Bank CUTS OFF His $1.2M Business...

You know, my written goal is 20 million. Whoa.

We have negative cash to make today. We're in Kansas visiting Olin from wetlands, irrigation and Turf. There's about $300,000 in debt. Correct me if I'm wrong there, that would put us under.

That's been very financially stressful. We really struggled. I mean, we were in the red for 120 days.

We have negative cash in the bank.

Payroll came around and cleaned us out. Like we didn't have money for the materials, for vendors, for anything else.

We have hundreds of thousands of dollars of unsecured debt.

The bank would just loan me more. We'd do a little operating loan.

We have personal loans to family.

The auditors came to our bank, they pulled our line, which means that our bank couldn't loan us any more money.

If we don't change anything, this business will go bankrupt. I believe that this offseason is make or break.

I agree with that.

Honestly, I'm very concerned for Olin and I'm very concerned for this business.

Yeah, I want to grow more. You know, I built this shop in mind of doing probably 10 million out of this location.

This is the business turnaround show. My name is Mike Andes. I'm the founder of Augusta Lawn Care where we have over 190 locations around the world. I travel the country fixing struggling businesses.

I'm all for raising prices, but I'm not the one that deals with the angry clients.

Right, but she's saying they raise the prices.

Yes, I do.

Our goal is to give Olin a strategy, turn the company around in the next six weeks. Or just maybe a little bit before 2023.

They really hit rock bottom and had.

To do like an entire restructuring of the entire business.

My name is olin Unruh. I'm 34, married and have a 4 year old daughter. I have a lawn irrigation and fertilization business that, that's, you know, we normally do in around 1.2 million in the last three, two, three years. 10 to 12 employees most of the time.

Well, there's problems in like every area of the business.

You know, we lose so much money in January and February that it takes us till, you know, August to kind of really get out of that.

Really, really bad seasonal issues in the. They lose so much money in January, it's crazy.

And we have about 300,000 in debt.

I think there's going to be like this is going to be a target rich environment as they call it. Shoot in any direction and you'll find a problem. So then it just Becomes which one do we focus on first?

Another 175. That is primarily operating expense debt. But we've had cash flow issues for years.

We've got it all. We've got state tax, loans or debt. 16,000 doll credit card, $3,000 credit card $3,000 personal loan. $7,000 personal loan. Accounts payable of vendors 27,000 sales tax 30,000 EIDL loans 134,000. Loan from his brother is 50,000 truck payments. 105,000 mercy goodness. We have a lot. How's it going? Good.

Welcome to Kansas.

Thanks.

Good to have you.

Yeah, man. This is a great space.

Thank you.

Maybe show me around a little bit and we'll jump right into things. Do most of the trucks park inside or.

Yeah, we do. We pull everything in at this point, obviously employee parking. We come in, we do our huddle kind of morning stretches right in this area. Get the weekend started with some hip rolls here.

Good morning.

Welcome to part of the team. And then we've got a couple office ladies that Stacy, our office manager, is coming in a little later. So we just gather kind of around the table here in the morning. And I think it's probably Tanner's turn for the code. We've kind of been jumping out of order a little bit. But we build trust through open, honest communication. We respect those we work with.

We always seek to understand our clients.

Needs and provide solutions for every challenge. Our commitment is to treat every lawn.

As if it was their own.

Thank you, Tanner. Our turf division has kind of these two bays and then kind of irrigation and service kind of has the rest of this. So we started out strictly irrigation. Then 2018 added fertilization and weed control. And 2020, we added holiday lighting. And then this year we started doing kind of just for our clients, some bed maintenance and some new landscape installs.

For the difference between, like, the turf and the irrigation. In terms of revenue breakdown, what's that kind of percentage look like?

So turf, we're growing all the time. It's still probably 35%. And irrigation, you know, 65 or so. And then there's a little snow removal and holiday lighting in there. So own these weeds to the backside of that dirt pile.

Okay, nice.

You know, 2021, 2022, we were growing like crazy. Then 2023, we kind of just had this fantasy of more growth and we hired more people in the spring. Just kind of like to start training and getting ready right then by like June, we could barely cover payroll every. No, I mean, like, payroll came around and cleaned Us out. Like, we didn't have money for the materials, for vendors, for anything else.

Whoa, we have negative cash in the bank. Need the bingo card when you go to a turnaround. No money in the bank to do anything.

So it was kind of a hard wake up there. Plus, in May that year, we were trying to start a house project, and the auditors came to our bank and they. They looked, they pulled our line. They deemed it substandard, which means that our bank couldn't loan us any more money. And I'm sitting here with this, you know, $300,000 house project that we were getting ready to start that, you know, was overdue. And so it was. That was a toug business, does 1.2.

Million and isn't profitable. Like, the immediate thought is, okay, well, why wouldn't we not just raise prices dramatically, do a business that's 800,000 but made $200,000 in profit? That's where your immediate thought goes. But then the problem is they have $300,000 of debt, a bunch of which is not backed by assets, just operating cash they needed.

The bank would just loan me a little more. We'd do a little operating loan, line of credit, something to kind of make up for, you know, a somewhere. And so kind of having that actually hard shut off was. It was tough mentally, really.

Do you get like a construction loan for this then or. Yeah, got it.

Yeah. So it's actually. It's on action Realty is a little realty LLC that I have that owns the building.

Got it.

And Wetlands pays rent to it, so.

Cool.

Cool. And what's the rent to the business monthly for that then?

4,000.

Okay. And this is like admin, I'm assuming, office. Are you Stacy? Hi, I'm Mike. Mike, nice to meet you.

I'm Stacy Unruh, and I am office manager here at Wetlands Irrigation and Turf.

Do you make the world go around.

On the admin side even more than the admin side? She's. Yeah, she does a fair bit of scheduling and operations type work as well.

I have been here for four years, March of this year.

Cool.

So then there's several offices. Yeah.

So this office right now is our turf manager office, but we don't really have a full time turf manager. You know, money's been so tight for so long that, you know, we think of, oh, we need an operations manager. Well, I'm just like, we can't afford that. This is a kind of our little meeting room, conference room in here and then obviously reception area in here. My Office. And then Stacy there. Bathroom here. Yeah. I want to grow more. You know, I built this shop in mind of doing probably 10 million out of this location. And we've kind of stalled out around 1.2, 1.5.

I'm like, I guess I'm an optimist, but, like, dude, if I was in that position, I would sleep. Because I was thinking, like, the Mount Vernon location, at peak, they have about seven, eight employees, usually about five or six. And they'll do 1.1 million, 1.2 million. And they have a storage container and $500 a month in shop rent. That's crazy. That's crazy, dude.

You know, my written goal is 20 million. And I know that's kind of a random number, right? Everybody likes a big number. And I would want to open a branch in Wichita, but that would be kind of my goal and to be, I think, a full service, you know, maintenance.

Dude, this is gonna be a tough one. He's negative cash. Hundreds of thousands of dollars in debt. Owes money to family, credit cards, equipment loans, the state for sales tax. That's not good. Even if we fix things and you put every single dollar of profit towards the debt, it'll take them several years to dig out. Walk me through, like, starting the business.

I bought the business in 20. I don't remember, 15 years ago. 2010. 2010.

And then what were we doing? Revenue. Then, like when you first bought it?

When we. Oh, when I first bought it, it was like 70k maybe our first year.

Got it.

I bought the business when I was 19. There was like one employee at the time. He kind of trained me for two weeks, and then he left.

So 70,000 starting out. Then you started to add other services in several years later. Yes. And then what did it kind of grow to?

Then the last year when it was just strictly irrigation, we were at 500,000. And then when we added the turf, I think that added A, you know, 100, 150 maybe the first year. You know, that was kind of the growth over the next, you know, five, six years. Honestly, kept doing the same thing, getting a little bit bigger team. Within 2020, we added holiday lighting. And that was just to, you know, I wasn't really thinking of it in the time, but it was to fix the off season. It was, hey, I've got good team members that I want to keep year round. I don't want them to have to leave. 2022 was kind of our biggest year. And we did like 1 point, almost 1.4, 1.3. Something 2023 was kind of a really reset, rock bottom year for us. And so we did less. We did 1.2 ish, probably 23 and 24. 24 was kind of the same there. And now this year we've been up about 30%.

But this one's tough. When you have a 1.2 million dollar business in revenue, you have a lot of levers. But when you have no cash in the bank, it makes it harder to. It's like he needs to be profitable. Well, he needed probably years ago, but like yeah, there's. Without immediate action, this business goes under. This off season, the January and February, he loses so much money and he drops revenue by like 80, 90%. So you can't you when, when you have a bunch of debt and a bunch of fixed expenses, you can't afford to have an off season simply because your payments still keep coming out and you have higher fixed expenses. So you've got to get revenue up during the off season. So if you can't do that, you won't make it this often. If you struggle with having an off season in your business and your revenue dropping a lot for three or four months out of the year. Like a lot of home service businesses, I created a special workshop. It's completely free. You can scan the QR code here or just go to mikeandys.comworkshop and it's three to four hours of content where you'll be able to figure out the five solutions to make sure that the winter or your off season doesn't tank your business. All right. And then just from a like liquidity, like cash currently, that's sort of the part where it's the most acute pain.

Yep.

The 4L framework shows the four reasons why every home service business stops growing. It's either because of a lack of liquidity cash, a lack of leads, a lack of labor, or a lack of leadership. From what I can see, there's about $300,000 in debt. Correct me if I'm wrong there equipment, some state, some family, like kind of a mix of everything.

Yeah, that's correct.

And how much are we paying on that net now? Like monthly payments wise.

The debt payment itself between it would probably be 6, 5 to 6,000.

So 5 to $6,000 a month in payments. Some of it is like you're probably not paying on at all. Like some of the family stuff or personal.

I am paying. I did start this year paying 2,000amonth on that 50,000 and then you know, we paid a couple 2,300 probably or so to the bank for the operating loan there. And then I pay like 730, 750amonth for my SBA.

And that SBA one, the EIDL one, I'm not so concerned about that one. It's so long term and low interest. It's the other stuff, right, and the stuff that's unsecured, like the sales tax, things like that. Yeah.

Okay. You have your 0, 250. It's physical stress, right? It's like working hard. And I've been there, like exhausted. I mean, I've fallen asleep in road work, you know, stopping on, waiting on a pilot car to get honked at because I'm so tired, you know. The next stress is financial ever, for sure. The last five years, ever since we kind of got to about a million dollars, built this place, that's been very financially stressful. But also, you know, I'm recognizing the psychological stress that I deal with now. Five years, I would say, has been very financially stressful.

And then from a cash perspective, that's the part that's probably squeaky. Yeah. Okay. And that. That's like basically around zero. We're basically trying to get money.

Yeah, we're right there. I mean, we started the year off. We lost a bunch of money in Q1 then. Yeah, we really struggled. I mean, we were in the red for 120 days, like, from kind of March sometime to, like, July. And that was not fun. I mean, obviously liquidity's. And it has been an issue, but, you know, when I sit back and look, I mean, Andy's gonna go leads and, you know, really leads in leadership probably.

Right now, the biggest problem with wetlands, irrigation and turf is the fact that we have $300,000 of debt. There's no money in the bank. The cash on hand is zero and negative. And we're going into the off season where last year we lost hundreds of thousands of dollars. This cannot happen again. Why is that? Because it isn't. During that springtime, you do get a lot of work for irrigation stuff, right? And Cam.

Yeah, yeah, we do. No, we had. We had good. We had good months, but it just. I don't know. Stacy, do you want to. You had anything to weigh in on that?

I think that. Yeah, revenue wise, we were. We had the prepays that we had gotten.

And how much is the prepays exactly? It's like 150, 200,000.

I would say probably 100 between the two.

Yeah, we'll get a good amount of prepays in there, but it's Just like every year we barely, we get started out, we get the ball rolling kind of by September, October, you know, we're finally starting to get some profit. Right. But it's just like we usually get into that time and we're, we're about like we're caught up now. And then we get our prepays and we, you know, especially since we built this place, our overhead is just so much higher that by the time we get through winter there's really not the prepay in the bank that we need.

Yeah, so it was payroll week, so I better watch what I'm, you know, don't pay that bill. I just, it would be really nice to just take care of things as they come up and not worry about it and focus my, like you said, my space, my all of what I have to offer into something that's going to bring some value, you know.

And so now we're, now we're buying materials, we're performing services that were prepaid, you know, and we're relying on like every cent from the non prepaid work really to kind of help us fulfill that obligation. Which means that nothing's coming back really to the business yet until we get quite a ways into the year.

This is just an example. Say we needed our tank of gas filled up, but we still owe them from the last fill up. That pressure of we need our tank filled up but we're going to have to somehow pull that money together to pay the prior fill up. Those kinds of, of little things, they don't seem big, but they are just to be able to take care of things as we go and not having that well, if I pay this, we're not gonna be able to have enough for that. And this is going to put us in a hole this much.

And the reason we're feeling the pain right now this late in the season because that prepayment injection of cash kept us through the actual difficult time which is January, February, March. My. I literally just sent a post to a Augusta Nation this morning. I said if you're doing prepayments and you don't have a reason for that money, don't do it. The big problem that Olin has is the fact that he has a bunch of fixed expenses that don't change throughout the off season. Fixed being. Regardless if he makes $10,000 a month or $200,000 a month in monthly revenue, he still has to pay his mortgage, the rent, the utilities, the office expenses, salaries for the admin people. And right now, if he's not making $70,000 a month in revenue. He can't even break even. So when the off season comes and he makes 15, 20, $30,000 in monthly revenue, he's digging a massive hole in profitability. And that hole is taking him the entire year to dig himself out of. Okay. And in terms of managing the current cash crunch, like, are we using a line of credit? How are we making payroll?

Like, currently we've been, you know, managing to keep it in the black for the most part. That hasn't really been an issue. But, yeah, there's. It's just bootstrapping, like, figuring out what we can get by with what we have to have versus, you know, what would be nice to have.

I just want to make sure that that pressure doesn't continue.

Amen.

Because, like, it's such a big amount. Like, I was even doing the math this morning. Okay. So if we turn this around and, like, even if everything goes smoothly, it'll take three years, kind of get this debt manageable to where the overhead's not crippling and. Or, like, the fixed expenses of the debt payments, it's like, it's still a long road. It's difficult. Like, I just want you to not have that pressure because I know what that's like, and it's no fun. No, the constant nagging of knowing, okay, we got the prepayment, like, juggling all of that is painful. I know. I've been there, and I hate it. And I'm just sorry for you. I'm really am. Like, it's.

Well, I appreciate everything that you have done. Done amazing things for the industry. I mean, at least anybody that pays attention of just fixing those kind of things that. I mean, it was.

Yeah.

This year, I would say, the turning point a lot of ways for me on this seasonality thing was doing that exercise of taking my next lowest quarter and replacing my worst quarter. And I'm like, we're dubbed. We would double profitability if we didn't lose money. And all of a sudden, the light bulb was like, okay, this is the last year that we're letting off the gas. I'm looking at this as. It's not about me, number one. It's about getting better as a company. My biggest. Well, maybe it is a regret. My biggest regret, I would say, is that I can't pay my people. Like, I want to pay Stacy more money than she's ever made in her life, you know, and she gives so much. She works so hard.

I deal with a lot of the turf department, mainly, and. And so when we need something that comes up in the turf department, when they come to me and talk about it, which happens quite a bit. You know, it'd be really helpful if we had this or if we had another one of these or if this could get repaired. That's kind of the biggest thing. I would love to have the money in the bank to cover those things. That maybe would only be, oh, you know, three, four hundred dollars to say, yeah, let's go get it. If this is going to make your route and this service go faster and easier for you, let's do it.

Just to be able to really take care of the team, to be profitable enough that I can, you know, give them. Make them feel really appreciated and give them a desire to grow with the company and, you know, love the industry and not feel like, you know, you have to work here because you love it, versus you work here because you get paid good too.

My concern when I look at the P. L is our busiest months are.

Like the middle of the year.

We are losing money. Yeah. And so that's where it's like, well, then, no, it's not just a seasonal problem.

There's some efficiency issues as well.

Okay.

And then leads. I mean, that's been my kind of aha moment this year, honestly, was like, we don't have enough leads. Yeah, I knew we would. I mean, I knew leads. I kind of had seen enough of Mike's 4L stuff that I'm like, leads is where. Where you've got the lowest hanging fruit. I feel like, in terms of our client base, in terms of leads.

I know that you see that as kind of the constraint specifically probably for the off season. Like, how do we get leads coming in January? Yeah. So what are you doing currently for marketing? Are you spending on anything in terms of ads? Kind of. Give me the breakdown. I'm where leads are at right now.

Yeah. So in the spring, we. We kind of. We got a. We had a Facebook coach, someone that had a business that we worked with a little bit just to help us get some actual legit ads and a campaign set up. And we did that. We probably spent 3, 4, 5,000. I mean, not huge numbers on Facebook driving people to our website. Probably another about that much on Google school.

And that was it just during the spring or throughout the whole year.

That was spring. I mean, that was March, April, May. Probably by May, you know, we were really in a tough spot financially. So we, you know, we weren't spending on Facebook. We were posting regularly, but not. No, no. Spend There we had shut down all the pay per click spending. And then the first of this month, we. We put out some Facebook ads again. And we probably spent, you know, 1500 on that so far, kind of just driving for fall services.

And do you know what from. From the Google and Facebook, do you know what your kind of blended customer acquisition cost was on that or even just cost per lead?

That's been a tough point of. No, I'm not very clear on it. Obviously I know what, you know, my cost per lead is low. We're running, you know, Facebook, we're running 34, 35 bucks cost per lead. Google, we're running, you know, higher. Probably 70 to 100 cost per lead. But then rolling that into client acquisition cost is where I've been really. It's tough. It's really tough.

Right now Olin is marketing some on Facebook and on Google, but without the proper tracking codes in place, it's really like you're throwing money at this black hole and hoping that you get some leads. We need to be able to have Google tracking codes, Facebook pixels and know exactly how many people convert into paying customers. If we know that math, we're able to, with confidence, invest into Facebook and Google Ads. Without that, it's just a guessing game.

I know that, you know, I have some scars from business in the past, even of just financially. And so I wonder sometimes, like where I'm spending a dollar to save a dime. You know what I mean? I can be that way. Like, I'm afraid that, you know, we're gonna go backwards and run out of money and so just don't spend on some little piece of equipment that the guys would be like, man, this would make our life so much better. So. And then just. Yeah, just some outside eyes on, on the business and on me personally, like if you guys see anything today and you're like, that's a limiting belief or something, just call it.

And from a close ratio pers. Do you know what that is? Kind of blended or. Or even for both divisions?

Well, I know blended, it would say about 70% close rate on there. I would say it's lower than that. In our new construction, I would say we're probably. I feel like we probably run more like 50% there.

And so for like the blowout startups of irrigation and for like chem, it's really high.

I would.

Yeah, it's.

It's high, I would say. I mean, we get a few, you know, most people when that. The irrigation, it's like people do not price check Irrigation service.

Right. They need it done.

They need it done. And sometimes you send them a bill, they complain. It's like odds, you know, you guys charge what plumbers charge. And I'm like, yeah, we are smarter than plumbers.

Yeah, yeah, totally. I get it. Do the same thing outside. And how many people do you have in real green, like just contacts do you know?

I think like 800 and something.

No, it's a lot higher.

Is it higher than that?

Because I just. Have you looked at it?

What was it?

We have 2500.

2500 now?

Yeah, now. Right now active. I think it's probably more like 12, 1300, probably.

Oh, active.

Okay.

But as far as. Yeah, yeah, we've done business with that many people since 2021.

Okay. And do we do any sort of like months leave promotion or text blast to them or anything like that? Okay. All right.

We don't. We need to.

I see the real opportunity for wetlands to be able to upsell existing customers and email and text the current database. They have 2,500 contacts. They have hundreds, like five, 600 people every single year they are in contract with to do their recurring maintenance. I see as two major things. Like, I don't see, I don't see leadership as a big problem problem. Like right now, the fact that you have three people on overhead. I'm not too concerned. A $1.5 million business, especially because things like installation of irrigation takes significant amount or time to sell, takes more time to manage and schedule. Etc. I'm. I'm looking most at liquidity and leads as like our two opportunities. I think from a 70% close rate, if that's what it is. I think we should raise prices, prices immediately. And I know that's difficult because it's like, well, I need the leads. But from a. When I see 70% close rate, I just immediately know we can raise prices by 20% and that might go to 60% because. Because if the average is 70%. You were saying? I think the irrigation install is more like 50%. That means that like the turf and like irrigation like maintenance, we must be closing like everything.

Yeah, I mean irrigation maintenance, again, you just don't. You don't even. People don't bid that. I mean, it's just like, hey, so.

Why don't we charge more? We've got to raise prices by 20% on all these renewals that are upcoming right around the corner for all of our chemical and all of our turf management as well as all of our irrigation maintenance. 20% increase across the Board without emotion. Because I know if 80, 90% of people are accepting estimates for a service, we can absolutely increase the prices. Like, I think I just look at 70% and there's like, it's a, it's an immediate lever. I know we can pull and immediately make the business more profitable. So why don't we charge more?

I, I agree with that. Because if you break those four services down and I've noticed this whenever they prepay for them, and then you've got to put those numbers in on the services in the program. And so it's $125. That's what we charge for like a service call fee. Just, just that's not additional time and, and parts and all that. But then you get that June inspection and that September inspection to balance the number out to what they prepaid. It's like $65 for those two services.

Yeah, our two middles or our inspections.

Yes.

Are like 65 bucks.

But that shouldn't be that way.

No, they, but they, they're super quick. And you know, I, I think a.

Minimum should be 85. Minimum.

Yeah.

But really the customer is paying that prepayment. That's the dollar amount that we'd be changing.

I mean, I think that we could definitely increase by $40 just for that.

I think based upon the fact that you have so many legacy clients. I know it's difficult. You know them and you will get a few unhappy people.

Yeah.

But like when I see 70% close rate, I just immediately think we need to raise prices. And it just like everyone, like you and the weeds, you understand the business so much that it's like. Oh, like no, like this, this, and this and this. Especially when I'm hearing that people don't bid out.

The truth is, I'm all for raising prices, but I'm not the one that deals with the angry clients.

Right. But she's saying, you ready the prices?

Yes, I do. The 20% increase does not scare me. I know it needs to happen. I know we need to get into this place where you're going to lose some, probably, but we're going to gain some too.

Now, in the 40 framework, we've talked about liquidity problems. We've talked about the issues they've had with leads, but there's also labor and there's leadership. Now, I didn't talk a lot about this with Olin because I see the most problematic issue in the business as the liquidity crunch, the cash crunch. We have no money in the bank. And the fact that our leads drop by 80 to 90% during the off season.

You know, I thought we would spend a little more time on leadership. I was happy not to spend time there.

Now in the future, once he solves liquidity and solves the leads problem, he will eventually have a problem with finding of labors and then managing those labors with an operations manager and more middle management. But for now the only thing I focus on is raising prices, liquidity and then getting enough leads during the off season. The ability to focus on the next constraint in the business is the most important thing because we could talk about 500 different things to change in the business but right now we need more money in the business bank and we need more leads during the off season. And once we solve those problems then we can move on to the other constraints of labor and leadership in the four hour framework.

As far as doing the price increases, you know, Stacy's on board, I'm on board. That's going to happen.

Cool. The next thing is this is kind of without saying new customers coming in for those services, we need to make sure their price like that matrix is increased.

Yeah.

Because the close rate is so high to new customers we got to raise prices by 20% on them. Then the next thing is January and February. And so I think the 2500 contacts that you have in real green is the gold mine. It's the thing that we haven't really tapped into and maybe we've sent newsletters and things but we haven't been like this is going to be how we replace all of the lead flow when we need it is it's through that 2500 people. Now their current CRM does not do text blast but down the road they can even upgrade this by doing text instead of email. We want to a create, create season specific offers for season specific services so that when peak demand for any service throughout the year that's when I want to be emailing them. That's why I want to be texting them and asking them if they want that service done. They're already the people that have given you money. The people have already said hey, I need services. And even if they've declined an estimate, they at least have said I need this. And so that 2,500 people I would be recommending is having a monthly email that you pre schedule like so like it'd be something you work on now for January, February, March, every single month of the year you already know the email that's going out based upon the season. So for example, October, November, probably going to be Christmas lights. Right. December, probably going to be, let's get, you know, get this free tick. I forget what it was, sorry. Mosquito fleet. Mosquito fleet. Tick service. If you get on for next year, if all our customers accept even just one or two of those offers throughout the year year, we're able to take the average annual value from $1,000 per year to $2,000 per year. And if we do that, this business goes from 1.5 million to $3 million. And that growth strategy is the only way that Wetlands will be able to outgrow their current debt load. I would also segment that into three different people. So like right now, if you're doing the renewals, I would segment that because you could also use this as a way to get people to upgrade because people are in this low level package. If we can get them in the second or the third one, which I'm assuming is something like 400, 800 and 1000, what's that look like?

Yeah, there's probably a bigger jump actually between the emerald. I'd say it's more like 400, 600, a thousand.

I think it's like, let's go ahead and roll with that, get them in. But then in January we then contact everyone that is in and we try to upsell them. Before I let my general managers spend a single dollar on advertising, they spoke, Google door hangers, whatever. I'm making sure they send a text and email to all of my customers using Homeworks. That's a CRM we use to text all of our customers a season specific offer during our off season to fill our schedule. I go over all of this in the copy and paste millionaire. But right now you can actually go to homeworks home dot works and you can get free texting unlimited until July 1, 2026. Like so much, much less. Like, here's your renewal. Let's not like tie the renewal into in with an upgrade. Let's get them on the upgrade. We know what's happening. And then in January when it's slow, we have a specific process to contact all those people and get them like we have five different things we can sell them. It's like, can we sell them bad meetings? Because we can do that in the next few weeks. Can we sell them an upgraded package? Can we sell them a one more core aeration? Like we should have like four upsells that an admin person can contact. And during the slow season of January and February, we know what to sell them instead of trying to go after the new Shiny customer. Let's just take the customers who already have given us money. Our existing customers or the people have at least asked for a quote and said, I need service, let's go after them first. They're already in our database and they won't cost us anything to go sell them more stuff. Instead of going after the new shiny customer, focus on the warm people in your database that have already given you money.

So we're not currently mowing and that was a big question. Do we add mowing?

No.

Okay.

No. It's so easy to always think that we can solve the problem in the business by adding more services. And right now Olin's thinking about adding lawn care and mowing. And of course, I'm the lawn care guy, he thinks that mowing is what I'm going to suggest. And although I love the recurrence of mowing and the fact that I get on a property for 30, 40 times a year, that's why I love lawn care. However, adding a new service to your existing business is the last resort. No. Because it follows the same demand curve as your.

Yeah, it does for sure.

Sure. But it would add more.

Obviously it's be going to raise our price per client significantly and it's going to, you know, get us on the property every week where now we're like six weeks to eight weeks between visits and providing a lot better service.

I feel like, yeah, like you get to 2 million next year if we said yes to add lawn. Yeah, because you have 2500 customers and several hundred of them overhead percentage if.

We went to 2 million next year.

Well, it would, the problem is it would add a whole other division. Yeah, right. So you're adding more mowers, more truck. Like everything just gets more. And we would, we would inflate the top line revenue, but we would add more debt. We'd have to get more, more mowers. Also everyone here would have to get treat like trained on another service. And in my opinion, when you have like seven guys, let's call it eight guys, like right now we need less services. Like we want them to stay focused. And the last thing I want to do is add more complex complexity, more services, more training, more equipment, more debt to a business that already has a demand curve. That's crazy. I don't want to add mowing because it's simply going to make my spring rush even crazier and my off season even lower. I want to only add new services if it's going to fill in my off season. So unless I Can do the service during December, January and February. I don't want to add any more services to this business. The reason I'm okay with adding bed maintenance is because you're saying, hey, during January and February, we might be able to actually pull some of that demand forward and do that during January and February. So, like, I only like adding another service if it's going to fill my off season. Like if you had mowing, talk about spring rush. You will now go from 14050 to 230. 240. But it'll still be at five or ten grand in the winter.

Yeah.

And that's killer. Like that swing is. That would put us under. So as much as I know that caught my revenue, yes, it would 100% crush. I would love to. For us to take what we currently are doing and just do more and better of that before we focus on the new service. Yes. We could go on double our marketing budget and double the number of new customers joining our business. That would double our revenue. We could also not spend all that money on ads and just focus on upselling our current database and going from $1,000 a year to $2,000 per year on average. If we do that, we will also double the business.

I think my true love is business.

It just.

This was the one that chose me, I guess, or whatever at the time. So in 2016, my wife and I, we actually started the coffee shop, ran that for a year and a half, and then sold that one. And then I love real estate. I do some, you know, I just don't have the bandwidth with this to really pursue it. But, I mean, somebody asked me what I would do if I didn't have this. I mean, that's what it would be. It would be real estate.

Oftentimes when it comes to entrepreneurship, we're always thinking about the next thing. Oh, I want to do this business and I want to do a restaurant. I want to do sell cars. We have all these other industries we want to get into. And I understand that the business should serve you. And if that's your goal, that you build the business so it creates cash so you can do these other things, that's fine. But realize that many times, if you've built a business that has 3 million, $4 million in revenue, or you have multiple locations and it's pumping out 20, 25% profit, you are like in the top 1% of that industry. Why would you not just keep doing more of that thing?

I love real estate. Building a real estate portfolio there. So that would be my goal even now is, you know, this is kind of my cash cow, my golden goose and take good care of, you know, her and then take, take those eggs and spread them out, you know, in the community. Start some other businesses. That's my.

It is very rare that investors that make a bunch of money go out and do investments and beat the returns of their existing first business. Just keep doing the thing that you are exceptional at. Just keep doubling down and doing more copy and paste, replicate, keep scaling that business that you are the best at. If you go and do real estate, if you go start a coffee shop, you're like every other coffee shop owner that got started or every other real estate owner that wanted to start investing in real estate. Whereas if you've taken a home service business and you've been able to produce a business multiple millions in revenue and has management in place and runs on 25, 30% profit margins, just keep growing that business, focus on that thing and you will make more money. I think that not this off season, but the next off season I would be interested in like how do we actually create a winter services packages for our residential customers and actually go after that. I think this off season we use better upselling and emails to be able to fill December and just January and February with bed maintenance. If there's no snow because there's snow, you got something to do, you keep the guys busy, you at least make money, a break even, whatever it is. I'm mostly concerned when there's not snow and it's super cold and frozen. You can't do irrigation, you can't do fur, right? And then you're, you're dead in the water. We want to create season specific offers for season specific services so that when peak demand for any service throughout the year, that's when I want to be emailing them, that's when I want to be texting them and asking them if they want that service done. And so at least if we could have something to do there, which is likely going to be the bed maintenance. And I believe that if you sent out an email to all 2500 people and told them, hey, when we hit mark March, we get booked out like crazy. Get your, get your spring cleanup and your bed maintenance done in January and February. And as, as part of being an existing customer of ours, we allow you to pre book now and get this discount and we give to the first 20 customers or however you want to kind of create the, the scarcity of that say scarcity 20 customers urgency, you've got to get it, you got to get the service done before the end of February and you send it out that out mid January. As soon as the installs are the taking down the holiday lights, those first two weeks, you take them down and then immediately you're moving into. Okay, the next six weeks because that's what's killing you right now is the last part of January and all of February. If we can fill those six weeks with a ton of bed maintenance, molten stalls even.

Yeah.

Just to be able to fill that schedule at least. Like from how I see you kind of need. Need 60 to 70,000amonth to break even.

Yeah. Yeah, you're right. You know, I'd say that's our 12 month goal at this point is to eliminate that shorter term debt. To be fair, being broke isn't bad either. It's just inconvenient and unhandy. You know, you're not a bad person if you don't have a lot of money. It's just, you know, you're not. Life is going to look a little different. No big deal.

Honestly, I'm very concerned for Olin and I'm very concerned for this business. And I don't really see that sense of urgency. Like we have negative cash in the bank. We are struggling to make payroll. We have hundreds of thousands of dollars of unsecured debt. We have personal loans to family, we have property taxes on the land. Like there's a lot. And I don't see that urgency. It's like he's very optimistic and trust me, you have to be optimistic to get in business and stay in business. Business. But something's got to change. And in my opinion, when I look at these numbers, if we don't change anything, this business will go bankrupt. I believe that this offseason is make or break. Yeah, it is, it is. Like when we look at the business as it currently stands, it can't have another last off season. It will, it'll actually be really, really, really bad. And so I understand these things will seem drastic, but I do believe we have to go on two fronts. We have to go offensive and defensive. Defensive being we need to raise prices as fast as possible. 20% on the stuff that we're closing at 90% close rate. People are never saying no. Raise it 20%. I guarantee you it'll hardly move the needle. You'll get three or four mad people and here's how you handle those in the price increase email at the bottom to say if this will materially impact you or have A significant financial impact on your family. We don't want that and we don't want to lose you. Please call us. You'll get five or 10 people. And then what I would do with those people say, okay, we are going to extend it for six months. So for the first six months or even one more year if you really wanted to. But what that does is it makes. Where they can't freak out at you because you're basically saying, if this is really going to cause a problem, let us know. 90% of people roll with it. The 10% people that call you, you just say, okay, great, we're gonna delay it. You could do it one more year. You could do it like for the first six months of the year, downsell them. You could also downsell them them into something like the cheap one two times a year or something.

I am nervous. But people also understand that prices are going up everywhere. A lot of people are going to understand it. We need to not be nervous about it. But if we have it scripted, there won't be an issue. It's making sure everybody's on the same page on how to respond to this, what to say, because that's going to be it. Why is it so much higher than last year? You know, I would do a small.

Because I want to be able, when I call these people to be like, here's your price. Not okay, we'll send somebody out, do an estimate.

Yeah, you will. I would, I would. Part of my scripting is pre. To the call. I would have my admin person pull them up on. On Google and already know the price. Yeah. And here's the thing. Let's assume that you would rather charge $1200 for a cleanup and you gave them the 99, 999 package. That's okay during January, February. Because the alternative is we sit here and do an nothing. Yeah, yeah, yeah. The bottom line is the preparation for that call determines whether or not you get 20 people to get it or 150. Right. So it's the urgency and the scarcity of it that allows you to sell during January and February. Because I can guarantee you knowing property bed maintenance in this area, people don't think about it till March or April. So we're trying to pull that demand forward. And I would go through one by one by one by one by one and call.

And that's great too, because by doing that, you're offering them something we hadn't always offered. You get that personal conversation with them. You get to. They've got questions you can answer their.

Questions and they're a customer because they renewed.

Right.

So after January 1st, okay. We know everyone's. They've the letters been. It's renewal.

It's getting to know your clients too.

Hey, we got, we got you in the schedule for this year. I just wanted to let you know, for our existing customers only, we're offering a service in January and February. That's where we do bedmakers maintenance.

Yes.

I believe if you have that script down and I would nail it like the scripting for your admin, there's probably what, 500 people you service.

600 on a contract. Yeah, five, 600.

That's awesome. Like, I believe a hundred of those, you can get a bed maintenance. Yeah, 100 bed maintenance costs 50 to 100 grand. And there's your January and February.

Right.

And then you're going to take all the other people that are in your database, the other 2000, and we're going to send them an email and probably get another 50 at least.

That is a great idea.

This is easy stuff. Give us something hard.

No, I like easy. Easy as hard stuff is where things don't happen.

The execution is the hard part. Stacy, you know.

Yeah.

And it was a great surprise. It was the happiest, you know, five minutes of my life was that, let's just sell more Christmas decor and more bed maintenance. We don't, we don't have to do this, you know, 17 step property checklist, winter services package.

Look, I think there'll be people in the comments probably being like, you should be talking about his cost of goods sold and his labor and the size of the shop space and his rent is crazy. And there's only seven employees in this master shop space. And I agree with you. But ultimately, when I go into a business, I'm asking what are the easy levers we can pull within six weeks to turn this around? Because they don't have six months to figure this out. If they do not do these price increases, if they do not fix their off season, this business will not survive to next spring. And sometimes the biggest levers, the biggest changes in your business are the most obvious ones. Raise your prices and make sure we don't lose money during the off season. Sounds like a good business plan to me. So again, we're leaning out 12 emails, one for every month. What's the offer? And to your point, it's what's the thing that they're actually thinking about if I try to sell them Christmas lights, even right now in September? Yeah, you're not getting nothing. It's right when the pain is acute. That's when you want to have that email. And again, no flashy. Don't go down the rabbit trail of buttons and videos and pictures and graphics and logos. It is so simple for two sentences will outperform all of that. Using your name. That's all it is. No email signature even just Stacy.

And they just reply to that email.

They always reply to the email. It also keeps your email out of spam because if you start spending those big ones and all people start marketing as spam now, you're not getting back to them ever again. Cool. Let's recap. 20% increase in price on irrigation maintenance. 20% increase on fertilization and chemicals. January and February we're really pitching the bed maintenance. We're going to call every customer, have the script. So we're going to be looking at their property beforehand. Already know what the small, medium and large price is, what that includes and whether they ask why. I don't want the mulch. Great. All right. Then it'll be this and sell it right there. I would come up with a commission plan for your admin during that period of time. They probably get less hours during that period time anyways.

So for the January, February is great.

I mean the ability for them to be able to come in here, take get hours but then also be able to get a commission on on stuff so they actually incentivize to sell. I did the same thing in November and December for lights over the phone we talked about kind of the windows of time for renewal. Then email, then going after one by one calls for existing customers. A monthly offer email for every month of the year can be very basic. I don't care if it's a template inside of real green or a Google Doc Month, here's what we're offering. Month, here's what we're offering. You know, you've been in the industry long enough to know what time of year certain things are needed. Just pitch those. Like I heard someone say like the greatest form of optimism is having a kid because you, you have to believe that the future is going to be good enough for them to be able to survive. And so I think the same thing about entrepreneurship. It's like the most optimistic thing to do is start a business because like the chances are so slim that it's actually gonna survive.

Definitely. I feel like we have a of lot a lot more momentum coming into the year. You know, we're definitely taking more action in this quarter than we have in previous years. And I, you know, it seems like a lot of times we come into January and we're not thinking sales, sales, sales. And we were able to kind of make that shift. And, and that's what, that's what we're all talking. Look at, I've got it on the wall up here above my desk. So, so we've done that. We, we went up with our irrigation maintenance and our, our fertilization chemical side. We did a 20% price increase on that. And so that was on our six week plan. And then we sent out those renewals about the end of October, so early November. And then kind of from there we switched right into the holiday lighting sales over the phone. You know, did quite a bit more, probably 20,000 or so more in sales in holiday lighting this year. Gave us about an extra week of work into December, then December kind of once the holiday lighting slowed down, we started making the phone calls for just kind of some fall services, some bed clean outs, leaf cleanups, stuff that we weren't really pushing in the past and just really to existing clients. We ended up selling a good amount of that and keeping a couple guys busy through the rest of December. We're just following up on all of our maintenance contracts, the ones that we haven't heard from. We've had about a 10% cancel rate so far with the price increase. We only are about 35% renewed. So we've got about 55% that we're reaching out to this week and next week. So by, you know, mid January we want to be at hopefully have a lot better grip on what our renewal rate and what are, where we're going to be at and kind of what we need to add or backfill coming into this year. So relatively easy. And we just did them, the irrigation maintenance and the, and the fertilization. 20% price increase. We did that. We also took out our prepay incentive that we had been doing in the past. So we got rid of that and then a handful, that kind of last resort. We're just like, well hey, we'll, you know, we'll knock 5% off if you guys will sign up and pay. The other thing that we're seeing with the price increase is more people opting for installments versus you know, the prepay. Like so it's, it's good. I mean that's really where we want to take the company is to more installments. And so it's a little bit tougher up front because you're not getting that cash But I think long term it's better for the business. You know, we've got our, had our kind of our tax planning and everything for 2025. So you know, we're squared away there as far as you know, accounts payable. We're in the best shape we've ever been at this time of the year. I mean kind of focusing on the profit mode versus growth for 2026. And Mike said this, I mean our business isn't a fast turnaround. I think just that the biggest, what I feel like the most proud of is just that mindset shift of kind of not letting off the gas. December, January instead, hey, it's cold, it's sale time, it's go time. And keeping some of that momentum is huge. I just feel like morale wise, it feels so much better. The upselling opportunity, you know, that's in our current clientele. I mean we spent 40, $50,000 on marketing year. You know, if we would, we would put that effort into just really making sure that our existing clients are super well taken care of. Are know everything we offer, they're getting, you know, monthly offers at a minimum for whatever service is currently in season. That would probably be, probably be the other biggest thing was just taking the action to generate that new sale versus kind of more passive approach of like well we'll, they'll call if they want something.