The Confession Booth With Mike Andes | Episode 2

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Ladies and gentlemen, welcome to another episode of the Confession Booth.
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We tried this last week and we had like 10 or 12 really good calls.
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So I'm opening up the phone line again.
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How this is going to work is if you call in, you do not have to say your name, you do not have to say your business name.
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We will garble your voice using AI.
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So no one will know who you are.
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I will not say the first three digits of your phone number.
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The objective here is that you can anonymously share some of the issues that you might be facing in the business.
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And I have been on other talk shows or Q&A.
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And you're always trying to make sure it's like, well, do I hurt a customer?
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Do I hurt a team member?
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Do if I bring up something personal, am I hurting someone else?
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And so the objective here is to be able to get the real answers that you might be looking for, but you're too cautious to talk about if people knew your voice, they knew the name of your business.
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And that's why we built the show.
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So the confession booth is we can come spill tea
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anonymously and be able to get the help you need.
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And so we already have someone in the call queue, but if you have a question, just go ahead and call 361-733-3332.
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And again, I'm not gonna say your name.
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You do not need to say your business name.
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I'm not gonna say the first three numbers of your phone number.
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and your voice will be garbled.
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So anything I can help with, the objective here is to be able to reduce the walls that we build up as business owners, and it's very difficult to find people that you can just openly share, and I'm trying to emulate that for those that might not have that opportunity or have a close confidant or a circle of entrepreneurs they can share with their struggles.
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This could be a problem with a job.
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This could be a problem with customers.
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This could be a problem with your employees and some...
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kind of like messy stuff happening.
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It'd be very difficult to help you in this setting if you were sharing your name, et cetera.
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And for one-on-one personal calls with me, people book them a couple times a week.
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I open up slots for it.
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It's like $2,500.
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And so the objective here is for those that cannot afford that and do not want to spend that time, you know, they don't need 50 minutes, but they need a question answered about how do I deal with this problem with the employee or a customer or my spouse is not understanding me, we're not on the same page or we're going through a rough time.
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I want to be able to offer this opportunity for you to be able to call in and no one know who you are.
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So without any further delay, let's go ahead and bring the first caller in.
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Welcome to the show and thank you for coming inside of the confession booth.
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Yeah, hello, Mike, can you hear me?
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I can.
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How's it going?
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Oh, good morning, man.
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How's it going?
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Very good.
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Very good.
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What can I help with?
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Yeah, sweet.
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So, I'm not going to say my name.
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So, I'll just say my name.
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My name's Dennis.
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I'm based here in Vegas.
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I run a super small family owned business over here in the Vegas Valley.
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Under $100,000.
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My dad's been running this for a few years now, but
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come to the realization that he doesn't know how to scale it.
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And me as a son, like, I'm coming into this.
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I'm like, what can I do to help him scale?
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Recently, I partnered up with a few agencies to, like, obviously, like, sales cheers off to, like, bringing more leads, help with the sales process, all that kind of stuff.
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And I started working with them last month back in April 5th.
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This long, a few days ago, I was doing my calculations.
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I realized that I spent a total of $3,000.
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to work with that agency and in return I've generated close to five to maybe pushing 6,000.
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I'm breaking into ads but from here I just like
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I guess I want to hear your expertise because I'm doing this all alone.
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Like what can I do to help me scale to the point where consistently I'm bringing in five figures a month with obviously monthly recurring revenue with monthly maintenance.
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Plus like those big extra jobs that obviously help bring in more revenue.
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Okay.
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So just to be clear, so you spent $3,000 on the ad spend or is that on the management fees of the agency?
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Yeah, so the way it kind of works, I guess you could kind of call it digital knocking, right?
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They send out black SMS messages to like homeowners in the area.
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And then any, any responder that does reply back, they charge me $65, right?
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So you can just imagine that fee of 3000 has gotten me about close to 38 to 40 clients.
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Right.
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But out of those 38, um,
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Not a lot of them respond, right?
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Cause it's cold out there.
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Like I'm reaching out to these people.
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Some of them do respond, some of them do respond.
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And the guys that do respond, like we go out, make a job.
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But again, when you're spending $65 per lead, it's like,
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Your minimum has to be 300.
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And sometimes these homeowners are just looking for like weed removal, right?
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Where like, it's like, dude, we can't do that.
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Like I'm going to lose money if I do something like that.
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So I want to hear like your expertise on what I could do differently.
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I certainly do with an ad agency as well, like around the same time.
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I spent a total of 300 in ads.
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It's been all right.
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I think I do have to improve my ad creative.
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It's not the best.
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But I am more so leaning on ads and wanting to replace that digital door-knocking because the return on investment just isn't theirs.
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And I want to hear your expertise on what I could do differently to, like, obviously scale consistently and, like, for sure hit that $100,000 mark this year.
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Okay, so you spent $3,000 on, let's call it ads, but really this is like SMS tokens.
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What was the management fee on that?
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Or is that the management fee, the $3,000?
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Yeah, that's kind of like the management.
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So there really isn't no management fee.
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They should.
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So the upfront base was 500 for eight leads, confirmed.
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And then like any lead that they gave me was 65 on top of that.
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Okay, so $500 for the first eight leads.
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Okay.
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All right.
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And then right now, do you have a website that you're sending people to or are you just doing it all on like?
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I don't.
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I don't.
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I think I have a pretty good sales process, to be honest with you.
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I've been in sales all my life since I was on.
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17 years old.
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So I don't have no website.
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I call as soon as possible.
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Any estimates I do, I have a 50% close rate.
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So out of 10 people that I see, five of them are for sure going on their business and we're going to run their stuff for them.
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So I don't have no website.
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Got it.
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So the thing that I would say is when we look at kind of the sales process, I'm going to go ahead and agree with you that you're really good at sales.
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But here's the thing.
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Right now we have prospects and then right now we're paying a bunch of money for them to become leads.
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You're really good at turning them into like through sales, turning them into customers.
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But the problem is we don't have any engine right now besides paying for $65 per lead to turn prospects into leads.
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And I think that's the part that's broken because you paying $65 per lead is actually not like incredibly bad.
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What's bad is the fact that you are, if you turn that lead stream off tomorrow, you'd be at zero.
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And I want you to be able to build more of an organic path through your website.
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And so if you're spending $3,000 on ads, I would spend some portion of that and just go build a great website.
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Because if you do that and you get 100 plus reviews, you're going to start ranking and getting leads for free.
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And that's ultimately the long-term game.
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The short-term game, yes.
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Like we can make this math work.
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And if you're closing, let's just call it one out of two.
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Well, now your customer acquisition cost is, let's just call it $130.
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Yeah.
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And then I'd be saying, okay, great.
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Now that they're a customer, how do we do an upsell process so that we can get customers to pay us more than $130 in the first week or two?
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That would be the first thing to do.
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But I also think about long-term.
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I don't want to keep me on this like IV drip of $65 per lead to this other agency.
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100%.
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100%, yeah.
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And that's also a thing.
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So in your personal feeling, it's like, don't spend so much on that agency and cut half the price, spend it on the website, improve it, get those Google reviews and all that kind of stuff.
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Well, I don't think it's necessarily a or game as much as an and game.
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Like you can keep doing this, assuming you have sufficient capital.
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This math is okay if you convert half of these leads into paying customers and then you get, like let's just call it $500 in the first 30 days.
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And so I would do two things.
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First, I would focus on the upsell process of new customers because right now they are gonna be low quality leads.
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But if you're saying you're closing 50% of them, I still have a cost per,
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cost per customer of $130.
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I just got to figure out a way to upsell them and create an offer where I'm getting $500 in the first 30 days.
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Otherwise, I'm going to have a bad cash flow problem.
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If I'm paying $130 for a customer that has a $200 service and I'm 20% profitable on it, that's a losing formula.
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And so the first thing I'd be doing is focus on my upsell process.
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The second more long-term thing I'd be doing is trying to solve this lead flow issue of you having to pay for every single one at $65 to where you are addicted to this lead source.
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Because what happens is if you scale this, if someone gave you $50,000 tomorrow and you went and got a bunch of leads, you'd build this infrastructure and they'd build this business.
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And then all of a sudden you would find yourself having to pay more and more and more on the top of the funnel to get these leads.
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Simply due to the fact that if you turn it off, your leads go to zero.
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And I don't want you to help be held captive to them.
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Yeah.
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I'm also, I'm going to be honest.
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I personally feel like spending $3,000 to only make close to $5,000 to $6,000.
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I feel like that ROI just isn't there personally when I have been looking at ads and I'm like,
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Ad, a lead cost me $10 and let's say I get like a super basic job for like 150 weed removal, like the return on investment isn't going to be a lot better than a 65 just even consider them and then just tell me that you're just looking for a weed quote, right?
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So I do want to like completely cut off that agency, just not work with them at all no more because I personally don't see that return on investment just double down on ads and then eventually, not eventually, but as I'm running up on ads, as I'm fixing my ad creative,
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as I'm growing my social profiles, break into SEO, get the website, rank on Google, all that kind of stuff.
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What are your thoughts on that as well?
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Yeah, like ultimately when we started Augusta Leads, for example, this is why we did not charge a per lead basis.
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It's because now I'm just arguing about the quality of leads all day long.
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And so you are always at odds with this agency over the quality of leads because you're paying per lead.
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Rather, before you go turn them off or reduce their budget, go figure out like, right now, let's say spending 3,000 making $5,000, yes, you're never gonna make money doing that.
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However, if you're able to spend the same amount of money, $130 and get a customer, and instead of making 5,000 on those customers, you made 25,000 because you 5X the amount of the lifetime value of that customer, now all of a sudden the exact same lead source makes sense.
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And so before we just discount the lead source and turn it off, because you're very new, like cutting off your lead source right now is like saying, take off the wheels off your car.
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It's not going anywhere.
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And so before you start thinking about that, and if you're like, hey, I can go get leads for $10, then yes, by all means do it, but prove that before you go cut out your agency, because I think most of us, there is no agency I've ever talked to, there's no business owner I've ever talked to that hires an agency that loves them forever.
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Because eventually you just expect the cost per lead to go down when it's actually the opposite when it comes to marketing.
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And so when you're chained to this cost per lead, I want to first figure out the downstream funnel of making sure that the customers were so much that I make sense of spending $130 per customer.
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I was looking at someone's numbers the other day.
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They're spending far more than that.
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But because they sell three or four services in the first month and make $500 plus, they can recoup the customer acquisition cost within the matter of the first three to four weeks.
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Yeah.
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And so I would rather you fix your downstream and then go fix the upstream because the upstream is always the thing that looks easy to fix.
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And then you're going to get into it and realize, okay, like those $10 leads are also not that great.
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And I've got to have a better website to drive them to.
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I've got to be a bit better tracking and make sure that I'm have the analytics to track all this in Google.
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And now you're spending all of your time doing that instead of just focusing on creating an upsell process that makes a $200 customer, a $1,000 customer.
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Mm-hmm.
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Okay.
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Okay.
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Makes sense.
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Fantastic.
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Well, thank you for coming on.
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Someone's got to break the ice.
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I appreciate it.
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Next caller is coming in.
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I'm not going to say from where.
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Welcome to the show.
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Thank you for coming on.
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Yeah, this is Aaron.
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I just had a question about picking a GM properly.
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Right now we have two guys.
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that are both very good options and I'm just having a struggle with who to pick.
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If that makes sense.
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Sure.
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Maybe since this is nice and anonymous, give me, give me kind of a synopsis of the two and then we can kind of break down which ones we might want to prioritize.
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Yeah.
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So one of them's been with me for three to four years and he has been
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He's been good.
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He's managed everything well, but he's not super systematized, if that makes sense.
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You know, he struggles to log the property notes sometimes and mark things.
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And then the other person I have is relatively new, less than a year, but he does well with the system side.
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Okay.
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And so right now, what's the role you're trying to fill?
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Is it general manager, you said?
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Yes, yes, because we're approaching 500 this year.
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Okay.
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And are you trying to step out of daily operations?
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Um, yes, I would like to step out of daily operations.
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Okay.
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And are you going to still do sales or are you like moving away?
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00:14:12.945 --> 00:14:16.327
I would like to do sales and admin and just delegate the operations.
215
00:14:16.967 --> 00:14:17.227
Okay.
216
00:14:17.687 --> 00:14:29.112
And this year being at $500,000, um, do you think the business has enough cash to be able to afford this general manager or are they going to be working in the field like 70, 80% of the time as the quote general manager?
217
00:14:31.435 --> 00:14:36.724
I would like them to also be working in the field for probably half at least, I would say.
218
00:14:36.964 --> 00:14:38.066
I think that would be a fair amount.
219
00:14:38.476 --> 00:14:44.320
Okay, so I'm going to go out on a limb and say what you're actually looking for is an operations assistant, not a general manager.
220
00:14:44.860 --> 00:14:51.464
Because you being in sales and you doing admin, there's no way in the world you're going to let this GM actually run it the way they want.
221
00:14:52.044 --> 00:14:53.585
You're still going to be in the daily operations.
222
00:14:53.605 --> 00:15:02.931
Like, you might not be in operations doing the work, but you're daily involved in getting more jobs, answering phone calls, setting up the crew for success.
223
00:15:02.991 --> 00:15:06.053
Like, I would consider this much more of an operations assistant.
224
00:15:06.073 --> 00:15:06.333
Mm-hmm.
225
00:15:06.693 --> 00:15:10.734
And if we through that lens, you might tend to give this guy more grace.
226
00:15:11.295 --> 00:15:14.196
The person that's been around with you longer knows, knows systems.
227
00:15:14.596 --> 00:15:17.957
If you're not required to be a general manager, in my opinion, a general manager runs the business.
228
00:15:18.477 --> 00:15:25.400
They're the person that like when you leave the country, they run the business and they're over sales operations admin.
229
00:15:25.600 --> 00:15:29.381
But if you're going to still do sales and admin, the only thing you need them to help you with is operations.
230
00:15:29.701 --> 00:15:32.062
And that's going to be a much more of an operations assistant.
231
00:15:32.962 --> 00:15:41.232
And I would say that if you continue to scale and you want to say a million, $2 million, maybe this person becomes your operations manager.
232
00:15:41.633 --> 00:15:47.359
And then this person, the person that's newer in a few years, though, becomes their operations assistant underneath them.
233
00:15:48.000 --> 00:15:54.764
And so I would just get clear about the language because if you call it a general manager, they're gonna expect to literally never do work unless you make it very clear otherwise.
234
00:15:54.984 --> 00:15:59.587
And they're also gonna expect to manage generally, like general manager, sales, operation, ad.
235
00:15:59.607 --> 00:16:00.788
They're kind of over everything.
236
00:16:01.408 --> 00:16:04.090
And so if you really just want them to be like, hey, I just need help.
237
00:16:04.790 --> 00:16:10.153
Managing the crew, getting the shop space set up in the morning, make sure everything's on deck.
238
00:16:10.193 --> 00:16:11.794
If there's complaints, I want you to manage those.
239
00:16:12.134 --> 00:16:13.555
That's an operations assistant.
240
00:16:13.615 --> 00:16:21.559
And be careful with, I've done this mistake many times, especially on the early, like giving titles out that people do not deserve.
241
00:16:21.879 --> 00:16:23.100
And then you end up paying them more.
242
00:16:23.340 --> 00:16:24.380
They feel entitled.
243
00:16:24.681 --> 00:16:30.984
And it becomes an absolute mess because I simply gave someone a title they did not deserve or the business wasn't ready for.
244
00:16:31.264 --> 00:16:31.624
And at $500,000,
245
00:16:33.025 --> 00:16:36.806
You're only hiring a general manager if you're not going to be there.
246
00:16:36.926 --> 00:16:44.389
If you're going to be there doing sales, doing admin, there's no way in the world you're hiring a general manager, especially if you're just getting help in operations.
247
00:16:44.569 --> 00:16:46.049
That's an operations assistant.
248
00:16:46.569 --> 00:16:47.890
Next caller, welcome to the show.
249
00:16:47.930 --> 00:16:48.690
Thank you for coming on.
250
00:16:51.407 --> 00:16:52.628
Hey, Mike, how's it going?
251
00:16:52.648 --> 00:16:53.649
Fantastic.
252
00:16:53.669 --> 00:17:08.679
So right now I'm looking to hire a lawn maintenance technician, and I was just wondering what approach you would use if I should go on Indeed or if I should try Facebook or what method do you think works best?
253
00:17:08.959 --> 00:17:09.780
Is this your first one?
254
00:17:09.800 --> 00:17:12.702
Second.
255
00:17:12.722 --> 00:17:13.042
Second.
256
00:17:13.702 --> 00:17:17.025
Okay, so yeah, right now Indeed is where we're seeing most applicants.
257
00:17:17.526 --> 00:17:21.790
I would highly recommend running your job description through AI.
258
00:17:22.330 --> 00:17:22.951
Talk to AI.
259
00:17:22.991 --> 00:17:27.215
Don't just like, I want a long hair technician job description.
260
00:17:27.615 --> 00:17:32.420
Much rather explain the size of your business, what their role is going to look like, what their comp is going to be,
261
00:17:32.840 --> 00:17:41.263
where the business is going, the objectives and goals and missions of what you're trying to build and what you're looking for in the ideal candidate, and then ask AI to build the correct job description.
262
00:17:41.783 --> 00:17:44.624
And then what's, where, I'm not going to ask that.
263
00:17:45.004 --> 00:17:49.565
Depending on where you live, you're going to either, there are places right now that are getting overwhelmed with applicants.
264
00:17:49.905 --> 00:17:58.808
And so if you're going to put up an application and in 24 hours get 50 applications, then we need a process to hone that 50 down to five or 10.
265
00:17:59.686 --> 00:18:01.747
And so I would say it's your second one.
266
00:18:01.767 --> 00:18:03.849
You probably have not done a lot of Indeed ads.
267
00:18:04.229 --> 00:18:07.831
If you run an Indeed ad and you get 10 applicants, you're going to go through all the resumes.
268
00:18:07.851 --> 00:18:09.652
You're going to set up a couple appointments.
269
00:18:10.013 --> 00:18:20.620
If you get 50 in 24 hours applications, then we've got to figure out how do we reduce that number because otherwise you're just wasting two days setting up appointments and two or three people show up.
270
00:18:21.440 --> 00:18:24.781
And so the first thing we want to do is create the ad, optimize it with the AI.
271
00:18:25.141 --> 00:18:31.724
Don't just tell it to give you a long care technician or a tech's job description.
272
00:18:32.124 --> 00:18:35.025
We're going to give it all the information about the business and then ask for it.
273
00:18:35.565 --> 00:18:37.626
And then we're going to see what happens in the first 24 hours.
274
00:18:37.646 --> 00:18:45.068
Because if it's over 20, I want you to build some sort of process of like, hey, send me a loom, or here's a link to a Google form, fill this out.
275
00:18:45.448 --> 00:18:49.390
And you can very easily weed out 90% of people that are just kicking tires.
276
00:18:49.750 --> 00:18:50.310
Does that make sense?
277
00:18:52.983 --> 00:18:53.263
Yes.
278
00:18:53.664 --> 00:18:57.066
And should I promote the base pay?
279
00:18:57.506 --> 00:18:59.668
I do implement the P4P, too.
280
00:18:59.728 --> 00:19:04.131
So I follow Marco with Augusta.
281
00:19:04.151 --> 00:19:06.953
So I see how he kind of promotes that, too.
282
00:19:07.113 --> 00:19:12.697
And saying, like, if you're like a rock star, basically you can get up to like 30 an hour.
283
00:19:12.757 --> 00:19:17.300
So should I do it that same way, too, or until I filter everyone out first?
284
00:19:17.540 --> 00:19:22.628
Yeah, what you want to be careful of is most people joining have two things.
285
00:19:22.828 --> 00:19:25.152
One, they are very used of hourly wages.
286
00:19:25.432 --> 00:19:26.975
That's how they're comparing against everyone else.
287
00:19:27.736 --> 00:19:31.201
And secondly, they've been told that every job they've ever been to that they can make a lot more money.
288
00:19:32.067 --> 00:19:33.327
and they've never seen any proof of that.
289
00:19:33.988 --> 00:19:35.928
And so they are already jilted on P4P.
290
00:19:36.388 --> 00:19:44.531
So how we usually frame it is we want our base pay to be competitive or on the higher end in the market, and then we want them to, I was just gonna give them the facts.
291
00:19:44.571 --> 00:19:48.992
Here's what our average hourly wage was last year, and we give the real numbers.
292
00:19:49.572 --> 00:19:57.357
So like instead of just saying, hey, you can make up to 30, I would rather say like our top performers last year made $32.46 per hour.
293
00:19:58.237 --> 00:20:00.118
And that would be more believable for them.
294
00:20:00.659 --> 00:20:07.082
But the base pay is still going to be the thing that you're judged on because it's easiest for them to compare apples and apples against other competition.
295
00:20:07.663 --> 00:20:08.864
Next up, welcome to the show.
296
00:20:08.884 --> 00:20:09.684
Thank you for coming on.
297
00:20:12.326 --> 00:20:12.526
Hello.
298
00:20:12.826 --> 00:20:13.326
Hello, hello.
299
00:20:13.486 --> 00:20:13.706
What's up?
300
00:20:13.726 --> 00:20:14.067
Can you hear me?
301
00:20:14.287 --> 00:20:14.587
I can't.
302
00:20:15.455 --> 00:20:17.796
Hey, what's going on this different key come from Texas?
303
00:20:18.116 --> 00:20:28.558
I just I didn't I don't really have a confession But I just wanted I mean a confession that I did instead of hiring other people I hired two admins I had two people answer phones and that freed up my space.
304
00:20:28.658 --> 00:20:40.601
I don't know if anybody else needs to hear it Because work is hard to come I have three I have started a company last year and then and you know Got on did worker calm got everything I needed to do but my best
305
00:20:41.441 --> 00:20:46.742
My best help is having, I hired a lady who was a CPN who was like, I'll be a desk clerk basically.
306
00:20:47.162 --> 00:20:50.423
And she sits in the office, takes all the calls and it's been wonderful.
307
00:20:51.363 --> 00:20:51.623
Awesome.
308
00:20:51.763 --> 00:20:53.604
Well, thank you for dropping the words of wisdom.
309
00:20:53.684 --> 00:20:55.784
I appreciate it.
310
00:20:56.224 --> 00:20:56.925
No worries, man.
311
00:20:56.985 --> 00:20:57.965
Any advice?
312
00:20:58.445 --> 00:21:02.866
I'm at a, I'm a very small company, but we're at 325 regulars now.
313
00:21:03.526 --> 00:21:04.106
Any advice?
314
00:21:05.086 --> 00:21:07.227
So you have 325 recurring customers.
315
00:21:07.247 --> 00:21:07.767
Is that correct?
316
00:21:09.718 --> 00:21:11.019
Yes, they're all just mowing.
317
00:21:11.519 --> 00:21:11.779
Okay.
318
00:21:12.320 --> 00:21:14.841
And did you say you have two people in the office now?
319
00:21:17.002 --> 00:21:18.523
Yes, I have two people in the office now.
320
00:21:18.563 --> 00:21:19.384
They handle scheduling.
321
00:21:19.404 --> 00:21:21.145
They go out and do estimates.
322
00:21:21.285 --> 00:21:23.746
And there's two ladies that are wonderful when they go out and do estimates.
323
00:21:24.346 --> 00:21:29.589
And then one just handles calls and she, you know, chat GBTs my routes and sends them out to me.
324
00:21:29.629 --> 00:21:31.631
And it's been, it's been wonderful.
325
00:21:31.651 --> 00:21:33.312
I've been able to, you know, do my job.
326
00:21:33.772 --> 00:21:35.113
And are you trying to grow right now?
327
00:21:35.133 --> 00:21:37.534
Or is this kind of like the size you want to optimize for profit around?
328
00:21:39.543 --> 00:21:49.166
Man, I've been thinking about growing because I'm in North Texas, DSW, and we have new neighborhoods everywhere I would like to grow, but I don't know the next step.
329
00:21:49.206 --> 00:21:52.827
I feel like for two years, I'm okay money-wise, payment-wise, everything.
330
00:21:52.847 --> 00:21:56.068
If it still continues, it's still growing, but what's my next step?
331
00:21:56.668 --> 00:22:03.350
So do you have anyone right now when someone calls out for the day, one of your employees, they're sick, are they calling you right now?
332
00:22:05.143 --> 00:22:06.945
Okay, so, right.
333
00:22:06.965 --> 00:22:08.826
No, they called up there, but it's, go ahead.
334
00:22:09.147 --> 00:22:09.587
You're fine.
335
00:22:09.667 --> 00:22:14.592
I'm gonna, like, throughout the day, for example, if something breaks down, are they gonna contact you if like a truck breaks down?
336
00:22:16.892 --> 00:22:17.112
Yes.
337
00:22:17.613 --> 00:22:17.853
Got it.
338
00:22:18.133 --> 00:22:23.677
So the next step, if you continue to grow, which, by the way, I'm a big fan of being like, hey, this is a great-sized business.
339
00:22:23.877 --> 00:22:24.377
I'm happy.
340
00:22:24.517 --> 00:22:26.278
I'm making money and being okay with that.
341
00:22:26.298 --> 00:22:30.541
But if you want to keep growing, you have essentially delegated your admin.
342
00:22:30.661 --> 00:22:32.242
You have two really solid people, it sounds like.
343
00:22:32.262 --> 00:22:36.906
And it sounds like they're actually kind of doing a little bit of your sales, like some of the estimates that are drive-bys.
344
00:22:37.326 --> 00:22:46.012
The part that's going to unlock you to get past, let's call it 1.5 million, is going to be getting operations delegated.
345
00:22:46.632 --> 00:22:57.822
And that's getting someone likely in your current operations, your crew, and elevating them to where they have the systems and the resources to be able to make calls for the crew out in the field.
346
00:22:58.203 --> 00:23:03.287
Whether that be broken equipment, customer complaints, calling in, like who do I report to?
347
00:23:03.647 --> 00:23:06.190
They become a buffer between you and the crew.
348
00:23:07.274 --> 00:23:08.977
And that's very difficult to find that person.
349
00:23:09.638 --> 00:23:16.951
And I'm going to guess, though, that you've been in business long enough to have someone that's probably pretty solid in the field that could step into that role.
350
00:23:17.072 --> 00:23:17.693
Is that correct?
351
00:23:17.793 --> 00:23:18.815
Or am I off on that?
352
00:23:21.045 --> 00:23:21.965
No, I do.
353
00:23:22.045 --> 00:23:25.006
I have three other crew members that are great that do step up.
354
00:23:25.566 --> 00:23:28.006
But also, too, I barely hit a year.
355
00:23:28.026 --> 00:23:29.647
I started last year.
356
00:23:30.187 --> 00:23:30.667
Fantastic.
357
00:23:30.867 --> 00:23:37.888
So then I think when you're growing that fast, I think knowing what the operations is the next thing to hand off is one thing.
358
00:23:38.329 --> 00:23:42.469
Having the systems to where when you put them in that place, they actually are successful is another.
359
00:23:43.009 --> 00:23:45.250
And so I would highly recommend asking yourself,
360
00:23:45.590 --> 00:23:48.232
throughout your day, what are the things that you're doing that are in sales?
361
00:23:48.512 --> 00:23:49.112
Getting more work.
362
00:23:49.212 --> 00:23:51.194
What are the things that you're doing that are operations?
363
00:23:51.514 --> 00:23:52.254
Getting the work done.
364
00:23:52.695 --> 00:23:54.656
And what are you doing in admin?
365
00:23:55.076 --> 00:23:59.940
And as like answering the phone, text messages, payroll, workers comp stuff, all those things.
366
00:23:59.980 --> 00:24:02.561
I want you to list out what you're doing in each of these categories.
367
00:24:03.002 --> 00:24:05.263
And I want you to look at the ones in operations.
368
00:24:05.283 --> 00:24:07.545
Cause I'm gonna guess this is your longest category.
369
00:24:08.225 --> 00:24:14.169
and then create systems for each of those tasks so you can hand it off to someone else and they have KPIs for each one.
370
00:24:14.650 --> 00:24:21.315
So when it says like, hey, make sure that we have an efficient crew, like that's part of an operations person, like make sure we have work on the schedule and the crew is efficient.
371
00:24:21.555 --> 00:24:22.736
Great, what does that look like?
372
00:24:22.776 --> 00:24:24.437
Does that mean we need to be booked out three or four weeks?
373
00:24:24.717 --> 00:24:26.519
Does that mean we need to have 70% efficiency?
374
00:24:26.879 --> 00:24:35.465
These are the things that you wanna nail down and create a system for because then it allows you to hand this off because otherwise handing something off, like I'm delegating, well, what are you delegating?
375
00:24:35.485 --> 00:24:37.427
It's a mess and you're setting this person up for failure.
376
00:24:38.027 --> 00:24:48.899
And so right now, given the fact that you've grown so quickly, I would first organize yourself, create systems for the things that you want to delegate, and then as time goes on, you'll be able to delegate those things off to someone else.
377
00:24:51.241 --> 00:24:52.583
That makes a lot of sense.
378
00:24:53.163 --> 00:24:53.424
Awesome.
379
00:24:53.464 --> 00:24:54.265
I appreciate you answering that.
380
00:24:54.794 --> 00:24:55.534
Oops, sorry, I dropped you.
381
00:24:55.774 --> 00:24:57.435
If I drop you, don't be offended.
382
00:24:57.495 --> 00:24:58.656
It just would try to keep moving on.
383
00:24:58.936 --> 00:24:59.936
All right, let's go.
384
00:25:00.016 --> 00:25:00.977
We'll move to the next caller.
385
00:25:01.297 --> 00:25:01.857
One quick thing.
386
00:25:01.917 --> 00:25:04.579
If you would like me to come out in person, it's completely free.
387
00:25:04.839 --> 00:25:07.480
You can scan the QR code or in the links in the description.
388
00:25:07.780 --> 00:25:09.201
You can sign up for a turnaround show.
389
00:25:09.481 --> 00:25:11.282
It's mikeandys.com slash turnaround.
390
00:25:11.762 --> 00:25:20.086
We have filled up this month as well as the beginning part of June, but we have a couple more spots, I believe this summer, available where I will fly out to you in person.
391
00:25:20.486 --> 00:25:22.247
I'll do what we're doing here, but in person.
392
00:25:22.747 --> 00:25:28.152
So I can meet your crew, see your full operations and hopefully help you get your business to the next level.
393
00:25:28.432 --> 00:25:31.495
But let's go ahead and jump back into the confession booth.
394
00:25:31.915 --> 00:25:32.596
Welcome to the show.
395
00:25:32.876 --> 00:25:33.657
Thank you for coming on.
396
00:25:33.697 --> 00:25:34.197
Next caller.
397
00:25:36.479 --> 00:25:36.860
Hey, Mike.
398
00:25:37.100 --> 00:25:37.460
Can you hear me?
399
00:25:37.701 --> 00:25:38.021
I can.
400
00:25:38.221 --> 00:25:38.601
How's it going?
401
00:25:40.623 --> 00:25:40.823
Good.
402
00:25:40.863 --> 00:25:41.284
How are you?
403
00:25:41.504 --> 00:25:41.984
Fantastic.
404
00:25:42.004 --> 00:25:42.585
What can I do for you?
405
00:25:44.606 --> 00:25:51.093
Yeah, I currently have one mowing crew and then a project crew that I drive for.
406
00:25:51.914 --> 00:25:54.316
I'm looking to get to a second mowing crew here soon.
407
00:25:55.217 --> 00:25:59.662
I'm currently just looking for, I guess, a crew lead for the second mowing crew.
408
00:25:59.682 --> 00:26:00.843
Yeah.
409
00:26:01.684 --> 00:26:06.789
What should I be looking out for within my current guys that are mowing right now?
410
00:26:06.809 --> 00:26:11.293
Because I've got a few people that are possible candidates for possible drivers.
411
00:26:12.054 --> 00:26:17.059
I'm just not quite sure which one I should be looking forward to being a lead.
412
00:26:17.179 --> 00:26:22.063
One has more experience, but he...
413
00:26:23.845 --> 00:26:31.736
Yeah, one has more experience, but he's not as good at talking with customers, and then the other one's less experienced, but very good at talking to customers.
414
00:26:32.817 --> 00:26:35.962
So are you looking for someone, do they both have a driver's license first off?
415
00:26:37.984 --> 00:26:38.305
They do.
416
00:26:38.673 --> 00:26:38.853
Good.
417
00:26:38.893 --> 00:26:40.614
So they're both candidates to be a crew lead.
418
00:26:40.854 --> 00:26:42.775
You're wondering like which one should be.
419
00:26:43.175 --> 00:26:51.138
I also think like, can I simplify the business to where I don't need high level skilled people to be able to do the job?
420
00:26:51.958 --> 00:26:57.641
And so there's a very good, very good chance that if we have the right systems and training, both of these people are great candidates.
421
00:26:58.301 --> 00:27:00.522
And it's just a function of which one do you do first?
422
00:27:01.475 --> 00:27:15.563
And so I think when it comes to, for example, talking with customers, can we train that in team meetings enough to get the first person that isn't great at that skill to be able to at least be able to communicate enough with a customer if they came out of their house.
423
00:27:15.903 --> 00:27:18.124
But the thing is too, sometimes we overblow this.
424
00:27:18.344 --> 00:27:22.747
Like the amount of customers that come out and talk to a mowing crew is what, maybe one out of 20?
425
00:27:24.678 --> 00:27:26.618
And so, yeah, maybe even less than that.
426
00:27:26.899 --> 00:27:27.119
True.
427
00:27:27.199 --> 00:27:32.920
And so I would, when it comes to operations, I am more thinking about, do they follow systems?
428
00:27:33.840 --> 00:27:34.940
Do they do the work efficiently?
429
00:27:35.441 --> 00:27:39.521
Because if they do the work efficiently, I make money and they make money on pay for performance and profit sharing.
430
00:27:39.982 --> 00:27:43.522
Secondly, if they are doing it, you know, that's if they're doing it efficiently.
431
00:27:43.782 --> 00:27:52.485
If they're following systems, I can teach them how to do upsells, make videos attached to their mobile app, be able to look for opportunities to upsell the customer, give them bonuses.
432
00:27:52.745 --> 00:27:54.545
And I can incentivize what I expect.
433
00:27:55.226 --> 00:28:01.552
And so I think this decision much more comes down to who's the best fit in the moment.
434
00:28:01.792 --> 00:28:12.063
But both of them ideally would get the systems of the business to the point where either of them could become, because the only thing that's holding the first person back is that you're afraid they're not going to talk to customers very well, right?
435
00:28:14.245 --> 00:28:15.166
Right, yeah.
436
00:28:15.226 --> 00:28:16.928
Does that person work more efficiently as well?
437
00:28:19.313 --> 00:28:21.995
Yeah, I'd say he's a bit more efficient as well.
438
00:28:22.015 --> 00:28:23.397
I would say the one that had less experience.
439
00:28:41.557 --> 00:28:41.837
Got it.
440
00:28:42.058 --> 00:28:44.021
So that's usually indicative of a good leader.
441
00:28:44.581 --> 00:28:47.005
And so for us, we don't have crew leaders.
442
00:28:47.366 --> 00:28:48.928
We try to get everyone up to the same level.
443
00:28:49.589 --> 00:28:55.798
And then they might have leadership in other areas, like for example, shop maintenance, or equipment maintenance, or trainers.
444
00:28:56.619 --> 00:29:02.863
but we want everyone at the same level so that we can move them from truck or crew, and it doesn't matter.
445
00:29:02.883 --> 00:29:05.825
It creates less operational drag if someone goes down.
446
00:29:06.425 --> 00:29:12.769
And so I would say, especially for a mowing crew, I don't necessarily need a leader unless there's only one person with a driver's license.
447
00:29:13.735 --> 00:29:15.756
or like one log into the software, for example.
448
00:29:16.336 --> 00:29:23.279
But assuming that everyone has the same tools and the same training, I should be able to put them in and out of trucks as I see fit.
449
00:29:23.619 --> 00:29:32.363
And for something that's low skill requirements like mowing, I encourage you to go in that direction because otherwise it just creates a bunch of bottlenecks for the business when it comes to scheduling.
450
00:29:32.843 --> 00:29:36.824
Like, I can't schedule those customers because so-and-so is the crew lead and he's out for vacation.
451
00:29:37.404 --> 00:29:40.005
I would rather just get them all trained up and there's not really leaders.
452
00:29:40.325 --> 00:29:43.726
Like, what's the reason you need a, quote, leader on the crew?
453
00:29:44.066 --> 00:29:45.787
Is it a matter of someone holding someone accountable?
454
00:29:48.828 --> 00:29:52.729
No, it's really just, I guess, keeping the workflow efficient.
455
00:29:53.049 --> 00:29:55.850
And, yeah, I suppose keeping the rest of the crew accountable, yeah.
456
00:29:56.499 --> 00:29:58.981
The thing is, I would really encourage to create a system for this.
457
00:29:59.501 --> 00:30:09.128
Pay for performance, for example, or giving some sort of incentive around efficiency gets them all on the same page immediately, and they will hattletail very quickly if there's someone that's not efficient on the crew.
458
00:30:09.649 --> 00:30:13.431
And so a lot of times we create these roles because we don't have systems.
459
00:30:13.712 --> 00:30:17.915
Like you need a crew manager to basically watch over the crew and make sure they're efficient.
460
00:30:18.355 --> 00:30:29.557
versus just being like, why don't we just create everyone the same, have the same tools for everyone, and then we make the objective the same for everyone, which is be efficient, get these jobs done to a high degree of quality and don't have yellow slips.
461
00:30:30.078 --> 00:30:37.739
That's why pay for performance or like some sort of level around making sure that you have incentives around efficiency is so important.
462
00:30:37.899 --> 00:30:40.220
Because no longer is it, okay, we need rank and title,
463
00:30:40.940 --> 00:30:48.405
It's more a function of the system runs the incentives and the incentives are going to produce the outcome I want, which is efficient work at a high quality level.
464
00:30:51.667 --> 00:30:51.948
Okay.
465
00:30:53.168 --> 00:30:53.429
Okay.
466
00:30:54.089 --> 00:30:54.710
Does that make sense?
467
00:30:56.611 --> 00:30:57.571
Yeah, perfect sense.
468
00:30:58.432 --> 00:30:58.672
Awesome.
469
00:30:58.832 --> 00:30:59.553
Best of luck to you, brother.
470
00:30:59.933 --> 00:31:00.173
All right.
471
00:31:00.413 --> 00:31:02.515
Next one up is coming in.
472
00:31:03.516 --> 00:31:04.216
Welcome to the show.
473
00:31:04.856 --> 00:31:05.637
Thank you for coming on.
474
00:31:08.019 --> 00:31:08.279
Hello.
475
00:31:08.599 --> 00:31:09.119
Hello, hello.
476
00:31:09.300 --> 00:31:09.880
What can I do for you?
477
00:31:12.248 --> 00:31:13.869
Hey Mike, quick question here.
478
00:31:16.150 --> 00:31:16.530
Go for it.
479
00:31:16.870 --> 00:31:19.051
How do you deal with negative reviews?
480
00:31:20.211 --> 00:31:20.491
All right.
481
00:31:20.551 --> 00:31:21.772
Is this on Google right now?
482
00:31:23.733 --> 00:31:25.573
Well, it might end up on Google.
483
00:31:25.773 --> 00:31:25.974
Yeah.
484
00:31:25.994 --> 00:31:28.274
We're having a little bit different with the customer.
485
00:31:29.255 --> 00:31:41.420
Um, I think it's a lot of communication and stuff going on, but, um, I mean, the dude, he was like, yeah, we have, he was like, I got a Google review drafted, a Yelp review drafted, a BBB review drafted.
486
00:31:41.460 --> 00:31:42.040
I mean, it's like.
487
00:31:42.868 --> 00:31:45.929
You can't everything we have tried to do to please this guy.
488
00:31:45.989 --> 00:31:46.970
It's just not working.
489
00:31:47.070 --> 00:31:49.031
I've gave him a $2,000 discount.
490
00:31:49.351 --> 00:31:52.312
I've done so many things to try to accommodate for this.
491
00:31:52.412 --> 00:32:03.617
And, uh, um, unfortunately I haven't heard from him, you know, in the past four or five days, but I mean, he, he seems like the type that just isn't going to let whatever is bothering him go.
492
00:32:04.277 --> 00:32:06.378
I've tried to get to the bottom of it and, uh,
493
00:32:06.888 --> 00:32:08.569
He's just picking at every little thing.
494
00:32:08.629 --> 00:32:11.431
I mean, it's just one of those customers, like, you cannot please them.
495
00:32:11.732 --> 00:32:14.674
So I'm thinking that he might potentially leave you.
496
00:32:14.994 --> 00:32:16.075
Is this a project installed?
497
00:32:16.095 --> 00:32:17.236
Yeah, we did a project.
498
00:32:17.976 --> 00:32:20.158
Yeah, so what we did, I have a gutter company.
499
00:32:20.298 --> 00:32:22.039
I've talked to you a couple times before.
500
00:32:22.540 --> 00:32:27.984
I think you even made a YouTube video about my company, like, using my website and stuff.
501
00:32:29.405 --> 00:32:33.688
So what we do, we install gutter guards for him, clean his gutters, build his gutters.
502
00:32:34.081 --> 00:32:39.405
We did underground drain work, repairs, replacing and stuff like that.
503
00:32:40.005 --> 00:32:43.527
And he just, he just, like I said, it was a lot of miscommunication.
504
00:32:43.567 --> 00:32:45.429
He thought we were going to be there for like four days.
505
00:32:45.789 --> 00:32:48.751
I've been in business for six years and never been on a job for four days.
506
00:32:49.551 --> 00:32:53.154
What I told him was four to five hours and he, I guess he thought it was four to five days.
507
00:32:54.034 --> 00:32:55.055
Um, and then like.
508
00:32:55.428 --> 00:33:00.391
What's really bothering him is we were there for about four or five hours, and he keeps breaking it down.
509
00:33:00.431 --> 00:33:04.353
He was like, well, you made like $2,000 an hour or $1,500 an hour.
510
00:33:04.934 --> 00:33:06.615
Is he complaining about the work?
511
00:33:06.835 --> 00:33:09.616
Is he complaining about the work quality?
512
00:33:10.897 --> 00:33:12.758
Not so much that he's complaining about.
513
00:33:13.339 --> 00:33:16.861
He doesn't think it's worth what he paid for the time.
514
00:33:16.921 --> 00:33:20.503
I said, well, sir, you had every chance to get other estimates and so forth.
515
00:33:20.523 --> 00:33:22.364
I said, we do not work by the hour.
516
00:33:23.052 --> 00:33:24.094
We worked by the job.
517
00:33:24.134 --> 00:33:25.898
If we worked by the hour, we wouldn't be in business.
518
00:33:26.339 --> 00:33:31.509
He is so caught up on, like, it was like $1,500 an hour.
519
00:33:31.529 --> 00:33:32.832
Lawyers don't even make that.
520
00:33:33.407 --> 00:33:35.689
And I'm like, we do not charge by the hour.
521
00:33:35.729 --> 00:33:36.489
We charge by the job.
522
00:33:36.509 --> 00:33:44.495
Yeah, a lawyer sits inside his office and does not have a whole bunch of trucks and shop space and insurance and workers' compensation and trailers and equipment.
523
00:33:44.515 --> 00:33:47.256
So, like, you know, the comparisons go back and forth.
524
00:33:47.276 --> 00:33:48.938
You will always get customers like this.
525
00:33:48.998 --> 00:33:52.360
And it's so easy to get in this knick-knack back and forth with them.
526
00:33:52.880 --> 00:33:56.783
And more importantly, all the mental energy you have spent just thinking about this.
527
00:33:57.143 --> 00:34:00.886
The bottom line is a negative review from this customer will not impact your business in a negative way.
528
00:34:01.710 --> 00:34:10.378
The reason is, is because the customer's only complaining about price and you are transparent about your prices, no other future customer will care.
529
00:34:11.559 --> 00:34:14.741
If he went on there and said that you did a bad job, very different, right?
530
00:34:15.002 --> 00:34:20.186
And I would say that if you've tried to give money back, you've tried to accommodate, like you've done everything you can and you're going to make mistakes.
531
00:34:20.446 --> 00:34:22.428
But in this case, you have not made a mistake.
532
00:34:22.809 --> 00:34:23.809
The quality of the job is fine.
533
00:34:24.110 --> 00:34:27.653
They mostly have buyer's remorse because they figured out the fact that you make money.
534
00:34:29.047 --> 00:34:29.807
And then, so.
535
00:34:29.907 --> 00:34:30.187
Right.
536
00:34:30.287 --> 00:34:31.008
Go ahead.
537
00:34:31.688 --> 00:34:33.568
Go ahead.
538
00:34:34.509 --> 00:34:38.270
Ultimately, when it comes to an online review, the only thing I'm caring about is the future customer.
539
00:34:38.490 --> 00:34:44.312
I do not care about the existing customer because I have already likely exhausted everything possible to make them happy.
540
00:34:45.135 --> 00:34:48.897
And assuming you have done that, which you have, you got to just let the chips fall where they are.
541
00:34:49.397 --> 00:34:55.601
Because if they go online and spew, your response to them is not going to be bringing up everything you've done, all the refunds.
542
00:34:55.841 --> 00:35:00.043
You're going to be responding with the future customer in mind that's going to read that review.
543
00:35:00.323 --> 00:35:05.886
And as a customer that would read that review, I don't care if that person thinks they overpaid.
544
00:35:06.386 --> 00:35:09.188
If the quality of work is good and I'm looking at my estimate from you.
545
00:35:10.087 --> 00:35:13.490
And it is saying that it's going to cost $1,500 to do this task.
546
00:35:13.810 --> 00:35:16.673
I am judging $1,500 versus the problem that I have in your solution.
547
00:35:17.554 --> 00:35:21.397
And so there are going to be some people that will not understand that they are paying to solve a problem.
548
00:35:21.477 --> 00:35:22.658
They are not paying you per hour.
549
00:35:22.678 --> 00:35:24.480
There are going to be people like that.
550
00:35:25.701 --> 00:35:26.982
Do not worry about their online review.
551
00:35:27.022 --> 00:35:27.703
Yeah, and that's where...
552
00:35:29.477 --> 00:35:34.664
Yeah, I mean, this dude's probably going to put – because his emails are, like, two books long, man.
553
00:35:34.684 --> 00:35:35.446
I mean, it's crazy.
554
00:35:35.466 --> 00:35:38.009
And he's probably going to put, like, a two-book, you know, review.
555
00:35:38.049 --> 00:35:41.014
I mean, and, like, there was, like, a little drip coming from the gutter.
556
00:35:41.054 --> 00:35:43.958
Like, he took a picture of that when it was, like, a heavy rain.
557
00:35:44.319 --> 00:35:44.860
And then, like –
558
00:35:45.712 --> 00:35:48.554
Like stupid stuff that he's just nitpicking on every little thing.
559
00:35:48.574 --> 00:35:50.416
And then he was sending me pictures of this stuff.
560
00:35:50.456 --> 00:35:51.917
I'm like, dude, you got to be kidding me.
561
00:35:52.217 --> 00:35:52.797
Yeah.
562
00:35:52.817 --> 00:35:53.097
I mean.
563
00:35:53.498 --> 00:35:54.338
I would let it go.
564
00:35:54.498 --> 00:35:55.799
I would let the chips fall where they are.
565
00:35:55.819 --> 00:35:57.461
You've done everything you possibly can.
566
00:35:57.841 --> 00:35:59.902
At the end of the day, there's going to be people you cannot make happy.
567
00:36:00.443 --> 00:36:04.165
And they will always hate the fact that you make money from them.
568
00:36:04.806 --> 00:36:07.668
And at the end of the day, they don't see all the expenses.
569
00:36:07.828 --> 00:36:09.609
There's no way you could ever.
570
00:36:10.790 --> 00:36:12.813
justify this in the eyes of that customer.
571
00:36:13.074 --> 00:36:14.656
That customer's gone, they're never coming back.
572
00:36:14.896 --> 00:36:16.919
Let's not try to save them and their relationship.
573
00:36:17.159 --> 00:36:19.623
Let's wait for the review, because most of the time they won't leave a review.
574
00:36:19.643 --> 00:36:20.444
But if they do,
575
00:36:21.542 --> 00:36:26.783
Just make sure your review response is with the future customer in mind, not them.
576
00:36:27.143 --> 00:36:39.785
It's very easy, especially because you've gone through all the drama with them, to when they post an online negative review, just to start spilling all the tea, talking about all the bad stuff they did, the pictures that were not correct, the fact that you gave them money back.
577
00:36:39.885 --> 00:36:40.565
Don't worry about that.
578
00:36:41.065 --> 00:36:47.467
It's just a function of, we want to think about the future customer, and the future customer wants to know, does this company back up their work?
579
00:36:47.887 --> 00:36:49.247
And so being able to notice, hey,
580
00:36:50.626 --> 00:36:53.248
the response back to this person freaking out over two pages.
581
00:36:53.268 --> 00:37:05.335
Like, first off, when I see a review where someone's left like three pages of text about a home service business, that person has too much time on their hands, especially if it's around a small job, but you did in four or five hours, they have too much time on their hands.
582
00:37:05.595 --> 00:37:06.856
Immediately as a customer,
583
00:37:08.373 --> 00:37:10.014
I don't even have time to read the review.
584
00:37:10.615 --> 00:37:24.149
And if the future customer is the type of person that reads a three-page huge review and then believes that person when they never said anything bad about the work that you did, but just simply the fact that you made money, I don't want that customer.
585
00:37:25.374 --> 00:37:32.019
And so it's actually sometimes a good pruning mechanism to keep bad leads out of the system and prevent people like this from ever getting back into the business.
586
00:37:32.519 --> 00:37:37.423
And so, you know, there is many, many bad reviews about Augusta Lawn Care.
587
00:37:37.483 --> 00:37:45.308
And specifically a couple websites where negative reviews are bound, they all aggregate to one account because they type in Augusta and like it pops up.
588
00:37:45.488 --> 00:37:47.590
So like every bad review is in one spot.
589
00:37:48.070 --> 00:37:51.633
And if I wanted to be on the constant negative...
590
00:37:52.468 --> 00:37:54.969
mindset that just drains me and keeps me awake.
591
00:37:55.089 --> 00:37:58.210
I just have to open up that one page and I would immediately lose sleep.
592
00:37:58.450 --> 00:38:00.991
I would immediately not be thinking about how to improve the business.
593
00:38:01.011 --> 00:38:07.654
I would immediately not be thinking about my team, the next customer, the next person I can serve, or creating opportunities inside the organization.
594
00:38:07.874 --> 00:38:17.378
And so to focus on what you can control, because what you can't control is the Karens of the world and the Kens of the world that will just constantly bombard you because they just love sapping you of your attention.
595
00:38:17.858 --> 00:38:26.645
And so you're gonna have to cut ties with this person in terms of if they're gonna leave a non-anime review, fine, let them, but don't let it take over your psychology because it'll prevent you from doing a follow-up.
596
00:38:26.786 --> 00:38:32.290
It'll prevent you from pushing through and someone throwing up a random, like I gotta think about it.
597
00:38:32.550 --> 00:38:33.951
You won't push through those things
598
00:38:34.592 --> 00:38:38.333
and those objections because now you're playing defensive, you're on your heels.
599
00:38:38.633 --> 00:38:48.176
And so don't allow something like that to prevent you from being on the offensive and think about the growth of the business and the growth of your team and the growth of you being able to solve more customers' problems because it's debilitating.
600
00:38:49.036 --> 00:38:52.777
And the reason it's debilitating is because you care about the customer and you feel horrible about it.
601
00:38:52.797 --> 00:38:56.658
And the fact that you have $2,000 back, I'm not thrilled about it because it's probably all of your profit.
602
00:38:56.958 --> 00:38:58.619
However, it means that you care.
603
00:38:59.469 --> 00:39:06.730
And so just keep caring, but don't worry about the one out of a hundred that you're not gonna be able to make happy, no matter what you do.
604
00:39:07.790 --> 00:39:09.051
All right, next caller.
605
00:39:11.311 --> 00:39:11.871
Welcome to the show.
606
00:39:11.971 --> 00:39:13.311
Thank you for coming on the confession booth.
607
00:39:16.492 --> 00:39:17.252
Mike, can you hear me?
608
00:39:17.412 --> 00:39:18.132
I can, what's up?
609
00:39:19.873 --> 00:39:20.193
Awesome.
610
00:39:20.733 --> 00:39:28.214
Hey, so you might know who I am, but I've got a situation with a shop
611
00:39:29.328 --> 00:39:36.332
Um, where I put, I got to confess, I bought land, put $40,000 down.
612
00:39:37.553 --> 00:39:42.956
Uh, it wasn't, it was supposed to be where I could get my money back out of it.
613
00:39:42.976 --> 00:39:45.358
Like my initial investment and pay myself back.
614
00:39:45.978 --> 00:39:47.219
That didn't work out at all.
615
00:39:47.259 --> 00:39:47.699
Changed.
616
00:39:47.759 --> 00:39:56.164
I got started and I got into this because the small city I'm in just outside the big city of service.
617
00:39:56.772 --> 00:40:00.875
At the time, the administration wanted to say that the owner didn't have it zoned right.
618
00:40:01.155 --> 00:40:07.919
And now I've got this place built and it's like right at final inspection.
619
00:40:08.599 --> 00:40:15.063
And I was having my, I was going to have my crew leader of 10 years move in there.
620
00:40:16.324 --> 00:40:24.589
And then it's just like, I got to like looking at numbers because now this shop, like the city administration says that I can be here.
621
00:40:25.231 --> 00:40:32.674
But the owner, he's been trying to sell it and that's another reason I built, but he wants way too much for the land that I'm on.
622
00:40:32.894 --> 00:40:39.618
It's about three acres and he wants, and it's got just a 1800 square foot Kwanzaa hut with one door.
623
00:40:40.658 --> 00:40:42.859
It's actually, we're so close to 800,000.
624
00:40:42.879 --> 00:40:47.061
It's like, I want, I want to just keep this place.
625
00:40:47.701 --> 00:40:52.623
I like, but that payment would be probably, I think it was $3,500 last time I looked.
626
00:40:55.061 --> 00:40:58.483
And that would be even more down, 20% down.
627
00:40:58.983 --> 00:41:10.608
But it's just like, if I go where I should go and be close to my service area, everything's at least three to $5,000 and it's not as big.
628
00:41:10.788 --> 00:41:13.950
It's, I just, I'm scared.
629
00:41:13.970 --> 00:41:16.751
Like I can't operate it, operate out of there.
630
00:41:16.771 --> 00:41:21.393
This guy says that he'll give me one year on a lease.
631
00:41:22.215 --> 00:41:34.738
Uh, and raise my rent from 1200 to 1600, which I'm okay with that because of the security, I think, um, it's still not that long, but it's a problem I need to solve.
632
00:41:35.238 --> 00:41:48.822
But at my size, I'm trying to, you know, the office person being sales train, um, Tracy of, you know, my guy's 10 years and, you know, I've got a virtual assistant.
633
00:41:49.578 --> 00:41:53.841
Last year we did P4P service idle pilot and I built this place.
634
00:41:54.482 --> 00:41:59.706
The good side, it's got a hundred, I should have about a hundred in equity.
635
00:42:01.167 --> 00:42:11.315
But it's just, I kind of created a mess and it's like, I'm trying to find the best out.
636
00:42:11.496 --> 00:42:13.858
You're talking about equity, but then also the owner.
637
00:42:13.878 --> 00:42:15.599
Do you own the shop space right now?
638
00:42:18.545 --> 00:42:26.093
So there's two separate shop locations, the one I built and the one we've been in for three years, the one that you came and visited.
639
00:42:26.454 --> 00:42:26.754
Okay.
640
00:42:27.575 --> 00:42:40.068
And so right now, why would you not just, if the landlord pulled out from underneath you and said after your, hey, no, we're out, why could you not just go to the second shop space?
641
00:42:42.843 --> 00:42:44.885
Because it's not zoned correctly.
642
00:42:44.905 --> 00:42:46.847
And I guess I forgot to mention that.
643
00:42:46.907 --> 00:42:47.548
It's ag.
644
00:42:48.569 --> 00:42:48.909
Okay.
645
00:42:49.630 --> 00:42:50.671
And so that's the one you bought?
646
00:42:50.691 --> 00:42:52.412
I didn't think that... That's the one that you bought?
647
00:42:53.073 --> 00:42:53.273
Yep.
648
00:42:53.674 --> 00:42:55.295
Okay, and so can you get rid of that one?
649
00:42:55.576 --> 00:42:56.336
Is it useful?
650
00:42:56.657 --> 00:42:57.878
Can you use that one or not really?
651
00:42:59.439 --> 00:43:01.201
So what it is is...
652
00:43:03.243 --> 00:43:05.145
Okay, so that payment will be $3,200.
653
00:43:05.185 --> 00:43:05.445
$3,200.
654
00:43:06.703 --> 00:43:14.586
It's, and it gets my guy of 10 years that he says he can't afford himself to move 45 minutes closer.
655
00:43:14.746 --> 00:43:16.087
He moved away like four years ago.
656
00:43:16.127 --> 00:43:17.868
I tried to tell him, please don't do that.
657
00:43:18.688 --> 00:43:20.389
But he might've been planning an accident.
658
00:43:20.489 --> 00:43:23.990
I have no idea, but now he's paying for it like crazy.
659
00:43:24.270 --> 00:43:25.070
We could keep it.
660
00:43:25.391 --> 00:43:27.691
He would pay a thousand dollars a month rent.
661
00:43:28.312 --> 00:43:28.972
That was like.
662
00:43:29.655 --> 00:43:33.196
the original plan and then my rent's only $2,200.
663
00:43:33.576 --> 00:43:36.957
And then it's like, if I run fully out of there, I'm just waiting.
664
00:43:36.977 --> 00:43:40.038
I'm a target for somebody to complain.
665
00:43:40.418 --> 00:43:42.499
So why, why did we buy that land?
666
00:43:42.599 --> 00:43:43.399
Was it just a function?
667
00:43:43.419 --> 00:43:45.399
We didn't know that we couldn't operate from there.
668
00:43:47.860 --> 00:43:58.783
I just, I, I made a bad decision at the time and rushed it and it was either go pay five, six grand, uh, in a whole new area.
669
00:43:59.375 --> 00:44:04.917
and then have to drive further from my house to a shop that I'm not set up with.
670
00:44:05.958 --> 00:44:10.460
Or it was like three minutes from my house, buy some land.
671
00:44:11.000 --> 00:44:14.522
I know that I could have this issue, and now I'm paying for it.
672
00:44:14.642 --> 00:44:16.462
It was just honestly a dumb decision.
673
00:44:17.523 --> 00:44:20.844
But I was rushing it, and it's like $3,000 versus $6,000.
674
00:44:20.904 --> 00:44:21.885
Right.
675
00:44:22.225 --> 00:44:22.925
Well, here's the thing.
676
00:44:22.985 --> 00:44:26.026
Right now, your rent is actually $4,400 a month.
677
00:44:27.665 --> 00:44:30.908
Because the utility that you're actually getting is... Yeah, that's where it hits the boat.
678
00:44:31.168 --> 00:44:31.409
Right.
679
00:44:31.769 --> 00:44:38.636
And so, in my opinion, I would cut loose of number two, the ag land, as fast as possible.
680
00:44:38.836 --> 00:44:39.837
Because you know you can't use it.
681
00:44:39.857 --> 00:44:44.601
And even if you did rent it out to this employee, it's like one third of the cost that you're paying on the mortgage.
682
00:44:44.881 --> 00:44:46.163
It's like you're already upside down on it.
683
00:44:46.623 --> 00:44:52.787
And then it's a function of like, well, worst case scenario is we lose the shop space that we currently are at for $1,200 a month.
684
00:44:52.827 --> 00:45:00.113
And what's going to happen, I'm going to have to go spend $3,000 to $4,000 a month on a lease in another part of town that's probably closer to my service area.
685
00:45:00.393 --> 00:45:00.853
But guess what?
686
00:45:00.873 --> 00:45:02.875
You're already paying $4,400 per month.
687
00:45:05.516 --> 00:45:05.717
Yeah.
688
00:45:05.997 --> 00:45:09.039
So like the worst case scenario is that we... Go ahead.
689
00:45:09.399 --> 00:45:11.921
It wasn't... Oh, I'm sorry.
690
00:45:12.501 --> 00:45:14.583
I was going to tell you, originally the plan was
691
00:45:15.420 --> 00:45:22.942
I thought I was going to be kicked out of this one and I was going to plan to move everything there, fly under the radar as long as I can.
692
00:45:22.962 --> 00:45:29.984
Um, and I knew that I, from the deal I've, I've done, I should for sure get my money back.
693
00:45:30.484 --> 00:45:32.845
I probably won't see a hundred grand, you know, profit.
694
00:45:33.473 --> 00:45:35.736
But it's like, I don't even care about that.
695
00:45:35.756 --> 00:45:38.079
I just went out of the situation pretty much.
696
00:45:38.519 --> 00:45:38.659
Yeah.
697
00:45:38.719 --> 00:45:42.524
I was still going to take some time, but I mean, I would sell it as fast as possible.
698
00:45:42.764 --> 00:45:43.605
You can't use it.
699
00:45:43.725 --> 00:45:45.407
You're never going to rent it out and make a cashflow.
700
00:45:45.428 --> 00:45:48.331
So it's not like it's an investment and you're never doing agriculture.
701
00:45:48.351 --> 00:45:49.573
That'd be another distraction.
702
00:45:49.593 --> 00:45:51.535
It's like, I'd get rid of that as fast as possible.
703
00:45:51.655 --> 00:45:56.036
I would also just double down on growing the business because this is right now sapping your mind space.
704
00:45:56.656 --> 00:46:01.137
And it's like, what happens if in a year, my rent, I can't get the $1,200 a month rent.
705
00:46:01.357 --> 00:46:17.141
The worst case scenario, if the landlord doesn't renew your lease, is that you go get another shop space for three to $4,000 a month, which is already what we're paying right now, but it would be in a better part of town and probably be closer to our market and our customers, which by the way, even going from one,
706
00:46:18.681 --> 00:46:22.183
$1,200 to $4,400 a month, you can run the math very quickly.
707
00:46:22.243 --> 00:46:23.364
Okay, that's what?
708
00:46:23.504 --> 00:46:24.224
$3,000 more?
709
00:46:24.865 --> 00:46:25.585
$3,200 more?
710
00:46:26.125 --> 00:46:38.712
Well, if you have, let's just call it six employees, we could very well make a lot of sense of actually spending $3,000 more if we're 15 or 20 minutes closer to all of our customers, just in terms of drive time.
711
00:46:39.112 --> 00:46:41.835
And so I think the worst case scenario is not that bad.
712
00:46:42.135 --> 00:46:48.441
But the thing is right now you are finding a dragon that doesn't exist.
713
00:46:48.842 --> 00:46:53.987
And doing that in the past and crossing a bridge before you got there is what caused you to buy this land.
714
00:46:54.507 --> 00:47:02.334
And so instead of fighting the dragon in front of us, we fight the boogeyman that we can't see and the fight the ghost that we just inevitably is going to happen down the road.
715
00:47:02.794 --> 00:47:04.656
And what we do is we make dumb decisions because of it.
716
00:47:04.976 --> 00:47:09.160
So you went and bought this ag land because you were afraid this rent was going to go away, this shop space.
717
00:47:09.440 --> 00:47:09.820
It didn't.
718
00:47:10.636 --> 00:47:15.818
And so let's not double down on that by getting concerned about keeping this land when we know we can't even use it.
719
00:47:16.098 --> 00:47:20.399
Cut your losses by the fact that we fought a boogeyman that didn't exist, because we still have this shop space.
720
00:47:20.599 --> 00:47:25.801
And I happen to believe if in a year, it comes this time, and the landlord's like, hey, I wanna get rid of you.
721
00:47:25.841 --> 00:47:27.342
And you say, hey, can I give you $1,500 per month?
722
00:47:29.117 --> 00:47:29.737
i.e.
723
00:47:29.897 --> 00:47:32.138
a 25% increase in rent, they'd be like, you know what?
724
00:47:32.218 --> 00:47:33.299
Let's go ahead and renew that lease.
725
00:47:33.579 --> 00:47:35.600
And now all of a sudden, this does not become a problem.
726
00:47:35.960 --> 00:47:40.122
And so many times, if we even break this down, let's look at this.
727
00:47:40.662 --> 00:47:48.545
So if we have $3,200 per month right now, our whole problem, the worst case scenario is this.
728
00:47:48.845 --> 00:47:51.527
Landlord kicks us out and we have to go to another shop space.
729
00:47:52.107 --> 00:47:53.267
And that is $3,200 per month.
730
00:47:55.750 --> 00:47:56.411
All right.
731
00:47:56.431 --> 00:47:57.171
So we run $3,200.
732
00:47:57.471 --> 00:47:58.432
We times that by 12.
733
00:47:58.752 --> 00:48:04.397
That equals, let's see here, $30,000, $36,000, $38,400.
734
00:48:04.557 --> 00:48:04.957
Is that right?
735
00:48:05.317 --> 00:48:05.878
$38,000.
736
00:48:06.078 --> 00:48:07.779
Something like this.
737
00:48:08.319 --> 00:48:12.642
This is the worst case scenario of you getting kicked out of your current spot in a year.
738
00:48:13.803 --> 00:48:16.205
You have an $800,000 and a revenue business.
739
00:48:16.826 --> 00:48:17.426
All right.
740
00:48:17.446 --> 00:48:17.866
$800,000.
741
00:48:17.886 --> 00:48:18.126
$800,000.
742
00:48:18.527 --> 00:48:21.349
Meaning this constitutes about 5% of revenue.
743
00:48:23.182 --> 00:48:31.765
Meaning I would be building the business in a way which I just need to raise prices by 5% and this whole problem goes away if I can raise prices by 5%.
744
00:48:32.765 --> 00:48:45.830
And so the vast majority of us are facing issues inside of our business, that if we just built a better business and then we're able to raise prices because we had better service, we had better quality, we had a better website, better systems, better procedures, better software, answering the phone, better communication.
745
00:48:46.190 --> 00:48:49.431
If we just did those things, this would not be a problem.
746
00:48:50.211 --> 00:48:51.472
And this is the worst case scenario.
747
00:48:51.512 --> 00:49:02.557
And by the way, I also think you'd probably end up saving about 20K just in the fact that this new shop space in the worst case scenario would be closer to your customers.
748
00:49:02.937 --> 00:49:09.680
And you'd save in payroll and extra time driving back and forth from the shop space that is currently far away from all your customers.
749
00:49:10.360 --> 00:49:14.981
And so many times when you play out the worst case scenario, it's a small fraction of the percentage of your business.
750
00:49:15.382 --> 00:49:20.043
And so that's why I just focus on growing the business, making it more profitable, having a better team.
751
00:49:20.163 --> 00:49:25.905
The simple stuff, because the actual boogeyman that you're facing is 5% of revenue.
752
00:49:26.045 --> 00:49:26.545
5% of revenue.
753
00:49:26.945 --> 00:49:33.067
I have seen people add whole lines of service and build out new brands and build up websites and a whole new ways of doing their business.
754
00:49:33.427 --> 00:49:35.188
And it adds like three, four, 5% of the revenue.
755
00:49:36.686 --> 00:49:46.169
versus just focusing on the majority where all the good stuff is happening and just making it better so they can raise prices, making it better so it's more efficient, making it better so they retain their team more.
756
00:49:48.069 --> 00:49:49.350
All right, great call.
757
00:49:49.490 --> 00:49:51.370
Next one coming in, coming in hot.
758
00:49:51.710 --> 00:49:52.410
Welcome to the show.
759
00:49:52.490 --> 00:49:53.331
Thank you for coming on.
760
00:49:56.272 --> 00:49:57.472
Hey man, how's it going?
761
00:49:58.452 --> 00:50:04.734
Yeah, so we built our first location and it took me like four weeks to get to
762
00:50:08.368 --> 00:50:09.589
You're breaking up a little bit.
763
00:50:09.609 --> 00:50:10.650
You're breaking up a little bit.
764
00:50:11.030 --> 00:50:13.512
I don't know if you can get to a better spot.
765
00:50:16.394 --> 00:50:16.774
Can you hear me?
766
00:50:17.014 --> 00:50:17.434
I can hear you.
767
00:50:17.454 --> 00:50:17.875
Yeah, go ahead.
768
00:50:17.915 --> 00:50:18.475
Let's try it again.
769
00:50:18.775 --> 00:50:19.115
Hello?
770
00:50:20.977 --> 00:50:21.937
Okay, can you hear me now?
771
00:50:22.097 --> 00:50:22.338
Yes.
772
00:50:24.839 --> 00:50:25.140
Okay.
773
00:50:26.060 --> 00:50:30.964
So first location got to 900K.
774
00:50:31.424 --> 00:50:34.386
And then we just built our second location.
775
00:50:34.446 --> 00:50:37.088
And within the first four months, we hit...
776
00:50:37.935 --> 00:50:42.039
This month we'll do 130K in the second location within the first four months.
777
00:50:44.401 --> 00:50:47.684
The goal is to get to $11.2 million in revenue.
778
00:50:47.704 --> 00:51:02.036
I guess my question is like, with production at like around a million dollars in revenue, do you think there's a way to do it without a production manager and just keep that profit?
779
00:51:02.777 --> 00:51:05.339
Like I'm just right now kind of in between like,
780
00:51:06.486 --> 00:51:31.362
either systematizing it to the point where it's like just super efficient without a production manager or like i hire this overhead guy which we have in the first location as a production manager so i'm kind of stuck in between that right now um and what's the most efficient way to do that you know so if you don't have a production manager who's going to like lead the crew who's that
781
00:51:34.064 --> 00:51:44.473
Yeah, I guess my thinking is like these guys should be able to lead themselves in a sense of like if they're getting 20% of the job, you know what I mean?
782
00:51:44.493 --> 00:51:47.996
Like most of them are making $45 to $50 an hour right now.
783
00:51:50.038 --> 00:51:54.502
Like my thought was like, what is the production manager actually doing?
784
00:51:55.142 --> 00:51:59.606
You know, because in our first location we have one and he's great, but it's like,
785
00:52:00.730 --> 00:52:07.153
If the system was set up so proper, would they be actually able to do the same thing without that overhead guy?
786
00:52:07.693 --> 00:52:08.433
Here's my question.
787
00:52:08.573 --> 00:52:10.194
On that first location, I have two questions.
788
00:52:10.574 --> 00:52:18.838
First off, do you think the current production manager at the first location increases the efficiency of the crew by 10%?
789
00:52:18.878 --> 00:52:22.980
Yeah, of course.
790
00:52:23.040 --> 00:52:23.340
Yeah.
791
00:52:23.660 --> 00:52:23.920
Okay.
792
00:52:23.940 --> 00:52:25.221
So that was like an of course.
793
00:52:25.361 --> 00:52:27.141
So I was looking for how much you reacted to that.
794
00:52:27.582 --> 00:52:28.342
That's their wages.
795
00:52:29.823 --> 00:52:42.232
And so although you could create a system to probably get rid of the production manager, I have a feeling that removing that production manager from location one would reduce efficiency by less than or more than 10%.
796
00:52:43.092 --> 00:52:44.813
And if you do that, that's $90,000.
797
00:52:47.355 --> 00:52:55.921
And especially when it comes to technicians, regardless of how much they're being paid, we have seen consistently a great manager can get 20% to 30% more discretionary effort from that team.
798
00:52:57.515 --> 00:52:58.775
And so it sounds like you have that person.
799
00:52:58.815 --> 00:53:13.020
So the next question is for that production manager, the, the, because I'm bringing it, I'll bring a guy out as a, from a lead tech to production manager, but the issue is right now is getting 20% of the job.
800
00:53:13.100 --> 00:53:13.380
Right.
801
00:53:13.900 --> 00:53:23.284
And then the production manager, like, I just want to find a really good incentivization structure from when we go to like 10 locations or the production manager itself.
802
00:53:23.364 --> 00:53:26.545
So one thing that was working well in the budget was 10%.
803
00:53:28.505 --> 00:53:55.090
of overall revenue like it does kind of work out i know you probably hate that for a production manager but like how do you incentivize the production manager the same way that you incentivize the tech so that he's put like you know what i mean so he's pushing it too yeah the challenge becomes if there is no one to do quality control um because if everyone's incentivized based on revenue you will make more revenue but what can hurt is the long-term brand equity of the business
804
00:53:56.112 --> 00:54:00.196
And so it also can hurt the long-term profitability of the business.
805
00:54:00.657 --> 00:54:06.963
And so right now, on the $900,000 first location, what's the profit percentage per year average?
806
00:54:09.405 --> 00:54:12.908
Yeah, the profit, I would say we're at 22%.
807
00:54:14.877 --> 00:54:15.097
Okay.
808
00:54:15.638 --> 00:54:17.962
So that's the number that you care about.
809
00:54:17.982 --> 00:54:22.088
When you leave there every day, the only number you care about is that profit percentage.
810
00:54:22.829 --> 00:54:30.760
And if the production manager is a huge piece in the puzzle as to whether or not that location is profitable, I want them to think about profit and I want the techs to think about revenue because I'm
811
00:54:30.760 --> 00:54:43.010
And with the technicians thinking constantly about being efficient, doing high quality jobs, there's not callbacks, but I need someone thinking about profit in terms of equipment maintenance, in terms of shop and overhead expenses.
812
00:54:43.270 --> 00:54:44.791
Otherwise, those things will just go on a tear.
813
00:54:45.031 --> 00:54:49.255
Like right now, how is this production manager being incentivized in terms of bonuses?
814
00:54:51.391 --> 00:55:05.229
So the first location, he's like, he's, he's at, um, he's at a salary plus, um, plus 10% of the profit of the business, um, paid quarterly.
815
00:55:05.329 --> 00:55:10.135
So the only thing is in the second location, I'm just thinking like, I'm going to take this tech from.
816
00:55:10.851 --> 00:55:14.894
you know, 20% like production pay, right?
817
00:55:14.914 --> 00:55:17.976
He's making like probably eight to nine grand a month right now.
818
00:55:18.477 --> 00:55:21.839
And then I'm going to drop them into something where it's more of a quarterly thing.
819
00:55:21.899 --> 00:55:24.661
So what I was thinking is just tweaking that to monthly.
820
00:55:24.681 --> 00:55:35.649
Um, but yeah, the first guy gets paid 10% of profit and then he owns like 5% Phantom stock and then he gets paid around like 75 grand a year.
821
00:55:36.501 --> 00:55:42.567
Okay, so Phantom Stock is sometimes tough with home services if you're not going to exit.
822
00:55:42.848 --> 00:55:44.109
Are you planning to exit down the road?
823
00:55:46.672 --> 00:55:52.838
To be honest, man, it was more of a thing where I just really wanted him to feel like he was part of it.
824
00:55:52.918 --> 00:55:53.579
You know what I mean?
825
00:55:53.859 --> 00:55:54.660
Okay.
826
00:55:55.120 --> 00:55:57.062
So it was more of that kind of thing.
827
00:55:57.102 --> 00:55:59.545
I would say I'm not sure about the...
828
00:56:00.701 --> 00:56:29.756
the five-year plan if we want to exit but i do want to make it to our goal is 11 million in five years so yeah so the five five percent phantom i think i would explain that better to a a production manager because right now to them that doesn't mean anything they don't even know what that means likely and if they do it doesn't actually move the needle for them because unless you're planning to exit phantom equity does absolutely nothing because they have no ability to make decisions in the business in terms of from an equity perspective i would say this i think he knows that
829
00:56:30.016 --> 00:56:30.596
Cool.
830
00:56:31.036 --> 00:56:35.739
So like, I think you have a great model and I think trying to tweak it would be crazy.
831
00:56:35.819 --> 00:56:44.223
If you're doing 22% profit margin and in four months, you're able to spin up the second location, which we consistently see, this is where you start having trouble.
832
00:56:44.303 --> 00:56:47.444
Cause like now you leave the first location and you get a second manager.
833
00:56:47.704 --> 00:56:48.865
That's always the hardest hire.
834
00:56:49.695 --> 00:56:52.277
Because now that person will be compared to your first production manager.
835
00:56:52.557 --> 00:56:57.481
And now you have to become a leader of leaders, which is now two people, not just like someone underneath you in production manager.
836
00:56:58.101 --> 00:57:02.345
But the fact is you have built a model that gets you to 120K per month in four months.
837
00:57:02.365 --> 00:57:03.565
Is that mostly recurring revenue?
838
00:57:06.047 --> 00:57:07.829
It's no recurring revenue.
839
00:57:07.889 --> 00:57:10.351
It's just soft washing roofs.
840
00:57:10.791 --> 00:57:11.611
Okay.
841
00:57:11.712 --> 00:57:13.273
So I think you've built an excellent model.
842
00:57:13.373 --> 00:57:18.577
And if you're able to figure out making it more recurring revenue, it would be phenomenal.
843
00:57:19.517 --> 00:57:21.019
Like really, really good.
844
00:57:21.459 --> 00:57:26.904
Because right now you've been able to figure out how to get to where they can make profit quickly.
845
00:57:27.124 --> 00:57:32.770
The biggest problem is if it took you four months and you need like $15,000 a month in revenue, there's no profit to give the person.
846
00:57:33.230 --> 00:57:40.718
And when it comes to like going from quarterly to monthly distributions, for example, or like profit sharing, that comes down to whether or not you're consistently profitable.
847
00:57:41.078 --> 00:57:45.781
And if you're consistently profitable every month, then I'm cool with monthly distributions or monthly profit sharing.
848
00:57:46.161 --> 00:57:54.406
If there's ups and downs or there's three or four months of the year where you're negative, that's where it gets really hard to give monthly distributions because they just all of a sudden don't see a bonus for four months.
849
00:57:54.966 --> 00:57:56.327
And they're used to that monthly bonus.
850
00:57:56.627 --> 00:58:01.470
And you don't plan on it, but they plan out from a budgeting perspective of what they think their bonus per month is going to be.
851
00:58:02.270 --> 00:58:07.957
And so I would only switch from quarterly to monthly profit sharing if you're consistently profitable every month.
852
00:58:08.317 --> 00:58:10.620
But at 120 per month, that's really good.
853
00:58:10.880 --> 00:58:15.485
It comes down to whether or not you're making, you know, 30 or 40,000 in the winter.
854
00:58:15.505 --> 00:58:16.847
And now all of a sudden you have negative months.
855
00:58:19.472 --> 00:58:36.753
yeah yeah that makes sense yeah so another question i quickly quickly quickly had for you is like what's your thoughts on like the cac being high and then raising like an average ticket like adding like gutter guards or something just to raise raise the average ticket so you can spend more for the customer
856
00:58:37.800 --> 00:58:39.081
Yeah, I'm a fan of that.
857
00:58:39.261 --> 00:58:40.462
Would you increase average?
858
00:58:40.962 --> 00:58:41.142
Yeah.
859
00:58:41.342 --> 00:58:42.003
Yeah, yeah.
860
00:58:42.183 --> 00:58:43.223
Can you touch on that, please?
861
00:58:43.363 --> 00:58:46.525
Yeah, I love increasing average ticket on any project.
862
00:58:46.745 --> 00:58:50.188
What I would prefer is we increase the quality of the revenue.
863
00:58:50.888 --> 00:58:59.353
I would rather you do $70,000 a month in revenue, but it's mostly recurring, or a big chunk of it is recurring, compared to $120,000 per month of one-time projects.
864
00:58:59.693 --> 00:59:02.775
Because it's very difficult to give...
865
00:59:02.795 --> 00:59:07.178
If you're going to start duplicating these and copying and pasting this model, you prove that you can scale quickly...
866
00:59:07.638 --> 00:59:22.430
But can you figure out a model where after four months, you have 120K of one-time projects, but you also have 20,000 a month of recurring revenue that you've been upselling customers on where you come back annually and do cleaning or maintenance or something of the sort?
867
00:59:22.890 --> 00:59:28.674
Because that business is much less likely to have downturns during the off season.
868
00:59:28.815 --> 00:59:32.938
And it's easier to find the operations manager that's not constantly on the hunt for new jobs.
869
00:59:33.943 --> 00:59:42.028
And so although increasing the average ticket would be awesome, the highest leverage thing to do is to create recurring revenue in this model.
870
00:59:44.250 --> 00:59:49.713
Yeah, and then for Augusta, you guys are just, is it just like before sales process?
871
00:59:49.733 --> 00:59:51.935
Like it's just, you guys are hitting them with the recurring...
872
00:59:52.648 --> 00:59:57.650
revenue ask like every part of the sales touch point, like the sales motion.
873
00:59:58.050 --> 01:00:06.733
Yeah, so if someone's asking for a one-time project, you could in the estimate give them the option for the maintenance of that or annual inspection or tie the warranty to
874
01:00:08.954 --> 01:00:10.576
them getting on the annual inspection.
875
01:00:10.816 --> 01:00:21.027
It's like, hey, we come out annually, we do this cleaning, and if you do that, you also get a warranty, no money asked, no cost to you, we will replace whatever on the work we did originally.
876
01:00:21.468 --> 01:00:29.437
And so you sell as a warranty, you sell it as a guarantee, you sell it as maintenance that they're gonna need so they don't have to do it again in X amount of years.
877
01:00:30.527 --> 01:00:38.554
And you can grease that at the very beginning of the process when you are making the original sale, when you are giving them the price for the one-time job.
878
01:00:38.894 --> 01:00:41.236
But most of the time, that's going to happen after they've paid.
879
01:00:41.276 --> 01:00:41.857
They're happy.
880
01:00:42.077 --> 01:00:43.618
You've proved that you do a good job.
881
01:00:43.979 --> 01:00:49.063
And then you show them the math of, hey, doing this every five years, here's what it's going to cost you.
882
01:00:49.123 --> 01:00:51.785
Doing it every year is going to cost you the exact same.
883
01:00:52.045 --> 01:00:53.186
But now you're going to have a warranty.
884
01:00:53.206 --> 01:00:54.387
We're going to have a guarantee.
885
01:00:54.508 --> 01:00:54.988
It's going to look good.
886
01:00:55.008 --> 01:00:56.790
You're not going to have to wait for it to look bad again.
887
01:00:56.810 --> 01:00:57.350
Yeah.
888
01:00:57.570 --> 01:01:01.131
And now you have some resemblance of a recurring revenue model.
889
01:01:01.411 --> 01:01:04.152
And so if you have a $5,000 job, I'm just making stuff up.
890
01:01:04.592 --> 01:01:13.835
If you've got $5,000 job that customer just paid for my whole objective, this business gets three to four times more valuable and much more scalable.
891
01:01:14.235 --> 01:01:16.696
And you'll have way more confidence in copying and pasting this.
892
01:01:17.096 --> 01:01:18.936
If you can turn this $5,000 job into a $499 job,
893
01:01:21.877 --> 01:01:24.099
annual inspection when you come back.
894
01:01:24.459 --> 01:01:24.979
That's crazy.
895
01:01:25.019 --> 01:01:33.186
Well, if the gutters are going to last 20 years and I can make $500 per year on that, I made $10,000 extra.
896
01:01:33.526 --> 01:01:48.057
And so although I could try to upsell this $5,000 person to gutter guards, get them to 7,000, the real moneymaker in the long term is tripling the amount they give me from 5,000 to 15,000 because I get them into this annual package.
897
01:01:48.537 --> 01:01:50.097
Now, I would love to get them to quarterly.
898
01:01:50.178 --> 01:01:51.298
I'd love to get them into monthly.
899
01:01:51.658 --> 01:01:54.479
I'd love to increase their occurrence as much as possible.
900
01:01:55.339 --> 01:02:00.921
I'm just giving the example of the quality of the revenue is far more important to me than the average ticket.
901
01:02:01.621 --> 01:02:05.302
And this whole model that he's built is phenomenal.
902
01:02:05.502 --> 01:02:09.743
The fact that in four months you can get to over six figures per month is just keep doing what you're doing.
903
01:02:09.943 --> 01:02:12.204
Like, don't figure out how to try to cut out your production manager.
904
01:02:12.504 --> 01:02:15.125
Just keep doing what you're doing with a 22% margin business.
905
01:02:15.545 --> 01:02:16.425
Copy and paste this.
906
01:02:16.925 --> 01:02:22.589
However, there's this big asterisk when I see one-time work because that can dry up very quickly.
907
01:02:22.729 --> 01:02:31.975
Give me a recession, this production manager going down, them losing the ability to sell, them getting distracted with something in life, and all of a sudden, if my revenue drops in three weeks, it's hard.
908
01:02:32.735 --> 01:02:37.157
I can, my revenue can drop on a recurring location, recurring revenue model.
909
01:02:37.537 --> 01:02:40.978
It can drop over the course of a few months if my general manager starts to check out.
910
01:02:41.278 --> 01:02:41.699
It can.
911
01:02:42.359 --> 01:02:49.101
However, it doesn't, it can't happen like a week of them being bad, which is the case when I have to kill to eat every single job.
912
01:02:49.582 --> 01:02:55.864
If I have to keep killing and eating $5,000 jobs, I'm just on this constant treadmill of customer acquisition costs, sell them a $5,000 thing.
913
01:02:56.184 --> 01:02:58.165
Customer acquisition costs, sell them a $5,000 thing.
914
01:02:58.445 --> 01:03:00.466
If I can instead get the customer,
915
01:03:01.486 --> 01:03:03.388
Sell them something that they constantly are coming back for.
916
01:03:03.428 --> 01:03:05.530
I can get the next customer and build on top of that revenue.
917
01:03:05.790 --> 01:03:07.171
And yes, it'll take, it'll be slower.
918
01:03:07.631 --> 01:03:11.695
You're not going to build $120,000 per month of recurring revenue business in four months.
919
01:03:12.135 --> 01:03:17.800
But if you can build this as one-time jobs, but then sell them into something else, you can sell them into a recurring maintenance.
920
01:03:18.020 --> 01:03:23.244
You can sell them into a warranty or a guarantee and get this to $20,000, $30,000 a month in recurring revenue.
921
01:03:23.504 --> 01:03:28.449
The quality of that $20,000 or $30,000 a month revenue is far higher than $100,000 of one-time projects.
922
01:03:32.322 --> 01:03:34.963
Next caller, welcome to the confession booth.
923
01:03:35.864 --> 01:03:36.624
Welcome to the show.
924
01:03:36.644 --> 01:03:37.765
Oh, it's still coming in.
925
01:03:38.405 --> 01:03:38.885
It's loading.
926
01:03:40.246 --> 01:03:40.726
Incoming.
927
01:03:41.106 --> 01:03:42.387
The confession booth is taking...
928
01:03:42.607 --> 01:03:43.007
There it is.
929
01:03:43.367 --> 01:03:44.027
Welcome to the show.
930
01:03:44.067 --> 01:03:46.909
Hi, how's it going?
931
01:03:47.089 --> 01:03:47.649
Fantastic.
932
01:03:47.849 --> 01:03:48.469
What can I help with?
933
01:03:50.550 --> 01:03:53.252
Yeah, so I have a couple questions.
934
01:03:53.472 --> 01:03:57.834
If it's okay, if I just kind of lay some framework down for you first, is that all right?
935
01:03:57.894 --> 01:03:58.274
Go for it.
936
01:04:00.310 --> 01:04:25.008
okay great so i i'm going to be hiring an office manager or a virtual assistant assistant super qualified starting june 1st right now i have two full-time guys and two part-time guys um and we're running one crew a day pretty much um and then sometimes i say probably twice three times a week we'll run two crews or myself or one of the business partners will get out and run a crew for projects or overflow mowing or whatever's left
937
01:04:25.737 --> 01:04:49.898
doing between i'd say 14 to 20 properties a day four times a week right now we're generating somewhere around 750 to a thousand dollars in revenue a day for mowing we're usually doing one larger project coupled with a few smaller sort of like bed clean outs that i contracted at the beginning of the season a large part of my question has to actually do with these contracts because i feel like it's time to raise prices we're kind of in this place where our asset capacity
938
01:04:50.581 --> 01:05:09.236
would allow us to run two crews pretty consistently we don't have the manpower and i've held off on sales i felt very comfortable selling jobs not having any trouble finding leads closing leads and kind of getting the ball rolling on that side but um my concern is should i
939
01:05:10.015 --> 01:05:14.878
completely pack out asset capacity first, or should I raise prices?
940
01:05:14.998 --> 01:05:25.404
My concern with this is that our current books are showing that we were somewhere around 30% to 40% profitable last year with right at $300,000 in revenue in our first year.
941
01:05:25.965 --> 01:05:28.867
However, we don't have the money to show for that.
942
01:05:28.907 --> 01:05:33.770
We don't actually have that money sitting and available to use or utilize.
943
01:05:33.810 --> 01:05:37.512
We're a cash flow business that's floating somewhere around, I would say,
944
01:05:38.412 --> 01:05:45.196
$2,000 a week from week to week after payroll and after, you know, salaries are paid and all of that jazz.
945
01:05:45.597 --> 01:05:49.099
My hopes are that adding this is going to free up time for me to sort of.
946
01:05:49.479 --> 01:05:53.041
Get doubled down on focusing on systems and sales, et cetera, but.
947
01:05:53.721 --> 01:05:56.863
No, with where we're at right now, it's smarter to go ahead and just.
948
01:05:57.083 --> 01:06:03.207
Jack up our prices and lose those customers like I know you talk about often, or if we should be focusing on.
949
01:06:03.907 --> 01:06:05.108
On capacity.
950
01:06:06.901 --> 01:06:09.382
So right now, how much cash do you have in the business?
951
01:06:11.944 --> 01:06:16.528
Right now, after payroll this week, we'll have probably $3,500 sitting there that's free.
952
01:06:17.308 --> 01:06:31.158
And we have roughly, I know that on this call I should notice, but I think we have about roughly $1,000 to $1,500 in monthly expenses between CRM, tax accounting and bookkeeping,
953
01:06:31.900 --> 01:06:37.547
and there's another fee there that's escaping me now, but it's roughly $1,500 in expenses.
954
01:06:37.647 --> 01:06:39.629
So this all comes down to your risk tolerance.
955
01:06:40.010 --> 01:06:41.251
If you're pro-growth,
956
01:06:42.078 --> 01:06:42.578
You could do it.
957
01:06:43.458 --> 01:06:51.101
Do I think on a 300,000 annual revenue business with $3,500 of cash in the bank, we should be spending that cash for growth?
958
01:06:51.241 --> 01:06:54.302
No, from my personal risk assessment.
959
01:06:54.882 --> 01:07:04.486
But if you're like, hey, I just wanna grow this thing and I got tons of leads and I just need to go get a truck, you could probably spend a couple thousand dollars on a truck and a down payment and get some debt.
960
01:07:05.246 --> 01:07:07.647
That'd be very pro-growth and very pro-risk.
961
01:07:08.305 --> 01:07:13.449
And so it really comes down to when you go to sleep at night, do you worry about how much cash you're gonna make?
962
01:07:13.609 --> 01:07:14.770
I would, but you might not.
963
01:07:18.012 --> 01:07:19.413
Yeah, I definitely am.
964
01:07:19.553 --> 01:07:22.035
I mean, I've got myself and two other partners
965
01:07:22.718 --> 01:07:30.722
One of the partners is taking a salary because of his investment, but isn't always available to actually generate revenue.
966
01:07:31.082 --> 01:07:33.043
I am the managing partner.
967
01:07:33.163 --> 01:07:35.244
I'm operating everything, hiring, firing.
968
01:07:35.264 --> 01:07:37.085
Most of the systems are built on my back.
969
01:07:37.806 --> 01:07:40.367
So cash flow is super important to me to kind of get ahead of that.
970
01:07:40.747 --> 01:07:45.930
My concern with raising prices, and I think that raising them 20% to just try and be aggressive,
971
01:07:46.310 --> 01:07:47.671
you know, would definitely help us.
972
01:07:48.032 --> 01:08:00.242
But at the beginning of the season, I used, we used Jobber, and at the beginning of the season, I took the optional line item tool and basically created a menu of optional services for our customers with everything that we offer on it.
973
01:08:00.663 --> 01:08:06.728
And I've got, you know, probably 160 active customers, I would say 90 to 100 of those are reoccurring.
974
01:08:07.148 --> 01:08:09.150
And there's a lot of services on there, such as,
975
01:08:09.838 --> 01:08:20.869
winterization startups, bed maintenance, some light tree trimming, just like maintenance services that are on that list that I'm feeling are probably underpriced.
976
01:08:21.129 --> 01:08:30.178
And some of our timing has been off, waiting a little too long to get started on some of those projects or just getting bogged down with people getting sick or whatever that might be, because we're obviously a young business.
977
01:08:30.732 --> 01:08:34.036
What are your thoughts on raising prices on all those services?
978
01:08:34.517 --> 01:08:42.907
The contract doesn't say anything about a price lock, but it also doesn't say anything about our freedom and ability to raise prices if we want to.
979
01:08:43.287 --> 01:08:49.955
And I'm just not I'm just curious your thoughts on whether that's a disingenuous thing to do, if it's a smart move, if we wanted to go that route and what you think.
980
01:08:50.835 --> 01:08:55.296
Yeah, like to me, I say we raise prices across the board by at least 20%.
981
01:08:55.676 --> 01:08:56.696
The reason for that is this.
982
01:08:57.376 --> 01:09:01.717
You are saying we are, we are, we do, we have plenty of demand.
983
01:09:02.497 --> 01:09:03.418
We have plenty of demands.
984
01:09:03.678 --> 01:09:05.398
So we have demand over here.
985
01:09:05.818 --> 01:09:07.178
We're getting leads like crazy.
986
01:09:07.478 --> 01:09:09.359
I'm gonna go on a limb and say you're booked out.
987
01:09:10.119 --> 01:09:12.079
And if you wanted more work, you can get more work tomorrow.
988
01:09:12.139 --> 01:09:12.599
Is that right?
989
01:09:14.620 --> 01:09:15.300
Yeah, absolutely.
990
01:09:15.320 --> 01:09:17.080
I have a sales background, it's very easy to do.
991
01:09:17.881 --> 01:09:19.721
Are you currently spending money on marketing?
992
01:09:22.023 --> 01:09:23.384
Very, very, very little.
993
01:09:23.744 --> 01:09:24.785
I built our website.
994
01:09:24.885 --> 01:09:25.466
It functions.
995
01:09:25.486 --> 01:09:30.850
We get a couple weeks from there, Facebook, and then we pay for some tax, but I have it on the lowest budget possible.
996
01:09:30.870 --> 01:09:35.654
So I'd say we spend maybe $300 a month on advertising, maybe, if that.
997
01:09:35.714 --> 01:09:36.395
Okay.
998
01:09:36.575 --> 01:09:43.581
So right now you are supply constrained, meaning you need more trucks and equipment and employees to be able to make up for the fact that you have so much demand.
999
01:09:44.001 --> 01:09:49.686
And so the only thing to do in this case, if you don't increase supply, is you must increase price.
1000
01:09:51.807 --> 01:09:57.818
And so whether or not it's disingenuous or all the rest of it, it's like these are the basic principles of economics.
1001
01:09:58.199 --> 01:10:02.547
If demand is higher than supply and you cannot increase supply, price must go up.
1002
01:10:04.505 --> 01:10:11.650
Because the alternative is you are saying no to customers, demand, leads, that would otherwise be happy to pay you the higher price.
1003
01:10:11.670 --> 01:10:18.055
But you have to say no to them because you're stuck at the amount of supply you currently can afford and you can't serve more customers.
1004
01:10:18.415 --> 01:10:25.280
And so you need to raise price to be able to get rid of some customers, reduce your close rate, and make room for better, higher paying customers.
1005
01:10:27.717 --> 01:10:43.166
And I understand the connection with customers or they supported you in the past, they got you to where you're at, but the thing holding you back from where you want to go is trying to serve the customer that's your lowest paying, that you are not making money on, and it's keeping you from growing the business.
1006
01:10:43.526 --> 01:10:50.890
And if you have a $300,000 annual revenue business and $3,500 in the bank, from a 4L framework perspective, your constraint is liquidity.
1007
01:10:51.430 --> 01:10:54.693
And so you can solve that very quickly on a $300,000 annual revenue business.
1008
01:10:54.873 --> 01:10:59.436
If you raise prices by 20%, that's $60,000 of profit going to the bottom line.
1009
01:11:00.197 --> 01:11:07.302
And we can only do that because we know that we have plenty of demand, that even when we raise prices, supply will be, that's fixed.
1010
01:11:07.622 --> 01:11:08.803
Demand will be just fine.
1011
01:11:09.023 --> 01:11:14.888
Like, assuming you raise prices and you still believe you get more customers, there's no reason not to raise prices.
1012
01:11:16.209 --> 01:11:19.951
And so for some reason, this industry, it's just amazing.
1013
01:11:21.028 --> 01:11:22.469
how much we overthink price increases.
1014
01:11:22.829 --> 01:11:23.869
And I'm guilty of the same thing.
1015
01:11:24.789 --> 01:11:31.092
You get to know the original customers, you're thankful for them, you wanna serve them, you got to know them, you don't wanna lose them.
1016
01:11:31.672 --> 01:11:45.858
But it is amazing to me that everyone that says that in home services also in the past year has almost for sure had a price increase from Microsoft, had a price increase from Google, had a price increase from Netflix, and we haven't batted an eye.
1017
01:11:46.478 --> 01:11:48.038
And they're making 35 to 40% profit margins.
1018
01:11:49.679 --> 01:11:53.381
and they're making billions of dollars of profit and they are just fine raising prices.
1019
01:11:54.021 --> 01:12:01.724
And yet we working our butts off, making 300,000 in revenue with $3,500 in the bank and we are questioning whether or not we are gonna raise prices.
1020
01:12:02.504 --> 01:12:08.227
And yet Netflix is able to just increase prices by 50% on their subscription and no one bats an eye.
1021
01:12:10.283 --> 01:12:14.206
And so we have to get more confident in raising our prices.
1022
01:12:14.646 --> 01:12:17.128
Like, it's such a vanilla thing to do.
1023
01:12:17.208 --> 01:12:22.551
And a lot of times when I say it on, like, the turnaround show, people, they say, oh, it's so simplistic.
1024
01:12:22.571 --> 01:12:23.752
You make it, you're just dumbing it down.
1025
01:12:23.772 --> 01:12:25.813
You're saying the same thing all the time.
1026
01:12:26.254 --> 01:12:30.997
Yeah, like, because the vast majority of home service businesses, their problems would be solved if they just raised prices.
1027
01:12:31.017 --> 01:12:31.858
That's the fix.
1028
01:12:32.698 --> 01:12:36.501
If you serve the customer well and you have more demand than you have supply, you need to raise your prices.
1029
01:12:37.303 --> 01:12:37.623
A lot.
1030
01:12:38.344 --> 01:12:43.047
Not by 5%, not 3%, not a price increase for the adjustment of fuel.
1031
01:12:43.087 --> 01:12:43.987
15% minimum.
1032
01:12:44.928 --> 01:12:48.871
And while at the same time we get worried and concerned, we wonder why all these big bad businesses...
1033
01:12:49.051 --> 01:12:56.275
The reason they got big, the reason they make so much cash is because they raised prices when they realized that people would stay if they just did a good job.
1034
01:12:56.556 --> 01:13:02.780
The reason people don't cancel Netflix is because they're okay with spending the extra $5 a month to get unlimited shows.
1035
01:13:03.875 --> 01:13:06.857
Because going to the movies is going to cost them, let's just call it $20.
1036
01:13:07.377 --> 01:13:10.619
So they're okay with paying $20 a month for unlimited movies.
1037
01:13:11.780 --> 01:13:12.960
Value, price.
1038
01:13:13.421 --> 01:13:19.304
And so many people inside of home services are providing a very high value to customers and charging way too little.
1039
01:13:19.584 --> 01:13:22.026
And we're so afraid that if we raise prices, they're going to leave.
1040
01:13:22.146 --> 01:13:22.526
You're not.
1041
01:13:22.866 --> 01:13:25.128
As long as value is higher than price, they will stay.
1042
01:13:26.709 --> 01:13:27.949
And so when I started...
1043
01:13:29.556 --> 01:13:36.443
When we started HomeWorks and the software side of things, it's just amazing to me how much they think about price increases and optimization of price.
1044
01:13:36.924 --> 01:13:39.667
And yet in home services, we freak out over raising prices.
1045
01:13:41.188 --> 01:13:42.830
And then we wonder why they make money.
1046
01:13:43.851 --> 01:13:44.812
And they're so bad.
1047
01:13:44.852 --> 01:13:46.975
No, they figured out price optimization.
1048
01:13:47.175 --> 01:13:51.459
And when we have a bunch of demand and we do a good service, we can raise prices and people will not leave.
1049
01:13:52.357 --> 01:14:00.344
And if we take care of the customer, when we raise prices, they'll understand the fact that fuel has gone up, insurance has doubled, cost of wages has gone through the roof in the past few years.
1050
01:14:00.604 --> 01:14:02.626
And so why would you not raise prices?
1051
01:14:02.866 --> 01:14:03.887
And they want you to raise prices.
1052
01:14:04.427 --> 01:14:09.011
We recently, Brianna and I, we turned down a bid because it was like, they're so low.
1053
01:14:09.071 --> 01:14:10.352
There's got to be something wrong.
1054
01:14:10.512 --> 01:14:11.934
Are they going to steal it from our house?
1055
01:14:12.214 --> 01:14:16.637
Recently, I talked to Jonathan Potoschnik on the Home Service Millionaire podcast, and he mentioned that they moved their house.
1056
01:14:17.598 --> 01:14:20.200
The contractor they hired was doing 1099s.
1057
01:14:20.801 --> 01:14:24.764
And one of the movers stole $80,000 worth of their stuff.
1058
01:14:26.525 --> 01:14:30.328
Do you think in the future someone like Jonathan is going to be price sensitive on who's going to be their mover?
1059
01:14:31.949 --> 01:14:33.250
Let's get the cheapest person, honey.
1060
01:14:33.730 --> 01:14:34.511
It's not happening.
1061
01:14:34.991 --> 01:14:36.352
It's $80,000.
1062
01:14:36.752 --> 01:14:43.958
So I'm going to pay a little more for the company that has W-2 employees and a professionally wrapped truck and hasn't changed their name four times in the past 10 years.
1063
01:14:45.679 --> 01:14:47.620
and make sure that their employees are trained and uniformed.
1064
01:14:48.020 --> 01:14:48.880
I'm gonna pay more for that.
1065
01:14:49.741 --> 01:14:56.824
And yet all of us are trying to provide that value and service to the customer without charging the prices required to do all of those things.
1066
01:14:57.204 --> 01:14:58.784
It costs money to have software.
1067
01:14:59.005 --> 01:15:00.585
It costs money to answer the phone.
1068
01:15:00.605 --> 01:15:02.486
It costs money to have uniforms and trained employees.
1069
01:15:02.526 --> 01:15:03.827
It costs money to have insurance.
1070
01:15:04.027 --> 01:15:08.669
And yet we're trying to compete with people who don't and think that somehow we're supposed to have the same prices as them.
1071
01:15:09.269 --> 01:15:09.849
It's ludicrous.
1072
01:15:11.110 --> 01:15:11.410
All right.
1073
01:15:12.342 --> 01:15:13.363
This is the confession booth.
1074
01:15:13.383 --> 01:15:15.143
We've got a lot of people in the call queue.
1075
01:15:15.444 --> 01:15:16.964
I'll be hopping next call in a second.
1076
01:15:16.984 --> 01:15:23.568
But if you would like me to fly out in person to your location and do the turnaround show, scan this QR code down in the description.
1077
01:15:23.588 --> 01:15:24.208
There's links.
1078
01:15:24.829 --> 01:15:25.649
Submit a quick video.
1079
01:15:25.769 --> 01:15:29.211
I'd love to come out and see you in person and do this live at your shop space.
1080
01:15:30.371 --> 01:15:30.692
All right.
1081
01:15:31.132 --> 01:15:32.813
Next caller is coming in live.
1082
01:15:32.933 --> 01:15:33.593
Welcome to the show.
1083
01:15:33.633 --> 01:15:35.054
Thank you for coming on the confession booth.
1084
01:15:38.456 --> 01:15:38.756
Hey, Mike.
1085
01:15:38.796 --> 01:15:39.196
Can you hear me?
1086
01:15:39.376 --> 01:15:40.097
I absolutely can.
1087
01:15:40.137 --> 01:15:40.697
What can I do to help?
1088
01:15:42.844 --> 01:16:11.818
perfect um i knew this is confession booth but this is spelt um and i had a bit of a situation this past weekend and it's kind of thrown me and uh like just kind of grow up and want to get some advice um so i got a reckless driving uh ticket and my court date's coming up in about months but um i had to fire one of my guys this morning just because he wasn't hitting any of the benchmarks
1089
01:16:12.645 --> 01:16:19.770
doing the service and I really want to grow this thing, especially now seeing that it can't really run without me.
1090
01:16:19.790 --> 01:16:23.953
I don't have a guy and I might not be here, uh, depending on how the court goes.
1091
01:16:23.973 --> 01:16:27.775
Um, so I have a couple of questions.
1092
01:16:28.916 --> 01:16:31.738
How can I grow to 500 K as fast as possible?
1093
01:16:32.598 --> 01:16:34.420
I, I want to do the copy and paste method.
1094
01:16:34.640 --> 01:16:35.440
I read your whole book.
1095
01:16:35.500 --> 01:16:37.462
And that's what I want to do.
1096
01:16:38.022 --> 01:16:39.863
Um, but actually getting there, um,
1097
01:16:41.555 --> 01:16:44.257
I'm not sure with where I'm at now.
1098
01:16:46.439 --> 01:17:04.132
I'm going to be hiring another person here within the next couple weeks, and my plan is to have a full mowing crew, two guys be in our mowing truck, and then that will allow me to go out and do more sales and more landscaping-type things.
1099
01:17:04.813 --> 01:17:08.316
I will say up front I'm not great at sales, do not have a background in it,
1100
01:17:11.937 --> 01:17:13.398
definitely the reps are not there.
1101
01:17:14.099 --> 01:17:18.061
How are you going to do the landscaping jobs and focus on sales if you can't drive?
1102
01:17:21.564 --> 01:17:21.844
Right.
1103
01:17:21.884 --> 01:17:40.617
So when I was in the policeman's car, he said that I could get like a working like suspension so I could drive to work and then drive at work, but I can't do anything but as if I can't like go to the gym or church or whatnot.
1104
01:17:41.238 --> 01:17:41.438
But
1105
01:17:42.722 --> 01:17:47.364
He said that there's a little bit of leeway he can give on that.
1106
01:17:48.244 --> 01:17:53.506
So it kind of is up in the air depending on how everything goes.
1107
01:17:53.886 --> 01:17:58.488
Yeah, so I would cross that bridge when we get there in terms like we have a month to make the business better.
1108
01:17:58.508 --> 01:17:58.668
Right.
1109
01:17:59.088 --> 01:18:01.149
And so I wouldn't worry about copy and paste.
1110
01:18:01.369 --> 01:18:02.609
I wouldn't worry about projects.
1111
01:18:02.709 --> 01:18:03.669
I wouldn't worry about sales.
1112
01:18:03.769 --> 01:18:07.831
I would worry about one thing and it's getting a great employee ready to go.
1113
01:18:08.874 --> 01:18:10.415
And I wouldn't be hiring them a couple of weeks.
1114
01:18:10.475 --> 01:18:15.978
I'd be hiring them as soon as possible so that in the next month, you can really make sure that they understand the systems, the procedures.
1115
01:18:16.218 --> 01:18:24.002
I would also have a second employee that's in my back pocket that might be willing to work part-time or fill in the gaps.
1116
01:18:25.483 --> 01:18:33.247
Because if things go bad in a month and you're not able to get that extra permit or whatever, we want to make sure that the whole business doesn't come collapsing down.
1117
01:18:35.414 --> 01:18:35.674
Right.
1118
01:18:35.774 --> 01:18:39.695
And right now I had the full timer that would help me Monday through Thursday.
1119
01:18:39.796 --> 01:18:49.359
He's not here anymore, but I've got another guy that works Thursday through Saturday and he clocks his 40 hours in that time.
1120
01:18:49.379 --> 01:18:52.080
So I do have still hit him.
1121
01:18:52.600 --> 01:18:54.761
I'm mainly just looking for the other guy.
1122
01:18:56.401 --> 01:19:01.663
My, but I guess my question is should I hire that one guy now for
1123
01:19:02.715 --> 01:19:07.398
full-time and then get another full-timer to join him in the truck?
1124
01:19:09.259 --> 01:19:12.601
I think right now it's a function of if you had enough demand, yes.
1125
01:19:13.222 --> 01:19:17.384
But I think by getting a full-time person, you have a month to basically put on your sales boots.
1126
01:19:17.464 --> 01:19:21.487
I'd focus only on recurring revenue because any building of projects could be in jeopardy.
1127
01:19:21.507 --> 01:19:26.250
You could put the business in a really bad spot if you sell out eight months or eight weeks worth of projects in the next month.
1128
01:19:26.970 --> 01:19:31.974
by having a second employee in the truck, and all of a sudden you come up to this court day and you can't drive.
1129
01:19:32.434 --> 01:19:39.800
And so I want to mitigate risk by simplifying services and making sure that if that were to happen, the business continues.
1130
01:19:40.320 --> 01:19:48.306
And if we get past the month and you've got a solid employee, you've got another one that's ready to go, great, put them in the truck, you're able to drive, do the landscape thing, do sales, et cetera.
1131
01:19:48.647 --> 01:19:53.871
I just don't want this to be a cataclysmic failure if what we think is going to happen doesn't happen.
1132
01:19:53.891 --> 01:19:55.092
Right.
1133
01:19:55.112 --> 01:19:55.292
Right.
1134
01:19:56.032 --> 01:19:56.773
Right, yes, sir.
1135
01:19:56.913 --> 01:20:01.116
And my projects are more like property cleanup and molten stall, not like hardscaping.
1136
01:20:01.256 --> 01:20:02.097
Yeah.
1137
01:20:02.698 --> 01:20:09.583
But I guess my follow-up question to that, with doing door hangers, as of now, I don't really have the time to do that.
1138
01:20:09.924 --> 01:20:13.987
Do you think I should hire someone specifically to pass those out?
1139
01:20:14.888 --> 01:20:18.311
Or how sure about that?
1140
01:20:18.511 --> 01:20:21.013
Right now, how far are you booked out in terms of work?
1141
01:20:24.629 --> 01:20:33.698
We have mowing Monday through Wednesday, or Monday through Thursday, and then we do about a week or two for projects.
1142
01:20:34.079 --> 01:20:34.339
Okay.
1143
01:20:34.739 --> 01:20:40.966
Yeah, like, I would say, if you were to get a full-time employee right now, you would still be in the field somewhat, kind of like you are now.
1144
01:20:41.006 --> 01:20:41.747
Is that right?
1145
01:20:41.787 --> 01:20:45.270
If you were able to replace this one that left, you'd be still in the field a little bit.
1146
01:20:45.310 --> 01:20:45.871
Is that correct?
1147
01:20:47.877 --> 01:20:48.558
That's correct.
1148
01:20:49.319 --> 01:20:59.215
I would be in the truck with him doing the mowing route, and then technically we have three guys on Thursday, and then Friday, Saturday, I have the other guy that I have.
1149
01:21:00.155 --> 01:21:05.039
Yeah, so the way to scale is eventually going to be having another employee that replaces you in the truck and you go focus on sales.
1150
01:21:05.460 --> 01:21:06.240
Big fan of that.
1151
01:21:06.681 --> 01:21:09.303
After this month, we need to pass the month thing.
1152
01:21:09.923 --> 01:21:12.686
Make sure that we can actually drive before we go sell projects.
1153
01:21:13.146 --> 01:21:19.772
And I don't want to even put in a bad spot where you get one employee, you train him up in three, four weeks, and then he leaves you right before this.
1154
01:21:19.892 --> 01:21:21.053
Now we're in a really bad spot.
1155
01:21:21.473 --> 01:21:24.074
So I want to build more conservatively for the next month.
1156
01:21:24.094 --> 01:21:26.675
And that is get this employee as fast as possible trained up.
1157
01:21:27.195 --> 01:21:29.996
And then if this month comes by, hey, we're in the clear.
1158
01:21:30.076 --> 01:21:30.316
Great.
1159
01:21:30.676 --> 01:21:31.817
Then you get another employee.
1160
01:21:32.037 --> 01:21:34.717
You have a solid two-man crew doing all the lawns.
1161
01:21:34.998 --> 01:21:36.778
You go focus on projects and getting sales.
1162
01:21:36.878 --> 01:21:37.518
I'm fine with that.
1163
01:21:37.839 --> 01:21:41.800
But we got to build the business to avoid catastrophe.
1164
01:21:42.440 --> 01:21:50.071
And so whenever I hear about something like this at this size of business, I don't wanna build the business in a way that could potentially put you completely out of business.
1165
01:21:50.431 --> 01:21:56.960
And so for now, for the next month, I would lock down replacing this employee as fast as possible, training that person up one-on-one,
1166
01:21:57.621 --> 01:21:58.782
even having a backup to them.
1167
01:21:58.842 --> 01:22:00.422
It sounds like you got the Thursday to Saturday guys.
1168
01:22:00.442 --> 01:22:00.962
That's great.
1169
01:22:01.483 --> 01:22:09.946
And then once you're past this month suspension thing, or like you're in the clear on that, then I give you permission to like, okay, place yourself in the truck and go focus on sales.
1170
01:22:10.206 --> 01:22:11.387
And does that mean doing door hangers?
1171
01:22:11.447 --> 01:22:11.687
Yes.
1172
01:22:11.707 --> 01:22:13.448
Does that mean maybe spending some money on ads?
1173
01:22:13.668 --> 01:22:13.908
Yes.
1174
01:22:14.148 --> 01:22:17.069
Does that mean focusing more on automations and follow-up phone calls?
1175
01:22:17.089 --> 01:22:17.289
Yes.
1176
01:22:17.570 --> 01:22:18.390
That's what sales is.
1177
01:22:20.571 --> 01:22:20.691
Okay.
1178
01:22:20.711 --> 01:22:20.911
Perfect.
1179
01:22:22.011 --> 01:22:23.792
That answers my question.
1180
01:22:23.932 --> 01:22:24.393
Thank you, Mike.
1181
01:22:24.513 --> 01:22:24.813
Thank you.
1182
01:22:24.833 --> 01:22:25.353
You have a good one.
1183
01:22:26.022 --> 01:22:28.963
Next caller is coming in hot to the confession booth.
1184
01:22:29.003 --> 01:22:30.083
Welcome to the show.
1185
01:22:30.103 --> 01:22:30.884
Thank you for coming on.
1186
01:22:33.004 --> 01:22:33.685
Hey, how you doing Mike?
1187
01:22:33.805 --> 01:22:34.345
Fantastic.
1188
01:22:34.545 --> 01:22:35.105
What can I do to help?
1189
01:22:37.186 --> 01:22:39.047
So I have a company now.
1190
01:22:40.527 --> 01:22:46.829
We've been in business for about five years and I do about a half a million in revenue which projected this year.
1191
01:22:46.849 --> 01:22:53.291
But I have no problem getting leads and work and selling the work.
1192
01:22:53.351 --> 01:22:54.712
My problem now is almost like
1193
01:22:56.194 --> 01:22:59.915
I guess just like, I wonder if I should simplify my services.
1194
01:23:01.316 --> 01:23:07.638
Um, on the landscaping side, I have one mowing crew and one landscaping crew and the mowing crew is really profitable.
1195
01:23:08.318 --> 01:23:12.019
Uh, but my landscaping seems to really only be profitable sometimes.
1196
01:23:12.980 --> 01:23:18.221
Um, every job feels different and it's hard to kind of price profitably for me.
1197
01:23:18.241 --> 01:23:21.862
Cause I don't, I like that pricing for some line items, but not all of them.
1198
01:23:22.943 --> 01:23:23.503
And, uh,
1199
01:23:24.112 --> 01:23:27.714
it seems hard to train guys to do them properly.
1200
01:23:27.734 --> 01:23:30.995
So I feel like I've almost taken on too much work.
1201
01:23:31.535 --> 01:23:35.117
You know, we're booked out for a good two-ish months right now.
1202
01:23:36.657 --> 01:23:42.560
And I've started to raise pricing on landscaping to and we've dropped our close rates to probably like 40%.
1203
01:23:44.721 --> 01:23:50.523
And that's helped a little bit kind of weed out some of the jobs that I may have priced incorrectly.
1204
01:23:50.983 --> 01:23:52.804
But I'm starting to think like, OK,
1205
01:23:53.825 --> 01:23:58.170
I don't really need to say yes to every single service, every lead that comes in.
1206
01:23:58.290 --> 01:24:16.348
You know, I can start choosing what I want to take on and reduce the headache of, you know, callbacks or not as good profit from pricing incorrectly on my end by scaling back the services or, you know, maybe hiring somebody with a little bit more experience.
1207
01:24:19.139 --> 01:24:22.263
because I feel like that's kind of hit or miss.
1208
01:24:22.423 --> 01:24:30.052
Right now, I have two landscaping guys with me and I'm on the landscaping side and I just feel like I can't leave for more than like a few hours
1209
01:24:31.613 --> 01:24:33.434
because they're both inexperienced, unfortunately.
1210
01:24:33.454 --> 01:24:38.418
And that's another thing is like, I probably should have not hired two inexperienced landscapers to work with me.
1211
01:24:39.779 --> 01:24:48.006
But regardless, down the line, I feel like simplifying services, I think I've heard you talk about it before, but I couldn't find any resource on it.
1212
01:24:48.847 --> 01:24:51.649
And I was curious your opinion on that, someone at my side.
1213
01:24:52.234 --> 01:24:57.778
Yeah, so when it comes to the landscaping side, it's actually pretty rare that someone says what you just said, which is like the landscaping side, we don't make money.
1214
01:24:57.818 --> 01:24:58.778
The mowing side, we make money.
1215
01:24:59.219 --> 01:25:08.124
Usually the tempting part about landscaping is the fact that you do make more money and then people keep building around it and they keep adding more and more services and more and more complexity and bigger size jobs.
1216
01:25:08.625 --> 01:25:12.047
And so you're definitely on the path that's correct, which is simplify and standardize.
1217
01:25:12.087 --> 01:25:20.853
Now, the reason I say this is when people hear simplify, they think it only means they can do simple, basic jobs that someone could do within an hour of training.
1218
01:25:21.373 --> 01:25:26.657
The other thing though is standardized, which is taking what you currently do and just saying we're gonna do it the same way every time.
1219
01:25:27.478 --> 01:25:31.921
And so for example, if you're planting a hedge, you only plant two different types of trees for the hedge.
1220
01:25:32.462 --> 01:25:37.846
And I can guarantee you two trees in your market would suffice for 95% of jobs for a hedge.
1221
01:25:38.466 --> 01:25:39.967
The same thing is true when it comes to pavers,
1222
01:25:40.708 --> 01:25:41.869
walls, et cetera.
1223
01:25:42.249 --> 01:25:47.212
And so before you go out and say, I'm gonna cut off the entire landscaping division, I'd ask myself two things.
1224
01:25:47.533 --> 01:25:51.695
One, what are the jobs that you could leave your crew doing and they'd be okay with it?
1225
01:25:52.516 --> 01:25:58.320
And you probably know, okay, it's like these three or four different types of jobs, I can leave them there, they will get done on time and on budget.
1226
01:25:59.332 --> 01:26:01.674
that's the first area I'd focus on.
1227
01:26:01.734 --> 01:26:03.615
And I potentially would say cut everything else.
1228
01:26:03.915 --> 01:26:09.779
But if you're not going to cut everything else, it's got to be standardized, which is we're not going to offer custom work every single time.
1229
01:26:10.159 --> 01:26:14.062
Custom types of materials, custom types of trees, like custom colors.
1230
01:26:14.162 --> 01:26:16.544
It's got to be the exact same thing every single time.
1231
01:26:17.224 --> 01:26:28.572
And usually you can go back in the work for even the past month or two and just look at the jobs that you lost money on or that you were constantly called back to and have a pretty good understanding which services you need to cut out completely.
1232
01:26:32.205 --> 01:26:33.005
Yeah, that's good.
1233
01:26:33.366 --> 01:26:37.788
I guess like right now too, like, let's say I've looked back on some of the jobs that we completed this year.
1234
01:26:38.628 --> 01:26:41.510
And, you know, last year I had a very experienced landscaper.
1235
01:26:41.530 --> 01:26:46.093
He had like 10 years of experience and I felt like we did pretty good.
1236
01:26:46.113 --> 01:26:56.078
I would say anywhere between like, I don't know, 30 to 40% on landscaping or our labor revenue rate.
1237
01:26:57.017 --> 01:27:00.539
Uh, mowing is usually around like 30%, maybe sometimes lower.
1238
01:27:01.359 --> 01:27:12.705
Um, but now with these two guys I have this year, we're literally like, and maybe it's like, because I have three guys in landscape crew and doesn't justify it, but it's where, I mean, I'm some of these jobs were at like 50 bucks an hour.
1239
01:27:12.725 --> 01:27:14.185
We just did like a $20,000 install.
1240
01:27:15.406 --> 01:27:20.708
And, um, I think I, I calculated our man hour right after it was like $63 an hour.
1241
01:27:20.729 --> 01:27:22.269
And I'm like, I can't do that.
1242
01:27:23.190 --> 01:27:23.750
And, um.
1243
01:27:24.588 --> 01:27:31.514
So you're saying like, if not cutting back, then at least standardize things to where it's not so custom every single job.
1244
01:27:31.754 --> 01:27:32.375
Yeah, exactly.
1245
01:27:32.395 --> 01:27:42.663
So like before I cut walls and patios completely, we went down to, there was one block that we installed for walls, and there was one block with one design and one color for papers.
1246
01:27:43.104 --> 01:27:50.110
And it's amazing, as long as you present it correctly on the sales side, you can still sell 95 to 98% of those jobs just by standardizing.
1247
01:27:50.490 --> 01:27:52.071
I will also say, we did that for a few years,
1248
01:27:52.752 --> 01:27:56.717
And then we realized we can still cut this out as long as we replace it with recurring revenue.
1249
01:27:56.897 --> 01:28:08.870
So if I was you and you're in the camp, hey, I'm making a bunch of money on mowing, which by the way is higher quality revenue, by the way, all of your time and attention and your late evenings and weekends thinking about the business is spent on these landscaping jobs.
1250
01:28:09.371 --> 01:28:12.694
If that was all deployed, that discretionary effort was deployed toward your mowing crew,
1251
01:28:13.235 --> 01:28:35.032
and you're mowing jobs and getting more mowing customers, you're advertising for them and upselling those mowing customers into simple projects, you could probably keep your landscaping crew busy with just the mowing crew upselling landscaping jobs that are simple, like molten stalls, bush trimming, property cleanups, pressure washing, like all these little basic things that you could potentially add to the business in terms of upsells, you could probably keep this crew busy absolutely.
1252
01:28:35.132 --> 01:28:39.513
after cutting out 50% of their revenue of jobs that were complex and custom.
1253
01:28:39.673 --> 01:28:43.274
Which by the way, complex is the opposite of simplification.
1254
01:28:44.294 --> 01:28:46.435
Custom is the opposite of standardization.
1255
01:28:46.975 --> 01:28:54.636
And so right now, anytime I hear custom, anytime I hear complex services, those are things that I know are very difficult to scale.
1256
01:28:55.237 --> 01:28:56.097
Are they possible to scale?
1257
01:28:56.237 --> 01:28:57.797
Yes, but way more difficult.
1258
01:28:58.037 --> 01:29:00.618
And I'd rather do things that are easier in life to make more money.
1259
01:29:01.358 --> 01:29:05.561
And so I'm not gonna take the path of most resistance, which is complex services.
1260
01:29:06.022 --> 01:29:08.323
They're custom, every single project, they're gonna be different.
1261
01:29:08.343 --> 01:29:10.505
Guess who's gonna be the one that has to be on every job?
1262
01:29:10.665 --> 01:29:10.905
You.
1263
01:29:11.306 --> 01:29:12.647
Guess who's gonna have to manage the project?
1264
01:29:12.827 --> 01:29:13.087
You.
1265
01:29:13.387 --> 01:29:14.588
Guess who's gonna have to order the materials?
1266
01:29:14.848 --> 01:29:15.089
You.
1267
01:29:15.349 --> 01:29:18.992
Guess who's gonna have to teach the crew on every single job how to do the new design of the pavers?
1268
01:29:19.172 --> 01:29:19.412
You.
1269
01:29:19.772 --> 01:29:23.875
Guess who's gonna have to hop on the excavator because no one else has done the drainage this way exactly before?
1270
01:29:24.116 --> 01:29:24.376
You.
1271
01:29:24.716 --> 01:29:25.777
And so you become the bottleneck.
1272
01:29:25.797 --> 01:29:28.099
It's very hard to scale any business where you're the bottleneck.
1273
01:29:28.639 --> 01:29:34.465
And so what I would be doing in this business, I would be looking at what are the services that are constantly pulling me back into the job.
1274
01:29:34.985 --> 01:29:37.227
Usually those are also the ones that go way over budget, by the way.
1275
01:29:37.527 --> 01:29:38.969
And so you can very quickly identify.
1276
01:29:38.989 --> 01:29:40.550
And for most people, you don't even have to look back.
1277
01:29:40.590 --> 01:29:46.196
You're like immediately top off the top of your head, list off the three or four services that you just know you're going to go back to.
1278
01:29:46.456 --> 01:29:51.421
And you do not have the confidence to price the job within 10% budget hours.
1279
01:29:53.042 --> 01:29:59.526
Meaning if it's a 200 budget hour job and it takes 400, that's 100% increase or overage on budget hours.
1280
01:29:59.866 --> 01:30:02.688
There's no way you should be doing that service.
1281
01:30:03.549 --> 01:30:11.574
If you can lose your shirt and do twice as many budget hours, or in your case, you're probably doing half the amount of labor revenue that you would make mowing grass.
1282
01:30:11.914 --> 01:30:16.657
You're out doing a project hardscaping job and making $50, $60 per man hour.
1283
01:30:16.777 --> 01:30:17.698
You're not making any money.
1284
01:30:18.850 --> 01:30:36.245
And so cut those things out, knowing that if you cut those things out and it gives you time to focus on mowing or the thing that's making money, like enter any service we've just talked about with the thing that is currently not making money but taking all of your time with the thing that is making you money but you're not spending any of your time on.
1285
01:30:37.026 --> 01:30:43.251
If that is existing and you just cut this out and you focus more on this, you would make more money.
1286
01:30:43.931 --> 01:31:04.247
And furthermore, I will say if you cut out 40% of your revenue on these big projects and these big jobs that you're being pulled into, it's sucking all of your time and energy, if you just cut all of it out, 40% of revenue, and spent your time training your mowing crew, creating upsells, text messages, email blasts to your existing mowing customers, you would probably fill the landscaping crew with the simpler services
1287
01:31:04.527 --> 01:31:08.650
that they can install and it would fill up their schedule now with work that they can do without you.
1288
01:31:08.851 --> 01:31:10.172
And it's profitable.
1289
01:31:10.852 --> 01:31:17.217
And these customers have a lot higher lifetime value and you're able to recoup the customer acquisition cost of mowing customers faster.
1290
01:31:17.377 --> 01:31:17.978
So what do you can do?
1291
01:31:18.218 --> 01:31:20.240
Go spend money on marketing for mowing.
1292
01:31:23.042 --> 01:31:23.883
Great question.
1293
01:31:25.784 --> 01:31:26.265
Next call.
1294
01:31:26.385 --> 01:31:27.025
Welcome to the show.
1295
01:31:27.045 --> 01:31:28.086
Welcome to the confession booth.
1296
01:31:28.126 --> 01:31:28.867
Thank you for coming on.
1297
01:31:34.405 --> 01:31:35.546
Check, check, one, two, three.
1298
01:31:36.166 --> 01:31:37.487
The confession booth is live.
1299
01:31:37.687 --> 01:31:38.228
Can you hear me?
1300
01:31:41.050 --> 01:31:41.410
All right.
1301
01:31:41.790 --> 01:31:43.151
Sorry, you've been waiting for a while.
1302
01:31:44.772 --> 01:31:45.032
Okay.
1303
01:31:45.412 --> 01:31:46.293
Next caller.
1304
01:31:47.734 --> 01:31:48.495
Coming in hot.
1305
01:31:48.955 --> 01:31:50.916
Welcome to the confession booth.
1306
01:31:51.497 --> 01:31:52.017
Welcome to the show.
1307
01:31:52.037 --> 01:31:52.337
Come on.
1308
01:31:54.359 --> 01:31:55.039
Hey, Mike.
1309
01:31:55.059 --> 01:31:55.940
Really quick question.
1310
01:31:56.040 --> 01:32:00.723
How would I go about throwing my name in the hat to be a speaker at the Blue Collar Summit?
1311
01:32:01.186 --> 01:32:02.707
No, we have Blue Collar Summit.
1312
01:32:02.747 --> 01:32:04.107
The website's being built now.
1313
01:32:04.908 --> 01:32:06.989
In probably a couple weeks, it'll go live.
1314
01:32:07.329 --> 01:32:15.772
And then basically what we're going to do this year is probably have it where for everyone that shows up, they're able to apply to be a speaker.
1315
01:32:16.413 --> 01:32:23.916
My objective this year is to... We had a conference last year with Just Augusta, and we got so much good feedback, and I enjoyed it thoroughly.
1316
01:32:23.936 --> 01:32:30.079
And that is hearing operators that might not be professional speakers, but they have just like raw, like they share the way it is.
1317
01:32:30.739 --> 01:32:31.680
And I really enjoyed it.
1318
01:32:31.720 --> 01:32:32.962
We got a lot of really good feedback.
1319
01:32:32.982 --> 01:32:34.504
So I want to kind of emulate that this year.
1320
01:32:34.864 --> 01:32:38.328
And that is have a lot of people from the community be speaking.
1321
01:32:38.848 --> 01:32:40.911
And people probably have never heard of before.
1322
01:32:41.051 --> 01:32:42.192
Not big name speakers.
1323
01:32:42.773 --> 01:32:44.235
And so I'm really looking forward to it.
1324
01:32:44.275 --> 01:32:46.838
So what we're going to do is when you sign up for a ticket,
1325
01:32:47.218 --> 01:32:51.500
you'll be able to, if you're interested in speaking, you'll be able to apply to speak.
1326
01:32:52.121 --> 01:32:56.563
And it'll probably just be a quick video that you shoot and talk about what you're going to, you're thinking about sharing.
1327
01:32:57.023 --> 01:33:00.905
And then I will probably reach out to some people too, if there's certain topics I want covered inside the community.
1328
01:33:01.485 --> 01:33:03.586
But that is the plan.
1329
01:33:04.247 --> 01:33:05.807
Next call coming in hot.
1330
01:33:06.228 --> 01:33:06.688
Welcome.
1331
01:33:06.788 --> 01:33:07.048
Whoops.
1332
01:33:07.488 --> 01:33:08.349
Nope, nope, nope.
1333
01:33:09.729 --> 01:33:10.030
Here we go.
1334
01:33:10.510 --> 01:33:11.650
Welcome to the confession booth.
1335
01:33:11.931 --> 01:33:12.611
Thank you for coming on.
1336
01:33:15.308 --> 01:33:16.109
Hey Mike, can you hear me?
1337
01:33:16.289 --> 01:33:16.629
I can.
1338
01:33:16.790 --> 01:33:17.130
What's that?
1339
01:33:19.552 --> 01:33:20.614
Yeah, so I was calling.
1340
01:33:20.714 --> 01:33:23.176
So we have a very short season.
1341
01:33:23.236 --> 01:33:26.700
I currently have three employees, two full-time, one part-time.
1342
01:33:27.281 --> 01:33:33.007
We're trying to basically go from about $200,000 to about $400,000 to $500,000 this season.
1343
01:33:33.808 --> 01:33:37.932
The biggest slogan right now is kind of understanding the hourly rate, production targets,
1344
01:33:38.567 --> 01:34:03.141
and uh all that while we grow oh so basically we have about two to three weeks to kind of uh really you know reoccurring work and reoccurring maintenance and i was thinking of maybe doing a mowing crew and then a landscaping a small landscaping crew on the side and i kind of me and one other guy take over the landscaping crew uh just kind of wanted some feedback and kind of uh direction on like labor targets uh for pricing and the crew setup at this stage
1345
01:34:04.215 --> 01:34:05.755
Yeah, like what's your long-term goal?
1346
01:34:05.795 --> 01:34:07.216
Is it to have more recurring revenue?
1347
01:34:07.236 --> 01:34:08.436
Like you have a short season.
1348
01:34:08.936 --> 01:34:10.496
So what are you doing during your off-season?
1349
01:34:13.177 --> 01:34:15.797
So we do snow removal in the off-season, but that's kind of hit or miss.
1350
01:34:15.817 --> 01:34:18.337
We kind of can't really bank on that, especially with the last couple of seasons.
1351
01:34:18.357 --> 01:34:19.198
They've been kind of iffy.
1352
01:34:20.818 --> 01:34:23.958
Yeah, so like I'm assuming... Yeah, the goal is really just to kind of step out the field.
1353
01:34:24.138 --> 01:34:24.539
Sorry, go ahead.
1354
01:34:25.039 --> 01:34:30.260
I'm assuming you're trying to... During those months, you're just trying to like get as much project work or recurring...
1355
01:34:30.280 --> 01:34:32.260
It's like whatever comes in, you're willing to do it.
1356
01:34:32.380 --> 01:34:32.780
Is that right?
1357
01:34:35.308 --> 01:34:36.048
Yes, pretty much.
1358
01:34:36.308 --> 01:34:36.528
Okay.
1359
01:34:37.148 --> 01:34:44.970
And so when it comes to going from two or three employees to the next level, what likely happens is you start spending less time in the field.
1360
01:34:45.971 --> 01:34:49.712
And so right now, is most of your day spent out in the field producing revenue?
1361
01:34:52.312 --> 01:34:52.512
Yes.
1362
01:34:52.552 --> 01:34:56.873
So currently right now, like I said, with the short weeks, I'm kind of trying to fill out the schedule.
1363
01:34:56.893 --> 01:34:58.214
We're about a week and a half booked.
1364
01:35:00.084 --> 01:35:06.338
Right now, I'm in the field with the guys for a couple days, and I'm trying to, you know, maybe one or two days kind of try to book the schedule and sail.
1365
01:35:06.639 --> 01:35:09.024
But that's kind of where I'm at right now.
1366
01:35:09.623 --> 01:35:22.271
Yeah, so as you go from $400,000 to the next level, let's call it $600,000, you're going to see more of this shift of demand of your time outside of the field, where you're working on the business, you're working on sales, you're hiring, you're training, and doing these other tasks.
1367
01:35:22.631 --> 01:35:38.080
And so what we want to be careful of is that as you spend less time in the field, what a lot of times happens is you go from, let's just call it $400,000 and $100,000 in profit, and then all of a sudden, you're doing $600,000 in revenue, but because you're not in the field anymore, you're doing $80,000 in profit.
1368
01:35:39.581 --> 01:35:49.769
And this is mostly just because you stop spending time in the field producing revenue and spend more time working on the business, doing sales, getting more work, doing everything else with running the size of the organization.
1369
01:35:50.389 --> 01:36:00.017
And so what I would keep in mind in terms of, quote, pricing and making sure your margins are protected is that you increase prices somewhere in the middle of here when you hit capacity.
1370
01:36:00.909 --> 01:36:04.472
So like, for example, it might be this year when you're like, hey, we have so much work.
1371
01:36:04.732 --> 01:36:08.916
I got two full timers, I got a part timer, but the trucks are out rolling all day long.
1372
01:36:09.276 --> 01:36:11.298
We don't, like, we can't take any more work on.
1373
01:36:11.678 --> 01:36:14.941
When it happens, if you raise prices just one time by 15 to 20%,
1374
01:36:16.802 --> 01:36:26.765
That will put you in a good spot to where now, when you make $600,000 in revenue, you'll make still $150,000 in profit and not less than what you're making now.
1375
01:36:27.485 --> 01:36:32.466
Because a lot of times at $400,000, the amount of money that you make in the field in terms of labor is your profit.
1376
01:36:35.467 --> 01:36:37.888
And so when that goes away, I know what the business is stall out.
1377
01:36:42.630 --> 01:36:45.551
Okay, so basically just fill the schedule now.
1378
01:36:45.651 --> 01:36:49.792
Because like I said, we're at the $200,000 last year, and then this year is kind of the first time.
1379
01:36:49.812 --> 01:36:51.832
Because last year was just me and a part-time guy.
1380
01:36:52.053 --> 01:36:54.653
And so this is my first time kind of having multiple people.
1381
01:36:55.013 --> 01:37:01.115
But basically just kind of stay in the field with them as much as possible, fill our schedule up, and then raise prices once we get to capacity.
1382
01:37:01.395 --> 01:37:05.477
Yeah, and if you had tons of cash when you hit capacity and you're like, I'm just going to keep growing.
1383
01:37:05.597 --> 01:37:06.677
Great, fantastic.
1384
01:37:07.197 --> 01:37:23.504
However, if you have cash constraints or you're running a little in cash, there's a little bit of pressure, you're like, I don't know, going into the off-season with this much cash, it's iffy when it comes to snow, then I would just say hit capacity, raise prices, build up that cash reserve, and you can always go on the offensive again down the road.
1385
01:37:24.284 --> 01:37:28.606
All right, next caller is coming in hot to the confession booth.
1386
01:37:29.246 --> 01:37:29.867
Welcome to the show.
1387
01:37:29.887 --> 01:37:30.647
Thank you for coming on.
1388
01:37:33.465 --> 01:37:34.705
Thank you, Mike.
1389
01:37:35.106 --> 01:37:43.048
We're currently about six weeks out on landscaping projects, and I'm trying to strategically build out our first full-time mowing division.
1390
01:37:43.768 --> 01:37:45.089
I got four guys.
1391
01:37:46.069 --> 01:37:53.431
And without hurting our landscaping production, right now I'm trying to avoid making that mistake.
1392
01:37:53.812 --> 01:38:01.014
What would you say, if you were in my position, how would you structure and scale the mowing crew while still keeping the landscaping side running?
1393
01:38:02.038 --> 01:38:05.580
Yeah, like right now I'm assuming landscaping makes up the vast majority of the revenue.
1394
01:38:07.722 --> 01:38:08.082
Yes, sir.
1395
01:38:08.102 --> 01:38:08.602
About 90%.
1396
01:38:08.622 --> 01:38:11.764
Just this year we started implementing mowing.
1397
01:38:12.264 --> 01:38:13.285
Cool.
1398
01:38:13.525 --> 01:38:18.208
The first thing I would do if I was you is actually think about landscape maintenance before I even think about mowing.
1399
01:38:18.748 --> 01:38:26.313
And that is how do I get recurring revenue from the one-time jobs by just selling them a recurring maintenance package for whatever I installed?
1400
01:38:27.774 --> 01:38:31.216
Because everyone in your database that you install a project for, I would be... Go ahead.
1401
01:38:33.803 --> 01:38:37.824
Yeah, that's exactly what I would, that's what the 10% or so makes up.
1402
01:38:38.164 --> 01:38:40.685
We have more maintenance accounts than lawn mowing accounts.
1403
01:38:41.225 --> 01:38:41.485
Got it.
1404
01:38:41.605 --> 01:38:42.005
Makes sense.
1405
01:38:42.425 --> 01:38:47.866
And so right now for six weeks booked out, are you starting to get customers saying no to your landscape jobs?
1406
01:38:47.886 --> 01:38:49.087
Just cause you're so far booked out.
1407
01:38:52.168 --> 01:38:53.068
Yes and no.
1408
01:38:53.468 --> 01:39:02.050
Our close rates around 28 to 30%, you know, so, uh, I would lean towards no on that, but,
1409
01:39:02.833 --> 01:39:04.454
Um, yes, as well.
1410
01:39:04.474 --> 01:39:06.656
I mean, and are you spending money on ads right now?
1411
01:39:08.857 --> 01:39:09.157
Yes.
1412
01:39:10.238 --> 01:39:10.418
Okay.
1413
01:39:10.438 --> 01:39:11.859
What's the budget on that per month right now?
1414
01:39:14.341 --> 01:39:15.121
Oh, 1500.
1415
01:39:15.562 --> 01:39:15.822
Okay.
1416
01:39:16.322 --> 01:39:27.370
So I would set some sort of target and you know this better than I do is when do I switch from landscaping ads to mowing ads?
1417
01:39:27.390 --> 01:39:27.490
Okay.
1418
01:39:28.575 --> 01:39:30.957
And I would do that based upon how far you're booked out.
1419
01:39:31.618 --> 01:39:39.305
So for example, hey, you know when you start getting a backlog of X amount of days where you start to feel a little bit uneasy.
1420
01:39:40.226 --> 01:39:41.747
And I would just go right above that.
1421
01:39:42.168 --> 01:39:43.109
Let's just say it's four weeks.
1422
01:39:43.649 --> 01:39:49.595
When I'm above four weeks being booked out on landscape jobs, I'm immediately going to go spend this money on mowing.
1423
01:39:50.175 --> 01:39:51.717
The ads are all going to go towards mowing.
1424
01:39:52.802 --> 01:40:00.848
I will also say this is very time-specific, and so you're going to get a lot of leads for the lowest customer acquisition costs during the spring for both landscaping and for mowing.
1425
01:40:01.248 --> 01:40:05.291
So sometimes you have to actually determine, what am I trying to focus on with the business model?
1426
01:40:05.451 --> 01:40:13.937
And when I have $1,500, a limited budget, I'm going to spend money on advertising the product or service that I want to scale in the long term.
1427
01:40:14.918 --> 01:40:17.540
And so, for example, if you have warm season grasses...
1428
01:40:18.737 --> 01:40:24.701
you still have a June, July, and August where you can go advertise for mowing and get a ton of customers for $1,500 per month.
1429
01:40:25.861 --> 01:40:37.889
And so if I was trying to move the quality of revenue or shift it towards recurring, I would just say, how far out do I need to be with landscape jobs before I'm confident enough to just go turn all my marketing budget towards mowing?
1430
01:40:42.572 --> 01:40:42.872
Okay.
1431
01:40:43.272 --> 01:40:48.195
And then at what point, so you say you get 30, 40 accounts
1432
01:40:48.887 --> 01:40:53.329
And then you have four or five weeks booked on landscape projects with the same amount of guys.
1433
01:40:54.109 --> 01:41:04.113
I w how does that look like from a production standpoint without going into debt and, you know, getting more guys and that kind of thing?
1434
01:41:04.153 --> 01:41:05.733
Like, yeah.
1435
01:41:05.833 --> 01:41:06.854
How many trucks do you have right now?
1436
01:41:06.914 --> 01:41:07.554
Two or three?
1437
01:41:09.995 --> 01:41:10.215
Two.
1438
01:41:10.235 --> 01:41:10.915
Okay.
1439
01:41:11.336 --> 01:41:14.737
And so do you need, you need probably both of those trucks to do the landscape projects.
1440
01:41:14.777 --> 01:41:15.337
Is that correct?
1441
01:41:17.358 --> 01:41:17.638
Yeah.
1442
01:41:18.207 --> 01:41:18.447
Okay.
1443
01:41:19.107 --> 01:41:22.468
And I'm assuming the business is a little cash constrained right now.
1444
01:41:25.369 --> 01:41:25.669
Yeah.
1445
01:41:26.009 --> 01:41:26.269
Okay.
1446
01:41:26.649 --> 01:41:29.070
What size of lawns are you typically experiencing?
1447
01:41:29.090 --> 01:41:32.271
Like the turf square footage, is it like 15, 20,000 square feet?
1448
01:41:32.311 --> 01:41:33.231
Are they smaller lawns?
1449
01:41:35.332 --> 01:41:37.072
We're sticking to the smaller lawns.
1450
01:41:37.493 --> 01:41:37.793
Okay.
1451
01:41:37.913 --> 01:41:42.414
Thicky cutter, like top 30 minutes max, 30, 45 minutes.
1452
01:41:42.857 --> 01:41:43.017
Okay.
1453
01:41:43.417 --> 01:41:44.638
So I would do one of two things.
1454
01:41:44.758 --> 01:41:52.464
Either A, if you're more pro-growth, I'd say go get a small truck and even if you have to finance it, to be able to spin up the mowing side.
1455
01:41:52.744 --> 01:41:56.527
Because you already have a lot of the fixed expenses like shop space insurance already covered.
1456
01:41:56.907 --> 01:41:59.549
So the revenue that you get from this is going to be pretty profitable.
1457
01:41:59.849 --> 01:42:01.810
So you can afford to take on a little debt.
1458
01:42:01.830 --> 01:42:02.631
That's more pro-growth.
1459
01:42:02.931 --> 01:42:04.032
Let me go more conservative.
1460
01:42:04.552 --> 01:42:11.635
That is, let's go ahead and say right now you're six weeks booked out if everyone's working five days a week or 40 hours per week on landscaping.
1461
01:42:11.835 --> 01:42:16.777
Let's now re-look at the schedule if I take one day a week and just go do mowing with the same crews.
1462
01:42:17.677 --> 01:42:18.998
Now all of a sudden you're eight weeks booked out.
1463
01:42:20.678 --> 01:42:28.882
And so I think the more conservative approach is like, I'm going to constrain my capacity per week of budget hours based upon assuming that I'm going to spend one day a week doing mowing.
1464
01:42:29.102 --> 01:42:32.243
And then as time goes on, that's going to become two days, three days, et cetera.
1465
01:42:34.900 --> 01:42:35.020
Yeah.
1466
01:42:35.220 --> 01:42:37.221
Right now we do one day a week of mowing.
1467
01:42:37.681 --> 01:42:44.023
Like every week we do one day of mowing or maintenance stuff, and the rest of the time is projects.
1468
01:42:44.503 --> 01:42:49.545
And so right now, you know, as we build that up, you know, it's going to become more and more days.
1469
01:42:49.805 --> 01:42:50.125
Totally.
1470
01:42:50.425 --> 01:42:56.167
So what's nice though is with recurring work, as jobs come in, it doesn't completely change your schedule overnight.
1471
01:42:56.687 --> 01:43:04.390
Meaning on that one day you currently have maintenance, how many mowing customers do you think you guys could take on without having to add a second day?
1472
01:43:08.066 --> 01:43:09.947
Right now, 10 to 15.
1473
01:43:10.207 --> 01:43:10.688
Oh, awesome.
1474
01:43:10.888 --> 01:43:11.268
Let's go.
1475
01:43:11.688 --> 01:43:18.692
So there's definitely a world in which you could get 10 to 15 customers by spending this ad budget on mowing.
1476
01:43:19.413 --> 01:43:20.133
Fill that day.
1477
01:43:20.153 --> 01:43:23.335
And then there's going to come a time like, we cannot get any more mowing jobs done.
1478
01:43:23.735 --> 01:43:24.015
Great.
1479
01:43:24.315 --> 01:43:30.499
We're now resetting the expectation of how many hours we can get done in a week of landscaping.
1480
01:43:30.959 --> 01:43:37.383
And so instead of trying to get 32 hours worth of projects and eight hours of mowing, all right, we're shifting that.
1481
01:43:37.883 --> 01:43:40.485
Now we're going to have one crew on Thursday.
1482
01:43:40.525 --> 01:43:41.125
I'm just making this up.
1483
01:43:41.486 --> 01:43:43.587
One crew on Thursday on landscaping, one on mowing.
1484
01:43:44.068 --> 01:43:51.373
Instead of just both crews on Friday doing mowing, we're going to do one crew on Thursday and two crews on Friday for mowing.
1485
01:43:52.294 --> 01:43:58.058
Therefore, needing less landscaping projects to keep yourself booked out over the four-week threshold.
1486
01:44:02.381 --> 01:44:02.621
Right.
1487
01:44:03.102 --> 01:44:03.682
Does that make sense?
1488
01:44:03.702 --> 01:44:04.463
Yeah, that makes sense.
1489
01:44:04.843 --> 01:44:05.043
Okay.
1490
01:44:08.205 --> 01:44:08.405
Cool.
1491
01:44:09.045 --> 01:44:09.285
Awesome.
1492
01:44:09.305 --> 01:44:10.106
Well, thank you for coming on.
1493
01:44:10.206 --> 01:44:10.766
I appreciate it.
1494
01:44:10.846 --> 01:44:11.046
All right.
1495
01:44:11.206 --> 01:44:11.426
Thank you.
1496
01:44:12.347 --> 01:44:12.687
All right.
1497
01:44:12.947 --> 01:44:17.729
Next caller coming in to the confession booth where we spill tea anonymously.
1498
01:44:18.129 --> 01:44:18.729
Welcome to the show.
1499
01:44:18.749 --> 01:44:19.469
Thank you for coming on.
1500
01:44:20.550 --> 01:44:21.150
I'll be coming on.
1501
01:44:21.710 --> 01:44:26.072
I want to know what you're smoking.
1502
01:44:26.112 --> 01:44:26.252
Oh.
1503
01:44:26.312 --> 01:44:27.393
It looks like someone's talking.
1504
01:44:27.833 --> 01:44:29.093
Oh.
1505
01:44:29.173 --> 01:44:29.573
Coming in.
1506
01:44:29.894 --> 01:44:30.674
Hello, hello, hello.
1507
01:44:32.140 --> 01:44:32.940
Earth to the caller.
1508
01:44:33.260 --> 01:44:34.461
Welcome to the confession booth.
1509
01:44:34.621 --> 01:44:35.241
Are you there?
1510
01:44:36.002 --> 01:44:37.242
Earth to the confession booth.
1511
01:44:37.662 --> 01:44:40.663
All right, we're moving on to the next caller, I think.
1512
01:44:40.743 --> 01:44:42.784
Sounds like they're chatting it up.
1513
01:44:43.204 --> 01:44:45.105
They're chatting it up.
1514
01:44:45.285 --> 01:44:46.266
They're chatting it up.
1515
01:44:46.406 --> 01:44:46.886
It's important.
1516
01:44:47.146 --> 01:44:47.526
Got it.
1517
01:44:47.866 --> 01:44:50.047
I wish I'd... Yeah, okay.
1518
01:44:50.067 --> 01:44:52.868
I wish there was something I could spray on that.
1519
01:44:52.988 --> 01:44:53.869
Yeah, I wish so.
1520
01:44:53.909 --> 01:44:54.989
We could spray it.
1521
01:44:55.109 --> 01:44:56.530
Keep the bushes, but kill the weeds.
1522
01:44:56.710 --> 01:44:57.170
It's important.
1523
01:44:57.290 --> 01:45:00.993
No, I don't think there's any selective for... Yeah, I don't think so either.
1524
01:45:01.013 --> 01:45:01.873
I don't think there's any selective.
1525
01:45:01.893 --> 01:45:02.674
He's a couple of those lines.
1526
01:45:02.994 --> 01:45:03.154
Nope.
1527
01:45:03.855 --> 01:45:04.575
Yeah, definitely not.
1528
01:45:05.236 --> 01:45:05.516
Yeah.
1529
01:45:05.936 --> 01:45:10.380
All right, well, I think this person wandered into the confession booth by accident today.
1530
01:45:10.920 --> 01:45:12.441
All right, let's take a couple more callers.
1531
01:45:13.021 --> 01:45:17.205
Next call coming into the confession booth where we spill tea anonymously.
1532
01:45:17.685 --> 01:45:18.345
Welcome to the show.
1533
01:45:18.365 --> 01:45:19.106
Thank you for coming on.
1534
01:45:19.126 --> 01:45:22.789
How are you doing, brother?
1535
01:45:23.149 --> 01:45:23.729
Fantastic.
1536
01:45:24.170 --> 01:45:24.610
How can I help?
1537
01:45:27.690 --> 01:45:31.831
Hey, so I guess I'm in a little bit of a dilemma here.
1538
01:45:31.931 --> 01:45:39.214
So I hired an office lady on, so we do about, probably on page for about 1.2 million ish this year, so around there.
1539
01:45:39.234 --> 01:45:41.455
Did about 580 last year.
1540
01:45:41.475 --> 01:45:43.956
The year before that we did like 100 grand.
1541
01:45:43.976 --> 01:45:46.336
So we were picking up pretty quick.
1542
01:45:46.917 --> 01:45:50.618
And I'm kind of in a dilemma because essentially I hired a lady in who had worked at
1543
01:45:51.197 --> 01:46:00.320
you know, like a $5 million, one landscape company previously, but she had a lot of experience and I hired her in to take over the admin roles for myself.
1544
01:46:01.300 --> 01:46:02.121
Didn't work out.
1545
01:46:02.241 --> 01:46:07.122
I got rid of her partially my fault because I didn't have any SOPs or anything set up from her.
1546
01:46:07.602 --> 01:46:15.805
However, on the other side, um, I hired her specifically because she was supposed to come in and bring her experience to make those SOPs and everything.
1547
01:46:15.845 --> 01:46:16.085
So,
1548
01:46:17.845 --> 01:46:30.347
That just didn't work out, but I'm kind of back in the spot where I'm trying to figure out if before I hire another office person, if I wait until there's really enough workload for them to take it on, or if I just delegate it now.
1549
01:46:30.807 --> 01:46:39.209
Quite frankly, it adds about an hour and a half to my day because we have so many automation set up in homeworks and like 90% of our services are reoccurring.
1550
01:46:39.509 --> 01:46:46.430
So it's not necessarily a ton of work and upkeep, you know, dealing with the clients.
1551
01:46:46.992 --> 01:46:49.654
And it is work that I genuinely do enjoy doing.
1552
01:46:49.954 --> 01:46:59.319
But I do realize like in the long term of things, especially as you know, we continue to grow that I need to delegate that at some point.
1553
01:46:59.359 --> 01:47:05.202
Like, am I punishing myself by staying in that role and continuing to do it?
1554
01:47:07.128 --> 01:47:12.270
50,000 a year on Google ads rather than $50,000 a year on an admin person when it has been out of my day.
1555
01:47:12.290 --> 01:47:22.574
It's just kind of hard to justify until, you know, I can delegate it correctly with all the SOPs and, um, workflows and like loom videos and all of that good stuff.
1556
01:47:23.685 --> 01:47:32.189
Yeah, so first off, if hiring someone full-time is only gonna save you an hour a day, at your size, I understand the apprehension.
1557
01:47:32.790 --> 01:47:34.831
I would also say there's a few things you could do.
1558
01:47:35.091 --> 01:47:40.033
One, you could just not hire someone full-time, and they could just do a couple hours worth of work a day.
1559
01:47:40.814 --> 01:47:41.554
The second thing is,
1560
01:47:44.474 --> 01:47:46.756
I believe there's probably other things they could delegate.
1561
01:47:46.996 --> 01:47:54.442
You could delegate to them to say more like four or five hours a day, but it requires them being a very good player.
1562
01:47:55.323 --> 01:47:57.684
And so this is where it's very much of a catch-22.
1563
01:47:57.724 --> 01:48:04.690
It's like, you could go get a VA or someone part-time, probably work three hours a day and do everything you need and get it off of your plate.
1564
01:48:05.250 --> 01:48:13.557
I will also say hiring an all-star rockstar admin will probably unlock twice as much of your time because they will actively be looking for things to be taken off of your plate.
1565
01:48:14.944 --> 01:48:17.285
and they'll do more than save you an hour, an hour and a half a day.
1566
01:48:18.625 --> 01:48:23.327
And so I agree with the sentiment that you might've like not set up for success.
1567
01:48:23.387 --> 01:48:32.850
I will also say if you hire an all-star, one thing that I would really recommend, you might've done this, and that is in their job description, make it clear that they are supposed to be setting up the SOPs.
1568
01:48:35.411 --> 01:48:36.812
Because you- Yeah, that was made clear.
1569
01:48:37.308 --> 01:48:37.648
Okay, yeah.
1570
01:48:37.868 --> 01:48:44.693
So then it's a function of, I think, what are the lowest hanging fruit of tasks that can be taken off your plate?
1571
01:48:45.073 --> 01:48:58.863
And if those are a matter of an hour, an hour or two a day, like, I would probably just give a VA or a part-time office person, and then keep your eyes open for a rock star that you're going to pay three times as much, but they're going to give you most of your day back, and that's what gets you from $1.2 to $3 million.
1572
01:49:03.099 --> 01:49:09.625
Yeah, no, I 100% agree that my only issue with trying to get somebody part time is really there's so much that's automated now.
1573
01:49:09.906 --> 01:49:11.787
And it's like I got an operations manager.
1574
01:49:13.569 --> 01:49:16.332
The guy's been with me for four years and he's running everything in the field.
1575
01:49:16.472 --> 01:49:16.832
Awesome.
1576
01:49:16.852 --> 01:49:25.540
So I'm at a point where I'm just dealing with essentially phone calls coming in and and like he's taking over scheduling and all of that.
1577
01:49:25.580 --> 01:49:28.123
So I feel like it's like those
1578
01:49:28.479 --> 01:49:32.101
Phone calls is kind of hard to delineate whether they're for sales or they're for support.
1579
01:49:32.441 --> 01:49:39.345
And hiring somebody part-time that's only there a couple hours a day, there's no way to know when the calls are necessarily coming in.
1580
01:49:39.385 --> 01:49:45.948
So that's only been the reason I was kind of apprehensive to get somebody part-time and hold off until I could justify a full-time more so.
1581
01:49:46.248 --> 01:49:46.828
Great question.
1582
01:49:46.868 --> 01:49:53.532
So this is why I'm a huge fan, especially when it's things like phone calls that you mentioned, to hire someone to buy the minute.
1583
01:49:53.852 --> 01:49:54.532
Yeah.
1584
01:49:54.652 --> 01:49:57.274
And this is a function of either A, hiring someone...
1585
01:49:58.094 --> 01:50:12.522
call center or even someone that you literally say I will I will pay you by the minute and it's gonna be like 200 bucks an hour But you're only gonna get a few calls a day The thing is this right now you are underestimating how much distraction these reactive tasks are taking from your day
1586
01:50:13.468 --> 01:50:19.051
And it's going to keep you from growing the business because that phone ringing four or five times a day is keeping you from growing the business.
1587
01:50:19.652 --> 01:50:22.193
It's keeping you from staying focused on the higher leverage tasks.
1588
01:50:22.493 --> 01:50:27.356
And even though the phone call might be three to five minutes, it's taking 15 minutes of your time because you got back in your phone.
1589
01:50:27.376 --> 01:50:28.317
You noticed four other things.
1590
01:50:28.337 --> 01:50:29.097
You got into Facebook.
1591
01:50:29.117 --> 01:50:30.038
You saw an email come in.
1592
01:50:30.838 --> 01:50:33.140
It's the 30 interruptions throughout the day that are killing you.
1593
01:50:33.660 --> 01:50:41.347
and you're putting them all together, I'm like, oh, it's an hour and a half, when I believe if those were all actually off of your plate and you then time blocked when you'd react to them.
1594
01:50:41.367 --> 01:50:42.828
Because you're like, well, I still have to respond.
1595
01:50:42.868 --> 01:50:44.149
It's just a sales function still.
1596
01:50:44.529 --> 01:50:46.171
Okay, I'll go along with you on that.
1597
01:50:46.491 --> 01:50:54.278
But now you're going to block, okay, I'm going to spend 30 minutes from 9 a.m. till 9.30, and I'm going to spend from 2 p.m. till 3 p.m. doing these tasks.
1598
01:50:54.798 --> 01:50:59.382
And what you will get done in an hour and a half is technically taking you five hours right now.
1599
01:50:59.702 --> 01:51:01.544
It just, it's spread throughout the entire day.
1600
01:51:04.208 --> 01:51:14.297
And so the ability to build a time block comes after you've taken reactive tasks and put some sort of barrier between you and the customer so that you get to react on your own time.
1601
01:51:15.297 --> 01:51:18.800
And now you go into your day being like, I will work on sales during these hours.
1602
01:51:19.781 --> 01:51:25.146
I will respond to the tasks that my admin, all the tickets they put together for me, I'll respond during these hours.
1603
01:51:25.466 --> 01:51:28.188
And you're like, oh, it's gonna slow down how fast my communication is.
1604
01:51:28.249 --> 01:51:28.769
Yes, it will.
1605
01:51:29.049 --> 01:51:30.811
It'll also allow you to triple the size of the business.
1606
01:51:31.545 --> 01:51:40.528
Because right now, there are five to 10 things you're reacting to in a day that if you could just time block them, you could get them in 30 minutes, but they're kind of spread throughout your whole day right now.
1607
01:51:41.208 --> 01:51:47.671
And so this is definitely where I think a call service or some sort of permanent situation is probably helpful.
1608
01:51:48.211 --> 01:51:54.353
And then down the road, you can get a part-time person for things like payroll, all this other stuff, but you've probably already farmed a lot of that out.
1609
01:51:54.833 --> 01:51:57.074
And so I would really be thinking about anything reactive.
1610
01:51:57.154 --> 01:52:00.215
Anything that buzzes on this phone is something I'm trying to get rid of.
1611
01:52:03.867 --> 01:52:04.687
Okay, fair enough.
1612
01:52:04.767 --> 01:52:11.208
So I guess, obviously I don't want to make the, I need to learn from a stake, have SOPs and workflows and all that set up.
1613
01:52:12.089 --> 01:52:24.751
Should I build the plane while I'm going or, you know, maybe hold off for a couple weeks to a month, really get that position built out and all the training material for that position built out and then go ahead and hire for it.
1614
01:52:24.771 --> 01:52:33.573
Because I also think realistically in the next month, now that we got an ad agency and we're just, you know, funneling money into ads that we'll be able to,
1615
01:52:34.232 --> 01:52:40.623
also pick up enough work to justify the added overhead within even just the next month or so.
1616
01:52:40.663 --> 01:52:40.903
100%.
1617
01:52:40.943 --> 01:52:48.475
And if you add in your automation, just one extra step for this admin person, which is like calling them within 60 seconds, that alone could pay for this person.
1618
01:52:49.382 --> 01:52:52.683
And so these are the type of things that right now you don't do because it's your time.
1619
01:52:52.723 --> 01:52:53.043
I get it.
1620
01:52:53.443 --> 01:52:55.884
And so I think there's two ways to do this.
1621
01:52:56.044 --> 01:53:03.185
One is very violent, which is in 24 hours, you talk through each of your processes when it comes to answering the phone, what to say, how to upsell.
1622
01:53:03.385 --> 01:53:06.426
You could talk through with AI, and it will create the quote-unquote SOPs.
1623
01:53:06.686 --> 01:53:13.188
The other way to do this is over the next 30 days, whenever you're doing an admin task that you know you eventually want to hand off, you just record it.
1624
01:53:13.528 --> 01:53:14.328
Do a Loom video.
1625
01:53:14.688 --> 01:53:15.488
Take the Loom video.
1626
01:53:15.548 --> 01:53:16.288
Take the transcript.
1627
01:53:16.328 --> 01:53:19.109
Drop it into ChatDBT, and it will give you the SOP with the checklist.
1628
01:53:19.929 --> 01:53:22.651
And so I'm more in that direction if you want to do it passively.
1629
01:53:22.671 --> 01:53:30.956
If you're like, I need to get this off my plate today because we're just growing so fast, then you could very well probably talk to AI for four to five hours and create SOPs for every single thing.
1630
01:53:30.976 --> 01:53:32.457
Keep in mind, people don't follow checklists.
1631
01:53:33.332 --> 01:53:34.273
like no matter who you hire.
1632
01:53:34.853 --> 01:53:38.916
If you show them what to do though, via the recording, that is usually more effective.
1633
01:53:39.257 --> 01:53:45.822
And so I would be in the camp of over the next week, anytime you're answering email, answering a phone call, you're simply recording everything.
1634
01:53:46.182 --> 01:53:53.568
And even if you get like, for example, on voice memos, it gets transcripts right away on iOS, on Loom, you can drop any video or audio, it'll immediately get you the transcript.
1635
01:53:53.928 --> 01:53:57.910
Drop that stuff into ChatDT and allow it to give you the script for upselling.
1636
01:53:57.970 --> 01:54:00.011
Allow it to give you the script for when you're selling over the phone.
1637
01:54:00.311 --> 01:54:08.134
These are all things that you can create SOPs for quickly, but then have the video in Loom or some sort of screen recording for that person to follow along with.
1638
01:54:12.589 --> 01:54:14.150
That sounds great.
1639
01:54:15.630 --> 01:54:16.330
I appreciate it.
1640
01:54:16.370 --> 01:54:21.212
I'm in this weird spot where I genuinely love working 60 hours a week.
1641
01:54:21.732 --> 01:54:24.052
I have no intention to stop doing that.
1642
01:54:24.132 --> 01:54:26.613
It makes it hard to want to give those things away.
1643
01:54:26.633 --> 01:54:28.994
Obviously, I'm making the effort.
1644
01:54:29.034 --> 01:54:33.535
I tried and it burned down, but I'll shoot for it again.
1645
01:54:33.855 --> 01:54:34.895
That's definitely a good plan.
1646
01:54:35.016 --> 01:54:40.137
I just wanted to make sure that I was on the right track of not pushing it off for too long, but I'm not sure.
1647
01:54:40.602 --> 01:54:43.483
making sure that next time I go about it, there's more structure to it.
1648
01:54:43.523 --> 01:54:47.105
So it, uh, you know, has a different result than I did the first time around.
1649
01:54:47.385 --> 01:54:47.765
Awesome, man.
1650
01:54:47.805 --> 01:54:48.345
Keep crushing it.
1651
01:54:48.445 --> 01:54:48.925
You're doing great.
1652
01:54:49.426 --> 01:54:49.706
All right.
1653
01:54:49.866 --> 01:54:49.986
Yeah.
1654
01:54:50.006 --> 01:54:55.728
So this is a great point about reactivity is so easy to say, Oh, I get this done in an hour or two hours a day.
1655
01:54:56.068 --> 01:55:04.932
But when you take those tasks and it's two minutes here, four minutes here, eight minutes here, six minutes here, three minutes here, one minute there, that distraction is a tax on the business that keeps you from growing.
1656
01:55:05.252 --> 01:55:06.332
And he's running up against it.
1657
01:55:06.372 --> 01:55:10.074
Like most companies do when you hit around seven figures and that's,
1658
01:55:10.554 --> 01:55:11.615
I'm okay with you.
1659
01:55:11.775 --> 01:55:12.756
I love doing admin.
1660
01:55:13.357 --> 01:55:13.857
Totally fine.
1661
01:55:14.338 --> 01:55:16.460
I just don't want you to be reactively doing admin.
1662
01:55:17.060 --> 01:55:17.360
I.e.
1663
01:55:17.441 --> 01:55:18.702
the phone rings and I jump on it.
1664
01:55:18.942 --> 01:55:22.725
I'm in a sales meeting with a customer and the phone rings and I have to go to answer it.
1665
01:55:22.986 --> 01:55:29.652
Either A, I'm going to jeopardize the sale if I answer the phone, or B, I'm going to jeopardize the lead that's coming in because I stay with a customer that I'm talking to.
1666
01:55:30.032 --> 01:55:32.515
And so being reactive through your day is costing you.
1667
01:55:32.535 --> 01:55:33.415
It doesn't show up on the P&L.
1668
01:55:34.076 --> 01:55:39.919
but I can promise it's a whole lot cheaper than paying some phone company to answer the thing at two or three bucks a minute.
1669
01:55:39.999 --> 01:55:45.741
It doesn't matter what the cost is per minute because it's costing you way more in distraction when it's reactive.
1670
01:55:46.021 --> 01:55:49.803
I would rather him keep doing the admin tasks, but don't be reactive.
1671
01:55:49.823 --> 01:56:00.988
Have them create a ticket and you get a plan and schedule when you're gonna take those admin tasks on instead of being reactive to whatever customer wants to blow up your phone that day.
1672
01:56:01.588 --> 01:56:04.270
That's a recipe for chaos and eventually hating the business.
1673
01:56:04.991 --> 01:56:05.251
All right.
1674
01:56:05.271 --> 01:56:06.352
A couple more callers.
1675
01:56:07.213 --> 01:56:09.355
First one or next one coming in.
1676
01:56:10.195 --> 01:56:10.576
Here we go.
1677
01:56:13.858 --> 01:56:15.420
Welcome to the confession booth.
1678
01:56:16.301 --> 01:56:17.001
Thank you for coming on.
1679
01:56:17.141 --> 01:56:17.702
What can I do to help?
1680
01:56:23.507 --> 01:56:24.007
Hello, hello.
1681
01:56:25.408 --> 01:56:26.769
This is the confession booth calling.
1682
01:56:27.510 --> 01:56:28.131
Yes, hello, Mark.
1683
01:56:28.391 --> 01:56:29.011
Hey, how's it going?
1684
01:56:29.191 --> 01:56:29.692
I can, yes.
1685
01:56:31.623 --> 01:56:32.484
Yes, hello.
1686
01:56:33.104 --> 01:56:35.726
My question is around capacity, like personal capacity.
1687
01:56:35.946 --> 01:56:36.166
Okay.
1688
01:56:36.406 --> 01:56:40.569
So I've been doing a solo thing for about five years.
1689
01:56:40.629 --> 01:56:48.714
I had to do it under the table, do some citizenship-related stuff, and this is my first year doing it professional with LSA setup and everything like that.
1690
01:56:48.774 --> 01:56:53.858
So I'm really feeling a lot of the personal capacity stress coming from just the loneliness on the truck kind of.
1691
01:56:53.978 --> 01:56:57.300
So I'm just wondering how you would like, when to decide on this, on that.
1692
01:56:57.320 --> 01:56:59.081
Because I feel my personal capacity kind of,
1693
01:56:59.772 --> 01:57:21.900
lessening honestly throughout the day than like just maybe having somebody on the truck feels like it would be the solution but i'm just wondering what you have experience with that yeah so the tough part about personal capacity is also the best part and that is personal capacity will limit the size of your business every single time it's actually the reason why all of us including myself don't grow a bigger business is because of our personal capacity the good news is that you can change it
1694
01:57:22.973 --> 01:57:29.078
And so identifying why your personal capacity is the limit to your growth is the hardest part.
1695
01:57:29.839 --> 01:57:35.163
And so when we talk about personal capacity, I have to ask, is it a skill that you're lacking?
1696
01:57:35.663 --> 01:57:37.445
Is it the stamina that you're lacking?
1697
01:57:37.845 --> 01:57:39.286
Is it just keeping your head in the game?
1698
01:57:39.566 --> 01:57:43.690
What's the actual thing that is keeping you from like, I want to keep growing this business.
1699
01:57:43.770 --> 01:57:45.071
I want to keep putting more work.
1700
01:57:45.351 --> 01:57:45.751
What is it?
1701
01:57:45.911 --> 01:57:47.272
And have you identified that already?
1702
01:57:49.074 --> 01:57:51.716
Yeah, I'd say it's definitely keeping the head in the game work.
1703
01:57:52.086 --> 01:57:57.229
Like I'll go and like Monday I'm motivated, but then my Friday after it feels like, you know, rat racy kind of.
1704
01:57:57.529 --> 01:58:00.411
And I've had part-time guys on like for one job and want to do.
1705
01:58:00.731 --> 01:58:03.113
And that gives me a lot just having going through with somebody.
1706
01:58:03.153 --> 01:58:05.054
I feel like it's a lot of what I need to do.
1707
01:58:05.074 --> 01:58:06.595
I feel like I'm going through a lot of it by myself.
1708
01:58:07.876 --> 01:58:11.778
And when you say by yourself, when you have that employee, does that make it feel better for you?
1709
01:58:14.195 --> 01:58:17.536
Yeah, I feel like my personal capacity raises quite a bit.
1710
01:58:17.556 --> 01:58:24.359
So what I was wondering though, right now I make around $8,000 a month from the business, with about four of that coming from maintenance.
1711
01:58:25.119 --> 01:58:34.042
So my risk is like, I think hiring someone on the truck would help my personal capacity, but I worry then it'll affect my, like I'm not there yet in the business is what I worry about.
1712
01:58:35.663 --> 01:58:36.943
Right now, do you have enough leads?
1713
01:58:36.963 --> 01:58:39.584
Like do you have tons of leads to where you could hire someone else or not?
1714
01:58:42.707 --> 01:58:46.449
I think, yeah, I've been getting pretty consistent leads about three a week.
1715
01:58:46.469 --> 01:58:48.710
So I think right now in this video, I could hire someone on.
1716
01:58:48.730 --> 01:58:52.992
And it would start part-time probably, but I don't know if I could hire someone on full-time right now with the amount of leads.
1717
01:58:53.072 --> 01:58:53.652
Totally.
1718
01:58:54.033 --> 01:58:59.495
So what I would love for you to be able to do is an intermediary step before hiring someone from just a business perspective for a minute.
1719
01:58:59.775 --> 01:59:04.378
I would love if we can get that to $10K at least per month, which would probably mean raising your prices.
1720
01:59:05.358 --> 01:59:16.524
Um, and most of the time, the reason people, when they hire someone first, like it is lonely being up solo all the time, but then you get that employee and all of a sudden you're making $12,000 a month, you pay their wages and you're making less than before.
1721
01:59:16.844 --> 01:59:22.087
And now you create financial stress that actually makes now loneliness sounds pretty good.
1722
01:59:22.647 --> 01:59:25.588
You know, it's like, I'd rather have that than not be able to pay the bills.
1723
01:59:26.048 --> 01:59:33.091
And so I don't want to exchange one stress, which is the current stress you're facing now, uh, with another stress, which is financial stress.
1724
01:59:33.431 --> 01:59:35.732
And now having to get, figure out how you're going to let this person go.
1725
01:59:35.772 --> 01:59:36.592
Cause you don't have to off work.
1726
01:59:37.292 --> 01:59:43.154
And so I would love for your prices to get more in the range of 80 plus per hour and making at least $10,000 per month.
1727
01:59:43.255 --> 01:59:44.815
I would love that to be the case first.
1728
01:59:45.515 --> 01:59:49.937
I will also say, um, the, um,
1729
01:59:51.970 --> 01:59:55.172
There are certain times in the business that you just have to push through.
1730
01:59:56.373 --> 02:00:02.098
And you've already increased your personal capacity by going from under table to being pro.
1731
02:00:03.418 --> 02:00:10.063
And I believe that you're probably only six to 12 months away from being able to afford what we just talked about, which is hiring an employee and building a team.
1732
02:00:11.585 --> 02:00:18.970
This might just be part of the time where it is lonely and you do not want to buy yourself anything.
1733
02:00:20.043 --> 02:00:22.866
companionship on the truck that is going to put the business in jeopardy.
1734
02:00:24.628 --> 02:00:31.256
And it might just be that for six or 12 months, it's going to be lonely so that you can build the cash reserves to be able to afford the team member.
1735
02:00:33.879 --> 02:00:39.465
And the only way to get through that point is to have a reason why you're doing this business in the first place.
1736
02:00:41.100 --> 02:00:46.162
And so I would go back to that as the anchoring point as to you're running out of steam throughout the week.
1737
02:00:46.302 --> 02:00:47.083
I understand that.
1738
02:00:47.623 --> 02:00:48.844
Start off Monday, high energy.
1739
02:00:48.904 --> 02:00:49.184
Let's go.
1740
02:00:49.204 --> 02:00:50.704
And then Friday, you're like, I just got to get out of here.
1741
02:00:51.185 --> 02:00:51.845
I understand that.
1742
02:00:52.745 --> 02:00:55.867
And the only way to keep your head in the game at that point is to have a why.
1743
02:00:56.767 --> 02:01:00.329
And so, like, if you don't mind, like, why even have the business?
1744
02:01:00.429 --> 02:01:02.109
Like, who are you trying to provide for?
1745
02:01:02.129 --> 02:01:03.070
What are you trying to accomplish?
1746
02:01:06.165 --> 02:01:11.309
So originally the business started from the thing that everybody says freedom, that freedom view of it.
1747
02:01:11.950 --> 02:01:15.873
But really the business now I see it as an investment in myself.
1748
02:01:15.953 --> 02:01:17.234
It's something I do enjoy doing.
1749
02:01:17.274 --> 02:01:18.855
I do enjoy doing the growing of the business.
1750
02:01:19.215 --> 02:01:21.177
And it is something I think I can do.
1751
02:01:21.197 --> 02:01:22.518
So I don't know if that's the why.
1752
02:01:22.538 --> 02:01:23.779
And then I do it for my family too.
1753
02:01:23.799 --> 02:01:27.622
But really it feels like a good way for me to build the life I want.
1754
02:01:28.341 --> 02:01:33.223
And it's like something even if I don't end up succeeding in the amount of skills I've learned throughout the process.
1755
02:01:33.263 --> 02:01:36.924
So that's I don't know if that really answered your why reason, but that's kind of where I come from.
1756
02:01:37.644 --> 02:01:43.546
What does that version of you that you're trying to get to, how does that differ than the current version of you?
1757
02:01:51.123 --> 02:01:52.104
Yeah, that's the thing.
1758
02:01:52.144 --> 02:01:53.305
Yeah, that's what I do.
1759
02:01:53.325 --> 02:01:55.966
I think that's the question I need to ask right there because I don't have an answer to that.
1760
02:01:56.247 --> 02:01:56.607
That's fine.
1761
02:01:57.027 --> 02:02:02.051
I think the reason I push so hard on this is having clarity is what keeps your head in the game when times are tough.
1762
02:02:02.711 --> 02:02:05.453
And so there are, and this doesn't go away by the way.
1763
02:02:05.833 --> 02:02:07.635
As the business grows, the problems get bigger.
1764
02:02:08.175 --> 02:02:14.600
there'll be times you will doubt yourself more and you'll have more evidence as to why you should quit because the problem is harder to conquer.
1765
02:02:14.940 --> 02:02:18.143
The problems are bigger, they're more expensive, there's more people involved.
1766
02:02:18.443 --> 02:02:24.668
Now when you get three or four employees and they're all turning against you and they're doing a revolt against you, they all don't show up, now we have bigger problems.
1767
02:02:25.309 --> 02:02:28.571
And so having a reason why you show up is what keeps your head in the game.
1768
02:02:29.252 --> 02:02:34.916
And there's been plenty of times I went to quit and it is the easiest, the path of least resistance is just to give up.
1769
02:02:35.717 --> 02:02:44.523
And so when you're feeling that way on Thursdays and Fridays right now, but that doesn't change as the business grows, it just means I have to know why I'm enduring this pain.
1770
02:02:45.643 --> 02:02:46.464
Like I go to the gym.
1771
02:02:46.624 --> 02:02:47.284
It's not fun.
1772
02:02:47.345 --> 02:02:52.288
I don't love lifting things at 4 a.m. about like hundreds of pounds and it hurts and I'm sore.
1773
02:02:53.128 --> 02:02:54.209
But I do it for a reason.
1774
02:02:55.641 --> 02:03:03.825
And so having a lot of clarity as to why you're doing this many times will be the thing that allows you to be able to endure the pain that is inevitably going to come.
1775
02:03:04.586 --> 02:03:07.007
And so instead of trying to put a bandaid on it and say, oh, this will fix it.
1776
02:03:07.027 --> 02:03:13.290
And like, let's go hire someone and then just prevent causing that hemorrhage to show up in a different place, which is going to be financial stress down the road.
1777
02:03:13.611 --> 02:03:16.132
I would just get really clear on why you started this business.
1778
02:03:16.672 --> 02:03:18.633
And like, you're like, I want to become a different version of myself.
1779
02:03:18.813 --> 02:03:19.954
What does that person look like?
1780
02:03:21.338 --> 02:03:28.202
Because when you're really low, I've got to remind myself that it is worth the pain I'm going through to become the person I want to be.
1781
02:03:30.163 --> 02:03:32.484
And having clarity around what that person looks like will help.
1782
02:03:33.885 --> 02:03:34.746
That could be financial.
1783
02:03:34.986 --> 02:03:37.347
It could be financial relief.
1784
02:03:37.687 --> 02:03:38.768
It could be paying off a debt.
1785
02:03:38.808 --> 02:03:42.430
It could be being able to provide, not just for you, not just for your family, but for the people that you love.
1786
02:03:42.790 --> 02:03:44.391
Like, you've got to have a reason why.
1787
02:03:45.232 --> 02:03:47.873
And then get really clear what that's going to look like.
1788
02:03:48.574 --> 02:03:49.134
Does that make sense?
1789
02:03:50.896 --> 02:03:52.497
Thank you so much, Mike.
1790
02:03:52.877 --> 02:03:53.397
My pleasure, brother.
1791
02:03:53.497 --> 02:03:53.817
Take care.
1792
02:03:54.057 --> 02:03:54.617
Best of luck to you.
1793
02:03:55.958 --> 02:03:56.318
All right.
1794
02:03:56.658 --> 02:03:57.398
Next caller.
1795
02:03:58.539 --> 02:04:00.900
I think this one was the one that dropped a little while ago.
1796
02:04:00.920 --> 02:04:02.260
Let's pull this one in here.
1797
02:04:03.181 --> 02:04:04.681
Welcome to the confession booth.
1798
02:04:05.101 --> 02:04:05.982
Thank you for coming on.
1799
02:04:06.942 --> 02:04:08.583
Hey, Mike.
1800
02:04:09.063 --> 02:04:09.483
How's it going?
1801
02:04:11.544 --> 02:04:11.784
Good.
1802
02:04:11.844 --> 02:04:12.264
How are you?
1803
02:04:12.304 --> 02:04:13.564
Thanks for taking my call.
1804
02:04:13.644 --> 02:04:15.245
Sorry about the earlier when I...
1805
02:04:19.111 --> 02:04:20.872
What can I do to help?
1806
02:04:22.373 --> 02:04:32.497
So, so, uh, there was the first day when I was ready to give up after five years for my business.
1807
02:04:33.418 --> 02:04:45.383
Uh, and I just, uh, I don't know if I can just, you know, it's a bad period or, uh, I should just, uh, get back.
1808
02:04:47.368 --> 02:04:51.354
Um, so last year we did 1.591.
1809
02:04:51.374 --> 02:04:53.597
We profited about 150,000.
1810
02:04:53.617 --> 02:04:56.842
We're definitely in the growth mode.
1811
02:04:58.444 --> 02:04:58.565
Uh...
1812
02:04:59.668 --> 02:05:02.872
At the beginning of the year, we had a month worth of cash in the bank.
1813
02:05:02.892 --> 02:05:04.073
So everything looked good.
1814
02:05:04.473 --> 02:05:12.141
Uh, I was kind of ready to turn, turn things into profit mode, but then things fell apart real quick.
1815
02:05:12.662 --> 02:05:19.790
Just, uh, a couple of bad hires and just, uh, bad decisions on my end.
1816
02:05:20.430 --> 02:05:21.852
Um, so.
1817
02:05:23.225 --> 02:05:33.069
Right now, I have $150,000 in loan and about 50 cash in the bank.
1818
02:05:33.909 --> 02:05:46.054
And so we have more than enough work to handle and on paper, we should be able to turn profit on them like 40, 45% margins.
1819
02:05:50.566 --> 02:06:01.352
All those mistakes and decisions that happened earlier this year, I'm kind of trying to somehow get out of there.
1820
02:06:01.993 --> 02:06:11.838
But at the same time, I kind of pivoted from hiring less experienced guys, hoping to train them to let's just hire actual experts on a higher rate.
1821
02:06:15.675 --> 02:06:19.056
But I just feel like I'm like, maybe I'm three months late.
1822
02:06:19.656 --> 02:06:24.278
I should have made the decision earlier.
1823
02:06:24.498 --> 02:06:25.658
Why do you want to quit though?
1824
02:06:25.959 --> 02:06:26.739
Why do you want to quit?
1825
02:06:26.799 --> 02:06:28.339
Is it the cash being low?
1826
02:06:29.020 --> 02:06:30.600
Is it the fact that your margins have clapped?
1827
02:06:30.660 --> 02:06:32.601
Or was there some mistakes that were made?
1828
02:06:32.941 --> 02:06:33.981
Like, why do you want to quit?
1829
02:06:38.543 --> 02:06:38.943
I don't know.
1830
02:06:42.004 --> 02:06:42.364
I don't know.
1831
02:06:44.227 --> 02:06:45.468
that I'm getting emotional.
1832
02:06:55.712 --> 02:07:03.416
It's just... You're good.
1833
02:07:03.496 --> 02:07:03.976
Take your time.
1834
02:07:04.577 --> 02:07:12.000
I just don't know if I have
1835
02:07:15.559 --> 02:07:23.503
the skill or have the opportunity to keep moving, keep going.
1836
02:07:26.405 --> 02:07:29.946
Is a lot of that pressure coming from the business's cash position?
1837
02:07:30.447 --> 02:07:35.969
Or is there things happening inside the team or at home that are causing that desire to want to quit?
1838
02:07:38.991 --> 02:07:40.112
A mix of everything.
1839
02:07:40.172 --> 02:07:42.032
Obviously, cash positions are great.
1840
02:07:44.405 --> 02:07:46.666
Employees, I mean, I'm not kidding.
1841
02:07:46.686 --> 02:08:03.511
In the past four or five weeks, every single Monday, I have minimum one guy calling for, I would say, understandable reasons, but at the same time, I'm like, you know, thanks for letting me know 9 a.m. in the morning.
1842
02:08:05.291 --> 02:08:06.031
So now what?
1843
02:08:06.651 --> 02:08:07.012
Uh-huh.
1844
02:08:09.452 --> 02:08:11.253
Elvis, I'm trying to
1845
02:08:19.613 --> 02:08:25.117
I'm trying to keep things together, but definitely it affects things at home, so.
1846
02:08:28.200 --> 02:08:28.400
Yeah.
1847
02:08:29.301 --> 02:08:34.305
So, I think a couple things.
1848
02:08:34.785 --> 02:08:40.690
I think first and foremost, a lot of this pressure is actually caused from the last part, which is the pressure at home.
1849
02:08:41.958 --> 02:09:00.828
And I understand you want to grow the business, but I have to ask, would a business that does half as much in revenue but only has a couple employees and you make way more profit and you're able to pay them more and they show up more on time, they're more reliable because of that, is that a business that serves you and your family more?
1850
02:09:00.848 --> 02:09:07.592
Because I just don't want you to...
1851
02:09:07.612 --> 02:09:08.532
I don't know, I mean...
1852
02:09:08.812 --> 02:09:09.653
I just don't want you to quit.
1853
02:09:13.237 --> 02:09:16.938
Yeah, as I said, like beginning of the year, things look really good.
1854
02:09:17.378 --> 02:09:27.562
So it's just kind of like, yeah, I mean, we were supposed to be on track of 2 million this year.
1855
02:09:27.622 --> 02:09:33.443
And right now we a month behind every single like month.
1856
02:09:33.543 --> 02:09:38.765
So, you know, I have, oh, I could pay off that loan, uh, with, uh, with, uh,
1857
02:09:40.546 --> 02:09:49.172
receivables that I have easily is just like constantly have something hold us up where I'm like, okay, you cannot finish the project.
1858
02:09:49.192 --> 02:09:50.673
We're not going to get billing cycle.
1859
02:09:50.713 --> 02:09:51.974
Therefore I got to wait again.
1860
02:09:53.515 --> 02:10:09.006
Uh, so it's just like, I feel like I'm every month I'm getting throw back to that same spot that I was the month before and, um, to, to get out of it, uh,
1861
02:10:10.580 --> 02:10:30.090
So my mistake was that I thought I can hire less costly on an hourly basis employees, train them up in a few weeks to do our way, and then they will be able to produce the work, but I was wrong.
1862
02:10:30.550 --> 02:10:32.111
So then I was like, okay,
1863
02:10:33.958 --> 02:10:43.964
I have the demand still, I mean, so I got, I need guys, so then, okay, let's find experts who've been doing this for at least a decade.
1864
02:10:44.464 --> 02:10:48.646
Yeah, they're gonna cost 40 to 45 dollars an hour.
1865
02:10:49.166 --> 02:11:00.693
But they have the experience, and I mean, it seems to be working out just, because it's been like maybe six weeks when I turn things around to go this way.
1866
02:11:02.022 --> 02:11:05.383
I feel like I kind of miss... Yeah.
1867
02:11:05.643 --> 02:11:06.404
I'll say this, though.
1868
02:11:06.464 --> 02:11:08.125
You're just going to have problems with this, too.
1869
02:11:08.165 --> 02:11:12.626
Because, like, when someone has 10 years of experience, there's other problems that show up.
1870
02:11:13.087 --> 02:11:15.247
You might not have to micromanage them on the job.
1871
02:11:15.307 --> 02:11:16.968
But now, all of a sudden, there's cultural issues.
1872
02:11:16.988 --> 02:11:18.569
There's expectations on wages.
1873
02:11:18.889 --> 02:11:21.170
There's now financial pressure because you have to pay them twice as much.
1874
02:11:21.190 --> 02:11:22.190
They're harder to find.
1875
02:11:22.590 --> 02:11:24.771
So now it becomes stressful to get more employees.
1876
02:11:25.071 --> 02:11:27.812
They're trained incorrectly because they came from another position.
1877
02:11:28.073 --> 02:11:30.654
They're expecting things, like, in terms of management that you can't offer.
1878
02:11:30.934 --> 02:11:31.254
And so...
1879
02:11:32.380 --> 02:11:42.705
The way that you're feeling, the temporary band-aid, many times people think, I just need to hire people more experienced, but they wake up in a couple of years and realize now they just have other problems.
1880
02:11:47.248 --> 02:11:49.929
And so what services are you providing now?
1881
02:11:49.989 --> 02:11:52.090
Like what's the business's services?
1882
02:11:54.212 --> 02:11:54.992
Plumbing and heating.
1883
02:11:56.113 --> 02:11:56.633
plumbing and heating.
1884
02:11:56.853 --> 02:11:57.914
So that is very technical.
1885
02:11:58.334 --> 02:12:00.055
And that is where skill is going to be important.
1886
02:12:00.755 --> 02:12:02.916
I would say when you were doing, because here's the thing.
1887
02:12:03.437 --> 02:12:08.699
At the end of the day, you build a $1.5 million business over the course of five years.
1888
02:12:10.400 --> 02:12:15.802
And less than 10% of people that start a business will get to where you're at.
1889
02:12:17.203 --> 02:12:20.465
And I don't know why there's pressure to build a $2 million business this year.
1890
02:12:20.505 --> 02:12:22.386
And it's so much pressure, like we're one month behind.
1891
02:12:22.706 --> 02:12:24.927
When you have done something what most people will never do,
1892
02:12:26.754 --> 02:12:28.436
And you're not negative profit.
1893
02:12:28.496 --> 02:12:31.038
It's a profitable business doing over a million dollars.
1894
02:12:32.799 --> 02:12:38.324
And so I don't know why there's this expectation for you to keep growing on this treadmill because this treadmill is exhausting you.
1895
02:12:38.785 --> 02:12:43.409
And I just need you to get off this treadmill of expectation that you need to keep growing this thing so fast.
1896
02:12:48.265 --> 02:12:49.906
Are you comparing yourself to someone?
1897
02:12:49.966 --> 02:12:51.487
Is there pressure to keep growing?
1898
02:12:51.507 --> 02:12:54.288
Because like, I see this as you've done very well.
1899
02:12:54.348 --> 02:12:56.770
You've grown this thing extremely fast and growth sucks cash.
1900
02:12:56.850 --> 02:12:57.670
It creates loans.
1901
02:12:57.950 --> 02:12:59.671
It creates pressure on profit margin.
1902
02:12:59.831 --> 02:13:06.074
But in five years, you build a $1.5 million business and there's nothing wrong with saying, I don't need to get to 2 million this year.
1903
02:13:08.536 --> 02:13:09.596
Why is there that pressure?
1904
02:13:10.317 --> 02:13:10.657
Yeah.
1905
02:13:12.658 --> 02:13:12.818
Yeah.
1906
02:13:17.764 --> 02:13:22.887
It was kind of an organic, so we didn't, I wasn't, let's say, planning.
1907
02:13:22.907 --> 02:13:27.850
It's just based on the demand we have from current customers we have.
1908
02:13:27.910 --> 02:13:37.075
It was basically like, okay, all I gotta do is add one or two people and then just keep working the same people.
1909
02:13:37.275 --> 02:13:40.737
I don't have to like network my way into new places or anything.
1910
02:13:40.777 --> 02:13:41.898
So it wasn't like a...
1911
02:13:42.663 --> 02:13:46.184
oh, we must do this just more like the opportunity is there.
1912
02:13:47.064 --> 02:13:52.445
Therefore, you know, and those customers are all happy with us.
1913
02:13:54.525 --> 02:13:59.746
So I was like, let's just go and keep going.
1914
02:13:59.866 --> 02:14:03.907
And honestly, around $2 million, that was my limit.
1915
02:14:03.947 --> 02:14:08.388
Like, okay, I'm going to stop here, make some money and then figure out if I want to
1916
02:14:14.047 --> 02:14:16.470
at the end of the year and just, you know, living my life.
1917
02:14:16.750 --> 02:14:19.574
But what I want you to do is get clear on how the business serves you.
1918
02:14:20.134 --> 02:14:28.324
When I hear someone say that because their customers are happy and they keep trickling in and we just kind of kept growing, I hear one, awesome, they do great service.
1919
02:14:28.384 --> 02:14:30.387
I also hear you are serving the business.
1920
02:14:31.328 --> 02:14:32.509
I want the business to serve you.
1921
02:14:34.050 --> 02:14:36.571
And being really clear in terms of how many employees does that mean?
1922
02:14:37.172 --> 02:14:38.693
Like, what's my personal capacity?
1923
02:14:39.213 --> 02:14:52.580
You could be an amazing $1 million operator and stink at 1.5 simply because you don't have the personal capacity yet to get there and be able to manage that size of a business and handle the stress that comes with more employees, more loans.
1924
02:14:53.200 --> 02:14:57.583
You should not grow the business because employees trickled along and opportunities showed up.
1925
02:14:57.783 --> 02:14:59.264
There's opportunity to go climb Mount Everest.
1926
02:14:59.384 --> 02:14:59.884
I don't do it.
1927
02:14:59.944 --> 02:15:00.765
It's too high risk.
1928
02:15:01.885 --> 02:15:03.046
It doesn't align with my goals.
1929
02:15:04.168 --> 02:15:12.216
And so if the growth of the business and more opportunities and customers trickling in leads you to have moments like you're having now, it's not worth it.
1930
02:15:12.916 --> 02:15:14.297
The business should serve you.
1931
02:15:18.461 --> 02:15:26.068
And so I would strongly recommend talking to your spouse and getting on the same page of like, what do we want this business to do?
1932
02:15:27.020 --> 02:15:29.723
How many employees does it have before I start getting overwhelmed?
1933
02:15:30.244 --> 02:15:39.654
Because I can guarantee you, if you had less employees, you'd spend more time with them, you'd train them better, you wouldn't feel the same level, you'd be able to afford a little bit more to pay them if you raised prices by 15% or 20%.
1934
02:15:39.754 --> 02:15:41.737
And you're like, well, I'm not going to get $2 million.
1935
02:15:41.917 --> 02:15:42.578
Who cares?
1936
02:15:43.619 --> 02:15:47.964
You're going to get zero if we throw in the towel and we give up if there's enough moments like this.
1937
02:15:49.174 --> 02:15:54.859
And so I'm giving a little bit of tough love, but I just want you to know that there's no one expecting you to be a $2 million business.
1938
02:15:54.879 --> 02:15:57.382
And I guarantee if you talk to your spouse, she could care less.
1939
02:15:59.804 --> 02:16:00.845
It doesn't serve you.
1940
02:16:03.327 --> 02:16:10.514
And getting off this treadmill is potentially the most liberating thing you'll ever find is you do not serve the business.
1941
02:16:12.208 --> 02:16:14.189
You built this business for you and for your family.
1942
02:16:14.389 --> 02:16:15.850
Over five years, you built a 1.5.
1943
02:16:16.050 --> 02:16:17.270
There's nothing to hang your head about.
1944
02:16:17.430 --> 02:16:18.591
You're doing a phenomenal job.
1945
02:16:19.111 --> 02:16:22.553
Statistically speaking, you're in the top, probably five to 6% of entrepreneurs.
1946
02:16:25.034 --> 02:16:27.935
But there's no reason to stay on this treadmill if it's gonna cause you to die.
1947
02:16:27.995 --> 02:16:30.336
Like it's gonna cause you to give up and throw in the towel.
1948
02:16:32.537 --> 02:16:38.179
And if it's causing struggles at home, personal relationships, personal health, like it's not worth it.
1949
02:16:38.280 --> 02:16:38.660
It's not.
1950
02:16:45.244 --> 02:16:46.125
how do I do this?
1951
02:16:46.145 --> 02:17:00.462
Because obviously I have I have the loans I have obligations I have a certain amount of overhead that I can just like what I'm like
1952
02:17:03.192 --> 02:17:07.296
I wish there was a plug that I can just unplug it and okay, it's done.
1953
02:17:07.816 --> 02:17:12.660
But at the same time, I just feel like it's a little bit more complex than just okay.
1954
02:17:13.000 --> 02:17:23.509
From tomorrow, we are targeting 1.5 and then, uh, not worry about all those decisions that have been made in the past.
1955
02:17:24.029 --> 02:17:31.535
It's just, I feel like there is no, I don't see the way out of this, like in a couple weeks
1956
02:17:32.722 --> 02:17:33.383
Yeah, I get you.
1957
02:17:33.904 --> 02:17:38.690
So first thing we've got to do, and I know it sounds like, hey, this doesn't change anything tomorrow.
1958
02:17:38.750 --> 02:17:39.171
I agree.
1959
02:17:39.411 --> 02:17:42.035
But the first thing we have to do is change our expectations.
1960
02:17:43.145 --> 02:17:48.748
Because the reason you want to quit, the same reason why most employees quit, is because expectations don't meet up with reality.
1961
02:17:49.348 --> 02:17:52.429
And so they quit after two or three weeks, they just leave.
1962
02:17:53.110 --> 02:17:54.631
The same thing is true with yourself.
1963
02:17:54.911 --> 02:18:00.073
You don't need to build a $2 million business to be happy and have everything you want in life and for your family to be happy.
1964
02:18:00.193 --> 02:18:00.453
You don't.
1965
02:18:01.294 --> 02:18:04.775
And so expecting yourself to build a $2 million business, you're going to drive yourself into the ground.
1966
02:18:06.176 --> 02:18:08.697
And it doesn't mean that down the road you won't build a $2 million business.
1967
02:18:08.757 --> 02:18:11.759
It just means right now you don't want to build it because it's going to cause you to want to quit.
1968
02:18:12.800 --> 02:18:14.381
So that's the first thing, it's expectations.
1969
02:18:14.661 --> 02:18:16.641
Now let's get into like the nitty gritty details.
1970
02:18:16.661 --> 02:18:17.842
Cause like you do have loans.
1971
02:18:18.262 --> 02:18:21.303
How much is the total principal and what's the monthly payments on the loans?
1972
02:18:26.004 --> 02:18:32.907
It's $160 and I pay a little bit over $8,000 a month.
1973
02:18:32.947 --> 02:18:33.687
It's a two year.
1974
02:18:35.240 --> 02:18:57.355
year thing because my fault was like okay all i gotta do just collect receivables and you know i'll pay it back in a couple of months but since then i'm having these issues with like last minute calls last minute like oh something oh we gotta go back because whatever issues happen just so i'm clear is did you say 560 000 in loans
1975
02:19:01.008 --> 02:19:01.509
150.
1976
02:19:01.629 --> 02:19:03.090
160, sorry.
1977
02:19:03.270 --> 02:19:03.951
Okay.
1978
02:19:04.411 --> 02:19:04.511
1.6.
1979
02:19:04.531 --> 02:19:04.751
1.6.
1980
02:19:04.771 --> 02:19:05.112
Okay, got it.
1981
02:19:06.473 --> 02:19:06.733
Okay.
1982
02:19:07.394 --> 02:19:14.700
So right now, when it comes to the work that you have on the schedule, how far are you booked out?
1983
02:19:18.503 --> 02:19:20.565
We are pretty much all summer.
1984
02:19:21.125 --> 02:19:21.426
Okay.
1985
02:19:22.286 --> 02:19:26.390
And right now, what's your close rate look like?
1986
02:19:29.582 --> 02:19:36.786
Since we have added customers, we work with a lot of general contractors.
1987
02:19:36.806 --> 02:19:45.290
I would say 100%, but obviously they know our prices, so projects being priced away without rates.
1988
02:19:45.350 --> 02:19:47.511
So it's not a competitive bidding or anything.
1989
02:19:48.191 --> 02:19:49.392
Okay.
1990
02:19:52.973 --> 02:19:54.014
We have to raise our prices.
1991
02:19:55.224 --> 02:20:00.848
And I know that's scary because it's contractor relationships, but if you lose one or two of them, it doesn't matter.
1992
02:20:02.449 --> 02:20:06.611
The reason we need to raise our prices is because I generally believe you raise your prices by just a little bit.
1993
02:20:07.052 --> 02:20:11.594
You wipe out this monthly loan payment very quickly.
1994
02:20:13.235 --> 02:20:17.198
If you raise your prices by 10%, that's gonna be more than $8,000 a month, the bottom line.
1995
02:20:21.840 --> 02:20:23.241
And that would take a little bit of stress off.
1996
02:20:23.401 --> 02:20:29.827
It would also allow us to be able to pay employees more that would allow us to be able to expect more of them because they become more qualified.
1997
02:20:32.910 --> 02:20:39.295
And so if we're closing 100% of bids, how many contractors, let's just call them customers, do you work for?
1998
02:20:39.615 --> 02:20:42.418
Is there only one or two major contractors?
1999
02:20:42.498 --> 02:20:47.042
Or do you have a more- No, it's about, I would say,
2000
02:20:49.437 --> 02:20:50.017
eight to 10.
2001
02:20:50.538 --> 02:20:50.798
Okay.
2002
02:20:51.118 --> 02:20:56.822
But we work with like three or four, like almost every two week basis.
2003
02:20:59.323 --> 02:21:00.544
So we're pretty frequent.
2004
02:21:01.364 --> 02:21:02.545
We have to do a price increase.
2005
02:21:03.006 --> 02:21:14.973
We have to, I understand that might be scary, but like at this point, if you lost three out of the 10, but we've raised prices by 15%, you'd still do $1.2 million, but you'd be more profitable.
2006
02:21:18.080 --> 02:21:20.001
Yeah, I mean, I have no issue.
2007
02:21:20.201 --> 02:21:21.702
Great reason prices.
2008
02:21:21.782 --> 02:21:31.706
It's more about, uh, let's say for example, today, this is the second week I call on this customer that you're not showing up last minute.
2009
02:21:31.806 --> 02:21:39.129
So, and here you go, actually we are charging 10% more because, and I mean, I feel like.
2010
02:21:44.470 --> 02:21:46.772
more, but your service is just degrading.
2011
02:21:46.832 --> 02:21:49.874
Like, how does that make sense?
2012
02:21:49.934 --> 02:21:51.776
And he's not the only one.
2013
02:21:51.796 --> 02:21:53.697
I have, like, several customers now.
2014
02:21:53.717 --> 02:21:59.602
We had to do this, like, in the past few weeks quite frequently, more frequently than I would like.
2015
02:21:59.622 --> 02:22:08.028
I mean, they understand, like, okay, life happens, but it just seems to be happening way too frequently than it used to be.
2016
02:22:09.570 --> 02:22:10.651
This is part of growth, though.
2017
02:22:10.671 --> 02:22:17.379
Like, if you have 100% close rate and they're still not saying no, they're voting with their dollars that they still see more value than the price that you're charging.
2018
02:22:18.270 --> 02:22:22.132
And so I actually need some of them to say no, because I want you to have less employees.
2019
02:22:23.312 --> 02:22:27.534
I want you to be able to feel like you have a handle on quality control, because you're a perfectionist.
2020
02:22:27.554 --> 02:22:28.675
You love these customers.
2021
02:22:28.915 --> 02:22:29.876
You want to do great work.
2022
02:22:29.956 --> 02:22:33.897
And it's killing you right now when you get bad reviews, when customers say stuff like that.
2023
02:22:34.578 --> 02:22:37.439
That's what's sapping your energy, because you're a perfectionist.
2024
02:22:37.459 --> 02:22:38.800
You love doing great work.
2025
02:22:39.520 --> 02:22:47.724
And I want you to focus on that instead of trying to get to a $2 million arbitrary number and then having stuff like contractors saying that stuff about your work, and then you're just feeling gutted.
2026
02:22:49.490 --> 02:22:50.811
I need some customers to leave.
2027
02:22:51.032 --> 02:22:56.396
I need you to have less employees so that your personal capacity, you can grow the business inside of that.
2028
02:22:58.578 --> 02:23:01.480
Okay.
2029
02:23:01.900 --> 02:23:15.772
And I know I'm taking too much of your time, but how do I speak to the team that like... You already know one of these employees that you're hiring that you need to let go.
2030
02:23:15.812 --> 02:23:17.473
The one that's causing you all the grief.
2031
02:23:20.604 --> 02:23:24.047
You cut that person immediately and you're like, oh my goodness, what am I doing?
2032
02:23:24.227 --> 02:23:26.469
You're gonna go raise prices and lose a couple customers.
2033
02:23:27.910 --> 02:23:38.119
But now you're gonna make more profit on the customers you do keep, and you're gonna have a smaller team that you feel like you can manage and have high quality standards without all the drama.
2034
02:23:41.402 --> 02:23:46.727
There's no pride in having a whole bunch of employees or a bunch of trucks or getting a two million revenue if you hate the business.
2035
02:23:47.519 --> 02:23:54.668
I want you to fall back in love with the business as to why you started it five years ago and why you've grown in five years to 1.5 million is because you do great work.
2036
02:23:58.072 --> 02:24:06.502
And right now you're letting these certain employees that you have that you know you need to let go, you're tied to them because you're trying to hit this arbitrary $2 million marker.
2037
02:24:13.875 --> 02:24:17.176
And so the third thing is we're going to cut the employee.
2038
02:24:18.216 --> 02:24:20.937
They're making you resent your job every single day.
2039
02:24:24.057 --> 02:24:24.977
We're going to get it rid of them.
2040
02:24:25.257 --> 02:24:28.398
You're like, well, I'm not going to have enough guys to do the work.
2041
02:24:28.658 --> 02:24:32.339
No, we're going to raise prices to reduce the amount of workload that we have.
2042
02:24:33.159 --> 02:24:36.860
And now you're going to be able to pass some of those extra money up to your team.
2043
02:24:39.373 --> 02:24:55.508
And you're going to be higher compensated, higher skilled, people that you love working with, that love working for you, and you're going to go out and now not have this cloud of your head of contractors calling you saying you're not doing good work and all the rest of it.
2044
02:24:55.528 --> 02:25:00.333
$160,000 in debt on a $1.5 million business is not a death sentence.
2045
02:25:02.815 --> 02:25:04.637
This is you have fell out of love with the business.
2046
02:25:06.848 --> 02:25:09.250
And the moment you do that, it's a slippery slope.
2047
02:25:09.930 --> 02:25:16.195
And I just want you to get off the treadmill of you've got to grow this thing and get it back to where it's underneath your personal capacity.
2048
02:25:16.515 --> 02:25:17.576
And my friend, you will win.
2049
02:25:24.101 --> 02:25:24.381
All right.
2050
02:25:25.983 --> 02:25:26.823
All right, brother.
2051
02:25:26.863 --> 02:25:28.084
I'll be rooting for you.
2052
02:25:28.444 --> 02:25:31.607
I appreciate you tremendously calling in, and my thoughts and prayers are with you.
2053
02:25:33.112 --> 02:25:33.932
Oh, well, okay.
2054
02:25:34.112 --> 02:25:36.513
Well, that is why we have the confession booth.
2055
02:25:37.113 --> 02:25:48.197
But I think it is a good example of, for anyone that's doing less than 1.5, and like, if I just go to a $1.5 million business, all my problems will be solved.
2056
02:25:48.357 --> 02:25:48.857
Not true.
2057
02:25:50.059 --> 02:25:55.025
Building the business that you love, that has systems, that can run without you, is the reason you build a business.
2058
02:25:55.766 --> 02:26:05.279
And if you're having a $1.5 million business that goes bust because you hate the thing, it's left with a whole lot more collateral damage in terms of employees, debt, and a lot of problems.
2059
02:26:06.220 --> 02:26:06.400
And...
2060
02:26:07.430 --> 02:26:11.833
I just encourage everyone to get off this idea that you need to keep growing your business.
2061
02:26:11.854 --> 02:26:15.116
Like if I grew 50% last year, I've got to grow 80% this year.
2062
02:26:15.376 --> 02:26:17.258
And if I got, then I gotta grow, why?
2063
02:26:17.498 --> 02:26:24.423
Like the whole reason you started this business is to provide for your family, or to be able to take a vacation, or to be able to put your kids through college, and you've done that.
2064
02:26:24.884 --> 02:26:29.828
And yet you put yourself through all this extra stress and hassle and wanting to quit, wanting to give up.
2065
02:26:30.488 --> 02:26:36.293
It's causing damage in the relationship at home when it's just like, it's just simply a matter of expectations on yourself.
2066
02:26:36.913 --> 02:26:40.875
Versus like, my personal capacity is here, the business has grown too far.
2067
02:26:41.255 --> 02:26:45.296
I am going to reduce the size of the business so that I can feel more in control and not quit.
2068
02:26:45.317 --> 02:26:46.117
Because you will want to quit.
2069
02:26:46.477 --> 02:26:49.938
In the long term, if you exceed capacity, you will burn out.
2070
02:26:50.619 --> 02:26:58.402
Long term, you will burn out if you're running a $1.5 million business and your capacity personally is to manage three or four employees at a million.
2071
02:27:00.650 --> 02:27:03.671
And for people that think that I always tell people they should stop growing their business.
2072
02:27:03.851 --> 02:27:10.013
And I see in the comments, oh, he says to stop growing their business at six or seven or eight employees because he wants them to just not grow.
2073
02:27:10.033 --> 02:27:11.813
And he wants to take all the customers himself for a gust.
2074
02:27:11.833 --> 02:27:12.814
That's a bunch of hogwash.
2075
02:27:13.414 --> 02:27:16.975
It's the fact that when you start getting a larger business, this happens.
2076
02:27:17.655 --> 02:27:19.456
And I hate seeing people at this point.
2077
02:27:19.496 --> 02:27:23.857
And I want them to be able to grow the business that serves them and their family and the whole reason they started the business.
2078
02:27:24.785 --> 02:27:30.990
And so the fact that someone can be in the top five or 6% of entrepreneurs and still feel like they want to quit is crazy.
2079
02:27:32.191 --> 02:27:35.073
And it's crazy because we put pressure on ourselves to keep growing the business.
2080
02:27:35.673 --> 02:27:38.876
Instead of asking ourselves, how big of a business do I need to build for it to serve me?
2081
02:27:38.936 --> 02:27:45.901
And for the vast majority of us, that is six to eight employees, be able to manage them ourselves, be able to still go away for a week vacation.
2082
02:27:46.221 --> 02:27:48.383
And we don't need to keep growing to two, three, four million.
2083
02:27:48.403 --> 02:27:48.743
Okay.
2084
02:27:49.023 --> 02:27:50.424
Not everyone needs to do that.
2085
02:27:50.924 --> 02:28:00.687
And no one building a $5 million business is any better than the person that does 800,000 with a few employees, is able to take vacation, makes really good healthy profit margins, and is living a good lifestyle.
2086
02:28:01.107 --> 02:28:04.869
It comes down to success is determined by whether or not you are content.
2087
02:28:05.229 --> 02:28:10.331
And if your level of what you need to be content is lower, don't be ashamed by the fact that you don't need a bigger business.
2088
02:28:11.961 --> 02:28:15.065
Determine what you need to be successful and achieve your goals.
2089
02:28:15.325 --> 02:28:19.230
And then work backwards in terms of how big of a business do I need to build in order to achieve these things.
2090
02:28:19.530 --> 02:28:21.953
Personally, I want to change the level of professionalism in the industry.
2091
02:28:22.213 --> 02:28:24.216
That's going to require a billion-dollar business.
2092
02:28:26.032 --> 02:28:29.873
But if your aspirations and goals are not that, you don't need to do it.
2093
02:28:30.193 --> 02:28:31.454
You will run yourself ragged.
2094
02:28:31.694 --> 02:28:32.494
You'll want to quit.
2095
02:28:32.674 --> 02:28:38.276
You will likely end up in, this is why like billionaires have like three or four wives and none of their kids wanna spend time with them.
2096
02:28:38.916 --> 02:28:50.280
It's because they just sacrificed everything for this one objective and then they get there and realize like, oh, actually what I wanted, the whole reason I started this business, the reason I clawed my way out of poverty was to provide for my family and now my family doesn't wanna be with me.
2097
02:28:53.141 --> 02:28:53.421
All right.
2098
02:28:55.788 --> 02:28:57.348
Let's go on to the next caller.
2099
02:28:58.289 --> 02:29:00.589
Again, this is the confession booth.
2100
02:29:01.009 --> 02:29:02.030
Your voice is garbled.
2101
02:29:02.270 --> 02:29:03.210
It's completely anonymous.
2102
02:29:03.570 --> 02:29:07.291
If you would like me to come out and do a turnaround show, you can scan the QR code here.
2103
02:29:07.391 --> 02:29:08.872
Go to mikeandys.com slash turnaround.
2104
02:29:08.892 --> 02:29:10.092
The links are down in the description.
2105
02:29:10.912 --> 02:29:12.873
And I'd love to come out in person.
2106
02:29:13.193 --> 02:29:18.194
We have a couple more spots this summer or fill up for the next couple trips, but we have a couple more spots this summer.
2107
02:29:18.374 --> 02:29:19.195
I'd love to come out and help.
2108
02:29:19.235 --> 02:29:19.995
It's completely free.
2109
02:29:20.675 --> 02:29:21.896
And it's all from all of your support.
2110
02:29:22.276 --> 02:29:31.461
This whole show, everything we do here is because of those that support at HomeWorks, the software, the franchise, Augusta, and Home Service Web Design on the media side of things.
2111
02:29:31.481 --> 02:29:35.443
So, all right, next caller is coming in to the confession booth.
2112
02:29:36.183 --> 02:29:36.804
Welcome to the show.
2113
02:29:36.824 --> 02:29:37.584
Thank you for coming on.
2114
02:29:37.664 --> 02:29:38.445
Hey, what's up, Mike?
2115
02:29:38.485 --> 02:29:39.445
What's up, brother?
2116
02:29:40.426 --> 02:29:40.946
What's going on?
2117
02:29:41.226 --> 02:29:41.546
Not much.
2118
02:29:41.566 --> 02:29:42.627
What can I do to help?
2119
02:29:44.381 --> 02:30:09.215
So I have this one, I've been in business for like almost eight years and I have um so I haven't really been paying my sales tax Okay Right, I've made payments but I owe you know maybe like uh I don't know 45 Okay On it and um Yeah that's just I just don't know and now
2120
02:30:11.052 --> 02:30:12.573
I can't register my trucks.
2121
02:30:13.513 --> 02:30:14.434
Right.
2122
02:30:16.294 --> 02:30:19.255
Yeah, they're just coming out.
2123
02:30:19.315 --> 02:30:20.536
They're trying to come up.
2124
02:30:20.896 --> 02:30:24.137
Or they're trying to get me to pay the money back.
2125
02:30:24.157 --> 02:30:29.579
So that's really my, how do I get out of the situation of going this much money to the state?
2126
02:30:31.260 --> 02:30:33.381
So first I had- I can't drive my trucks.
2127
02:30:33.621 --> 02:30:39.223
I mean, I have, but without registration, because they don't allow me to re-register.
2128
02:30:39.243 --> 02:30:40.023
Right.
2129
02:30:40.420 --> 02:30:42.402
So now I have to get a new vehicle.
2130
02:30:42.802 --> 02:30:43.042
Yeah.
2131
02:30:43.703 --> 02:30:45.124
How much revenue did you do?
2132
02:30:45.304 --> 02:30:45.484
Yeah.
2133
02:30:45.784 --> 02:30:47.266
How much revenue did you plan to do this year?
2134
02:30:50.188 --> 02:30:51.609
Plan, like $250.
2135
02:30:52.070 --> 02:30:53.371
So, yeah.
2136
02:30:53.391 --> 02:30:58.014
So I assume it's been several years that they're going back and trying to get all your sales tax.
2137
02:30:59.876 --> 02:31:01.838
Yeah, I'm talking about the past five years.
2138
02:31:02.398 --> 02:31:03.319
Okay.
2139
02:31:03.619 --> 02:31:07.062
And I've made payments here and there, but there's just plenty to have them.
2140
02:31:07.447 --> 02:31:07.607
Yep.
2141
02:31:08.607 --> 02:31:10.388
And what kind of payment plan have they proposed?
2142
02:31:10.408 --> 02:31:12.468
Have they given you any sort of payment plan offering?
2143
02:31:13.668 --> 02:31:14.849
Yeah, so that's the thing.
2144
02:31:14.889 --> 02:31:19.070
I went on a payment plan a few years ago, did well, and then it wasn't.
2145
02:31:19.350 --> 02:31:25.791
So I don't even remember what happened, but I couldn't make the payments.
2146
02:31:26.932 --> 02:31:27.192
Okay.
2147
02:31:27.272 --> 02:31:27.992
Right, so...
2148
02:31:28.834 --> 02:31:32.455
Well, I didn't make the payments because, you know, self-tax is always really comfortable.
2149
02:31:32.915 --> 02:31:33.135
Right.
2150
02:31:34.055 --> 02:31:35.276
Um... Yeah.
2151
02:31:35.516 --> 02:31:37.156
I'll come back to trying to solve this, but...
2152
02:31:37.956 --> 02:31:39.997
Uh... Just to be blunt.
2153
02:31:40.577 --> 02:31:41.778
Have you considered bankruptcy?
2154
02:31:45.459 --> 02:31:46.979
Um... What kind of bankruptcy?
2155
02:31:47.879 --> 02:31:49.480
Well, like, dissolving everything.
2156
02:31:50.220 --> 02:31:55.841
And, like, have you talked to, like, a divorce... Or not a divorce, but a, uh... A bankruptcy lawyer at all?
2157
02:31:57.822 --> 02:31:58.062
No.
2158
02:31:58.778 --> 02:31:59.939
Okay.
2159
02:32:00.039 --> 02:32:06.224
I don't like going that path, and I do think there's ways to solve this problem still, but it might be worth talking to them.
2160
02:32:06.845 --> 02:32:12.069
The alternative is we put our heads down, we grow this business, and we make it really profitable, and we grind for 12 months.
2161
02:32:13.130 --> 02:32:17.714
But what's the monthly payment if you were to go back on the plan?
2162
02:32:17.754 --> 02:32:18.975
Or they're not offering the plan anymore.
2163
02:32:18.995 --> 02:32:21.397
It's like, hey, you crossed that line, and now we want 45K.
2164
02:32:21.497 --> 02:32:27.062
Yeah, so now they're telling me that I can give them 20.
2165
02:32:27.576 --> 02:32:29.337
20K, and then we can get on the plan.
2166
02:32:30.118 --> 02:32:32.119
Or now it's probably like 25.
2167
02:32:32.139 --> 02:32:32.840
Okay, so 25...
2168
02:32:32.860 --> 02:32:34.481
But I don't have that amount of profit over.
2169
02:32:34.821 --> 02:32:35.602
Right, I got you.
2170
02:32:36.142 --> 02:32:36.522
Yeah.
2171
02:32:36.562 --> 02:32:43.868
So 25K, and then what do you think the monthly payment would be, if you had to guess?
2172
02:32:43.908 --> 02:32:45.269
Probably like $1,000 or so.
2173
02:32:45.289 --> 02:32:46.530
Okay.
2174
02:32:47.891 --> 02:32:53.515
And on the $200,000 in annual revenue, has that been consistent the past few years?
2175
02:32:55.236 --> 02:32:55.816
Yeah, yeah.
2176
02:32:56.337 --> 02:32:56.757
For sure.
2177
02:32:56.777 --> 02:32:56.877
Yeah.
2178
02:32:57.452 --> 02:32:57.672
Okay.
2179
02:32:57.772 --> 02:32:59.154
And what services are you offering?
2180
02:33:01.597 --> 02:33:05.863
A lot of basic maintenance, no construction, just the basics.
2181
02:33:06.563 --> 02:33:07.364
Okay.
2182
02:33:07.505 --> 02:33:09.026
And do you have your trucks paid off right now?
2183
02:33:11.309 --> 02:33:11.630
Yes.
2184
02:33:12.351 --> 02:33:12.631
Okay.
2185
02:33:12.771 --> 02:33:14.193
And what's the value of those trucks?
2186
02:33:16.396 --> 02:33:18.277
Like maybe like four or five thousand.
2187
02:33:18.597 --> 02:33:18.837
Okay.
2188
02:33:18.877 --> 02:33:24.179
But the thing is that because because they have a hold on the registration, I can't sell it.
2189
02:33:24.539 --> 02:33:25.599
No one can register it.
2190
02:33:25.819 --> 02:33:33.902
So I'm forced to get a new vehicle, which is going to happen like, you know, like within a month, I'll get another one.
2191
02:33:35.062 --> 02:33:38.603
And register in my wife's name, because I can't.
2192
02:33:38.623 --> 02:33:43.105
If anything is in my name, they will put them on the hold and I'll be in the same situation.
2193
02:33:47.195 --> 02:33:48.476
Okay.
2194
02:33:49.176 --> 02:34:02.103
I would recommend talking to a bankruptcy lawyer mostly because he's going to have a better understanding of your state's legal parameters of what you can't do.
2195
02:34:02.543 --> 02:34:03.163
I will say this.
2196
02:34:04.504 --> 02:34:05.925
I would not recommend running from it.
2197
02:34:06.445 --> 02:34:16.370
Like the whole registration thing, bouncing around, this is going to become a cloud over your head and the worst thing that can happen is you become successful and you just know you can't do it all legitimately and everything's hidden.
2198
02:34:19.361 --> 02:34:22.582
At the end of the day, we're talking about $25,000, which is, I understand, a lot of money.
2199
02:34:23.103 --> 02:34:25.364
It's also what you make per month in revenue.
2200
02:34:26.104 --> 02:34:30.606
And if you can somehow sweep that and then get $1,000 of payments.
2201
02:34:30.926 --> 02:34:35.848
And so what I would highly recommend, this is going to be crazy, but it's going to be the thing that potentially gets you out of this.
2202
02:34:38.098 --> 02:34:43.140
giving an offer to your customers to pay up front for services and getting a whole bunch of cash up front.
2203
02:34:43.800 --> 02:34:52.023
But then being, you've got to be ready to deliver on that work and the money won't be coming in because you would have given it to the government and you're going to have to work your brains out.
2204
02:34:54.104 --> 02:34:54.344
Yeah.
2205
02:34:54.644 --> 02:34:55.405
I'm already there.
2206
02:34:56.405 --> 02:34:56.765
Okay.
2207
02:34:57.205 --> 02:35:00.707
Like if you went to your customers right now and said, Hey, for the next...
2208
02:35:02.020 --> 02:35:05.561
12 months, you know, last 12 months, you've paid me $2,000.
2209
02:35:06.281 --> 02:35:13.903
I'm giving 20% off if you pay up front for the next 12 months for the services that we hear those services.
2210
02:35:14.283 --> 02:35:18.624
And I'm going to get $1,800 from one person, $1,500 from another person, $1,000 from...
2211
02:35:19.004 --> 02:35:23.465
If you can do that, now keep in mind, you're not going to get that money over the next six to 12 months.
2212
02:35:23.485 --> 02:35:26.206
You're going to be working extra hours to make up for it.
2213
02:35:26.566 --> 02:35:30.887
But the objective is to get the $25,000 so that you can... Because you can afford $1,000 a month.
2214
02:35:30.907 --> 02:35:31.607
You can afford that.
2215
02:35:32.768 --> 02:35:33.989
Yeah, definitely.
2216
02:35:34.529 --> 02:35:40.214
But I would highly recommend being vicious and violent with this, and that is immediately going to your customers.
2217
02:35:40.234 --> 02:35:44.897
If they're on maintenance and recurring revenue, then you can look back at the last 12 months and say, hey, you spent X amount.
2218
02:35:45.238 --> 02:35:48.500
We're now offering this discount if you pay up front for the next 12 months.
2219
02:35:48.881 --> 02:35:51.483
Some percentage, 15%, 20% of people will take you up on it.
2220
02:35:51.963 --> 02:36:09.440
And that's all you need, about 20% of your revenue, or 20% of your customers to say yes to this, for you to be able to get enough revenue to capture the 25K and start on these monthly payments, and then you're going to have to put your head down and grind for the next 12 months of performing on work that all that money is going to go to the government.
2221
02:36:09.740 --> 02:36:14.285
But I would much rather you build a business where you're not constantly running from the government
2222
02:36:15.855 --> 02:36:22.560
putting things in people's names and licensing and registration, and then people are coming after you, and then you can't buy this piece of equipment, and then you can't get a lot.
2223
02:36:23.200 --> 02:36:24.801
That's a messy way to live life.
2224
02:36:24.901 --> 02:36:26.082
It's a messy way to run a business.
2225
02:36:26.462 --> 02:36:30.685
And the best-case scenario is you somehow outsmart them for a couple years, but they'll eventually find you out.
2226
02:36:31.286 --> 02:36:34.168
And so, first off, huge kudos to him for calling.
2227
02:36:34.188 --> 02:36:35.789
This is why we have the confession booth.
2228
02:36:35.809 --> 02:36:39.472
There's no way in the world they're going to call in and say your name if this is the type of thing.
2229
02:36:39.612 --> 02:36:40.192
And I will say this.
2230
02:36:40.352 --> 02:36:42.514
If you are currently underreporting your sales tax,
2231
02:36:43.114 --> 02:36:46.660
This is a very short-term thinking strategy that you are currently experiencing.
2232
02:36:47.141 --> 02:36:49.745
There is no big business that is doing this.
2233
02:36:49.986 --> 02:36:51.949
Like, oh, this is one competitor in my local area.
2234
02:36:52.270 --> 02:36:53.712
There is no company...
2235
02:36:54.498 --> 02:37:04.981
that is running hundreds of millions of dollars, that is legit, that lasts for decades, that is underreporting on sales tax, not trying to get around employees tax.
2236
02:37:05.581 --> 02:37:09.763
For us, if it's a gray area, it's like, great, make them W-2, pay a little extra taxes.
2237
02:37:10.023 --> 02:37:19.225
I will sleep better at night, and by me sleeping better at night, I will be able to deploy discretionary effort and energy and ideas towards growing the business instead of running away from the government.
2238
02:37:19.906 --> 02:37:20.826
Bad strategy.
2239
02:37:22.157 --> 02:37:23.138
So kudos to him.
2240
02:37:23.618 --> 02:37:25.399
I highly recommend just tackling it head on.
2241
02:37:25.680 --> 02:37:29.543
It'll be 12 months of pain, but make an offer that customers cannot refuse.
2242
02:37:29.843 --> 02:37:35.367
Collect the cash up front, pay off the 25K, start making the monthly $1,000 a month payments.
2243
02:37:35.427 --> 02:37:45.915
You're going to be working on Saturdays, you're going to be Sundays, you're going to work in evenings, and you're going to need your wife to get bought in on this because she's not going to see you very much because you're going to do a whole bunch of extra work to be able to make this up over the next 12 months.
2244
02:37:48.856 --> 02:37:50.876
Next call coming into the confession booth.
2245
02:37:50.896 --> 02:37:51.517
Welcome to the show.
2246
02:37:51.537 --> 02:37:52.337
Thank you for coming on.
2247
02:37:54.877 --> 02:37:55.117
Hello.
2248
02:37:55.297 --> 02:37:55.517
Hello.
2249
02:37:55.537 --> 02:37:55.817
Hello.
2250
02:37:56.117 --> 02:37:56.878
What can I do to help?
2251
02:37:57.918 --> 02:37:59.718
Hey, all right.
2252
02:37:59.798 --> 02:38:02.519
So, um, I have a Christmas light business.
2253
02:38:02.879 --> 02:38:05.059
Um, we've been in business for five years now.
2254
02:38:06.139 --> 02:38:10.460
Um, we did a 263,000 last year.
2255
02:38:11.441 --> 02:38:18.582
Um, my big thing is, uh, obviously my off season, um, starts about March and then it's
2256
02:38:19.507 --> 02:38:23.388
a struggle all the way through until I get to October when we start doing lights again.
2257
02:38:24.209 --> 02:38:39.654
And so the last few years I racked up some debt going for this big commercial job that we were supposed to do last year that they ended up not paying on.
2258
02:38:41.657 --> 02:38:48.583
Looking at my monthly bills with my fixed costs and the debt, we're at like $7,000.
2259
02:38:49.424 --> 02:38:59.533
And with the customers that we have on quarterly payments that they pay throughout the year, we bring in about $20,000 every quarter.
2260
02:39:00.353 --> 02:39:00.714
So...
2261
02:39:01.755 --> 02:39:10.912
like we are just, just getting by, by the time like October comes and we have our clients who didn't want to do the quarterly payments, but they've already said that they're coming back.
2262
02:39:11.814 --> 02:39:11.914
Um,
2263
02:39:13.993 --> 02:39:25.055
we get like a big flush of cash then, but like until that point, it's just, I just watched the meter drop, you know, month after month with all the cash going out.
2264
02:39:25.095 --> 02:39:32.757
So I'm just, I know you got the book for the off season, but mine's kind of like flipped from what everybody else is.
2265
02:39:32.777 --> 02:39:36.918
So I'm just trying to figure out what, uh, what any advice you got for me.
2266
02:39:38.142 --> 02:39:40.803
What else could you sell these customers off the top of your head?
2267
02:39:41.523 --> 02:39:44.604
I have a few ideas, but like, what else could you sell your existing customer database?
2268
02:39:46.604 --> 02:39:50.105
So, um, we dabbled in the permanent lights.
2269
02:39:51.005 --> 02:39:55.006
Um, I, I started focusing on doing that maybe more for commercial.
2270
02:39:55.666 --> 02:40:03.148
Um, I kind of got away from residential because it, I don't really want to sell to my, uh, my current customers.
2271
02:40:04.346 --> 02:40:08.769
and advertise that I do it because I get that recurring revenue year after year with them.
2272
02:40:08.789 --> 02:40:15.075
But then it'd be, yeah, like I get a little bit more money that first year, but then I get nothing from them.
2273
02:40:15.755 --> 02:40:21.420
And my clients, about 90% of them have stayed with me over the last five years.
2274
02:40:22.061 --> 02:40:24.283
So I have a really good return rate.
2275
02:40:24.383 --> 02:40:29.988
So I don't really want to scare them off or not scare them off, but lose them by doing just one time job.
2276
02:40:31.156 --> 02:40:42.485
So I've dabbled and thought about doing more, like, aiming more for, like, commercial jobs, the auto stores and bars and stuff like that.
2277
02:40:43.105 --> 02:40:50.211
And then the other one I've started looking into doing is, like, event lighting.
2278
02:40:51.071 --> 02:40:56.595
And, like, for graduation parties like that, putting up the bistro lights for weddings.
2279
02:40:57.356 --> 02:40:58.577
That's kind of my idea, but...
2280
02:40:59.884 --> 02:41:01.825
I just haven't really acted on it yet.
2281
02:41:02.386 --> 02:41:03.627
Okay.
2282
02:41:04.207 --> 02:41:06.188
So a couple ideas come to my mind.
2283
02:41:06.449 --> 02:41:14.434
First off, I agree about the permanent lights when it comes to your existing customers, and I would ideally like to sell to your existing customers.
2284
02:41:15.134 --> 02:41:19.558
Have you ever thought about something along the lines of window washing or gutter cleaning?
2285
02:41:23.981 --> 02:41:27.383
I have, but the gutter cleaning...
2286
02:41:28.214 --> 02:41:35.698
kind of runs right into the same time we'd be installing lights for the fall time.
2287
02:41:36.218 --> 02:41:44.463
So I wouldn't want to take away my, because it's a low ticket item for us, or it would be.
2288
02:41:45.663 --> 02:41:53.908
Our average residential job is about $2,300 for the Christmas lights, so trying to get
2289
02:41:54.812 --> 02:42:21.029
get something around that same price point is what i was thinking yep okay okay then the other thing is to sell something that's not tied to christmas and i like the idea of doing events things like weddings graduations etc um my sister actually had a a light business for weddings where they do like the edison bulbs okay have you done any of those or advertised that at all
2290
02:42:23.178 --> 02:42:29.885
No, that's, I actually just, I just got done reading your total business.
2291
02:42:30.565 --> 02:42:31.666
Turn around.
2292
02:42:32.267 --> 02:42:33.208
The total business one.
2293
02:42:33.608 --> 02:42:34.529
You turn around, thank you.
2294
02:42:34.569 --> 02:42:36.631
I keep wanting to say makeover, but I know it's not a makeover.
2295
02:42:37.472 --> 02:42:38.733
It feels like that.
2296
02:42:39.241 --> 02:42:47.591
But, yeah, so I have the email template that I just worked on last night, so I haven't sent it out to my current clients.
2297
02:42:47.671 --> 02:42:54.379
That's my next thing I was going to do today, and then I seen that you guys went live, so I hopped on here really quick.
2298
02:42:54.819 --> 02:42:55.020
Okay.
2299
02:42:55.560 --> 02:42:56.461
where I'm going to be doing that.
2300
02:42:56.921 --> 02:43:02.183
Yeah, like ultimately, I don't like adding new services if they do not have an inverse demand curve, right?
2301
02:43:02.243 --> 02:43:08.226
So if gutters are going to be right when we're doing the fall installs, then we don't want it.
2302
02:43:08.746 --> 02:43:10.267
I think we could push it forward a little bit.
2303
02:43:10.347 --> 02:43:14.809
But to your point, if we're only going to make a couple hundred bucks, it's not going to move the needle enough.
2304
02:43:15.309 --> 02:43:20.933
And so I'd be looking at the next, in the off-season, we talk about the next, the third one is adjacent services.
2305
02:43:20.953 --> 02:43:21.773
That's the third cure.
2306
02:43:22.494 --> 02:43:30.259
And I think an adjacent service is ideal, assuming that it is in the same vertical, but it is at a different time of the year.
2307
02:43:30.579 --> 02:43:34.882
And the nice thing about events, when it comes to weddings, no one does it around the holidays.
2308
02:43:36.346 --> 02:43:38.128
It's always during the summer and during the spring.
2309
02:43:38.968 --> 02:43:53.101
And so I would really love to be able to have, whether or not you rebranded or you changed it to a slightly different brand that was more events, both for commercial events and also for things like weddings, et cetera, graduations.
2310
02:43:53.261 --> 02:43:55.243
So more celebratory and then more corporate.
2311
02:43:56.484 --> 02:44:13.499
and like you know your brand name but like whether or not it can currently do both or if you have to change out and do a new brand I'd be in favor of all things lights does this which is you have celebratory you have corporate and you have Christmas
2312
02:44:14.575 --> 02:44:16.176
There's your three C's, right?
2313
02:44:16.716 --> 02:44:23.360
And so celebrations are things like graduations, Easter, what's it called, gender reveals.
2314
02:44:23.541 --> 02:44:29.124
Corporate is very much like, hey, we have this dinner, we have this fundraiser.
2315
02:44:29.784 --> 02:44:34.567
These are the type of events you can absolutely do things like Edison lights or the more moody lighting.
2316
02:44:35.128 --> 02:44:36.469
I think that would be a great opportunity.
2317
02:44:37.009 --> 02:44:43.413
And what's nice is a lot of times you can rent these at the price where you can make up for the cost of goods sold in the first rental.
2318
02:44:46.945 --> 02:44:50.007
Okay, yeah.
2319
02:44:50.067 --> 02:44:50.287
Yeah.
2320
02:44:50.307 --> 02:44:56.510
So I think a lot of it comes down to rebranding or even just making a new landing page and driving traffic to it.
2321
02:44:56.771 --> 02:44:58.872
Like if you're like, well, I just wanna dip my toes in it.
2322
02:44:58.992 --> 02:45:04.335
Great, you could sell, because what's nice about events is a lot of times they're planning four, six, eight months in the future.
2323
02:45:05.215 --> 02:45:11.579
And so you could start marketing it now, knowing that they're going to be the last minute people for weddings, which, by the way, they're extremely price insensitive.
2324
02:45:12.560 --> 02:45:15.602
For June, July, and August, that's when people are having their weddings.
2325
02:45:15.862 --> 02:45:21.445
You could run ads to a landing page, not even have a business name up, not even have a new brand.
2326
02:45:21.645 --> 02:45:30.431
Just build the site, drive traffic to the thing, and just see what happens in terms of customer acquisition costs before you even go buy lights.
2327
02:45:36.122 --> 02:45:38.747
Does that sound like something you can do?
2328
02:45:40.865 --> 02:46:06.305
yeah the only thing that i worry about is more the advertising like right now like what i said like with our payments like i don't really have any extra cash to uh like put towards marketing or like doing like like doing a dba and like the right paying like for legal fees and stuff like that so that that's like my only concern with that that's what's kind of helped
2329
02:46:08.075 --> 02:46:10.257
Maybe resistant to doing it.
2330
02:46:10.277 --> 02:46:11.137
So two things.
2331
02:46:11.738 --> 02:46:15.081
You can build a free landing page on just about any site right now.
2332
02:46:15.721 --> 02:46:16.662
It's not going to be complicated.
2333
02:46:16.722 --> 02:46:21.286
It's going to be a form and showing some pictures of weddings.
2334
02:46:22.106 --> 02:46:22.887
I'd go after weddings.
2335
02:46:22.967 --> 02:46:23.988
If I was you, I'd go after weddings.
2336
02:46:24.108 --> 02:46:25.949
Weddings, people are price insensitive to Wazoo.
2337
02:46:26.329 --> 02:46:28.071
I would go after weddings as your lowest hanging fruit.
2338
02:46:28.731 --> 02:46:30.072
You can spin up a site pretty quickly.
2339
02:46:30.913 --> 02:46:36.399
I will also say, you likely have, how many contacts do you have in your database?
2340
02:46:36.419 --> 02:46:38.922
Not customers, but contacts do you currently have in your database?
2341
02:46:42.326 --> 02:46:43.487
Let's see here, 496.
2342
02:46:44.842 --> 02:47:02.793
I bet if you made a really solid email that said, ABC Christmas lights is now offering ABC events, and we are doing lighting for weddings, graduations, and parties this summer, and as an existing customer, we're giving you $300 off your first event.
2343
02:47:03.234 --> 02:47:04.715
Click here or fill out this form.
2344
02:47:05.055 --> 02:47:08.097
I happen to believe you might get your first four or five customers from that list.
2345
02:47:09.299 --> 02:47:11.582
Because we all have an event of some sort coming up this summer.
2346
02:47:12.243 --> 02:47:16.869
And if they don't know, they know someone else who is having a wedding, they forward it over to them.
2347
02:47:17.109 --> 02:47:22.737
And you can just say, send this email to anyone you know that's having a wedding this summer, and they'll get $300 off.
2348
02:47:24.813 --> 02:47:30.658
Now they get to send it to someone, they get to save their friend $300, and you get the customer without spending any money on market.
2349
02:47:30.698 --> 02:47:34.581
And I wouldn't go get a DBA, I wouldn't set up an LLC, I wouldn't do any of that.
2350
02:47:34.821 --> 02:47:39.585
Because you can sell these way in advance before you even buy the lights, before you have the event.
2351
02:47:40.165 --> 02:47:42.127
You can get these shipped in within a week or two.
2352
02:47:45.300 --> 02:47:46.721
Yep, yep.
2353
02:47:46.761 --> 02:47:57.289
My sister would buy the string lights from Costco, and then the very first install, she would be able to make more than the cost of the lights, the cost of goods sold, because she would install them.
2354
02:47:57.529 --> 02:48:02.613
So she'd buy them for like $500, rent them out for like $2,000, and within the first...
2355
02:48:03.213 --> 02:48:19.643
time to be able to install them because no one doing their wedding wants like string up lights it's always a chaos it's over but she knew how to do it and so she was able to low cost of goods sold 500 bucks sell it for 2000 meaning i don't need cash to grow this business i don't need to be spending money on marketing
2356
02:48:21.142 --> 02:48:24.064
All right, ladies and gentlemen, it's been three hours.
2357
02:48:24.345 --> 02:48:25.826
So I'm gonna go ahead and cut the confession booth.
2358
02:48:25.866 --> 02:48:28.628
I apologize, the call queue is completely filled.
2359
02:48:28.928 --> 02:48:30.109
We will do this again.
2360
02:48:30.129 --> 02:48:32.471
I appreciate everyone for calling in today.
2361
02:48:33.892 --> 02:48:38.115
There is, if you want me to come out in person, I do this for free.
2362
02:48:38.495 --> 02:48:39.336
It's a turnaround show.
2363
02:48:39.716 --> 02:48:42.499
You can scan the QR code, go down, the link's down in the description.
2364
02:48:43.419 --> 02:48:50.405
But I implore you, whether or not you call into the confession show, find a community of people that you can share things like this with.
2365
02:48:50.805 --> 02:48:54.808
We've talked to several people today that are going through really rough spots despite having big businesses.
2366
02:48:55.329 --> 02:48:56.850
Big businesses does not mean easy life.
2367
02:48:56.870 --> 02:48:58.551
There's still a lot of trouble.
2368
02:48:58.672 --> 02:49:03.956
There's a lot of problems, and the problems get bigger and more complicated and more complex, and the stakes are higher.
2369
02:49:04.416 --> 02:49:08.580
And so find a community of people that you can share this stuff with because the last thing you want to do is quit.
2370
02:49:09.220 --> 02:49:15.423
And the reason we did the confession booth is, and we garble everyone's voice, like, why does it sound robotic?
2371
02:49:15.443 --> 02:49:19.685
Because we don't want, we want it to be anonymous and we want people to be able to share what they're actually going through.
2372
02:49:20.226 --> 02:49:22.227
And this is the type of content I always wanted to have.
2373
02:49:22.807 --> 02:49:27.769
And so if you would like me to come in person, we do have the turnaround show and we document that for everyone else.
2374
02:49:27.789 --> 02:49:29.410
It's also trying to learn and grow their business.
2375
02:49:29.810 --> 02:49:30.611
The whole objective is,
2376
02:49:31.091 --> 02:49:34.093
of the content is to help home service business owners become rich.
2377
02:49:34.693 --> 02:49:46.099
And I believe that money in the hands of you and entrepreneurs like yourself in the local communities does a lot more good than the coffers of other corporations or the government.
2378
02:49:46.359 --> 02:49:47.320
So that's why I do what I do.
2379
02:49:47.980 --> 02:49:48.480
I love you all.
2380
02:49:48.620 --> 02:49:50.661
Appreciate all of your support that makes all of this possible.
2381
02:49:50.682 --> 02:49:55.144
To everyone in the call queue, I'll drop you out for now, but we will try to have these more frequently.
2382
02:49:55.484 --> 02:49:58.045
But thank you for another episode of The Confession Booth.
2383
02:49:58.626 --> 02:49:59.086
Take care, everyone.