$400K Lawn Care Business CAN’T PAY the BILLS!

There's no money.

Yeah, I would have probably been better off just working at McDonald's.

I don't even have to ask. It's pretty stressful.

I've been more stressed than I've ever been in my life.

Like, you're selling trucks in order to make payroll.

I'm so broke.

Why would you not just sell everything and do something different?

It's humiliating what happened.

We'd just be digging ourselves a bigger hole.

I'm in too deep to get out. The hardest thing is gonna be letting my brother.

I see a very nice vehicle. Look, I like very nice vehicles, but when I see very nice vehicles and I see a lot of debt, makes me very sad. Good to see you, man. Absolutely. What's up, guys?

This is my brother Riley.

This is Riley.

Yeah.

Awesome.

And Fade.

Last time I spoke with Carter, we were looking at trying to grow his business. I also know that Carter has had some issues when it comes to working with his brother Riley.

He can complain a lot, but hopefully.

They'Ve been able to learn to work together. Together.

Well, if you want to get them rolling and stuff like that, that's fine. Just do your thing and then we can connect after that.

How long has Thade been with you?

May.

Okay.

He's. Honestly, he's probably better employee than Riley.

And then how long has Riley been with you?

I think he started with me last maybe a year and a half.

Okay, okay. Because he was doing all your, like, mowing. Got it. Okay. So you had seven employees at peak this year. Okay. And then what'd you do in revenue that month?

I want to say it was, like.

60, and I was basically way too low.

So last year we did a little over 200.

Oh, last year, 200.

But it was only me and one guy.

Right. And then you were going to ramp up this year?

My goal is to grow my business to about 1.5 million in annual revenue this year. Looks like I'll do a little bit over 200,000. Next year, my goal is do 600,000, which I did, but I ramped up everything. But the revenue.

Ramped up everything. Right. So you got a bunch of employees, a bunch of trucks, and no revenue. Oh, man.

As of November 30th, I had only done 396.

Okay. So this year we're probably going to do 420 maybe.

Yeah.

Why do you think it happened? Like, in terms of, like, the revenue not going up? Was it, like, inefficient labor? Was it, like you were doing projects you shouldn't have been Doing, like, what was it?

Probably communication. Sometimes I have to call him a lot, and, you know, I don't want to be bugging him.

Communication is a big, big thing.

Some tools not working too good. I mean, just freshen up on those, I think.

Just growing too fast. The debt, obviously.

I think it's a mix of several things. I know inefficient labor is a big thing, and not that the guys weren't good.

Yeah.

But none of them had prior experience. Yeah, just. Well, I guess equipment breaking law was a huge thing.

It seems that all this miscommunication is leading to a lot of inefficient labor. Combin. Combining that with broken equipment is a recipe for disaster, because I was trying.

To cover the maintenance, manage a project, go out and do estimates, and then sit in the truck at the project, writing the estimate. It just was, like, so much going on that I couldn't focus on one thing.

Carter seems very overwhelmed, but if he can get on the same page as his team, he might be able to delegate and hand off some of these.

Tasks to other people.

First started, it was Carter doing the maintenance, doing a lot of small stuff like property cleanups that were unprofitable and working in the mobile home.

Well, the maintenance got left behind the most. But then the projects. If I leave for an estimate or go get materials, and I'd come back three hours later, it was like a half hour's worth of work was done.

Oh, yeah, I know how that goes.

So you're like, oh, this will be.

Done by the time I get back. And then you get back, and it's like, what happened?

I'm realizing that I don't have time and I don't have the system set up in my business to be able.

To run it well.

I don't have it set up where I could leave and the business would continue.

But you still feel like you have to basically be on all the projects.

Yeah.

Do you want to go inside the office? Let's do it.

Definitely.

Dude. Nice setup.

Little bit worried about him going through my. My business, my numbers, just because it's all such a mess right now. I really need to get. Get better at that. I need to hire a bookkeeper is the next big thing, But I'm hoping to take a lot out of it. I'm hoping that he can kind of guide me in the way I should go. So, yeah, it's pretty, pretty bad. I pretty much know the path I need to take, and I think I.

Know the kind of stuff he's going.

To say, but having him actually say it is going to be a huge, huge effect.

What's the monthly payments right now? Because that's the part I did not see anywhere. Cause I see like all these cards in terms of like just fixed expenses going out the door. Because we got like a lot of credit cards. They're mostly small amounts, but like they add up.

Yeah. Monthly expenses right now are 6,000amonth. Covers everything. That's debt payments, that's debt truck.

Okay, but just for credit cards, because like we got an Apple card, we got a Wells Fargo card, we got Chase card, Barclays card, Capital One card, Dick card, Wells business cards, Home Depot cards. Okay. So an actual credit card is basically 6, 7, 8, 9, 10, 14, 22, 30, about 30,000 in credit card debt.

And that's so last year I paid.

Everything off in June.

By November I was like, oh, I'm gonna grow everything.

Since I've come back, his business has grown a lot.

He's got two trucks now running separate things and then dump trailers. He's got a bunch of ride on mowers, tons of commercial accounts. So everything's starting to pick up. Oh, I need this tool. So then I go spend three grand on it and oh, I'll just put it on a credit card. It'll pay it off, you know. Oh, I need a plate compactor. 2,500 bucks. Okay, I'll go get that. No, I need this. I'll go get that and then I'll, you know. Well, like, you look at like Tigrin, right? I mean, his business runs great. I mean he obviously makes good money off of it. He hit 5 million in revenue in a few years and have all brand new trucks, all brand new equipment, and drive a Lamborghini.

Sometimes when you see influencers online, it can be easy to believe that seeing the private jets or having the fancy cars car is somehow making that person successful. When reality, what you don't see is the 10, 15, 20 years of hard work that goes into building that lifestyle. Right now Carter needs to focus on building a solid foundation before he can start building the skyscraper of his career and his business.

So you're saying like this time last year you're basically. There was no credit card back?

Yeah, like November last year I was clean, and then December I started adding it. Yeah, it's bad.

The gmc. How much is that worth right now, do you think?

I mean, I see them from dealership selling for like 55. Mine, I mean, mine has the tail light got busted and it has a Scratch in the back. So I would say it's probably the 48 range.

So 58,000 out the door. You owe 34 in it now. It's probably worth 45 to 50.

Yeah, I want to sell it. My wife doesn't want me to sell it. So when I bought that truck, I was solo, and I could afford it because I had a 96. Tacoma was what I was driving, and it worked great for the maintenance side. But I was wanting to get into projects. I was wanting to buy a dump trailer. Can't really pull a big dump trailer with a little Tacoma. I was looking at newer trucks. Why buy something 6 or 7 years old when I can buy something brand new for a little bit more? And it's. It's a nice truck. I love it. It's got more features than I need. And I'm not opposed to selling it, but my wife wants me to keep it, but she just saw me with the older trucks and always working on them just about once a month. Then being broken down and having to push jobs off take home. I got to replace the radiator this afternoon. Or leaf springs broke, or this goes out or that goes out. I guess having something new that I don't have to worry about. So I don't know if you saw the Land Cruiser in the back.

Yeah.

So that I've been focusing on getting the Chevy all painted, but once that's done, it just has, like, a day's worth of work left on it, and then I have to register it. I mean, right now, I can probably get 15 for it. Spring and summer, I could probably get mid-20s for it. So when I sell that, that's a good chunk of cash to just.

And you own that outright? Yeah, got it. And no one's gonna get, you know, unhappy if you sell that. No, the wife is gonna attach that. Oh.

I've had that since I was 15.

Really? So you're thinking of selling the second truck? Do you own that one outright?

Yeah.

So if you do that, My only problem is now you have one truck to basically cover all your fixed expenses. I don't know if it's going to be enough.

That's part of what I'm worried about. But at the moment, I haven't done a job in three weeks now.

Right. A project.

A project or. I mean, I help Riley with the maintenance accounts on Mondays. That's it.

So no leads are coming in? Basically, yeah.

No new customers in three weeks. Honestly, alarm bells should be going off if your fixed expenses are piling up. You can't afford to not have work on the schedule even during the slow season.

So you're saying your fixed expenses are like $6,000 a month just to cover the the cost of this stuff and then like insurance and it's not payroll.

Yeah, I'm like six grand a month for that and then like four grand a month for payroll. Right now without anything extra, I barely scrape by for a month.

Right.

If we just have maintenance revenue coming in. I've really overextended myself unfortunately on a lot of things. Just got into a lot of credit card debt. I didn't bid jobs right over the summer and now I'm trying to dig myself out of that. Don't really have money for marketing. Like I'm so broke and could definitely use use help.

The problem is we were getting all this work earlier this spring to make $60,000 a month. However, we were charging $60 an hour. So we were probably making like 0% margin. Usually around 55 to $60 per hour is what you need just to cover the cost of labor and your overhead. So typically we want 30 budget hours of work per 40 hour employee because that means a 75% efficiency. So if I can do 30 budget hours of work in a 40 hour week, that's pretty standard.

Their efficiency score right now is like.

40% because they're probably doing about 35 budget hours in 80 hours worth of work. In my opinion, if you, if you have budget hours divided by clocked hours and it's less than 50%, you'll never make money. If you're at 70%, you'll do okay. 90% is like the gold standard. That is where they are super efficient. They're usually very motivated by P4P because they're making 6, 7, 8, $9 per hour on P4P. Right. And right now there's just not a budget hours for me. Like you need a team member. Like it can done by one person. I think you get out there and you knock it out in literally four days.

It looks to me like 2,000 to 5,000 is kind of like your wheelhouse for projects.

Yeah, those are the ones I make the most on because I used to bid property cleanups by the job and I would always lose my shirt on them.

When you say buy the job, you.

Mean by oh, we'll clean up your backyard for 500 or 800.

Right.

And I would always lose a ton of money. So then I started doing day rate. Really need to work on having a backbone saying no to people. Really just Unprofitable morning. We ended up having a total of about 10 man hours in the project, plus drive time, plus equipment usage. It just sucks. It ends up wasting so much time and money. Something that I really, really need to work on.

Why do we lose our shirt when we do it by the job like that? Because I remember the same thing happened last year.

I don't know how to vet them.

Right. Okay.

I know what I can do in a day.

Right.

Not what employees can do in a day. And then when I asked, okay, why did this take six hours when like it should have taken an hour?

Right.

Oh, well, you don't realize that this came up and that came and it's just all excuses and it's like, okay, I understand things come up. You can be digging and find some a big rock that you have to dig up. But like every single job doesn't have those.

Right? Yeah. And if they were paid based upon the six hours, all of a sudden they figure out how to do it in two. Right. So we just have to align their incentives with that of yours, which is you want the job done as fast as possible. Let's make sure they get paid the same way. But we need to have a higher. Like we need a hundred dollars now or for that to actually make sense. Sense for them.

Looks like I'm not charging enough. That's what's causing my lack of cash flow and stuff. So I'm going to be working on implementing that in the next week.

Right. So like all of these problems that we like, our trickle downs get fixed when prices get to the right.

Yeah.

Like, because cash solves it, Money solves everything. And so like, it is literally like, let's get prices from 60 to 100. And like now all of a sudden our laborers can be more efficient because they have incentive and motivation with pay for performance. I think that's the safest thing to do. Like in terms of your current team members, it doesn't seem like either of them. You're like, I must keep these guys.

The one guy, he put in his two ignote estate.

Okay. And then your brother is the other one.

Yeah. So my wife keeps saying to fire him or let him go.

I think I would be better used not in maintenance. So in the long run, I'd rather that's one thing I'd change is just once it gets to a point when I don't have to do maintenance to put me into projects.

Well, this is easy. Then it all happened for us. The first thing is he's getting married In May.

So I'm like, I don't want to take away his livelihood income.

I don't know.

I just. I feel bad.

I understand. But he's not $96,000 in debt. Right. Like, you're taking the brunt of his problem on. But ultimately, if the business fails, like he is going to lose his job. That's actually what's happening.

Working with family can be tough. When you're first getting started in your business and hiring your first employees, it can be super beneficial to have family and friends join the team. But the stresses of a growing can quickly form a wedge between your relationships.

We're trying to look at all the business side, but I do consistently see this issue. And maybe it's just a matter of confidence, but like, the estimating seems like it's always off. Like on big projects. But even if it comes small cleanups, if we can't give someone a 500 cleanup price and like, know exactly to the minute how long that will take, it has a big part with having efficient labors. Yeah, right. And you can say four hours and you know, it takes you two and a half, but then it takes them eight. That's tough. But you should. You should really be able to gauge what percentage longer they are going to be compared to you. And then it's a matter of like, do we have the management skills necessary to enforce that level of efficiency? So in the short term, from a cash perspective, we are essentially, we have $103,000 worth of assets if we sell everything, and we have $96,000 worth of liabilities due to debts. Instead of trying to fix this right now, why would you not just sell everything and do something different?

I knew what I needed to do, but I was also torn between stepping back and doing that. Just pedaling the metal fool into it and just try and grow it again. And then if I did that slim chance I could just take off and make a ton of money and make it work. But ultimately I would probably be back in the same position, but far worse. I mean, this year I would have probably been better off just working at McDonald's. I probably would have made more money in my pocket.

You'd have $6,000 in your pocket. If you sold everything right now and you went and did something else.

Honestly, like, feel like doing that.

Right.

You know, if I were to just sell everything. Yeah, you end up with a couple grand. But that doesn't, you know, that's. Oh, yeah, I gotta have something else.

Yeah. The thing is, would you. And could you get another job at like, say as like a manager. Would you want to do that? Is that like sound like the worst thing in the world?

Opposed to that for the moment. I don't want that as long term thing though.

Right. Spending three to five years going, being a manager someplace else and getting all the skills required to actually correctly bid a job and manage a crew is not a bad idea.

Sometimes it's easy as a small business owner to get sucked into the identity of growing a big business and hiring a lot and buying more trucks and more equipment, when reality, if we just strip it back to the fact that our business exists to make money and make profit for our families and for.

Our employees right now, I don't even have to ask. It's pretty stressful. Like you're selling trucks in order to make payroll. If we keep letting the company bleed by, like selling this next truck, for example, we're just putting a band aid on and we're literally siphoning off the assets that we're considering right now. Do we move on to something else? Yeah, a lot of people get very like, oh, I'm a business owner and like that's been our identity. But there's like plenty of employees that have become billionaires. Oh yeah. You know, like Steve Ballmer never owned anything. He had a 10% profit sharing inside of Microsoft, cashed it in when they went public and took a bunch of equity. I think it could be valuable to go get skills because right now I do. I consistently just see us hitting up against this idea that like, things are under bid, we can't hold the crew accountable. There's definitely something to be said about the fact that you have 50% close ratio. You just don't have any leads. I think we could fix that. I think that is something that we can definitely talk about today if we want to go for it. But I think as like a complete honesty standpoint is like a do I go do this? Try to like revamp marketing and like get these leads coming in. Well, if the leads come in and we're just losing money on all the jobs, we'd just be digging ourselves a bigger hole.

Yeah.

Because Carter has absolutely no leads coming in right now. I recommend using every door, direct mail, or EDDM marketing to help you get started. Here's a free postcard template you can.

Download@Lawncaremedia.Com postcard the past two months, I've.

Been more stressed than I've ever been in my life. I mean, I get so stressed that I can't sleep. So I just stay up till two or three pretty much every morning working on, you know, whether it's tweaking a website or doing, you know, updating all the copilot stuff, working on automations.

I mean, it's rough at times because, you know, I can see how stressed out he gets and worn out. But I mean, again, he has a lot of ambition and wants to do good.

So, yeah, I'm not opposed to selling everything, but I'm also not like wanting to throw the towel in too soon.

Yeah. Okay.

Now, last year I got you guys website generates a ton of leads. When I was transferring over to copilot, I kind of went through all the leads that I got and never responded to for small projects and maintenance accounts. And there was 200 and something.

There was 200 leads you didn't respond to?

Yeah. So did you see them or you too busy?

I'd see them and then I'd be like, oh, I got to call them and then something to come up and I go handle something. And then it'd be a week or two later.

We have 200 leads we didn't service this year that were free and none.

Of those are from Yelp and all from the website.

And so just a matter of, like, why would we go spend money on Yelp if we're not servicing the 200 that came in like, well, it's the time of the year. Let's build the system to make sure that we can service those 200, build a backlog and still stay busy throughout the slower season. So I know, like, especially when you've been in growth mode so long, it's.

Like, it's hard to switch.

It's hard to switch. Now we are in strict profit mode. Profit mode is every time I hit capacity, I raise prices versus what always been the past. I hate capacity. I hire and I buy trucks, right? So that is the difference between growth mode and profit mode. Profit mode is I raise prices, I hit capacity. Growth mode is I spend more money on employees and more money on trucks when I hit capacity. And yeah, and if you're not running a high enough margin at $60 an hour, you'll never be profitable when you hit capacity to keep digging a bigger, bigger and bigger hole. Like the fact that you got 200 leads, dude, tells me that the business can absolutely be 6, 7, 800,000. Absolutely can be. It just has to be done profitably. And you have to have a system in place to be able to absorb those leads during the spring and summer to build the backlog. For winter.

It is certainly a humbling experience to have a larger business, have all those employees and go back to being in the field by yourself. But I truly believe that if Carter can step back, build confidence in his ability to do estimates and start turning a profit in the business, he'll be able to create the foundation to grow the business down the road. The thing like at 400, you're basically.

In this wilderness of revenue, right? Like the 200,000 to 500,000. You typically don't make a lot more profit at 500,000 compared to 200,000 because you go from solo. Like you could literally just take these hundred dollar per hour jobs and solo do these jobs, maybe have a helper on a big project, and you could easily do $15,000 a month on projects.

Most of that goes in my pocket.

Likely more profitable, honestly. And then this is the reason I actually think that might be a good idea is because if we know, hey, if we can pay $6,000 per month in fixed expenses, well, now we don't have very many variable expenses in terms of labor. We get rid of the secondary truck. So, you know, make the wife happy, keep the good truck. Let's go. There's not a lot of meat on the bone. Like I don't see us selling that and having 10 grand in our pocket going to help us a ton. Yeah, because we're up against $96,000. Like we can't crush our top line revenue. We have $6,000 a month. We got to like pay out and fix stuff. If you just went down to like, you're doing all the work and it is a matter of you're likely going to basically do all of the recurring work and then have like a day or two a week. And on that day or two, you'd be trying to get projects done. That'd be all you'd be doing. And you'd have literally a cap of only being able to do three or four projects a month. For those three or four projects, at least two or three grand a piece. Now become you're making 20 grand a month by yourself instead of all throughout as you're growing, like, oh, I'm going to hire more, get more trucks. And so you just keep burning through all these leads and then you have no backlog during the slow season. I think you'll be fine. Like, I think it's the better route. I wasn't really sure which way to go in terms of should you just go get another job and get the skills? Because that is like, so like if you learn someone else's dime how to do project management, learn someone else's dime how to do, manage the crew, et cetera, great. But I really think if you can get in there and do this and just really track what your budget hour capacity is, and every time you get close to that, you're raising prices or you're cutting out customers that are lowest, like, are the lowest prices for mowing and you're optimized, optimize, optimize. And then you're going to be literally.

I think within a matter of a.

Couple months, you'll be literally have a two month backlog of projects because you only need one a week. And so the whole mindset just changed because we literally need two leads a gazillion just to fill the guy's schedule. And by the way, they're not making any money when their schedule is full. And you're not going to go to them like, you guys are inefficient. You're going to go to them like, I'm going back to solo. I just do not have the money. I'm going to try to rebuild the business. I need to make it more profitable. And I'm sorry, I want to give you guys time to find something else. And if you find something and you need to leave right away, I'm fine with that. I don't like giving people time between when you're letting them go, but in this case you're not replacing them. It is like you're just taking the humble pie of like, I'm going back to being my myself and I've got to like fix the business.

I really believe that Carter will be able to turn around the business, pay down all of his debts as long as he's willing to put in the sweat equity throughout the next one to two years to make sure he has better systems, better pricing and better profits. However, this is not always the case. For example, check this video out here. We're at Freedom Lawn Care. Because of all the problems with the business, I actually recommended they close down.