6 Mental Traps That Keep Contractors Small

If you run a home service business and feel like you're doing all the right things but still stuck, this video will show you the 6 mental traps that quietly keep contractors small and exactly how to escape them. And I'm not guessing. I have watched these same traps show up over and over again while building Augusta Lawn Care past 200 locations and traveling the country fixing struggling businesses. Different industries, same mistakes, same outcomes. I'm going to break down 6 beliefs that sound smart, feel responsible, and even look professional on the surface, but underneath are killing your profits, efficiency, and growth. And if you're thinking, we already do those things the right way, that is exactly why these traps work. They only catch disciplined, hardworking owners. Let's get into it with mental trap number 1: Customers care about your company mission. Look, I understand that when you're leading an organization or company, you want to have a mission or a vision that the ethos for which you are existing and why you do what you do. But customers don't actually care about that. They care about solving their problems. Now, an example of this was Eco Valley Lawn Care, where they had electric trucks, electric mowers, handheld equipment. Everything was electric because they really cared about being electric and saving the environment. What they ran into is that the customer doesn't care about that. They care about the cost and solving their problem. In other words, getting my bushes trimmed, having the grass go from tall to short. And they realized that the customer is not willing to pay a single dollar more for it to be electric compared to gas.

The battery charging is there, but the equipment that we use with those sort of batteries isn't quite up to the professional standard we're looking for. So it makes you wonder, you know, is it worth investing?

Now you might get a university or municipality or city or big commercial contract because you're quieter with electric equipment. But rarely is a customer going to pay a single dollar more because of your mission, or you're trying to achieve something and push something through going electric, or being environmentally conscious, or even paying your employees more. A lot of them don't care a lot about that. They just want their problem solved.

So, so how long would it take for this to charge the smaller mower?

About 4 hours for a full charge. The only problem with this whole setup is These cost $6,000.

What? This cost $6,000?

$4,000 on sale. I've only bought them on sale. You get this, the charge and discharge cycles are only meant to be about 2,000, so they're not meant for the wear and tear we put them through. So they've been lasting me less than a year. Oh, so that is not—

mercy.

Yeah, I mean, about a year to 2 years if I'm lucky. Some of them less than a year. This is the consequence of early electric adoption on the cheap, right? If you can't have your battery built into the mower or you can't have electric trucks or trailers that have some kind of supercharger attached with like all the infrastructure built out for hundreds of thousands. This is what you're dealing with.

At Eco Valley, we realized that adding all this electric equipment was actually not only massively adding to the cost, but was also adding a lot of operational complexity for scheduling and efficiency. Because not only was the F-150 they purchased twice the cost of a comparable gas-powered powered vehicle, F-150, but also the mowers were more expensive. Everything had to be charged and they had to buy these really expensive battery banks that would go out on the trucks and the trailers just to make sure that if they did lose their charge, they'd be able to have a backup. They would throw in like the EGO batteries like in the back of the truck.

Yep.

Charge those throughout the day in a bank while they're doing their other stuff.

Yeah, this is the bank, exactly. So like for fall cleanup, the battery drain is massive Those things, like, you get like 40 minutes out of commercial, you know, 2-battery backpack and then you're swapping them out. Really?

Even the backpacks?

Even the backpacks. And yeah, yep. So the biggest batteries they make, and EGO makes the biggest one, they last maybe 40 minutes to an hour. And then the half-life of them as they get older, they last 6, 7 years, but you better believe like every 20 minutes you're running back to the truck to swap.

This was causing a headache to actually manage the business and make profit, and yet the customer was not willing to pay for it. It doesn't matter, like, does the customer care enough to pay more?

Right.

And that's the part where like, it's just unproven. I don't know.

It's always scary, right? And it's the jury's out on whether it really does make good economic sense. 'Cause, you know, I thought it was more like 50 to 70% of the people probably care. And they do about the environmental and quiet aspect, but maybe it's only closer to 10% who care enough to reach in and go, you know, deeper into their pocket.

So realizing that the customer does not care about your mission or what you're trying to achieve, they just want their problem solved. An example of this is at HomeWorks. When it comes to the software that we build, we're trying to help home service business owners grow without breaking. But no one really cares about that mission. They want more leads, faster software, better features, more reliable service. So the mission that you have in your business is important to you, but it might not be important to your customers, and it might just be a byproduct of giving them what they want and solving the problems for them. So you might not care a whole lot about making tall grass short or doing the actual work inside of your industry. And you might have a passion for something around your local community or religion or even potentially saving the environment like Eco Valley. But most customers don't care about that. And so make that mission the byproduct of just solving the customer's problems consistently over and over again. Mental trap number 2: Trust no one and make sure everything is in writing, signed, even for small jobs. Now, example of this was TC from Home Roots Lawn and Landscaping.

My name is TC Bliss. I own Home Roots Lawn and Landscape. We're a full-service lawn and landscape company that has recurring maintenance, but we also do like full landscape build-out and construction.

And when I went to do the turnaround at their business, I went to their office and they had like 5 to 10 pages of fine print and documentation that they would give customers prior to getting the proposal signed and getting the contract underway.

They come in, like our logo's up on the screen. It immediately goes to like their before picture, then an after picture of the design of what I want to do. And then I'll hand them like this little thing here. I just literally slide it like this. It's got satisfaction guarantee and then 3 pages of reviews that I hand them and then like our warranty agreement and then like they're good.

Okay, folks, this is, this is fun. All right, all right, all right. And this was causing days of waiting for the customer to actually go through all the fine print. Understand all of it. And a lot of it was repetitive. As I started looking through all the documentation that they required for people to sign on every single thing, terms and conditions, things, stuff about the weather, stuff about change orders, stuff about the deposit, like paragraphs of information. So payment and scheduling, we already have payment here, right? Warranties and guarantees, we have that. There's a lot of duplication here. I would just try to reduce, reduce, reduce. I figured we can consolidate all of that. Down to just a couple paragraphs. Remember that if you're going to add huge amounts of fine print, realize that's going to add time to the equation and it's going to cause doubt in the mind of the customer because they're wondering if you potentially are trying to trick them into signing something that they don't know about.

I don't want to give them—

whoa, 1, 2, 3 pages about my payment terms. This is confusing.

Yeah.

Look, we require 50% to get on the schedule. Once you're happy with the job, we'll collect the rest.

So where do you put that? Just in like one DocuSign?

On the estimate.

'Cause right now the way this looks, I do have to go home.

That makes sense. I'm like setting them up with homework instead of just like, you know, let's move forward.

I have to go home and I have to think about this. Sure. 'Cause I need to read your testimonials. And I actually, as a client, you're giving me all these tools to be able to delay. We've all had as customers the time when you signed a document and someone else held it over your head when you tried to cancel or when there was some sort of glitch in the customer service. And you were stuck paying for something you didn't want. And people are afraid of that when you show them pages and pages of fine print. So what's the fix? When you have an estimate and you need to have terms and conditions, instead of putting it in the estimate proposal, making the estimate this big ginormous scary contract, and even the using the word contract instead of agreement, what I wanna do is reduce the size of the estimate and really focus the verbiage on what the customer is getting, What problems am I solving for them? And if I have terms and conditions, I'm either going to summarize them very, very shortly. And AI is a great use case to reduce the amount of terms and conditions and say the exact same thing. Or I'm going to attach it as a PDF to the estimate. And then inside of the estimate, I'm only going to put one sentence that says that they accept the terms and conditions that are attached by accepting the estimate. This allows your estimate to stay much more focused on solving the customer's problems and getting to closing the job and getting on the schedule instead of going through the very details of some intricate policy around the weather or whether or not you cancel or whether or not the deposit goes through. All of these things are slowing down your sales process and causing you to lose more jobs. Mental trap number 3: Advertise your project work to keep your crew busy during the slow season. Look, we all understand that during— there are certain periods of time of the year when we are seasonal, that there's less work coming in and the leads are not pouring in and A lot of times we are inclined to go advertise for big projects to fill the schedule for our crew. Now, we went out to Paul at Green Earth Landscaping in California, and he had done a big acquisition of a company that did projects.

The guy who owned it before had owned it since '79. He started the company in '79, so he had it for a long time. But his focus was on construction. He really liked doing the construction stuff and he's very, very good at it. I needed cash flow when I first took over the business, you know, and I needed to build up the maintenance inside to have that monthly income coming in. I mean, that's just what had to happen.

And so he was stuck on this project treadmill of constantly looking for the next big project. $50,000, $60,000, $100,000 as a big project would keep his crew busy.

My feeling is this $1.2 million, we're right at that absorption level, right? And we're— so we're absorbing our costs well and we're doing okay. If we can just get past, that's when the profit starts coming in and we can start doing a little bit more with what we do. My goal from the very beginning was that the maintenance side was going to be the foundation of the company. They were going to pay the bills, they were going to pay the overhead, they were going to pay the salaries and everything like that, and that the profit was going to come from the construction side.

The problem was, even though he was doing $1.2 million in annual revenue, he only had $11,000 in the bank. And he kept doing these big projects even though their hourly rate was so much lower, like almost half as much as they were making on maintenance and mowing and bush trimming. And the recurring maintenance side of the business.

Right now, if you looked at the P&L, the maintenance side would show that we're profiting $200 grand a year, right? And it's the other side that's taking it down. We've probably lost $80.

Why don't we cut it?

I love my people.

Right.

And I'd have to let some of them go if we did that, right? And you know, I'm afraid if I let them go, I won't be able to find them if I need them again.

What do you do if you're in this situation where you're feeling you're on this hamster wheel of getting the next project just to keep your crew busy? I want to advertise and spend all of my marketing dollars for recurring work only. In other words, the small, simple projects or the recurring work that I can get every week, every 2 weeks, every month I'm showing up at the customer's property. And by doing those, I'm able to upsell those existing clients the projects during the slow season. For example, when it comes to lawn care and landscaping, I can't cut grass for 3 to 4 months out of the year in my market. But what I'm going to do is upsell all the people that I did mow their grass during the mowing season, I'm going to upsell them one-time projects during the slow season. And so I want to spend most of my marketing budget when there's leads pouring in, demand is high, everyone needs your services. That's why I want— when I want to be advertising, and I'm going to focus all my advertising dollars on the recurring work side of things. It's much more consistent, and many times I can get people to convert to recurring revenue even during the off-season. But then I'm going to build up this database over the course of time. And I've seen it inside of HomeWorks where people over the course of 1 year, 2 years, 3 years have 1,000, 2,000, 3,000 contacts. And if they do that, now when they get slow, they send out one text message, a bulk message to all their customers or an email. And we promote one service that we know is useful during the off-season for existing customer database. This saves me from having to spend marketing dollars and advertising during the time when no one needs my services. And the customer acquisition cost is way higher than it is during the spring rush. But I'm able to prioritize my existing customers and sell them a service that they need even during the off-season. Now, the difficult part that we ran into with Green Earth and many home service businesses, once they realize they're on this treadmill of 90% of revenues coming from big projects and they, they understand, okay, I make 40, 50, 60% of that revenue, I want to come from recurring revenue. The problem with that is that recurring is a slow build and takes years to really wean off the large projects. And so when we first got to Green Earth, I realized immediately they weren't making any money on projects, but 70, 80, 90% of their revenue was coming from these massive contracts that were making $30 or $40 an hour. We're never going to make money on that. But we also now have the infrastructure of a $1.3 million business with office staff, equipment, trucks, a huge crew. And so in the meantime, while I am still doing projects, I'm going to slowly wean off and start focusing where I can. Can I get 10%, 15%, 20% of my revenue from recurring work? And I'm going to do that, that transition by spending all of my marketing dollars on the recurring jobs, knowing that even when you advertise for recurring work, the one-time projects are going to come in anyways, and I'll be able to upsell my existing recurring customers into those one-time projects when I need them most. Mental trap number 4, make your website professional. Now, this is a term that I've used in the past. Make your website professional, make sure it's a really good looking website, but everyone uses that and then makes a professional website and then wonders, why don't I get any more leads? And this whole website thing is a scam. This reminds me of a turnaround that we did out in Texas with Paxton from HP Landscaping. And what's sort of like your perfect size of project? Is it like $50 grand plus? What's sort of the—

Our sweet spot is like $20,000 to $30,000.

He also had a $1.2 million business and the website looked good. It had really professional images of landscaping and they did pools and hardscaping and concrete and tons of different excavation and grading jobs.

After our third year of business, we transitioned into project-based work doing landscaping projects. Today we're going to go an hour and a half for a $30,000 install to do a putting green and mortar and walls and whatnot. Doing pools, turf, and really anything for your outdoors. We take care of— that's our, our service.

Very cool. But the pictures and videos that were being used, although they were professional, they were stock images and videos that could be used on any landscaper's website across the entire country. There was no differentiation showing their uniforms, their trucks. And the problem that people try to fall into is like, I want a professional looking website instead of the whole objective of the website is to get leads. It is to get people to show up to your website and submit their information so you can give them a quote. Whether you do that instant quotes on your, on your website or they call in over the phone or you need them to fill out information so you can do an in-person consultation. Regardless, the reason for your website, the entire premise of a website is to convert prospects into leads. In other words, people that you could do work for and they're kind of interested in your service to people giving you their information so you can actually give them a quote. That is what we call conversion rate optimization. I want a website that converts well. I don't necessarily need a website that looks good, and I am willing to sacrifice a good-looking website for a website that converts much better. Why? Because if I run traffic via ads or even just word of mouth to my website and 1 out of 200 people are actually converting from a prospect into a lead, That's not good. That's half a percent conversion rate. The fastest way to grow that business is to all of a sudden now, instead of 1 out of 200, what if we could move that conversion rate to 1 out of 50 people that visited the website actually submitted an estimate request form? That would move from a half percent conversion rate to a 2% conversion rate. That is a 4x amount of leads that you will get from that website. Now, go back to your homepage real quick. The reason no one clicks the request quote button is because it, it, no one even sees it.

Yeah.

Click on request form real quick. So this Jobber form, I would say the same thing about Copilot's form, too long, don't use it. The reason it's nice for you is 'cause it's gonna bring in that data.

Yeah, yeah, yeah.

Into Jobber.

Right.

Right, right, right. But what you're saving is 30 seconds of copying and pasting. And so what I would prefer is to double my, my, my number of leads by having it right here.

Oh, just like a big old—

Yep. 'Cause like the goal of, of us having a website is to get more leads. So we should make it as easy as possible for someone that shows up to this website to get more leads.

The amount of people that like the traffic we have versus the leads is horrible.

So like, so this is low-hanging fruit because if I can go from 1% to 2% conversion, we just doubled our leads. We didn't spend any more on marketing. Yeah, we didn't change anything besides the estimate form being there. It's crazy. Page loading faster. We have service pages. This being fixed alone could increase our leads by 30, 40, 50%. For sure. And so instead of getting wrapped up in trying to make your website look so beautiful and make it scratch your ego when you show your friends and family or even your existing customers to show how big of a business you have, instead, ask yourself, is this actually optimized for conversion? Does it load fast? It's like on your website, for example, on the services page, see that loading in the middle? That deal, that is slow loading. The page load speed is a huge determining factor now, especially with AI and these of like whether it—

whether or not you're going to rank.

Wow. The other part of it is if you go to the services, one thing you could ask them to do as you scroll down, you have all these different services. You want each of these to be a different page. So you want it to be hplandscapingllc.com/fertilizing/concrete/herbicide because that keyword will rank. Does it show my trucks, my uniform, my brand, and does it actually push people to give their information? Because I need a lead. I'm only happy when I get a lead. The customer is only happy when they get service done and their problem is solved. So let's get them to that faster by making it easy for them to submit information. Like, one of the funniest things is when I go to people's website, I'm like, how hard is it for me to give you money? You make it impossible to find the button to call you, make it impossible to find a form on the Contact Us page. I got to click out of the home page, like, and then once I get to the form, it's like 20,000 different fields. What do you need, my Social Security number? The whole objective of the website is just a mechanism to convert them from prospect to lead. And if it's failing to do that, it could still look professional. But if they can't find where to call you, they can't submit their information. When they try to submit their information, it's 20,000 pages long. These are the things that are keeping your conversion low and tweaking just a few things can dramatically increase your conversion and increase the amount of leads that you're getting. Ask for payment after the customer is happy with the work. Now, this sounds good in theory, and everyone likes to say, you know, customer satisfaction is so important to us. You don't have to pay unless you're satisfied. That is great in theory. But we went on a turnaround to Good Hands Roofing, and they did a phenomenal job of building their business to almost $3 million in annual revenue.

So my name is Malin Fisher. I'm the owner of Good Hands Roofing, co-owners with my brother Melvin Fisher. Just as we've been growing and God's blessed our business.

The problem was there wasn't a lot of money in the bank at certain times because they're doing $50,000, $100,000 jobs and they're not collecting until after the job is done.

Now, on the books right now, like on your balance sheet, there is $278,000 of accounts receivable. But how much in like the real world do you actually have that's outstanding?

Actually produced?

Like, does that sound like a decent number?

Yeah.

Well, I wouldn't say that much. Not necessarily. I know there was a job that we did, like a reframing over the wintertime. Reframed inside of this wedding venue that burnt down. The guy that was there, he struggled to like pay, pay us up. It was a job that we broke even on, but then he owed us like $40K.

Worse off, sometimes they were waiting 30, 60, or 90 days for the customer to finally pay them.

If this continues in this direction, then we're going to be out of cash real quick.

When you see how much money they have in the bank and then realize that 4 times that is sitting there in accounts receivable, like literally 20% of the revenue sitting in uncollected revenue. And that's what turned a profitable quarter last quarter for them into a negative profit margin. When you look at their cash accounting, which is money— when does the money hit the bank account versus their accrual accounting? In other words, when the work was completed, it's way different. On one of them, they had like a 10% profit margin and the other one they were losing like 10% profit, like negative profit, like $70,000. When you see that difference in a cash accounting versus accrual, you know they don't do a good job of collecting the money because you shouldn't have that much of a difference. There shouldn't be the 20% swing when you switch from accounting, accrual and cash accounting, unless you have a very, very long time to collect the money.

Now we can solve this problem very quickly. I want to get payment upfront. In the perfect world, I'm getting prepayment, which means all of the work is getting paid for prior to me even starting the job. But at the very least, I am going to get a deposit. I want to collect at least 50% of the revenue from a project prior to the job starting. Why? So that as the job is getting done and I'm paying for labor and the wages of my employees and all the materials and the contractors and all the supplies and the rental equipment, I'm not going into the red to get the job done. And if you're not collecting deposits upfront to cover the direct cost of doing the work, You're actually going in the red until you get paid for the job. And you're like, "Oh, well, the job only takes a few weeks. We'll get the money in a few weeks." But if you don't have a card on file, if you don't have an ACH on file, you can't even charge them when the work is done. You might be waiting a week, 2 weeks, 3, 4, 5, 6 weeks until you actually get payment. And you're basically giving an interest-free loan to the customer. And so I am not going to wait until the customer is happy for the work to get completed. I'm going to build up enough trust on my website with reviews, great social media presence, and a portfolio of work that shows I do quality work. And then I'm going to require payment prior to the job starting. And then I'm going to do everything in my power to make sure that the work is done to a high level of satisfaction. And I don't mind if I keep going back to the customer and working with them and trying to make sure that they're very satisfied. But I'm not waiting on my money because that puts my business in jeopardy and puts everyone that is working for me in jeopardy because I might not be able to pay them one day if I have enough big projects that are holding out on payment. So how do I solve this once and for all? Get payment up front whenever possible. Prepayment is the best. At the very least, get deposits. Also, get a credit card on file or an ACH on file. With a check of a button inside HomeWorks in the settings, you can require them to have a payment method on file so you never get caught where you're finished work and you're waiting for the customer to pay you. Mental trap number 6: you need a big budget to run ads. I have seen home service business owners constantly spend way too much money on ads and they are losing money on every single customer. Last week, I talked to a soft wash business that is doing $1.5 million in revenue annually. However, they are spending about $250,000 on just Google Ads. That's insane. That's like 15% of your revenue going out the door to just advertising. You do not need to spend that kind of budget. An example of this was a turnaround that we did for a poop removal company called Doggie Duty.

I'll do residential yards. I install pet waste stations and service them for apartments, HOAs, parks, county, city, anything. Anybody that needs them, I'll install them.

We knew that they could go to Facebook and for $50 to $60, get a customer. That's your customer acquisition cost. Now, if I can sell that same customer within the next 30 days at least $100 worth of services and net out about $50 to $60 of profit, I would be able to just use my credit card and not need a bunch of cash to be able to keep advertising and growing the business. You don't need $20,000 today in cash to run ads. What you need to be able to do is get a customer knowing your customer acquisition cost. And then in the next 30 days before your next credit card payment is due, I'm trying to recoup all of that customer acquisition cost immediately. I think we can get leads for less than $30 per. And then I think we can close half of them. So if we have cost per lead is $30 and we close, like half of them actually convert, that'd be $60 customer acquisition cost. We know we can get 60 bucks in 3 weeks of doing service. As long as we can either A, finance the next few weeks of ads, or B, get a credit card for $500, we should be able to run this profitably right away. Now, if I could collect $400 or $500 from one customer at Doggie Duty for the entire year of service, I'd be able to today get a customer for $60 and immediately get $400 in return and then go spend that money on going and getting another customer. Especially when you're small and you're solo, because your profit margins are so large, I want to be able to collect money upfront or upsell the customer into another service as soon as possible in those 30 days and collect as quickly as possible to recoup the customer acquisition cost. If I do that, I can then go buy another customer over and over again without needing cash, a whole bunch of cash in the bank, but rather just using my credit card as long as I'm able to within 30 days recoup the cost of that acquisition. So if you're able to get even one customer to pay upfront, that's like $800. Yeah, that money is now the money we can then just recycle into Facebook ads. I want Dustin to simplify his pricing as much as possible. We're going to have a weekly $25 visit. And then we're going to have the option to get them to prepay for the entire year.

My customer, he took the 6-month because of the 10% discount. Sent a message out to him. His contract is up on the 3rd.

Okay.

So there's a good chance he's going to redo another 6-month, which that'll— that's another like $760. So that'll be my $500 there that I can put in.

Perfect. And honestly, I would really prefer like 6 months, 12 months. If someone's going to prepay, they're going to prepay. I would do 12 months, but give them a really good off, like 25% off. Okay. Because if you can get $800 up front on this service, that $800, we can go get 10 more customers. This is why at Augusta Lawn Care this year we are focused so much on treatments and applications, because when we sell mowing over the phone, we might be selling a $50, $60, $70, $80 per service visit, and that's fine, but it might take me 4, 5, or 6 visits to actually recoup the customer acquisition cost by the time I pay all my other expenses. Whereas with treatments, it's very common that I would upfront ask for $400, $500, $600 for an annual treatment program. Therefore, be able to get $500 or $600 before I even start service on the customer's property. That allows me to then take that money and go buy another customer. This allows me to scale much faster. These are the 6 mental traps that constantly keep home service business owners stuck. If you want 40 brutally honest truths that every home service business owner needs to know, watch this video right here.