Are You Offering Too Many Services?

My question is my. I wanna do about 30 plus in net margin revenue or net margins in the business, which. Beyond. Beyond for what other services I could add to be able to grow this business. Because I know mowing, you know, I'm not gonna get hit those numbers.

So here's the thing. Which, which market are you in right now, Iggy?

Sacramento, Northern California. So, so like barrier.

Yep. So the question is, are there mowing companies that do, let's call it 5 million or plus in that market?

Sure, sure, there's plenty. Yeah. Okay.

Okay. And then are there companies that do just fertilization, weed control and they also do more than 5 million in revenue?

I don't know. I only know TruGreen's only here. That's it.

Cool. 80 billions. Let's go. So what I'm getting at, Iggy, is I don't think adding more services is necessarily the thing that says like I should, should or should not add more services to generate more revenue. Because a lot of times what people do is instead of they spend all this time and energy starting a new service, instead of just taking all that time, energy and money and advertising dollars and putting it toward their core services, they grow the business just as much if not more and generate be more profitable. But more importantly, it would be simplified services or standardized services that could actually run without them being there. And so what I get cautious about is okay, we already have mowing, we already have chemical applications. If we starting, let's just call it irrigation because that's a high margin service. We can definitely. Or pest control. We start adding so many different degrees of separation between training different departments, having different types of managers and start adding complexity to the business when reality each of the services you've mentioned, you can build a massive business on the back of. It's not a constraint of your, of your, of your market. And it's proof in that competitors have done it and you have a huge population and there's plenty of people with money there. And so I, I would say choose the, the service that you know you want to be doing for the next 10 years. Because applying yourself for 10 years to any of those services will make you a lot of money if you just execute correctly. And so I would focus first on like which one am I choosing? You're in a great market, there's people that want to have money. Just think that you're going to add more services on your way to growing bigger and is usually a recipe for one day having to unwind a very complex business. So you can actually have a life outside the business. Like, I just got. I. I just got off the call with a guy that has $14 million doing fencing, and he hates his business. And he, he. He basically needs a turnaround because he cannot run it without him going. He. He can't go on a vacation for three days. You don't want a business like that. He doing welding in house. They're doing all sorts of manufacturing of the lumber, and they very profitable too. But he hates the business. And so, like, my diagnosis is strip this thing down to 5 or 6 million, but do it based on one service that you're most profitable, that you love doing and that can run without you. And so I would focus on building right now that business model, which is simplified. I'm going to stick to a couple services and I'm going to be able to standardize and hand it off to someone one day.

Sounds good.

And then I had a quick question about VAs, just quick.

Do you.

You don't. Do you use virtual VAs like from the Philippines to pick up phone calls? So I have a manager that runs a whole office.

Doing like, estimates, billing and everything. And they're really affordable, like 10 to 5 to 10 bucks an hour.

Yeah. So it's absolutely possible. Keep in mind that managing someone that's remote is very difficult. It'll actually take just as much of your time sometimes to manage them as much as you just doing the work yourself. So everyone likes the idea of getting someone five or ten dollars an hour, but if that person does half as much of the work that someone in your office does, you're breaking even. Furthermore, if it takes twice as much of your time to manage them because they are overseas, or there's a language gap, or they understand what lawns are, which is a valid thing over in the Philippines, by the way. Some of their markets, they don't even have grass. And then mowing is not a thing. There's so much more training that sometimes is baked into that. Like we assume how to answer a phone. Like, you say your name and you see the company name, that might be something you have to retrain. So I've seen time and time again, people go through churn of VAs and they spend two to three times longer training them. And that time that you're spending with them is otherwise you doing other tasks in the business. Just be careful of that. But it's absolutely possible. Yes. Next one up. Go ahead, Tori.

Harold is up.

Yes. How y' all doing, man? I appreciate everything you do, Mr. Mike, my question was on the onboarding I was, I'm coming from service autopilot, been with them for about four years. Just the, the onboarding as switching all. I don't know if I can do services or clients and all that. Would you have someone like a, a call session that kind of get me swapped over or is that just me just going through those courses of onboarding courses?

Yeah. So the onboarding course is super helpful. Copilot University is super helpful. Well, we do have also Harold and it's kind of first come first serve. So the, the wait time is sometimes between one to three weeks. We do white glove it for you which means we will take your CSV file and actually import everyone, we will put everyone's tags where you want them. We'll do it all for you and it doesn't cost anything. Right now eventually we're gonna have to charge for this. But if, if that's something that's a huge blocker for you Harold. What I would recommend personally is watch the training. See. Okay, what does this look like? If I have to move this in, if that seems daunting to you, make a call with ATC and then they'll kind of say hey, we're probably thinking around two weeks or three weeks but we will get everything moved in for you. So that's definitely an option if you want to go ahead a hundred percent.

And that's just booking a call just, just from the, the drop down menu, correct?

You got it, yes.

All right, thanks.

Benjamin Berry is up next.

What's going on?

How you doing man? Nice to talk to you again.

So we're getting really close to launch, man, and I'm gonna be a solo guy and I'll be out here doing.

Oh, you muted yourself, Ben. Ben, you muted yourself accidentally.

Goodness, sorry. But so I'm going to be a solo guy and I'm going to be out here doing most of the work and I'm going to do most of the office and admin work as well. So what do you think the most crucial or the most crucial automations for someone who's going to kind of have the weight of doing a lot of work and doing a lot of admin stuff as well.

Are you trying to grow fast Ben, right now? Are you trying to be as profitable as possible?

Extremely fast? We're going to, yeah, we kind of have it worked out where.

I have a partner, he was actually on this meeting until the question and answer started and he's, he's grown a medical manufacturing business like 20 million and sold it, had a couple partners. And so he, he's very, very detailed. And we've broken down every, we know our costs, basically every replacement piece for every piece of equipment and how much it's going to cost us per square foot. And all this stuff is all broken down. But we just need to know basically where is the weight going to be lifted off of me the most to allow me to be able to perform at the highest level in both aspects.

Okay, so you have like five questions. I'm going to track the first one which is you're trying to grow. What's the automation that you really want to focus on? In my opinion there's only one thing to focus on when you're trying to grow fast and especially at your size and that is close ratio. What percentage of your estimates are getting accepted and versus the ones that are being sent. And so I would really lean into here in March as you're going to get the, the, the ability to see why people are declining, to really figure out a system as to follow up for declined estimates. So what I'm trying to do is I'm trying to get above 70% close ratio. If you're under 70 close ratio, there's something wrong because it's going to be very difficult to grow and scale if you're having 30, 40% close ratio because your customer acquisition cost is going to be so high based upon that close ratio and you're just simply going to take way longer to grow the business. So I recommend if you're trying to grow really quickly, 70% plus we're talking like 75 to 80% is a nice range. When you give a 90% close ratio, usually you're leaving money on the table and you should probably raise prices. You could probably raise your prices and get away with not losing very many customers. But I would be shooting for above 70%. To do that I'd be focused on two things. Speed to lead. So on every single estimate, the very top it's asking when did the customer ask for the estimate? Fill that in and track it and, and make sure that's as low as possible. If they actually do it over the phone, that then you just click the now button. But if they ask for it on Saturday and you're getting to it on Monday, that's two days you drive the speed to lead down. And secondly, the automation I'd be focused on is the follow up sequence. I'd be calling, emailing and texting people as much as I possibly can. The first two Days, as much as I possibly can, the first seven days. And until they give me an answer, yes or no, there is no such thing as a pending estimate 30 days later. Pending estimates are estimates you have spent time, energy and money. You get the estimate done. Whether it be the design, whether it be over the phone from an admin staff to give it over for mowing. It is a matter of we deserve a yes or no. And I'll be more and more blunt like that toward the end of that month. But I'm not allowing an estimate to go past 30 days pending. More importantly, I would actually push that to seven days, especially if you're doing recurring services, because after seven days they're finding someone else. But within those first 24 hours, I'm definitely texting, emailing and calling them.

Do you have any ideas for following up with people other than just the generic, hey, I'm following up on the estimate. Have you figured it out yet? Do you have any ideas for like how to approach somebody?

Yes, yes, I have. I have 12 different ways to do this. So instead of going through them now there's just go to mikeandy.comworkshop and in.

In cure number 1, 2, 3 there is a list of 12 things to do when you call someone to follow up. You never call up just to follow up. You never call.

Exactly.

Hey, I wonder if you have questions. Hey, I'm just calling if you got the estimate. Those are weak, those are novice. You have a reason, whether it be an offer, whether it be a date, whether it be like, hey, we need pictures for our website for this service and we wanted to offer it to you. My crew loves this type of work, this job specifically. We love to do the work for you. We'd like to get more jobs in that area. So we want you on next Thursday. So look at the workshop, it's free. And there's a list. Screenshot it. All of us, when we do our follow up calls, we have that list right next to our computer and we're choosing one and dialing. Because if you leave a voicemail saying, hey, do you have questions? And they say no, or let's say they get the phone and say no, I don't have questions. I'll get back to you when I, when I, if I have any questions, you're, you're stumped. If you get a voicemail, you say, if you have any questions, give me a call back. You're also stumped, like there's no more follow up allowed. Socially acceptable. Whereas if I give them a Reason for my call and I say, hey, tomorrow I have a spot came available and as a solo operator, this is why I'd be using band. Hey, I was the estimator, but I would love to get this done for you and I know it's really important to you because you got a promotion party next week for your daughter. I'd love to get this done for you.

I'll.

As they estimate, I'll do the job tomorrow. I'm gonna move some things around my schedule. Like that's why I follow up. Okay, man. Next up, Tori.

Yep. Anoop. Matthew is up. Hi. Quick question. We wanted to find out if.

This program does some of the accounting software sort of part of it where it collects the payment and, and, and so on. Not just like credit card, but also if somebody was to send in like ACH or something like that, how would that be taken care of? And payroll.

Yeah. So payroll. Yeah. So great. So I'm gonna break it up because you talked. You said the word accounting and then we talked about billing and invoicing. So it does invoicing, it does billing. And part of billing is it can take credit cards and it can take ACH and you can put those on file. So for example, we do all the processing to stripe. You're going to be looking at around 3% as processing fees for a credit card. And then you're going to be looking at 1% for ACH and it caps at 5, $5. So I like ACH if I'm doing massive projects because I'm capped at $5 processing fees, even if it's a $50,000 achievement. So I really like ACH. That being said, in terms of accounting, we do not do accounting. Now, typically when I say accounting, I'm talking about creating a P L. I'm talking about creating a balance sheet I'm creating. I'm connecting my credit cards, my bank accounts to the software and categorizing transactions. I would recommend using QuickBooks for that. There's just no way we're ever going to create a software product as good as them when it comes to categorization of estimates or, sorry, of. Of. Of expenses, tracking the asset values or loans and everything in one spot. So we don't do that function. And then in terms of. The last thing you mentioned was payroll. We do not run payroll either in, in terms of actually moving money to the account of your employees, but you can do time tracking to get the information required that you would then put into, say, QuickBooks to run payroll or if you Use Gusto or another software that does actually run payroll, pays your, you know, your quarterly payroll taxes, et cetera. That part we do not do. Does that make sense?

Yeah, it does. One more quick question though. Does the contract that we create, like if we have our own contract and we put all that jargon and right now we're using DocuSign to send it to the customer, does that. Is that in the copilot?

So right now, how long is that document like one pager that you're putting in?

Two page.

Okay. And for what services are you using that for?

All of them. So everything there's a, you know, mowing, fertilizing, Mowing, fertilizing, snow plowing, lawn care, anything related to that.

Okay, and are you having them sign that as like a contract, like a 12 month contract? Is that what that is? Yes.

Service agreement? Yeah. So we. Sorry, Christian. You're right, I apologize. Not 1%. It's 0.8 on the ACH. But yes, the. What we usually do is put it on the estimate. We don't make a separate signature document. That being said, if you wanted to, there are several ways to do that. One, some people are making them attachments of PDFs, some people are making a link to a DocuSign inside the estimate. There is a signature block inside of copilot where you can collect the signature. It's not going to be as beautifully integrated as DocuSign. This is something that next year we are looking at in terms of like custom forms and better signature, digital signatures, et cetera, where you could probably eventually get rid of DocuSign completely. I do think, and this is something that I'm happy to dig in with your. On your goal session too, is how do we get that information on the estimate in a very much more concise manner where it gets the same point across, it still holds the same value, but when they click submit, it's the equivalent of a signature. And then that way there's less of a feeling of a contract. Are you trying to grow it now or you're mostly just trying to make as much profit as possible?

We're trying to avoid having to spend so much time on doing the, you know, the day to day operations so that we can just be out and do the thing that we actually like, which is being out with their customers and doing the work.

Yeah. You know, I can certainly look at this on your goal session, but like I do believe that you could get all that information that's currently in DocuSign into an estimate. Use the item and description, the description on your items and services to make it tailored to the services that you're selling. And then when they click Accept they're accepting the proposal. And in the vast majority of states from a legal perspective that signature doesn't hold a whole lot more value than a digital footprint of you clicked Accept and I would assume that also you're probably not taking people to court over a 12 month agreement they signed, are you? Right now?

Right now? Yeah, we are if they're not paying because we don't collect a lot of the payments up front. So if they're not, I needed to have legal validity because in our state that's how we get paid.

Yep. So some people that are having this requirement and they still want a signature, some people will just link to the DocuSign. I have seen these hold up in court just as well when it comes to clicking Accept and then all this terms of conditions are spelled out in the estimate itself. Because think about like from a digital perspective whether I Even if you docuSign you're actually not actually signing anything, you're pushing a button that says your signature and you're clicking.

Okay.

And so when you submit on the digital footprint of that is usually enough to say hey look, we, we can see opened it, we can see you signed it and we can have record of it went to your email and that's all trackable inside copilot. So I believe to simplify the business and if your goal is like I want to reduce admin, I'm going to be reducing that as much as possible. I would also say on this one ANU is if you love docusign what I would personally do is make an automation that when they get the estimate accepted, it's a welcome to my business name, we'd love to have you. Last thing we need to do is sign this service agreement. That's an email that's gonna or a text message that could come immediately when they click Accept, click this link, sign the document and we'll be set up for service. You could also automate it but make it much more streamlined instead of having like all the different softwares for a service agreement, billing, invoicing and all these different softwares.

Now one quick point of order clarification. You said there was a cap of $5 for ACH. Is that per month or is that per transaction?

The latter. Per transaction. That's correct. And that's what stripe charges us. We don't have any upcharge on that. Okay, cool. Next one up Tori.

Brett.

Hey. What's up, dude?

The brother. How you doing?

Good. How about you?

Good, Good. What's up?

Okay, so my question would be the best way to double my revenue. Right now, my strategy is to pass out 36,000 door hangers, and I'm kind of assuming a 1% return on that, which means I get like 365 clients. And I would try and get about $1200.

Per customer, and that would put me over that doubling. And I was wondering. I was actually talking to Christian about this, that I'm kind of like, in a little competition, friendly competition with my buddy, and he's projecting to be at like 800,000. And I'm trying to beat him, to be honest. Like, just a little.

What are you now, Brett?

Last year I did 267.

Okay.

So if I did the 36,500, that would put me in like 705, assuming those returns. And I'm trying to fill that gap of about $100,000. So I'm considering doing like, Facebook marketing or Google Ads. So that goes back to the original question of what do you think is the best way to double my revenue at the bare minimum?

Okay, So I think. I think. I love you so much, Brett. I'm gonna. So I'm gonna give it to you straight. This is the. This is the wrong question. This is the wrong question. But let's try to figure out what actually is gonna be useful. Okay, so first off, how much money do you have in the bank in the business right now?

I mean, I'm in Richmond, Virginia. We've had like two.

Snowstorms. Last two.

It usually starts with a dollar, A dollar, and then numbers. What number is in the bank?

Like five grand.

Okay, good.

That.

Thank you for being honest. So to think that you're gonna go to above 800,000 this year. You're gonna. You're either A, going to work 24 7, or B, you're gonna go into a lot of debt. And so if you're not willing to go into a lot of debt, and I mean, like substantial, I'm talking a hundred thousand plus, because you need a minimum of three to four trucks to add that much revenue. You also, because right now you're solving one constraint of the business, which is sales. I need more leads. Right. And have you heard me Talk about the 4L framework? You have no idea what that is.

Yeah. Yeah.

Cool. So for anyone who doesn't know you have liquidity as a constraint, how much cash you have, and then usually you're going to convert that into more leads. You're going to do door hangers, Facebook ads, whatever. Then you have a labor constraint. Then you have leadership constraint. You are assuming right now, Brett, the only constraint you have is leads. As soon as you get more leads you will need more labors.

Yeah.

And as you get more laborers you will need more leadership. And so like everyone usually assumes when they have a smaller business that I will just fill in those gaps, no problem. Like I do believe the same way that you're currently facing constraint with leads, when you get, let's just call it 200 new customers, all of a sudden the constraint will become finding employees and training them. And because that will become the constraint, let's assume everything goes super well with these door hangers and you get a 1% return and you got 200 customers and now you have five or six new employees and two more trucks and you somehow are able to afford those or get debt on them or etc. The next constraint is you no longer have time to do door hangers because it's spent training and hiring new employees. And so like to do 36000 door hangers. If you did a hundred per hour, that'd be 360 hours. So essentially for the next nine weeks. No, 10.

Yeah, I was planning on doing it from now to the end. I already did all the math. Like I basically have to, I'll just put pull it up real quick.

No, I, I, I can do math. It's more a matter of like I believe if the math works out, you're going to have a constraint of hiring and training. And so do you have another general manager right now?

No.

You are going to have to train employees. You're not going to be able to do that many door hangers. Even if you get 30 or 40 new customers, you get a new truck, you're going to have to hire more people, you're going to have to go train them and that will be the constraint. So I'm not saying it's impossible. What I'm saying is I don't want you have unrealistic expectations or do something unhealthy in the business around debt to be able to hit this arbitrary number that your friend made up. Your friend made this number up.

We were kind of talking about me and him talk about our P. Ls all the time. What he's doing compared to what I'm doing. Obviously comparisons aren't necessarily a good thing sometimes. So basically he spends money on a marketing agency and I've Heard you talk ill about that and I didn't have a good experience with the same marketing agency. And it's working well for him. He gets tons of leads and stuff. But I was trying to lean into the route that you have recommended, which the door hangers. And I was like aiming to do 460 or 406 door hangers a day over 90 day. About 90 days, which is about 51 per hour.

Right.

You're, you're, you're solving for the constraint right now of sales. When you grow a business, there's sales, operations and admin. As you grow sales, you will now put a massive tax on operations, hiring, training, routing, scheduling, and managing employees. And so then there's another constraint of admin. And like you're going to need an office person. When that many call phone calls and are coming in, you no longer can get the estimates out. So I'm going to move on to the next person, Brett, but I'm not too feeling on your deal. I love it. I love it, I love it, I love it. I would just say don't buy 36,000 door hangers, buy 10,000 and then focus on those. Like just focus on what's even five. Yes. Just focus on that next step because I believe you'll do five to 10,000 door hangers. And you'll now need to actually slow down on that to focus on employees because you don't have the capital to go out and hire general manager or an operation mayor to now train your employees, hire them and all of that. And if you start getting all these leads, we can do math on that all day long. But if when you get into customers, they're all churning out the back end because your employees aren't trained correctly and you can't get anyone to actually fulfill the work, we have ourselves a problem.