100K Subscriber Special: LIVE CALL-IN SHOW
Mike Andes stayed up until 3:40 AM watching the subscriber count hit 100,000, then took live calls to answer questions about small-business basics: profit margins, off-season revenue for teenage lawn-care owners, pricing for multi-employee landscaping crews, and when to hire a general manager.
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Hey, folks, we're live. No sound. You gotta love it. Okay, we're back. We're back, folks. Okay, I apologize.
I was saying is last night was quite the night because it was like 2 o' clock last night and I looked at our YouTube analytics and we had about 150 subscribers left. You know what? I can't go to sleep. Because if I go to sleep right now, I'm going to miss the moment. And you know, it's one thing to get a subscriber count above it and then take a screenshot, but if you can get it right when it goes across, that's good. And I really wanted 99999. So stayed up 3:40am we crossed the marker 100,000 subscribers. I appreciate all of you. I did make a post on the YouTube channel as a community post for everyone. Kind of what I've learned over the past seven years of doing content. And some of those takeaways I think will be useful. I. I will go over those today. But we do have the call in show. So if you would like to call in, call 361-733-3333. Now, this is not a congratulate Michael for 100,000 subscribers show. This is not what that is. This is a Q and A session about business. Okay? So I appreciate the thanks, but let's get right into it. And then if we have time, I will go through some of those things in a little more in depth of what I have learned over the past seven years of doing content on the Internet. Very, very fun. Okay, let's go ahead and get the next first caller. First caller is coming in from 704. Welcome to the show. Thanks for coming on.
Hey, can you hear me?
I can hear you. What's up?
Wait, two things. One, the audio was not on in the YouTube live. Don't know if you changed that yet.
Yeah, yeah, I did. Thank you though, for letting me know I missed it for the first time there.
Cool. The other question I had is I know I'm supposed to know it. I was going through all your videos. I have all of your stuff. But how or what's the formula for profit margin? Yeah, so basically like how to find it.
Yep. So just the amount of profit on the bottom line divided by your total revenue is going to give you a fraction. Right. So if it's. If you did $34,000 in profit, divide that by the total revenue of 100,000, you're in at 0.34, 34% profit margin. So what percentage of your Revenue is profit is essentially what that's asking. Makes sense.
Okay, cool. Yes, sir. Thank you.
Cool. All right. You got it. Have a good one.
You too.
All right, bye. Bye.
Sorry, I thought you had a second question, but we're moving on to the next caller. Next caller is 618. Welcome to the show. Thanks for coming on.
Hey, Mike. My name is Ashton. Thank you so much. First of all, I have a quick question, short and sweet, but I do want to thank you so much for all the wisdom you've shared on the Internet. You helped me grow. Not just grow, start my lawn care business this year. So I want to say thank you for that.
Absolutely.
So my question is I'm 14 years old. I'm making 250 a week in my lawn care business. And I was curious what you would recommend I do the fall and winter months that keep generating revenue and make money.
Cool. And how old are you again? Sorry, 14. And so you're in school still? And are you going back to school in September?
Yeah.
Yeah. So the big thing is like, you're going to be constrained by the fact that you probably only have maybe 20 hours a week worth of working daylight during that period anyways. So what you're going to be wanting to do is take all your existing mowing customers and just selling all of them leaf cleanups. Right. And so you should be able to stagger them in a way where you should be able to get them all done. But you're probably going to be limited to like one a day, like after school or maybe like two on the weekend. Right. So I would just be really intentional about making sure you get all of your mowing customers scheduled to do leaf cleanups. And then I would go ham on Craigslist next door, Facebook local groups, and just be trying to sell as many leaf cleanups as possible. And then along with the leaf clips, bush trimming, weeding, and basically just an overall property cleanup.
All right, awesome. Well, thank you so much.
You got it, brother. Take care. Have a good one. All right, next caller is coming in from six. One, two. Welcome to the show. Thanks for coming on.
Hello.
612.
Is saying that the name of the. The business is 24 hour towing. 612, going once, going twice. Make sure you're unmuted because I can't hear you.
Okay, well, I'm gonna go ahead and drop you, but feel free to return back to the queue. Oh, what?
Hello?
Hey, can you hear me? What's up?
I'm sorry, man. So I'm. My Name's Wyatt, I'm 13. I own a lawn care landscaping company. So I want to thank you because you helped me sell mine.
Awesome, man.
I make around on average 800 bucks a month.
Okay.
From mowing customers. I have three bi weekly and three weekly. And I'm looking to expand. I have a truck trailer, zero turn push mower, two trimmers, an edger, and two backpack blowers. But I got. I got everything. So I'm looking for the best and best ways to, like, expand.
All right. And how.
I live in a small town.
Yeah. How old are you right now?
I'm 15.
15. So are you able to drive then?
No, I actually have my grandpa drive me around because during the summer I do farm work for him.
Yep. So, yeah, if you're just trying to get more customers, what I'd really recommend you do is lean into the fact that you are as young as you are. And I know that's harder to do because you're trying to want to be professional and, you know, seem big and all that. That is your unique advantage right now compared to everyone else. So I would recommend you do is go to all the places where that's really enc. And that's going to be local Facebook groups next door, maybe a little bit on Craigslist even too. And that is just post a picture of you with your grandpa in front of your truck with your equipment, and you're going to say exactly what's going on. Tell your story. And that's like, I am 14 years old. I'm mowing lawns in our area. I was born and raised here. I'm doing this. I'm saving up for X, Y and Z. I want to become, whether it be a business owner or whatever you're trying to do with it for college or that's what you want to lean into because that's what really makes you unique. Does it make sense?
Yep. Awesome. Thank you.
All right, brother, take care. All right, next caller is coming in from 4:1:7. Welcome to the show. Thanks for coming on.
Hey, Mike, Thanks. A quick question about just like a kind of a big picture thought. How much would you expect expect a business owner to make with four employees, one general manager, kind of your model. Typical 60, $70 an hour labor charge. How much? You know, if all four guys are doing full time work, the owner's doing sales and marketing, what would be kind of a projected take home pay for that owner?
Great. Okay, great question. So you can do this two ways, right? You can kind of do it more of a generalized way and that would be like just me using your number of employees, which. So in this instance, I would say if you're only charging 60 or $70 per hour, you're probably going to be lucky to do 400,000 in annual revenue. Assuming that you're able to keep the guys busy year round. Where do you live?
Southwest Missouri.
Okay, great. So you're going to have a little.
Bit of snow, Christmas lights, something like that.
Cool. And you can, you, you're gonna, you either going to, or you have the ability to do those services in the winter.
Could. Yeah, we could.
Cool. So I'm assuming you're trying to like, you're thinking about starting and your goal is to, you know, just kind of make, make a plan for that right now. Is that correct?
Yeah, I've got one full time guy, he's about 50, 50 in landscaping, you know, smaller cleanups and then mowing, just wanting to grow and. But I don't want to get bigger than that necessarily.
Got it. Okay. Yeah. So like, you know, the easy answer is, okay, if you're having a general manager, you're going to be looking at paying them probably $60,000 on minimum, maybe 50 in your area, depending on where you're at. But like, you know, let's just call it $60,000. So if we can assume that each of each of our employees can bring in 100k, that's 400k. And then you got to subtract out the fact that you got overhead of this manager. Right. So by the time you do, let's just call it, let's say you're 25% profitable. That's a hundred thousand dollars on 400k, then you've got to take out the cost of that gm. Right. So on the low end, I think you, you could probably say you get 40 to 50k of distributions as an owner if you're not going to be there working. And is that kind of your model, is that you don't want to actually be doing any of the work?
Yeah, I would say so. And I'm just trying to look at, is that, is that a good long term option? Would it be worth, you know, worth doing?
Yeah, when you start, when you start looking at. Yeah, totally. Like, if you're looking at it from the perspective of the owner not being involved at all, it just is going to have a lower ROI on that size of business because you don't have a very large revenue base. And, and that, that general manager is going to cost you a lot of money because if you let's just say you were that general manager. Well now all of a sudden you take their $60,000 salary tack on that 40, $50,000 that we just said. You're going to be taking distributions as the owner and now you're making a six figure kind of income if you are the owner operator. Right. And keep in mind that business isn't going to do that right off the bat. Right. During that scaling process. There's going to take capital requirements, finding the gm, all the rest of it. And so another way to do this though which is going to be more accurate is really to actually look at how much in revenue each employee is going to do per hour. So $70, let's just say that they are actually going to work full time year round. So, you know, 2,000 hours in the year. And let's say that they're 75% efficient, which is kind of average. So just say that they complete 1500 budget hours in the year. There's your $105,000 in gross revenue that employee should be making for the business. Right now if you're doing project based work and doing some landscaping, you're probably going to get more around 120 to 130 per employee because you're going to have cost of product in there. Right. So it's not necessarily going to drive a whole lot of margin. But in terms of the revenue, you might do more around that 500,000 level if you're doing some, you know, 50, 50 projects and then you might drive more along that 60 to $70,000 in profit that you could take as distributions. But in my opinion that's going to take at least two years to build the infrastructure and the team, the general manager have, getting them in place as well as making sure that you actually have pricing all at correct levels to where they're making 1500 budget hours per year is being completed by each employee. Does that make sense?
Okay. Yeah. That's really good. Amazing how you can spit all that out.
Yeah, like the, the, the big thing when as soon as you bring a GM in, you're just gonna bring your margins way down. Right. And that's fine. When you start getting above 6, 700,000, that's when I, I really like the model of having a gm. Just keep in mind it's gonna be harder to find that gm. So your model is more a passive model that an owner would do like myself. And that's exact size that I'm looking for, 500,000 or so where that GM can have about three to four employees and it's really profitable. But it usually takes me into year three and four to get there because that GM is going to learn a lot about pricing. They've got to dial everything in exactly right, turn it into profit mode, reduce their close ratio, increase prices. And so as long as you're patient with it and you're looking as more of like a passive investment, that's fine. But I see even some people in the comments saying about it too is like usually it becomes more profitable from an owner's perspective if you're hitting 7, 800 to a million in annual revenue and then getting a GM because you can afford their overhead and now you know they're 70, $80,000 even in, in salary isn't a big dent against a million versus that against 400,000 is potentially the majority of your profits.
Okay, yeah, that makes a lot of sense. I've got, I'm trying to do this part time first and so I'm just kind of strategizing.
Yeah.
Like what I would do if I was you, what I would do if I was you is, is basically keep growing it part time like you are. And if you find an employee that you think could become a gm, that's when you potentially have some dry powder where you have are ready to deploy to growing. Right. And so I would be very patient because he doesn't sound like you're in a big rush to make this happen. Right. So if you have another job and you're kind of doing this on the side, I would keep doing that. But then go out and hire, go through guys. But when you find someone, you're like, okay, if I don't have a GM position for this person to move into, I'm going to lose them and their long term thinking and maybe you give them a percentage of profits that that's when it would be the time where I personally would be like, yes, let's do it. Because if you try to force this to happen, what's probably going to happen, seeing that you've never hired a GM before and you don't have the systems in place to train them, is it a lot of times it's going to be pretty difficult. So I would wait for a great hire to pop along and it's like, okay, I have to get this person to be my GM or else I'm going to lose them. And, and they're the person that I believe could be the kind of the cultural standard for the next three or four employees and scaling it up to four.
Yeah. Love it. I love it.
All right, man.
Thank you.
All right, next call is coming from 757. Well, 757- welcome to show. Thanks for coming on.
Hey, Mike. Thank you.
Absolutely.
Hello?
Yep.
Hey, buddy.
So, been in business for seven years. In 2021, I scaled back, cut my business by about two thirds. Went down to just me, reduced to one third.
