.”
People get burnt out. They get worn out. They’re sick and tired of this. And I can tell you, if they’re not now, they will be in a few years because I already reached it about four years ago. I’m not a big social media user. I’m not on the internet 24/7. Like, apart from the occasional call, I’m not even anywhere near a device.
So it’s really a matter of defining what is the ideal outcome you can promise and deliver? And if that happens to involve engagement, great. And there’s lots of groups that have got plenty of noise but no signal.
I say this, in fact, one of the most popular products that sells that tells people to have a membership; they’re very noisy, very high up-top, really busy. You get those stupid daily posts like what would be your superhero; that sort of things; getting people engaged.
But really, does that help them grow their business or is that just keeping people entertained and keeping you busy? And it’s kind of like sugar, really. It’s like eating candy instead of vegetables. You can keep busy with it, but it’s not doing you any good.
So rather than engagement, I think a successful membership will be giving someone a massive return on their investment. And that depends on how do you define a return. Would you like to buy a membership where you get a massive amount of engagement or would like to buy a membership where you put in some money and it delivers you the exact outcome that would make your life perfect?
And for some people, that’s not more time in a community. I’d say, for most of them. And in fact, the busiest ones, the ones who ask the most questions are often the most rejected; they’re easily procrastinated ones who just don’t get a result because they’re too busy going around in circles and being engaged. And they’re easily engaged by marketers.
It takes discipline not to be engaged especially with all the science that goes into those platforms to keep you hooked in. And right now, I’d say, everyone is using social media a lot more to the point there’s even a term called doomsurfing.
That’s literally people who’d go online looking for trouble to rubberneck because it’s just their distraction in it; it’s an escape from facing the fact. It’s like you’re saying before, people have their head in the sand. Well, their head is in the social media platform being dragged around and getting into useless discussions.
Anfernee Chansamooth:
Yeah. I love that. It’s just centring back on, on a freeway, you’re so good at what you do because you just go, “Okay, what’s the actual objective here? And I do want to double your revenue.” Well, yeah, chatting on Facebook every day is not going to do that for you unless it’s sales conversations, right? So I really, really appreciate that.
Optimise products and services for Effective Hourly Rate (EHR)
Anfernee Chansamooth:
Let’s wrap up. We’re going to just make one case for people to read the book. I want people to read it. I’ve read it and it’s been significant like this learning about EHR. Do you want to explain that concept, James?
James Schramko:
It’s simply effective hourly rate. It’s a great benchmark to get a gauge on where you’re at right now in terms of how effective you’ve been and it gives you a tool to use to decide what things you should do, which business models are good.
If you’re an employee, then you probably know your effective hourly rate. It’ll be the hourly rate on your payslip. Almost all employees know their hourly rate. Literally, no entrepreneurs know their hourly rate.
And it’s basically, if you take your revenue and you subtract your costs, that leaves your profit, and you divide that by the number of hours you worked to achieve that – that’s your effective hourly rate.
You can do it monthly or weekly or whatever. Most people have a fairly low effective hourly rate when they calculate this and it can be a bit depressing. But if you increase the effective hourly rate or you mentally increase it first, and then you carry out activities consistent with that higher rate, you’ll start to see a significant change within your business and the outcomes you get.
Anfernee Chansamooth:
That’s what the book really goes into is how to calculate EHR and then how to actually build that and systemize that to get it to a point where you; whatever the goal might be. So for some people, it could be that 4-hour workweek first thing, but I don’t think that’s really fit for a lot of people.
I don’t think you’ve got to; probably the closest in reality to that model in terms of how many days are you actually working in the business versus family time and surfing; I know you’re a big surfer. So you’ve; it’s only been for over the past two decades, we started off with the recession; the last recession. We’re going into the next one very soon.
So what can you share with our audience about just as a summary? Your key takeaways about mastering timing and change?
Jame Schramko’s key takeaways about mastering timing and change
James Schramko:
Well, if you just accept change, it’s going to happen no matter what. So be ready for it, embrace it, get yourself thinking about the various scenarios. If this changes, what will I do? If that changes, what will I do?
Start anticipating not in a fearful way. Like, don’t spend a lot of time learning about all the bad things that might happen. Also, think about what are the good changes that could happen and think about those scenarios as well.
And as they happen, make sure you’re well-rested, that you give yourself time to process this. So don’t do gap reactions. At the moment, you’ll see a lot of really obnoxious behaviour and just outlandish responses to things where you’ve seen. In a normal environment, you wouldn’t see that. But people are stressed, they’re on edge, they’re not sleeping, they doomsurf. They’re just like trigger-happy.
If you recognize that, like step back. Just get away from the socials. Have a good night’s sleep. Write down your thoughts and think about them. And then, move forward in a responsible way because you’ve got to look after yourself. You’ve got carry yourself through this.
If you are struggling where you’re having a lot of stress about it, talk it out with someone. It’s important to let people know if you’re feeling down or if you’re feeling really negative thoughts. Talk it through with someone.
Especially for men, especially for entrepreneurs; they don’t have many people to talk about it with, which is why you’re seeing community is so popular at the moment. People need to connect with each other.
So there’s a few things that you could do. And just map out fair scenarios and pick one and start. And then, be ready to adapt as things change again, which they will soon enough. And remember, this is just a temporary phase. You’ll get tail side of it and it’ll be in the past at some point. It’s like, me quitting my job is over a decade in the past but it felt very real at the time.
Anfernee Chansamooth:
That’s incredible. Alright, we’re just going to wrap up with the final question here, which is one we ask all our guests, which is what does financial freedom mean to you? I know a lot of people aren’t talking about freedom right now. We’re talking about security at a point in time, but some theories just to get your thoughts around.
Was that ever an objective for you when you started your business career? Or what does it actually mean to you and do you even care?
James Schramko:
Absolutely. It was critical for me. I mean, it’s the whole reason I embarked on the journey. I have kids and that means massive responsibility. Certainly, you’re stuck with them for at least the first 20 years of their lives.
So it’s not just you. It’s like legacy and it’s your family infrastructure. I’ve ended up being in a supportive role for a lot of people like employees, family members, etc. So I have to have that responsibility.
So yes, beyond doubt, my absolute goal is to be so financially secure that I don’t have to work, that I don’t need to worry about bills or take a calculator around with me at the local shopping centre when I’m doing my groceries or work out if I can or can’t afford a cafe latte today at the coffee shop.
And I’ve been fortunate enough to navigate myself into a position where I don’t think there’s ever going to be an issue for me. And I certainly think about all scenarios where that could change but I feel like I’ve gotten past that now.
And it’s really hard at other aspects of life like my surfing, like relationships, like spending time with my family, and appreciating things, and writing books, and reading things, and learning, and that’s what life has become for me now. It’s like, I feel like I’m in a state of semi-retirement that I could sustain for decades.
Anfernee Chansamooth:
And I’m just going to ask this question because you are a parent and a lot of our listeners are parents as well. What would be the key message you’d like to leave for your kids?
James Schramko:
I think just be a good person. Just like, be a good human. It’s the most important thing. I don’t mind what they do. I don’t tell them they have to be a doctor or a lawyer or a solicitor; I just want them to be healthy, happy, good people.
I’d hate to look at the news and see that one of my kids did something terrible. You often see that when someone does something bad and their parents are ashamed of them or whatever. I would just hope that they have good security within themselves, that they carry themselves around in the world as a good person and that they have a good life.
Anfernee Chansamooth:
I respect that. I want to say I appreciate you, I acknowledge you, James, for all you’ve done and for joining us today. Thank you so much. Everyone else, please check out SuperfastBusiness.com and connect with James and his community there.
Meryl, our CEO, is part of that community and it’s only I’ve been to James’ last event. I don’t know what SFB Live 2021 is going to look like, but hopefully, will be in-person in a room together again. So thanks a lot, James.
James Schramko:
Thanks for all the character you bring to our community as well. It’s always a joy to see you around and your discussions in there, your enthusiasm. and it’s good to see all the great work you’re doing. And I think Meryl is happy to have you on the team for sure.
Anfernee Chansamooth:
Cheers, mate. I appreciate it. Thank you, everyone. Talk to you real soon.
Meryl Johnston:
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Contact James Schramko:
References and Links Mentioned:
- Superfast Business Live 2020 Recap
- Work Less, Pay More
- 10XPro
- James Schramko on the Hustle & Flowchart podcast
- James Schramko’s comment on Anfernee’s FB Post
- Know Your Numbers Course
- Bean Ninjas Profit First Program
- Bean Ninjas Recession Survey
- James Schramko LinkedIn
Accounting may not be the most exciting topic but our podcast with Bean Ninjas’ Meryl Johnston is super informative.
— SuperFastBusiness (@SFBcom) June 3, 2020
If you have a service business, you definitely need to give this a listen – https://t.co/SwbS0uODM2 pic.twitter.com/mnrrrMp1pu
