A HUGE Decision.. COLLEGE or BUSINESS?

A lot of the customers that left were like old customers that I knew. So then, let's see. Hired Uriel. And Uriel, I'm paying 30. Uriel, 30. But I put an ad on. Indeed. I said experienced landscaping master. That was my job title. Paid him 30 bucks an hour. Wonderful. Completely changed the game. So I put. Put him on a crew with a $20 an hour guy, and finally they can actually make money. So. Okay, so recently I have a new co pilot. I'm very happy. A lot of people aren't very happy. I. The Facebook group makes me depressed. I don't know. Like, this is awful. But then I'm like, no, this is actually fun. So, so the time track and the pictures, everything is beautiful. So 60 to 70% efficiency.

I'm.

And I'm paying them around charging 70 bucks an hour for labor. They're hitting 60 to 70% efficiency, which isn't great. But so like Pascal, like last Thursday they had 72% efficiency, which was the best we had in a while. So they brought in like, like 1100 bucks an 11 hour day, actually. Profit that. Okay. Profitable, but comparatively a lot better. All right, that's a mouthful.

Very good. Cool. So. So what are you doing in terms of monthly revenue? Like, what is May looking like right?

At 30,000.

Got it. Okay. And then is most of your day still spent in the field? No.

So. So. Right, right. So basically I was in school full time, so I. Not in the field at all.

Got it.

Yeah.

And so you really needed that person Uriel to have the experience and be able to run without you. Yeah, got it. Okay. All right, cool. What can I help with?

Okay, so, so that's. Okay. So I'm also deciding what, what. So I'm. I'm pretty like, I'm into school. I really like the. I'm going into engineering next year. I like, like the math and the science. And so I'm trying to. Trying to decide what. What I'm trying to do. So there's kind of, kind of four main paths. I'm thinking of want like between like 100 business and then like 100 school. So the most business would be like to take a gap year or two, go all in on the business, and then try. Try to get some solid financial footing for like the rest of my life. One step below that is like doing night classes at community college, try to get credits while I'm still growing the company. One step below that or whatever is like. So I'm renting neighbor. My neighbors are crazy that I was running it out of my house. They. They called the cops. Well, once I started getting employees, they called the cops. And so I found a shop space, running a shop space. And now every time I walk out the door with my uniform on, they video me. So they have like hundreds of videos of me. They send it to the. The township. It's ridiculous. And then I want. I went like, like, our school gives, like, has an award. And so I won this award. And so all the people from the township were at the award. They gave me the award. But the neighbors are still complaining, so the people are complaining too. Where, like, that was pretty funny anyway.

And.

And then one step below that is actually like selling everything. So I'm talking to a couple people also. I'm wondering what your thoughts on them, on how much like, this would be worth for selling or what do you think the best?

All right. Okay, cool. And what do you want to do? Do you want to go kind of full into the school thing? Like, where's your head at currently between those four things?

I don't. I don't know. So basically, like the next 10 weeks, I just want to work on this as much as possible. And then. But what I want to do after that, I don't know. I'm. Right now, I'm thinking pretty much either. So that's what I was going to say. The person I'm renting space with, so he, he owns an excavation company and he was talking about potentially, like, partnering with me, like, 50, 50. And he, he can run it. Basically what I've been doing, just running it while, while I'm in school.

My concern is if you take a gap year and grow the business for, say, two years, and you grow it significantly, you're going to be still pouring all the money back in over the course of two years. It's going to grow it to say, 60, 70,000amonth in revenue. And then you're going to now be faced with the fact that if you're going to leave the business, you will need an experienced general manager. You'll need a lot of systems in place for it to run without you because there'd be multiple employees, lots of trucks, lots of moving parts.

Yeah.

So I would say either a, you really raise rates and keep it where one or two people can manage it, and then you can manage it from afar. Realistically, you're going to need five years to make it sizable, like 800,000 plus and sellable and super profitable. Right. And so especially if you're growing, like, if you did say you know, 250, 500,000, 800,000amillion. We're still looking at four or five years from now. And at that site, at that pace of growth, you're not gonna be profitable. Like, all the money's gonna be going back into the business. And so you'd have a really big business, then you'd have to make it profitable for a few years before you could sell it. Because most people aren't gonna want to buy anything outside of just the contact list and the assets if there's not track record of predictable profits for, like, at least three years because you can't get a loan on it otherwise.

Yeah, dude, say two years isn't really. Isn't really a thing.

Well, you can. You can it just to think that you're gonna grow it and be really profitable. It's just a matter of, like, if you're gonna leave it after two years. It's gonna be harder to manage after two years because it's gonna be way bigger.

Yeah, okay, that's. Yeah, it's not gonna be easier.

What you could do, though, is say, okay, I have. You have two trucks right now, or one, two trucks. So if you say, hey, I'm gonna take stay with two trucks and I have two employees, I'm gonna give Uriel, like, a 40% or 30% profit share. I don't know how good he is or someone like him that can manage the actual work itself. And the only thing you're doing from afar is routing, scheduling, and billing. Right. That. That could work. But then I would be saying, hey, let's determine how many customers we can serve. And right when we hit that, we are raising prices.

Okay.

So then we actually become profitable. Instead of growing, growing, growing, and just pouring money back in the business, we need to actually get some distributions.

Okay. Okay. So like a relatively low, like, small, small company and. And high, really high percentage going to the guys, that might work.

Yeah, you can say, okay, I'm going to give 20%. No, I'm going to give 10 to one employee, and I'm gonna give 25 or 30% to the other employee. They're going to be reboots on the ground when things break everything. They're going to have to manage for you. You're just going to be running it from afar, and you're going to want to make it profitable for their sakes. There's incentive, but also for the sake that, like, you want to have distributions. You can't have it burning a hole in your pocket while you're in school.

Yeah. Okay.

I would optimize, like, this year for straight profit.

Okay. So. Okay, so. So I have. I've. I've one. One. Two trucks, one trailer and two mowers. So I'm think. I'm thinking, like, do I want to get a second trailer? And then says we can get. Because right now we have one. One truck that's mowing with the trailer, and the. The other just does, like, small property cleanups and most jobs without a trailer. But I have two mowers, so I could. If I get another, like a ramp rack or a trailer, then I can have two. Two, like, mowing crews or like, split up the mowing and have two.

Yeah, Like, I. I'd probably do a ramp rack. That way you can just. You can still use it for little projects if needs be, but it can also be used for mowing. It's a little more versatile. You only are gonna have two employees, and they. It's likely they're going to go together anyways. Right.

Yeah.

So I'm okay with, like, having two trucks, though, because if one goes down and you're out of town, it's nice to, hey, just hop over and it'll work for both. You just want them to be interchangeable. So not. It's not like, if one goes down, you can't do projects or one goes. Then you can't.

Yeah.

Right.

Okay. Okay. Yeah, I can. That sounds beautiful.

The thing is, even if you decide, like, you wanted to stay and keep growing, there's, like, you're never going to regret raising prices and make it profitable. Especially after last year where you lost money.

Yeah.

At 60 to 70 efficiency, you know, you're not going to make great profit. Like, they need to be above 70, which. It sounds like they're trending that direction. I have to believe that if they get a piece of all the profits, they'll be really motivated. And as you raise prices, the profits will increase and they'll be more motivated.

And so the one thing. So I had this. I had a couple weeks in the spring where it was just like, the quality was really, really bad. If I raised prices right then, I feel like a lot of people would leave. How much of a buffer do you think you need after going through a period like that where people kind of forget.

It all comes down to if you're at capacity, like, are you at capacity right now? Like, are you bursting at the scenes with customers or not?

Right now, with the. They have to go into overtime for mowing. And we're still getting New mowing customers.

Then you're at capacity at the, at which point it does not matter about any other factor. You just very fast.

Okay, so but if I get, if I get the ramp rack, then that'll dramatically increase the capacity?

Well, I wouldn't say dramatically because you're still having similar labor hours. It's just a matter of they're going to be a little more efficient because they'll be split up. But if you're getting more customers right now being added, like let's say a couple a week, you're getting added new.

Yeah, yeah. I've gotten like six or seven in the past four days. Five days. My Google business, my Google business listing has been like, okay, for anybody watching this, the Google business listing is overpowered. I got 60 Google reviews and we got like past couple months, like five people a day, like five people per weekday reaching out and it's like, it's wild and zero ad spend.

So if you can, if what I would recommend, like if they're already working overtime, even if you get the ramp record, it's going to bring them back out of overtime. But we know we're adding four or five a week. So like especially while we still have a few more weeks of spring rush, raise the prices now.

Okay.

Immediately. How many mowing customers do you have?

Uh, we have 97 recurring. So, so some are bi weekly. It ends up being like 80 a week.

Ultimately you're probably, if you raise prices, you're probably going, you raise them all by at least 15, 20%. At least. You might lose five or 10 customers. You're going to replace them all in two weeks.

Yeah.

Okay, but if you raise them all by 10, by, by 15 or 20%, you're literally going to bring an extra $4,000 to the bottom line.

The, the thing that like, like you have to balance right, is, is like the higher raise the price, like let's say I lose customers, it's going to decrease their app density. And then if I'm, if I'm doing.

Because you're gonna, you're getting so many new ones all the time. Like we're getting new ones all the time. And right now any new customer you're getting, you're not profitable because they're gonna have to go more into overtime to do that job. Yeah, we need to lose some customers or increase capacity. Yes, yes. Getting the ramp rack and having a second truck that help. But that's like three weeks out by the time you get it here, set it up and all the rest of it, you're gonna need it in three weeks. And anyways, because you're getting all these new mowing customers. So raise the prices immediately, make yourself more profitable, lose some customers, and then in three weeks you will have already filled all of those customers that left with new customers. And you'll be needing the ramp rack then as well, because right now you're at capacity. That's really like, you are at capacity. And there's two ways to fix that problem. You either increase capacity by getting like more equipment and trucks.

Yeah, I'm getting out of school soon, so I'm pretty much out of school. So that frees up me to, to, to work and. But I mean, I'm also gonna be doing estimates.

But yeah, God forbid we make $4,000 profit and you spend a, you know, 500 or a thousand dollars in ads and you get a whole bunch of leads and now you get more customers at a higher price. Right?

Yeah. This is pretty much exactly what I expected you'd say, but somehow it's different when you're actually telling it to me.

Well, the thing is, we always, like. I understand. Especially because you're not. You're still undecided somewhat on the school thing. The inclination is we should keep growing. But if you actually are going to step away from the business within the next few years, there's no reason to grow. You just want to extract as much profit as possible.

Okay.

And even if you do leave, you can now have a smaller business that is profitable, that can actually incentivize the people to run it. That's boots on the ground.

Yeah. So I was talking to my, my dad. He was like, like, what you have now is like, like there's no, no reason to like, if you're losing money on a business, it's like worthless, but like, okay, then over the next 10 weeks actually turn into something that is making some money, then there might be something there.

Like, I genuinely believe you could have it where you have two really solid employees that are working. Because, like, keep in mind, I don't really think it'd be a great move for you to depend your labor to float the business during the summer. I would do like projects that keep yourself busy, just make extra money. Great. But like, I would try to keep, if I was you, to two employees once you leave.

Okay.

Your budget hour for capacity for mowing should basically be at that 60 to 70 budget hours. And once it's there, you raise prices no matter what.

Okay. All right. Beautiful. I love the graphs. Yeah, it's like.

All right. Oh, okay. I had a video idea for you. Okay. So. So you're nice. S. Supply and demand curve. Yeah, you take, you can tell when you're on the phone with somebody who they're going to be. Usually you take, you take the, the videos from a command center of like somebody with like a baby. Like you can hear the baby screaming. They just had a automatic 10 extra $10. They don't care. And then you have somebody who's like really haggling with you. You can like, you can like, because it'll help you like understand like what the supply demand curve actually is. People don't care. You can charge them a thousand dollars they want to care about or. And then these people like they, this is their only exercise for the year. Like, like they, you'd have to pay them to, for them to not do it.

Yeah. And even if you move like there's things you can still do working on the business. For example, like to reduce admin. So for example, like we try to get people not to call in. Like we want them to be on our website checking out. Right. And those optimizations you can still work on the business from afar. You just need to have guys boots on the ground if you're not going to be there to have a massive incentives for profit.

Okay. And so I'm paying them 30 bucks an hour right now. Like I feel it's gonna be pretty hard to get get over that. But I, I don't know.

Yeah, because like you can't really do P4P right now because you haven't hit the rule of 25%. So the rule of 25% is like would assume that you're charging 120 per hour.

Yeah, that's not happening.

Right. So I would say though that it's like, hey, we gotta raise prices. Like I already know if you're, if you're charging, if you're paying $30 an hour, what's your hourly rate? 70.

Yeah.

So you're like 40 something percent of of the revenue going to them. The thing is they're only 60 to 70% efficient. So like then you cut it down again. Now all of a sudden there's like no margin for error whatsoever.

Yeah.

And so you can raise prices though, even if you could get it. Like because if you raise prices on a $50 cut to say 70 bucks, right. That is a 20% increase and that is likely going to move your hourly rate to almost a hundred dollars. I believe that like next season because we're not going to be Trying to grow, and you're getting four or five new customers a day or a week, you're simply going to raise prices again.

Yeah.

And then going into next season, you know, you can't get a lot of customers. You're going to start every new customer at 1:20.

All right. And so is it last, like during the spring, it was like five people reaching out a day.

And that's why you've grown so much this year, all the way to 30,000amonth. But next year, like, we're not going to be able to grow. We're at capacity. So all your new customers, I would just put them right at the price, you know, you need, which technically, really, gus, you need 120 an hour.

That's pretty much my plan. And so is it. So I feel like for door hangers, like, that's the only way I know to, like, kind of actively get more customer. I could experiment. I haven't done any Facebook stuff, but. But the. What I'm thinking is, like, when I do door hangers, people usually are more price sensitive. That's what I found. Like, it feels like if I put like, like a lower price in the door hanger, then they might have.

Facebook is worse.

It's even worse.

Yeah.

All right.

So people that are searching for you and they find you like.

Yeah. Well, that's why I love the Google business, because they go on it, they're looking for it, then they read like 60 reviews of people like, saying how great we are. And then by then it's already like in good shape. So when I'm doing door hanger, because I'm to try to try to keep things going, when I'm doing door hangers, should I still. I'm still like a slightly lower rate or should I put the. The high like a hundred dollar an hour.

We don't need more customers. We got customers coming to us for free right now. And we're at capacity. So if we're going to actually go into profit mode and have you heard me talk about profit mode versus growth mode, Right?

Yeah, yeah, yeah.

You're in profit mode. There is no advertising, okay? Because we are. We can't take more customers. And so any customer that comes in means we have to get rid of another one. And the only way to get rid of someone is to raise prices.

Okay?

There's no reason to even think about advertising. And we're not spending any money on ads because we are in profit mode, which means no advertising. And we raise prices. We hit capacity. We do not extend Capacity.

All right. So the only thing I'm. I'm worried about. But like, so, so I, I raised. Raise price, we lose customers. So I, I've. I have three guys, Three guys working right now full time. If we, if we lose customers, we don't have enough work for all of them. Would you say just let the. So there, there's Uriel and, and, and his brother Jose. One thing I'm a little worried about is if I have them going that, like, if one of them leaves, they're probably both going to leave. And then I'm like, sol. But if, if it's like two people who are like, not kind of associated as much, that might be a little safer. Or, or, or maybe, maybe. Maybe it's better. It's like a family kind of.

Anytime you have two employees, like, you're putting the business at risk because, especially if you're gone. Like, the thing is right now the reason I know you got to raise prices so bad is because you lost money and you were working still.

Yeah.

And so, like, we got to raise prices significantly just to get tread water and then be profitable without you contributing labor. And so whether you have the both of them or him and one other person doesn't really matter. Whenever you have two employees running your business, you are at massive risk. Because if one of them leaves, 50% of your workforce just left.

Yeah.

That's the thing you'd really have to come to grips with if you're going to leave the business is if some, if two of, like one of them leaves and the other one leaves, your business is going to be sold in a week.

Yeah.

Right. So you got to be at peace with that. And the only way to come with peace, to. To be at peace with that is they know that it's printing money. You're giving a big chunk of it to them, so they're like, super incentivized to stay.

Yeah.

And then if they do leave, it was making money, I enjoyed it. And then I gotta actually sell it for something because the clients are all making a lot of profit.

Okay. So I'm in, I'm in like a Philadelphia suburb, by the way. So, like, like in Pennsylvania, just. It doesn't sound crazy to be charging more than like a 55 average cut. Our average property is like either like 5 to 10,000 square feet.

Flying demand, baby. If demand is higher and you're getting all these leads, you cannot sustain the work. Like, your supply is low, your labor supply is low, that lower than the demand coming in, you raise price okay.

It's very simple. It's very simple.

Okay, but. But you will have to raise it significantly because your chart, you're paying them so much and their efficiency isn't like out of this world incredible. Like if they were at 95, 100% efficiency we can make, you know, you'd be okay. But they're not knocking out of the park. I would really, really try to emphasize two employees is your capacity. Anything above that, you raise prices. And if you're there this summer and you want to make extra money, do projects. Let's go do some upsells, send out someone. Click estimate emails. Cool. You'll make some extra cash. Great. But in terms of like making money for the business, it needs to be how many budget hours on the schedule for recurring. Yeah, because you know those are coming in no matter what. And then they are all priced exactly where you want them to be and forever you literally have to say okay, when we hit above 100 customers Price increases no matter what. And then I would, I would, I would write from the get increase prices massively to new customers. Even if your close ratio goes on 15 or 20%. Who cares?

My close ratio right now is at like 33, 36%.

Yeah. So I would, you know, you don't need customers and so you need profit. And so the way to do that is raise price in existing. And anyone that comes in needs to be jacked through the roof in terms of price.

Yeah. Okay, I, I got it.

I got a new one.

It's $90 bi weekly, 5,000 square feet.

I'm like, let's go.

Yeah, I tried it out. I was like, okay, this is, this is possible. Okay, so there's three. So sometimes I str. Like things I, I personally struggle with are like communication, not procrastinating and like being on time flight. Like so sometimes I'm like five minutes late to put like it's kind of like my, I do it very frequently where I'm like five minutes late to somewhere. Sometimes I, I drop the ball on communicating with things and like in, in school I'm really bad procrastinator. Like just, just that's my standard way of doing things. Like just, just wait until I have no other choice and do it. Which of those. How do you think you'd go about like or what. What order would you try try to fix those?

Why, why do you think is. Why are you labeling it as bad?

Communication is, is bad. So sometimes like when I'll like I'm good at like talking to like meeting New people, like mentors and stuff. And then as soon as I, like, just stop following up. I don't really know why, but it's like missed opportunities.

Like following up to estimates.

No, no, not, not with that. So, like, like, well, sometimes, sometimes with estimates and just, just in general. Like, it's very strange, but it's not ridiculously bad communication. But, like, I just feel like it's.

Not 100. Who's telling you that?

I am. I just. Well, they're like, when there's a lot of stuff coming in, maybe it's hard to get to it all.

But don't, don't worry about it. Like, look, there are horrible communicators that are super successful in family, in life and in business. So just look at the results. Just focus on the results. Like, you can't change yourself without massive amounts of reps. So if you want to get better communication, put yourself in more, More situations. You need to communicate, right? Put yourself in awkward situations, date people, go out with strangers, meet new people. You're going to school. That's a big reason why you go to college is for communication, right? So, like, even if you don't learn anything in engineering, like, you'll get better at these skills. So just embrace those, those scenarios because that's what will, you know. If you want to get stronger, you go to the gym and you lift heavy things. If you want to get better communication skills, put yourself in the place where you're going to be communic. Right? In terms of being late, it's like people will wait a very long time. For important people now you can be as late as they want. So be I. I would recommend just making a resume so good that people are. They would be thrilled. If you're five minutes late, they could care less if you're an hour late. They just want to see you. And then it becomes a matter of like, well, is it a matter of respect? And that's when it comes around like family and things like that. Like, people don't feel respected if you don't respect their time. Right? That's just a matter of you will learn these skills. You're still young. I would not worry about this. Don't beat yourself up about it at all.

Okay. Well, if one thing is I'm capable of change, that's that. That's. That's my motto. I'm able to change. So in time I will.

If the work is put in and the reps are done, change is inevitable.

Yes.

Cool. Well, hey, regardless of whether or not you Go to school or not. Like I'm very confident. Like you need to raise prices if you're going to be having $30 an hour labor. And by doing that you increase your budget hours. That'll make the efficiency score go up. And then if you do end up leaving, I try to keep it the two people. As soon as you make three, you start creating lines and you need a manager pretty badly. Whereas if there's two, they're kind of partners, they both get a piece of the pie in terms of profit. You can open up the books to them, but you need to make it where it's actually profitable so they actually care alike. An owner would. So otherwise they'll still just look at it as a dollar per hour labor and they'll just run you dry because you're out of, you're out of, out of town.

Okay.

All right. And so if I, if I, if I do end up selling it. Well, I, I know you have videos, but if it's not profitable, you just go like just. So I have two, two people I was talking to. They might, they said they'd buy like a customer list.

Did they give you a price?

No, no, I'm, I'm talking to them on Wednesday.

Yeah. If I was you and someone gave you a good, a good offer, I'd probably just take it because you got to figure out school. It's not like you're gonna make a million dollars while you're in school with this part time thing. Even if it is probably at best gonna make $5,000 a month in profit with you not being there and meal contribute because they're gonna have to do all the overhead stuff, all the equipment maintenance, etc. It's just gonna distract you a lot from the business, from school. You might in the best case scenario come out of school with like $150,000 extra. Yes, that would be awesome. But also that's best case scenario. Assuming no one leaves, you don't have to rush back home because some they both leave at the same time or they both have a, you know, disagreement. And so I just, I want you to get through school and focus on that part if that's what you want to do long term anyways. And then you can always go back and start again. And you're only going from, you know, right now 30, 000amonth. You'll get back to that in one season if you ever decide to start again.

Yeah.

Because now you have the skills.

Okay. How much do you think would be a good price for, for like Like a hundred hundred lawns.

How much, how much in mowing out that 30, 000? Is it like 24 of it is mowing?

No, like, like 20.

20. Okay. And there's 90 right now, you said.

Yeah, well, it was 90. I've now, now it's up to 97. So the 20,000 was from 90. And so, so it's up like 11%.

Like, personally, I would buy it for $20,000. Cause I wouldn't want to spend more than double my, my average customer acquisition cost of a hundred. Now, if, if, if they, How I would be pitching this if I was you is try to get 30 grand at least for the customer list.

Okay.

That would be a good deal for them still. They'd be paying a little bit of a premium. And then how you're. You're not gonna go the route of customer acquisition costs. Don't do that. That's how you get a low price when you're trying to buy. Yeah, you don't talk about that. What you're gonna talk about is like, hey, we made $20,000 in revenue last month. I'm gonna sell these to you for 30. In a month and a half. You're gonna get all the, all the revenue back.

Yeah, okay.

Right. That's how you're gonna pitch it. But if you're ever buying from someone, you look at the customer acronym cost, you deduct a percentage of people that are going to leave anyways, and you come up with a real number. But if you got 30 grand for these people, I would, I would probably just take it if I was you.

Okay. Yeah.

More if you can get 35 or 40, then you're crushing it. Done.

Yeah. And then. Yeah. And so then I've trucks too, and the equipment. If I'd sell that, I'd probably maybe get up to like 45 or something.

And you got a bunch of experience. And again, what's taken you three, four years, you would do in six months if you ever started business again. So you've learned, like, there's a huge amount of benefit. It's not like it's a waste or anything like that.

Yeah, yeah. The one that, yeah. Last year I, I got, I didn't get into the travel. I was like, I'm learning. It's okay that I'm not making money.

All right.

But then I became kind of weak, like.

All right, well, best of luck to you. Have a great weekend.

Thank you so much.

You got it, man. Take care.

Bye.

Bye. Bye.