Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

$1.8M Business- 24 employees-$50k in the Bank

19 Jan 2025 · 1 min

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Transcript excerpt of Mike Andes discussing financial fragility in a business with $1.8M revenue and only $50,000 cash on hand. He highlights how high labor costs (about 60% direct labor and ~20% indirect labor) leave the company extremely vulnerable to routine shocks (payment processor failures, insurance issues, accidents). The piece serves as a caution about stewardship and cost structure.

Questions this video answers

$1.8 million

$50,000

About 60%

Almost 20%

Chapters

Like this to me, is a big, big problem. $50,000 in the bank on $1.8 million business. Since I literally have a location that does that, I just in my brain, I'm literally thinking about all the things I've come up in the past 24 months that literally could have sunk this. That is a literally a matter of like payment processor not going through correctly. That is a matter of an insurance claim. That is a matter of insurance premium going up. There's one truck getting in an accident. When you actually bring the gravity as leaders to let the business get to a place that is that fragile at this size is not being a good steward of what we' like right now at 60%, 60% of revenue is going to direct labor. Then we have another almost 20% going to indirect labor, which is office estimators, your wages, et cetera. That business will never make money.