Broke Landscaper… with Baby #3 Coming!

She tells me all the time, this is a business. You need to make money.

I've seen the numbers. He gives away a lot of things.

We're here to make money.

We haven't paid ourselves in two weeks. I don't know what to do.

Today we're in central Illinois visiting David from Thrive Lawn Care.

I think I hear this is a business, not a charity. I probably hear that, like, once a week.

David made over $200,000 in revenue last year, but his bank balance is dangerously low.

Payroll's expensive.

We want to make sure that they're paid because they have families.

Right now, I cannot afford to this contract, and it's going to put me out of business.

You didn't get paid last month.

They hit just $500 in the bank account.

Looking back, I don't know if last year was more of a cash flow issue. I didn't even know what I was doing.

I have to remind him, like, we're.

In a business and they have high interest credit card debt from a medical emergency that happened last year.

We had an employee that was terrible. I trusted him too early. Learned from your mistakes. He just never did.

They're paying $3,000 a month to an ad agency that won't show their results. How many, like, leads in a month do you usually get?

I have no idea.

And worst of all, David doesn't know his numbers.

I wasn't doing monthly bookkeeping or anything, so I didn't know my numbers at all.

This is the business turnaround show. My name is Mike Andes. I'm the founder of Augusta Lawn Care, where we have over 170 locations around the world. I travel around the country fixing struggling businesses. Our goal is to give David a strategy to turn around the business in the next six weeks and get the company back on track. Like, we are here to make a bunch of money, and. And if you're not going to make me money, you're out.

What if I just fire everybody this year?

How you doing?

How you going, David? Good to see you.

Nice to see you, man.

Absolutely. Dude, you're taller than I thought. Let's go. Great spot you got out here.

Appreciate it. So it goes back to, like, the farthest white fence that you can see.

Got chickens. What else you got back there?

We have two goats that we're hoping to breed soon, and then we have a guardian dog that guards the ghosts and the chickens. Yeah.

And then do you use that kind of storage?

Yeah, that's like the equipment barn over there.

Do you want to go through it?

Real quick. Yeah, absolutely.

Do it. How long you've been at this Property?

August of 23. I wanted to offer more personal customer experience, so I started pushing lawns out of the back of my SUV with free equipment. And then it grew into what it is. It's not pretty, but it's where we keep everything. This is New Bern. We don't do much out here. Everything's in Springfield and Chatham and most of it's like small residential.

And what's the split do you think? Like 50, 50 essentially between landscaping and mowing?

In terms of revenue, yes, just about. I look at mowing as sort of vehicle to get into other things and that allows us to do the landscaping and do the other things that I want to eventually do.

First year was like 50,000. Did you come for another job? Do you come from landscaping?

What was your. So yeah, my wife and I got married up in Michigan. We moved to Wisconsin. I did some school there and then I got hired on a landscape company there, lawn treatment company. So I was doing minimal landscaping like mulch and then spraying pesticides and fertilizer. Found out I really enjoyed the work. But I told myself I would never own a company because I saw how my boss ran it. I was really sick of how other companies had treated their employees or had lied to them. Bold faced and expected me to lie to them just so we can make a buck. I would much rather lose a client over being honest about something and not ripping them off than, you know, doing, doing just that. First year was 25,000. I was working part time at a closet installation company in town. Second year was 52 years ago was 150. 200 was last year.

Got it. So this year projecting, you kind of think like 250, 300. Is that what you're shooting for?

I'm really hoping for 300 minimum. Ideally I want to hit like 350 in revenue. That's the goal. But I'm totally okay with that if that doesn't happen as long as we're profitable. Last year pretty much all of our profit was paid to us because that's what we felt like we had to make. And then there was like nothing left over. I want to have it to where we can pay ourselves a comfortable wage and the business still has some to either pay distributions or reinvest back in the business or save back for winter. I just want to get the business to the point this year where it's just healthy. I don't care about the top line. Mowing is going to start up next Monday. Surprisingly. I can't believe it's already here. My wife's pregnant. Due in May.

Oh my word.

And I'm hoping to have a landscaper ready for me to like at least step out for a week or two and take care of that.

Is she still working with you out in the field?

No, she's actually never worked in the field. She's a stay at home mom and she helps a little bit with like finances and budgeting. Now she would mostly be considered like HR if we have any conflicts and stuff.

I, you know, I try to be a big part of all of this and I am a big part because I stay at home and while he goes out and does all this stuff and I do a ton here, but at the same time I still, you know, I back him up. I try to, I'm still part of it.

And then this is the trailer. I assume the truck is used for the landscaping side.

So yeah, the dump trucks, landscaping and projects. That's the mowing truck and the mowing trailer.

Okay.

Hey Brad, you can go ahead and dump that. We got animals. We wanted this place for the kids to run around and not have to worry about cars. We have two kids. My oldest is four. Then we have a two year old, then one on the way in May. And it's always been my wife and I's dream to just be out in the country. A lot of times I'll go forward, then back up and break super fast. There you go.

Now just pull forward.

All right, go.

You're good. Look at that job sheet. So on that job note to go to Chapman Stone first, see if they have cedar mulch, that's what you'll be using today. And then when you get the mulch out, then you can put your debris in the bed.

So the biggest glaring problem is the fact that we have three full time employees and a part time admin person doing 200,000 annual revenue. That's bonkers. And so is right now he your main employee or do you have a couple others?

So yeah, he's our crew leader. I kept him from last year. He's had a few years experience now and he takes great care of the properties and clients. And then we had two other guys last year, my landscaper, I ended up firing him and then we had a crew member under him and then he ended up quitting. I just hired two more guys that are starting next Monday. People is the reason I started Thrive. I try to put myself in their shoes. I stopped working for these other companies. Because of how they treated me and their customers. If I can create an environment where my customers are treated right and my employees are treated right, it's a win win and it only helps the company more.

The team is great and we try to treat them like family because that's a big thing for our company and family is so big for both of us. And so we want them to have a family life, like balanced. I feel like nowadays it's so unbalanced where work comes first and family should come first. So we try to be a little bit more lenient but not take such a hit with the business at the same time.

First year, like they did 50, I think they did like 100. Then they did like 150. Last year they won 19. I feel like they're kind of stalling out. And it'd be okay if it was him and my helper. They'd be profitable. But with him and three full time employees and an admin person. Yeah, you're never gonna make money.

Looking back, I don't know if last year was more of a cash flow issue. I don't know what it was. I didn't even know what I was doing. I wasn't doing monthly bookkeeping or anything, so I didn't know my numbers at all. I'm great at doing the work and talking to people and landing jobs, but when it comes to numbers, that's just not my expertise. In the last year, I didn't keep an eye on those numbers. That's changing this year. We're an LLC now, so now we have to have real books.

Well, this is like his fifth year in business. He still hasn't crossed 200,000. Like there's something systemically wrong with his marketing and advertising because even if you have bad pricing, you'd be growing super fast. So there's just something actually wrong with his, the way he's advertising. So right now, like I saw on the P note, we're spending like 20, 20,000 last year on marketing. What's that mostly going towards?

So in the beginning, in the past few years, it's all been Facebook ads.

Okay.

And I managed those myself and I got a pretty good ROI on those. When it came to the Google Ads, which I tried to do, I couldn't figure out Google Analytics. So I heard that out.

Do you know what your kind of customer acquisition cost is on those right now?

I don't.

And is he not providing like any like cost per lead, cost per acquisition, anything like that?

Nothing in like a actual report to me. We go over, I think we have like, a monthly call and we see how things are doing, but not that I know of.

All right, we'll look at it later.

Yeah, for sure. We got a lot to do here. We're planning on, whenever we can afford it, building a house over there. But that's going to be, you know, at least five to seven years from now, probably. It's a bit small in here. Sorry about that.

From an advertising perspective, something's off. Like, he's paying 10% of revenue right now. More than 10% of revenue is going to marketing. That's a lot of money right now. Like, my biggest, like, where I see the constraint in some regard or a big not problem. Like the fact that we're spending $3,000 a month on the ads for Google and we don't know where that's going. Like, we don't have traceable cost per lead, customer acquisition cost. There's no information he's sending you, like.

Clicks, Nothing, like, official. I've never gotten a PDF or anything written in an email. We've done, like, some stuff on, like, a video call and he shares his screen, but I still don't think I'm seeing an roi.

So how many, like, leads in a month you usually get?

I have no idea.

I do not need to know how Google Ads work in order to know are there leads? And is it costing me more to get these leads from Google than, say, Facebook?

I can look on jobber, pull it up 46.

Wow, that's quite a bit. So you're basically getting more than one a day. I'm really interested to see, like, if we can get any sort of other data from him in terms of cost per lead. He doesn't have tracking codes on your website to track when an estimate is being requested. If you're not tracking these numbers and know enough to be dangerous, then people will take advantage of you. And that's what's happening right here. What we want to know is, like, how much are we spending to get one lead? If we get, say, 50 leads and it's all from Google, like, 100% of which I would assume it's like half. But you're saying we get 40 leads on $3,000. We are spending, like, $80 cost per lead. I happen to believe that out of those 40, let's just call it 50 leads, maybe 20 of them are actually coming from Google. Why are we spending $3,000 for, like, 10 extra leads a month? And we don't even have clarity and insights and reports as to those leads came from that Google Ad. Now, for paying $300 customer acquisition cost, and we're only getting 10 new leads a month. Now, this might not be a good way to use our money. Like last year, we spent $20,000 in marketing. $2200,000 in revenue. That's like a 10x. Right. But that assumes every single customer came from our ads. But you already had like 150,000 in revenue the year before.

Like I said, I heard them later in the season to more than 10%.

Of revenue is going to market. If you're spending 10% of your revenue on marketing, you should be growing very fast. If you. Your marketing stinks. I'm concerned we're spending $3,000 a month on marketing for the return that we're getting.

I always looked at it like, okay, I want to spend 10% of revenue on marketing, but I never really tracked it. That's why I hired out my Google Ads, because I didn't know how to track it. And then I guess I just lost interest in tracking it. Yeah, that's not good.

He doesn't know how to ads. That's fine. Most business owners don't. But you should generally be able to understand, I need to know my cost per lead, and I should get a report on that. If someone on Google is not giving you a cost lead per lead, they have no idea what they're doing. What you want them to do is put a Google tracking code on your thank you page.

Yeah.

So when someone makes an estimate request form, that ad made that lead.

So he set up basically a duplicate of my website. It's my website with Go at the beginning, and I think that's connected to it. And I'm also concerned. I had this thought last year. I wonder if he didn't share those numbers with me because they didn't perform as well as he thought they would when I was managing them. I could be wrong because I don't track these things very well. But I thought I could have been getting more leads than he was getting me.

That is not your main website.

Yeah.

Like, I don't want traffic going to some other subdomain. I want to all go into my main website. Yeah, that Google's like, oh, there's a bunch of traffic going to this spot.

Plus they can't explore elsewhere on the. On the site.

They can.

Yeah. My website's trust thrive.com.

Yeah. Yeah.

His is go.trustthrive.com which is not connected to my website at all.

Oh, at all.

Yeah, it's just a landing page. A landing page? Yeah.

Oh, mercy. Yeah.

No, really?

Yeah. Okay, let's see. You spend $2,000 a month on ads and a thousand dollars on him. If you run the ads, he has to beat you by 50% cost per lead to make it break even on pay. $1,000 to him.

He definitely wasn't doing that last year.

I don't know who he is, but I would recommend cutting that. That's $3,000 in your pocket right now. And I happen to believe even if you turn that off completely, you probably get 70% of your lead still.

So here's the thing. We locked into a year contract.

Oh. So.

Which was last June, I want to say. At a bare minimum, I have to finish out till June, unless there's some clause that I can get out somehow.

Like, we're shooting for a 20x return as on new revenue. So, for example, if last year we did 200,000. If I spent $20,000 in marketing this year, I would expect a $400,000 increase in revenue, which would be on top of your 200,000. We'd be getting to 600 grand. In the perfect world. People, especially reaching out, like, from Facebook, and, like, they are taking advantage of the fact that you just feel inadequate and you don't know the number side of things.

Yeah, Yeah. I didn't even shot at tracking all that. I guess for now, like, until June, I just need to, like, be on it about, like, hey, I need to be getting this roi, you know, to even.

Yep.

For it to be worth it.

So for now, for the next few months, we're just like, hey, we. I would love to be able to see my cost per lead. And if he can't give that to you, it's a really tell. A tall sign. Or just the fact that he knows that and he knows really bad. If they were crushing it and even getting like 40, 50, 60, 70, $80 cost per lead, they would share that information because he'd be getting an extra 15, 20, 30 leads a month. That's not happening.

If I go to my request, I have no idea which one of these came from him and which ones of these were just from my website or from Facebook.

You could also just be like, hey, can I just have a list of the ones that are coming to your CRM? You can actually just ask for that.

Okay.

Like, hey, I just want to know which leads are coming from Google. A. Can you give me cost per lead? Which I think he has, but he's not giving it to you. Or at least say, I'd like to be able to see which ones are coming through your CRM so I can compare how many are coming from my other advertising. I can almost guarantee it's a horrible return investment.

We talked about like hiring out the office, hiring out the advertising. I do want to do that. I think last year I just jumped the gun. I wanted to get out of the field a little too quickly and I outsourced those things a little too quickly. I can handle the ads if I need to and I can handle the office work if I need to. I should have just done that.

I would also like to see that traffic going to your website and it kind of makes sense as to why you have 75 Google reviews but you're not ranking super high. Your traffic's lower than what I would have anticipated because you got 75 Google reviews, which in this area is like basically the highest. So you rank really well on Google listing but the native search is not there.

We rank really well for native search in Chatham, Illinois because that was my first target market. Only last year did I create a landing page for Springfield and keywords for Springfield. At first I wanted to stay out of Springfield because I was, you know, super small. I just wanted to hit this really tight knit community. And now that we're expanding, I'm like, well, I should really get into Springfield more.

Pull up your website real quick. Did you build this?

I did.

Oh, that's very good.

I was gonna do just Springfield because I wanted to have exceeding expectations there. But it's not needed. I was afraid of taking Chatham out and then losing my ranking in Chatham.

I want to see this here. Like serving Chatham in Springfield, Illinois with lawn care landscaping since X date, for example. Or just saying exceeding expectations of residents in Springfield and Chatham. From a conversion perspective, I would rather instead of having this stuff, I'd have an estimate request form. I would make a small form. I'd be putting it right here. I'd probably make even a button up top here. So as someone scrolls down, they're reading about you, they're reading everything. Always a spot to like. The call to action is really, really clear. I know as soon as I have a different page, like if you click this and it drops them or takes them to a contact page, immediately you're losing 30% of people. Yeah, just immediately like 30% of your people are lost by the fact that I can't immediately insert my contact information. We have one goal. Exceeding expectations. Great. They don't care. They clicked on an ad saying Lawn care, landscaping. Like, I have a problem, I want.

It solved because we get a ton of traffic on our homepage, right? And then anything else like it drops off, then the time spent on those pages is like nothing. Nothing.

Yeah. This part of your page, it's kind of Google.

Yeah.

If you're on the first like three spots of Google, you know, you don't get seen. It's the same thing with their website.

Okay.

Above the fold. Everyone sees it. Like when they come to the site, they will see this. The likelihood of them seeing the conduct page or the pricing page is like 1%. And like, if you look at your conversion, like you said, like, there's such a huge drop off if we can just increase that by double. So hey, for example, one of the 50 people currently submit an request for get to the site. If we get to like one more, it's like one out of 25. We double the business.

Yeah. Holy cow.

And that will do like, more for us than spending $3,000 a month.

Right now here I'm sitting here thinking like, my website was like, super good.

It's good.

No, no, no, I know, but it.

Could do a lot better. A lot worse.

It could do a lot better functionality wise.

The whole reason the website exists is to get people to go from interested to a lead. The 4L framework allows to identify the constraints in the business so we can continue to grow. There's four different components. The first is liquidity. Liquidity or cash is simply the money in the bank. I then take that liquidity and I turn it into leads. I go spend money on advertising to get more customers. When I get a bunch of customers, I have to get more laborers and those labors. Once I get a bunch of those, I got to get more leadership, general managers, admin, et cetera. But once I hire all those leaders, I usually have less cash because all the extra overhead costs money from a leads perspective. So when we look at the 4L framework, market is basically just going to help us kind of like organize this stuff. So liquidity is the first the L's. So liquidity we know like right now the cash crunch is real. But from a leads perspective, we know we need to know cost per lead. We are going to increase conversion of the website using the estimate request form. We got to know our cost per lead. For now we'll talk to the guy with Google, see if you can't give us that information. And if not, just ask for a very manual outlay of like, okay, give me all the leads that come into Your CRM after June, if you just can him and you spend $1,000 on Google Ads yourself, save two grand, you'd probably get more leads. All of his leads right now. I can guarantee if he turned off his Google Ads, he'd probably get just as many leads almost right now. What's the likelihood of getting out of the contract?

I don't know. It's hard to. Because I'm a pushover.

I know, I know.

I could probably make it happen.

Okay.

I would just feel terrible, I guess. But logistically, it just doesn't make sense to stay in it if we're not getting anything.

I would come from the angle of, I can't afford this. We are spending way too much of our revenue on it. And I genuinely believe if you spend a thousand, you get the same results, if not better. And then the other 2,000, like, we need it in our pocket. We just don't have the cash. You could just be really straight and honest and like, I don't have one month worth of advertising.

That's what I told them. Last week. We had our phone call for the year to get things ready and we were supposed to start this week.

Yeah.

But I was like, I just don't have the money. I got to re register my truck. So I got to pay my cpa. I don't have the money to do ads right now. And I'm like banking on the fact that we'll have money in two weeks to be able to pay him what his fee is.

If we can get out of that contract. That'd be huge.

Okay.

Because it's not just a thousand dollars of basically straight off to him. It's the $2,000 in ads. And I don't see any return. We are spending way too much for what we're getting. And the fact that he's not giving us our cost per lead, we're not getting any sort of tracking around, it means we are literally throwing money and just coping and praying. And I got the bad strategy.

That's what it was last year.

Okay. Let's try to get out of that.

Okay.

And even if you have to say like, hey, I'll give you next month or something like that, basically we're going to try to save nine grand over the next three, four months. If we can do that. Take control back of your ads. I feel like the time you're spending on just those calls. If you could just take one day before spring rush starts, like, even if it's this week.

Yeah.

And watch videos on Google Ads. And you already know Facebook ads, but like, watch another couple videos, really hone it in a little bit. You'll do better. And especially once you fix the site's conversion stuff. Yeah. Like doing that could immediately put you above him in terms of conversion.

Okay.

And like, number of leads coming in.

Just even if I didn't do any ads.

Yeah.

Just the website alone.

Because you already have traffic. You can see that traffic coming in and it's not coming from his ads.

Right.

Because he's going to different subdomain. If you can just increase the conversion, you might actually not spend money on ads. But because you double the conversion, get just as many leads. So liquidity goal is get out of Google contract. Okay, I think we can do that. If you wanted to pay them for one month, they're like, fine. But like, I think this is also a time like we got to put our foot down sometimes as a business owner, like, this is what's right for the business. And just take like the fact, like, we gotta provide for the family and like, we currently can't. Yeah. And so sometimes it's taking the angle with someone that's. That is reasonable. I can't afford this. And maybe I'll come back to you in the future. I would love to. And we can end this on good terms. Great. Like right now, I cannot afford this contract and it's going to put me out of business. And I really believe that with the conversion of the site and then you taking over the ads, saving two or three grand right now is like really important. There's someone that knows more than him about a topic is able to weasel their way around getting paid some. Now, is this person a bad person? No. But is it worth it for his business? Absolutely not. So from a liquidity perspective, what's our labor rate? Like, what are you trying to charge out in the field?

80 to 90 an hour. So I try to get. Doesn't always happen. The mowing side usually is hovering around 80, but again, that depends on things going wrong. The landscaping side is where we started last year, I would try to charge between 80 and 100, but some days we'd be getting like 50 or 60, and then some days we get 120 and it's just all over the place. My bare minimum that I want to hit is like $80 an hour.

Do you know what approximately your close ratio is?

Last year it was too high, so it was like above 50%.

My concern right now is that we have a few employees and yourself working and at the revenue marker we're currently doing, like, we're not actually hitting 80 or 100. We really want to track that. So we know also to track the efficiency of the crew.

Yeah, that's another thing I need to.

Work on this year. What you could do, though, is just track how much do you pay someone per day in wages, and then how much do they earn in revenue per day? We got labor. We're trying to track the labor efficiency. This is an important number for any home service business, and that is budget hours divided by clocked hours. Now, what is budget hours? That's how long I think the job should take based upon the target hourly rate I'm trying to achieve. So if I'm trying to get $80 an hour, if I think someone's gonna take half a budget hour, I would price it at $40. That's how I determine budget hours. But I've also got to determine how long the job actually take, the clocked hours. So if I think it's going to take half an hour, so 0.5 budget hours, but takes two clocked hours, we got a problem. How we're going to track labor efficiency is going to be wages paid divided by what we earned for that day. Okay, I earned $1,000. Well, it's 180 divided by a thousand, that's 0.18. 18%. Good. We want that number under 40. And what you can do because you have the two trucks is track it by the crew. What I would guess is that you are, like, crazy efficient and your other crew is just falling behind a bit. It's tough to hold people accountable is when you're not tracking the numbers. The numbers don't lie. Like, if one crew is at 60% of revenue going to wages, and the other one's at 25%, then we have a training or an efficiency problem or work ethic problem. I would say down the road, you'd want to incentivize.

I was just talking to Brad about this morning.

Okay.

I was like, the more we grow, the more money we make by your efficiency. I want you to win from that. I just don't know how to implement that quite yet. I don't know if that's the time.

To do it yet. Ultimately, pay for performance is nice for that. I think the simpler model is like, let's just track for now what percentage of labor revenue is going out in wages. And then down the road, you could be like, hey, guys, if you beat 30%, you get some sort of a bonus.

Yeah, for sure.

And so tracking this allows me to ensure that my pricing on every job is correct, as well as track the efficiency of every one of my crew members to see who's actually the most efficient and who might be the person that needs more training. Really going into this year though, you got one person been with you since last fall, and then two brand new ones starting next week.

Yep.

Let's go. Your employee handbook.

Last year I really struggled. I shy away a lot from conflict and I try to avoid it as much as possible. This is almost mainly there just to help me. I just implemented this year because last year we had a late problem again, like, I don't like conflicts. So like, hey, can we stop doing this? And then they'd be late again, stop doing this. And I'm like, too nice about it too. So this, it'll definitely help. I think this year I don't let quality slide. I try not to micromanage, but I feel like I'm pretty gracious with mistakes. I think that employment handbook is going to help, but because I can be a pushover, I am afraid I'm going to be afraid to reference that.

Right.

Just because I don't want to cause contention and I just want to be liked. Things that I can enforce but I didn't have in place to enforce, like being late or not wearing a company T shirt. To me, it's common sense. To them it may not be. I had someone total a truck last year, so I should have been mad at him for him, but I wasn't. He was texting and driving. They were coming up to a red light, wasn't paying attention, didn't slow down soon enough and just rear ended. Someone totaled that car too, then pushed that car into another car. And so they were three vehicles involved. I didn't fire him for totaling the truck. Fired him for how he dealt with it. He ended up yelling at my other crew member at the time and they got in this heated argument. But that wasn't his first time of doing that. There were other instances of him breaking my equipment over an anger problem. These are things like red flags. I should have fired him for sooner, but I did. Everyone's like, you need to fire him right now. I just have a hard time kind of mixing, like, personal.

Is everyone your wife? Okay, so we need to listen to your wife on all HR related issues.

She was like, as soon as I hired him, she's like, I need to be involved in every interview. She wasn't in this one.

Good.

She was telling me from the get go, like, I Don't like this guy. He shouldn't be here.

You're just optimistic. You want everyone to be better.

Like, I want this kid to do better. I saw myself in him when I was, like, 18 years old, and that was a bad mistake.

So is she involved in the hiring process now? Yeah. And then does she meet with them, like, throughout the day or talk to them throughout the day?

Occasionally, yeah. She'll come out, she'll be outside, and they'll say hi to each other, you know, recap the day or something. But mainly it's like interviews, and then if I. Facing the conflicts with the guys. She's heavily involved in that. Last year, there was a conflict between two guys, and she handled most of it because I was like, I don't know what to do.

Does she want to be more involved in that area or just. We're trying to kind of keep her where she doesn't have to be involved in the business more.

So this. The latter. Okay.

It's mostly like, you know, this is a weakness, and it's a strength of her. 100%. Got it.

I want her to focus on the kids. Just say, hold on. I love that. My weakness is the people and putting my foot down. And she's good at that.

And if she can do. Even spend, you know, 10% of her time doing that, it'll save you, like, half your day.

Yeah.

Because it's such a huge leverage point once you start having. Having employees. One thing I would consider is having her being tasked with creating a bench, which means there's a backup person that's hired, ready to go. That is, like, not hired. I shouldn't say that. But, like, they're a good applicant and you're ready to hire them, because if you have that person, you'll have more confidence to go pull the trigger on someone when you know they need to instead of. Well, we kind of need them. We're in the middle of spring rush. Who else is going to be able to do it? And so if her jam is hiring people, interviewing them, sniffing out people in terms of, like, are they a good fit? Okay, we need two employees. Great. But we're going to have another one that's like, we tell them. We tell them when they. Okay. We don't have a certain start date. We're always looking for great people.

Yeah.

And then they pass the interview process. And then she tells you, hey, I got someone. They're really good. We're not gonna offer them a job, but just, you know, that way, if there's someone that, like, does something stupid today, you're gonna pull the trigger a lot faster.

Because I'm not afraid of losing someone good.

Exactly. On the labor part, I'm gonna put create a bench. As a business grows, it's almost impossible for any one person to have the skills required to scale the business past 500,000, then a million, then 5 million. And as the company grows, you're gonna realize there's certain things you're just not that great at, and those are the things you want to delegate. And if he's able to hand off this important task to his wife or someone else that has these type of skills, they'll be able to create a bench or a backup for people that if they fall out of the field, if a crew member doesn't show up to work, we got someone else that we can pull in from the bench. If you know your weaknesses, sniffing people out, being a little bit more skeptical of them, etc. Let her handle all that.

Okay.

And she only says, I have someone on the bench or I do not have someone on the bench. Then when you're out in the field and someone doesn't show up for two days, you're immediately pulling their card, and you have someone else to step in.

Yeah, that makes a lot of sense.

But right now you're putting up with it because, like, we're busy.

Yeah, yeah. The time to find someone else.

Now you have the benchmarks as to why their card would get pulled. In the handbook, it says, if you were late, this happens, and now you're going to actually have the kahunas to go do it, because it says it and they signed it, and there's someone to back them up, Right?

Yeah, that makes a lot of sense.

If David can find someone to replace him in this important skill, he'll be able to delegate this task, but also they'll be able to create a bench, a backup of team members that are ready to step in if someone doesn't show up to work, if he has to fire someone, because they'll be a whole lot more inclined to fire someone based upon lack of performance if he knows there's a backup that can step in their place.

Like I was telling Mike, like, I can be a pushover, and I tend to look at, this kid has potential. I want to see him grow. But I've learned it's not my responsibility to help them grow personally, that's on them. I can do all I can by offering some tips and some guidance and on things that have helped me. If I'm not willing to put that in action, then I need to find somewhere else to work.

From a leadership perspective, I think a lot of this will just come down to like confidence as you build the business and then not being taken advantage of. From the employee perspective, there needs to be some whip cracking in terms of efficiency. 198 was our revenue. You working 50 hours a week, I bet you made over 100,000 of that with your revenue.

100 left for two or three guys.

Which is kind of insane is I actually think you have last year made more money. You being solo, not doing any advertising, not worrying about any leads and just doing the work yourself. Because what's happening is 20, 30% of your day is being spent managing a crew and doing more sales is required to fill their schedule. You're doing all the work, advertising and overhead required to fill work that is unprofitable. I bet you could do 140 to 150 by yourself.

I really want to make this business to where like if I break a leg, my sole income isn't gone. I would almost take this over me making 150 just because I have a bit of security, knowing I won't lose all my money if I get injured or if I have to stay home with my wife for a couple weeks to take care of the kid or whatever.

Right now if you got injured, you're still making up half the revenue. And now the business would lose 50 to $60,000 a year because you have employees are inefficient. Let's juice up the website, let's cut back on like the marketing stuff, be a better leader to the crew, hold them accountable, track our labor efficiency, make sure that they're actually making money for us. And as much as we want to help them and their future life, if they're not making money, we need to fire them.

I really don't like the high turnover rate. I guess I wasn't expecting it. I was at least expecting two guys to stay this year, but that didn't happen. I'm just glad I at least have Brad because he knows what he's doing, he's a good guy and he'll be able to train someone. Someone else. The MO crew, literally. A couple days ago I was talking to Anna and I was like, what if I just fire everybody this year and when so. And the more I thought about it.

Dark thought, yeah, well, like the, the.

Money size, like this could be nice. But it's not just what I want to do long term.

Yeah. What if you had Just one employee. Cuz I feel like having three employees right now. If you're going to shoot for 350, we could probably make it work.

It's very doable. We have quite a bit of work lined up for April.

If you don't have enough work, we need to lay one of them off.

Okay.

We can't be like, oh, well, we hired them, we've got to keep them full time. I have a bad feeling that if we don't have enough work, you will just keep them on staff.

That's a possibility.

I hate to say it, but yeah. And so this is why tracking the labor efficiency is so important. Okay. Because as soon as you start having people work four or five hours a day, you're trying to kind of just fill their time. You're having new stuff around the shop. That number will drop. If we're spending more than 40% of their labor revenue on wages, that should be like red flags all over. We're just not going to be profitable. The notion that we are going to run a less risky business for the family's sake by having employees is actually false. Because if you got hurt, the business would be negative profit. Right. If you were solo, revenue would stop, but you would have all these expenses. So we've got to make that other side of the business profitable.

I think I jumped the gun a little bit out of stress, I guess, so that I was taken care of if anything bad happened to me, but it just created more stress because I had jumped the gun too early on it.

We're here to make money.

Yeah.

And when you make it about that, it makes it so much easier for everyone. And so, like, we're here to kind of like improve. And like, we want to be better landscapers and we like, be about, like, making the customer happy. No, no, we all want to make money here. How do we make more money? We make customers happy and they keep coming back to us.

That's the conversation I have with Anna all the time. She's like, this is a business I.

Like, not a channel. I've never met Anna, but Anna sounds like an amazing person. We get along very well, I think.

I hear this is a business, not a charity. I probably hear that like once a week.

Hallelujah. Can I get an amen? Let's go.

She tells me all the time, this is a business. You need to make money. And she can look at anything with the guys or anything that the guys have done wrong. She can look at that objectively, whereas I am with them. You know, eight ten hours a day. And I'm like, well, he's a good guy, but, you know. And she's like, but he did this.

I think there's a difference between being kind of and genuine and being a charity. I mean, I love that about him, but I have to remind him, like, okay, but at the same time, we're in a business.

A lot of times I can be a pushover and more so focus on this person's personality or their quality of their work. But, like, none of that stuff matters if we're not making money, because that's what we're here to do.

Talking to my team about it helped. I just got sick of, like, being so stressed about money. I just came to a conclusion. I'm gonna make this all about money.

Yeah.

If I make more money, I'll be able give them more money. Once we made the change, all of a sudden, like, okay, we knew health benefits. Okay, we're new, paid time off. We can offer this other stuff, which all lines with their goals, too. And so you're not being selfish. You're making the goal post really clear. Yeah, like, we are here to make a bunch of money. And if you're not going to make me money, you're out. If you make more money, the customers are being served, well, it means they're coming back to you over and over again. Means they're referring you out. It means they're willing to pay a higher price to get you on their property. And so it's really a win, win, win. I'm not going to dictate that you, like, be a better landscape, like, listen to books. I'm just gonna make as much money as possible so I can give you more money, and then you can do whatever you want in life.

That makes a lot of sense. I just got to put it to action.

Look, I wanted to help a lot of people when I was first getting my business started, too, but guess what? I had no money. And if you don't have money and you don't have the resources to be able to give what you want to, whether it be nonprofits or your employees or your family, then let's focus on the one bottleneck to that, and that is make more money. And if we can do that, then we'll be able to give bonuses, then we'll be able to give incentives, then we'll be able to pay benefits, then we'll be able to donate and give away to other people. But first, we must make money.

I just put a little bit too much emphasis on people sometimes and put money to the side. But if I focus on profit first, it gives me the ability to be able to create that environment.

Essentially, I think the leadership side is just holding people accountable when people make mistakes, like a skid mark, a damaged lawn. I'm assuming right now you're taking the phone call, you're going back to do the callback.

I make them do the callback.

Oh, you do. Very good. Fantastic. Does it happen, like, once a week maybe?

Last year, yes. We had an employee that was terrible.

Yeah.

I trusted him too early, and they were doing callbacks like, twice a week. And I was hoping, like, okay, you're going back. Learn from your mistakes. He just never did. Now with Brad, it rarely happens.

So what I would do on the leadership side, too, is implement the yellow slip system. The yellow slip system is essentially that when a customer calls in and they're complaining or there's a callback, we have to go back to the customer's property because a mistake was made or damaged case. I'm going to write a yellow slip for my crew. Now, it's not a pink slip. No one's getting fired. But a yellow slip is an indicator to everyone when they show back to the shop that someone made a mistake. And on that yellow slip, I'm going to have the customer's name, what went wrong, and who was responsible for that yellow slip. That employee is now responsible to take the yellow slip, go back to the customer's house, and within 48 hours, have it resolved. They sign off on it, and then go over that yellow slip at the next team meeting. Meeting you already kind of doing it, which is they go back to the property. We just want to add the extra layer of you are now accountable to the entire team on the next team meeting, and you're going to talk about it, why did it wrong, on whose property, what I learned from it and how I'm going to avoid it in the future. They sign off on it goes into their employee profile. Sometimes they have more pressure on making mistakes and telling their team members about it than having to go back to the property.

And they're ruining their chance for a bonus for their other employees, too. And it's, like, visible to everybody. I love that.

Also, we want going back to the property. Now. They're not going to be generating as much labor revenue the next day. Right. So that number is getting worse.

Okay.

So now we're going to try to incentivize that down the road.

Right.

So that actually going back to their customer's property, they don't like it. And then in your employee handbook, you say x amount of yellow slips equals. Yeah, right. You're in a performance improvement plan after three, you get more than three in a month. Performance improvement plan, you do that next month. After that, you get more than three, you're fired.

Is there like a certain amount, a percentage of revenue that I should see in liquidity? Obviously, I had way too much in ad spend last year. I just don't know what I guess is normal or healthy in terms of cash flow and how much I should have in the bank for. I read a book, obviously you probably heard of it, called Profit first, and we're implementing that this year. If we ran it like we did last year, I would not be able to do profit first.

The basic concept of profit first is I take the profit first in the business before I go pay payroll taxes and all the operating expenses of the business. It comes from a book called Profit first by Michael Michalowicz. And it simply is the fact that I am going to pay myself first before the business gets all the other expenses paid. Profit first, in my opinion, works really good. If you have a bad habit of spending money when you see it.

I do.

You do?

Yeah. I'll look at my bank account like, sweet. I got six grand in here. I really need this piece of equipment. I'm going to go buy that. Next thing I know, employee taxes come out, payroll taxes come out a week later that I wasn't planned for because I don't follow my numbers, and then I'm back.

Okay, then Profit first will work. Good for you because I didn't think.

You had that in the field. I want to make things easier for the guys. I feel like if I make things easier for the guys, they'll be happier and I'll be happier and be more efficient. So I buy things for them.

One way they will be more happy is if you can give them more money.

That's true.

And then they can spend it on whatever they want instead of like, they will. Like, if I get the Meister equipment, maybe. I guarantee you if they give you more money so they can go do something else. They like a vacation or get a nicer car. If you have that, then yeah. Profit versus work. Well, have you set it up with your bank accounts already?

So we just set up a LLC because we're still a sole proprietorship.

If you're going to do profit first, legit, Relay Financial online. You do?

Yeah.

Oh, dude. Yeah, it works really good with I.

Messed around With a little bit. It's super cool.

Yeah.

And I have a CPA who's a profit first professional.

Okay, perfect.

And we're going to do like monthly CFO meetings and go over everything.

Hallelujah. Okay, good. Most online banks, or banks in general, will allow you to have multiple bank accounts set up to where when revenue comes into one account, it automatically splits into your operating expenditures, to your payroll, to your taxes. So there's no surprises when payroll comes, there's no surprises when taxes are due. And this can be done at most banks. But Relay is one I've used. I'm not affiliate with them. They do make sure they adhere to the profit first principles. That allows revenue to come in and then automatically broken up into multiple bank accounts. So liquidity then I guess really, is profit first implemented? I think we can get implemented in six weeks. Have the EIN numbers. Have it up. If you're in Relay, easy peasy easy. It's really easy to split between the accounts. Then what I would do, and this is the part I would stray from prop first a little bit on, is to determine how much money I need in the bank account before I get distributions. He takes profit out first.

Yeah.

And that's fine.

Right?

Go for it. When your operating account gets a certain amount, I would then say then it's licensed to take more money from the.

Business, from the profit.

Yeah, yeah.

So like what the business is holding.

Yeah. So for me personally, like I'm trying to get at least one month of revenue, revenue in the bank account. Anything above that I'm willing to take as distributions. You know, in the off season, your revenue is dropping precipitously, which we can address later. But like we're looking at last three months. So if I did 40,000, 50,000, 60,000 in revenue in the last three months, the average of the past three months is 50,000. Anything above $50,000 in the bank, I will take his distributions.

Okay.

And the reason that's helpful is because down the road, if you do profit sharing with your team or general manager or anything like that, you've already set this like dollar amount that must be in the bank. And anything above that we can now split with the team.

My idea for this year was like not so much taking distributions, but more so paying ourselves more, stacking some of that in a savings account that we can't touch, that we can use for the winter. And then anything that is left over would be just invest back in the business. There were a lot of times last year where we couldn't Pay ourselves. There's a lot of people to provide for my family. And then I also want to give opportunities for employees for them to grow and for them to provide for their families. We haven't paid ourselves in two weeks because I spent, spent a lot of money getting equipment worked on. This is our first week back and we just now paid ourselves yesterday. Yeah, a little bit of a cash crunch. Payroll is expensive.

That was tough. We want to make sure that they're paid because they have families. We didn't get paid, so they, they came first. And, you know, we're not going to just not pay our employees.

That leads me into like the off season when you're leased or you can be generating eight to ten grand a month. That needs to be the expectation. So how do we do that? Well, if we have this year, if we get to like 100 mowing customers, which I think is very doable. 75. Now, if we get to 100, we need to do winter services.

If we don't get snow, what other winter services are there?

We have a list of nine things. We hardly ever get snow at our place.

Okay.

And so if there is snow, you pull the next visit forward and you go shovel their walkways, put some salt down, et cetera. You can even just not do the driveway. Just like, hey, we do walkways and we do salting. And that's included in your service. Okay. But what we're trying to do is keep recurring revenue coming in. So out of 100 customers, I'd be shooting for at least 50 to stay on recurring services on a bi weekly basis at their mowing price. And you spend the same amount of time that you would spend on mowing, you spend on these other services.

Are they paying this amount no matter what every week or two?

Every two weeks.

Really?

The same week they're paying for mowing. So if they're paying $60 every two weeks for mowing every two weeks, I'm just going to continue after mowing season into winter services. Now, how we do that is we say, hey, look, there's two options here. I can do a fall cleanup for you, I can do a spring cleanup for you. It's going to cost you $800 and $700. You got 500 bucks? Or you pay me $60 every two weeks and I come all throughout the winter and I get it all cleaned up over the course of the winter. Your property looks good all year round. Wow. Now, getting creative with what services you do is important because the grass isn't growing right. But okay, well, we can check your gutters. We can blow off your walkways if there's a windstorm. We're picking up all the branches. We're edging the lawn to still look sharp. We're going to trim any bushes that are touching the house so there's no algae that's growing. We're going to rake out the beds. Like you can stay busy for 30 minutes on someone's property.

Yeah, that's a really good idea.

You pitch them. This is the cost of your property cleanups. Here's the cost of us coming every two weeks and keeping the property looking good all throughout the winter.

Right.

Here's the list of stuff we're doing. And it's going to be like 10 things.

Yeah.

We start at the top every single visit, and we work our way down. And we spend the same time on this as we would with mowing your grass. The last one on ours is property that inspection and send video to customer. Some people, they've said that we just do wish services. So we get a video of our property every two weeks because we're in Florida for six months of the year.

Wow. Yeah, That's a really good idea.

Think of it as, like, more like you're selling insurance and peace of mind.

Yeah.

Not the actual, like, service itself.

Right. Even just an inspection is huge.

Right.

Yeah.

And now how you sell that is a month before the end of mowing season. You're gonna pitch it to them. There's, like, different ways to do it. One is you send them an email, like I just mentioned. Very much like, here's the list. If you, you don't want this, opt out, let us know. Some people aren't going to see the email. Like, if they accidentally see the email and, hey, I didn't want this service, we will just refund them there first that month. And no worries, we'll get you started mowing. What I would recommend doing when you have 100 customers is talking to every single one. I would knock on the door of every single one. Because if you knock on the door and actually explain that they're saving money, everyone goes for it. It makes a lot of sense if you just like pitches, like, I'm trying to make more money. That's how they hear it. If you say, hey, here's the cost of your fall cleanup. Here's the cost of a spring clean cleanup. For half of that, we can come every two weeks and chip away at it, make the property look good all year round.

I'm guessing this is probably something That I would do solo, right?

Yes.

Okay.

Because if you get 50 customers, you would absolutely do it solo, right? Seven to $10,000 a month. And right now that's the difference of us going negative and having to put money aside versus at least breaking even.

Yeah, I love that.

And then you'd still lay everyone off, but you know, you're at least going to cover all your bills and not have to save up money and take it from the family during the winter. So on leads I'm going to add that in, which is winter services. Okay, well, I would recommend as you get started this year on your estimate for mowing, just put in there winter services continue to use throughout the off season as part of your mowing estimate. Every single one, no one bats an eye. And then what happens is during the fall you say, hey, you accepted this. I want to make sure you're fully aware of what that is and why we do it. And he pitches 100% as a budget friendly option option to keep your property looking good year round. Usually what we see is on new customers we can get about 60 to 70% conversion. The old customers, they're the ones you really got to explain things to because they don't know what's going on.

Right.

And they think you might take an advantage. So we go knock on every door. Then you have no refunds.

That's huge.

And so those ones, usually we convert 30 to 40%. So if we get new customers this year to get to 100 total, I think 50 of them you can convert into that. Okay, Keep yourself busy. All throughout the winter.

I am looking for ways other than than just higher prices to sort of throttle the incoming accepted mowing client bids. And that would probably help as well.

We're going to get so many leads from fixing the website that we're going to hit that capacity very quickly. Either a be forced to raise prices or you go do get a second crew or you potentially convert your landscaping, which you didn't make any money on last year, into mowing. And now that we have an off season where we know we can make money on those recurring customers, that might not be a bad option.

Yeah, I never even thought of winter as like a money making opportunity other than snow. Yeah, it's huge. I definitely need to do that. I think it's huge. Like we've always struggled in the winter not knowing what we're going to do. Like we try to save back, but that doesn't always happen. We go through a cash crunch and we end up using it. But having the ability to keep that consistent cash flow of the winter would be huge. I never even thought of something like that.

So basically, liquidity. We're trying to get out of the Google contract in the next six weeks. In the next six weeks. We want to implement profit at first inside a relay. Get everything set up with the LC from a leads perspective. We got to know our cost per lead. If we get that from Google, whether it be from this agency or we figure ourselves. But we're going to get out of the Google contract, so we're going to figure ourselves. We're.