Addicted to Debt… and Ford F-450's (INTERVENTION)

This is just as bad as drugs.

On this episode of business boot camp, it's racing on.

Let's go.

See, this is the F450 everyone's ragging me on.

I mean, you think it's a bad idea if I take on more debt?

I would.

You didn't even have a confessional right now, bro.

$300,000 of debt, $2,000 in the bank.

Oh, I didn't know that.

It's insanity.

Now I'm kind of in a pickle. How much of a chance do you give somebody?

You guys did very little jobs today. We need to pick up the pace. Was this a smart choice?

No.

Of businesses will fail in their first three years.

I'm Mike Andes, and I'm on a mission to fix this. I know the fear, and I felt their pain.

For the next 30 days, these owners.

Will be sweating it out while trying.

To avoid becoming another statistic on this season of business boot Camp.

Hola.

Como estas?

Last week on business boot Camp, we caught up with Aaron from Arizona yard maintenance.

I would like you know, yourself to. To be able to understand the picture before I take your advice.

He was literally $300,000 in debt with only $2,000 in the bank account.

I might be broke, but I look like a million dollars.

And running his entire business off of his reminders app of his iPhone.

The downfall in doing it this way is it kind of works off the honor system, and it works off of my brain.

We talked about how he needed to get onto a CRM software system to be able to take the business to the next level.

With that being said, I look into jobbers.

However, I don't think he's learned his lesson, and I caught up with him in person on this week's episode.

Yeah, you have a confessional right now, bro.

And he's actually considering getting more debt.

No.

I have nine guys working for me today, two different crews. What I'm doing today is basically hanging out with my daughter, getting prepared for a trip. I'm going to Kentucky. Louisville. I think that's how you pronounce it for a equipment expo. I'm gonna fly out there tonight. Today I am a chaperone for my.

Daughter'S first field trip.

You know, if I didn't build things up in my business, I wouldn't be able to afford to do this. I wouldn't have the time. I'd be out there grinding like a lot of you guys, you know, just trying to survive, you know? I mean, I guess I. I'm trying to Survive too, you know. But what's nice is that I built up a business where I can rely on, you know, other guys to run it for me. All I have to do is, you know, about, you know, 45 minutes of paperwork at night. The set off the schedule, gets it done, I get paid.

Right now I am in Louisville, Kentucky. Right now. We're staying at the house, staying with Tigrin Gertz, part of Goat Gang. You know, we got a pool. I'm gonna try to talk Tigran into jumping in it. He was talking about being primal and, you know, doing things that are uncomfortable.

So second draw.

Wait for the second drop.

We are on the way to the equipment expo.

I am on a 92 foot boom lift, thinking about purchasing this. I got this thing fully extended. The boom lift I have now goes 50ft up.

This is 92.

I think I'm gonna sell my 50 foot by 92. I wanted to come down here to check out the different types of equipment and suppliers that are throughout the country. I just found this supplier. It' Jenkins Iron and Steel. It looks like they have some pretty good deals. We got this mini backhoe and thumb for $2,100 delivered to my door. Definitely a great find. Also looking for my candies. I can't find him yet. I know that he stopped by the Goat Gang booth, made a nice video.

Jobber. I know we were talking about prior. So where are we at on my.

Plan tonight was to start incorporating everything into Jobber tonight. But after consulting with a few people, I think that's a bad idea. I didn't bring a computer, so doing everything off of my phone could create some problems. I don't want to have any problems. I'd like everything to go seamlessly. I don't want to have duplicate accounts.

So I'm actually next week I'm going to dedicate a day moving all over just at my house, in my office.

And then so this week, obviously you came here. Who's managing the accounts now and how are they? How are they done so far?

Using the past few days, it's myself managing as far as putting out the schedule. And then I have my foreman. I send him to any of the difficult jobs that are just more complex that have to do with the irrigation.

All right, so we're going to break this down. Why do you think you need the big trucks? I want to go over this because I saw your comment on YouTube on.

One of my ones.

Yeah, we saw. We saw that.

I want to go over that because I agree with you to some extent. And I disagree with you on some other extent. Walk me through your logic, though, on the.

The trucks.

So that truck, I had already ordered that truck, so I've already wanted a 450 truck. I figured it would be good for marketing purposes. Like, oh, this guy has his stuff together. He has, like, this, you know, $100,000 truck. Like, you know, just. It gives you. It puts your foot in the door as far as, like, credibility. In addition, with everything else that they already may know about me. It has crash detecting. I know myself. I'm extremely busy. I'm on my phone and I would like that alert, like, hey, you need to stop.

Yeah.

Beep, beep, beep, beep. You know.

Yeah, yeah.

So. And it actually did save my butt once, you know, where I had to lock up the brakes because I was on my phone texting. If I was driving my, you know, F350 truck that didn't have that, I could have rear ended someone, hurt someone. You know, that truck saved someone's life, you know, so.

Oh, man.

I guess you could just not tech and drive.

Yeah.

But then I couldn't manage everything.

Okay. Cause, like, what do you think? Well, I just. It's a lot of debt. And I understand our plan is like, to grow out of it. I get that 100%. I'm just concerned in the meantime, like, the next 12 months, I think if someone was doing, say, 1.5 million, I'd be okay. 300,000 in debt. I get that, right? Like, even I was talking with TJ yesterday. He said about 3,400,000. That makes sense to me because he does 3,4 million plus. I'm concerned when there's that much debt and such little cash. And then my question is, from a marketing standpoint, could the $1,700 per month on that spent on marketing and actually get more customers than the image that is currently using on the truck?

Yeah, I mean, it could, you know, I mean, I weave this back in my head too. I feel like I purposely put myself under that. That stress or that struggle, just be uncomfortable and force myself to get ahead.

The only way in my mind is just growth. Like, massive growth. You'd say about 20 to 30% of your revenue now is from the project side. 70 to 80% of it is from the maintenance side. What was that like last year? Was it mostly maintenance? And now you've. You're really going after the projects. Is that kind of the goal?

I mean, I've always liked the bigger jobs. I've just had to rent the equipment to get those bigger jobs done. And then now I own the equipment versus renting it. But I've always kind of put myself. So I don't have a lot of money in the bank.

Right.

That's how I've always been and just like, pushed it, you know, right back towards the business to grow, grow, grow. And it's worked. But I know it's risky.

As long as you know it's risky because it's extremely.

Okay, yeah. I mean, go ahead.

No, no.

I don't really have anything to say. It's scary to me, honestly. I don't do as well underneath that financial pressure as you do. It seems like you really put yourself there almost in order to force yourself to just keep kicking butt.

If you want to be here, you got to get something to be there.

Yeah, I would not be happy with that.

There needs to be a spending freeze.

Last week on business boot camp, we caught up with Dylan from urban roots lawn care in Tacoma, Washington.

Just feeling a bit frustrated by the scope of work this is turning into.

He's grown his business literally more than double over the past year. However, he's starting to outgrow his current garage, and he needs to find shop space.

We're starting to monopolize the space out here. Don't think the neighbors probably appreciate it too much.

He also needs to learn a dependable way to get new customers and marketing his business online.

Got a chance to post a performance plus Matt's campaign. So we'll see how that does in the next few days.

Let's catch up with Dylan and see if he can't figure out these bottlenecks.

To the growth of his business.

First thing in the morning, get a text message that one of our employees is not going to be in today having car troubles. You know, this is, I think, the third time in about five weeks he's not come in. I just tend to want to operate and just trust what they people are telling me. It's legitimate. Three times in five or six weeks of employment. That's kind of a lot to call in, I think.

All right, I made it to the sod farm, JV and salon. They have a great product. Two and a half hours of driving to pick up less than 100 square feet of sod. Such a bummer. I think I've learned my lesson on measuring, but looks like it's all going to fit. All right, we've arrived at the job site. A couple little things to get buttoned up here. Got this section we have to finish. So we picked up the sod floor, and we're gonna go grab some gravel, pack that in there real quick and be all done.

How was the week?

Geez. So we've had an issue where I'm contemplating letting one of our employees go, one of our newer employees.

So we'll see.

I'm gonna have that conversation after our conversation and still milling over it right now. But besides that, it's okay.

Why do you want to let them go? And are you mostly mulling around it because of the timing of the year?

It's an interesting, like, the way things played out.

We're just finishing a sod job. Things happen really quickly. We had an employee who texted in the morning, said they would come in late, didn't come in, and then I didn't hear from him until the evening. Then the next day, text texted, sick again. Didn't follow up with me until the evening.

There was a message from the employee that, oh, I'm not feeling well in the morning. And they said, I'll be in just a little bit late. I'm sleeping in. So I'm like, okay, just text me. So I went to the job. I kind of fill in that position for the employee. The employee didn't message me until that night.

Just never came in.

You know, it was supposed to come.

In just a little bit late.

Said, oh, totally. Being tomorrow, it's all good. And then it was like the next day, same thing, not feeling well. And that's all I got. And I was like, what does that mean? Are you wanting to sleep in or are you not coming in today? Didn't hear again until that evening.

Coincidentally, someone called looking for work midday on that second day. So I did the interview just trying to be proactive just in case the employee fell off and kind of ghosted us, which has happened to us before.

Around noon on that day, I was just kind of frustrated with the lack of communication. And I had been ghosted so many times at this point where I was, like, kind of freaking out. I'm like, I'm going to start hiring. I'm going to post on indeed and do all that. And then I randomly got a call on that second day at noon, and someone's like, are you hiring? And I'm like, actually, I am.

So I went through this entire interview with this person, and they had a lot of experience and would be a good asset to our crew from what I could tell so far.

Met up for an interview later that day, did a working interview, and it's Working out great.

Now I'm kind of in a pickle where I have to be decisive and decide, you know, do I draw a hard line on this type of stuff with an employee having that lack of communication and calling in sick, but not also not following up with kind of adequate notice as to when they're going to come in and just. And then we also have this other person who we've already interviewed and they've done a working interview now today, and they're working out great. So that's a tough one.

Is this more of an ethical dilemma because you're concerned about the fact of whether the timing of the year is playing into this? Because from a business standpoint makes a lot of sense. Like you found a better fit, you'd be able to make an example of this person from the rest of your team and you've got a better working employee.

Yeah. So you've hit the nail on the head.

I do feel like I need to set a standard. And how much of a chance do you give somebody?

Right.

Is it more of a pattern of behavior or are there just these kind of hard rules that I need to follow?

I mean, I was told this week, oh, we think you're a little too nice sometimes. So I think that's a big sign that it's like maybe I agree.

You know what's funny? When the media team came down for zero turn, that's what they said about you to me. They said, I think he's a little bit too nice.

I am kind of a people pleaser. So I mean, I get that part of it too.

I like to too. But like ultimately, like what we talk about all the time is like, you don't make a standard in business until you fire someone over that standard until next suggestion. So if you want them to communicate well, if you want them to show up on time, that is a suggestion. Until you fire someone over that. Honestly, in my opinion, if you have a replacement, this is like a gift for you to be able to do this without hurting the business. And that is make an example of this person and everyone that's currently there, maybe for the next three to six months, has a massive impact on them. This happening in the middle of spring rush, big problem. I think if you don't cut it in the bud here, this happens in spring rush with another team member. And now you just. Now you won't let them go because you need them. I think this is a teed up position. Teed up ability to be able to make like an example of It I.

Ended up letting go one of our employees. This employee just seemed like a good person. But again, we need that communication piece. So if that's lacking, it's just not going to work. And I'm hoping that that'll kind of show the rest of the crew the standard that I expect in terms of sick days and how to appropriately take off and communicate with me about it. But, yeah, so that's never easy letting someone go.

I have the trucks. I have the equipment. I just don't have the guys.

Last week we caught up with David from headman movers, who was having a very hard time doing two things. Number one, it was hard to find employees and keep them for any meaningful amount of time.

He actually just sat down in my office the next day and then put.

In his two weeks notice.

And we talked about trying to pay them a percentage of the revenue of the job instead of just an hourly wage.

When the crew is getting a percentage.

Of the labor revenue, they will absolutely demolish other employees that make them late to the job because they're sitting in.

The truck not making any P4P.

We'll see how that turned out. Secondly, he's having a hard time finding work in the middle of the month.

We had zero jobs on the books.

Because people move in and move out a lot of times around the end of the month and the beginning of the month. But during the middle period, it gets very slow and it's very hard to find work.

Just trying to keep the crew busy.

I didn't prepare for it to be so slow.

Let's find out today if we can find a solution for that problem.

We're going out to the bin to me or speedway, and we are gonna race the big moving truck against a Ford Raptor. Looking forward to having some fun with the team. Look forward to getting some content after that. I'm gonna be calling leads, following up with leads. I got a few in home estimates. Just trying to book as many jobs as I can today. The next two weeks are actually pretty slow, so the season's slowing down a little bit. So I really just got to step it up. Yeah. So I'm looking forward to to the day. I'm sure the guys will all be positive, have great attitudes because we're gonna have some fun today.

Light her on up, boys. It's race time.

All right, go.

All the headband trucks are gonna get it.

Going over my books today. I'm gonna open up the books to the team, sit down with them, giving them an idea what the company Is making what the company is spending money on, what it just takes to operate the company. So I'm gonna open up the books to the team. A little bit nervous about this. I've never done something like this before, but I think it's a good idea just to be transparent with the team.

But I did get the chance to sit down with my main lead and my dispatch manager opened up the books to them and it went really well.

So what was their kind of reaction to that?

They were surprised about how much money it cost to operate the company.

Okay. And what was some of their questions they had when you did that?

They really didn't have a lot of questions. They were just more so surprised. My kind of explained while I was opening up the books and I just said that we'd get the opportunity next week with the entire team to actually sit down and dig into it. And if they have any questions, they can just address it in front of everybody.

Today was a great day. Had the chance to talk about my books with a few of the guys on the crew.

Everything went smooth.

It was great to be transparent with the team. Looking forward to sitting down with the entire team. Have a conversation about the company's books and what we're spending money on and how much money the company isn't making.

Did they change their behavior at all? Like, was it a matter? I feel like those are the guys who've already bought in. More. More or less the other crew members that are going to be the ones we're really trying to work on.

Is that correct?

Yeah, that's correct. They're. They're both bought in. They're both solid. It would be the. When we get the group together, some of the newer guys, it'll.

It'll.

I think it would be really good for them.

I'm super happy that David has opened.

Up the books for his higher level management team.

But now he really needs to open.

Up books to the full team to.

Get the full impact of what open book management is all about.

And that's clear, transparent communication with your.

Team today to see exactly how much.

Money the business is making.

Did you share with those guys just to kind of dip your toe in the water? Feel more comfortable with doing that before you did it with the whole team next week?

Yeah, man. I was really nervous about just even opening up the books to anybody and then having that. Those initial conversations. I feel a lot more confident doing it and I see now how beneficial it can be.

We talked last week a little bit about the potential of trying to Pay the guys more of a percentage base instead of an hourly wage. Were you able to run any of the numbers in the back end or kind of seeing what that would potentially look like if we did that?

I brought it up to like three of the guys, guys already. And they're like, oh, okay, that sounds interesting. What would that mean? But I haven't had the chance to just really go into detail about it.

But if you keep seeding that to the guys, keep getting their feedback, I know. Even if it's something that you're kind of apprehensive about or even just like you're not sure how that would work, if you can even get them to like, hey, we want to try it out. Let's see how that works. Try it out for a week and just see what that changes. But first before we do that, we need a baseline. And that is okay, how many hours are worked divided by how much revenue was made. That's going to give us our effective hourly rate. And then take that number and divide it by what we charge per hour to the customer. That's going to essentially give us what percentage of our day is billable versus what, how much percentage of it is non billable time. I'm also hoping he can get to.

Know these numbers so he can determine.

What his efficiency score is and determine.

Whether or not a percentage based Pay.

System like p4pssoftware.com would be able to.

Eliminate a lot of the waste that.

Is in between jobs and be able.

To pay his employees more until you actually their pay is based upon it. It doesn't move the needle. Like their behavior will not change on wasted time until their pay is. And then if you run a week and tell me, hey gu, I want to try this out. I want to see if you guys can make more money doing this.

Let's.

I want to give you guys a percentage of the revenue that you make in a day and you can just say, hey, we're going to try it at 30%. Oh, and by the way, you can't make less than you make typically on hourly. Just to give them the coverage for that week. Like, hey, for this one week we're going to do this trial period. I want to see if you guys like it more if you're able to make more money and you can't make any less than you would on hourly. And if you do that for a week and then all of a sudden you run that math and it goes from when I is going to be like 70% efficiency to 85% efficiency. That is a lot. That is massive in terms of just profitability. And they'll be able to make more money.

I've turned down a lot of work. A lot of work in the last 3 days.

I've turned about 15k down.

The business right now is not doing good. I know I have a lot of like nice shit, but I really don't have a lot of money in my bank account.

I don't think that Aaron is understanding the severity of all this debt. I am proud of him for overcoming drug abuse in the past, but I'm afraid that his addictive personality is coming to light in the form of overspending on excessive equipment he doesn't use all the time.

Let's check back in and see if.

I can get through to him.

Tell me a little bit.

Steven had said at one point you were really, you were really into the drug scene and all that sort of thing. What helped you get out of that?

Really what motivated me was having my daughter. I got into drugs because of depression, self medicating. I seek help and it just, it wasn't working. You know, they could only see me like once a month for one hour. And that just wasn't gonna cut it, you know, because I had some deep issues.

So you had your daughter and that was kind of wake up call you needed.

Yeah, I didn't want to have this innocent child, have a father that's like a deadbeat, you know. So, yeah, I just, you know, suffered through it and got off of it.

Yeah.

Like.

It'S almost the reason I asked is because like there's a couple friends I have that I've seen. They came out of that and then they really got, instead of drugs, they started putting it on like other things. And what I don't want to see you do is put identity in the trucks and the equipment.

So would you be feeling different though if I had like $60,000 in the bank right now?

100%.

So, I mean, you think it's a bad idea if I take on more debt?

I would.

Is there. Do you even have a confessional right now, bro?

Well, because I want to get another truck. I'm waiting for it to be built. Another?

You already have the order in?

Yeah, I put it in last year.

But this truck's cheaper.

Check it out. This truck is msrp. So I don't have to overpay for this truck. So I could actually sell that truck for more once I get it.

Are you gonna sell it?

No.

Boy.

How much is it worth?

It's like a $90,000 truck. It's just identical truck to what I have now. You know when it's made, when Ford gets around to making it it. But hopefully by then I'm in a better situation. I know, but I'll have 60 grand in the bank.

This is, this is seriously like, this is seriously like almost like the drug thing because it's like I'm always gonna get better. I'm gonna get out of this. I'm control this. And it's like this is just as bad as drugs. It's like a, it's like a financial drug. Like you can always take more debt to get the business keep going on forward. Yeah, but like ultimately you can build a five million dollar business, but if there's so much debt, there'll be no profit and it'll just be a, it'll just be a, a bigger mistake. And so I would, yeah, I would.

Not be happy with that.

There needs to be a spending freeze.

There does for what, a year?

There's no until you have X amount in the bank and until the business is doing X amount of revenue.