The Most Profitable Local Business Everyone Overlooks ($70K/Month) ⏐ Ep. #196

I'm like, okay, there's definitely demand for this. And I started looking into the companies, couldn't find any. So I just was like, holy smokes. You know, I definitely kind of stumbled upon this industry. We're like, all right, let's do it. So the first month, it was like 17,000.

What's your average job size?

It's about 3,100. We've got around 70,000 on the schedule for each month up to October.

You'll do a million next year.

The new machinery got 0% financing for 60 months. Somebody's going to kill it with that little machine. You just have somebody who's operating joysticks from standing off to the side.

Had you ever used one before?

We've never used one.

Have you ever done a home service business before?

No.

So I was scrolling on Twitter the other day, and I find this guy named Alex, and he started a brush clearing company in Cincinnati, Ohio, and his first month, he did almost $18,000 in revenue with 85% net profit margins. Why did he start this? Because he has a marketing background. He can do a little keyword research. Nothing more extensive than what I talk about on this podcast all the time. And he learned, holy crap, there is a ton of demand for brush clearing in my area, and almost no one is fulfilling this demand because he had just bought five acres and he needed brush clearing. So, having never started a home service or a local business or a sweaty startup before, he said, I'm going to do this. I'm going to start a brush clearing business, because I know there is so much demand for it, and I can charge $2,000 a day. You can get the equipment financed, you can start this for very little money. And there's a ton of markets that have way more demand than supply for brush clearing. Forestry mulching, as it's called. We got super tactical about his Facebook ads, what types of ads he's running, how he's using YouTube, which I did not see coming, and how much money he's making today. Only 13 months into this business and what his margins are, we held nothing back. You are going to love this. Please share it with a friend, especially someone that might be interested in starting a local service business with very little money and very high margins. Tell me about how you even stumbled upon this industry.

So I bought a house, and we have five acres. Four of it was wooded. And I was like, okay, well, I have this nice yard, but I can't even use it, so how do I clear this? And I started looking into it and I couldn't find anybody. The closest person was over 100 miles away.

I don't want to dox you, but, like, what. What is the population or the size of your city? How far are you from a major metroplex that we might have heard of just to give us some bearing.

So I'm about 30 minutes from downtown Cincinnati.

Okay. In like a small rural city.

It used to be 10 years ago, it was a lot more rural. There's a lot more suburbs out here now. But so I'm kind of right on the edge of the suburbs. So there's like a thousand acre farm near me. And then, you know, on the other side, you've got just tons and tons of subdivisions. So kind of right on that edge.

It's funny because we're very similar. I. I live 30 minutes from downtown Dallas and I'm like right near all the major Dallas suburbs. Plano, McKinney and all that. But I'm in like this little rural pocket.

Yep. Where it's the best, isn't it? You saw property.

Perfect. We have three acres.

Yeah.

Not a lot of it is wooded, but I've rented a skid steer about four times.

Yeah.

I have no problem finding someone to because, I mean, there's 8 million people in Dallas and I'm close enough. Right, right. You're in a much different situation from as far as, like, population is concerned.

Yeah. Texas is interesting. They're one of the few saturated malting markets from what I've heard.

Interesting.

Yeah. So somebody out there must be really promoting it and doing really well with it or a multitude of companies. One of the guys I've met is from Texas, and he just traveled up here because there. There was no competition.

Wow. Okay. So you bought five acres, four of which were wooded, and you need someone to come out and clear it at least to some extent. You can't find anyone within 100 miles.

Yep. So then that got me thinking. I said, well, you know, could. Could I do this? And I started looking into it. I started looking around at my neighbors and I'm like, everybody needs this in Ohio. And I'm not necessarily sure in other states, but in Ohio in particular, especially our area, we have this plant called honeysuckle. I know it's pretty prevalent everywhere, but here in particular, it's really bad. And everybody has this problem. It's overgrowing on them constantly. What happens if you have any sort of property and you mow? It'll over time, you know, five years from now, you've lost 15ft of your property because it just keeps creeping over and over and over. So I just saw that everywhere, and I'm like, okay, this is. There's definitely demand for this. And I started looking into the companies, couldn't find any. I found some owner operators that were just promoting a marketplace. They didn't really have, like, a brand or anything kind of established. And so I started doing keyword research. And I'm kind of learning, you know, off of X, that I'm kind of doing, like this old school version of keyword research, probably because I did it a lot back in the early 2000 or mid 2000s. But I just sat down and I said, okay, what? People don't seem to know what forestry mulching is. If I type in forestry mulching, I'm hardly getting any sort of results. I talk to friends, talk to family. They're like, what is forestry mulching? So I just started asking them. I said, okay, let's say you wanted to clear your. Your property. You've got this problem. It's been overgrowing, you've lost 20ft. What are you gonna search to try and find this? And so people were giving me ideas, you know, clear my woods, get rid of this wild rose, destroy honeysuckle. And I just started taking this list into a spreadsheet of all the different terms that people would search for. And then I use a keyword tool, typing in those and seeing how much. How many results they're getting.

Which tool did you use?

I think it was Semrush. It's been about two years since I.

Did it, but unlike Ahrefs, they actually have a free trial, so.

Yeah. Yeah, that's. Yep. Yep. I always never pay for those tools.

No, never.

Yeah. So I just noticed there's this huge search traffic, so I just was like, holy smokes. You know, I definitely kind of. Kind of stumbled upon this industry, don't know anything about it, and just started looking into the equipment. And then my. My business partner, Zach, he was a part of this whole idea process as well. And I was just, you know, all the time like, okay, let's see. This is what the service data is showing this. I think we can do this. And then we just kind of were like, all right, let's do it. I know how to run ads. I know marketing. I think, you know, we can solve this problem that I'm. I'm seeing with other companies and what I mean by that. So I actually reached out to some tree service companies, because if you're trying to get this done, you would think, okay, maybe I'll just contact the tree service company. And what I found was these guys don't know how to sell this, this service. And they also don't have the operators. So you can't take a tree service guy and stick them in these machines. So they've never really pursued this, even though they got asked about it a lot. How to sell it is through content marketing. And that's, I was like, okay, I think that's the answer. That's how we sell this. And so we went and bought the machine and we didn't have any jobs on a schedule. I kind of cobbled together an ad. I actually used like Bobcat's YouTube channel where they had a four stream launching demo to kind of cobble together my first ad.

You borrowed their video?

I was like, well, it's Bobcat. I'm using their equipment. They're probably cool there, right? Sure. I was like, until I at least get my own videos. And yeah, so I mean, we got inundated pretty quickly.

Now when you say content marketing, you mean like paid content marketing? Not necessarily.

Not necessarily. So like YouTube, I, I consider YouTube like content marketing. It can be used as content marketing. You know, people have YouTube channels where they're trying to get tons of views. And I didn't approach YouTube that way. I don't really, I don't care at all about the view count. I needed something that, that would support the business and support the service and support the marketing process. So I kind of see YouTube as a content marketing outlet in a sense.

So are you. Because to me, content marketing is not the first thing I think of when I think of a local service business. Because, you know, the YouTube algorithm will spread your video far and wide, not necessarily to people that live in Cincinnati or thereabouts. So how do you approach that?

So I actually use local keywords. So when you're putting in your tags, I use the local keywords. I'll do like Cincinnati forestry mulching as part of my tags on YouTube videos. And the reason is, is because if somebody local is searching that on Google and you know how it shows the video results kind of up there first, it's more likely to show my video to them. So because it's specifically for my area, so I kind of use adwords, keywords, in a sense onto my YouTube tags.

So is the hope then that someone local to your area who needs your service, they don't know it yet. They're just kind of, they're typing around, they're Clicking around. They're looking for content related to it because maybe they want to rent one themselves and do it or something. And then they see you and then they're thinking, yeah, let me just have this guy do it.

Not necessarily. So that's kind of a perk of it, is that if somebody's looking for it specifically, we're going to show up. But that's where the meta ads come in. Because, you know, I see meta ads totally different than Google AdWords. Google AdWords is somebody's looking for your service, bidding against other people looking for your service. Meta to me is they're not looking for my service. I'm going to knock on the door and sell this to them, essentially. Right? That's the way I see meta. You're interrupting their flow. You know, when they're scrolling through their timeline. And so we just made. I was like, okay, well, I'll make a cool video, you know, highlight the problem first, show that you're local. Local is the number one. Because people don't like, you're not going to pay attention to it if you're not local. If they see, oh, wow, this, these people are local. Oh, dang, this is cool. Look at this thing in slow motion, shredding this tree. And then I kind of introduce the service into that ad video. And then when people see that, I want them to say, well, I have this problem. They weren't necessarily looking for me. I just have to show them like, here's a solution to a problem you probably complain about every spring when the leaves come back on the trees. Right?

Yeah.

And so that's the way I use meta ads. And then I put the YouTube link on the ad and then they go to our YouTube channel and they see, okay, look at all this content. Look at this job. Look at this before and after. These guys are, this machine is crazy. They've never seen this before. And then they, I gotta call them. And that's what happens. So we essentially reinforce that ad through our YouTube channel. We create fans. I mean, it's crazy. I would say almost every customer has watched our YouTube channel. Some of them have watched every video and they still do see the ones we've already, you know, served.

That's amazing. I'm so glad this conversation took this direction because I didn't know you were going to talk about YouTube or content marketing at all.

Yeah, yeah.

So. But this is awesome because I own a tree trimming business and that's not even on our radar. Content market.

This winter I'm going to Be doing one for tree service.

Okay.

Not. Not for my company. I'm going to, I'm going to help out somebody else.

So you're going to be like kind of an agency to another local tree trimming business to help them?

Yeah, yeah. I only do that kind of stuff if I think it's fun and cool to do. And I think this one, this is a big tree service company. I think he's like 6 million a year. And he's referral only. He does not advertise.

Wow. How long has he been around?

I want to say doing Tree service for eight to 10 years.

Okay. So I pulled up your YouTube channel. You've been doing this for a year now on YouTube.

Yeah, so we, we just crossed. We're about a year and a month that we've been doing this business.

Okay. And you started YouTube on day one, basically?

Started on day one, yep. Cause I knew I needed the. I, I needed the videos. I like photography. I like videography as a hobby, so I just, I love doing it. Anyways, I knew people would think this is cool to watch. So I went out and took my cameras and went out and recorded the first job. I utilized a lot of that footage for the ads.

Mm.

So, yeah. And then I just kind of kept going. I just like doing it. You know, eventually you'd have to pay someone to do it, but I just like it.

So are you editing it yourself as well?

Yeah. Yeah.

Okay, so you're not that good.

But the thing is, it's like, it doesn't have to be that good. It just has to show.

So are you just setting up a phone on a tripod or two phones or two cameras or what does your hardware look like?

So I have like a camcorder, a 4K camcorder. I've got action cameras. I have a Sony mirrorless camera. I actually just got a, like a pen on camera. Was the. The Go3s, the Insta360. So, yeah, I have all kinds of different cameras. I used to travel the country and go to national parks, so. And record stuff.

So this is awesome. Are you able to attribute a specific percentage of your business to YouTube and if so, what does it kind of look like, give or take, directly from YouTube or just like the customers that touched YouTube in some way?

Uh, I would say most so probably around 80%.

Wow. It's not independent of your meta ad strategy. It complements it.

It complements it. Yep.

Okay.

The YouTube is for the ad strategy.

Yeah, basically. That's so interesting. Are your most successful Meta ads. Video.

Oh, yeah, without a doubt. Yeah.

Okay.

Yeah. Instagram as well. Image ads aren't even worth it. I don't even run image ads. People just scroll right past. If you don't have, like, the perfect picture that's going to interrupt them scrolling on their feed, then, you know. So videos are. Videos are much more interesting.

You're confining it to a geographical radius and. Correct.

No, no, no, no. So. So, okay, that's. That's an interesting thing. I think a lot of people get wrong about meta ads and agencies get it wrong. A lot of people get this wrong. So I don't confine it necessarily by a radius. I specifically choose zip codes where they're more likely to have large property. So. Because if I don't want to blanket an ad to people who won't buy it, because then you're at. You're spending money to people who won't buy it. And then I target. And I say, okay, well, how do I target people who own land? Right. Specifically land. And so in those zip codes, I'll target people who have an interest in tractor supply company or Rural King. And then. Yeah, so I'm. Yeah, I'm only bidding on people who are over the age of 35. So they have money. They. They likely have land, and they're within my range.

Yeah, I said radius. I meant geofence. You're geofencing your ads.

Yes. You're not.

You're not trusting Facebook to show it to people in a certain geographical area. You're picking zip codes. In this case.

Yeah, I don't trust Facebook's audience algorithm at all. I like to choose it, and you should pick it because there's no sense in advertising to people who wouldn't buy your service.

So do you do any paid stuff on YouTube or is it only organic?

No, I don't do any. No, it's all organic. Yeah.

Okay. Do you have, like, a particular cadence that you like to release YouTube videos or is it.

No, it's more so if I'm available to do it. Yeah, I may be. You know, I used to say record one out of every five jobs. Now it's maybe one out of every ten. I'm gonna be doing a lot more videos because I've stopped ads. We're booked out too far. It's hard to tell somebody on a quote like, hey, how about October? Yeah, it's the middle of July, so. And. And I also want to leave that kind of last month of. Of heavy running open for referrals. I Want people that, that we've done work for to be able to refer their friend and then us to be able to put them on schedule this year.

Okay, so back to the research. So there weren't clear search terms for this because it's an obscure service. Clearly people are searching for it. They're probably just not calling it like the official name.

Right. They have no idea what to look. Right. How to look.

Which gave you an opportunity. So you assembled a bunch of keywords yourself. Yeah. This probably took a few hours. Then you looked at the search volume relative few days.

Yeah.

The search volume relative to other industries and or other markets. Correct.

Yep.

And this was just like screaming at you, like, start this business.

Oh, yeah, yeah. I mean it's. People have this problem. I have. If I have the problem, then other people have it too, you know. So other people have a way worse. I've learned.

Yeah. Have you ever done a home service business before? Like a sweaty startup? Okay, that's, that's encouraging. All right, so let's talk timeline. Thirteen months ago, you hadn't booked any jobs. You didn't like pre book stuff and then go rent a skid steer or buy a skid steer after you had jobs. Book. Correct. You bought a skid steer. How much was it? And then what did you do?

So I think it was around $90,000. And that was used with the head. And it was a used head as well. The reason that we didn't rent was because they were Bobcat charges 2700 a day to rent it.

Oh, oh man.

Yeah. So. So I was like, that's, that's crazy. But they do that. And a lot of times they'll only rent to forestry companies. They only rent to other people like an individual.

Because this isn't just an average skid steer you need. Right. Like I rent a skid steer. I love it. It's my favorite Saturday of the month. And it's like 450 bucks for a day. And it just has a bucket. There's no fancy attachment. It's probably a $25,000 skid steer.

Yeah, yeah. So. So these skid steers, they have to be the large ones. They have to have at least high flow. So what hydraulic flow. And they have to have the forestry kit. So the forestry kit is like an additional $15,000 kit. It's got a fall guard on the top, so if you cut it down a tree, it's not going to smash the cabin. It's got three quarter, three quarter inch polycarbonate screens. All the way around. So the windshield, the side windows, the debris kit as well. So it keeps debris from going out down into the engine. They're pretty much. Once you get the forestry kit on these, they're purpose built for this.

Yeah. And then you need the head in addition to that.

Yeah. So the head is included in the 90,000. I think we paid 15,000 for the used head.

Okay.

Just bought a new head and it was 38,000.

Holy cow.

Yeah. For that. Yeah. And we just bought a new machine, too. I think overall, we ended up around 1:29 for the new machine. However, the new machine, totally worth it. We will probably end up paying double on this used machine because this stuff is hard on the equipment. It's definitely hard on the equipment. And having that warranty is very, very important. And Bobcat is very good about their warranty. Pretty much everything they'll fix under warranty and they'll give you a new machine. So your cost on the machine under a warranty is very, very low.

So one of your regrets is not buying is buying used. If you could go back, you would buy new. What do the financing options look like on these, both new and used?

The new machinery got zero percent financing for 60 months.

What? Percent down?

We had to put 5,000 down on that.

That's nothing.

Yeah, not. Not a lot.

Holy cow.

Yeah, they were doing some big Bobcat sales event. So the financing, I believe, is through Doosan or somebody who works directly. Doosan owns Bobcat and then the used machine. We're around 7.8% at the time, so.

So what does your payment look like on both the 90,000 and the 130,000?

So the 90,000, around 1400amonth. 130. Around 1900amonth, man.

Okay. So you could pay for that in one job?

Yeah. Oh, yeah. That's what we want to stay under that. So we want to stay under one job and, well, at least, you know, the revenue of one job. We just like that number. It makes the payment negligible.

Yeah. Right. So just one job a month and our overhead is zero? Essentially, yeah. Are you storing this at your house on your property?

I was. So we just got a shop space. So at my property we had to storm out. My barn wasn't big enough. Right. So they were sitting outside. We didn't want that to affect the machine. They're tearing up my yard, too, which I didn't like. So, yeah, we ended up getting a shop space. We just got the shop last month.

Okay.

And this.

Congratulations.

Thank you. Appreciate it. The shop is 1500amonth, so. Which is. I think it's on the high end, but we got the H vac because we're going to run winter as well.

And how many square feet?

It's 2,000 square feet.

Oh, that's good. That'd be really good for DFW. Okay, so day one, you've got this $90,000 liability. I'm shocked that you can get in this thing for five grand. I know that's a new deal, not a used machine deal, but that's shocking to me. Tyler, my stump grinding friend, he bought a 60, $70,000 stump grinder. I think he had to put 20% down on it.

Yeah. So I think a lot of that had to do with. We have a lot of history in businesses. So the lenders really looked at that, like, if you've never started a business, a successful business before, they really don't like that. So they don't like just taking the risk on new guys. But they will, you know they will. Especially if your credit's good. They don't care.

Yeah, yeah.

At the end of the day.

Or your wife's credit's good.

Yeah, yeah. Or your wife's credit scan. Yeah.

Okay. So day one.

So day one, I'm just, you know, we get the machine in, we take it to my property to start testing it out, getting used to it.

So had you ever used one before? Did you do this on your own property? Had you rented one or was this brand new to you?

We've never used one.

I love it.

So they're our main operator right now. And he. He had run some stuff before. Not. Not quite like this.

Pushed a lawnmower before.

Yeah. But he picked it up pretty quick. So. And I used that opportunity of us testing it to get footage and. And things. And we also, like, kind of broke it down. Pull all the. Because it was a rental. It was in the rental fleet. So we pulled all the rent stickers off of it, put our branding on it. When we made the decision, I started the ads, and then we immediately started getting leads, and we basically had a job on the schedule then two days of getting the.

Oh, man. Let's talk tactical about your ads. So you talked about your targeting strategy. Geographically, buy zip, more rural zip codes, 35 or older, landowners, tractor supply, interest, etc. What about, like, placement? Are you video in the Facebook newsfeed, Instagram newsfeed, stories, reels, etc.

Yeah, so I let pretty much all of. Everywhere. So my goal is kind of. It's a Lead ad. But I want exposure. The more exposure I can get on it, the more placements I can get on it, the more people know about this service. And so that's why, you know, I've never been threatened by another company that's starting up or anything like that. Because in this industry, we need people advertising. We need these companies because we need. We're going to expand the ocean, essentially.

Yep. Grow the pie. And I think that's an important distinction because depending on what your strategy is, sometimes I only do like, Facebook and Instagram reels. Sometimes I only do Facebook newsfeed. But for something like this, I can see the value to doing. There's like 23 different ways places you can put it. Audience network, the right side of the page stories reels, Facebook reels. So I see your logic here because there are only so many people in six zip codes outside of Cincinnati that are 35 and older that own land. Like, that's a very small market. So you want to look everything everywhere all at once to them, right?

Yep.

Okay. All right. So you put it everywhere. Videos. What types of videos? Is it just you talking to the camera? Is it you, you know, in action?

It's sort of like a highlight reel kind of video. So it leads off with, you know, the machine kind of munching down this big mulched area or this big viney area. And then it cuts to. Based in Loveland, Ohio. And I've got this drone shot of the big water tower with the. With the branding on that everybody knows about, some kind of, you know, local landmark that I used. And then it cuts into like a time lapse of us just crushing through all this area. And then it's got just where it's like clear your land fast, you know, so it's very eye catching. Very interesting.

Quick cut.

Yeah, quick cuts. I always look at ads where, like, I don't think it's cool, then it's not cool. Nobody's gonna like it. Right?

Yeah.

So that's the way that. And. And I'm going to be doing a new one soon. And. And I'm actually going to be doing a, like an old 90s infomercial style. I'm gonna have some dude on a mower that's like some branch hits him in the face.

Yeah. Oh, it's like black and white.

Yeah, yeah.

It's like the commercial, the Tupperware commercial, where like the woman opens a cabinet and like 8, 000 Tupperware.

Right, right, exactly. Except I would have brush hitting a guy in the face on his lawnmower. Because that's the number one complaint we get is like I can't mow. You know, this keeps hitting me in the face. Yeah. I'm going to use that as like an attention grabber. Very overly animated.

Yeah. Okay, so really like one video ad has been your stalwart.

Yeah, I mean I've run other ones. So I did a fence line one. So particularly people looking to clear fence lines. We've gotten really into the horse community from that ad we did. The horse community is very tight knit community and these people all own land. Right. So once you kind of get into that, that community, they start sharing your information. We get a lot of referrals from that. And their number one issue is keeping the stuff off of their fence. They need to be able to walk the horses around the fence. We did that ad. I tested other ones, but not for very long. Our bread and butter has been the one lead ad. It is time for it to be changed though. So it'll be changed because it does decay over time.

Okay. When you say lead ad, you're keeping them within the meta platform and you're getting the name, phone, email.

Yep.

And then do you have automation set up to reach out to them as soon as possible?

I wish. So we use Housecall Pro. They charge, it's like 350amonth. If you want access to their API, which is crazy.

Yeah.

You have to go with their max plan. I'm like, I don't need anything else on their max plan except this API.

Yeah.

So I haven't set up an automation for it. I do have like if somebody fills out our lead form, I do have automation set up to where it'll send us an email, send us a message on telegram. But yeah, I don't have it with housecall Pro because of their cost of their API.

Yeah.

So the first boarded. I just don't, I don't, I can't just. Yeah.

So you start getting leads like immediately. What, what does your close rate end up being?

49% right now. Yeah.

Oh, wow.

It's, it's very high.

You can't quite close half of them.

Yeah, I know, right? I was at 44 for a while and then I got up to 49 and I'm like, come on, jeez, gotta get that 50, you know.

And then what is your cost per lead?

So cost per lead, average $23.

Holy cow. And then what's your average job size by revenue?

So it's about 3, 100.

So $46 to convert a 3, 100 customer.

Yep. That's why it's infinite.

That's outrageous.

Basically run into peak market size.

That's why. Wow. That's why you're booked out. That's why you're in business. Yeah.

Yeah.

That is beautiful. Okay.

There's a lot of pent up demand. That's, that is something.

Yeah.

About a lot is because. Yeah.

So the CPL will probably go up over time. You're competing with yourself. Right. So someone fills out the form, you give them a call. Is that the process? And try to get over there. Quota in person.

Yeah. So I give them a call, try to set up a time to quote in person. I mean it's pretty easy. Like as soon as I call them, they know. You know, sometimes though they filled the form, they're like, who's this? And they just gave me their information. But yeah, I'll call them and then I set up a time on the schedule to go out and give a quote.

Okay. Do you ever try to close over the phone or have you ever been forced to.

I have closed over the phone. I don't try to. I. Yeah, it's, it's.

The close rate's not as good. I mean.

Yeah, yeah. I, I don't know. To me it's, we're, it's an expensive service and yeah. People want to put a face to it. So to me it's just, I don't know, it doesn't, I don't feel comfortable just trying to close over the phone. I, I have had customers tell me that there's another company that's charging for quotes. They charge $50 to do a quote if they want them to come out. Or they'll just, you know, hey, what's your property? They'll give them some rough quote off of a satellite image. And even, even well intentioned customers, well intentioned leads that are interested in your service. Can't afford it. Don't appreciate that.

Okay, so $3,100 average job size, how many hours does that take? On average?

31. I mean that would be about a day and a half. So, okay, we have, we typically would do by day, half day, multi day. 3100 is the average because you get some that are booking for four days, five days, some are half days.

So that's kind of how you run the calculus in your mind.

Yeah.

When pricing is by half day, day, multiple days. Okay.

I don't love that. But it's for some reason customers like it. I've tried to switch to quoting by square acre or square quarter acre and doing, like, brush density, something that's kind of scalable, easier to where if I bring another sales rep in, they're not relying on just experience of looking at it. It's a very hard mind thing. Even though the pricing came out to be the same, customers didn't like it. My close rate dropped at half for a couple years, and I'm not really sure why. I think they kind of like that day service where, oh, if I can just. I could just extend it another day if I want them to keep going, you know?

Yeah. I feel like it's just when it comes to pricing in any industry, it's. You just want to remove friction and confusion. And if they have to run any math or numbers in their head, which is second nature to you because you own the business in the industry to them, it's like, if you're there that day, I want to know what I'm paying for that day. If I got to have you come back, what happens if you quote, like, a full day service, call it 2500 bucks or whatever, and it ends up taking, like, two hours. How long did it take you to learn that? You know, like, all right, this will take us.

I'm still learning it. I'm a lot better now. But that does happen. I mean, there. There's jobs where I quote them a day. It took us three hours. We end up charging them a half day, or if it took five hours, then it's within that day scope, so they still pay for a full day. I've been off before by a couple days, so I've been short or long a couple days before. Because it's a large area.

Yeah.

And sometimes you don't really know until they start cutting into it what it actually looks like a hundred feet back into the woods. Because a lot of these, you can't even walk through them.

Yeah. So you've got your costs on the machine every month. You have your variable cost for gas, which probably isn't much. You've got a budget for repairs. I'm sure you're stocking some away.

Yeah. And then 15 for repairs.

15 right off the top.

Yeah.

For repairs. Other than that, like, these margins seem pretty juicy.

Yeah. Yeah.

Okay.

Yeah. They're pretty good, actually. So. Yeah. Our gross margin is 69.75.

Jeez, Louise. Okay. Does that include you putting 15% away for repairs?

Yeah.

Or no. Okay.

Yeah.

So if you're not saving for repairs, it's 85%.

Yeah.

Just gas and travel, because you're not really paying employees yet. You've got an operating partner and he owns equity in the business.

Right, right. We are paying for one.

So one employee?

Yeah, one.

Okay.

So he's, he's. He gets about 300 a day for a full day job.

Okay. What's the max diameter of these trees that you're able to mulch?

6 to 8 inches. Depends on the species of tree. Geez, that's pretty really hard wood. It'll be on the lower side if it's soft like evergreen on the higher side.

Okay. Now are you ever having to get out of the. Of the skid, steer with a chainsaw and take care of business?

No. I mean, we've done it before, but we typically would tell the customer if it's too big, they have to leave it service.

Okay.

Yeah.

Do you ever get referrals from other tree services or do you refer business to tree services?

Yeah, there's. Yeah, it's all the time. We actually kind of worked out a deal with the tree service for a while where they would give us a good commission for referring trees to him. I think I ended up selling up about 80% of his schedule. Wow. But he never paid it. He never paid it.

I could tell in the disgust in your voice that it's not a good experience.

So now I don't really refer anybody on. On tree services. I just kind of tell them like, hey, you know, here's a few good companies. I could refer a tree service every other job.

Wow.

I come into something where they want it gone, but it's 20 inches wide, you know, 20 inches diameter.

Yeah. What about inbound? Are you getting. Are you starting to get more inbound calls and leads? And how has Google business profile served you?

You mean as far as outside of advertising, like organic? Our organic has gone up quite a bit. Our organic is now on our web traffic. It was around 36%.

Wow.

It's hard. The. My X profile kind of just took off, so I'd have to go back and look at the. The data. Yeah, it's going to have a weird data point in there, but yeah, our organic is growing pretty, pretty rapidly. And that's another reason I turned off ads, because I've only got so much time and I still have organ organic leads coming in.

That's encouraging. A lot of times people count on organic from day one. And yeah, you just can't. You've got to go out and find the business.

Right. I did not count on organic at all because I knew that Google wasn't really going to serve us up quite yet because they. The four stream launching isn't even a service on Angie's list or any of these service sites.

So thumbtack and all that, that's not even an option for you?

It's not even an option. Yeah.

Okay. It's a smaller industry. It's very niche, right?

Yeah. But I think it's bigger than most.

People realize, which is why you're doing so well. One reason. Right. You're clearly like just doing the business well. Like you're, you seem to be running it well. You have five star reviews.

Yep.

This is you, right?

Yep.

Okay. It's not, it's not easy to have all five star reviews in home services, but people ask me all the time like there are thousands of home service niches and I always say, you know, look for the supply demand imbalance. In fact, I did a whole hour long YouTube video where I live streamed myself researching an industry and I say find something high ticket, you know, something in the thousands of dollars range.

Yeah, I'm selling expensive service to wealthy people. Yeah, basically.

Yeah.

More recession proof that way. I kind of look at it because wealthy people always have money.

Yeah, they do. All right, let's talk about your sales numbers from like month one to 13 to today. What did that look like and how seasonal is it? Two questions in one.

So the first month, I mean I pulled up before it was like 17,000. Second month was a little higher in the 20s. It's been a while since I looked back last year, but we're only running one machine then. So we basically maxed out that one machine around the third month and then we ran all the way till the end of November. So that one machine could do about with one, one person running it. We're doing about 30,000 per month until the end of November. It varies quite a lot for weather. So this year we got the new machine. We got that middle of May. So we've only been running two machines since then. Since middle of May. I basically we were getting so bugged we didn't really have a choice. It was funny when we were looking at it because we were like, oh my gosh, should we take the risk and get the new machine? We'd have to turn up a little advertising. And then now we got it and it's like, oh my God, I could run ten.

Well what's stopping you? Eight more machines.

It takes time to build cash flow too. So we're brand new, we're investing everything we possibly can. Back into it and we'll get another machine. I think we could probably get two machines a year or two machines next year. So two machines can afford to buy two more machines next year and then that kind of expands from there. The challenge we have right now is that one, one truck can move to two machines not at a time. But he's going and drops it off at the job site, picks it up and just goes to his job site right now. However, a third machine, it's just not feasible. You'd have to. You'd have to have him not running equipment at all, just dedicated to moving equipment around. So ideally what we need is to get a larger truck, something that can. And a larger trailer that can haul two machines at once. So that would drastically reduce our costs on. On running equipment around and our time investment. So.

So which is also your first employee, Is that the guy running the second machine while your operating partner runs the first?

Correct. Yep.

Okay.

Yeah. And then we have a part time operator that'll help. But it's my business partner's father in law. He's. He retired as an equipment operator.

Oh, that's perfect.

So he just steps in every now and again when you know, he wants some money. We have a lot of work for him. So.

Right. What do you pay your employee? Is it per hour and if so, what?

So we're trying, we're paying him on the day, so we give him. Okay, so 300 for the full day.

Okay.

We're kind of treating him at this moment as a subcontractor.

Yeah.

So that won't be forever though. So we'll be wind up bringing him on.

I mean that, that's 100 grand a year if he worked every business day.

Every.

Yeah, that's not bad. Especially considering other like harder. Because he's air conditioned in there, right?

Yeah, air conditioning.

I mean if he go does landscaping or something, you'll probably make about the same, if not less and have a.

Much harder sticks all day basically.

Yeah.

Listening to podcasts, music and how.

Let's talk about how fun it is. Like how fun is land clearing. Like that is like so enjoyable.

Yeah. You know, it's actually surprisingly rewarding too. There were some things that, you know, we had our very first customer. She took over her parents property. Her parents passed away. The property had been completely overgrown and we cleared it all and she just like, she just started crying and I was like, I wasn't expecting that. She's like, this is what it used to look like when I was a kid. You know, wow. So like, it really brought a lot of memories back for her to see it the way that it used to be.

Yeah.

So it is cool. It's very rewarding.

When she started crying, your mind went from, holy crap, why am I in this business? I really screwed up to this is the best business ever.

Yeah, yeah, it was cool. I was like, wow. I didn't realize it would have that kind of impact on people, so. But it does. You know, not most people are like that, but there's definitely some.

So what are your monthly sales like today and what do you project them to be? Or is it just based on how many machines you have?

So last month we did 54,000. It's been a very, very rainy spring. I think we're like the seventh most, like seventh highest rainfall in recorded history out here right now. So if it rains a lot, we will sink into the mud and we won't run. So. But we're entering into the summer months, so we've got around 70,000 on the schedule for each month up to October.

Holy.

70,000 next month.

Good for you. You'll do a million next year.

Probably. Yeah. If we get a pretty normal year, you know, we're projecting to be around 500,000 with two machines and what's running nine months. So. However, as we get more known, and especially with these horse farms and stuff, these horse farms, they don't care about ruts on their property. So you're talking being able to run large jobs all winter as well, which is something we didn't do our first year. We just kind of supplemented with our time with snow clearing.

Yeah, but so it doesn't, it doesn't have to be seasonal if you find more horse customers or the right types of customers.

Customers, yeah, yeah. Any large farm pro farm property, you know, they don't really care about ruts on their property. A lot of them just want to open it up. They're going to bush hog it twice a year. But yeah, any like residential kind of stuff, they, they do typically care if they've only got four or five acres. They don't want it torn up. They just want it opened up so it's usable.

Yeah.

Put 8 inch ruts in people's property, that's, you know, right problem.

Now when you, when you run like the search traffic numbers and you look at what your tam. Your total addressable market is in your local area without having to really expand out much to other metroplexes, what do you think the ceiling is for your business or, or what? Like what is the total market share for the whole industry in your area?

We could probably run about 10, 10 machines. So. And that's if we took over a majority of the market share within our immediate area.

Okay.

If we started traveling out, we could do more. We don't target commercial. We'd get contacted by commercial. But there's a lot of commercial work out there. It's hard for me to say because it is kind of a lesser known industry and it is hard to get a lot of this data, so.

Well, if you're doing 2,000 a day per machine and you're booked five, six days a week, that's 6 million a year at like 70, your margin will probably drop a little bit as you hire more people. Call it 50. Only 50%.

Yeah.

That's a 3, 3 million dollar net profit business in one local market. Like that's outrageous.

Yeah.

It's incredible.

Yeah.

And if anyone's listening in Cincinnati, don't even think about it. He's gonna crush you.

He's just gonna. I'm not worried about it. I want him to start, you know.

Yeah.

I want him to. I want it because it increases the size of the market entirely. It really does more people who knows about it. It's a educate the customer kind of business.

Yep. That's a very like mature insight. I'm not trying to sound patronizing, but it's like the default is to have such like this limiting mindset. Like Elon said the same thing about electric cars, like bring on the competitors. I need electric cars to be normalized. You know, that's what's happened. Right. Like Tesla 10, 15 years ago, they never thought they would have been selling. Well, he did, but no one else. None of the analysts thought they'd be selling millions of cars per year because it was so niche. But they wouldn't be if it weren't for all of the other electric automakers out there, you know?

Yep.

What a beautiful business. Is there anything else that you'd like to mention or talk about that we didn't cover that people might find helpful or interesting?

So I had this idea. There's a, a machine that's called the Green Climber. I made an ex post about it.

Yeah.

And I really want somebody out there because I'm not going to do it quite yet. I do want somebody to take on this, this business. So it's basically a remote controlled machine. You know, very low risk. You just have somebody who's essentially just operating joysticks from standing off to the side.

It does to the side, not below it, right?

Yeah, yeah. A 45 degree angle away from it. That's the.

Yeah, yeah.

But it's relatively affordable. It's on the expensive side for what you think it would be. But it does stuff that we cannot do. So it'll do like steep hillsides, ditch lines. It's perfect for cutting paths. And that's. There's a lot of work out there for that kind of stuff, especially commercial, where commercial buildings in particular, they have stuff that grows up into their edges of their parking lots and they. And like it's the perfect machine for that. I think it could be sold door to door, you know, not like selling a pressure washing service almost. Yeah, I really want somebody to do that. And if they do that, let me know how it is. It's just a really cool thing that I've never seen before. And I don't think anybody does it in the whole country because you're turning.

Down business because it's too angled in places.

Yeah. It's too steep for the skids here. So typically what I'll do is I'll offer them the option of the green climber because I can rent it. And it's expensive though. We charge like 3,000 a day to run the green car. It's a specialized machine. It costs us. We have to go pick it up. Now. The good thing about it is you can just pull it with a regular truck. It's not like a skid steer where you need a one ton truck.

And how much does it cost to both rent and buy rentals?

About a thousand a day to rent it. Buying. See, that's a tough one because I've asked the. For some reason these equipment dealers are very weird about the private, about their pricing. I've been told 150,000 for a machine and I've been told 70,000 for the machine. Yeah. So huge, huge difference. But it could just be the different machines. I think the smaller ones around the 70, the larger ones around the 150.

You know what business this reminds me of? Last summer I interviewed some teenagers that started a pond cleaning business. And they use expensive equipment to. They go to lakefront homes that have docks that are just completely surrounded by seaweed and it looks gross and their grandkids can't swim in it. A business that 99% of people didn't know existed, including myself, until I saw these guys on Instagram.

Yeah.

And they have one expensive piece of machine, but they're able to charge ridiculous amounts to go scoop out and like scrape off the floor of the lake, all the seaweed. And what I love about it is they can. I like calling it fish. Where you know, the fish are. Right.

Yeah.

They're only knocking on doors sometimes, literally. Of homes that are lakefront and homes that they know that all their neighbors have the same seaweed. And so if they can get one customer, they can get 10. And I see this as very similar. Like, hey, I see this ditch. Everyone's got this ditch. It's ugly. It's going to look kind of worse almost if only one or two people get it done.

Oh, it happens all the time. I mean, what happens? You, you clear somebody is at the. At the property line and then you make this neighbors look like brush, Right?

Yeah.

And then now the neighbors looks ridiculous.

Yeah.

Because it's not all just one congruent area anymore. The. The neighbor just had it clear and it looks so nice. And so then the neighbors, we end up doing the neighbors property. The same thing would be true with this machine. It just does smaller stuff, but a majority of the work is in the smaller stuff.

That's a very interesting business. I'm sure you could get these financed as well, right?

Oh, yeah, definitely can get these financed. Yeah. There are other companies that make a similar piece of equipment, but primarily these are sold to like city workers or highway workers where they clear the hillsides on the edges of the highways. And so I think that this company in particular, they really only ever market towards government. But the average person needs this machine as well. And you know, I quote these jobs. But typically for me, it's a larger hillside if it's small enough. I'm kind of like, I don't even wanna. It's not even worth me doing like a half day on this because I gotta rent it, I gotta bring it out. But there's so many little half day, couple hour things that can be done with that machine. And you can literally door knock and sell this. So. Yeah, you can put flyers up. You know, it's. It's. Somebody's gonna kill it with that little machine one day.

Yeah.

It's just that nobody's targeted it.

Yeah, that. That is some great insight. Thank you. Well, Alex, this has been amazing. Where can people find you if you want them to find you?

So you can find us on YouTube. It's Brushworks Company on YouTube.

Brushworks Company. Okay.

Yeah. We're trying to hit to a thousand subscribers just because it opens up the next level for us, but.

Well, when we publish this to YouTube, we'll tag your account and I'm sure we could get you there.

Yeah, I appreciate it. And then our website is brushworksco.com.

That'S a great name. Okay. All right. Please let me know in the comments if I should do more deep dives on sweaty startups. High ticket home services like this. I've done one on stump grinding, junk removal, dumpster rentals, pond cleaning. I love these industries. And I'll do more if there's demand. Please share the Kerner office with a friend and we'll see you next time.