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So it's time to focus now. This is the one video that if you're gonna get anything out of and you really need to focus, this is the video. This is the secret sauce to building your business in the landscaping and lawn care industry. And that is your hourly rate. It's the cornerstone that everything else is built upon. And it will determine your profitability, which will determine how much money you have for marketing and how much money you can pay your employees, thus the quality of your employees. And so this is what everything else is built upon, your hourly rate.

In the video in the past, I talked about hourly rate, et cetera, and how it's your secret sauce. It's something that you don't necessarily tell the customer what your hourly rate is because we're giving the customer the job, the quote, based upon budget hours, and we are determining how many hours we're allocating towards the job and multiplying it by some number. However, we don't tell that number to the customer. We don't tell them how much we charge per hour. It doesn't really matter to them. They're just looking at the dollar amount for the job being completed. But the thing that I never really talked about is, well, how do you determine your hourly rate? In my opinion, this should correlate directly with pay for performance. Because with pay for performance, what you're doing is you are basically taking a number that is typically fluid and that is the percentage of your revenue that goes towards wages, and you're making that a fixed number by giving a percentage of that revenue to the employees. So in the past, if it rains, bad luck happens, customer's pick, you, whatever it might be, you might spend 50, 60% of your labor. Revenue that you charge for labor on that job might go to the wages of the employee. Whereas if you just crush it, the weather's perfect, everything goes well, you might be able to pay 10, 15% of your labor revenue that you charge for that job might go to wages for the team. By fixing that number, you take a variable expense of labor based upon weather and whether or not people feel good or whatever, and you fix it. You, you can make your profits much more dependable. And also it should really come into how you determine your hourly rate. So this is what I want you to think about. The hourly rate that you hourly rate that you pay employees on base pay of P4P. And we'll talk about base pay and P4P in the future. But basically, when it comes to P4P, they get a base pay that they cannot make less than per hour. That amount right here, divided by the hourly rate to customer that we're charging the customer. I want this to be less than, less than 25%. Okay? I've seen this across the board in service based businesses. Be something that is a good benchmark for. Some people are going to scream at me, oh, 20%. Oh, it should be 35%. Whatever it is, this is a really good benchmark. What do you have to pay your employees on base pay? And then what are you charging the customer per hour? Should be less than 25%. So for example, if I am charging, if I am paying my employees $20 per hour on base pay of P4P and I'm dividing that by what I am charging the customer, let's just say it's $80 per hour. That equals 25%. Let's change the math up a little bit though and say, all right, well, I' able to get away with $15 per hour and I'm able to still attract talent. $15 per hour is my base pay in P4P and divided by 80, guess what? I'm like 20%. What is that, 20? It's like right around 20% now is my percentage here. So it's less than 25. Great. The lower I can get this number, the better. Usually means I'm gonna have better margins. And it's also meaning that on P4P, the majority of their pay is gonna come from the performance dollars instead of just their base pay. And you might be saying, well, that's so bad for the employees. No, I'm giving them a percentage of this revenue here. But my base pay is right here. Now this number right here is gonna be determined usually by your local labor market. If you can get employees at $15 per hour base pay, that's the number you should have as base pay on P4P. Now you might give them say a third of labor revenue, which means they're gonna make a lot more than $15 per hour as long as they're half.

Needs to be less than 25% of the number you're charging the customer. So in this case, passes the litmus test. Now, what does not pass the litmus test is if you're charging, let's just say $60 per hour to the customer. And then in order to get employees, because your labor market's really hot, you've got literally offer $20 per hour as a base pay on P4P. If you do that now, all of a sudden you run the math here. 20 divided by 31, we're gonna come up with 33%. Very bad news. I consistently see this, and I see this as being a very hard business to make any money and any profit on because not less than 25%. We'll talk more about P4P in the future. But ultimately you need this base pay per hour that you're paying employees to be less than 25% of what you're charging customers. So the question is, well, how do I determine my hourly rate? Very simple. Ask yourself what's the kind of average going rate for labor in your market? If it's $20 per hour, that means in order for this equation to work where I'm gonna be at 25% or less, it means that my hourly rate to the customer needs to be $80 or greater. And if I can't do that, I've got to figure out either A, I've got to lower my base pay or B, I've got to increase the value to my customer, have a great website, have great customer service, have someone answer the phone that have a web chat on my website, have a great truck that's painted uniforms, trained employees. My marketing's gotta be in point. That all generates value to the customer where I can increase my hourly rate to the customer to where this equation works out. So in my opinion, your hourly rate to the customer, that's always the golden question. What should I be charging per hour? Should be determined by your biggest variable cost, which you are basically reselling to the customer, which is labor. You are selling an hour's worth of someone's labor at a marked up rate. And I want that rate to be at least a 4x. Alright? So at least a 4x is the equivalent of saying this ratio 20 divided by 80 equals less than 25%. Now, the greater this number can be in terms of right here, if still I had $20 as my base pay and I was able to make this 90, well now guess what, this is now going to be like 22, 23% and that's great. But the lower this percentage can be, usually the higher your profit margins are going to be. And Most importantly on P4P, the more their base pay is going to be further away from what they're actually making on P4P and there's going to be a more and more bigger piece of their paycheck that's constituted by performance dollars instead of their base pay. We'll talk more about that when it comes to P4P pay for performance. But this is what you are going to use to determine your hourly rate. You're going to. Your hourly rate needs to be determined by the going hourly rate for employees just to get them onboarded. I believe that in this case, for example, this is a local shop right here. Let me show you what we have at our local shop. Now and again, this always goes up. But 18 is what we get for employees locally in terms of their base pay. And we charge $90 per hour to the customer. So that's like 20%. Very good. Passes a litmus test. Very profitable. Awesome. And you've got to realize that this number here is probably going to go up with time. The $18 per hour, just what you need to attract them. You want that number to be high enough to attract talent, but low enough to make sure that this number still works. Because guess what? On pay for performance, I'm going to give 33% of labor revenue to the employee. So they're not going to make 18. The average employee at the local shop makes like 23, 24, $25 an hour. But I want to keep this base pay as low as I can while still attracting talent, because this base pay is going to attract talent. And by raising this number, I'm really only giving more money to my lowest performers because the highest performers are already making way above $18 per hour. So raising base pay on P4P doesn't really help your best performers. We'll talk more about that when it comes to P4P. But that's the first thing is determining your hourly rate should really be determined by what's your going rate for labor in your market. Making sure that this equation equals less than 25%. So you can literally work this backwards. Oh, you know what, Mike, in my market, I don't know what I need to charge per hour. What should I be charging to my customers? Go on Craigslist, go on Facebook. Look at all the landscaping and long hair companies. What are they offering per hour underneath hourly wages? Just as an average. So that's $15. Great. What do I need to be charging my customers per hour in order for this to work? At least $60 is what's going to allow this equation to still work. Ideally it's 65, 70, 75. And this number gets. This percentage gets even lower. Next thing I want to talk about, because I talked about price quite a bit there, but what I want to talk about is in general, in your business, there's something called levers. And levers are something in your lawn care and landscaping business. Any Business, really, that allows you to make a small change and have a massive impact in another part of the business. If you look at this, this is what's called a fulcrum. And then we're going to have this kind of a teeter totter thing here.

Boom. Like this. This is the fulcrum. And you have two different weights. You might have a weight here and a weight here. Now, when you have this kind of dynamic, what happens if I move this side of the equation by, say, 2 inches to right here? If I do that, it's going to move the fulcrum or the other side of the equation, I should say it's probably gonna move it by like 4 inches. So if I move this by 2 inches, literally has a 2x impact over here because the distribution is so great with this lever. Okay, this is the lever. So the question is, in your business, what can you do that is small changes that leads to massive results. And the two levers or three levers I want to talk about today are gonna be the things that in your business you can make small changes on, and they're gonna make massive impacts on your bottom line and in your profit. The first thing I wanna talk about is retention. Retention is simply the opposite of attrition. So If I lose 10% of my customers every single year, that would mean that I retain 90%. I lose 10%. That just means I retain, I keep 90% of them on. If your retention is really low and it's like 20, 30, 40%, or let's just say it's 50%. If your retention is 50%, that literally means that one out of two customers leave your business every single day, year. That is bad in the lawn care and landscaping industry. What's typical in our industry is about.

20% attrition, or I'd say 80% retention. Why? Because about 20% of your customers are going to leave every single year because they pass away, they move, they sell their house, they go, they downsize, whatever it might be, and you lose a customer. So about 20% is going to be inferred. Now, this is why it's so impactful. Because if I have a 50% retention rate, 50% of my customers I keep every year, but I lose the other ones, I lose half. There's a 50% attrition, 50% retention, that would mean that the average lifespan of a customer is two years. Now, if I take that same business, but instead of having a 50% retention where I lose half my customers every year, I only retain 50%. Instead of my retention being 50%, let's have a retention rate of 80%, kind of average for the industry. How can you improve that number? Well, you can have better customer service. You can make sure that you make the customers happy, you have great office staff, you answer the phones, you take care of your customers. Those are all ways to increase retention. Have a credit card on file, that's how you can increase retention. So instead of having 50% which would assume imply a two year average lifespan of a customer, if I change the retention to now being 80% where I only have an attrition of 20%, that would now lead to an assumption of five year lifespan of a customer. So just by changing my retention, I'm able to increase the lifespan of a customer by literally more than doubling it. I'm more than doubling the lifespan of my customer. So if I make $1,000 per year on each customer, I go from $2,000 per customer. That's the value of the customer, the lifetime value of a customer. Or sometimes you do. LTV Lifetime value of the customer at $1,000 per year, two years is the average. I made $2,000 on that customer. I can literally turn that into $5,000 simply by making sure that I increase my my retention. I keep the customer. So I'm going to more than 2x my profits just by retaining my customers. And Instead of losing 50% a year, I lose 20%. Little changes in the business, improving the way that you communicate, having automations, having credit cards on file, having where you talk to the customers, sending monthly newsletters, all of this allows you to increase your retention. Little things in the business that lead to dramatic, dramatic results and profitability. The second thing I want to talk about is close ratio. I talked a little bit about it in the previous video, but when we talk about close ratio, this is a massive, massive lever in your business. Especially when you're first getting started. I truly believe this is the only thing you should care about when you're scaling your business from 0 to 250,000 in revenue. Now in my opinion, you should have a 30 to 50% close ratio if you are in profit mode. Remember, go back to the previous videos. I talked about the two different directions you can go with your business. Either profit or growth. If you are in profit mode, you are going to be thinking about 50 to 30% margins. If you have higher than that number, it means that you can raise your prices. If you have lower than that number, you probably have a serious flaw with your business or your prices are too high. Whereas if I'm going for growth, I'm going to have 50 to 70% close ratio if I'm trying to grow the business fast. And the reason I'm gonna do that is because my prices are gonna be a little bit lower in order for me to have a higher rate of growth. I'm getting more customers now. Why do I not want over 70%? Because if I'm over 70%, I'm literally leaving money on the table. My prices are too low and I need to increase them. So for everyone out there that bragging that they close every single job or 95%, you are leaving money on the table. And the next thing is gonna scare you by what you're leaving on the table in terms of price. But this is the general rule of thumb that I'd be using if I was you. I'd be trying to use this to at least 250,000 revenue. Assuming you wanna grow a million dollar business, if you wanna grow to a million faster, you might literally use this 50 to 70% close ratio until you hit a million. If that's really a big goal of yours, is growth, that's what you wanna be at. Not higher than this because then you're leaving a ton of money on the table, but not less than this because you're gonna really inhibit the rate of growth and you're gonna really not grow as quickly as you possibly would want to. So again, you've gotta determine do I wanna profit and have a higher margin, increase my prices, charge estimate fees, charge dump fees, really increase my hourly rate back to what we just talked about, increasing the hourly rate to the customer, or do I wanna go into growth mode and have a higher close ratio. And close ratio is simply one estimate divided by total total estimates. That's how you're coming up with this number. The number of estimates that you won divided by the total number of estimates is going to give you the percentage that you've closed or your close ratio. Now, the third lever in your business, again, these are the things that make massive impacts in your business. Because literally you could run the math on this over the course of four or five years. If you have a 30% close ratio versus a 70% close ratio, your business will literally be a third of the size in a few years if you just have a close ratio of 30 versus 70%. So trust me, close ratio, very important. How can you improve close ratio? Have a better response time to get the estimate to the customer? Maybe you do it over the phone instead of meeting them in person. How can you make sure that once you do meet them in person for a project, the estimate gets back to them within a day or two instead of a week or two? All of these little things that you can do to improve your close ratio, your communication skills when you're on the property with the customer, your online reviews that you send with the proposal so they get that feedback, that social proof that they need to make the buying decision, all of that increases your close ratio. These are three things that you must be focused on. And the last one is most relevant to what we're talking about today, and that is price. Changing the price on your work is going to dramatically improve and affect your profitability. Let's assume real quickly that we have a $40 per cut lawn that we are charging on all of our lawns. As an average, we're charging $40 per cut. And we're gonna just assume that we are making 25% profit margin. So not bad, right? You could scale this up as big of a business. You could have 100 customers, 1,000 customers, whatever. Let's just assume we're doing an average cut price of $40 per cut at 25% profit margins. That would assume that we're making $10 per cut. Now let's assume that we have 100 mowing customers and we mow everyone's lawns four times per week. So let's just do the math this. So four cuts per week times 40 equals 160. And that's the amount of revenue per customer. Multiply that by 100 is going to equal $16,000 in monthly revenue that we're making from mowing. And if we assume a 25% profit margin, our profit is literally going to be $4,000. Pretty cool. Hey, check this out. Let's go ahead and erase these top two real quick because I want to emphasize price here is a massive lever in your business, and really, ultimately, your goal is, in your home improvement lawn care business is to be able to increase your prices. That's ultimately the goal of your business. Make a very sticky service that people do not want to leave. And the pain of leaving and finding another provider is way greater than the pain of a price increase. And we'll talk more about price increases down the road. But we have a letter inside the templates and documents. We raise prices consistently almost every year to our customer base. And we usually have 2 to 7% attrition people that leave because of our price increases. And usually it's more around the 2% marker. So you've got to keep raising your prices. But the only way you can do that is having a very sticky service that customers do not want to leave and go change providers and risk making the wrong decision on finding another vendor, finding another landscaper that is $5 cheaper a month, $5 cheaper per cut. But they don't show up sometimes and they don't have a credit card on file and they don't have automatic billing and everything is done with check underneath the front porch mat. All of that is value to the customer. So you can raise prices and your service is sticky enough to where they stay with you. So you've got to have a high enough value to the customer like we talked about in the previous video, in order to be able to charge higher price. You can't just be like, I'm just gonna jack my prices up. But again, remember, the transaction will only go as long as value is higher than price. If you just jack up price, this is when you lose customers. So instead of on a race to the bottom, of always making the price lower and lower, focus on how do I focus on improving the value, Having a better website, having a great experience for the estimate request form, having a great automated response system for the estimate request follow up. All of these things are improving the value so that you can increase price. And as long as price is lower than value, the transaction will still take place. And my goal is to have a premium product where I can charge a premium price and still the transaction goes through. So comes down to price. Let's take this example here. Now, instead of $40 per cut, we're gonna charge $50 per cut. So now the math is this. Four cuts per month, still the same amount. But now instead of $40 per cut, we're gonna charge 50. 50, okay, that's a lot. No, it's 40. Anyone that accepts 40 is usually gonna accept 50. It's very marginal difference. You might have to keep them for a year and then raise the prices in year number two or three or something like that. But the goal ultimately is, watch what happens here. A little tiny change in price. We're gonna increase the price by $10 per cut. Watch what happens here. So now it's gonna equal $200 for our, which I'm gonna call it here, our $200 is our cost, or, sorry, revenue per customer. Now, down here, we can assume that our expenses equal, whoops, equal $12,000. My goodness, I can't write. So because I know that I have $16,000 in revenue and $4,000 in profit, I can assume that I have a $12,000 in expenses. Now what's really cool at raising your prices is it doesn't change your expenses. I'm sorry, still going to have $12,000 in expenses on all these customers. It doesn't change anything to raise price. It's a lever. I change it and massive change in profit. And I do not have to change my expenses. But check this out. $200 per customer that I'm gonna make and I'm gonna have 100 customers. Whoops. Not 1,100 customers that I'm going to be able to keep. These customers, they have great value. I'm gonna retain them. But instead of $40 per customer, now I'm charging 50. Now it's going to equal $20,000 in monthly revenue, minus $12,000 in expenses is going to equal $8,000 in profit. Check this out. By raising my prices $10 per cut, I am literally going from $4,000 profit to $8,000 in profit. So a 25% increase in price resulted in a 100% or.

A doubling of my profit simply by raising my price. Small change in price, $10 per cut literally doubled my profit. That is the power of pricing. That is the levers that you must focus on. And that's why it's so important to build value with a website. Build value with uniforms, build value with great trucks that are painted and have a great brand and your uniforms and you have a great CRM and everything is functioning on automations. You've got to do all that so you have the ability to raise prices and not lose these customers. That is the whole goal and ambition of starting your lawn care business is create a recurring revenue stream that you're able to have price insensitive customers to be able to raise prices and literally double your profit. That's a lever. This is what you've got to focus on when it comes to your lawn care business. Talk about how to estimate for a mowing recurring lawn service. Okay, now the reason we want to start with mowing, especially in year number one and especially in year number two. And as we kind of grow the business, we want to continue to make sure that I'd say at least 30 to 30 to 40% of your business, at least 30 to 40% of your business is recurring revenue. That revenue is most of the time for mowing and maintenance services. We're just going to kind of combine all of those maintenance services into what we call lawn care or mowing. And so the reason we want to start off with the mowing is create that recurring revenue. We make sure that we know we have money coming in the door and then we can focus on, once that's established, on getting those higher profit margin landscaping jobs. Now the reason that works so well is because you can actually see a direct correlation between the amount of recurring lawn mowing jobs you have and the number of landscaping jobs that you're gonna get. So as you get 100, 200 lawn care jobs that you're mowing every week, what happens is all their neighbors start to see your trucks more. And all the word of mouth, that's when it really starts to go to action for landscaping. The really where the meat is on the bone, where, where you get your profit margin really working and get higher priced products. And that's what you're trying to sell. But in order to get there, you'll see a direct correlation between the more mowing clients you get, the word of mouth increases. People see your trucks more, there's more employees, you're just around in the community more. And then you'll get those higher profit, higher priced landscaping jobs.

I do believe if you only have 15, 20 customers, it's not a good idea to be trying to do things over the phone because especially if you have really, really thin margins and like every dollar counts because 5, $10 difference on mowing price is going to happen. You're gonna be off by 5 or $10 occasionally if you're doing estimates over the phone. The reason you do estimates over the phone is when your volume is so high and speed is more important than accuracy, you are going to close more jobs if you get, if all things are held consistent. If you get the job, get the estimate to the customer faster, you will close more jobs. The question is, how accurate are you on that estimate? That's gonna come with time. So typically when you're first getting started, you're not gonna be able to accurately know how many square feet of lawn you get cut per hour, per minute. And you're not gonna be able to look at a 3,000 square foot lawn or a 8,000 square foot lawn and know accurately how long it's gonna take you. So I'm a little bit hesitant to tell people like you're gonna use hourly. You can do it over the phone when you have five or 10 customers because you might lose a customer that would otherwise be really good. But because you did the wrong calculations, you're charging $80 when they should be 60 and you lose the customer. So a couple reasons why I believe that you should do over the phone is if you're getting lots of estimates, you're getting like literally you have 100 plus mowing customers and you're getting lots of leads every single day. And just driving around with all of them is a waste of time. If you're getting multiple estimates every single day, multiple leads for mowing, probably a good idea to start thinking about doing it over the phone because the time it takes you to drive to all of them is killing your margins. It's taking your time. And ultimately, if you can save 30 minutes and be on a job site where you're charging $80 per hour, it's not the 30 minutes it takes to go to the client's house. It's $40 worth of labor that you would otherwise have done gotten, because the opportunity could have also been that you were on a job site. So just realize that there is absolutely the value of your time. And if that's becoming 1, 2, 3, 4 a day, now you're spending two hours driving around doing estimates. You should just do those over the phone and realize that you might lose an occasional job or be inaccurate slightly. Now, worst case scenario, you do an estimate over the phone, buy square footage, and you were off by five or ten dollars, and you just tell the customer, be honest with them, and you reset the price. You might lose some of them, but most of them, they realize, hey, they're doing it over the phone. They never showed up at my property. They realize that you might have to edit the price. Okay, so don't. That's the worst case scenario is you do the wrong price over the phone and you have to edit that with the customer. It's not a big deal.

And so again, what you're trying to do is save time and you're willing to, willing to sacrifice perfection of your estimate and accuracy in exchange for speed. Not usually necessary, or something I would recommend if you have a really tight route and you're literally all of your jobs within a few miles, you're literally passing all of your estimates every day. You might as well just drive by the property, get a more accurate estimate, build a rapport with the customer. Like at the beginning, you actually want to meet with the customer because you can build a rapport and you'll get a higher close ratio. Whereas when you're getting 5, 10, 15 estimates a day, you do not care about rapport. You do not want to talk to the customer. You want to pump these bad boys out. It's all a speed game because you might only be Able to do several appointments per day at a certain time, whereas you can pump out 50, 100 estimates a day if you're just doing them over the phone. So number one, I would be looking at, if you start getting multiple leads per day for mowing, probably want to start thinking about doing it over the phone via square footage. Have a rate matrix that based upon their square footage is a certain price per week and for bi weekly. Now, the other reason you would want to do this is if you have a very, very large area that you service, which I don't recommend you do, you should have really good route density. But if you don't have good route density, it's going to push you more in the direction of doing it over the phone. Because now it might take you an hour to go drive to their property. And that's horrible. You're wasting a ton of time and money going and driving and the fuel and your time is otherwise being on an actual project. Lots of costs are going just to get the estimate to them. So that's gonna push me more in the direction of doing it over the phone. Now, over the phone is most impactful. Doing estimates over the phone, we call them OTP over the phone estimates. Most impactful when you have an actual live agent, a live office person on the phone. Because think about it from the customer's perspective. If they give you a call, they leave a voice message, they submit an SMA request form, and the next day they get an estimate in their email. That's no different to the customer experience. If you get an over the phone estimate like you did digitally over satellite, or if you drove by their property and gave it to them, the customer, their experience is the same. Now what really sets OTP apart from everything else is when they can call in and get an estimate on the phone, close the job, get a credit card on file, get it scheduled and run rocking and rolling. This is what we do at command center for our franchisees at Augusta Lawn Care. Every single day, thousands, not thousands every day, hundreds are sold every single day of jobs that are called in. Customer wants a price. We literally measure it live. Give them the price, send them the estimate, get a credit card on file and schedule the job. That's the real power of over the phone because it actually changes the customer experience versus if you're going to get an estimate to someone the next day using satellite imaging, not as impactful because you could have just drove by the property. So the customer experience doesn't change unless you actually have a live agent or Someone that gets an extra request form in on email and five minutes later is measuring the property and sending the estimate back. That just blows people's mind. And it makes it more relatable when you do need to change the price on the job. Because they're like, okay, obviously when I called in, they gave me a price over the phone and told me they were measuring via satellite. They're more receptive to a price edit or change occasionally when you need to do that because of a miscalculation via satellite. So the real power of OTP happens when you have a live agent. If you're just doing over the phone the next day, or that evening, or getting out a day or two later, it's not super impactful, honestly to the customer because it doesn't change their experience. They don't know if you drove by or if you just did it over the satellite. So I recommend really focus on otp. When you have a live full time office person, that's when you can really cash in on otp, but you're gonna go that direction more. So even if you don't have a full time office person that's live, if you have a really wide route, a really big area geographically, they're servicing, you don't wanna be driving 45 minutes out in one direction to go do an estimate for mowing. So keep that in mind. Now when it comes to over the phone estimates, a lot of people wonder about, well, what happens if it's overgrown? What happens if I did price it wrong? Just charge on the first visit, just charge a per minute rate, right? So just say, hey, Mr. Jones, it's going to cost you $60 for weekly service, $90 for bi weekly service. Great. We're gonna get set up for weekly service. Just so you know, that first visit, in case your lawn is overgrown, we're gonna edge it, dial it in, get it to where we need to be, where it needs to be at. So if it is overgrown, we charge a dollar per minute per man in order to get it up to spec, up to our standards. And then after that it's gonna always be that $60 per cut. So that's how you can quickly get the sale and then make that indication. So that way if it's three feet overgrown, you don't show up to a $60 mow and take you six hours to get the lawn done. You don't want that on P4P, your crew will kill you. So you've gotta make sure you have that coverage that if it is an Overgrown mow. If their edges are way overgrown, you're gonna spend five times as the usual time that you are covered in that instance. Okay, the next thing I want to talk about is the fact of the matter is there's multiple ways to do estimates. Okay? There's over the phone, then there's a drive by we call it. Then there is a scheduled estimate and then there is a exact time estimate. Okay, we do not like exact time estimates. We do not want to set up the estimated for an exact 2pm we're meeting the customer. Very hard to schedule that. Especially if you're the owner operator, especially if you're estimators out in the field working very hard to get exact time estimates. Now scheduled estimates, I'm gonna give them some sort of a time range and I typically like this to be at least one hour. Some of our franchisees will be like up to four hours of the time range. This is much easier to hit if the customer actually wants to meet you in person. So these are scheduled in person. I don't like these as much either though because it means that I gotta actually make sure the customer's home. I gotta make sure I adjust my schedule and all the rest of it. Drive bys are my favorite. These are even for projects. I ideally like this because I can do it anytime I like. In the evening, late at night, on the weekends, whenever it's convenient for my schedule as an estimator. And honestly I can do like 20 of these a day easily versus if I'm doing schedule, I might be able to get 8 to 10 a day because I gotta make sure I hit all the windows of time. My route isn't is efficient because I'm just trying to accommodate people's schedules. So much more efficient. When you start talking about high volume of estimates per day, you want to be doing as many drive bys as possible. Now your close ratio if you're meeting people might be higher if you're scheduling and talking to them and having an in person connection. Because remember, if people can know like and trust you, they're going to do business with you. Easier to make that connection and that rapport when you are meeting them in person. But you're just not gonna get that volume in. So if you're just getting started, you might wanna do the scheduled estimates to build that rapport. Have a higher close ratio. But again as time goes on and you get tons of leads like our location locally now just 60, 70, 80 plus leads sometimes a day. We wanna be pushing that as much in this direction as possible over the phone is the most optimal because I don't have to send anyone there. I don't have to have someone drive there, I don't have to have an estimated expensive to send there. I don't have to pay for gas and fuel and all the rest of it over the phone is the best. Literally in 5, 10 minutes I can get an estimate over the phone, get a credit card file, get them scheduled. I don't want to be spending 20, 30 minutes driving there, walking around and all the rest of it. I definitely don't want to be spending an hour meeting with the customer, yakking and talking about the weather and whatever and all the other projects they want to do down the road that you can't even service. I don't want to be doing that. So the goal is always number one, get to over the phone. If you don't have an office person, if you don't have a high volume of leads, start moving this direction. Especially if you're trying to build rapport and have a high close ratio. If you're doing one, two leads a week, definitely schedule them. You want to close every single one of those bad boys. You want to meet that connection, build the rapport with the customer. You've got to build that exact. Build those scheduled estimates in. And at the very worst, I don't want you to basically ever do this, but sometimes with like property managers or commercial work or hoas, they don't want an exact time for you to show up. But it's very, very hard to accommodate schedules. It's very inefficient for the estimator that are sitting around waiting a lot of downtime, not efficient at all to do exact time estimates. All right, ultimately density is gonna be the thing that allows you to be most efficient on all of these. So if I do drive bys, if I'm super dense and route dense, I can do 25 to 30 of these a day. If I'm driving 30 minutes here and then 20 minutes here, I might only still get 12 to 15 of these a day. So really, route density is so important not only from an efficiency and profitability standpoint when you're out mowing and doing the jobs, but also just your efficiency in getting out estimates is much more efficient if you have a tight route. Okay, Last thing I want to talk about when it comes to mowing prices is weekly versus bi weekly. In that video I talked about having $40 for weekly service and $50 for bi weekly service. We would never do that. Now we always want to charge at least 50% increase on the bi weekly service. So if I'm going to charge $40 for weekly, guess what? I'm going to charge $60 for bi weekly. Okay, if I'm going to charge $50 for weekly, I'm going to charge dollar for bi weekly. Why is this 50% premium baked in there? Several reasons. Number one, it incentivizes people to do a volume discount. How you want to sell this to a customer is, hey look, you're gonna get a 25% cheaper price, a discount in order to go weekly instead of bi weekly. So sell it as a discount to go weekly and stay on that volume discount. Same thing goes when you go to the store. If it's like, hey, buy three, get the third, get, get the fourth one 50% off. It's not like the fourth one cost them any less to perform or cost them any less to produce. The same way that it doesn't cost you necessarily more to do the second cut, but it's a volume discount. And usually when you buy weekly service, there is more lawn to be cut, more grass. Couple things takes longer to edge. But don't really focus on that. Just focus on the fact that it's a volume discount. If you do more services with us, we're literally doubling the amount of services we're going to give you discount. You're gonna keep that lower rate. So when you explain it like that, customers are less likely to go to biweekly service and therefore we're able to increase our recurring revenue. And if someone it's slow during the summer, things are dormant or something like that, people want to switch, have a cheaper cost and lower their budget, great, we will still do their service for bi weekly. This will cost them about $150 per month versus up here. This is going to cost them $200 per month if we did it four times in the month at weekly. So it's still going to save them money. It's still a cheaper option and we allow them to do that. But it allows us also to make sure that we're going to be very profitable on this. Because literally charging 50% increase, our margins are fantastic. We get plenty of budget hours when we show up at the property. And so I would recommend having at least a 50% increase and explain that in the way of a volume discount. Don't get hung up on like, well, we have more clippings or takes us longer. Just hey, look, every other business you go to when you buy more of Something you usually get a cheaper price. So when you buy more services from us and more visits, we're able to give you a cheaper price. That's how you want to sell it. And this is going to help you with cash flow during those months when people are more inclined. When the grass is dormant, it's going to help you with cash flow, because although you're doing less services, your profit margins are going to be beefed up to the point where your profits will still remain the same. You might have less budgeted hours on the schedule, but it's definitely going to pad your profit margins during those months when the grass becomes dormant and you don't need to mow it every single week. So still allows them to have a cheaper option, gives them a discount for a volume, gives them a discount for volume buying more services, and it helps with their cash flow during those months when you might not need to mow every single week. So definitely recommend at least a 50% increase on that bi weekly service. We literally hardly ever have. People have issues with it, and it really incentivizes people to just stay on weekly service throughout the entire year, the whole growing season, because there's not a massive difference in the savings that they'll get. All right, so now we're going to talk about how to estimate for landscaping services. So this is going to be anything besides mowing. Essentially, everything from weeding, tree trimming, leaf collecting, gutters, pressure washing, building retaining walls, installing mulch, gravel, like the whole bit, everything besides mowing. This is what you're gonna be looking at. It has to be built on something that is gonna be scalable and that we can use time and time again. Regardless of the person, regardless of who's estimating, regardless of the technology or the truck that's not working or is working and the employees that are are not working that day. If you can create a system and a very precise way of estimating jobs, it's not only going to be beneficial for you, but it's also going to be beneficial for your client, who's going to be able to see consistency and be able to see that you are confident in the prices that you charge.

Hey, it's Mike Andes and today I'm actually at a real client's house and I'm going to be showing you a couple things that you might want to do at property cleanups. This specific cleanup is a weeding and property cleanup. It's completely overgrown. You can see here weeds coming out to the beds. This tree needs to be completely removed and it's actually a drive by estimate and we kind of use this a way to get as many notes as we possibly can from the customer. So we can use drive bys instead of having to meet the customer and take way longer to get the. You can probably get 8, 10 timed estimates in a day. Where you have a meeting with a customer. You can get probably 20 drive bys done.

So this is a drive by.

I'm able to get enough data, make a video for the client, make a, take a couple pictures potentially to clarify some things. But you can see there's a ton of weeds in the flower beds here. I flip this around, see weeds all throughout the flower beds. And one of the things that I want to talk about today is how to do an estimate like this. What I would recommend doing is breaking up here in the back. You can see you get a whole bunch of weeds overgrown inside of the sidewalk area. I can't even walk back there. This is called horse tank, all these massive weeds back here. But one of the things you want to do when you're doing an estimate like this is try to break it up. I call chunk it. And that is how do I make sure that if the customer can't afford to do a three thousand dollar cleanup of all these flower beds, how can I chunk the estimate in a way that is easy for them to understand as well as potentially accept a piece of the estimate. So for example, in this estimate I'm going to do the front yard as weeding and that's going to include from this corner of the house right here.

All the way to the other corner.

I just passed over there. That's going to be the first line item. And this will allow them to be able to prioritize based upon their budget. So instead of giving them a three thousand dollar estimate, I might give them an estimate that has three one thousand dollar options. Now I'm going to make sure I bid each of these options though as if it's the only option they accept because they, the last thing you want to do. You can see on this side, it's from the, there's an angle in the back here. The last thing you want to do is have it where they accept one of the job line items, the one options, one of the chunks that you, you put in, in the job notes, the estimate and they only accept one of them. You're like man, I, I put five different line items.

I thought for sure I do, you.

Know, three hours for one, four hours for another, five hours for another, whatever it might be. And they accept all of a sudden, just a three hour cleanup. Now all of a sudden you're stuck because you're not going to be able to make any money on just a three hour cleanup. So what I would recommend doing is pricing each line item, each chunk, as.

If it's the only part of the.

Job that's going to be done so you can actually make a profit. Even if they only accept one option, don't assume that they're going to accept all of them. But what you want to do is do this. So that way instead of making a massive cleanup and they have questions like.

Hey, hey, if I wanted to reduce the price, where could I cut all those work change orders?

And all the rest of it can be eliminated simply by making sure that you take what's here, chunk it up. Because I'm not able to talk to the customer. They're not home. This is actually a rental for them. So I can't talk to them. What I can do is give them options, different line items of breaking the estimate into smaller pieces and again, make sure each piece you'll be okay with doing the job by itself with just that one line item.

So hope that was helpful. Take care. The vast majority of home service businesses, including lawn care and landscapers, believe that if they get more leads, they will grow their business. And they're right. You can grow your business by getting new customers, but you can also grow your business by taking your existing customers and selling more to them. There was one business that I really focused on on a turnaround recently and they went from $300,000 in annual revenue to $780,000 in annual revenue. And they cut their marketing budget that last year they had spent $28,000 on marketing. They stopped marketing 100%. Instead, they use copilot to send out mass emails and mass texts and upsell customers. And they also use the upsell feature. Now the reason that this is so powerful is because if I can take a customer that's on average, and this is about the numbers that was in their business on average was spending $1,000 per year with the business. If you have a thousand thousand dollars per year or ACV annual customer value, that means you would need about 300 customers to make that $300,000 in annual revenue. What that also means is if I can just get that customer to pay me more along the lines of like $2,500 instead of 1,000, I would be able to grow the business just like they did. And that's exactly what happened, they moved their ACV annual customer value on the same 300 customers to about to $2,500. Now, how do they do that? They upsold them more services. And so instead of them just having mowing, they would try to upsell them into mowing with aeration and weed control, or mowing and snow services, mowing and other services they offered inside the business. And so upselling is extremely powerful because guess what? You don't have to go get new customers. You don't have to go advertise. You don't have to. You have your customer acquisition costs on existing customers in your database is 0. 0. And so if you're not sending mass texts and mass emails to customers in your database and trying to sell them more of your services, you're missing out. It's crazy to me that in home services we somehow go out to people we don't know, that we have never done business with that they don't know like or trust us. And we try to spend money trying to get their attention. When there's people in our database that we have done work for in the past or have at the very least got an estimate from us that we could see sell services to, they've already raised their hand and said, I need services. They've already done that. Why would we not try to sell to them if they've already opened up their wallet? If they've already spent money with your business, why would you not sell to that person? They've already expressed not only an interest, but the ability to be able to buy your services without getting more leads, without paying more to Google and Facebook. You can grow your business tremendously and most importantly, profitably, because you're not running around doing a whole bunch of estimates throughout the day. You're simply communicating with customers that have already done business with you.