Top 1% income is $310K. Guess what top 10% is… You’ll be surprised to know that you may already be there. PHD Mathematical Economist Thomas O’Grady shines some light on some facts that are commonly misrepresented.
Points of interest:
- Thomas’s podcast and how it all started
- Multiple jobs vs Multiple streams of income
- Leveraging yourself so you can make more money in less time
- One of the biggest problems people face as they get older
- Learn the numbers
- The entrepreneurial thought that makes people get into business
- The importance of putting aside money for retirement
- E-mythRevisited: Being very good at what you do with the technical trade or skill does not mean that you’re good at the business that offers that technical trade or skill.
- Every business has a competitor
- Thomas’s suggestion for somebody starting a business
- It’s important to always be getting business: market every week
- Where and how you can reach Thomas
Thomas O’Grady: People need to know what really are high incomes and it isn’t six of seven figures it’s you know it turns out that the top 1%, well for example what do you think the top 1% in income is?
Daniel Eric Bowling: Oh, I don’t know, millions?
Thomas O’Grady: Three Hundred and Ten Thousand
Daniel Eric Bowling: Really?
Thomas O’Grady: Yeah, and the top 2% is about 215K. The top ten percent… you know cause really if you’re in the top 10% that means you’re living relatively well compared to anybody else in your neighborhood. All the top 10% only about 85,000
Daniel Eric Bowling: Wow, I would not have guessed you know we need to be getting this in the episode.
Welcome to Smart Tradesman the show dedicated to bringing entrepreneurship into small business, whether you are a seasoned business owner or just starting out it is our mission to help you design a business that works for you and not the other way around, now here’s your host Daniel Eric Bowling.
Daniel Eric Bowling: Hi and Welcome to Smart Tradesmen nation, welcome to another episode of the Smart Tradesman podcast. I am your host Daniel Eric Bowling in today’s episode, I have the pleasure of talking with somebody who is way smarter than I am and I learned so much and I know that you will too. Yet, just another reason why I love having a podcast giving me the excuse to connect with people that could teach me so much. It was my pleasure to get Thomas O’Grady on the phone and talk about a lot of interesting points that I’m sure, you’ve never thought about as much as I’ve never thought about. He’s a podcast host and also an executive coach he’s appeared on radio TV and printed media more times than I could probably count. He is a very intelligent fellow with a PhD in mathematical and statistical economics. I’m surprised that I can even say those words. And he is more equipped offer is some great insights on how we can better our futures in our lives and in business. In this world where life is so unsettled, I am so proud to introduce my guests today the one the only Thomas O’Grady.
Getting started, can you just tell me first about your podcast because I’m really interested in what you’re trying to do with that and your future goals?
Thomas O’Grady: The podcast for me is very interesting. What happened was, I was doing a lot of sort of study work, etc for myself. I was realizing that gosh, first of all I’m a PhD mathematical economist at Berkeley. I’ve done a lot of things like I’ve advice Lee, Iacocca Greenspan people that sort – heads of companies and I realized that things have changed a lot for example I was looking as we all do is, what are we going to do when we retire as we get older? And the economy changing so much and I realized how this can relate to everybody else in the following way. The people who are basically 45 to 64, that’s what we call as Economist we call net savings years. Those are the years that you were empty nest or whatever and you’re earning more than you really need to spend or care to spend. You no longer chasing dreams of a fancy car etc, you starting put money away. As you doing, you are also putting that aside for your retirement. Realizing that what it used to be is you would die at 72, 74 years of age, now we living at 90 plus. And those savings years have been crippled, because all the work is being replaced by cheap workers. The whole thing with Obamacare is changing the economy in the structure of the Economy. I’m actually going to do an episode on that. On the fact that now we’re dealing with part-time labor that is under 30 hours a week. And if anybody doesn’t know there’s a lot of people now working two jobs or you need to work two jobs but two jobs do not equal 1 full time job in income. They just don’t match, so I decide okay what do I do to address these things not just these things, but the whole roll on what I can do that is how to be successful, how to do things to get across meeting of the people, how to set my goals etc. Realizing that the 50 year old is not no longer turn around (inaudible) (04:37) okay, how my going to figure out where I’m going to go fish, where I’m going to go and have barbecues whatever in a few years. Instead they’ve got 40 plus years ahead of them so let’s turn around that and make believe with 30 years of age and plan all over again.
Daniel Eric Bowling: So you mentioned having two jobs is not the same as having one, can you tell me the difference in your opinion between having multiple jobs in multiple streams of income?
Thomas O’Grady: Actually, two different categories I will break them down in there, one is having two jobs you’re actually putting hours in. Now to streams of income could be a variety of different things they could be exactly that you’ve got two jobs a those are your two streams of income, or it could be that you’ve got some investment, now you put money aside and whether it’s in real estate or something else. You’ve got that investment than that’s a stream of income for example of multiple streams of income from different things. Businesses, etc, those coming in some of which needed attention some of which are semi passive that is very different than having putting in 60 hours a week to earn less than I would of have made with 40 hours a week, few years ago.
Daniel Eric Bowling: So do you think that the multiple streams of income is of vital way to incorporate making the extra income moving into your older years?
Thomas O’Grady: Yeah, I actually think multiple streams of income is important for people and by later years I even mean people past the age of 30, 40 years of age should be thinking of those things because if something happens you want to have something to fall back on. And now things happen much more readily and much more frequently than they did 20, 30 years ago when people worked in a company and just continue to go on. Companies, no longer look at that the same way and people no longer look at it I mean it is sort of a chicken and egg thing. People blame it on companies, when companies blame it on people because all of a sudden they were these people with came into work force and they would leave after 3 months or 6 months and it takes about to 2 years for an employer to really start getting return on the investment of training and educating a new employee.
Daniel Eric Bowling: You have been on both sides of it coming into the trade as an apprentice and then trying to hire skilled, quality help, so I really see the argument on both sides.
Thomas O’Grady: Yeah, it’s an interesting point because it is on two sides and actually I had an interesting conversation I won’t bring up the topic because it’s completely off topic. But the interesting thing was the person was saying they had a very strong opinion and it had to be combinations. Basically political person or whatever and I mention the fact that I always try to look from the other side no matter what my opinion is I always try to understand what could it be that the other person is thinking or the other side is making and you have to look at that way as opposed to just turning around I mean you never resolve anything if either employer or employee and you just hollering the other persons at fault. Why did they do it? How did they do it? What’s the purpose behind it, they need to? And those are important questions just if nothing else for your own peace of mind.
Daniel Eric Bowling: I would totally agree with that and I think that the word that stands out to me when you are talking about being the business owner and not being able to find quality help. And now what do you do to move forward is leverage and as far as multiple streams of income really what I believe leverage yourself, would you agree with that?
Thomas O’Grady: Yes, leverage is an important part because not only you can get it more than from what you are doing, it becomes very important as you get older. In the sense that the more you can leverage as you’re say hitting 50, 55, 60 plus, let’s say you are 70 years of age. Now all of a sudden you probably can’t. Actually let’s be realistic you can’t really work like you did when you were 40. So if you’ve built leverage into what you’re doing then you can make more money with less time and that could be through partially passive or would I referred to as semi passive in the sense you have to monitor it but you don’t have to put in the 40 hours doing it.
Daniel Eric Bowling: So get away from trading your hours for money is essentially what were talking about?
Thomas O’Grady: Yeah, partly we are talking about that, yeah, because we’re talking about getting away from to some extent trading your hours for money or leveraging it by running your company and that is you build a company where you are leveraging other people’s business is as well. You using, that virtual assistant you using that person that has the transcription company or has, a social media marketing company, etc. So you are cooperating and working with other people that instead of you having several departments within that we are all employees that you have to constantly manage.
Daniel Eric Bowling: I love that you’re throwing out all the standard entrepreneurial words that I’m hearing all the time is I’m diving into my research, so I’m going to try to if not in this episode in future episodes go down each one of these past and explain things like the how you can use a Virtual Assistant in your business and how social media can be used for local businesses. So I think that entrepreneurship I think is what we’re trying to bring into small business.
Thomas O’Grady: Right, exactly it’s an entrepreneurship which is a small business or any kind of business in the sense and if you handle your business even if you are a large company then if you look back many of the companies now they are again lethargic when they were growing very rapidly had individual a different departments or divisions, etc. that were very entrepreneurial and they were held for accountability for return on investment potential growth and all the other things that were evaluated then by the parent. So I call a parent is not really a parent company but by the central management.
Daniel Eric Bowling: And as far as small business goes, I really think that one of the biggest problems with people especially if they get into their older years and they start thinking ahead after been making maybe a decent income for so long but now they’re not setting aside anything for the future is they have essentially just own of their own job.
Thomas O’Grady: Right, and that’s really what happens to a lot of people if you take a look for example at a franchise and a lot of franchise, there are good franchise and bad ones but an awful lot of them are very, very difficult. Yes, they have everything set up and recipe, etc but you have to do whatever the franchise soar decides what you have to do. I mean all of a sudden you will see all the McDonalds or all the Burger Kings or all the Subway shops or something, have all these new menus and new designs, etc. Well that was just the franchise over turned around and said everybody’s going to have that this year and don’t worry by the way we have the package and you will buy it from our supplier which may even be them. For a phenomenal amount of money and it just comes out of your money that year and you have no choice and then also any time they raised prices of their side because you buy everything from them you are basically losing some of your net profit. And you are always looking to expand. Most of those places many those places. You’re not expected to make a decent income until you own 3 of them. And you don’t know the second one until they give you permission to buy a second one which is only after they feel you have performed sufficiently well, so it gets to be a very sticky issue now this some ways you can get around some of that but those games I’m not going to bother expand on. Those are literally as you put it you’re buying yourself a job that’s not the same thing as having a business where by you’re helping companies out either with their social media or their marketing or to doing some of the kind of consulting or maybe you’re even though your own printing company.
Daniel Eric Bowling: It’s certainly not a get-rich-quick type of deal but it is a business in a box.
Thomas O’Grady: It’s a business in a box what I don’t like, there is certain business that I don’t like in a sense and what I don’t like about the franchise in general is and I know a lot of people that are successful items, I know a lot of people out of business and lost all their money in some of them. But what I don’t like is the fact that the person who’s giving you that business has complete control of the business. So in this sense you’re working for them you have quote your own business but you’re doing everything according to their rules and they’ll come into your doors once every quarter or 6 months or something tell you what to do and how to do it and everything’s got to be according to their scheme so there’s no originality, etc. You are doing exactly what you’re told to do and prices and costs of yours are really subject to whatever they want to do. The other side that I don’t like is if you set up a business that’s a storefront and you it’s always a question if it’s in an area that there’s a fair amount of demand and you get that storefront that store owner has control of you to a large extent unless it’s going to be you should always be thinking, what would happen if the next time around I have to move? Will that destroy my business? Because that property owner also knows that you have established a business if you have to have that store, you just lost all your renegotiating skills whatsoever to get your update you know to get your renewal of your lease, they can extract whatever they think they can get from you.
Daniel Eric Bowling: I think that term business owner has become this glorified thing that people really understand but then I believe is a lot more to it than people realize as far as headaches go and for what I know you but you Thomas you don’t sugar coat anything and before we really hit record we were talking numbers. As far as incomes go, can you go over the numbers with us because I was a little surprised on what they were actually?
Thomas O’Grady: Yeah, actually almost everybody is surprised except for the people that be the heard me say this all of a sudden I say, oh I think it’s and they heard me say it on something else or heard me give it on a presentation or a speech. But most people we have this and a lot of it’s the political stuff I won’t use any of the 4 letter words, all the political stuff that turns around and condemns the super rich and all the stuff the rich, the 1%, etc. Turns out the 1% is not millions and millions of dollars and part of the thing that’s also misguided about that is that you have all these people saying all the way can I help you earn six figures of seven figures in six months or nine months or a year or whenever. The top 1% is only approximately $310,000, now, yes that’s a very good amount of money but it’s certainly not the millions of people think actually seven figures if you made if you just hit seven figures a million dollars. Now I don’t know exactly what it is but it’s probably .00001% or something and something and astronomical. That’s why people say that when they want to take all the money away you’re all the tax everything away from the top 1% or the millionaires, they, turn around and say gee, we are not getting much in tax revenue because there aren’t that many of them and they don’t really make a whole lot. There is just a few up there, the super-rich. And actually it’s kind of good that they are there and that’s another topic we can or cannot get into if you want. But the top 2% is only around $215,000 the top 10% is only around $85,000 now when you think about, where you want to be? If you were the top 10% in your neighborhood, wouldn’t you feel good? I think most people say, oh yeah, yeah but then you ask them, what do you think you’ll have to make to get there? And they won’t guess $85,000 in general and it’s not hard for most people to get up to that category little bit above by supplementing their income whether it’s by hours of doing something that they like to do or buy some other investment or something else. That’s not difficult. Getting up 10% to the top 5% even is relatively easy. Maybe even 3% and then all the sudden you go on to the next stage but people hear all these unrealistic promises and also the condemnation in the political sphere.
Daniel Eric Bowling: Yeah, I was certainly surprised by those numbers because I was probably one of the people that thought 1% meant millions but out of that 1% of the top 1%. If there are millionaires in there and then they made it through savings and being smart with their $300,000 income.
Thomas O’Grady: Yeah they do an interesting this is something that I’m going to going to a great deal more and something to follow up that I’m going to be riding on someday. When you take a look at that top 1% or let’s say higher than that, the millionaires and billionaires they all talk about and some of the politicians say, well let’s take their money away from them etc. This goes back to what we were talking about earlier. I was looking to try to look at it, well what’s the other side? What’s the other part of it? And I’ll draw an analogy we have that’s political sphere that likes to have lotteries that people buy tickets for which basically is a very regressive system. Why? Because you take a look at the people that are buying the lottery tickets and funding all that and it’s like 25% of it goes to the slush fund and some percentage of gets returned. But those people can’t afford it, but why did they do it? They do it because of what they hear about that person who made it, gee so and so in Maryland you got $150,000,000 if I do that my right life is forever saved. Supposedly the probability getting hit by lightning twice is higher than winning that and I only know one person that got hit by lightening twice. The key thing there is what’s, driving people is that dream or thing that they can do it and they can get there.
Well think of the entrepreneurial thought, what is getting people to buy businesses, to start businesses by the way literally and I really have to say more than all and that sounds funny but I will explain in a minute. More than all, jobs are created by small business to medium business, now, how can I say more than all? Because large companies for the last 30 years every decade have lost jobs, so not only small business gain jobs itself to compensate for that but the actual gain is from small businesses to medium businesses. So, really, why are they doing it? They are doing it for those same kind of dreams, those dreams of looking at that guy who is making seven figures or more, and gee this could be me. When it turns out almost none of them ever do that a matter of fact the guy who opens the local fast food franchise store very often makes between $50,000 to $60,000 a year from his store and he has to have 3 stores literally in order to make it. Why? Because he got a higher management for the other 2 stores, somebody is a little more senior so they combine income so the 3 will get him over the $100,000 mark. But that’s what he is doing it for, he is thinking gee I can be very well off and that’s what drives them, so in a sense it is of the same analogy as the lottery.
Let’s think what would happen if we took it away so it was no longer reasonable for people to think that if they made over certain amount most of it will be taken away. What is your incentive? It was interested something I learned and actually implemented myself was quiet’s a few years ago, about 30 years ago. What I would do is that I would hit a $180,000 and at that point there was really no point in working more and making more money, why? Because the amount you make on each $1 is substantially less if you have 50, 60 cents out of your $1 coming out. Why you working 40 cents on the $1 or 50 cents on the $1? It is interested when unions, a union person works over time, they get paid a lot more, they get paid 50% more or if they work Saturday they can get double time, they can get triple time and all this sort of stuff. But if you have your own business if you work more they take more away.
Daniel Eric Bowling: That was very interesting I was going to touch on the topic of I’m dealing a lot with smaller trade based businesses so when you’re talking income I know that I’m going to be connecting it with what their shop brings in each year. And then the next problem is they don’t know how that equates into actual income for them, so I don’t think they are tracking it enough. But, how would you suggest somebody get started to start thinking in this way and looking towards the future when they’ve done it for some one way for so long?
Thomas O’Grady: The biggest thing that any business it turns out small, medium, large the reason for survival or failure. Most of the time and I’m talking it’s like 7 out of 10 times is because financial mismanagement and what that means is those business that you are talking about they really have to start learning to be comfortable and like looking at the numbers. Not just all I know if I estimate this and do this, etc, I will make such and such for about that may spend it afterwards. They really have to take a look at the numbers, they have to look at it month by month, week by week this year versus last year, this year for the same month versus last year for the same month. They have to really look at that, they have to look at it costs. I ran the division of a major company and there I was told that was a lost leader never to think and never talk about saving money, never talk about making money, it never will because this but we’ve had lots of great people before us. I actually had the president of the company scream at me in the hallway one time saying to me, I never want to hear you say that again etc. Well 14 months into being the head the monthly budget came out and I was profitable the guy from the insurance division called me up and said, you know soon as I walked in the door he said, don’t say anything I didn’t even know what happened yet. He said, they’re the upper management is really embarrassed and really aggravated with you for having made money because you’ve now embarrass them which is kind of a funny backwards thing you would think they would turn around and say gee we are so glad that we were wrong and praise it and take credit for maybe having selected me or something like that. But instead they were embarrassed because they said something that turned out that I made a profit, but it what it was I looked at the cost as well as the sales.
And that’s very important, what are you doing? How are you spending what? And that’s a crucial area don’t just think of yourself as a revenue generator because it’s what you bring home and then also what do you put aside every month. Don’t think that you always look at any business you doing as if it’s going to die in some period of time. Don’t think you are you know you started at 30 years of age you build a company and you’re already thinking about how you going to pass it on to your kids, treat it as if it’s only going to be a seven year or ten years business. Given that you realize you need to take income you need to put aside money for your retirement.
Daniel Eric Bowling: With a lot of these trade based businesses it’s pretty much day by day until I think they had a certain age and realized they don’t have a plan for the future and if it don’t have a kid or son or daughter to hand it down to, I started thinking I need the train somebody to learn this and then step in and take over the business. And that’s the retirement plan that sounds…
Thomas O’Grady: Yeah
Daniel Eric Bowling: kind of backwards to me
Thomas O’Grady: it’s very backwards and it’s also one of the reasons what they need to know and you need to educate them on is, how many of those trade babes business is either never amount to very much or fail and even though they may be the best etc. They have to look at it that way because those companies that fail and don’t make much money, they are going to be competing against even the successful ones. And they’re going to cause you to not be able to sell it is higher prices you might want because when they get desperate they’ll be pricing different when he will be offering all kinds of freebies. And everything else and you take a look at some of the ads on TV of some of the wireless carriers and some of them look pretty desperate. And that’s the same thing that exists even more so when you have small individuals some of them don’t even have a price their products well. So they don’t even realize that pricing it may be below with that can possibly sustain.
Daniel Eric Bowling: What I’m sitting and thinking about as were talking is any service based business at a certain level it is you are the business unless you’re going to build it into something bigger that can be marketable to sell to somebody else without you and the equation. You need to think about what you’re working for and if it’s not to build a business to sell then you need to be building side like a nest egg and actually working towards that rather than just one day. I need to put this on somebody else shoulder is like they’re going to keep giving you a paycheck or you’re too old to work.
Thomas O’Grady: You almost always so I can’t think of an excuse for it you really always need to think in terms of putting things aside as an nest egg, or putting things aside for your college aside your kids college education, etc. If you can’t do that you better stop what you’re doing and go work for somebody else where you can get a paycheck and do that because then maybe you haven’t learned the lessons that you need to really run a business.
Daniel Eric Bowling: I read the E-myth Revisited and what you’re saying is they may be very good at what they do but being very good at what you do with the technical trade or skill does it mean that you’re good at the business that offers that technical trade or skill.
Thomas O’Grady: And, yes actually you just hit on a really major point and that is the idea of being an entrepreneur is this glorified thing that people have. So, for example somebody wants to own a restaurant, why? Because they like to cook, problem is when they own the restaurant they’ve got to get somebody else to do most if not all the cooking. Why? Because they have to manage everything else they have to look over the finances, they have to go greet customers, etc or maybe the dream is to be out in front just greeting customers. But they realize they constantly need to do other things. Almost everything has the things that they really like to do are going to be the easiest things to hire other people for, why? Because they have the things people like to do, so really what they left in stock with his a lot of the crappy jobs that they don’t really think a whole lot of. So you’ve got to really know what you doing when you getting into business this so many misconceptions about it and so much more than people need to do than just, okay. I heard that John Doe made a lot of money because he opened up a store in the mall and sold widgets well I think my widgets are better than anybody’s widget so I’m going to open up another store the other end of the mall. Well, there is a lot more to it than just that. I take a look anytime you go into a major shopping mall I really feel bad about this every time you see a business that is closed down don’t think, oh they went out of business. It’s much more than that. Before they sign that lease and got that equipment and got that inventory they signed the way probably everything they have, their home is guaranteed against, it their savings, everything they have has been put against that and when they go out of business they probably went into bankruptcy. So, it’s a major thing. Now take a look at it work through that wall and you see those clothes businesses and when you see some of the ones that you see that a relatively new open there any see somebody selling something you say, who would ever buy this stuff? They open the business because maybe they were doing crocheting or something and their friends and family, said oh gee you are to sell these stuff its great everybody loves it. And that’s what they started a business on that idea.
Daniel Eric Bowling: Every small business is connected to a real human being and if you really think about their story it may just change your opinion when you’re ready to take a jump yourself or at least change your approach.
Thomas O’Grady: Right, exactly that’s the key things to change your approach, take it seriously if you want to take it seriously fine, great, glad to work with you so to speak but love to give you my thoughts etc. I had some people that I asked some questions of and they would just, devastated when they realized I let them realize themselves. When they realize what the situation was they have to look at it from realistic standpoint then step back and say, okay, what can I do about it or how can I build it? But it’s much more than just I want to sell this, okay, what’s the competition? What’s the industry size? I had a friend recently, oh I’m in this company and we’re selling this product that nobody else had. So it’s basically for health it’s has a lot of benefits to the body and I said actually it has a lot of competition. No there’s nothing like it, I said, well anybody else that sells anything that people take whether it be a pill, a drink or anything else is in competition with it. Then you whether it’s the same or not you may be the only one with this ingredient but everything else is in competition to some extent as well as everybody who exercises for their health versus takes a drink.
Daniel Eric Bowling: Yeah.
Thomas O’Grady: So in a sense there are always so much people spends on things to help their health. You might convince them spend a little bit more but more than likely what you doing is convincing them to take some money that they were spending on something and spend it on your product instead and that’s the way you’ve got to look at it because everybody has a budget. When you introduce your product it doesn’t automatically can slip out a $10 raise and they can buy your product every week. They got to take it from something else.
Daniel Eric Bowling: So it’s thinking of it as an income in any given category as a pie chart like entertainment, if your widget is the only one that exists of that thing that does that one thing. But within the entertainment category that it falls, it’s going to be taken from somewhere else so your slice of the pie is going to be affected by the competition in the whole big picture.
Thomas O’Grady: Exactly because if the person does have a choice and things that they have to do and you may get a good person to convince and say gee I want to spend a little bit more on entertainment I’m going to cut back on going out to fast food restaurants, I am going out to restaurants. Because I want to spend more on entertainment, that’s okay, and I can happen. So there’s degrees in the sense of competition what we would call substitution, substitution between products. So one can substitute one for the other within their budget but otherwise you got to rely on a person getting a pay raise which isn’t going to happen just because you put a product out there.
Daniel Eric Bowling: It would be nice if that’s all to it
Thomas O’Grady: I would be very nice indeed.
Daniel Eric Bowling: So we’ve touched on the older generation and what they should do and how they should be at least approaching their mindset. Learning from that would you suggest somebody just starting out maybe they’re just an apprentice wanting to go out on their own and start their own business. What’s the very first thing that they should start be thinking about now?
Thomas O’Grady: Well actually everything I said applies to them as well it’s not just the older generations got to think of putting money aside etc. Matter fact that’s very important if you put money aside earlier on you will have something when you’re older. I saw something recently that the average person over 65 male, yet makes about $25,000 a year, females holding on to $16,000 I don’t know people look back and say gee can I live on that. I don’t know how I would, but it’s all taken care of if people start putting aside a little bit of money put aside $100 a month starting at age 23 or 24 and you’ll be in very good shape, you’ll have over million dollars if you put it into something. Dave Ramsey for example as a great show and he puts it at 12% I might not put it you know the growth rate it that high in number but that is what the stock market had done supposedly I guess over that you very long period of time. You would have substantially over $1,500,000 or so. And, yes $1,500,000 won’t be what it is today but if the people 40 years ago thought of that they would be a whole lot different situation than they are today. Making $25,000 or $16,000 so that’s very important, now the person going out in starting a business they should really do all the plans make sure they have everything together before they start. Because once you start the tickling the trades you going to be very busy combination of running around and giving bids and getting business along with doing the work because a lot of the work early on you’ll be doing whether it’s supervising or doing it alone. So, that’s a crucial very crucial part that you understand what you’re going to do before you even get started as far as the business goes get everything set up. Get the accounting system setup and I don’t mean just get QuickBooks or something find yourself a bookkeeper that’ll put them in good terms and will give you report every month. Little financial things and can say something to you like gee cost are a little high here and then you can also look at them. They’re in a small enough detail not summed up so that you just know profits, employees, etc. But you have everything broken down into a very big details you can so to see you my gosh and you can see all of a sudden if you’re spending too much on certain kinds of equipment maybe the equipment is disappearing from your office or work schedule whatever. Some of the people you’ve been hiring have been walking office and things as they do side jobs. You’ve got to have a handle in an idea on all of that stuff but it’s got to be done before you get out there because after you get out there you are going to be rushed. And then the second thing is one of the things that a lot of people do as they chase around and I get business. And then complete the business and then the go and chase more business you have to be to dedicate a certain percentage of your time all the time every day, every week to marketing to always be getting business. So, that you basically have a waiting list of business for business.
Daniel Eric Bowling: I love that you said that I’m always trying to tell that to the other tradesman around me is the time to do marketing is not when all of a sudden you’re slow and you’re panicking because then all the sudden we have a knack for beating the bushes in a bunch of work falling out now then we’re really busy again and then we’re slow again and then we’re busy again. Rather than doing it that way put a system in place where it’s always trickling in and you’re not just rushing to do a bunch of work at once because you ran out of work.
Thomas O’Grady: Right, so for example they get to the point that they say, oh god I really want to get this check in so I’ll put in an extra hour or two. Well you do that instead of marketing and then that job is done and all the sudden you make it in this another problem when you get started get lean and you don’t have the work. Then you start almost begging for work and I’ll use an analogy in this, have you ever seen a 19 year old guy who doesn’t hasn’t had a date in a week or so has trouble getting any girl to say I’ll go out with them? It’s kind of like he is in heat and he can’t and it’s funny because I’ve said this in groups and all the girls with me laugh and say yeah, yeah. Because they detect it and the guys say, ahh, but its true and the same thing happens when you’re trying now to sell your next job but you’re desperate. People can see that you lose confidence you don’t come across with any kind of confidence, self assuredness and ability to turn around and say, no we can’t do it for that. Thank you very much maybe next time.
Daniel Eric Bowling: I think that’s the number one key factor to why my prices in upholstery and residential furniture or at least double what most upholsterers are because I only do it one way and its quality and I’m always 100% honest and genuine. But I’m not afraid to say I can’t do it for that price and rarely do I lose a job even when I’m trying to talk me down they respect that this is what I charge and I’m not going to waive it on my quality because I only do it one way.
Thomas O’Grady:Right and the thing is this to explain it thoroughly so the people understand what the difference is and then they think about it and they will make an informed decision because you’ve educated them you’ve got to be able educated customer. But you’re not going to be able to do that if you can’t come across with the confidence that you should have.
Daniel Eric Bowling: Very good Thomas I think that we should leave it at that because I think we could talk for hours so I’m going to have you back on in a future episode. Before I let you go tell us how my listeners can find you if they want connect with you further.
Thomas O’Grady: Alright, two things actually, one that just came out I just came back from Alaska on the trip and just as I left I’m actually on the way to the airport I got the message that iTunes had posted etc. My app, I have a podcast which has its own app I have pre paid for all the royalties, so it’s a free app and that’s called life unsettled it’s available on iTunes, it’s available on Android in the App Store and iTunes the Play Store and Google. My website is lifeunsettled.com and starting with people and go there you can leave me a voice message or a written comment message of some kind. Go into the contact area or there is something on the side we can just click on and leave me a voice message and let me know what your question, what your thoughts are and what you want to know.
Daniel Eric Bowling: And that’s a wrap. Alright Smart Tradesman. Were you surprised by some of the numbers? Because I sure was, if you are like me you are re thinking some of your assumptions right now. Where we stand in today’s economy I certainly thought that 1% in the millions but I could not have been more wrong. So if you left thinking about how you are going to build up that nest egg or side income for retirement, you are thinking about starting your own side gig or your own business. We have a list of service based businesses that you could start today with little to no risk and this is an ongoing and ever growing list. But it is a list of 65 to get you started you go on over to www.smarttradesmen.com/bizlist download that list so you can so you can add a few more to it. But I guarantee you are that you could get started today make a side income and work on your multiple streams of income start working on that nest egg and retirement that Thomas said was so important. So that’s all I have for you today be sure to go over to www.smarttradesmen.com/bizlist download this free list and get started on your small business, self employ journey today. I will catch you in the next episode of Smart Tradesman, good luck in everything you do. I am out of here, see you.