30K to 200K in a Year, Bad Ads and Pricing Talk

Hey everybody. Welcome to the lawn care business course podcast. Listen while you work edition. Today we have three great segments for you. We're going to hear about growing your business from $30,000 in revenue to $200,000 in annual revenue. We're going to look at a few Chuck in the truck advertisements, kind of break those down. And then we're going to be finishing it up by talking about pricing and why you shouldn't be necessarily looking at your competitor's pricing when determining your own. But before we jump into that, you can find all these videos over on YouTube under Mike Andes. Well, let's jump it and hear how Mike took his business from $30,000 to $200,000 in annual revenue in one year. Here we go.

Most landscapers and lawn care professionals actually do this part time to get started. And it's a matter of when that, that gig, that side gig on the side hustle is actually making more money than their real full time job. That's when they make the jump. And I was no different at the time. I was a personal trainer at Anytime Fitness. I would go on to later on buy that gym. By the time I was just a personal trainer, I was working part time there, working, going, doing a few lawns before I get started with work in the morning. So I had $30,000 in annual revenue, about 35 customers that I was mowing on a weekly or bi weekly basis. And I was really just doing mowing that first part time season. Now that second year, I'm going to go through the five things that I changed and really allowed me to unlock a massive growth from 30,000 to over $200,000 in revenue. The first thing is I went full time. And this can't be understated. When you go from a part time doing your lawn care business to full time, it immediately unlocks a lot of opportunities because now you have the time to follow up on jobs, you have the ability to contact your customers a lot faster and you have to wait to get off of work. It also allows you to be able to go on the offensive and go on the aggressive and go get more jobs instead of just being like, man, I have already too many jobs on Friday. So no, I don't want to go get any clients in that neighborhood because I just can't service that area on Fridays. I'm full. Right? So when you are able to have full time, it almost pushes you from this mechanism of like, I need more work to like, if you're filled and you're part time and you don't have any more space. You literally might cap out at 20, 30 lawns and not be able to get any done anymore. Done because your weekends, your evenings, everything's filled up. As soon as you go to full time, it's almost like it changes your paradigm. Oh my goodness. Like I need work. And you start actually trying to get more jobs. Whether it be upselling existing customers, whether it be talking to their friends and family, whether it be doing some door knocking or door hangers, you start getting scrappy. You start, okay, if I'm going to be aggressive, I'm going to have a website. I've got to do some marketing, I've got to make sure my branding is on point. So it really pushes you just by being full time, because it unlocks a lot of time that you can now get more customers. The second thing that I did to become legitimate was start a business license that has a business name other than my own. So if you're out there, you know, don't do Mike's Lawn Care. Because then every single time a customer has a problem, as you continue to grow, the business is they're gonna look for Mike. And there's obviously something to be said about having a homegrown small town business that people wanna support, that's fantastic. But it doesn't need to be named after you. And you can separate the business from you. Because down the road, if the business continues to grow, you're not gonna want every single customer wanting to have direct contact with you or asking for you every single time something goes wrong. You're gonna want, you want your employees to be able to take care of things and them not constantly be asking for the owner. So when I went to full time, I switched from Andy's Lawn Cares was my last name into Augusta Lawn Care, allowing me to really grow the business independently of my name. So as I begin to scale, someone else could answer the phone, someone else could sell jobs, someone else could do the work. And I didn't have to be there all the time because the customer didn't associate my name with the business. So get a legitimate business license, go in your department of licensing and then your state name or your province and we'll figure out very quickly how to start a business. The third thing that you should do and that I did to become a legitimate business and actually go full time is stop accepting cash. People putting a little bit of cash in an envelope underneath their front mat or sending you Venmo or through the cash app. Obviously a lot of people will do this because they think they're going to get a better deal. But most the time the premium customers, the customers you really want, they're willing to pay an extra 5, 10, 15% if you can just invoice them on a monthly basis or charge their credit card or at least send that invoice so that they can send a check back to you in the mail. Most premium customers don't have the time every single week to put cash in an envelope and stick it underneath their mat. Furthermore, when you have employees think down the road a little bit, you're not going to want your employees picking up checks and cash underneath the front mat of all your customers. You're going to want that kept separately so they don't have a big pile of cash in their truck that could easily be lost, so stolen or just disregarded and potentially lost throughout the day. So use a CRM, use a software to send your invoices, to send your estimates, keep track of notes from that customer and what they want on their property so you can stay organized and stop doing all the cash under the table. So I understand there's cost of doing taxes when you do things legitimately through a credit card statement, through a bank statement can be tracked by the irs. I understand that. But if you're going to really grow and scale you, you're gonna have to do things legitimately anyways. And at the end of the day, if you're willing to invest money down the road in real estate or take out business lines of credit, you're gonna need proof of income. And you can't do that if it's all been cash. Venmo and these apps are just trying to get around the IRS and eventually it'll catch up with you. The same thing goes for the fourth step that I would recommend if you wanna make your business legitimate and take it to the next level is get insurance, pay your taxes again, it's going to catch up with you. These are all short term strategies to save money in the short term. Maybe when you're doing a side hustle or side gig, doing it on the weekend, that' you take your standard deduction, anything under $12,000. You're probably not spending any taxes in terms of income taxes to the federal government anyways. However, just pay your taxes, just get insurance from day one, it will eventually catch up with you. I've never talked to anyone that did this for the long term and built a really successful business without insurance and without paying taxes. If you look at any multimillion dollar business in Your area, they might be doing some shady things with employees. And people will point fingers at what they do with their trucks not being upkept or something like that. But the vast majority of successful businesses that lead to a company that operates without the owner and running on systems, all of them, all of them pay their taxes, have insurance on their trucks, have general liability insurance. So just go ahead and get started. Insurance, literally when you're first getting started and cost like 50, 60, $70 a month to get general liability insurance for basic services like mowing, trimming bushes, installing molts, those are really basic services. They're going to cost a very, very small amount for general liability. And if you're going to get a truck, you got to get insurance anyways. You might as well get commercial insurance. So that way if you get in accident and you're doing it for work, that you're still be covered. The fifth and final thing that you can do, and that I did to go from $30,000 to $200,000 by becoming legitimate by going full time, is ask customers to do more work for them before you go out and do marketing. The first inclination when you go full time or when you want to become legit, you want to start the business and really scale it up, is, well, I've got to do advertising. And that's a great point. You can absolutely spend marketing. Absolutely. That's fantastic. But before you do that, before you spend $1 on marketing, I want you to talk to all of your existing customers that you might part time or on the side or on the weekends before and ask them for other services that you can do for them that are still simple. For example, if you were mowing their lawn, ask them if you can install their mulch. Ask if they can have a property cleanup, ask if you can do core aeration. These are all simple services, but you can literally take the annual value of a mowing customer that might be 1000, $1200 and easily make that 2000 or $2500 simply by selling them a couple property cleanups or some mulch installations. And those are absolutely going to add up. You can literally take the same exact number of customers you have now being part time and double that revenue without adding a single customer through advertising, simply by trying to upsell your existing customers. And I'd recommend before you send one penny on marketing and advertising and go at door hangers and you know, lawn caremedia.com is a great place. Lawn care web design great place. You can check those out. Those are great resources. But before you spend one single dollar, make sure you talk to your customers. Make sure they understand what services you offer. And then that way you can take the extra profit from upselling those customers and then maybe invest it in marketing.

Hopefully you guys found that helpful of taking what would be a side hustle and turning it into a career. But before we take a look at some advertisements, I want to let you know about creating your own advertisements with lawn caremedia.com It's a great place to get templates for flyers, door hangers, postcards, and so much more. It's definitely worth checking out. Lawncaremedia.com but let's jump into this next segment and break down some Chuck in the Truck advertisements. Here we go.

Now, Chuck in the Truck is the guy that underprices all of us and is willing to do things for half or less of the cost that we could even get the work done for. And typically uninsured unmarked trucks, everything's done under the table with cash. They don't do anything legally, etc. Now, today we're going to be going through some actual advertisements that were placed in a specific market. All these ads came from one specific market. This is not from all over the country. This is just one specific small location. So we're going to blur out some of this information just so that way the person that sent all this to me does not get exposed. So let's go ahead and jump into the first one. Now, this is a fun flyer as well as something that someone put on a Facebook group that says, hey, contact us. And the pricing is a flat $25 per hour. So for their landscaping, they're doing gardening services, landscaping, spring and fall cleanup, lawn maintenance, all these services, of course, they're using stock images there, but at the end of the day, they are charging a whopping $25 per hour, flat rate. Now, at the end of the day, what you need to realize when you're looking at all of these advertisements is that you are looking at a short term or unprofitable business because you cannot scale up a $25 in this economy. You cannot, you can't even get employees if you're paying them legally for $25 an hour. So there's no way you can scale this. The only reason this works is if someone is doing this on the side on the weekend, doing it as a side hustle, doing it for cash. And I'm not against that. It's flexible for their schedule. And honestly, it'd be like that they drove Uber or something. Like that. It's like a side hustle. That's fine. But just realize when you see these ads, don't get mad because they're never gonna be able to scale this. It will never work. And if they do try to scale us, either go out of business because it's unprofitable, or B, they're going to track the worst customers that are so price sensitive that they go after a $25 per hour flat rate. Like, that's crazy. All right, let's go to the next one and let's see here. Spring special. Book a 2022 seasonal lawn care package by April 30th. I like that. Scarcity. Close and receive a complimentary fertilization, spring cleanup, and hedge trimming. Mercy goodness. They're offering a cute trim and clean up for $25. Like, it's incredible that you can cut someone's lawn, clean up all their beds, and trim all their bushes for $25. Oh, plus. But, you know, I guess I could say starting at 25, that's not too much of a big deal. But this is the crazy thing. The spring special, a complimentary fertilization that's going to, like, the average lawn is going to be, let's just say 60 to $80. Okay. And then a spring cleanup. Like, the smallest spring cleanups we do are 400 bucks. Right. By the time we just show up. And so let's just say an average like $700. Okay. And then hedge trimming, we usually kind of throw that in with spring cleanup, but let's just say it's like $800 worth of what we would usually charge. They're giving away, giving away for someone that gets set up in the spring, it's incredible. So book a 2022 seasonal lawn care package. Like, at the end of the day, if you mow someone's lawn for $50, let's say it's 25 and up. So like $50. Okay. And you mow it, let's just say four times a month. And you do that for eight months.

Okay.

So that's 32 cuts times $50 is $1,600. So on a $1,600 per year value to the customer, you're giving away like $800. You're literally giving away a third of two. If you took the value of what you're giving the customers, it'd be 2,400. You're giving away 800 of that or a third of that for free. That's incredible. And that's assuming that the customer stays with you, by the way, because I guarantee you this person is not going to have a legal structure entity that's going to sue the customer if for some reason they get outside of a contract. That's not gonna happen. Especially when they have a hotmail email in their ads. Okay, next one. This is on a Facebook post. It looks like me and my friend will cut your lawn in this specific town. $10 all time low for small lawn, $20 and up for bigger lawns. Give me a shout out if you're interested. Okay, first of all, they need to work on their spelling. Now I'm not gonna hate on them because they might just be young, like the 13, you know, 11, 12, 13 year old. Hey, great. But guess what? When we started mowing lawns, I was 11 years old. That puts that. Fifteen years ago, our cheapest price was 25 bucks. I knew from day one I did not want to be the low price in our in the competition. I did not want to be that. I knew Even I was 11 years old that like, that was a bad financial decision. That was a bad business decision. And if you're young, guess what you can sell. You might not be able to have the most professional, most best truck, best equipment, all the rest of it, but what you can sell is you are young and people think you are cute and they are willing to pay for you because you are saving up for college. That's what I played on when I was 11, 12 and 13 because I went to college when I was 13. So 11, 12 and 13, when I was out selling for lawn care, I sold on one thing and one thing only. I'm a young kid and I'm saving up for college. And guess what? People were willing to pay 30, $40 for their lawns. And apparently this person in 2022 is charging $10. Mercy. Goodness. Next one. Okay, here's this one. A gift certificate. You know, they come up with all these creative solutions. They're giving a $5,100 and $200 gift certificate, which is incredible because theoretically. Oh, these are the. It looks like these are in the back of someone's business card. They got a business card on the back. They literally paste like with glue, a $200, $100 or $50 gift certificate. And if you zoom in here, it says any product service offered by the company in this area, no cash value. But this is incredible because if you gave someone a $200 gift certificate, that could literally mean you mow their lawn for four or five times and then they just cancel. Like, I don't know how you do that in the spring rush when you're already constricted and constrained by labor and you don't have enough work, new workers to get the work done. And yet you're giving this out. Like, I wouldn't mind giving out gift certificates like this in the middle of the dead season and like super, super slow. But the fact that you're giving us out during the spring rush is pretty troubling because this is going to lead to very, you know, flu free. I almost said cheap. It's free services at a period of time when everyone needs work and you could otherwise fill your schedule with profitable work. That's why I'm not a big fan of giving away free things to get them on the schedule. Because you attract the lowest quality customer. You, you attract the price shopper, you attract the person that cuts out gift certificates and coupons. Because guess what, there's going to become another competitor, another chuck in a truck is going to come along and offer a better coupon and a better gift certificate. And instead of $200 gift certificate, it's gonna be $300. And they're gonna be willing to be able to like basically rebuild their house for free if they just become a customer. Like, yeah, you just. What do you give away? Eventually it's like, my goodness, give away the farm, you know, sell my child to you. Like, what else do you want to give just to get them to become a customer. And this isn't legally binding. They're gonna stick with you either. It's just free money. It's like no cash value, but my goodness, it cost you something. So anyways, next one here. Looks like another Facebook post. Aerating and dethatching service starting at $60 a lawn. PM me for more information. That's not so bad. Like, dethatching is very expensive for us because we haul the debris away. Most of us do. So the fact that you would airy and dethatch for 60 bucks, that's really low. Like our minimum, I would say. Let me just do the math real quick. So our minimum, our market, we're looking at like at least 120 for the aeration. No, it'd be 120, $120 for aeration and like 180 for detaching. But in our market, we got a ton of detached with like moss and we have to suck it up and we have to haul it away to the dump, etc. Okay, we got a couple more here. Let's see here. Offering snow removal $20. Elaine, thanks and have a good day. So $20 per snow removal. Like, I don't even know how you can get a plow to the person's house for 20 bucks, to be perfectly honest. And I know that in some markets In Canada, Midwest, etcetera, there are maybe 20, 30, 40 services to the property. But even at that, just covering your admin costs, let alone your equipment costs, your wages, your labor, your insurance, when you're doing snow removal, extremely expensive. $20 a cut or $20 per push for snow on even a residential driveway is a lot. Because even if it takes you five minutes, you say, well, the math on that's actually not too bad because if you take five minutes, you multiply that by 12, you get 12 of them done in an hour. Therefore, you're actually making $240 per hour. Right. Assuming that you literally have every single person on a street. Right. So if you did have every single person on a street, you might be able to make good money on $20 a lane, but it's unlikely. Okay, next one. Offering salting service. Oh, this is the same person offering salting service for $10. A driveway includes salting the walkways, the driveway with pet friendly salt. Give me a message. Again, I don't even know how you can afford for $10 to pay for the salt, let alone applying it with labor and materials. So last one's $20 for snow blowing and shoveling. Okay, $20. Kind of the same thing. I don't know what the difference between snow blowing and snow removal is, but at the end of the day, it's really cheap. Again, don't be intimidated by this. If you're trying to scale a business, this isn't even your competition. This is going to be for the person that's extremely price sensitive, and this is going to be for the person that is in their first time getting a service. If someone already has had three or four or five services and they've had to go through a new service provider every single year, that's the customer you want that is willing to pay a premium. Instead of spending $20 for the snow plowing, they're willing to pay 40 for the fact that you show up with equipment that works, they show up within 24 hours, then you show up and you actually, like, there's a trained person that doesn't plow into their, their garage door. These are things that matter. And for the person, the customer that is the premium customer that you want and is willing to pay a premium price, they've gone through three or four of these cheap providers and now they're looking for someone that's professional they can stick with for a long time. Because it's annoying as all get out. It is annoying as all get out to have to change providers. It's annoying to have to get new estimates and get new contractors and new bids and then vet them and then they don't work out and they don't show up and you got to find someone else and you got to call five other people. Like no one wants to do that. A premium customer that has the money, they do not want to do that. And so if you have to slow down growth to be able to be a little more picky and choose with your customers, that's fine.

Hopefully that helps you guys see that all customers aren't created equal and how you can go about attracting customers that you actually want to service. Before we jump into pricing those jobs, I want to let you guys know that all websites aren't created equal either. At lawn careweb design.com you can get professional website created for you with up to date SEO and even add your own photos. These aren't templates, these are custom made websites for you catered towards the lawn care industry. So check that out at lawn careweb design.com well, let's jump into this next segment in here why comparing yourself to your competitors as far as pricing goes might not be the best idea. Here we go.

Hey, I'm talking about why it's a horrible idea in your small business to try to compare prices with your competitors. Just last week I made a video where I had a lawn care job that we filmed and I said if anyone can guess the price, they would win a $399 package on lawn caremedia.com now the winner is going to be shown later this week. However, what I wanted to talk about today is the variety and the range of pricing that came on that video. The lowest price that was given was $37 per cut. The highest price was $365 per cut on this mowing service. Now again, I'm not going to tell you what the number was. The actual number was today. That's going to come in a couple of days and the winner will be announced who, who guessed it correctly first. However, what I want to prove here is that regardless of what industry and when it comes to home improvement services, most of us get started by trying to figure out a pricing based upon the competitors pricing. And that's an okay place to get Started, I'll admit, when I first, first got started when I was 11 years old, we had absolutely no idea how to even price lawn. And literally we just had a couple of our friends ask for quotes from a couple different local companies just to at least get in the ballpark of where they were at. However, even that a sample size of 2 or 3 is not enough to actually know what the market rate is. Because if I have a range of $37 and then $365, that's literally almost 10x as much price for the same job, the exact same thing. Like it was. I showed the square footage, I showed what equipment we were using, what the property looked like, everything. And somehow we got 10x difference. Now you say, well, that's really, really high. But there was plenty of people around 240, 250, $270. And then there was plenty of around 35, 30, or sorry, 37, 38, 39. There's plenty of people in that range. So the question really is, well, how do you come up with your pricing? There's a couple of ways you can do it. One is you do contact some, some local competitors, or you work for another company and start to kind of know where the pricing is at in the industry that you're trying to work for. Or secondarily just get started and start clocking how long it takes you to work on a job site and determine the hourly rate that you need to charge the customer in order to make a Profit. Now, on p4pssoftware.com training, we talk about determining that hourly rate based upon what you pay your employees, because there should be a percentage of that revenue going towards labor costs and wages to your employees. But if you take that aside, the bottom line is this. You cannot determine your pricing based upon the pricing of any other competitor. You need to base your pricing on what it's going to take you to stay in business for the long term. And how much does it cost you to produce enough value for you to keep customers? Because if you want to, you know, I'm going to match the competition. I'm going to do $30 a cut, great. But if you need to charge $50 a cut in order to have a great website, have painted trucks, trained employees that are well paid and are paid above, above the table, and insurance and a bond. If you need to do all those things in order to make any money needed at $50 per hour, guess what? Your customers are going to be looking for a new provider for their lawn care service every single spring. And there's absolutely going to be a portion of people that are willing to pay a premium price. Instead of paying 35, they're willing to pay 45 or 50 in order to not every single spring be looking for another landscaper, be looking for another janitorial service, be looking for another handyman. These are absolutely home improvement industries that have become so price sensitive because you can always go lower. You can always lower your price, always. And make the deal close. But what's much more difficult is realizing that adding value to the equation is also another way to improve your close ratio and get more jobs. But improving value is harder. It's very easy to change price. It's very easy to cut the price and get the sale. That's very possible. But what's a lot harder is figuring out how is my presentation. Am I not a good salesperson? Do I not have good eye contact? Do I not have good verbal cues when I'm talking with the customer? Can I get the estimates back to the customer faster? Am I making sure that I have a professional image in terms of a website and people answering the phone? All these things contribute to higher value. And you've got to make sure that if you're having high value, your price needs to be high enough to make sure that those things are paid for. A lot of people will listen to me and like, I'm going to have a great website, I'm going to have great uniforms, I have great employees, and I'm gonna have great systems and I'm gonna have marketing a great logo. I'm gonna insure my business, do everything correctly legally and everything else. And then they charge so little that they go out of business and like, oh, it was wrong. Like, you know, those things don't matter. I should have lowered my prices. No, what you should have done is realize that having a high enough price to stay in business and be profitable is the right thing to do. Even if it means slower growth of the business. You might have to grow your business to a million dollars over the course of five, six or seven years by growing and picking the best customers that are willing to pay that premium price. Instead of. There's absolutely markets where an owner can go in and build a million dollar business in one or two years because simply what they need to charge in order to produce their valuable product is low enough to compete with the competition and beat the competition. That's how you scale really quickly is when you have a high value product and a low price in comparison to the competition. But if you in a market where it's actually difficult to have a high price, you've got to realize it's going to take much longer to grow your business, but you should not necessarily be long term committed to this low price strategy. Now watch this video here though, where you might actually want to take a low price strategy in order to have a high close ratio and then as you scale the business, then raise the prices down the road once you've convinced the customer that you have a high value.

Hopefully you guys were able to gleam a little bit of how pricing can actually affect your business and how you can use pricing to grow your business sustainably. But that's it for today. If you guys want to see anything else, Mike Andy's head over to mikeandys.com and we'll see you next time.