100 Minutes of Business Advice & Tips from Lawn Care Millionaire

Hey, everyone, it's Mike Andes for another edition of Roundup. Want to welcome you to the show. We're going to answer a bunch of questions and answers today. But before we show, a big thing to sponsor, which is Gusto. If you haven't already, go to gusto.combootcamp and use this software to be able to not just do your timesheets and clock in and clock out and pay your employees, but also see great options for benefits when it comes to health, dental and vision. To check that out today, go to gusto.com bootcamp try try it out for 90 days completely free, and you'll love it. So we're going to go to Q and A today. I'm going to be answering a whole bunch of questions about lawn care business, just about anything and everything you want. Basically an ama ask me anything. However, I am going to make a couple announcements while the questions are starting to come in. First and foremost, there is one of our franchisees out in Texas that is hiring a general manager. Now, this location is doing 1.5 million in revenue. It's actually a second business that he's going to be converting over to Augusta. Ryan is the name of the owner and he's going to be switching over to Augusta this winter for his Rockport location in Texas. So if you are interested in becoming a general manager for this location, you're going to learn a lot. $1.5 million in revenue. You need to be able to move to Texas, to Rockport. Just go to augusta lawn care services.com actually, I can show you exactly where to go. Augusta Lawn careservices.com/ let me see here, window. I want to pull this one out. Here we go. I'll show you the exact place where you can go. So augustalongerservices.com corpus/careers. And when you get here, you're going to see some stuff about Augusta, obviously. But here's where you can submit your application, submit your resume, and this will go directly to Ryan over at Corpus. So Corpus is where they have their first location. Their second location will be Rockport, which is already a big location. He's converting it over from his existing brand into Augusta Lawn Care. So if you're interested in that, definitely reach out. It's a big commitment. It's a very. It's gonna be profit sharing of salaried position. It's very, very well paying. But you need to have your stuff together. You need to know stuff about project management, employees, all the rest of it. So if you're Willing to move there. Definitely reach out to Ryan. He's a great guy. You're gonna learn a lot from him. He has a nursery, a dealership that he sells skag and a whole bunch of other brands and he's opening up multiple Augusta lawn care locations. So definitely want to reach out to him. Go to that link augustalonger services.com corpus/careers and you can apply for that position. Last announcement before we get into is actually another personnel announcement and that is one of our local team members is actually moving to Hawaii and he's incredible employee. He's been with us for a few years and has a lot of experience. If you are in Honolulu or anywhere around the University of Manoa, definitely reach out to melandscape businesscourse gmail.com and I can set you up with someone that's going to be an awesome asset to your team and to your company and is looking to move there next month. August, September. So let's go ahead and jump into the Q and A and I'm going to try to get through as many of these that I possibly can. And let's go ahead and jump into it. Let me take away this banner one second here. Boom. Okay, what advice would you give to a 16 year old person who is trying to create a lawn care business but doesn't have a vehicle to arrive to their clients? Yeah, so if you don't have a vehicle, you know this is where I was at when I was 11, 12 years old. My brother was, didn't have his license yet either. So really focus on one neighborhood, ideally the neighborhood you live in, door hangers, yard signs and really get to know the local community. And when I say community, I mean like that neighborhood. Zero in on that really dense route and if you have maybe 100, 200 houses within, you know, your neighborhood, try to get 30, 40 of them on mowing service. Try to get spring cleanups, fall cleanups. Like I would just double down on every single person in that neighborhood. I'd make sure they know your name, I'd make sure you'd be talking to them every few months. Just talking about their, their lawn and everything. And don't worry about needing a, a vehicle right off the bat. What's the brush bus, brush cutter out there? I have no idea. I'm not the best at that. Obviously there is ones that you can do a handheld like a metal head on a steel combi system, but then there's also like an attachment for a skid steer that would take a lot more brush. Do you Buy new or used mowers. We typically buy new.

How should you pay an estimator more than they make crew leading? So we don't necessarily pay our estimator a whole lot more in terms of their wages. We put. But we do allow them to have a lot more in profit sharing. And so I would prefer that someone in admin or sales much more of their revenue or much more of their profits or much more of their wages be governed from profitability of the business and not just their salary or their hourly rate. I'd much rather them be involved in the bottom line and be very keenly aware of that throughout. Mike. So the employees in the company that I just bought her all salary and 1099. I was going to keep them that way to the end of the year and then transition over next year. What are your thoughts? Yeah, that's fine. Just keep in mind that you're opening yourself up somewhat of a liability by doing 1099 when they're not supposed to be. It sounds like. And it sounds like you're the owner, you're putting on salary, which is fine, you know, but yeah, if you're going to transition out from that and you know that's the right thing to do and you have a date on the calendar circle, that'd be fine. That'd be totally fine in my opinion. But yeah, you don't want to do 1099s. You can really run into a lot of issues unless they are real 1099. 1099. If they are showing up at your shop, they're not a 1099. If they're using your equipment, it's tough to say they're 1099 if you're telling them what time to show up or they are considered. It can be considered late. Tough to say they're 1099 if they are you wearing a uniform. Tough to say that they're 1099. If they're using their own equipment, showing up when they want. And the only thing you're really governing is the end result, I. E. The lawn being cut that then you can be a 1099. But if they're using your equipment, your uniforms, you're telling them when to show up certain places, the fact that the matter just not gonna. You're not going to be a legal 1099 and you're gonna run into some issues down the road. And I have talked to plenty of people who have been caught and now their tax bill put them out of business. All right.

Yeah. The video from last night, the ones like that get like hardly any views. But they're, they're honestly probably the ones that help business owners the most. Hey Mike, should the weekly mo price be $1 per minute including travel ideally, or the bi weekly price is going to depend on your hourly rate in your area. So if you're assuming that your hourly rate was $60 per hour that your target was, then you would be doing a dollar per minute in terms of against budgeted hours. Obviously be more if you're going above that or less if you're doing 40 or $50 per hour. Target in terms of bi Weekly, we charge 50% more per cut compared to weekly. And at the beginning I was charging $5 or $10 more for BI weekly and I ended up switching to 50% more. And no one bad in an eye. So Lee, shout out to Corpus, what seed blends or cultivate cultivars do you recommend for a high sun yard? I am not the best at that because it depends mostly on where you are at in your climate and what area of the country. How do you buy blades for your 21 inch Honda mower? We just buy them from our dealer. Whatever ones they have is the ones that we buy because I don't want to depend on shipping and I want to be able to pick some up. I want them to hold my inventory and not me hold inventory. Mike, My name is Eddie. I started my business last year. I'm 16 and have 20 properties. I am considering going to school in another country for university. Should I keep investing in my business? I don't think no. This is a very, very individualized question. However, I wouldn't invest into my business if I was going to go out of town, like out of the country and I only had 20 properties because you're not going to be able to afford someone that's high caliber enough to manage this and like being a general manager and pay them really well. Unless you got another owner, like split equity with someone for example, and said, hey, I'm going to give you, you know, let's start a partnership. But that's going to be tough too because why wouldn't they just go start their own thing if you're not going to be around at all? So you probably have to be the money person and they would be the person boots on the ground. Operationally that might work, but it'd be very difficult to hire someone for 14, 15, 16 bucks an hour and expect them to run the business when you're out of the country. And they would be doing everything in the Business.

All right. Yeshua. Hey Mike, what is a good revenue milestone for a business first year? I'm starting off this year. I want to make sure I have a good target to shoot at. It's really going to depend on how much money you have up front in terms of starting capital. So I would be looking for a 10-20x multiple on your marketing dollars. So if you're going to spend $5,000 on marketing, I would expect this year to do at least 50 to $100,000 in revenue.

All right. Does Augusta add a profit percentage to products installed as well as a profit percentage on labor? So in terms of products, we do markup our materials and that can range anywhere from 100 markup to to 30% markup depending on if it's plants or bulk materials or mulch or soil, gravel, whatever it might be. And then in terms of a markup on labor, yes, you're obvious that's you got to make money somewhere and you're going to typically be charging, let's say to the customer, 60, 70, 80 per hour or whereas you're going to be paying your employees anywhere from 15 to $25 per hour plus taxes and all the rest of it. And that's obviously you have overhead you got to pay for and all the rest of that as well. How should an estimator be paid versus a maintenance crew leader? I answered this question earlier. Do you have an employee handbook or resources or pay grade increase standards? I need a system for this so it doesn't seem like I play favorites. Yeah, so in landscapebusinesscourse.com you can get the employee handbook template and use that in terms of pay grade increases. I don't like pay grades because I would rather use P4P pay for performance where the harder they work and the more experience they get and the more efficient they get, they can make more money. So I'm against pay grade increases. However, if you don't have P4P and using an hourly rate system. Again, I don't want to make a pay grade based on how long someone's been around because there's people who've been around for five years at your company and they make less for the business than the guy who just started two weeks ago but is a go getter and works hard hard and runs to their jobs and gets up, shows up early and all the rest of it. So I want it to be much more based upon their performance and not just the fact of how long they've been here or which is more common how much they ask for more money and then based upon how much you need them. And so that's the kind of thing you don't want to get into. It's like based upon performance, it's more fair for them. Because if they're a great employee and they're just starting out, why should they be making less than the guy who's been there for three years but is sleeping on the job, stopped at every single gas station, lazy as I'll get out. And the new guy is making less money. But making two to three times as much profit for the business does not make sense. It just does not make sense. It's not fair for the employee and it's not good for the business. Because what happens is you end up having people who have you like, man, I've had someone with my business for five, six, seven years. Great, they're fantastic. But I have to pay them $25 an hour to keep them around and they go a little slow. That's not the type of employee you want. They end up just being entitled and they are going to be going for the lowest common denominator of how hard they have to work. And you want the young hungry person that comes into your business to be able to achieve more money if they're actually producing that much revenue for the business.

Are you an llc? How can I start my own business? Yeah. So an LLC is a great way. It's a limited liability company. It's going to offer some protection to you in terms of if you go bankruptcy, you know, someone can't come after your assets, theoretically. That being said, if you're signing on a loan, almost every single loan is going to ask for a personal guarantee. When you're a small business, which basically means an LLC or any sort of limited. Limited liability goes out the window because you just signed on it personally with your Social Security number. So yes, I would start with an LLC over sole proprietorship because it does offer some liability protection in terms of getting sued by a customer. They can't come up your personal assets if you have delineated your business expenses from your personal expenses. If they're all mixed up like, oh, like I use my business expense, you know, business cards. Sometimes it's all mixed up. Good luck trying to defend yourself in court by saying that that LLC is a separate entity from you and therefore you're going to end up probably being liable personally in that case. So I would start now, I'll see oversold proprietorship, it usually gonna cost like 200 bucks. You can do it online. Usually it's very simple. But starting a sole proprietorship, if you're just getting started out and that's a big issue for you, like that 200, can you just start for like 50 bucks for the sole proprietorship. Get started a day and get rolling.

Hey, I'm starting a business. I'm 14 years old. There's a 99, 100 weed eater at Home Depot. It's 26cc straight shaft. Do you think it's a. It's good. Also it's hyper light.

Yeah, you go ahead and get started with that but as soon as you cross five or ten lawns you're going to want to upgrade to something that's a little more hard, a little heavy, heavier duty. Doing five lawns with a hundred dollar weed eater, if there's of significant size you're probably gonna like start running into issues and it's also not gonna have too much power at 26cc. So I can get started with that. But once you cross 5, 10 customers you definitely are going to want to upgrade to a commercial type setup. What's your favorite zero favorite zero turn brand? I do not have a favorite zero turn brand. Basically it's whoever, whichever factory or whichever dealer is closest to me, if they're good and they have great customer service, that's the brand I'm probably going to go with. How are you handling the truck prices going up and the shipping wait time? So in terms of truck prices, we're trying to avoid buying trucks at all cost. Only reason I would be buying a truck right now is if I have maxed out the capacity of my existing trucks. In other words, I have two people in every single one of my trucks, then I'd go buy another truck. If you have solo routes going right now, I would not be buying more trucks. I truly believe in 6 to 12 months the prices of used vehicles will go down 25 to 35%. And I only say that because in the past year they've gone up 45 to 48% across the board and some markets significantly more. So I'm pretty confident they're going to go down 25 to 35% at least in the next six to 12 months. So if you can hold off, I would if at all possible. And in terms of shipping wait time, yeah, that's like everything, equipment, trailers, fertilizers, seed, everything's delayed right now. Even getting trimmers or blowers right now you're going to be backed up probably just because of all the delays in shipping as well. And a lot of that was backed up from the factories and the shortage of in the supply chain. Best advice when doing service on wet lawns. If at all possible, try to do the wet lawn. Whether you have to weed, whack around a puddle, it takes a little bit longer, especially as you grow. This becomes a bigger issue when it comes to scheduling. When you have to start moving tons of jobs off, it really, really messes your schedule up. It messes crews up, messes their schedules up. Now you're going to Saturdays and Sundays and then if you have a whole week of rain, then you have a real big problem. I get there's times you're not gonna be able to mow grass because there's just so much rain. It's like a deluge. But I would be trying, if at all possible, to stay on top of your schedule. And if that means it takes a little bit longer, if that means you, if you know, rains in the schedule, like get your lawns done sooner. Like tell your guys, hey, we're working 12 hours a day. We've got to get lawns done. Grains in the forecast. If it rains, you guys should be able to know that, hey, if we're going to take the day off, it means we're going to be catching up over the weekend and we're going to be doing some long days. So thoughts on water barrels that are fed from downspouts to water gardens. I love them. Very efficient. Anything efficient, I love. How long does the paint on your trucks last? Do you repaint them on a recurring basis? Yeah, they last, I'd say three to five years and then they're going to need a repaint. That being said, we have not repainted any of our trucks and some of them have already been a few years. So I'd say five years. You'd probably want to repaint them. That being said, once you repaint them, they look brand new. So I can't say that about a wrapped vehicle. And that's why we've stuck with the paint. Because we're around rocks and we're, you know, skid steers and dents happen all the time, scratches. And with vinyl I'd have to peel the whole thing off and redo it. Whereas with the paint, I can repaint the thing, put the decals on for relatively cheap. It's less labor intensive in terms of wrapping versus wrapping. And that's why we stuck with paint. And when you've done, if you do a good paint job, it looks brand new when you're done, even a used vehicle. And so I really like that. And so it depends on the cost of the paint in your local area. There's some places where painting is the same price as wrapping and that makes it, you know, you have a good case as to why you'd wrap instead of paint. However, we in our market, it costs about three to four times as much to wrap, four times as much to wrap compared to paint. So I could paint my truck four times. So 20 years instead of one time wrapping. So, Michael Johnson, how would you ask or request for an employee to pick up the pace without being a slave driver? Again, I think you've got to take ownership of this and be like, hey, what can I do to make sure that they are incentivized to work harder and it's in their best interest, not just like me telling them what to do as the boss. P4P pay for performance. There's going to be employees that hit base pay every single pay period. There's going to be employees that make 6, 7, $8 more per hour every single pay period. Because they're thinking efficiently. They make sure they, when they show up to a job, they have a plan of action. There's no wasted time. They make sure they don't have wasted trips back and forth from the shop. They make sure they check all their equipment before they get rolling in the morning and they make significantly amounts more money. So I would rather instead of trying to change someone else's behavior, I can't control that. Like at the end of the day, I can't control their, how much they sleep, what they eat, you know, their family life. I can't control any of that. So I'm going to try to take ownership of it and be like, hey, how can I align their interest with mine? And that is, I don't want to be watching. They don't want me micromanaging and watching over their shoulder and tracking their truck to see where they're at and showing up on job sites to see if they're sleeping. Like, they don't want that. So create a system that allows them the autonomy where you can trust and know that they're going to be acting in the best interest of the business and the best interest of their pocket. So P4P is again my answer to that. How is your legal case doing so far? Any word? I guess, I guess you're probably talking about the city. There's really no new news. It's been a week, over a week now. We still haven't got A permit back from the city, which is kind of sad because we've always gotten permits from them in one to two days. So it'll be interesting to see if in the next two weeks before we start work again on the property, if they get back to us, if they don't, and then they get us in trouble, they're going to have a few choice words for me. Mike, it is 2021. What is your opinion on sustainability? I'm assuming you're talking about like fuel and electric vehicles and electric equipment and things like that. My opinion on sustainability is the fact that it needs to make business sense before I go electric. It needs to make business sense before me to think about a better watering mechanism for my lawn, for a customer's lawn until it costs cheaper or is more efficient, it's going to save them money and not in 10 years, but going to save them money up front. Then it starts to become a conversation. So whether it be artificial turf, better watering management, electric mowers, those things need to make sense from a money standpoint. Otherwise it simply will not, it will not take off the way it should. The reason that Tesla is starting to get so much traction is because the the cost of that vehicle has gone from $80,000 down to $35,000. That becomes an actual conversation around is it worth getting electric vehicle? The same thing will eventually happen with electric motor, electric mowers, robot mowers, A lot of this sustainability stuff that we're seeing, it will eventually catch up, but it will not actually take over until from an economic standpoint. It's cheaper upfront for the customer.

Hi Mike, I have 30 customers making about 900 to $1,300 a week in mowing. I have $10,000 saved right now with no credit and want to know if I should continue to save up to pay cash for a franchise or take out a loan. Any thoughts? Jeffrey? That's something on a one on one coaching call. We can talk About Augusta longer services.com franchise. We can talk about that. Your individual case. There's this is something that I know for a lot of you you're doing and this is what I would recommend. If I was starting out, I wouldn't just be like I want to start a lawn care business. I'm going to go start Augusta Lawn Care because you're going to probably waste three to six months just figuring out mowing and trimming bushes and looking, figuring out budgeted hours. Go get 10, 15, 20, 30 mowing customers like Jeffrey has and then join Augusta where You're going to pour the fuel in the fire because the branding and the marketing, all the rest of it, and not have to. I don't have to teach you how to like, mow grass and trim bushes and, you know, you don't have to. I don't have to know every, you know, guide you so much in those first few months on just like the mechanics. That's not really the benefit of doing Augusta. It is the, the scalability, the systems and the marketing. And so I, if I was starting out, I would go get 20, 30 mowing customers like Jeffrey and then join Augusta. So hope that makes sense. Does P4P only work for repeat business? I find it hard to use. For H vac, electrical, plumbing, we give employees a percentage of the sales. So you're giving a very close to P4P right now. Except we don't give a percent of the sales. We give a percentage of the labor revenue. And in my opinion, it's more accurate simply because if I am selling a $10,000, let's say heating system and the heater, let's just say cost $10,000. I don't want to be giving a percentage of that to the employee because now I have to mark it way up just to recoup my cost that I'm giving to the employee. I would much rather be giving them a percentage of the labor revenue. And so I do believe P4P works for all of these industries. And this is something that absolutely in the next five to 10 years, I'll be attacking for other industries outside of landscaping. We're still honing in the software for landscaping and lawn care, but it's definitely in my mind something that we will eventually make a revenue stream for the rest of the franchise. For us to keep continue getting revenue is by selling exterior other services besides mowing and landscaping using P4P. There's minor tweaks, but the same concept I've seen it used with some of the people I've consulted with in terms of restaurants, roofing companies, a fencing company, concrete pouring, a whole bunch of different. Anywhere with labor involved, P4P can be implemented. Absolutely. Do you feel lawn care is the easiest service industry to scale? Why or why not? It is not the easiest, by no means, but it's absolutely pretty simple. The easiest would probably be something like cleaning where you have no equipment and no upfront cost. It's very, very low barrier entry. Mowing is still relatively low entry, but you got trucks, you got equipment, you got equipment that could kill people. Like more. There's more liability, there's more workers compensation, it's higher, and there's some skill involved. That being said, I can charge a higher rate per hour mowing lawns compared to cleaning someone's house. The average cleaning company, they're struggling to get 30 to $40 per hour. Whereas, you know, for mowing in that same market, you might be able to charge 60.