“This week on Romance Your Tribe Radio I introduce you to a friend and mentor of mine, fellow Australian James Schramko.
I LOVE James’ approach to business. He has the same “anti-hussle, keep-it-real, lifestyle-focused”, approach to business that I’m passionate about.
A “corporate survivor”, he brings brilliant lessons from high achievement in sales and management and combines them with an almost minimalist approach to building a business.
A business that focuses on working less while making more.
In this episode we discuss:
- What is the Australian style of online business?
- E.H.R. and how to calculate it (and why it is James’ core measure)
- 5 ways you can work less and make more in your business
- Clever apps to measure where your time goes
- An example from each of our businesses of programs we closed that made huge changes to our respective E.H.R. (and happiness)
You can watch the video, listen to the audio, download from the podcast directory, or read the transcript below. Never miss an episode. Click here for all the ways you can subscribe.
5 Ways To Work Less and Make More
The Myth of 9 to 5
For decades we have been conditioned to see 9 to 5 as the standard for how many hours you need to work each day (at least).
A better measure is output, rather than time.
Output is the impact of the productive steps we’ve done throughout the day so it makes sense, that if you can create the outcome you need, in less time, with less productive steps, then you can “work less, make more”.
We’ll dive into HOW to do this below.
What You Can’t Measure, You Can’t Manage
Management Thinker, Peter Drucker, said it best: “You can’t manage what you can’t measure”.
Drucker means that you can’t know whether or not you are successful unless success is defined and tracked. Establishing clear metrics for success helps quantify progress and then adjust the process to produce the desired outcome. Without clear objectives, you’re stuck in a constant state of guessing. You’re stuck in the rut of the 9-5 shift.
When we clearly define objectives, we make educated data-driven decisions quickly.
The core metric James uses to measure success (work less, make more) is Effective Hourly Rate.
The Effective Hourly Rate (E.H.R.)
Let’s say you’re working at Mcdonald’s earning $16 an hour. Because you don’t have any costs as an employee, your wage is your Effective Hourly Rate.
This is different than calculating the E.F.T. of an entrepreneur and a business owner.
How To Measure E.H.O. of The Business Owner
Here’s a quick calculation:
(Last Month’s Revenue) minus (Last Month’s Expenses) Divided by (Number of Hours You Worked last Month).
What number did you come up with?
For entrepreneurs, it’s not unusual to work a lot harder than when you actually had a job. Many entrepreneurs work 10 hour days, 6 to 7 days per week ( so 24 to 30 days per month). On the extreme end, that could be up to 300 hours per month!
Most people are working 8 hour days, 20 days a week as an absolute minimum. That is easily 160 hours.
If you don’t actually know your revenue, or your expenses, or even how many hours you work, don’t beat yourself up.
You are not unusual at all.
That’s your first action step:
Calculate your E.F.T. for the last month
Our aim is to step-by-step make changes that have the greatest impact on increasing your E.F.T.
We do that by applying the Pareto Principle
The Pareto Principle
Otherwise known as the 80/20 principle, the key point is that most things in life (effort, reward, output) are not distributed evenly – some contribute more than others.
The important thing is to identify WHICH 20% of things give you 80% of your results so you can basically dump the unproductive 80%.
Here’s a few examples:
- 20% of the effort done in a day contributes to 80% of productivity: Focus on improving the most productive tasks.
- 20% of your members are contributing to 80% of your team’s performance, think on how to reward these members.
- 20% of your customers contribute 80% of your revenue – how can you retain them and also attract more people like them? And also, how can you avoid the 80% of less profitable clients?
- 20% of your products and services will contribute 80% of your revenue.
We can go on: The point is to realise you need to focus your effort on the 20% that makes a difference, instead of the 80% that doesn’t add much.
5 Ways to Work Less and Make More
1. Set a Goal for Yourself
Once you have calculated your E.F.T. set yourself a goal per month for your improved E.F.T.
Actually measure this so you know exactly how many hours you are working.
Set productivity goals per day. You’d want to have your checklist ticked off by avoiding distractions or other unnecessary things you shouldn’t be handling during the work hours.
2. Use Apps to Measure Your Productivity
If you haven’t been collecting your own data or you haven’t been really calculating how many hours you’re working, do a reality check.
Here are a few apps you can use to help you measure where your time is being consumed, often in multiple small grabs of time (hello Facebook and checking emails over and over).
3. Stop Consuming Time-Sucking Content
Be honest where your time is being spent on consuming content that is interesting (or not!) but totally unproductive.
- If it’s social media, maybe just stop using Facebook on your phone. Let’s face it, it’s practically impossible to log onto Facebook and just do one thing anyway. You get distracted and get sucked into the vortex of scrolling through the timeline.
- If you’re like me, and provide customer support through private Facebook Groups, be very strict on the times of the day and the amount of time you spend on Facebook so you don’t get distracted when you see a shiny squirrel.
- If it’s Netflix, stop logging on to Netflix every night and binge watching 3 episodes instead of the one episode you planned as your relaxation.
It just becomes so convenient to consume content that does nothing to move you closer to your goals.
Reframe: Treat content consumption and social media as a treat for after you have achieved your important work.
4. Stop One Thing and Say Goodbye to It. It’ll Be Worth It.
When you apply the 80/20 rule to programs, services, marketing strategies, daily activities, etc you may be faced with the option to make a tough call……completely stopping something you have “always” done.
Examples may be:
- A time consuming, but not very profitable program or service.
- It may be a marketing strategy that keeps you busy but doesn’t actually result in sales (hello, commenting for hours on social media).
An example for my business Wonderful Web Women
Quite a few years ago I had a membership program I sold for $47 a month. When I brought in a new accountant, at our first meeting he asked me “What’s the story with this program? As a percentage of your revenue, it’s not the biggest one so why do you still have it ?”
The answer was “Because it was my first program” . The reality was, it was actually the greatest consumer of time in my business. I was over-delivering severely at that level. So I cancelled it because someone externally could see what I was too close to see.
That’s when an interesting thing happened that resulted in replacing the revenue from that program with just one phone call.
On the day I closed the program I had an email from a woman who said she wanted to join the program but couldn’t see how to purchase. So I hopped on the phone with her to explain what happened to the program and see if I could help her in a different way. Instead of buying a $47 program she purchased a $10,000 program!
Years later we are still wonderful friends as she absolutely loved the help she got from working with me at a higher level. A win win for both of us…and affirmation closing the time consuming low priced program was a great idea.
For me, that’s a perfect example of how simply cancelling something can help unload and free you up to do the sales calls that allow you to sell higher price programs that you may not have had the time to do before.
That could be the 20% that you should be doing in your business to get the 80% of the results.
An example from James’ business
In James’ case, he used to have a website development business as part of his business portfolio. It wasn’t a massive contributor to his income and in fact, it took away working hours that could be used for more profitable things.
A lot of time involved customer support situations (because customers are always a 100x obsessed on how their website looks like than anything else!).
James ended up selling that business unit because it was draining his energy for not enough reward. It was the happiest day of his life and he redirected more energy into his higher level program which made all the difference.
It’s a good trade. Needing only one and a half clients in his silver circle program, James can do the same profit he could make from the website development programs.
5. Get the Right People to Get Quality Referrals
James shared how he has a number of industry celebrities in his high level coaching program. One referral from them is an unbelievable endorsement.
James experienced this as a wonderful surprise. Here’s his story, “this guy does $8 million a year and he came to me and he said, “Listen, I’ve just been to an event. I sat at a table and four of the five people were members of your top program”. And he was the fifth. “
There was no sales discussion. There wasn’t even a negotiation for the price! They just came to James because of his perfect customers who got him more perfect customers.
Maximise the word of mouth for your referrals.
Action Steps: What you can do this week
Here are some quick steps to working less and making more…
- Set a realistic goal. Be specific – include the number / duration / quality or quantity of your goal
- Compute your effective hourly rate.
- Use apps to track where your attention usually goes to.
- Improve your effective hourly rate
- Stop one thing and say goodbye to it. It’ll be worth it.
- Check out the Romance Your Tribe programs, designed to get you super clear on your uniqueness, suite of offers and launch your online course.
- Check out the no-brainer special offer we have created in partnership with the founders of 10xpro, the software we use and recommend to manage all your funnels… and more
A Special Message From Janet
Thank you so much for being here. I know there are a lot of podcasts you could choose to listen to and you chose to join me on Romance Your Tribe Radio.
I’m honoured and grateful for your support.
If you enjoyed this week’s episode, I’d love for you to take a quick minute to share your thoughts with us and leave an honest review and rating for the show over on iTunes!
Read The Transcript Here
Janet Beckers: Hello and welcome everybody. Janet Beckers here with Romance Your Tribe Radio and really excited today because I’m interviewing, one of my mentors. Somebody who I’ve admired for years and who has helped me a lot in business, James Schramko.
James Schramko: Hello Janet, how are you?
Janet Beckers: Okay, good, good. Now James, you, well, James is from super fast business and it was only a couple of weeks ago that you had your conference that I went down to in Sydney. So that you’ve done that about every year or every two years, haven’t you?
James Schramko: Sometimes twice a year. Sometimes I skip a year about 10 actually 10 years to the day. Yeah. Yeah, I think we’ve done 14 or 15.
Janet Beckers: That’s, I mean, so the, the thing that I really liked about when I was at this event that you were running just a few weeks ago, there were two things really. One was, and I just some you up, one was the caliber of the people in the room were people who were doing stuff like, so they were people who’d been doing marketing. You’ve been building business. So for me that was fantastic. It was like my tribe. Um, but the other thing that I really loved about the event, and that is what draws me to you, James, is like this title. It’s very in Australian type of approach to business and life I think is this kind of like, you know, let’s just chill, you know, like it’s, we’ve got nobody here to impress were just peers that are doing stuff and let’s help each other and you know, here’s the simple way to do it. Like there’s none of this, um, I don’t know how to official sort of trying to put yourself up on a pedestal and that separation that a lot of times can come with people with your many years of experience. So, um, so everybody that’s listening here, you are kind of, you’ll probably see between James and I, this is kind of like, you know, the way that Australians do business. Um, that’s, uh, yeah, I think it’s quite unique. You kind of embody that one. I think James.
James Schramko: Yeah. Well a few things go into that. I think one is, I’m not a perfectionist, so I don’t spend a lot of energy focusing on, uh, bells and whistles. And that sort of leads to the other thing is there’s absolutely no height.
Most people are attracted to my community, which is why the people there were great. They’re not there to be sold and razzled and dazzled and hyped up and whipped into a frenzy. They’re there because they want to be there. So even some of the things like having, uh, quite plain environment, they’re like, I don’t have trade bend or stoles. Um, we’re not doing big outrageous marketing campaigns. It’s all very low key. So we’ve kind of attracted people who just want, uh, they just want the raw direct on polished, on hyped version of what they can be out there. I mean, I don’t know about you, Janet. I’ve been to quite a few events where I’ve seen people do there car crash story and lots of crocodile tears and people are, I think they’re getting over that and I was never into it to start with. So I screen and filter very carefully. Anything that I’m putting towards my audience who I’ve worked really hard to build has to be filtered, checked. Uh, and, uh, I guess I’m curating the best experience I can even down to surveying my audience quite regularly so I know exactly what they need and then I build the best solutions I can for them rather than just guess.
Janet Beckers: Yeah. Yeah, that’s a great thing. I, I know years ago I used to, as part of my marketing, I was on that, that speaks circuits, you know, with the, um, the multi-speaker marketing’s has quite a few years ago, the Maldi speaker and I sometimes used to go, they always was like, I used to live in the newspaper in the middle of the road and I, my life was tough, you know, that whole stuff. And my bullshit meter used to just go off. So fears and, and I would just get up and, and said, look, let’s just get this stuff done. So yeah, it’s, um, a lot of people can just, yeah. Over that. So, um, so that’s, that’s the thing that I liked. So I noted day we’re just going to get, this is what works, you know. And so one of the reasons why I invited James along everyone, one was because apart from I love him, is your book your um, work less, make more, I mean, fading from that title just sums up your philosophy to business I think.
James Schramko: Yeah. So even extends beyond business. I think it’s more of a lifestyle position. Now. I remember when I had a job and I went to see a conference from a, at the time, very successful real estate agent in Sydney who’d put on an Internet marketing conference. This was in the early nineties, so it was pretty new to Australia. And uh, I remember he was talking about doing certain things on certain days of the week and having the independence to not be in an office. And I thought this is really, yeah, this is really quite a game changer. This is the first time I became aware of the concept of lifestyle design. I don’t think he even used those words, but that you could actually step aside from the whole nine to five Monday to Friday thing that everyone does. You know, I remember polishing my shoes on Sunday night, resenting having to go into work in the morning, putting on my crisp white shirt, driving into with, you know, with everyone else that exact same time driving to work in an office.
And I thought this is stupid. I don’t get it. There’s got to be another way. And that’s what sent me on this journey of the online world. And that definitely created a situation where you can create your own rules. And that’s what I wanted to do in this book was to share a lot of the things that I’ve learned with my kids. I’m pretty much writing it with my kids as a prime filter too, you know, so it’s not just for online marketers. I went to great pains to, um, you know, say out loud, any sort of terms that might be industry specific so that a regular person with, you know, a forklift driver or, uh, um, a tuck shop. Mom, anyone could read this book and relate to the core concepts of, some of them are so simple that we almost want to try and over complicate them.
Janet Beckers: Yeah. Yeah, she does. That is a really good point. Yeah. Sometimes if things are too simple and honestly, you know, 80 90% of what’s going to get you the results is pretty simple, straight forward stuff that there’s such a tendency to want to over complicate and that is, that’s been my default for too many years to human condition. It isn’t because she can go, oh, how can make that better? I can make that more exciting. I can be creative around that and it just ends up being, you know, that was just a waste of energy if I just stuck to what worked, you know, it’s almost like an evolution in business. That’s been my theme for the last 18 months is um, you know, addition by subtraction. Like how can I simplify everything? Um, which is why I really, really resonate with your particular topic. Now what we’re going to do as, as you can imagine, there’s a lot of topics that we can be covering with James and, but the thing that I really wanted to talk to you Jameson and that I really want to introduce you all to who you’re listening is the concept that’s really core to what you do, which is the e. H. R. So we’re going to investigate that and really pick your brain, James, about how people can do that. So first of all, what is this Ehr?
James Schramko: It’s just a formula called effective hourly rate. Yeah. And it’s a simple way to know how much you’re earning Corolla. So most people were, the job would be able to tell you the alleyway age know if you’re working in a, at Mcdonald’s, maybe you earned $16 an hour, that’s your alleyway wage because you generally don’t have costs as an employee. So whatever you get paid, that’s what you earned. As a business owner, I’m willing to bet. Most business owners couldn’t tell you that effective hourly rate there haven’t actually worked out their wage. They might be able to tell you their revenue, but they probably haven’t actually sat down and calculated how many hours they work. And they almost certainly won’t know which products or services within business are worth more to them than others. And that’s where sort of a a bit of a clue as to where you might start to find more profit. Because if you were to take your revenue as a business owner and then you subtract all of your costs and there’s usually a lot for the business and it’s often half the revenue or even three quarters of it, depending on your business model or if you have a business like yours and mine, it might only be, you know, a quarter or less if you’re really doing it well and then you divide that net profit by how many hours you actually were to get to that number. That’s your effective hourly rate. Okay.
Janet Beckers: Yeah. Okay. So that’s, so in order to do this, like if people were going to go, right, I’m going to set myself a goal.
James Schramko: Yeah.
Janet Beckers: Inside the next week.
James Schramko: Um, is this something that you would measure over a week? Could we do, could we do it in a week or a little bit more? You can measure it right now. I’ll take you about five minutes to it. You can just simply work off last month’s revenue. Uh, you just think about or you know, depending what time of the texts. If you’ve just done your tax, you’ll know your annual survey. That’s another issue altogether. A lot of businesses are flying a little bit blind when it comes to their actual financials. But let’s assume we have a reasonable grasp without finances. You could take last month’s revenue and subtract last month’s costs and see what, what number that leaves and then divide by how many hours you worked in the month. And most people could, uh, have at least a guess. I’m guessing a lot of people listening to this would actually be working six or seven days a week, and they’re probably putting in a 10 hour days. It’s not, uh, you know, it’s not unusual for, for entrepreneurs to work a lot harder than when they actually had a job. Yeah, they might be working, they might be working eight hour days, 20 days a week as an absolute minimum. It could be a 160 hours, would it be?
Janet Beckers: So 8 hours a day for what? How many days per week? Is it 20 days a week?
James Schramko: 20 days in the month.
Janet Beckers: Oh, right, sorry. Yeah, yeah, yeah, yeah! Okay. So that’s good. So if we’re looking, so that’s one of the first things. If you haven’t been really calculating how many hours you’re working, do a reality check. Okay. And that’s also going to be including just checking, you know, a couple of times during the night, what’s been coming through the email, chipping on the social media as it relates to your business. Don’t forget that. Okay. Because there are tools that help help
James Schramko: that too. You can install it all on your desktop called rescue time and you can install, I mean most iPhones come standard with a, an APP now. It’s called moments and it gives you insights as to how long you spend on the phone. And I’m going to tell you frightening one buys at halts the to be spending five or six hours a day on their phone a day. Oh, is that right?
Janet Beckers: Five or six hours. Is the average worse or better now?
James Schramko: Yeah, it’s, it’s going to be frightening for most people. The easiest way to improve your effective hourly rate is to just stop using Facebook on your phone or to stop logging onto Netflix every night because it’s just become so convenient to consume that we can fall into and an activity habit. Oh, just, you know, I’ll get to the work later. I’m just going to watch this game of Thrones, so I’m just going to check out Facebook now. You cannot log onto Facebook and just do one thing anyway. You’ll get distracted and sucked into the vortex of social media. Yeah. So those are sort of activities that I would regard as a trait. That’d be something good to do once you’ve earned it with some work. Yeah. Especially towards the end of the day when you don’t have as much. Brian our, uh, it’s a good to do the lighter activities and load your front end of your day when you’ve got the most reserves for the heavy work.
Janet Beckers: Yeah, good point. So we, if we’re looking at, um, because a lot of it does come down to that discipline and being aware of what you’re doing and that first thing starts with the measuring. So like if you’ve got, this is my effective hourly rate now what is it that I’m going to change and then come back and actually measure it. Because if you’re going to measure it and then record it to see what’s happening, that’s where it’s like when you’re losing weight, you know, you, you know, if you’re going to measure, you know, you’ll actually have that inspiration to keep on going is the, is the really good thing. Now there was, the other thing that you mentioned about was you’re effective valley, right? For particular products and services that you may be providing and other sorts of activities as well. So what’s, what’s been your findings with the people who you work with, James around that, around, you know, what’s, what’s a pretty common thing for people to find when they do that and then what can they do to make it so it’s more effective?
James Schramko: Oh, it’s really common that people first calculate the effective hourly, right? And then burst into tears. It could be like $7 an hour or something. They like, they would literally be better off to go and get a job at Mcdonald’s then to work on this particular product. So some, the other thing I’ve found is almost always one or two of your products or services will be far more profitable than the other ones. Some of them are barely worth doing. In fact, if you just stopped doing those and redirected the same time, so the higher profit activities, then you would instantly make more money and work less. So. So it’s, it’s definitely, um, a shortcut to that. I know with my business I have two primary business, um, products and I’m easily able to benchmark them with each other. I can see how long I spend on each one and how much I’m make with each one. And I constantly use them to compete with each other so that I’m able to, um, I guess it’s like owning coke and Pepsi. Uh, you can, we can try and, uh, you know, have that battle in benchmark off yourself.
Janet Beckers: Yeah. Right on that point about sometimes just stopping something is actually gonna make you so much more productive because that happened to me quite a few years ago in wonderful web women. I had a membership that was 47 a month and if people had purchased it, you know, in, in different circumstances, they may have got a $37 a month, um, offer. And it was the one that was my bench, you know, my, my core one that I started with, but then I started offering higher level programs and really became, there was, was one thing that happened where I thought, you know what, I’ve got a new accountant actually, and he started meeting with many went, what’s the story with this program? Like, why, you know as a percentage of your revenue, that one there is, you know, not the biggest one. Why have you still got it? And it was like what?
That’s where I started. That was my baby people wanted, um, so I was over delivering severely over delivering at that level. But the really interesting thing is when I decided to cancel it and that was because I had somebody externally just asking those questions are really interesting thing happened, which just shows exactly how that revenue from the whole program was replaced in one phone call after I did that because I, I took away the pay button on the sales page and removed it from the navigation, but we hadn’t actually removed the page. And then I got, as we were doing this, I got an email from somebody saying, oh, you know, I’ve, I’ve got the special offer that was in an autoresponder but I can’t find the buy now button. So I emailed him and went all, you’ve actually caught us with our pants down.
Look how about I hop on the phone with you, I’ll explain what’s happening and I’ll just find out what help you need. So she wanted to buy a $37 a month program on that call. Um, she bought a $10,000 program and so she would have been happy with the 37 and so for me that was like an a perfect example of what you’re saying if simply by canceling something that’s using up a lot of your time can even be freeing you up to do the sales calls that allow you to sell into a higher price programs that you may not have had the time to do before. So
James Schramko: literally swapping hours, swapping out a low effective hourly rate. Now for high effective, I mean I used to have a website development business and it didn’t represent, a big part of my portfolio was low six figures per year revenue and the cost branded about a 50% profit margin. So it wasn’t a massive contributor to my income, but it did take a amount of my time having to get involved in customer support situations because website development is one of those things where customers always about a hundred times more obsessed about how their website looks than anything else, whether it’s coded well or works in any browser, that’s like all secondary, whether it ranks well, it all came down to what it looks like and it’s so subjective. And I ended up really disliking this business unit. It was draining my energy for not enough reward. So I sold that business and it was one of the happiest days of my life and I redirected that energy into my higher level program. And uh, it, it just made such a difference. I actually only need one and a half clients in my silver circle program to make the same profit that I could make from my website development program. And the time I spend with one and a half clients, um, is not as long as it as I used to spend thinking about or being concerned about my website development pieces. So it’s a
Janet Beckers: Right. That’s fantastic. So for everybody that’s listening, that’s my challenge to you is this week. So we’ve got, you’re looking at how many hours you’ve been working so that you can then look at your profit, workout, your Ehr, and then also, you know, making those tough decisions. Like, you know, I, you’re holding onto something because it’s the way you’ve always done or you think that’s what people want or other people are doing it. Like you’d be really honest with yourself and you know, just say goodbye. It’s incredibly, um, you know, it’s just liberating to be able to do that. Now there was one other thing I really want to talk to you about, James, that you cover in your book and that’s the concept of the four percents, um, when it comes to Ehr. So can you just run us through that?
James Schramko: So this comes from the Pareto principle, which stems from Walfredo, um, Paredo who was a economist and he discovered that most of the wealth was held by a small percentage of the population. So it’s also called the 80 20 rule. And when I was reading books from Richard Koch and Perry Marshall, it mentions that that rule is fractal. It’s actually a power law. It’s a fancy way of saying that you can apply it to itself. So I, I 80, 20, the 80 20 in what I came up with was the fact that 4% of your inputs, uh, I most likely generating 64% of your results. Now this is a rule of some, right? Some people take me up on this, on social media has had a great discussion about this in the last few days actually because I saw that quote and they wanted to argue it. Then I look up Wikipedia parado principle and there sure enough, someone’s done the mathematical extraction through the 64 four and they’ve found the same thing, that it actually applies out to a global wealth distribution, global global economics.
It actually holds pretty true when you apply it to a real world environment. So it’s not gonna work for everything. But the main point of this is that not all things equal. And that’s really what we’ve just been discussing. It is crazy to treat everything as equal. Not all activities are equal. Not all customers are equal. Not all products or services in your business. Uh, equal, uh, the, I think Lombardi said something along the lines of there’s nothing so on equal is to, um, on equals as equals. So basically you have to realize that some things are just far more important. It’s kind of like our wardrobe. I bet you were some tee shirts or some, uh, shoes, far more than the other ones in the wardrobe. Like occasion. I found a suit in my cupboard here that I have not worn for over 10 years. It’s, it’s, I had it when I had a job, so if you were to count that in my wardrobe versus a tee shirt, which I wear a lot, um, it’s more like a one 99. Like, it’s like, yeah, I would wear that. Yeah. The t shirt 99% of the time and then assert, uh, you know, less than 1% of the time. Same with, with, you know, it just applies across a lot. Even if you have kids, probably like one of them a little more than the others.
There’ll be a Annette. Yeah. Just don’t tell him which one and keep them guessing.
Yeah, it applies to jewelry and all sorts of things. So I think this is a good thing to know because people tend to just sort of average things out and go along and uh, treat things equally. So my real, the somebody that is, we would want to ask ourselves, which one of our products or services is the one I should be spending a lot more time and energy with, which one of our team members is the real asset that I can leverage my business more? Which segment of my customers are responsible for making most of my, my income. Because there will be a subset somewhere there that if you just spend more time on, we’ll get you a huge reward. In fact, if you just stop doing a huge chunk of, of what you’re doing now, like a lot of it, you’ll still get almost the same results, which is, that’s just the mind like thing about it.
Janet Beckers: Yeah. Yeah. And I guess that’s where it comes down to the skill, doesn’t it? There’s that one side where it’s great to have somebody else like you who, you know, has seen enough of other people’s businesses to be able to go, look, I’m pretty sure this is the one that’s going to be, you know, you can pitch this. Um, but also that thing that we, you know, we came back to at the beginning is, you know, unless you actually know like where is the revenue coming from, where is my least amount of in time span for my, you know, effective hourly rate. And then even narrowing it down further. Like, you know, I know that, and like you James, you know, my VIP clients actually take less work than, um, than the people who pay me less money and so, and gives me more joy.
So that’s a real positive. But it’s even looking within say that revenue stream of, okay, what of these ones, which are the ones that you know, give you the most joy or, um, cause I always also like to measure in terms of like, you know, you my affective hourly joy I suppose, um, is, you know, really taking that extra look and you know, that’s, that’s actually a really, there’s something that I haven’t done is, um, is measured that about, you know, is there something that’s common to the ones that get the results the fastest, um, or you know, that you can get the results with it being so stress free. So that’s, um, that’s a challenge for me is, is having a look for that as well. Um,
James Schramko: that’s something I’ve definitely done. I did up a grid and I scored all of my highest level customers. Right. And you know, I measured them on how much I enjoy working with them, how much of an impact I can have for their business. Uh, I measure if, if they have an impact on my business. So I have quite a few celebrity people who I coach now and just one referral from them is, you know, it’s an unbelievable endorsement when you get really famous people recommending me. I, I’ve had a couple of members. In fact, most people come in at the top end for me a word of mouth referrals and in some cases, one guy, this guy does $8 million a year and he came to me and he said, listen, I’ve just been to an event. I sat at a table and four of the five people, and he was the fifth.
What’s this? This, they all said, your name is the guy who can help me the most. So here I am like, what? What’s the next step? There was no sales discussion. There was not even a price discussion. They just came to me hot because of my perfect customers who get me more perfect customers. So what you do is as soon as you identify a customer that’s not within that range, that’s not making you excited, that’s not getting great results, then you adjust your filters so that you don’t get more of those because they’re going to chew up more bandwidth and your profitability starts to road. So it’s very interesting thing. And um, certainly within your products it’s always good to see how can I adjust this effective hourly rate. So I’ve just had a reconfiguration for one of my other products where I’ve changed the way that I sell it, uh, as in particular the price points and the access levels because I’ve found I can build a lot more scale with the new way, which will actually increase my effective hourly rate. So I still want to spend the same amount of time on this product, but I’d like to make more per hour than I do spend on it.
Janet Beckers: Yeah, that’s brilliant. Yeah. So, and that’s the nice thing is it’s all, yeah, it’s not as if it’s something I’ve done at once and I’ve nailed it. So you’re just demonstrating, okay, well I can keep on applying this to my own business, which is brilliant.
James Schramko: And the sixty-four-four, for a simple way to think of that is imagine if one of my clients has a great business idea and they ask five people. I might ask their mom, they might ask their friend from school, they might ask someone on the street they’ve just met, they might share it with an Uber driver and then they might ask me, me, right? So one, you know, one of those people, it’s probably going to have significantly better advice for that person if it is in, if it’s within my range of skill set and my data catchment, considering I’ve coached now well over 2000 people over the last decade and have generated an enormous amount of success stories. If this person’s idea fits within something I’ve already seen. And I know exactly. In fact, I had a great example today. One guy came to me with this amazing opportunity.
Uh, he explained it all to me. He told me one of his hesitations and I just said to him like, who can I tell you something in confidence? And he said, yes. I said, this guy has been, um, he’s been arrested for fraud in the past, so I would not take the opportunity. And he said, thank you. So that means the, the, the advice, uh, is so powerful compared to the average. So you can’t just take that five people’s advice and then average it out. That’s what most people tend to do. Yeah. All right. Look, look for it. If you don’t find an unequal distribution, then there’s something not quite right.
Janet Beckers: Good point. Good point. Yeah. So if you’re going to be taking all those, all that different advice, you, if you’re getting the same advice coming from everybody, you’re the, you’re asking the wrong people. You’re like, who, who?
James Schramko: Like the other day I service my car and on the way back, the van driver gave me a list and he was giving a, he was saying how he’s, he, he doesn’t have a vote. It’s not, you know, there’s nothing you can do to change the politicians. And he was giving me investment advice and then I’m thinking to myself, this guy’s driving the van from the local service center. Would I take his investment advice over my investment friend who has a proven track record who’s been doing it his whole life and has generated success stories for all of his peer group? Who am I going to, you know, where do they position on the scale of how much weight I put in them and I can tell you they’d be very different.
Janet Beckers: Yeah. Yeah. And you know that that that might sound okay. Well that’s, you know, people can go, oh yeah, I get that one. That’s an obvious one. But look at the question I want people here to ask yourself is you may have sought out advice. You may have purchased a program to be able to learn to do something. You may have invested in coaching and mentoring. Are you then taking the advice? Because I see this a lot where people will go, okay, this is what I’ve got to do. And then they either do, looping back to what we said at the beginning with, I’ll go, well, that’s not sexy enough, or it’s too simple. I’m going to, you know, I can do more exciting than that. And so they’ll ignore the advice that works and then go on and make it more complicated than they need to. Or they’ll get the thing and I’ll be going, right, this is just about right. And I’m not even set everything up. And it’s up to that point now of, okay, now I’ve got to drive the traffic. I’ve got to sell this baby. And they will then start taking advice from everybody else around them and just leave it and start something.
James Schramko: I’ve had, I’ve had clients ask for advice and the next day I see them on Facebook asking Facebook and then I think we’ll, they don’t understand the, um, the preto principle. You can’t, you can’t just take that advice and treated all equally. It would be a mistake.
Janet Beckers: Yeah. So I think the important takeaway from there, if we do a bit of a roundup now, so when it comes to that Purina principle that applies to a few things. So it’s going to apply to you know, the best customers that you, that you get aggressive, the best results with the most joy, the most money from within whatever you’re offering, that has the least amount of work in order for you to get you results. So the best effective hourly rate. So if you’re looking at that, then when you’re building the business is also carrying that over into where do you get your advice from. So, you know, make sure that you’re seeking out, you know, the 4% that is going to be able to give you the right advice and then just do it. And then also going back to, you know, you can measure your effective hourly rate now.
And that’s my challenge to everybody that is listening here is you know what? I’m watching you to go now I want you to work out, you know, what was the difference between your revenue and expenses in the last year? Well, the last month in the last year outside and then divide it by 12 and then also look really, really honestly at how much time has gone into that. So you at least you’re measuring what your effective hourly rate and then after you have a big cry, um, if you come back to here, if you’re watching this on, you know, here on the blog post, if your, wherever you’re watching this common and let us know what it is that you’re going to do first to change your effective hourly rate, are you going to be dropping something? Are you going to be doing, as James said, and you’re going to be stunned to remove these apps from your phone so you don’t get distracted them as a reward.
Um, that’s what I really want to hear from you because for James and I, that’s one of the most rewarding things you can do is the time we’ve spent today. If you can come, don’t find James Anyway, you’ve got to go and find him on super fast business.com you’ve got to go and find him on social media and just give him some feedback and come unto me as well feedback. Like what was your Aha today and what is it that you are going to do first that’s going to increase your effective hourly rate. That would be, um, a gift for us cause we know that you’re gonna take action. That’s why we’re doing this stuff. Um, so any final points, James, for people that’s going to help them to work less and make more? Just see, I have to say that then because you know, I think you’ve got it.
James Schramko: Everything I talk about that in chapter nine I think would just question why you’re doing the things you’re doing and be open minded to making some adjustments. Swapping out some, um, bad stuff, bringing in some good stuff and you’ll find that a, you can really make a huge difference to your earning capacity if you’re open minded to listen. And once you get a higher effective hourly rates, like for example, if you’re making over a thousand dollars an hour, then your work becomes really quite joyful. And, uh, you don’t feel like you have to work all the time because just they’ve been doing a few hours a day is enough to have a really decent income.
Janet Beckers: Yeah, the guy that’s the benchmark babies thousand dollars an hour. So thank you so much, James. I really, I just love any kind of wisdom that you, um, that you share and I always feel, um, are you guys feeling this too? Just listening or watching this? Like I always just had this feeling after I’ve talked to James and it’s okay. Like this is not too hard. You know, this is all right. I’ve got this. So I hope you’re taking that vibe away today and just take that into everything that you’re going to do into your business as well. So thank you James, and um, and thank you everybody for taking the time today. Bye!