3 Secrets I Used to Grow My Service Business Past $500K!

One of the biggest issues I see with most home service business owners, whether it be landscaping, construction, cleaning, is the fact that they focus on so many different things in their business that nothing gets done. And in reality, if they just focus on one or two key things in their business, it would dramatically change the course of their company. They grow much faster, they'd be much more profitable, and their life would stay in more balance. So today I'm going to tell you exactly which are the one, two or three things you should be focused on in your business based upon what your revenue is. Because if you're doing, if you're doing under 500,000 in annual revenue, there are certain things I think you should focus on. And if you're doing above $500,000 in annual revenue, these are certain things I think you should focus on. Now I'm going to break it down to the three driving forces in the business. And that is Systems, KPIs key performance indicators and lead generation. This could be marketing, sales, but lead generation, bringing in more leads. How are you going to do that? You need to have a strategy for each one of these and based upon your revenue, that is what you need to be focused on. And that thing exclusively, not what kind of trucks you have and all these other little things that can distract us from your website and this and that. These are not the types of things that you want to have 500 things on your plate. You need a singular focus. Okay, what's the one thing I gotta work on? And then nail that, alright? That will dramatically change your business because most people try to do 500 things and in doing so get nothing done. So we're gonna talk about systems. The first thing we wanna talk about when it comes to a system for a 0 to $500,000 business is their.

Now you should have a process in place and a system in place for making sure that when an estimate comes in, when someone asks for a quote, that there is a process in place to make sure you get to their house efficiently, that you look at the property, you assess what needs to get done, you talk to the client, whatever it might be, have a process for when you're at the property with the customer, what do you give them? What kind of literature do you give them? How do you wrap up the talk, the interaction? Do you take a video after that interaction for your crew? And then how do you get the estimate? Actually the proposal sent back via email or text message back to the customer in a timely manner. There needs to be an estimate process. The reason this is so important is because one of the things that we so oftentimes neglect is the fact that time is one of the most important things that our customers have. And they're willing to part with their money before they're willing to part with their time. And so if you're gonna take five days to get to their property, another three days to send them the quote, and when they click accept another week to get them on the schedule for three weeks front down the road, you're literally talking about weeks before you actually solve their problem. And they don't want to go find five contractors and ask for a bunch of estimates and call a bunch of people. They just want someone to take care of their problem. And so you've got to have an estimate process so you can efficiently and very quickly get to the client's property, assess what needs to get done, and then send them a proposal. And then when it's accepted, make sure that it's getting on the schedule as soon as possible. Alright? That is an estimate process. There needs to be certain systems in place to ensure that it's done efficiently. Now, the system that you need to implement if you're doing above 5, 500,000 in annual revenue, is going to be P4P. Now, everyone always says you're trying to sell software. Here's the deal. We still don't make money on P4P. I lose money every single month on P4Psoftware.com I truly believe that pay for performance, if you're doing above $500,000 in annual revenue is the only thing you should be focused on right now. It is the only thing. It'll change your business. It completely changed the way I thought about my business, the way I thought about my employees, the way their interaction with me, and more importantly, the profitability of the business dramatically improved. I have yet to ask anyone to ever ask me for a raise since the day that I instituted P4P out in the field. The reason for that is because the harder they work, the more money they make, the more skill and experience they get, the more money they make. P4P is the perfect meritocracy that you are trying to look for. And right now you're scrambling around trying to find entry level laborers at hourly rates. You're trying to track their trucks, you're paranoid whether they're on their phone, whether or not they're working hard. PVP will solve these problems if you act, institute it, and do everything inside of the system. All of that can be found@p4psoftware.com Now, I'm not going to go above Too far above 500,000 in annual revenue on landscapebusinesscourse.com and mbaforantrepreneur.com I'm going to do a long video, probably 40 minutes long next week, and go quite a bit further down the road in terms of what you'd be focusing on. But I know the vast majority of my audience here on YouTube are in these two categories. So now we're going to go ahead and look at KPIs. What KPI, or key performance indicator. What sort of data do you need to be focused on? Cause there's so much you can be focused on. There's hundreds of key indicators in your business, data and numbers that you can track. And everyone's like, you should focus on this and this and this. I'm gonna give you exactly what you need to focus on. First and foremost, you need to focus on close ratio. If you're doing 0 to 100 or, sorry, $500,000 in annual revenue, the only number you need to be tracking, in my opinion, is close ratio. Close ratio determines how fast you're going to grow. Close ratio determines how profitable you're going to be. You say, how is it possible that close ratio determines how profitable you're going to be? I can guarantee you if you raise prices and increase your profits, your close ratio will go down. I can guarantee you that if you have a 90, 95, 85% close ratio, which means that 80, 90% of your estimates are getting accepted, I can guarantee you you're leaving profit on the table. I can guarantee you that if you raise your prices 10, 15, 20% and dropped your close ratio down to 60 or 70%, you'd be dramatically more profitable in your business. Close ratio is simply the number of estimates that were accepted divided by the total number of estimates that were sent out to customers, you're going to get a percentage there. And if you're under 50%, typically you're going to be not growing as fast. If you're doing 60, 70, 80, 90% of your estimates being closed, in other words, being accepted by the customer guarantee, you're probably growing very quickly. So KPIs key performance indicators, there's hundreds of them, lots of them. If you listen to my channel, you've heard lots of them. But if you're doing under 500,000 in revenue, the only thing I care about is close ratio. By the way, it also tells you is a very good indicator of how good you are at selling. It also is somewhat indicative of how well your estimate process has ran. Because if your close ratio is way too low, the first place I'm looking at is the system of your estimate process intact. Because getting that estimate to the customer as quickly as possible, typically that's the contractor who gets the bid. Now, when we talk about KPIs for larger companies doing over half a million dollars in annual revenue, the one thing I want you to focus on is attrition. Attrition is not sexy. Attrition is like the defense on a football team. No one really cares about it, but it actually wins championships. Defense wins championships. Not sexy, not fun. We all want to talk about getting new customers, but what we don't want to talk about is attrition. And that is losing customers. Every single day, every single week, every single month, there's a percentage of your customers leaving because they're unsatisfied with the service. They're unsatisfied with your office and not answering the phone and your communication, unsatisfied with any part of what you're doing for your business, your professionalism of it, or potentially just the fact that they move away, they pass away. These are a lot of different things that lead to attrition. And in some industries, 20, 30, even 40% annual attrition of your recurring customers can easily happen. You need to track that number because ultimately, if you're building a recurring base of revenue is the deciding factor of how much you'll need to spend on marketing or how many leads you'll need to put in the top of the funnel just to keep your revenue the same. Because I can guarantee you, if you're losing 20, 30% of your customers every year due to natural attrition, people move, people pass away, people sell their house, people quit service. If you're losing 20 or 30% of your customers, that means just to break even with the revenue that you did last year, you're gonna have to get 20 to 30% of new customers coming in the door. If you can, half your attrition by increasing your communication, your professionalism, making sure your services is top notch. If you can increase or decrease your attrition, decrease the amount of people leaving by half, you could theoretically, in a matter of just several years, double your business just by making sure your attrition is lower. Alright, the number of people leaving every single day, every single month and every single year. Let me really quickly just write down here what these KPIs close ratio is. Number of estimates accepted, so positive divided by total estimates, all Right over here we got attrition, which is going to be customers that have left. Customers that have left, they went bye bye, they left your business, they're no longer a recurring customer. Divided by total recurring customers, all right, that's going to give you your percentage in any given day, week, month or year of customers that are leaving to attrition. Extremely important, because the larger your business gets, that number starts to get inflated and inflated and all of a sudden you're wondering why you're not growing anymore and you're at 5, 6, 700,000 annual revenue. You've been there for five years. Why? Because 20, 30, 50% of your customers are leaving every single year and therefore you're just churning customers every single six months, 12 months, and you're never able to grow. Alright, let's talk a little lead gen. Making more customers. This is the offense, this is the thing that people like to talk about. And that's why I put it last, because this is what everyone wants to do. Like I want more customers, when in reality fixing these problems honestly a lot of times gets you more leads, better word of mouth, faster estimate process, better close ratio. Getting your employees on track and making sure that they are professional and efficient throughout the day, they're not slacking off, taking naps, they're a good professional representation of your brand and making sure that you don't lose customers honestly fixes a lot of the lead gen issues. But because that's what everyone wants to talk about, let's talk about lead gen. The number one thing you can do if you're doing between 0 and 500,000 in annual revenue is getting a great website. A great website that is mobile friendly, fast to load, has great SEO, search engine optimization. These are things that we talk about all the time@lawncarewebdesign.com I am completely biased because I have a web design firm and we do hundreds of lawn care and landscaping websites as well as homeservicewebdesign.com where we do other types of industries, contractors, cleaning, garage doors, we do flooring companies, the whole nine yards. I know all about websites and search engine optimization and making your Google listing is dialed in. And when you get a website with us, I will literally give you a tutorial on how to make sure Google listing is optimized and make sure it's running well and getting your reviews. All of these things are extremely important, especially at this level. Now when you get into past 500,000 in annual revenue because everyone's gonna say I'm biased on this one, let's move along because I actually think this next one is just as if not more important, especially as your business is growing. And that is upselling. That is how do I take my warm customers? The customers that have already done business with either in the form of asking for a quote and they maybe they denied it or I actually sold them on recurring services or a one time project, but now I'm going to upsell them into a different type of service. I'm going to cross sell them into a different type of service. These are the hidden gems of a $500,000 business. Because if I can take all my existing customers and upsell them on 20% more revenue by giving them a different service or potentially a different type of package that's a little bit bigger, if I can do that, I can literally add $100,000 in revenue. And by the way, that is the most profitable revenue usually is adding to your existing customer base, adding revenue there. But if I can go from 500,000 to 600,000, I can literally do that by just adding 20% to the annual value of each customer. And I can do that through upselling. How do you do that? You stay in contact with your customers. This is something@copilotcrm.com we are making sure we have here in the next couple months. And that's the ability to be able to send out one click estimate emails. When you send an email out to a customer, they click on one button and they are able to initiate the process of asking for a quote. They don't have to respond back to you, they don't have to call you, they don't have to fill out a form. This can all be done. And I don't care if you use Copilot by the way, just upsell people. Keep your customers warm. Send them a monthly newsletter, talk to your customers, make sure that you are staying in touch with them. So that way when there is leaves on the ground, you can send them an email and they ask for a quote. These are the type of things that you can absolutely do. And this is why in home service it's so beautiful is because if someone asks for one service, there's a really good chance that they need other services done. Because if they're the type of person that has their lawn mowed, there's a really good chance they're not going to be installing mulch by themselves. There's a really good chance that they're not going to pressure wash their driveway. They're the type of person that has someone else and they hire someone else to do it. And so that's your opportunity to upsell customers. You can do this at all stages and size of business, but at this size, it starts to really move the needle. When you start getting above 500,000, you can move tens of thousands, hundreds of thousands of dollars worth of revenue without getting any new customers. Just upselling the existing customer database that you have that are already warm or hot leads. People who've already contacted already raised their hand and said I need service at some point. Even if they rejected your offer, that's fine. Or potentially even people you've done work for. These are the best leads. Stop neglecting them. Stop focusing on the next shiny thing. Getting more leads and Facebook ads and Google Ads. I guarantee you a website and up upselling will absolutely demolish any other lead gen. Facebook, Google Ads, whatever it is. You have a great website and then you make sure you upsell the customers inside your database. You will absolutely have a fantastic business. Now if you're much larger, if you want to get more in the weeds, landscapebusinesscourse.com and mbaforantrepreneurs.com links are in the description. Go to mikegandies.com check that out too. I'll be making a much longer in depth video about this next week on the course. Thanks so much.