$300K Junk Business CAN'T PAY the BILLS

We're about $104,000 in debt for a business that only made $176,000 last year. Hey, everyone.

My name is Mike Andes.

I'm the founder of Augusta lawn care. We have over 150 locations around the world.

Today we're going to be helping Charles.

From takeaway junk removal.

It's been rough just trying to get customers.

He's literally paying 60% of his revenue to advertising.

We lost, I think, $25,000 last year.

You're not making any money.

We're so in the hole right now. It's kind of hard to see the light at the end of the tunnel.

This might be a closure. This might be. Hey, bank might be an option.

There's nothing left to fix.

We need to go get a job next week.

Pretty much a zombie just running in one direction.

He's in a massive amount of credit card debt, and the business is on the rocks.

I probably need to go to the doctor, but that's money.

Or, like, negative 15% profit margin.

Because really, I'm just. Every month is blind for me.

$32,000 in high interest loan debt that's due in 12 months. $35,000 of credit card debt. The business is losing $25,000 a year. Let's see if we can turn this thing around.

Going, Charles.

What's up, Mike?

Good to see you, man.

It's quite the drive out here from Charlotte.

From Charlotte. Yeah.

It's crazy is I. I was there for a whole month last year because we were, like, starting a business from scratch.

Yeah. Welcome to the sticks.

Yeah, dude, no kidding.

So this is kind of where you.

Office kind of get everything.

Office. You know, like just laptop computer in the bedroom.

Yep.

Because small house, kids.

Yeah, totally.

Craziness.

And then this is the rig. So you drive this usually into Charlotte.

Yes.

What does the work entail? Is it residential? Is it commercial? Where's the actual jobs coming from?

So both, like, I work with a guy called Indian trail services. Okay. And basically, he would give me all the contracts he doesn't want to do for, like, junk removal, whether it be a cleanup for the homeless, like a Lowe's target. Weaving targets, food lines, just any kind of developments like that, Trash can enclosure, things like that.

Got it.

We also work with this lady named Kelly with Charlotte estate sales. So all her estate sale stuff goes through us. So we do all the cleanouts for those. And she's. She's at a cap. So it's like 400 every time we go there. 400 a load. That's pretty much it for commercial. For the most part. Commercial jobs, though, those can kind of be pushed a few days. It's not always like, I don't look at junk removal being immediate for anyone, but getting into the business, it is very immediate. It's like they want. Same day if they call you, which I would look at as like a hot lead. They want it now. Usually now with things like this, it needs an inspection, it needs to be quoted out. Things are a little bit more drawn out, a little bit more comfortable in that aspect. And the same thing goes with social media. Those are really, really soft leads. So, like people, they want to have. They want to kick up the conversation. They want to know more about your business. Then you kind of like lay into. Like if they have something going on. A lot of times on Facebook, we get. My father has to go into a home. We're getting rid of all his stu. We need help. So that situation, you gotta come in, like, very nice, you know, you know, just appreciate their stuff a little bit more, like when you're putting it into the trailer, because this is everybody's memories, photos, like everything. And a lot of times they get rid of everything. There's been crying at jobs because, you know, they feel like they have to get rid of it because they can't store their stuff. So there's a lot of motions that go into that, but those are really, really soft. You're getting to know the customer a lot better. There's more of a relationship there. They're going to remember your name. And most of the times I remember their. We do work with Monarch, but they've never paid us. We did a job for them and we haven't gotten paid yet.

That property management?

Yeah, I think it's a property management company for mentally ill people living in, like duplexes and things like that. So we've done. We did one clean out for them and it's been almost three months since you didn't know.

Paid.

Yeah.

Nice quality, quality, nice stuff. And the rest is all residential. Just like random homeowners calling you.

Yeah. So most of the actual work that we do is coming through like thumbtack.

Okay.

Thumbtack has changed everything about how they do things. They make it so that you have to have booked appointments on there as well.

Okay.

So like, if somebody wanted to get a full trailer for me, I'm paying like $156 just to talk to this person to bid on it. Well, then, no, that's if they book me.

Got it.

And then we went all the way down to the lowest we could go, which I think for full trailer, it's $50 a hit.

So $50, like a lead.

Just for the lead.

If they book you 156.

Yeah. And then we try to do it ourselves. I had my wife go on there and like, try to book me.

Yeah.

And it just really pushes, like, you know, try to hire four more people while you're in and talk to everybody. And then those four people will also pay that $50. Dude. So that's their little. How they get money.

Yeah, right. They make their. All the money's at.

They're killing it.

Okay. So like, let's say on a $50 lead or $156, like customer, it's $500.

To fill the trailer.

Got it. And is that like an average ticket size then?

Not average. Most of the things that come through there are going to be close to our smaller load, which is gonna be between 90 and 100.

Like, if you do a thumbtack lead, that's. So you're paying $150 to actually get it, then you have the cost of like actually hauling the debris to the dump and paying for that.

Yeah.

Like, really, you probably have to make $200 just to bake. Get any gross revenue, gross profit.

Correct.

And then if you have an employee with you, I would imagine if you don't have a $400 load, you're not making any money.

So when you talk to these companies who want to build your website or they want to advertise for you, and they tell you they care about your business and somebody's going to be there when you call to go over certain things and problems with your business. I haven't seen it. And I've worked with multiple companies trying to help me with my business. And it just seems like everybody today just wants money as quickly as possible. And nobody cares about these business owners that are actually trying to do good in the industry. I did the MA and it was really like anything under $200, I'm losing money.

Yeah.

And you have to look out for the small jobs too. Cause you want those to stack. But sometimes just because the way the business is and I don't know what's coming in or not. We used to sit in Charlotte all day and just kind of wait it out because of the drive.

Sitting around in Charlotte just waiting for work to show up on the schedule for that day is an extremely inefficient use of time. At the very least, do what we call five or nine arounds. When it comes to putting door hangers on the closest properties to the house that you're servicing, that would be the two neighbors and the three people across the street. That's your five around. If you want to go even further, do nine arounds and you do two people on both sides of your customer's house and the five people on the.

Other side of the street.

But we would stay in Charlotte, and I was like, well, I'm losing my mind here in Charlotte. And we didn't do door to door advertisements yet or anything like that, especially for junk removal. It's kind of hard. But recently I saw actually one of your videos. I think it was Ken with door hangers.

Yeah.

And I was like, you know what? While we're not doing anything, me doing nothing, because all I'm doing is social media. Social media trying to, like, talk to previous customers, see if Steve's got anything. It's just like, that's not going anywhere. We're not getting anywhere. And so we decided to order door hangers. I'm going to try to hit neighborhoods and just. Or if I do a job, I'll just hit that street and then move on.

Thumbtack is one of those online platforms that give you leads, but you got to be very careful because ultimately they might sell that lead to other people or down the road, try to market to your existing customers. In the perfect world, we have a brand that's strong enough to attract those leads to our website. And then we keep those leads inside of our database so we can sell them over and over and over again without having to keep paying the piper and the toll booth of thumbtack. I have a feeling that the pricing that Charles is charging to customers is extremely low because he's competing with all these other contractors to. To get these leads. So let's go out to do an actual estimate with Charles and see if that's true.

And this was con. We were contacted through thumbtack for this one as well.

Oh, this is a thumbtack jaw.

Yeah, dude. Removing the pool. The pool is full, dude.

So you'd have to drain it and then just.

Yeah, I mean, flood the backyard. This isn't terrible. Like, it's not as big as I would think. But they want the whole deck removed as well.

They want the deck gone too.

The deck and the pool.

Sweet. So what would this kind of run in terms of cost?

Just from top of mind, they're gonna be somewhere probably in the ballpark of 1,500.

And that would Remove all the deck.

All of the pool? Yeah. It would make this just a bare land.

And then what's your cost for the dumping per ton?

4750 per ton.

Got it. So how much do you think is here?

A couple times, probably around £2,000. This job would probably go for like, 1150.

Would that include cutting down at the base of the ground for the post or taking out the concrete?

Not taking out the concrete.

Got it.

Just cutting.

Look, I haven't done a lot of junk removal in the past, but as I talk to Charles and look at this job, he's saying it's only eleven hundred dollars that he's gonna charge for this. I just don't know how that's even possible to cover cost of the labor and the dump fees and everything. So I figured I'd actually make a quick video on Instagram and share with all.

We're out here in North Carolina doing a turnaround for a junk removal business. We're hauling away this entire deck and this pool. That's what you call a cesspool right there.

So how much do you think we'd.

Charge to haul this whole thing away? This whole deck.

And that pool? Comment below.

Based upon the responses, the job is dramatically underpriced, as was my hunch. So $1,100 for what? The average price that was in the comments was over $2,000. Seems outrageously low to me today.

We don't have anything yet because a lot of things come in that day or not at all right now for the past from when we started till now. So it's been a little over two years. Most of that came from thumbtack, and for the past eight months, Google's been down for us. So when I opened the business, I put the business under takeaway, which is our name, and then I would add junk removal and demo or whatever to the end. But I didn't know that that was a dba because we're doing business. Ads. Takeaway, junk removal.

Right.

And I just found out yesterday, actually. And that's why my Google's been suspended for past eight months. And my Google Ads account got suspended because I used a personal credit card for ads. So if you want to advertise on Google, don't do it yourself. Have a company build a landing page. Do it.

All right. Do you have a website, though, right?

Yes. That was created by recent. This is our third person we're working with because I tried it myself, and the website was okay, but it looked more like a upgraded business card. More than a website. So Olliolli built our website out. Google will not tell you what you did wrong. They say look at the terms and conditions. You're the business owner, you need to figure out what you did wrong and then you let us know and then we'll tell you if you did got it right or not. And that is crazy to me. I've been dealing with the website stuff with different companies for a long time now. And yesterday with starting Olliolli who created my website, this is the first time ever, ever anybody's been like you don't have a dba. That's why this is all like happening. So your business is registered under takeaway. That's why you keep getting suspended off Google. And I was like wow, this is the first time I've ever heard this. And I'm two years into this on Google we only have like 26 actual Google reviews. Actual Google reviews on thumbtack I believe right now it's like 262.

Okay.

On there we've. And it tells you like how many times you've been hired which is like 460 something times for that.

But your Google right now is suspended and has 26.

Yeah. So all it looks like is there's no pictures on it. It literally just shows our property. Right. Which one of the things that was an issue on there is that it shows our address and we went on there and you know, put that worst service business and it still hasn't gone off. Ollioli is working on getting the Google business page back and I'm working on the Google Ads account right now. I'm trying to get that.

And you just found that yesterday?

Just yesterday.

Okay.

We've been working on it but I've been doing a lot of it by myself. And you know probably as well as I do when you try to contact Google it is very hard to try to get anything done. Well like the biggest thing is if.

You'Re using this address you're not going to get where your extra customers are at, which is Charlotte.

Yeah, like when they built my website they put we're servicing marshmallow.