Business Bootcamp: Carter Zoom Call #3

Welcome back to the Mike Candies podcast, where we discuss the ins and outs of owning a small business. If you're new here, Mike Andy's podcast is all about taking your business to the next level. We're covering season one, episode three of Business Bootcamp, Zoom calls this week. If you haven't heard, we've been watching four different home service business owners overcome their challenges and build their business into something great. Part of the whole thing is zoom call check ins that they do with Mike along the way, Mike has tons of great advice for anyone who runs a small business. So here's what we're getting into. We're talking to Carter from Rough Cuts Lawn Care out of Yuba City, California. Carter is doing a lot of work for almost no profit. They're setting their prices too low and they're worried about customers jumping ship if they finally raise them. He needs to learn that the customers that you lose when you raise prices, those are the customers you don't want to keep around. As always, you can find Aldous and more over at the Mike Andy's YouTube channel. But without further ado, here's the third call with Carter from Rough Cuts Lawn Care.

Hey, everyone, it's Mike Andes, and today we're going to be talking to Carter from Rough Cuts Lawn Care. And this is just a piece of the episode from Business Boot Camp last week. In the description, there's a link that was the entire episode, but today's specific. Specifically, Carter has issues with the fact that he wants to grow his business and get another truck, but he also already has debt and he has mowers that literally he hardly use maybe once a week, if at all. And he owes tens of thousands of dollars on these massive mowers. Also, he's thinking about whether or not he should use his old personal vehicle, a Toyota Tacoma, as the third truck to get his business really ramped up. We're gonna talk about all the pros and the cons of what equipment he should buy, what equipment he should sell so he can increase his capacity and grow his business past half a million dollars in revenue next year.

How have you been?

Pretty good so far. My wi fi might not be good as well just because I'm on a hot spot.

So I apologize.

It cracks up a bit.

No worries. I'm at a job site, so it might. Might be the same.

Very cool. Very cool. It's still light where you're at. Is that what, 6:30? No, no, it's 5:30. It's. It's 8:30 my time. So I'm used to now the Eastern standard time, so.

Oh, yeah?

Yeah.

Cool.

How's this week been so far?

Going good. First couple days were kind of slow. Just kind of like jobs that I been needing to do but haven't, Just kind of smaller jobs that are left over that were from previous pricing and stuff. So it didn't really do too well the first two days, Wednesday and Thursday, I did pretty good. And then today. Today is going to be a really good day. Cool.

And are we still on track this month, do you think? For 35 plus in terms of revenue?

Yeah. So next this week, like Today should be 2500 day. Yesterday was like almost 2000. And then next week.

Should be pushing 10.

Cool.

10,000 for the week. So I haven't looked at my numbers yet, but we should be pushing that 35.

Okay, cool. And have you already started looking at trucks? I know you're kind of thinking about buying one towards the end of the year. We're still a couple months out from that. What are you thinking?

I haven't yet. I own a 96 Tacoma that I kind of borrowed. My dad was gonna buy it, so then he put money down on my personal truck and then he decided not to buy it. So. So I've been slowly paying them off that. So I was thinking of just keeping that truck.

For the moment, just so I have something to use, because the more I'm realizing I need a truck right now.

I know, man. Like, I'm serious. It's doing 40,000 almost. And you have basically your personal truck and one other truck. Like, that's insane.

And it's. I have too many, like, a lot of the maintenance accounts. I'm still going to keep doing the smaller stuff for, you know, sprinkler pair and irrigation stuff. And I just, I don't have the time to get that done as well as projects. So I'm like, I need a truck for my. My two guys to be able to use on projects. Like, I can go get them set up doing whatever you.

What if you went and what? Well, yeah, I guess, like the Toyota Tacoma would probably work for a while with the smaller jobs. Right. But like, what do you think about if you sold the mowers now, got rid of that debt and just converted that over into a truck now?

I wouldn't be opposed to that. I just need to get it listed. That's one of my things on the list to do this weekend. I just don't know how well it's going to sell the mowers. Yeah, well, it's just the one, it's the 10 turn. So I don't know.

How much do you own that one?

It's like.

13 or 14.

Do you, how much do you think you can get for like 10?

See, I have no clue. I haven't even looked at it. I don't know. I mean it's got 45 hours on it and it's four months old. So it's not like it's, you know, it hasn't really been used that much. So I don't know, I really don't know what, what it's going to be worth when I go to sell it.

So it only has like 40 something hours. Have you talked to the dealer in terms of what they would take it back for or. Not really.

The dealer was going to take it back because had another customer wanting it and then that customer never got back to them. It took about a month because what I was going to do was trade in, trade that mower in for the 36 inch stand on. But then that customer never got back to him. I started these big accounts. The one big apartment complex.

Zero turn is pretty useless on, but it's too big to push just because there's like narrow walkway pathways and stuff to get through. So I just had to buy the 36 inch stand on. They haven't said anything but their customers wanting that 50 inch. I need, I need to just clean it up and get pictures, post it and see what I get.

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Okay, well let's try to get that done. Let's, let's try. I know it's somewhat of a small lift but like let's, for this week let's try to get that sold. Even if you take a little bit of a loss on it. I don't mind.

Yeah, you know, take a little bit of a loss. We have to. But Just get another truck because the truck's going to allow us to keep this pace. You really, in my opinion, can't do a whole lot more than 35 to 40 grand a month with two trucks. Like, you're hitting capacity. Right. And so you. And if you. Going into the winter in your market, you can continue to grow it. And if it's still coming to you in terms of the project side and we're going to be raising the prices we already know come spring for the mowing side, I'm fine with taking on a little bit of debt for the truck.

Yeah, well. And I have three projects. I need to quote four projects. Three of two of them are like 25, 30,000. Another one's probably going to be at least 10 or 15, and then the other one's at least 5 or 10.

And there's just like massive installs, like, like not even.

It's like the one is like almost 10,000 square feet of sod.

And then just like a DG pathway and stuff.

I mean, they're bigger jobs, but not like massive.

Complicated.

Yeah, yeah, Simple. It's just large, large properties. So I know I'm going to be having. I know I'm going to have, you know, have the, the work. So I'm not super worried about the payment. I'm not opposed to getting the payment on the truck while I have the mower if I need to. If it's something that, you know, just doesn't sell. And I, I mean, I don't want to take. I don't want to sell it for $5,000 or $8,000. That's just not. Not something that.

I can do because then I'm going to be making monthly payments on something forever that I don't even own anymore.

And once you sell it, they're not going to let you keep the debt. Like, you'll have to pay it off. Right. So as soon as the asset is sold, they'll want payment for whatever's the balance of the loan. Whatever company you're financing it with, probably.

It'S through Sheffield, but I mean, with mowers, there's no title. So I guess, I don't know.

It's secured debt. It's secured debt. Right. So theoretically, like, it's against the law to sell it and not have that because they would want to come collect on that if you ever didn't pay it. So, you know you're going to have to pay it off. Yeah, it's not like an unsecured line of credit or unsecured loan, they do have that as collateral. So you just don't want to be in the spot where they ask you like, hey, we want pictures of our, of our asset that we own. And you're like, oh, snap, Right. So you're going to need to pay that. But even if it's a couple thousand dollars less than what you owe on it that you get for it, you know, next spring, a lot of these manufacturers are starting to get a lot of inventory in right now and they're going to be bulking up on it over the winter. So I have a feeling you might actually get more for it now than you would next spring. Especially if we go in any sort of recession. Like they're just all going to start slashing prices. And so your mower might be worth 2, $3,000 more now compared to next spring if we wait. So, you know, even if you did sell it for, you know, 11, 12, and then you have to cover a little bit just so that your debt to income ratio is good enough to where you able to get the loan for the truck. Because that's probably my only concern is they're going to be looking at income ratio and that potentially could swing them in one direction.

Yeah.

But I think regardless, like the way you're growing and the fact that like, we know that we're going to be raising prices in February on the mowing side of things, I'm okay with you getting the truck now, regardless, honestly.

Okay. Yeah. Well, and actually that mower my dad bought because at the time I still had a bunch of. It was like a month before I won that truck from Tigrin. So my dad. So selling it wouldn't really affect my credit at all. You know, selling and getting it paid off for getting a new truck.

Oh, I gotcha. I gotcha.

So I'll just have to look into, I guess and see if I, you know, try to pre qualify online and see if how that goes.

And at the very worst, we make the 96 Tacoma kind of work for a bit. You know, like if that, that's worst case scenario, maybe you, you know, make it, you know, make, you know, pretty it up a little bit. But like if it can just pull a small trailer and do some small cleanups and at the hit the other project truck, you know, that'd be helpful at least. Yeah, just grab capacity. Got it. Yeah.

That's what I used for almost two years was that Tacoma. And it worked great for me. But then I, you know, once I realized I was going to be going into projects. You know, it can't tow anything, so you could barely tow half a yard of concrete. I mean.

A bigger truck.

Can you use that for, like, you know, bush trimming and like, simple stuff like that? Like, is there enough work for that to stay busy?

Probably not. What I would probably do is have a GMC Chevy 1500, a 2013. That is for the maintenance. I would probably switch back to the Tacoma for the maintenance, have it pull the trailer and use the 1500 for projects. @ the moment.

I don't know. We'll see. I mean, if the Tacoma is gonna. If I can sell the Tacoma fast enough, then I'll definitely go buy another truck. You know, just take the down, whatever.

Cash. Got it. Like, if you, like, if you sold the Tacoma and the mower and then basically in guy.

Truck.

Yeah. And even too, like, you know, hey, man, those 96 Tacomas, like, they're built like tanks. You literally could potentially use that as kind of your estimate truck until the day it.

Dies.

Yeah. And then, you know, small little projects here and there if you can, just to kind of ease up on the. On the.

Schedule. Yeah. Because I have. I really have nothing into it. I bought it for six. Someone backed into the side of it, put a little dent, and I got 4,500 bucks from that. So it's like. I know it's like 4800 bucks. So I got 1200 bucks in the truck. I mean.

The only downside is I borrowed money thinking it was going to be sold to my dad, and then now I owe them 10 grand. Well, eight now. So that's. If it wasn't for owing that money, I would just be 100% for keeping.

It. Got.

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So, guys, you still.

Owe. You still owe eight or 10 on the truck.

Then. Yeah, I.

Believe. Got.

It.

Yeah. Like, you know, I'm not opposed to trying to use it because, like, I really believe in a year, there's a lot of these trucks are going to be worth a whole lot less when you're buying. If you could Somehow make it work, even if it's till next February when we raise prices, you know, it just a matter of can you make it work? Right. And I don't know how many, like, obviously estimates is a great truck for that, because you just got to get around somewhere. But in terms of actually, you know, doing some work, you're going to need some. Because at 40,000, you need two trucks out on the road doing work all day long, and that's, like, really stretching.

It. Yeah, no, totally. Okay. Yeah, I'll. I'll go over everything and see. See if we can get. Make that.

Work.

Okay. Or maybe I'll just list it. If it sells, then that's. There's my answer. Go buy a new truck. If it doesn't, then I know you know, to keep.

It. Okay. Okay, cool. All right, so let's make that just kind of like the short sort of lift for this week. Then, like, let's try to get some of those things listed, see what comes in. And then if we can go look for another truck, potentially, that'd be cool. But really just trying to increase capacity at this point, because I feel like, even though I feel like you could keep growing throughout the winter, honestly, if we just, you know, play our cards right with marketing. And so I want to increase your capacity to where you can grow to 50 or plus, you know, going into next spring and then raise prices, be profitable at a higher. At a larger size.

Too. Now, would you. Do you think I should do paid advertising to try and get more maintenance accounts right now? Because right now the only. Only advertising I have is the website, which just got launched last week. I've got a couple leads, but it's more on the landscaping side. I got one. Yeah. One that was for maintenance, but the rest are for.

Projects.

From here on out. Like, for you, it's probably projects is gonna be a lower customer acquisition cost if you're pitching those services with the new website. Like, I think that's. That is a good place to be. And again, the difference is if you're in December thinking about spending money on marketing, but you're doing 50,000amonth in revenue because you got a third truck. That's different than let's go spend money on marketing. And we're doing 20 or 15 in the. In the winter because we're just trying to get by. Right. So the fact that you've jumped this month to 35, 38, and if you have confidence, like November, you could pull that off again. That's where I'm like, hey, we got the website, let's go put ads behind it and actually drive leads towards. And why not just keep growing? Because now we have this asset of a website that could potentially drive in leads throughout the winter that we didn't have in the past.

Right. So that's what I'm thinking is sorry to, to just like focus ads on growing the maintenance side. Right. Should I try to do that? Because the project side, you know, if I get a good project that lasts me a week, whereas the maintenance side, you need what, probably 80, 100 customers to make a week's worth of work. So that's what I'm wondering is, should I try.

To. Yeah. But in the winter demand, totally during the winter, the demand is going to go down for all our services. Right. So the question is, is there more like 80 to 100 mowing customers over the winter or can I go and get, you know, a project a week which is essentially going to be what, eight or 12 of them that we need to kind of get us through winter? That's more likely, especially when you have a website, that you're not gonna get tons of traffic because demand isn't high. But you know for a fact that if you run ads, you just gotta get literally a few clicks and a couple estimates a week and you're gonna be able to stay busy and continue the revenue growth. Then what's gonna happen? You have enough revenue to be able to stack some. Stack some money aside so that come February you're gonna lend money against the, the maintenance side of things and customer acquisition costs be way lower. Like getting a customer even service. Exactly. Right now with demand being lower, you're probably going to spend between 80 and $150 customer acquisition costs. That number goes down to 20 to 30 bucks during February and.

March.

Yeah. And so in your market it's not as much because you kind of have to mope throughout the whole year. But there's still a rush in.

Spring. Oh, totally. Yeah. Crazy. I'd get five or six calls a.

Day. So if we're going to deploy money against it, I do the maintenance side then and just know that, hey, I'm going to spend money on the price. I know it's one off jobs. I'm just trying to keep my, my three trucks busy throughout the winter. The winter. And if you can do that and be profitable jobs, you go into next spring having the compensate. I'm raising prices. So I'm going to increase cash flow and maintenance and I'm going to go spend. I have money to go spend on marketing, and, you know, you get an extra 100 mowing customers in a month or.

Two. Okay, sounds good. Sounds like a.

Plan. Cool. All right, brother. We'll stay in touch. I look forward to it. Have a great week.

Brother. All right, thanks. Take.

Care. Bye. Yep.

Bye.

This has been the Mike Andy's podcast. Now you have some ideas on how to take your business to the next level. If you liked what you heard. We have tons of lectures, interviews, and more. Or at the Mike and his YouTube channel. That'll be right up here. Alley, that's all we have for you today. We'll see you next time.