50 minutes will change the direction of your landscape business!

Hey, everyone, my name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 80 locations around North America. And today I actually did a consultant call with Dean King from Full Circle Landscapes. He's been on a couple consulting calls me throughout the past couple years. And the day is a really good episode, I believe for a lot of people that actually need to take a year to slow down their growth, focus on stacking cash. And it's something that I wish I would have known when I was 19 years old like Dean is. So I hope it's really a good way for you to step back, realize that raising prices, reducing your close ratio, increasing profits might be a good thing to do in your second or third year of business. Slow down growth, but increase margins, increase profits, and be able to sustainably grow the business as you move forward, allowing you to sleep better at night and allowing the business to be healthier financially. Can't hear you once. Good man. What's up?

Long time no see. Right.

Dude, you painted your wall pink. Let's go.

I did, you know. Got it. If I'm paying all this money for the office, at least has to have some.

How long it take you to paint that wall?

It was me and one of our team members. We were busy and we like had some time and it was longer than it should have. I suck at painting, but Me too, dude.

Cool, man. How's things been?

Good, you know, pretty good. Conference was awesome this year, by the way.

Good, good, good. And so I haven't. I haven't for the past like probably month and a half. I haven't seen of your videos. So maybe give me a quick update.

So yeah, that's on me. I've been busy. So where we're at currently. And I appreciate that you watch those by the way. And I am working on talking slower. It's in progress because custom everybody says it to me all the time. Hey, Liz.

But yeah, so where we are now is. We're just. We had a snow. We've had snowstorms. Which is awesome for me because we invested a bunch of snow equipment, which is a dumb investment. But was kind of hoping. I was gambling on the fact that we were. Came in the. We lost $12,000 last year. And like which was part of that was because I reinvested. I mean all of it was because I reinvested.

But.

So I was. We need cash in the spring, obviously. So I was gambling that if we spent more money in snow equipment over the winter, we'd get some snow and It. Luckily, it's kind of paid off so far, so we're at net zero currently, and if we get another snowstorm and more salting and stuff will be in a good.

You just got hit. You just got hit last weekend, right?

Yeah, we got like six inches, which is awesome. Cool for us. So, um, yeah, that was good. And I guess lately I've just been doing best to get ready for spring. Just knocking things off the spring to do list to get ready. Hiring just after conference, like, lit a fire in my butt. So I just hired two new team members and just sent out one more job offer, and I'm waiting to see if they accept it to where I'm gonna send two more out. So.

We should be good. We're hiring. I'm gonna hire four people, assuming that one's not gonna come in. We'll have three in the spring, and if all four show up, great. I can definitely put somebody else to work.

That's kind of. Do you want to know anything else before I kind of go into some questions I had about that kind of stuff?

Nope. Go for it.

Wait, so as far as hiring goes, I guess. Well, the biggest. The biggest problem I'm having currently is cash. Like, I think I'd be in a really. If I had, you know, $25,000 in a bank account, I would be set for this year because you've got the employees. The branding's been killing it. Like, pink trucks are just killing it around here, which is awesome. And then, you know, we've been doing some marketing, YouTube stuff, just branding plays, which with the blanc redesign website, which kill ours, kills it, by the way, has been doing really well together. So we've been. We've. We're already getting spring leads and stuff, and it's been converting well. So I know we're going to have a big year. And I guess the biggest thing is, like, do I go for hiring more employees and risk that, or is it. I'm just worried that if I take on too much payroll and through the training, we're not, like, we're going to have a point where it's really slim on cash. And I mean, I would rather, you know, charge my own credit cards and not make payroll, but I don't want to have to go to that point. You know what I mean?

Totally. Like, I would highly recommend taking a year where you really stack some cash. Right. Especially after seeing your videos. And the ups and downs. Ups and downs are. Are accentuated when you don't have as much cash. Right. And so you know, yes, losing people is horrible, but, like, the gut punch is a lot worse when you know that, like, how am I gonna, like, keep this thing together financially, Right? So if I was you, I would say don't spend any money on marketing. You got the website, you got the branding side. That's gonna bring plenty of leads. Right. I would really, really focus on. Okay, if I'm gonna hire four people, that's gonna be my focus. I'm gonna hire. I'm gonna hire six of them so I'm not left with four, and then I lose two of them in a week, and now I'm toast. Right? And I would not spend money on marketing. I wouldn't focus on growth. I would focus 100% on stacking cash. Because you really. You really need 50 grand going into next spring.

Agreed.

Agreed. And.

All right, cool. And I think I knew. I knew you were gonna say that, but I have to hear you. I had to pay all the time.

To hear you say it to me.

Because, you know, it's just one of those things. But. All right, cool. So I guess follow up to that. That relates on that really well is one of the biggest. I two big questions was one about office people, and the other one was about how much we should charge an hour. And with people, so we. We pay 20 bucks an hour, base rate. I could probably get it down to 18. Like, I could probably could, you know, still hire people at 18, but, you know, that's where the quality of applicant would be a little less. And then the other thing is we have three guys that we kept on a winner that are awesome, and they all, you know, know what they're doing, and they're great, but they are. They're at 20. And I don't want to, you know, lower their pain pay for performance. Like, I know it's not going to be super smooth in the spring just because we don't have all the numbers from last year. And I think my estimating skills are a lot better than they were. So I'm pretty sure I can rock that this year. But I'm just worried that currently where it's. I know at 60 bucks an hour, you get too much work, obviously. So 70 bucks an hour is where you were. And that was great. But I don't want to go to $80 an hour and then be not busy. But if we were at 80 bucks an hour, that's 26 on P4P when they're on the job, and then they could kill it, and then they're making it every week and they, you know, believe in it and all that stuff.

I would switch to 80. Yeah.

And just.

Yeah, because like what you can do is come come summer when it potentially could slow down a bit. You could cut ifees, you could cut dump fees, or you could potentially just charge less hours. Right. And be a little bit tighter on those just to. To get the guys work.

But I would raise that because that was my last year when so many craziness was happening with the employees. My biggest concern was the fact that P2P is a bunch of hot air if they're not able to hit it. And I mean they got to hit it 60, 70, 80% of the time. Otherwise it's just a bunch of hot air. And so I think if you move it to 80, you'll be just fine. Especially in your market, things are getting so expensive. Like people are used to it, whether that be raising existing customers prices or just new ones. But. But definitely like projects like where you can change that day to day level. Don't stress about it. If you're really busy and you gotta let. You got three hires now. Are you hiring four more people? Is that your plan?

So we have. Yeah, we have three people currently and I'm gonna hire four more starting in two starting in like the first week in March and then the other two starting the first week in April when we start mowing.

Okay. And how many of them you expect to actually hang out? Like, do you need six people? Is that kind of what you need? Five?

I really need three because we have. We've got. We're going to try to run three trucks next year because I'm selling the truck that I hate.

So I have. We're gonna have. Trying to run three trucks running three people on a landscaping crew. I know it's not ideal, but I don't want to spend cash on the truck, obviously. And then we're going to run two. Two man mowing crews with the stand on mowers and just one mower per crew and run it that way, I think.

So we need like these four people. Have you already hired them? And they have a scheduled start time.

To have to have to have hired enough scheduled start time.

Okay. And you're thinking about getting two more in.

I. Yeah, I just offered a job to one more person who is. If they take it would be fantastic because they're interviewed super well. And then there's two other people that are pretty good that if the person I just offered a job to declines, I'm going to offer Those two to.

Come along, I would stag. If you're going to hire more people, I would stagger them later. Right. Because of the year. Yeah, because this is what my concern was. Last year you were onboarding so many new people. You're just asking for problems. Right. Like you have three solid guys now. That's a big bonus. But if you bring in four newbies in a week, you can destroy quality very quickly. And then again, you're right back to fighting fires and you get stressed and you say it's the whole cycle. Right. So I would not be opposed to being like, okay, we're going to raise prices, we are not going to do marketing. So that's going to dampen growth. But that's not what I care about. Like, it like in the three, in a three to five year window, you taking one year, slowing down growth right now and focusing on profitability will allow next year to be the year you get to a million very quickly. Yeah, right. So I would, I would just be like, I like the fact that you're over hiring because you're going to lose a couple of those people. That's just how life goes. And we have this opportunity to hire right now, like this weird window like we talked about, conference. But.

I would stagger those hires, I would raise those prices that you can make it above base pay. And if you ever got to the point where like, okay, you hired seven people and you only need, you said three, that's a little concerning because what you're going to go do is you're going to go start selling work for lower prices just to keep them busy. Right. So that's why I would stagger them into this.

How far? Like what? Like give me date. Like, how would you stagger them?

Like, how would you at least, at least two weeks between. Right. Because within two weeks a decent worker is going to get up to speed, they're going to be able to go solo, they're going to know how things run. And then that way you don't feel like a whole bunch of newbies are dumped on you. It's good for the morale of your existing guys because they can keep doing P4P even with a bunch of newbies running around. And then you also have a way to kind of throttle the spring rush because it's not going to all drop on you in the middle of February. It's going to come slowly in March and then pick up in April and May. Right. So if you can stagger those hires, that'd be ideal. And then what you say is like, look, I'm gonna. I'm gonna plan to have you start March 15th. It might be before that. And you say that. So if someone drops off, you call them, like, hey, do you want to start earlier? You can, right? So that would be my recommendation. I'm concerned about dumping four new people on, especially when you know you only need three. Like, immediately. I would stagger those into the spring rush and then know that you might have to call someone if they all are working great. Like, worst case scenario, everyone works out great. You call the seventh person like, hey, we just don't have enough work for you, and just be honest. And, like, that's gonna hurt the pride a little bit more. But it's a whole lot better than trying to run things really, really fast. And I did that. I'm really low cash. Right?

Yeah. Okay, cool. That makes sense. And then I guess following that, the. I just want to hit this, because before I forget is office person versus not. Obviously.

If I had command center, I'd be in a very different state. But since I don't have it, I've looked into call. Actually, Zach looked into call boss and sent it over to me. But, you know, I feel like it loses. I feel like I don't. Like, my biggest reason we haven't been charging high prices 100%, honestly, is because I don't feel like we're worth it, because I see all the imperfections, and I'm in it every day, and I'm like, damn, we messed up this. Sorry to curse. We messed up this job. We messed up that job, all that stuff. And I'm like. And then when a client's like, oh, that's a lot of money, I'm like, you know what? You're right. I'm not worth that. And I lower the price. So I'm worried if I use a call service like that, I don't feel like we have that connection with the clients. But we're not. So I guess it's twofold. One is cash, one is how I feel about the price.

What's your close ratio?

So in the fall, our close ratio was, like, 60%. And what about springs and stuff in spring last year? I wasn't tracking it. It was. And this is obviously a guess, which is always wrong, but I would guess probably around 50%. 30 to 50% somewhere in there.

Yeah. So I like, you know, compounding. Like, I don't care what people say about prices. I only look at close ratio. Right. And if you are in hyper growth, you're going to be above 50% if you're trying to grow, grow, grow typically 70% if you're really trying to grow and you don't really care about close ratio, sorry, profitability. When you start wanting to become profitable, you want to be around 40% or below like 30 to 40% is not horrible if you're charging premium prices. And if you start falling under 30 and you're like, that's when I start getting concerned. Because then it's a waste of all the time and going and doing estimates. Right? So.

I'd be shooting for that. And I think you'll get there. And you just gotta be confident, like, hey, I'm only looking for 40% of people to accept and that's fine. And yes, that means that one out of or two out of three people are gonna say you're too expensive. And that's just part of the game, right? So don't get locked up in that. And then the second thing is like, if you're going to use a call boss or whoever to answer the phones, realize that there's a trade off. The trade off is, yes, they don't get the level of personalization that you enter the phone or someone else in the company that's really connected does, but they also get a phone, they get to pick the phone picked up when they call. Right? And there's a big trade off that gets a speed versus quality. Like, do we are going to focus so much on like the person answering the phone is the person who cut your lawn last? Like, is that really that important to the customer? Or is it the fact that when they call, they actually get a person on the phone? So I definitely wouldn't be hiring an office person. Mostly because I'm concerned about how much time it's going to take from you training that person. And then if they leave in the spring rush, you're toast. Like you're putting a ton of eggs into one basket, right? And especially at your size, when you're fragile like this, which is just normal, you're part of growth and is the worst thing to have anyone leave as an office person because they hold all the keys to everything, you know, and so if that, if that, if that would have happened last year when you two, you know, all your employees walk off the job, like, trust me, that's when businesses close. Right? So I'm, I'm a little concerned by that. I'd say that I would right now. Do you take the calls?

I take the calls and I pick up. I do Pretty, I mean, pretty good for somebody that's working. I pick up probably 80% of them. Like anytime the phone rings, I'll wrap up whatever call I'm on and like the 30, like, you know, the five seconds you have before it, you know, and then I answer the phone like, so I'm pretty good about it. But you know, I'm just worried in the spring when I'm trying to do everything and then, you know, it's like I just, I'm worried that I'll, it'll get too much of me. And then the bigger thing too is like I, then I don't mind doing it. Like I work all the time anyway, sometimes on the wrong stuff, obviously. But you know, if it's, it's the estimates I'm worried about, it's all the other office clerical tasks, other than just answering the phone as well, that I'm worried about.

Just getting stuff out. I mean our estimates are pretty simple. Like, like there's the same way that you guys do them or similar at least.

So yeah, like the thing about phone calls that is the reason why I like to offload them first is because they're extremely reactionary. Meaning like when they ring, you stop what you're doing and you do it. Sending estimates out, emailing customers back, sending invoices. That is kind of done on your time. You can do that when you get home. You can do that on a slow day. Like it's a little bit more flexible. The reason I want to off board calls first is because it makes you extremely reactionary. You're doing an estimate, you're on a job site, you're in a team meeting and your phone's ringing. What are you doing? You're stopping what you're doing and switching. I guarantee you probably pay a few hundred dollars a month if they just took the calls for you. Yeah, and I guarantee you'll never take them back because you'll get, you'll get start to fall in love with the fact that you get a set. Oh, hey, this is what I'm doing today, whether it be a project, hiring, working with a team member, and I don't have to answer the phone. That literally might mean that you get a message back from a calling service saying, hey, you need to call this person back. But now it's on your schedule, right. Still accommodate the client by answering the phone. And yes, it's not in the perfect world that you were able to take care of them in the moment, but when we start looking at your profitability, it Needs to be where you can stay focused and be a little bit more deliberate with your time throughout the day.

Got it, got it. That makes sense. So it would be worth it to then also do a call service. Then you would say probably, right.

Even if you just did during certain hours. Right. You're like, okay, I know that every in the mornings I'm always going to be doing estimates. I want to make sure that during those times I'm focused on that, whatever it is, right. You can do certain hours. I think that eventually you just realize that like, you know, even if you're paying them a dollar and fifty cents per minute, you might only have twenty minutes a day. That's thirty dollars a day. And twenty times twenty, that's six hundred dollars in a month. But again, you're never answering the phone. That means that you're going to. You're still probably at the call back. These calling services, unfortunately, a lot of them are somewhat glorified phone call voice messages. Right? Like, they're basically like taking information and you got to call them back still. However.

It makes. Again, it's more about you being intentional with your time because now they say, hey, Dean will call you back later today. You then choose when the hour block is going to be. Right. And you say, okay, maybe I don't, I don't answer phone calls. But then from 2 to 3pm every single day I'm going to follow up on whatever call notes I need to have from my virtual assistant and then go through them and be deliberate. And then that way you knock out 15 calls in an hour instead of having 15 calls one every hour of the day.

Okay, that makes sense. And follow up question to that is, I've been meaning to ask you this for like two years, but texting. Does Augusta allow texting?

We're working on.

Our clients love our. My clients love texting and I can't. I don't know if you can figure it out. I can't bring it. No matter how many times I call Ringcentral, they can't do an autoresponder for texting, which I wish they could, but like then I'm stuck in this thing where people expect immediate responses and I'm in the middle of stuff or it's at night and I'm like, I'm not like the person like that. I'll respond at night, but it's like, you know, what's your opinion on that?

Yeah, like, I like texting because most customers do as well. The problem with texting is we expect instantaneous and so if you can't deliver that, you shouldn't have it. Right. As well as.

It'S very hard to keep track of inside your CRM if there's not an integration. Right. So if someone texts you, you might have this whole thread of what's going on. Well, now someone from, you know, your virtual assistant or you, the next week go into their account on your CRM and if it's not connected like.

That communication is outside the system. Right. So I don't like that. That's the biggest thing I don't like. And so we've really avoided it so far. We're working on trying to make that a possibility, but it's still a matter of it's got to be where it is. Just as integrated as an email. And it's easy to search, it's easy to track. Because when you have multiple people in an, in an account, like we have Command center and you will have down the road, you've got to make sure that everything is recorded and searchable. And that's my biggest concern with texting.

Got it. So how would you go about. Because how would you go about cutting that out then? It's like a lot of our clients have, that we've had for a while have grown to have really liked texting because it's easy for them. I mean, it's hard for me to deal with, but like it's easy for them. So how would you phase that out?

Do they like the fact that they get their invoices and estimates via text or are they just like communicating with you via text?

They just like to complain and communicate via text. A lot of times it's stupid stuff, but like, it's just they like to communicate via text. All of our stuff is through like all of our estimates, all of our invoicing, everything, numbers wise or anything like that is through, you know, email. Like through text is like, hey, can you come next? The biggest thing I'm worried about is like the little sales I wouldn't make. Like, hey, you know, are you guys able to come read this, you know, in the next couple weeks, hey, could you turn my bushes or whatever. And it's super simple for people to send them and I just don't know if they make the phone call or whatever.

Yeah, if I was you, and you're trying to get away from it because especially right now, that phone is coming to you and they literally know that when they text that number, they're coming, it's coming to Dean. That's a big Big bottleneck. Right. Because what's going to happen is you're going to be doing an estimate. They're going to text you, say, hey, let's skip the day's service. An hour later, you see the text message and the crew has already showed up at the property and mode it. Right. Like that's going to happen. And so if you wanted to kind of get them off of that kind of gravy train, I'd be potentially making an auto.

Are you able to. In Ringcentral was my problem. I don't think you can. And it's green text regardless. And people just like, you know what I mean?

I would have a copy and paste that you would text every single person that sends you a text message that says, this number is no longer receiving that, please contact the office. Like, you're gonna make a couple people unhappy. But realize that how they're communicating with you is not your value add. Your value add is if you're accepting estimates or paying invoices on that. They're not. They're complaining. So if you make it really, really easy for someone to complain, they're going to complain. Right. If I could just look out my window and be like, oh, I don't like that. Boom, boom, boom. Like, that's too easy. Right?

Or just the picture of something. Yeah, that's.

Yeah. And you don't even know what it's about. Like, it looks good to me. Right. So, yeah. And again, that's not trackable. No one else besides you knows that bit of information. And so I would pitch that, whether it be an auto, like two things. One, when you start the spring rush, I would make a video or in an email telling them what's going on in terms of whether it be price increases. But then I'd also be saying, no, we're trying to make sure that all your communication is in one place. And we've had a big. We've had trouble with text messages coming to employees, cell phones, and it's not in the system and therefore we're not able to serve you at the highest level. So we're trying to keep everything in one. And we won't be accepting text messages for now. It'll be all going through email. So we can search it. It's all catalog. And that's what I would recommend. Like, honestly, if someone has a cell phone and they really want to complain, it's just as easy to send an email. Yeah, Right. Like it's an app. It's the same thing. It's just a Different thing in their mind. It's like they can't complain as easily but it's literally is just the same.

It's the same.

So I would, I would just pitch that going into spring rush like hey, there's no more texting able. And then I would make an autoresponder I you every single time a customer complains or calls or text, whatever and just say like this number is no longer in service. For full circle landscape, please contact the office via this email or phone number.

Cool. And with that two way texting on service autopilot. Have you tried that for like and I thought about using it for something. I don't know how to make it work. If you do like one click through that or whatever. But like for example for like salting or whatever with us, like we have to. Insurance. I hate insurance. But like you know, with we have to like ask before we solve or else it's on it. So like stuff like that or little things like mowing like hey, change of day. Like I think it'd be a cool. It seems like it'd be a cool way to communicate but same problem. So what do you think about that?

Yeah, like the big thing is I don't want people responding back. I don't care about notifying customers. I like that a lot. Like things like oh, we put down chemicals at your property, whatever. Like notifications are great. What I don't like is them texting me back if I'm not able to track and search that data. Right. Because it's going to get lost. And so like service autopilot's two way for example is it's okay, but it's not very, it's not great in terms of being able to search and track and multiple people get into account and know exactly what happened. It's not that good like with pictures and things like that. So I'm a big fan of using it for notifications and I like using for invoices and estimates like the links. But I don't like them. I don't want to be a dialogue back and forth from my cell phone to a customer.

Got it. Okay, that makes sense.

One sec.

So how much cash do you keep versus growth? Like how much cash do you try to keep? Because my problem is whenever cash comes in, this is obviously not. I know logically it's not the best thing to do, but when I see cash in the bank account I go, oh, I'm going to buy a leaf loader because it'll make leaf clamps easier. Buy A leaf loader. Oh, I'm going to buy another plow because it'll make some more money in the winter. Buy the plow. Oh, there's a good deal in this. Like, salter. I'm going to buy salt. Like, that's all examples from last year, obviously. But how do you, like, how do you keep money? I guess it's dumb question, but how do you keep money in the bank account and not spend it on business stuff? Not myself.

Yeah, I would say, like, first off, realize that you need cash in the business. What is that amount? So let's just say, okay, you said 25,000. You sleep better at night. Like, honestly, in my mind, it's like, you need enough cash at this point when you're. When you can grow, when you can expand because you don't have, like, a lot of other obligations. Like, you just need to sleep at night. That's the bottom line. And if 25,000 is that number, it's not that high. But yeah, I would say you need 25 at least. I would say that 100%. Because when you have seven employees, 25 grand can go like that overnight. So that'll keep you up at night. Right. So I wish I would have known this when I was growing. I did the same thing as you, like, see money in the account. Okay, go buy equipment, go higher, go whatever. And you grow fast. That's great. But you're gonna burn out, right? Yeah.

I mean, I have a relatively high threshold for stress, but I recently hit that a little bit ago when there was, like, legitimately, it was not good. And I was like, wow, okay, that's. Let's not do that again.

And it was. Yeah. So.

Yes, like, I would say. I would say literally putting a cap on yourself, like, I need 25,000. The bank and I will not spend a single dollar on equipment until then. And that's possible. The local shop, literally last year did not spend a single. Like, did not buy any equipment.

That's impressive.

So it's a matter of, like, just being strict, like a diet. It's like, look, I gotta cleanse myself with this ideology. I see cash, I spend money. Like, it's. It's just. You'll never be able to save, you'll never be able to grow it, you'll never be able to invest it. Right. Because you have to keep buying equipment. And so that's why, like, this year at the Kate, we're intentionally saying. Which as much as I'm saying that we're intentionally not growing, you're Going to be going from three to seven boys. Like, that's a huge. Like, let's just step back and say that's a ton of growth. Yeah. And I would actually be more comfortable if there was more like five and we hire seven knowing that we'll probably lose two. That's okay.

But even if you go to five, like, you're gonna grow 50% this year, right?

Well, way more than that even. Because last year our price is like, we averaged overall 45 an hour if you divide it. But not. Not one property, like, overall, which is still low, but they're like, actually. And that was with me working and not paying myself. So that's like. That's probably closer to like 40 or 38 or something awful.

Yeah.

So, like, we're. We could double probably just by correcting our pricing.

Yeah. Yeah. So I think, you know, it's a matter of you need to say, you need to give yourself a dollar amount that you got to get to before you spend a single penny. Right. And in my mind, Dean, you need at least 25,000 in the bank. Like, at least. Okay. Like.

Even at your size, I would be losing sleep at 25. That. That's literally two payrolls. That's a pay. That's one payroll and an accident.

Yeah, that.

You know, and I. If you convince yourself of that and let that hit you, though, then you won't spend the money.

No, you're right. For sure. And I've. That's happened and I've. I've had it where the day before payroll. We're not going to make it. And I have to do some magic to make like. And we don't have a line of credit yet. We're getting one, but not yet. And that'll just get myself in other issues if I don't start saving cash either. So with that, I think part of our problem.

And that's gonna mean. That's gonna mean there's gonna be a day where you're like, sick, I really need an extra leaf blower because I have seven people now and I need an extra leaf blower. And you're gonna have to say, I am not like, you guys gonna have to go pick it up from so and so.

Right. Because we can't. I know in the short, you're like, well, that doesn't make sense. It's super inefficient. I agree that one day you're gonna spend an extra 10 do and fuel going in the blower, but we don't have the next 12 months to recoup the cost of that blower. We've got to focus on the next three to six and conserve cash. Right. So it'll probably take you throughout spring rush of not spending any money, but if you do that, you'll go come out of it with. With like a little bit more flexibility.

Yeah. And that would be. I actually, I don't. Like I said, I have a very high tolerance for stress and very. I don't know, it's weirdly like, not like, obviously, I know it's terrible. Weirdly like I'm not as stressed about the cash because I know I can pull things out of my butt to do that kind of stuff. But I. I do dream about having more money to actually like be able to do something with. Whereas here I'm playing with. Not a lot question about that though. Part of it. And I wrote everything down before you came here, so I have a nice little sheet. But so our fixed expenses at our size company, we did 250 last year. Whatever you make of that. And I have the piano. I can email it to you or whatever, but I have the piano. But, you know, we spend. Our fixed expenses per month are like 4,500 bucks in fixed expenses are, you know, our offices. Actually, it's even more than that now. It's close call. Five grand a month with no. And that's, you know, obviously if nobody shows up, that's what our fixed expenses is. And the only payment on there is truck or is. Is the mowers. The mower is in a truck.

So it's like, is that high? Like, I feel like that's high. Or is our pricing just low?

I don't usually look at ratios like that simply because every business is so different. Right. Like if you had payments on trucks, then it's going to inflate that number. If you were renting versus buying, if you had an office versus you didn't. Right. So I'm not really too concerned. Like 5,000amonth, that's $60,000 a year. That's 24% of your revenues going out the door to or last year it did go out the door towards fixed expenses, which is potentially somewhat high. But you're also. If you can keep it at 5,000, go do half a million in revenue this year then.

And I could do that easily.

Yeah.

I mean, we overbought stuff last year.

Well, what you've done is you invested a bunch in the infrastructure. Right. So now it's a matter of like, let's execute using the infrastructure. Actually have Good asset utilization where the trucks go out every single day. And it's not like just you and one other truck. It's like you were using all the trucks every day. And we're trying to figure out how to crunch more in. Right. That's when you'll start making money. So. And that's when you can double the revenue without having to spend any equipment costs.

Yeah. Now that makes, that makes complete sense. I mean we, we literally last year I have a car and we have four trucks. That's that. And I drive the car around. And most of the year we only had one or two trucks running. And so we're paying whatever it is, you know, a thousand bucks a month in insurance and all that other stuff to not use it. I mean, only the truck that one of the trucks got used every day, it had payments on it. But I got a good deal on that truck. I talked about one last time. We talked and I tried to sell it and it just. The truck I bought stunk, so I just kept it. But you know, it's. So yeah, that, that makes a lot of sense.

Cool beans.

Yeah. If you have the three cars, three trucks in a car, like there's just no reason why you need to buy anything else to get to 4 or 500,000. Right.

I think the only thing we need is to let me know you think about this actually. So we can't use ramp racks because we need to have 60 inch mowers at least to be competitive. 60 or 72 inch mowers in our market. So I bought a truck that I bought this last year thinking I would do it and I haven't had time to, but luckily I hired a welder who wants to landscape, so that's awesome. So he's going to weld. I. The truck bed was smashed, so I put the truck bed off and we're gonna put a drive on truck bed onto one of our other trucks to use. I mean that's a couple grand in steel, but I figure it'll save the trailer and all of the terribleness. Like one of our trailers at the shop right now. Like I hate trailers.

So.

Yeah, like, you know, it's not a bad idea. The bottom line is like we can always make sense of spending more money, right? Always. So it's a matter of like, if you're gonna do okay, you gotta say, hey, what are the things I'm gonna do? And then like nothing. Like strict diet, right? It is a financial diet of we will not spend money on equipment or making things better. On our setups or anything like that. Yeah. So.

And the worst part is you're going to watch my YouTube videos where I. Yeah, it's terrible.

Oh, man. Do you guys track your trucks?

We do. We use the trackers that go into the kind of the console OBD port.

Yeah.

And so, yeah, we used to. We used to do it because we needed to know where they were at in terms of they're on hourly. Now we don't really track them as much because they're on P4P. So it's like I don't care if you stop at a gas station, you know, do whatever you got to do. But it's still useful for when things do go down for the general manager to be able to say, okay, you're close to so and so. Hey, can you go to so and so's place? Here's what address they're at. So that's what it's mostly used for. Um, but yeah, we do. We still track them.

So would you recommend signing up for a service like that and paying the monthly or. No, just save them.

Not at your size. Like three. Once you get above three, four trucks, that's what I would say.

It's.

It's probably worth it. But you have a pulse on everyone in the business even now. Like, you know where everyone's at. You know all the jobs. So in my opinion, again, once you start not knowing the job customers names, once you stop knowing and doing the estimates, that's when it's important to have tracks trackers because you can't gauge whether or not they're ahead of behind schedule. You kind of need to know that sort of stuff. So P4P will keep them honest, though. Like, honestly, I don't know if we'd still. If we would track the trucks now if we would have had P3P years ago. We just had the trackers already. Right. So. But then you kind of get used to it and like it. The fact that you can see a live map and know where everyone's at. But again, we're talking about 15 trucks. So, like, that's what makes it worth it. But we don't tell our franchisees they really need them until after three or four trucks. Cool.

And Brad, by the way, was awesome in that I did a P4P thing with him when I signed up for it, but he was awesome with questions. And one of the questions I had was that I forgot to ask him was about leaf cleanups and P4P. Because our live cleanups, like, I don't want to do hourly because that has all its own issues. So I hate doing that. And the clients are like, oh, it's too much money. So we stopped doing hourly. But the problem is that, you know, it could take. If the wind blows the other direction, like I know the. It'll average out higher. But you know, then you have people been like, oh well, those guys made all this money. I didn't make any money because you gave me the crappy job. You know, how do you work with that? Because we do a ton of leaf cleanups.

Yep. Do you, when you say leaf clips, are they usually like monthly or like one time leaf cleanups or like a part of the mowing schedule kind of thing?

So it's like a, you know, clients get between, maybe some of them are monthly, but usually it's between like one and four leaf cleanups a year. And I'll go out and estimate, I'll be like, hey, this leaf. And we have leaf cleanups, you know, like, hey, this leaf cleanup is going to be, you know, $1,500. Like with just massive properties with tons of leaves every where, like, and tons. We have those. The massive equipment that goes out there too. But like, you know, and I've had somewhere like last year where I just said, hey, we have to like, I'm just gonna charge you 80 bucks an hour like for per man. Like, I just can't even estimate this. But you know, how would you do that on a P4P where the chances, like there's a chance that I say, hey, this job is going to be, you know, four hours or you know, eight hours and then all of a sudden it's a windy day before the job comes and then there's double the amount of leaves w work the guys are working for. You know, they're making no money on P4P for that day because there's all this extra work.

They've got to realize that, that you're taking the average, right. Like you've got to make sure that, you know, four out of five jobs they can beat. Which means one out of five they're gonna, that's gonna happen, right? So they've gotta be like, okay, realize I have a two week pay period. I've gotta get, you know, come back tomorrow and hopefully that one, you know, Dean budget for eight hours, I get done three. Now that happens too. They don't complain during then, of course, right? So they've got to take the law of averages and they've got to understand that. But as long as again, 70 to 80% of them are getting above base pay every period. Then they will get mad if they're getting, they will get mad if they're not hitting above base pay once in a blue moon. Right. I would, I would completely side with them on that. But if they know that most of the time the far majority, and when I say 70 to 80%, typically it's not like they don't get above base pay. Sometimes it's a matter of 70 to 80% of the employees just will make it or won't. Like there's going to be that 20% of people that are always on the low performing side and they're always kind of hit and miss. But 78% of them have never even seen base pay. Right. Like, like there's employees I know specifically have never ever hit base pay in years. And so that's impressive. The fact of the matter is they realize, okay, look, I'm going to have that job that kills me. I'm. And I get bruised up, but as long as I'm not doing five week projects and I know I'm going to have a couple other projects in the next couple weeks, I can, I can recover. Right? But yeah, it's just a matter of them trusting the process and trusting the system. And they can only do that if they're consistently hitting above base pay. That's why I'm actually most bullish on raising your prices. Because if you'll do that and you'll get them above base pay, all of a sudden you won't need seven employees, you'll still, you'll just need four and they'll get the work equivalent of seven.

Yeah, that makes sense.

So question about raising prices. And I'm sure this is when you've heard, but I just haven't heard your answer to it or you haven't told me the answer personally. So the question I have is like my office is when you raise prices, it's, you know, clients. I'm worried that clients are gonna be like, oh, they're expensive. And maybe it's just because that's what my parents tell me people will say when I've mentioned it to them in the past. I stopped talking about business because I realized it wasn't that helpful. I love my parents. But so with that though, it's like, you know, I'm worried that I'm going to give somebody a price in the middle of spring that's a good client of ours and be like, hey, you know, this most job is going to be $3,000. And like, wow, I got it done last year for $1700. Like, you guys are awful. Cancel my mom, I cancel my dad. You tried to gouge me. Like, how do you deal with that when you're raising prices, you know, to.

Control demand, there's 10 other people and they go sign up the next same day. Okay. Like it's a numbers game. And like. Right. And guess what? They're going to go try to find another service that offers everything you have, and they're going to realize it's the same price because everyone else's prices are going up too. Right. And if they want to downgrade service, yeah, they'll get it for cheaper, but they're not going to get what you offer. Right. So the bottom line is ions don't believe. You believe in your prices.

You believe that you're worth about 40 an hour when you need to be charging 80. And so you've lost confidence in your sales process. And you don't believe you're worth what you're selling those prices for. That's the biggest problem.

Yeah.

You haven't sold yourself on your value. And so how you change that is realize that you are not the target customer. To you, you guys are only worth 30 to $40 an hour. Right. But to someone who cannot walk, that has a lot of money, wants to spend time on the weekends, works like crazy hours, and needs the time when they come home with their family, you're worth $80 an hour. They want to look good in front of their neighbors. They would like the fact that you have a pink truck. So everyone knows in the neighborhood that they have a professional service, like that's what you're selling. And so you sold yourself on the fact that you're not worth 80 because you're not to you. But you're not the target customer. You're young, you have all the health, you don't have tons of money and a family and all the rest of it. So you are not the target customer. You got to change your mindset and realize that you're not worth 80 an hour to you, but you're worth a whole lot more than that to the customer you're targeting.

Got it. Makes a lot of sense.

Thank you. Right now. Right now. That's why you're taking it so personal. When people say about your prices being so high, it's because you believe them.

Yeah, but think about like this. If I. If someone's making $200,000 a year, they have $4 million net worth and three homes and they, they have a big family, a bunch of grandkids. That hour that they get to save every single week not mowing is worth a whole lot more than a hundred dollars.

And you just have to find those customers, I guess just keep bidding them and. Yeah, got it. That makes sense.

And you're not going to have problems casting the net this year. Right now your website is ranking now your trucks are all painted like all of that's. You're going to have tons of work coming in. That's not going to be the problem this year. So this is the time to buckle down on, sell yourself in the value, raise your prices, get your guys above base pay and.

Your profit margins will get traction. So that next spring, okay, let's go for a million. And you'll have the cash to do it.

Got it. Because I have, we have the, we just, we're missing the cash basically. And we have to just take a year and get the cash.

Yep. And you're still gonna grow a lot. Like, let's just not discuss the fact of the matter is that you, you've built all the infrastructure. You just gotta realize, okay, I have tons of infrastructure now let's utilize it. Right. Have those three trucks pounding out five days a week. What do you do when people ask for.

No, no, like the top part. Zach.

Oh, Zachary.

That'S hilarious.

But I'll text someone with you. But.

Yeah, so that makes a lot of sense. And yeah, I mean we're gonna probably double even if we don't try to grow a lot just by raising factor of raising prices. I just have the want to just keep growing because I can take the stress of doing it. But it's, you know, it's the whole thing of like, even if I can take the stress, the business needs cash. And there is a chance that if we try to grow, I just go out of business because I've, you know.

And your risks are getting larger when you have that many employees, that many trucks, like you need cash. Like it's an obligation to them as employees to make sure their jobs are safe. But more importantly, like, like you said, you can take the stress all day long, but your bank account can't go below zero.

It has, it doesn't like it penalties.

So that's the only thing you should focus on. Right. You'll still grow just fine. Like you got to come to peace. The fact that even if you did 300,000 this year in revenue, if you could stack away 50 grand, that would be better than you doing 600,000 revenue and being strapped for cash this time next year.

Yeah. You saying that hurts my ego, but I'm going to internalize that over the next couple weeks and I'll get there.

No one cares. No one besides cares about how many, how many what your revenue is.

I know the IRS in the bank.

Cares about how much is in your bank.

Yeah. No, that's fair.

Health insurance? Yes. No, I've, I want to do it and I was thinking I could do like obviously you can get it through the company, but that seems expensive and headache y. But like what about a reimbursement? Like a hundred dollar a month reimbursement for employees just so we can say we have the benefit.

The whole benefit of having health benefits is the fact that it's pre tax dollars. Right. So the employee is getting a benefit that they don't have to pay taxes on. So that's the whole reason of a benefit. Right. Is that you as a company pay X amount and they don't have to pay that taxes on that as wages. That's the benefit. So there is no real benefit to give someone a stipend for health insurance. Right. We did the same thing originally because number one we couldn't afford it. Number two, we just wanted to keep it simple. So we gave them 100 but they were still getting taxed on that $100 because it's not considered an actual benefit. So the reason you would do health benefits is, is to allow them to not have to pay as much taxes and as well as some of them don't have access to health care outside of a employer plan. And typically their employer plans to be a lot cheaper than if they went and try to find it personally. So that's the benefit. Giving them a stipend towards health is just out of the goodness of your heart, but that's going to be taxed the same way that ordinary income is.

So what's your thoughts on that?

I wouldn't do it right now stat. Cash. Yeah, no, we just recently did it and I probably still did it too early.

Still too early.

Yeah.

When you said like oh, just try to. If you make no money this year, which I guess you weren't talking to.

Me and you said that.

But when you can make no money this year and just get employees, it's a good year. I went with oh, I'll just do health insurance and make them happy.

So yeah, but you'll be amazed like especially once you actually do have a plan in place, how few of them at the entry level are going to Actually accept it because they're already getting state benefits that are so much better than any plan you'll offer. Yeah. So like I, for example, if I was you, like, what would be used is you say, hey, I'll reimburse any gym membership. Something like that is going to be higher value ticket to someone that's entry level that already has state benefits. But if you say, hey, look, if you just bring in your, your gym membership every month, I'll, I'll give you that cash.

That's probably a way better idea.

And it's 40, 50 bucks a month instead of, you know, hundreds.

A hundred?

Yeah. Oh, it's, it's actual health benefit plans are a lot more than 100.

Oh, yeah, I was, I looked into those and it was not, it was like, you know, a couple hundred bucks plus the maintenance thing, plus having to deal with it and the paperwork, and I was like, I need to hire an office person just for the health side.

Yep.

So, yeah, that was a lot. All right, let me make sure. See if I have any other questions so I don't kick myself. Normally I get off a call and think of a question, but I'm in this for a long time, so I think we're good. But.

Oh, Zach wants to know if we can split a call next time because.

He stopped as long as 50 minutes. That's fine.

Yeah, perfect. Perfect. And any other, any other pieces of advice, I'm. This is whatever wanted advice, not unwanted. Any other like advice you get for.

I would just say write everything down right. Because you're going, you're going to go two different directions. One, you're going to be pulled by the fact that spring rush is going to come. You're like, man, I could grow. I could grow, I could grow. Um, you're gonna be pulled by that and then you're also gonna be pulled by the fact that you're not gonna have cash to do so and you're gonna want to constrict. Right. So what you need to do is know exactly how much cash you have now and like we talked about at conference, know exactly what your cash on hand is going to be throughout the year. I would do it on a monthly basis. I'd be tracking where you'd be spending that money and knowing which months you're gonna have X amount in your bank and then stick to it. And that means if you're gonna go on a three month diet, no equipment, you stick to it. Like it's a matter of you telling your crew like, we are not buying equipment until April 1, period. And so make do. You know, if you got to dig with your hands, sorry, the shovel broke. Right. But like, that's how serious you have to get if you actually want the result. Right. So write it down. And then that needs to be like on the wall where you're like, oh, we could get another truck. I saw this great deal and we have seven employees and only three trucks. That's going to be very tempting, but you've got to stick to the plan.

And they do get profit sharing, so they'll probably be on it.

Right.

Like, if I tell them, hey, you guys will have massive. Probably not massive, but large profit sharing. If we don't buy any equipment, they'll. Because they haven't gotten any yet.

Right. And the same thing with P4P. They don't. They will not believe you until that's actually happened. Right. So all of these things can get fixed by just slowing down for one year, generating more profit. You're still going to grow a ton. It's like, no need to worry about that. And honestly, if you didn't grow at all, I would still be telling you the same thing. Yeah, Right. But I know with the website the way it is, your branding's on point now. You're gonna grow and just your pricing, like you said, is gonna, you're gonna grow a lot in terms of top line revenue. But that's not, that is not the, the benchmark for success in 2022. It's 100%. How much cash you have at the end of the year. Yeah. That should be the only thing you measure.

Yeah. Because if you, if you have a hundred grand at the end of the year, you'll go into next spring, you'll buy three trucks, hire five to six more guys, and you'll scale to a million. And then you'll have an office person full time. Right. If you do, it's a weird hybrid thing where you keep growing this year but you have no cash, you're gonna go next year and you're not gonna be. Still not gonna afford an office person. You're still gonna be running around taking text messages from employees. Right. Like from customers. Like, that's gonna happen. And so just, just write it down and stick to it. That's what I'd say. Cool.

Sweet. Well, I appreciate you taking the time, Mike. And I know I still paid you for it, but I appreciate you taking the time schedule. It means a lot. Yeah. And I have one last, tiny, very quick question for you. Like, really quick and I wanted to ask it at the end so you could cut it out of the interview if you wanted. If you're gonna post it, if it didn't make you happy. But so why. And I don't mean this because I want you to. I mean this because I'm curious and myself, because I don't know, I'm watching a lot of Alex Hormozy and his very deep shit. See, I curse again at the end of video. Very deep stuff he talks about. Like, one of the things I was wondering was, why have you not asked me to be a franchisee? Or do you just not ask people that? And what character flaw slash business flaw do you see?

I've never asked anybody.

Got it. And do you see any character or business flaws that are massive, that are now you're just.

No, no. You remind me a lot of one of our franchisees in North Bend. He joined. He was 16 when he joined. So he's a couple years behind you in terms of kind of. He just got started last year.

I saw the video on him, I think.

Yeah. So he's very similar in his mindset to like grow, grow, grow. So he overgrew last year. He had like six employees within a few months and like bunch of trucks, like. And just there's the stress. Like he went from zero to, you know, almost 50,000amonth in revenue within like his first couple months, like crazy.

But it was a matter of. That kind of growth requires cash, it requires management experience. And those. That's the lack. Right. And so when I see your videos and what happened last year, those are the two things you're lacking in. It's just a matter of time though. And so it's a matter of slowing down is extremely important. Right. And if I could tell myself, I'd be telling myself the same thing. Like I lost like receding hairline man because of the stress. Right.

Yeah.

And so if I could tell myself one thing when I was. No. How old are you?

19.

Yeah, dude. Yeah. See, that was my second year in Augusta, Right. So if I could talk to my 19 year old self, I would say just take one year, don't grow and focus on cash flow. Because if I would have done that in the short term, I would have stopped my growth, but my profit margin would have jumped and then I would have jumped three years forward by being able to have all that cash.

But no, there's nothing. I would love to have you as a franchisee. It's just like I don't ever ask anybody.

Cool. Well, thank you, Mike. Like I said, I appreciate it. And have a good rest of your day.

And you'd have to paint the pink yellow.

Honestly, that's the biggest reason why I can't join.

That's awesome. Cool, brother. We'll stay in touch. Maybe we'll use some of this. That's fun. Take care, brother.

Thank you. See ya.

Bye.