3 Secrets to Build a $1M Home Improvement Business! [Mike Andes]

Hey everyone, it's Mike Gandies, founder of Augusta Lawn Care and Copilot CRM. And today I want to talk about three secrets to grow your home improvement business. And I truly believe you can boil down the kryptonite of just about every single business down to three different areas. Okay, so let me draw this out for you. And I think all custom, all businesses that fail ultimately come from bad customers.

Bad team.

Oops. Team or bad product.

And so really the goal is, how do we defend against having a bad team, a bad product, or bad customers? Every single problem in the business can come down to, to these things. Oh, no, no. Like this is a pricing problem. Well, it's actually a customer problem because the right customers would be willing to pay a higher price. And it might be a product problem because you don't have enough, you don't provide enough value at a high enough professionalism to the customer at perceived value if they pay a higher dollar amount, a higher price. So I really believe that any problem in a business can be boiled down to the team, the customers, or the product. And so I want to go through, how do we defend against each of these problems? So let's first look at the team. How can we make sure that as we head into, you know, you're wanting to grow this year, you're trying to grow the business a bunch. What can you do to make sure that you are not going to have a bad team that sinks the business? Okay, first off, as you're going into the spring rush, as you're going to here, where you're going to grow a whole bunch of throttle your hiring. Okay, so let's write these things down. Throttle hiring. What you're going to do is you're going to start hiring four to eight weeks prior to the spring rush starting and then be able to, even if you offer them a job, and hey, you know, we offer your job, you're going to be starting three weeks, you're going to be starting in four weeks. But instead of hiring 10 people on the same day at the beginning of the spring rush, maybe hire three or four over the course of five, five to six weeks now you'll be able to hire people sooner than all of your competition before. Everyone else is also looking for employees as well as you'll be able to make sure that as demand for the spring rush slowly declines, you're able to pace that demand with supply of labor instead of it dropping. All of you all of a sudden having a lot of inefficient labor, bad training, Practices, et cetera. Another thing you can do to ensure a bad, your team being bad doesn't cause a failure in the business is really to have a great training program and create accountability within the team. So when we have our team members that are hired and they're staggered throughout the spring rush, they don't just get plopped in, you know, throw a shirt and good luck for the day and you know, follow so and so and they'll show you what to do. There's actually a checklist for the first two weeks of what exactly they're supposed to be knowing every single day of those first two weeks. We start off with simple things, but that's all they're going to do until it's signed off by the trainer. And so when someone comes on as a trainee, we develop success partners within the company that are responsible for them to get to their two week training and then they're actually incentivized based upon the performance of their trainee on their following paycheck. For example, you might train someone for two weeks, you're gonna get an extra bonus. We pay $6 more per hour if you're training someone else. In part because on P4P pay for performance, it slows them down a little bit. So we make up for, hey, if you're a trainer, you're going to get a little bonus. However, you're also going to get a bonus if your new trainee is able to come every single day on time and is able to complete the two week training period without any problems. Problems being yellow slips or being late. Yellow slips are callbacks. Customers not being happy, work not being done up to snuff, but they're able to get 32 weeks. And every single day the trainer signs off on the checklist items that they had to learn for that day. Then the following paycheck. If the new team member, the trainee, gets above base pay on pay for performance, the trainer actually gets an extra bonus of several hundred dollars because it means that they trained them efficiently and made sure that they had all the skills required to be efficient once they were on their own. Because after two weeks we expect our team members to be able to be solo and be able to work by themselves. And so what this does is now the trainer actually will keep checking in on their trainee even after they their initial two week training because they want to make sure that they hit above base pay on pay for performance and are efficient. So they'll make sure they show up on time, they'll make sure that they have all the tools they need for the day. And really what I'm trying to do is create a culture of accountability where team members actually want the new team members to succeed. And this is how I make sure that my team is not the weak part that is going to cause my business to fail. Other things you can do inside of the team is to be able to have pay for performance. I've already mentioned it. But the ability to have a system where the harder team members work, the more money they make will ensure that you, a bad team, won't lead the demise of your business again. Every business I've seen decline or fail is because of a bad team, a bad product or bad customers. Okay, so that's what those are the things that you can do to ensure that you have a great team. We talked about having pay for performance as well as a great training system both during the couple, first couple of weeks of training as well as an incentive program for the trainers to have accountability for the people that they are hiring. All right, next up, let's talk about product. What can we do to ensure that we don't have a bad product? This is going to be things like quality assurance. Now, I'm not a believer in having quality assurance team members that are overhead that drive around and check in on all the, the employees, the frontline team members working hard. I don't believe in that. I believe having a great P4P system or pay for performance where you have yellow slips and the team that follows up after the current crew is going to be the quality control. They're going to be able to put notes and say they did not mow this area, the lawn last time. They, they did not clean this area of the house last time. They are the quality assurance. And so you don't always have to hire overhead people that are the highest paid and do zero labor revenue for the business and actually overhead just be driving around doing quality assurance. Instill a compensation plan that has pay for performance as well as a quality assurance component that if people make mistakes, we have yellow slips or deductions. Even if you're going fast, if you don't do a good job, you, there's going to be deductions from your pay. So in my opinion, a way to make sure that the product stays good is make sure that your team is compensated based on producing a great product. So quality assurance being rewarded within the crew on P4P. Also, when it comes to your product, keep in mind that your website is part of your product. And if your website is old, outdated Blurry images, no video, doesn't connect to social media, your web, your estimate request forms are hidden or like they're really long form on some antiquated page. These are the type of things that are a reflection of your product. You don't just sell your service, you sell the what the customers expect in terms of professionalism. And so when they come to your website, that is part of your product because it is giving a sense of value to the customer, a sense of security to them that you're going to be on their property. And so if your product is so great and you do a great service but your website's horrible, that is part of your product. So one of the things you can do is make sure you have a fast response time, a great mobile friendly website. These are the type of things that you can do to ensure that your product online actually matches your great service that you have out in the field. Right? So we talked about quality assurance, we talked about your website. Another thing you can do to ensure your product doesn't get diluted and you have bad product is your service areas. Don't try to service everywhere, all around you. You don't have to serve 100 mile radius. You can always keep growing and growing and growing your service area to grow revenue. You can always do that. You need to define what those things are up front. What, what neighborhoods, what cities, what zip codes are you going to serve. And don't go outside of those areas at Augusta Lawn Care because all the calls and the leads go through command center. Like the owners of Augusta Nation don't even see the leads that are outside their service area because it's very tantalizing and it's very tempting to just slowly creep outside your service area, slowly and slowly, until all of a sudden you're serving this massive market and you'll never be efficient, you'll never be profitable. And yes, your revenue might be growing, but your profitability continues to stink. So establish what your service area is so your product doesn't get diluted. Because ultimately your product will suffer and your current customers will suffer if you constantly are stretching yourself thinner and thinner and thinner in terms of services and what service mix you are willing to offer. If you offer every service under the sun, guess what? Your one service that you sold when you started out is going to get diluted. Your employees won't be as sharp and efficient on them, won't be as trained on that one service. So adding service area, adding a whole bunch of different services is going to dilute your product. So we talked about how a bad team can kill your business and what to do to prevent that. We talked about a product and the fact that a bad product will also hurt your brand and it will ultimately lead to business failure if you don't take care of quality assurance, your website, your service area, service mix, et cetera. All right, now customers, what can we do to ensure that you don't have bad customers lead to the failure of your business? First off, we can define capacity limits. Now, I believe a business.

Is ultimately defined by what its capacities are in terms of budget hours on the schedule. When it comes to home services, we are selling labor. And your amount of budget hours, your capacity is determined by how many trucks and employees you have. The more trucks and employees you have, the more work can be done. You need to find exactly how many budget hours you can complete before you go into the spring rush. So that way you can actually plan for it and not overbook your schedule and lead to a massive amount of burnout. Because you say, well, what's this gotta do with customers? Well, ultimately you will not be able to serve your customers well if you're overbooking yourself, having a cancel on them. You're shuffling around your estimate times and your meeting time with customers because you're not organized. And ultimately it affects your customers simply due to the fact that you have certain capacities. You can't, should not be going above them. Define what those are before the spring rush starts. Define what your service areas are and what service mix you're going to have. And yes, that will mean you have to say no to some customers, but not all customers are good customers. We want to eliminate the chance of bad customers sinking our business. And how are we going to do that? We're going to define what services, what service area we are going to serve and we're going to find how many customers can we actually serve. Because any customer that's going to push me above my capacity limits, in other words, I'm overworking my crew or my trucks are overworking themselves and I'm stretching myself really thin. I'm starting to get stressed out and I'm starting to be. It's starting to become unsustainable. If I, if any customer gets me above that limit, they're a bad customer because that customer could potentially lead you over the edge. They're not bad people. The service that they offer, the property, they're not bad. They ultimately, though, for your business, it could be the worst customer ever because it pushes you over the limit. And so knowing what Your budget hour capacity is how many budget hours can you complete with your number of employees? How many budget hours can you complete with the amount of equipment and trucks that you have right now? So that way you know exactly when you hit that number, what are you going to do? You're going to raise prices. And so knowing what your capacity limits are is going to allow you to be able to know exactly when to raise prices and or when you'll have to buy more trucks and hire more employees to increase capacity. The other thing that you can do to ensure that bad customers don't absolutely crush the business is focusing on time sensitive, sensitive and recurring jobs during the spring rush.

Okay, so again, we are talking about customers here. All right, so I'm going to have to shorthand that. So again, typically you want to serve everyone you know, first come, first serve. You get an estimate today. I want to put them on the schedule as soon as possible. But ultimately the customer that wants things done right away is not the right customer. What you want to be able to do is when you have a peak, a massive jump in amount of leads coming in, you want to be able to prioritize those leads. Getting on the schedule based upon what your business needs are and what you want to do is focus on recurring jobs. And the jobs that are time sensitive, they can't wait three or four months or be put on the backlog and that those are the jobs you want to focus on then. And then in the off season you can do one off projects, jobs that are not recurring, and you can do jobs that are time insensitive. In other words, they can wait. For example, in mowing, I need to cut the grass within the next week. Otherwise overgrown, I can't put it on the schedule for three to four months once I close the job. However, a paver patio, I might be able to sell it today and schedule it for three months from now after the spring rush. And so by doing this, I'm going to make sure that I get the right customers because the right customer will be willing to wait for me for three or four months. Cause they see my online website, they see my reviews, they've seen the great referrals, and they're willing to wait three months so that I can put my one time jobs and my time insensitive jobs out into my off season. And that's really how you can be able to dominate a spring rush, massively grow and avoid these three pain points that ultimately lead to most businesses failing. And is a bad customer, a bad employee, or a bad customer. Avoid those three things. By having those safeguards, you can ultimately grow the business much, much faster.