You’re going to love Michael Knouse. He’s the type of entrepreneur that seems to be intentional in all of the work that he does, and he tends to offer crazy perspective-adjusting advice that leaves you wanting more. Check out his about page to get a feel for his work.
Michael is a Business Coach for visionary business builders and mission-driven coaches. He hosts The Startup Sessions podcast and is the creator of The Council of Visionary Business Builders. He helps overworked entrepreneurs (mostly coaches, consultants, and service pros) to build a more sustainable, scalable, and profitable business so that they can hustle less while enjoying more freedom + impact.
Michael lives in Portland, Oregon with his wife Jill, and his very favorite things are trail running, shredding steeps on powder days, yoga, spoiling his dog Addiebelle (Michael calls her the cutest dog in the world on his website, but I had to edit that bit in case my dog reads this), having life-shifting conversations and experiencing new cultures and traditions through travel.
This is an interview that I think every entrepreneur should listen to. Why? Because entrepreneurship, in the way that most of us do it, is HARD. And it can feel better. If you’ve ever dabbled in entrepreneurship, I think this conversation will resonate with you. We talk about the seemingly inevitable hustle of building a business, delegation, sustainable income streams, and how to work smarter in a business that fits with your lifestyle. I recommend you take the time to listen!
“If you’re constantly in this grind as a creative entrepreneur then I think that will wear you down. I think this concept of designing lifestyle into your business before you think you need it is really important.”
– Michael Knouse
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Transcript of Our Interview:
Jess:
I love talking to business owners in their early stages of their business because they’re very passionate and they’re very excited and driven and they know what they want to do. And then what I find is that a lot of business owners end up doing something different than what they originally wanted to do in their business. Is this a common trend that you see?
Michael:
Yes, it’s a very common trend and I think that it’s a common trend for a couple of reasons. I think the first one has to do with when someone starts a business, they have an idea about what they want to do and what they want to sell and that changes over time as they get feedback from their clients or their customers. I know that was the case with me when I first started coaching back in 2014. I was coaching people that were where I had just been, which was working a corporate job, and they were looking to start a business on the side and I was experiencing that directly. So it was very easy for me to coach in that space. However, if you look at the timeline between then and now, I switched from coaching people that were kind of starting a side hustle to coaching business owners.
And even like through that cycle I’ve moved from coaching a lot of business owners to also coaching a handful of people that are more in the services line of work, right? So not just retail store owners or you know, people who create physical products and things of that nature, but more of a focus on service entrepreneurs since that’s the business that I’m in. And even looking ahead to next year there’s been a lot of coaches and consultants reach out to me because I’ve been doing this work for the past almost seven years now. They’re curious about how I built a sustainable coaching business. And so you can kind of track the organic progression of who my clients are and it’s been a little bit intentional, but it’s also been reacting to my market and to what they are asking for, which is always the easiest way, from my experience as a service business owner, to sell something. That is if people are asking for it, that’s a good thing.
So that’s kinda the first progression that I see for how business owners start doing one thing and then end up doing something else. The other way it happens I think is at the startup phase of your business, you’re doing everything, you’re doing all the work, which is kind of where you come in, right? Where your business can help offload some of that. And I know that in my business you guys take care of a lot of the things that are important, but honestly, it doesn’t make sense for me to do, like scheduling and formatting newsletters. If I’m doing a podcast, doing everything, but the guest research and interviewing the guest, those things represent real risks to my business evolving. Because if I’m spending time doing that, then I can’t really spend time in my zone of genius, which for me is coaching or designer. It would be designing. So I think that a business often can look very different a year or two or three years down the road based on the things that we’re able to hand off so that we can stay more focused in that zone of genius work.
Jess:
Yeah, that makes sense. And I’ve seen, in my experience, that it seems like some businesses, if they’re not handing things off and they’re trying to do it all themselves, they end up going in a completely different direction than they wanted to because they’re out of touch with it because they have more than they can handle.
Michael:
Oh, totally. I’ve been down that road. And it’s such a natural thing because when you start off doing all the things like that, that’s normal for you. Doing something different than that almost feels like a risk. And I think a lot of entrepreneurs, they want to control as many of the elements of their business as they can because they start letting go of things that can represent a change, which is scary when you are the sole person responsible for creating your income. And you’re like, well, what if this doesn’t work out? And what if somebody gets mad at me? And the truth is that in most cases if you do your diligence, the things you’re handing off, you recognize so quickly that they’re the things you had no business doing in the first place, someone else can do theme infinitely better than you are.
Jess:
And it allows you to focus on what you are actually about and good at. That’s a definite learning curve that everybody goes through.
Michael:
Yeah, it is. It’s hard to let go of things because in your mind you’re thinking, “how can anyone possibly do my business better than me?” And the truth is I was categorizing like bookkeeping or formatting newsletters or setting up social media campaigns and promotions. I was classifying that as my business and I don’t have the time to know how to do that stuff well, I don’t like doing that stuff well. So letting go was the best thing that I’ve ever done to allow my business to get to the next level. But at the same time, it’s hard. It’s just a hard thing to do for most people. Not all people, but most people.
Jess:
Yeah. And on the topic of these types of projects that tend to take up your time, I wanted to talk about the difference that you make between busy work and smart work. And how that comes into play. How do we evaluate if something we’re doing in our business is working well for us or if it’s part of this hustle, as you call it.
Michael:
Yeah. Okay. So my, my perspective has changed on this a little bit recently because I think there’s a couple of categories of small business owners. There are the ones that are in start-up phase, right? They’re starting out and I’m just going to reference the coaching world since that’s where I am. And as I started out in coaching, as a coach, it was important for me to, let me classify this, smart work in that early stage for me looked like building the foundation, which includes refining and defining my niche. I’m creating magnetic and powerful messaging, having irresistible offers, and simple offers for people to buy that get me really excited. Knowing and having a process for doing consultations with clients and selling to clients that again, I feel really clear and excited about. Those are the important smart things to do in business at the start as you get further along and your business matures.
So maybe in the coaching world, once you get to that six-figure mark, then you can start looking at some of those things that have been really important. It almost flips. It’s like that idea of the thing that got you here is the exact same thing that is going to keep you stuck there. So you have to reevaluate at a certain point and say, okay, well I’ve got my foundation built now how can I build in leverage? And so all of a sudden it’s kind of weird because those things that became really smart things to do can become the things that represent the hustle later on. And so in the early stages of a business, it’s tricky for a lot of entrepreneurs now in that they think that the smart things to do might be writing a book or starting a podcast or creating a full-blown digital course.
It makes sense, right? But if you think about, if you think about everything that you get from working with lots and lots of clients, that will enable those other things to be better and better informed whether you’re doing a podcast or writing a book. There’s just, from my perspective, building that foundation of your business, learning how to sell, and have consults and figure out your niche and your messaging and putting together really irresistible content for your clients. Those are the things that if you don’t do them at first and you try to replace them with other shiny objects like writing a book or something like that, it just holds your business back. You just get stuck in that constant when am I ever going to get ahead? Versus if you do those smart actions and it’s almost like everything flips once you get to a certain point because then the smart actions actually become maybe like creating a digital course that gives your brand some leverage so you’re not just relying upon one on one clients anymore or writing a book so that you’re visibility expands. And so it’s tricky because the things, the smart things versus the things that are busywork, they actually flip roles at some point in your business if that makes sense.
Jess:
Yeah, definitely. And I feel like a lot of people get stuck in the busy work because of this, being thrown in. You’re excited about one thing in your business, you’re thrown in and there’s all of these things they say, “to do a business, you need to do this, you need to start a podcast, you need to post on social media five times a day.” You need to.. you know, and you have this whole list and people don’t know the difference between whether it’s going to be something that’s smart for them or it is going to be that busy work. And they end up kind of throwing themselves into everything. Which whether you’re doing smart work at all, if you’re throwing yourself into everything, you’re probably stretched too thin. Right?
Michael:
Oh yeah. And honestly, if I talk to a new coach and they don’t have a background in sales like I do, the idea of selling and doing consults can feel very intimidating almost to the point you’ll find busy work so that you don’t have to do that. Maybe not consciously, but unconsciously. And me, check this out, Jess. I had a 14-year career in sales and business development and even I did this as a coach. Because when I first started, I had a, a mentor of mine sit down with me six months in and she was like, “So tell me what do you sell?” And I said, “well, I sell coaching.” She goes, “How many clients do you have?” And I think at the time I had three and she goes, “Does it pay you a lot of money or is that all you want?” And I said, “No, I actually want eight to 10 clients.” And she said, “We’ve been doing this six months, why don’t you have 10 clients?” And I said, “I dunno, I think it just takes time.” And she’s a New Yorker, right? So she called me out right away and she said, “Yes, what else are you doing?” And I said, “I’m doing a blog, I’m doing a newsletter, I’m doing a podcast.” And she just looked at me and she was like, “You are fooling yourself. Your only job is to fill your calendar with as many kinds of ideal clients as you can and serve them. And if there’s a match, ask them to work with you and just do that until your foundation is built. And then you can add on those other fancy things.” And it was such a wake-up call to even me because I was hiding out trying to do these busy things instead of doing the real work of getting clients that would pay me and then serving them.
So even I learned that lesson early of just like how important it is to actually figure out that there are some really foundational things that you do. And the ironic thing is that once you do them, and it’s kinda like ripping the bandaid off, right? It’s way easier to just say, all right, I got to nail my niche, I get to figure out my messaging, I got to create irresistible offers. I’ve got to fall in love ideally with doing consults in a way that feels good to me, that converts to clients. If I get that stuff down, my business is really set up to go to that next level. If I never dedicate time and energy to that, it’s just going to be this ongoing struggle. I see it all the time.
Jess:
Yeah. And I think that people, they do that in reverse like you’re saying. They spend so much time and effort putting themselves out there and trying to do all the fancy stuff before they know who they are, which means even if any of that works, you have to redo it again when you find out who you are, but likely it’s not going to work and you’re going to get frustrated and you’re going to end up feeling like your business isn’t successful before you even figure out what your business is.
Michael:
Yeah. So true. Yeah,
Jess:
Definitely. Can you maybe speak to some of the ways that we can evaluate whether the things that we are doing are right for us at this time?
Michael:
Well, yeah. So based on what I just said, if you’re a new business, and I’ll just say like for a service entrepreneur, like a designer, a web developer, a coach, a copywriter someone that’s even teaching Pilates or Yoga or something like that, service-based entrepreneur. If you’re not at that hundred K mark yet, then the things that you need to be doing are spending time either yourself or with a coach or somebody else, really, really defining who that niche is because it’s always easier to narrow down than it is to go broad. Even though logically it might not make sense as a coach. You know, I learned this lesson the hard way too, at the beginning I would coach anyone and it wasn’t necessarily a bad thing, but it just made it harder for my prospective clients to identify if I was a good fit for them. Because they’re like, what do you mean you coach anyone? What does that even mean? Right. And some people would still become a client, but it was just harder to locate my clients when I don’t even know who they are or where they hang out. And so that going through the niching is important. And the messaging part around, once you’ve got that clear, like knowing for example, like what’s your unique point of view? Because everyone has one and the better and the clearer that you define that, the easier it makes your ideal clients to align with you. It’s almost like this idea of polarizing yourself a little bit so that you clearly state what you stand for and why you stand for it. Because that’ll automatically attract people to you versus if you just don’t know what you stand for, you stand for everything, again, it makes it very hard for people to identify. You’re not really differentiated in the market.
One of my favorite examples of this is a friend of mine who’s a designer and she was a designer for about two years and just kinda did design work whenever, wherever, went to a lot of networking events and she did okay. But one of her clients was a craft beer, a manufacturer, and she really enjoyed working with that client and liked that industry and found the work to be really, really interesting just based on the nature of the client. And so she kind of put a stake in the ground and she goes, and she literally said, “I want to be the most well-known designer for craft breweries in the US!” And within, I want to say seven to eight months, all of her clients had been replaced with craft breweries. She was creating either three times or four times as many business opportunities in our pipeline. I think she tripled her rate because she just gets so well defined and so good at knowing a specific industry that she was in high demand. And that just made her entire business easier, more fun, more predictable. Cause she knew where to go to find those clients. And they were getting referred to her often too. And it’s funny because once she stood for that, there were these other complementary industries that started noticing and they started spilling over into her pipeline too. So craft distilleries started showing up in her inbox saying, “Hey, I know you did this really cool work for this brewery over here. Maybe we could talk about what you could do for us and our distillery.”
So she said some really cool things happened in her business because of narrowing her niche, getting her messaging down, getting her offers really clear. But at the end of the day, making offers and having conversations with people that represent your ideal clients are what you need to be doing in those early stages of business and balancing that with delivering your client work. Anything else besides that is often a very alluring shiny object that’s only going to set you back and keep you struggling. And I’m as guilty of this as anyone cause I started a podcast early on, and I didn’t know this early on, but it was a lot of work. And for the last several months I haven’t done a new episode. And that’s primarily because I’m building some leverage into my business with a new online, well, it’s kind of a hybrid online, offline package for newer coaches. But it takes time and energy to build that. And if I was going to give advice to anyone on a podcast today, I would say instead of starting one on your own, if you’re newer in business, gosh, just go pitch yourself to be guests. Do a guest interview for someone that already has a show. It’s far easier and you get to expose yourself to new audiences every time you do that. So definitely. Yeah. So that’s a few things that I think for an earlier stage business builder that you need to be focused on.
Jess:
I love that. So once we spend the time to set up our great business plan and we know who we are and we’re going out there and finding some success I wanted to talk about this idea that you mentioned of a burnout proof business. What do you consider to be the factors that need to be considered in order to build a sustainable business?
Michael:
The factors that I would consider in that realm of having a burnout proof business are having a business model that evolves, that can support you not being the linchpin in your business. So in other words, if my business is actually still pretty heavy on this in that, if I want to pull the plug and go to Mexico for two weeks unless I’m taking calls in Mexico, my business is pretty much shut down, you know, outside of the things that you and your team do. It’s just kind of like, well, I’m not making money while I’m in Mexico. And that’s not sustainable because if you’re constantly in this grind as a creative entrepreneur, over time, that will wear you down. And so I think this concept, which I do with a lot of my clients, is this idea of designing lifestyle into your business before you think you need it, is really important.
And the way that can look is, for example, I’ve got a client that 80% of his revenue used to come from speaking. And speaking is very much like coaching. If you’re not out there getting on the airplane and doing it, you’re not making money. And to keep making money, you’ve got to keep pitching and keep doing that. Right? And so we looked at, what are the assets in your business that could be leveraged? How can we shift the business model so that it’s not so dependent upon you getting on airplanes and traveling to speak? He likes to speak, so it’s not about not liking the work, it’s about just making it sustainable. We looked at his business and he had actually written a book that had a perfect framework in it, which was kind of the seven steps for being a better connector in the business world.
His book is called The Connector’s Way, right? And so within that book was the exact template to create a coaching program, a group coaching program, that he could then offer the companies that he was speaking to as kind of a follow-up. Hey, if you guys want to implement this, I’ve got a group coaching program and we can set this up specifically for your company and your teams. And now, like probably a year and a half later, that coaching works, which is way more high leverage and he doesn’t have to leave home to deliver, and it represents about two-thirds of his income. So not only is his business model shifted in a way that allows him to not get on the airplane as much, it’s more diversified and it’s led to other cool opportunities in his business as well, beyond the coaching. It’s led to, the coaching has actually led to other speaking engagements and the coaching can be delivered in a group format, whereas speaking is just like, it’s one to a big audience, but you still got to go and deliver the talk. Right? And so it’s looking at the lifestyle first and asking the question, what do I want? What do I want my lifestyle to look like? And starting to build the business model around that. And if you just wait for it to happen, it almost never happens. You’ve got to start asking that question, what do I want my lifestyle to be? And then acting as if that’s the case right now as much as possible, right? So if you don’t want to coach five, six days a week, then right now start consolidating all your coaching sessions into three days a week and give yourself some freedom to take a day off, work on other projects, whatever you want to do, right? So it’s really around the business design of things and being super, super intentional about that. To create a business that is truly burnout proof that you’re in love with.
Because many service entrepreneurs slowly fall out of love with their business because it becomes a grind. The six-day a week thing, a five day a week thing, working nights just to bring in the income. And I’ve done a lot of research around this because I used to work in a sales job that paid me a really good salary. The amount of work that I had to exert to create a really good lifestyle, it wasn’t a good situation for me. I left that situation because I had some creative ambitions around coaching because I’d had a coach for the better part of 15 years and I believed in the model and I wanted to do that. But after the first couple of years, I had to start getting more proactive with how I want my coaching business to look. So I wasn’t working really, really hard because I knew that if that happened I would burn out and I’d have to go back to my job. So it’s really important. Yeah.
Jess:
That’s great. Someone once asked me why I quit my normal job to work 60 hours a week instead. It does happen to all of us. And burnout is definitely a possibility. So once we able to pull ourselves out of that hustle what, how do we make sure that we don’t get sucked back in and what are the factors we need to look out for that could potentially pull us back into that mentality again?
Michael:
Well, I think one of the big ones is, once we get the foundation built, it can almost be like the scarcity mindset that kicks in. Or maybe it’s driven by just the pure desire to have a greater impact. And so you might start creating multiple offers for even multiple audiences. So your good intentions to do more good in the world can actually end up sucking you right back into a burnout situation. Because for me, my biggest constraints as a business owner are my resources, which are my personal time, my money, and the people who helped me. And I’ve got a limited resource of all of those things. And if I get all excited about adding a new thing to my business, a new offer, a new product that can make a lot of sense. But if I get too crazy with just adding things, you know, for each one of those offers that I bring on, they each require creative time to develop them. They need time to market them, to sell them, to deliver them, and support them. So that’s five things you’ve got to do for each product or each offer that you have. Right. And I don’t know about you, but for me, I’ve built a really great coaching business by selling, offering, and delivering two things, one on one coaching, and I do a group coaching program called The Council for Visionary Business Builders. So with those two things, I’m able to create a really great income that keeps me happy, not working too hard, and I’m looking forward to next year with a more leveraged offer.
So for me to bring this new offer online and not add any more team or anything like that, I’ve got to take a close look at, well do, I pull one of those other things that I’m offering off my plate? And so that’s what I’ve done. I’ve kind of parked The Council for Visionary Business Builders for a period of time while I bring this other thing online. And maybe if the other thing starts doing really well and I like it, I’ll stop taking as many one-on-one clients. Right? So there are ways to move these things around a little bit. But did you see a lot of people that get excited once they get their foundation built and they start offering all these products, services, and then that can also pull you into a dangerous place to be.
There are some people that I look up to the most in my industry, in the coaching industry, for example, there’s a lady in Texas, her name is Brit Castillo and her business, I always hesitate to give the revenue number for her business cause it’s, most people can’t even connect with it, but it’s $25 million dollars, and she’ll probably be more than that this year. And she said her company sells two things. It sells a coaching certification program and she sells a kind of an online membership coaching program, which is how she delivers coaching herself to a lot of people at once. Two things. That’s all she sells. And her business is highly profitable and she’s been doing it for I think 12, maybe even longer, years. So she’s put in her time and she’s been a smart businesswoman. But to me, that’s an example of simplicity. Really leveraging a couple of powerful offers to build a business that serves people in a really powerful way and creating an insane amount of income as a result of doing that.
She doesn’t offer a whole bunch of things just to, and most of the people that I know in this coaching space, they just keep it pretty simple. There’s a guy in my coach mastermind here in Portland and he makes a really cool income number. He’s only been coaching for two years and he just keeps it so simple. He coaches 50 people once a month and I think they’re on six-month contracts. So for everybody that coaches with him, he’s like, Oh, we’re going to meet once a month. The minimum time. We can meet together as six months and we’re gonna either meet in person or get on the phone. I’m going to coach you for 60 to 90 minutes every month. And it’s like 900 bucks or something like that for him to do that. And so you can do the math, right. He’s going to have a very good year and his business is so simple.
Jess:
That’s great. I love it. Thank you so much for taking the time to share all of this. And it was great to have you and chat with you about this.
Michael:
Yeah, this has been super fun. I love geeking out on this.
Jess:
It’s great, thanks so much.