Business Bootcamp: Dylan Final Zoom Call

Welcome back to the Mike Andrews Podcast, where we discuss ins and outs of owning a small business. If you're new here, the Mike Andrews Podcast is all about taking your business to the next level. We're covering the final episode of season one for 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 with Mike that they do 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 Dylan from Urban Roots Landscaping out of Tacoma, Washington. Dylan's goal is to grow their business to 400k. They're going to do that by going from 40k a month in revenue to 90k a month by next year. Mike is going to give him the guidelines and strategy that he can use to make sure he meets that goal. As always, you can find Aldous and more over at the Mike Andes YouTube channel. It all comes down to this final call with Dylan from Urban Roost Landscaping.

Hey, everyone, it's Mike Andes here, and today you're going to be getting the full consulting call with Dylan from Urban Roots Landscaping down Tacoma, Washington. He's growing his lawn carepins very quickly. He's needing a new shop space, though, because his neighbors are very unhappy with him trying to cram all of his trucks and equipment into their alley and into his garage. So today we're going to talk about getting that new shop space and the parameters that he's going to need to really scale the business up next year, where he's going to go from probably 3, 400,000 revenue to 6, 7, or $800,000 in annual revenue using the fact that he's going to have his managers helping with sales and admin. So we're going to talk about this because this is the last. The last episode of Business Bootcamp, the last call that I have with him. So going forward, he's going to have to implement these systems and these procedures that we've talked about. So if you want to see the actual episode of Business Boot Camp, check the link out in the description. Otherwise, this is the full consulting call with Dylan Moy from Urban Roots Landscaping. Here we go. Let's go.

Hey, how you doing?

You're starting to blend in with your. Your wife's cushions and pillows now.

There we go.

Getting a little freaky on me, bro.

Happy Halloween.

Yeah, good stuff. All right, well, I'VE been, I've been. Got in trouble for all my. My 30 minute Zoom call. So I have to shorten things down. So let's jump into it.

Let's go.

How.

How has it been trying to find a shop space. I know that was something we were thinking about last week. Have you made up to look around, get any good leads, Any good spots at all?

Yeah, not really. I visited, I think, three sites. One was like two thirds of an acre, just not enough. Another one was close to an acre or the other two were close to an acre, but just very sketchy area, to be honest. It just wasn't like one guy was running a. I mean, he's doing a good thing for the community, but like homelessness type. He was trying to really get whatever revenue he could out of it. So he was helping marginalized people, mentally ill people on the same property. So it just wasn't the best fan. He was transparent. He's like, yeah, we've had people come back and kind of prowl things around here, like former residents. So just just not great. So that's the tough part because Tacoma, we have a few areas like a little bit east that there are bigger plots of land, but it's not the best area in terms of crime. Then we have over the bridge, which is probably not going to work because the bridge toll, you know, that's 12 minutes away. Then we're looking at going all the way to Graham, which is like 45 minutes away. So it's just very tough in terms of finding something that's going to fit. And the leads have really died off. When I posted the Craigslist ad, I had every group I could on Facebook and it just, I'm not getting any leads the last two days, three days. So I was wondering, have you guys ever posted like a paid ad to find a space? I mean, can that be done on Facebook to kind of boost something and try to put the word out more? But I've even had my own clients say, oh, I saw your picture, you're looking for space. So, I mean, people are seeing my posts, you know.

Yeah, no, I wouldn't worry about it. Like, honestly, even the fact that in a week you've seen three properties is amazing. In the past, we've waited between three and four weeks to find a good spot and I've only ever looked at two or three locations. So the fact that you get that much response is pretty good. I would probably post on those same things, like in a couple of weeks.

Okay.

But what will happen is like, obviously, a lot of those people on those. On those listings and those groups aren't necessarily watching every single day. So you'll get a random one, you know, pop up in a few days. So I'd be patient with it. Three in one week, honestly, is really, really good. I've actually never looked at more than 3 before making a decision. The one with 3.3/4 of an acre being too small. Was there other factors? Because 3/4 makers fairly sizable. Was kind of a weird kind of setup, though.

So again, all three had issues with crimes. I mean, she told me her neighbor down the street has. But part of the acreage was septic, so we couldn't park any trucks there.

Got it.

So really, like, it wasn't truly that much. It was like only a third of an acre that we could actually use.

Okay, okay. That makes sense.

Okay.

All right. Well, just keep the search for that on. I know. Especially as you're going during. Throughout the winter, what can be somewhat tempting is like, okay, we're not getting as many leads and, you know, revenue is declining. But you have to be confident, especially with the plan for marketing next spring and the growth trajectory, especially having Michael and Jose in those positions. Like, you're going to need the space, and the last thing you want to do is in the middle of spring rush, be capping growth because you can't get more trucks in where you're currently at. So, like, don't. Don't let that be a temptation because it will happen. Like, you'll come into, like, November, December, things slow down. Like, okay, maybe we can make it work one more year and like, like, you have the capital grow. Like, just go do it. Like, I'm all in.

I'm going to make it happen. Yeah.

Cool. Cool.

And Michael and Jose, as time goes, I just feel like they're even more all in. So we're talking a lot about it. Yeah, yeah.

And I think, too, having the space is helpful for the employees to see, like, just the, you know, the fact that it's a little more permanent. It's not at your house. There's a lot of cultural benefits to having a shop space, but, you know, and again, I don't recommend someone do it from day one. But you having already been, you know, 3, 400,000 revenue next year, I expect 7 to 6 to 7,600. 700,000. You need the space. You got to get out of the house because it just makes it where, you know, your house, your personal life and the business get too intertwined, and then the employees Start to treat it like that and you just become too common to them.

Yeah, yeah, for sure. Yeah. No, I mean, that's going to be like my main focus I think now. So. Yep.

In terms of marketing, what's the plan going into spring? Obviously, you know, we talked a little bit about the Google Performance Max last year. We really did not spend a whole lot on actual marketing. It's a few hundred bucks a month. What's that plan look like in terms of budget and sort of trajectory of growth going in next spring? You know, obviously March is when you take off, but what's sort of that lead up in February?

Well, kind of like we talked before, I think because my website's ranking pretty well, it makes sense to do go more the digital route. I was going to ask you questions. I'm using Performance Max. You know, I did get a little notification. I was like, oh, your cost went up 160%. And I was like, click here to find out why. So I think it finally was past the learning phase and we don't probably have enough time to pull it up today. But it's. I need to learn more about the metrics. And my question for you is, when do I decide that the cost per click or conversion, whatever all it is, is too expensive and I should shift gears to Google local services or Facebook ads or another medium.

Yeah, like, I think the main thing is just tracking the number of leads that you're getting from there is important. The easiest way to do that is to put the conversion tag on the page that says thank you once they've submitted an estimate request form, knowing that that's not all of the leads because they click on call. Now, the only way then to get them is to ask on every single phone call, where did you hear about us? So I would definitely recommend making that part of your process. I know it's a pain in the butt. I know it's easy to forget, but like definitely make that part of the process. And that is at the end of every call after you've got their information, like, hey, by the way, where'd you hear about us? And again, you're gonna. A lot of people like, oh, I've seen your trucks around when really they clicked on a Google Ad. So it's not the best conversion, like in terms of tracking that cost per lead, but at least put the conversion tag and then I would say asterisks next to that. If you see your cost per click going above like six or seven dollars, that's when it gets starts to Become pretty excessive because what you got to ultimately ask yourself is, let's say one in ten people ask for an estimate request, whether we filling out a form or giving you a call once they get to the website. Well, if you take $6 and you multiply it by 10, that's $60 cost per lead. And if you're only closing 50% of that now, you're like $120 cost per customer, acquisition cost. Anything above 120, like, it's starting to take you a month or two to just acquire, you know, get the money back once you've acquired the customer. So that's when it starts becoming too expensive. So I'd use that as a kind of a rough benchmark because I've seen, you know, performance Mac be as low as a dollar or less during spring rush, But I have seen it go to 4, $5 during the winter just because demand's lower and there's gonna be less traffic.

Want to turn your business into something really special? You have to hear About Landscape Summit 2023, a conference by landscapers or landscapers. We'll have talks from industry experts and breakout groups for focusing on your business. Due to 2023 is a support track. These breakout sessions are specifically built for employees, managers, and family who support your business. We only have less than 50 spots left this year, so make sure you secure your tickets before they sell out. If you want to take your business to the next level, meet other successful business owners, you can get your tickets@mycandies.com summit.

Okay, so, yeah, just to finish answering your question, I suppose I'm going to experiment with performance Max. I'll keep local services going, and I'll just have to see if we're able to kind of handle that. I mean, we've had, Honestly, I was supporting at 1.6 people and, you know, so I think in the spring rush for sure. And that's always the. I know you always say you get the bang for your buck. It's much more affordable to spend in the spring, but it just seems so counterintuitive. I have a hard time wrapping my head around it because I just want to cancel all my marketing because I almost don't need it in the spring. But now I'm like, oh, I want to keep you guys busy. So that's, you know, it's tough.

The objective is keeping it as recurring services in the spring. Right? It's, it's. It's exponentially easy to sell both. Both projects and recurring services during the spring. But the Goal is lock in as many recurring services and mowing as possible. And then what I would recommend doing is any projects that can be delayed by a month or two, but book them out into the future because the recurring customer is what you can sell throughout the entire year as well as winter services throughout the winter months. And projects go massively up in the spring, but then they hit a massive down in the in the winter. Recurring is a little bit of a lull during the winter, but you can keep them a lot better. You could upsell them to other services and more maintenance driven stuff. So I'd really be recommending just spend your marketing dollars against recurring services, the other projects and things like that you'll get with them or when you try to upsell them when you're slow.

Right.

So what we do is we kind of flip it and that is recurring services during the spring is all we market. That's the only thing I want to lock them in long term. Then when I slow down, I market to those customers for projects. And a lot of them don't even know we do projects until the time when it's like we are ready to take on those jobs because the spring rush is over. And those jobs are typically less time sensitive like mulch installation, patios, bed installations, tree planting compared to mowing when the grass is two feet tall.

Okay, okay. And I, I mean I don't plan on expanding my geographic area. I did, I doubled it from last year, but I don't know if you remember, I was only like a diameter of two and a half miles. Right now I'm double that at least. But I'll probably keep that the same and just continue to market to the same areas.

Yep. Nope. I think that's fantastic. And then you said, you mentioned kind of Michael and Jose are even more bought in. Is that do you think? Partly because of the conversations and then also the shop, just having the shop, knowing that that's on the horizon. They're kind of looking forward to that now.

Yeah, I think it's a combination of everything. I think it's. They've had time to think about the profit sharing, maybe the pay has a little bit to do with it, but it's just sinking in. Michael and Jose are talking to each other, having conversations that I'm not even having and they're like really consulting each other, coming up with plans. I'm really checking in with them, letting them know about the shop space. I think it's just a shift of like they see me moving in that direction. It's like the momentum is like, we're going this way. So I think it's just kind of that momentum. And yeah, so that. That's probably what it is, you know, and maybe a little bit of the show too. You know, I texted on the video and they're like, oh, this is cool. You know, like, we're on this business boot camp. So just all the factors just creating kind of a new energy about, like, and raising the standard. Because I had been saying for like over a year, yeah, I need to get a shop space now. Now I'm like taking action to. Actually I'm visiting shop spaces now. So it's like, whoa, this is real. And I'm talking very matter of fact, like, oh, when we get this shop space, or, oh, I'm looking at these places. So I think it's making it more of a real thing.

And part of it too is just being confident in your vision. Part of it is you've always been very conservative in your projections and that's fine and good, and that's why you have such good cash position. But also there needs to be a sense of leadership and, you know, you're shooting for something and that's what they're buying into, in my opinion. They've seen the numbers, so now they have the information of an owner. You've given them the compensation, like an owner with profit sharing and the, you know, the increased position, positional authority. And now it's a matter of you have a vision you're driving towards that they can buy into, and they actually see evidence of you fulfilling on those things. Like, if you've been talking about getting a shot for a year and now they actually see it happen. Like, oh, like, he's serious. Oh, like he actually is giving us authority and not holding everything to himself. Like, that's what you got to keep doing as a leader is just like, give them the information, let them run with it, and then you just focus on the vision and growth.

Right?

You've gotten past the part of working in the field. You've killed it. Like, you've done very, very well in terms of the cash flow and putting stacking cash aside, you have no debt. Like, all that stuff is fantastic now. It's like, it's a total different brain shift now towards, like, I empower them to do their job. And now it's like, I'm going to lead the charge with simply the vision of what I want the company to become, and that's what they're buying into. And next year, when they start saying, oh, he actually delivers on hiring four or five more people. He actually delivers on a couple more trucks. We get a shop space, okay, now we're doing twice as much revenue. Now we're think about, you know, where do we expand and grow from here? Like, that's the type of thing they'll buy into and stay with you long term. And I think that's what they're getting excited about, is actually seeing execution against the goals.

Yeah. And I truly believe so. My mindset, I was. It's kind of like, you know, what is that? Paralysis by analysis? It's almost worse at this stage for me than it was starting a business initially, for whatever reason, because those last layers, like, I didn't have an employee. I was like, it's just me and a truck. You know, it's like, what's the worst that could happen? But now it's like, okay, I'm moving all my stuff away. I'm investing a lot more. And the numbers just seem bigger with marketing spend and everything. So this boot camp, you know, before the call is over, I just wanted to acknowledge that the bootcamp has really helped kind of get me past that paralysis point of just being like, yeah, we're going to do it. We're going to get in a shop space. It's going to happen to actually take an action. So I very much appreciate what this has done for me in terms of my motivation and my mindset. So.

And the big thing, too, is, like, is when I see someone like you, Dylan, that is conservative in their finances and makes good, solid decisions without just being flippant about things, that's the type of person that I know without a doubt, if they just put more fuel in the fire in terms of just executioning and making decisions faster, they'll always lead to a bigger and better result. Like, I was talking with our franchisee this morning on our mastermind said, look, if you believe that more than 50% of your decisions are the correct ones, just basic based on math, you should make as many decisions as possible because you'll make the most distance in your business and in your success. And so when I look at someone like you, like, hey, let's see. Let's. Let's say it's 65% or 65 out of a hundred decisions you make are good for the business. That means we should always make decisions quickly, because the more decisions we make, the more latitude we'll gain with the business. And that's what I 100% will be putting on you. And that's what over the past 30 days you've seen. It's just like I'm just pushing, like go do it, just go do it, go do it. And if you just keep that mindset, it's not about making the right or wrong decision. It's simply about making the decision and seeing progress towards something. You might get the wrong shop space, you might hire the wrong person, you might have put Jose or Michael. They might not work out, but it doesn't matter because taking action towards it, with your caliber of skill and business acumen, you will ultimately making the decision is the right decision.

We're talking about Landscape Summit 2023 again. Here are even more reasons to get your tickets asap. We have an amazing selection of experts, success stories and innovators in the science of small business. From the likes of Tommy Mello, founder of A1 Garage Services, a 74 million dollar business to Corey Ballard with Perfect Cut, it just sold to a 500 million dollar acquisition company. This year's summit is going to be the biggest yet and we only have 50 spots left. So if you want to take your business to the next level and meet other successful business owners, you can get your tickets@mycandies.com summit.

Okay. No, I appreciate that and.

I just want to get to all my questions. Do you mind if I ask about sharing a little bit? So yeah, I did promise my wife I'd ask about my compensation. Should I throw myself in there with profit sharing? We briefly mentioned it last week. So at what point does the owner kind of jump in on the profit sharing or do we increase our kind of our weekly salary, which right now I'm set at 800 a week for my take home payment.

What I would recommend is when you do your quarterly profit sharing for your managers, take your profit sharing then as well. Now you're not going to be able to take every piece of profit sharing besides theirs because you're going to need the working capital in the business to grow. So let's say you're giving 5% to Michael, 5% to Jose. Well then there's 90% of, you know, profit left over. Don't take 90%. Maybe take 50% because the other 40% needs to grow with the working capital of the business as it begins, it continues to grow. Does that make sense?

Okay, so 50% of whatever is left over, a certain, certain percentage of whatever is left over after paying out the guys to leave some for reinvestment.

Yeah, you will not even reinvestment, just working capital. Right, Reinvestment you know, if you're thinking reinvestment and growth, that's when you might only take 30% of profit for yourself and leave the other 60% in the business for capital expenditures and working capital improvement. Like working capital needs to go up because as you get to 100, 120,000amonth in revenue, you can't just have 20, $30,000 in the checking account for the business anymore.

Right.

That needs to go up. Right. So I would say if I was you, knowing that you're going to be growing pretty aggressively, I would probably Recommend, you know, 10% is going to them. Let's say 10 goes to your crew. It never ends up becoming 10 because they have to earn that 10% and usually owns it ends up being at 5%. So now we're not 85% of profit. I would probably take 35% of it if I was you and then leave 50% of profit in the business for working capital as well as for capital improvements that you're going to need, like trucks, equipment, et cetera. But that will put you on a growth pattern to still have money in the business to grow with that 35%, but then also have, sorry, 50%. And the 35% will still be enough for you to be excited. Because if, you know, next year you say, do $150,000 in profits, you know, if, if, if 50% or so of that is coming back to you on top of your salary, you're living a little more comfortably.

Yeah, for sure. And then.

So in terms of profit sharing, what if we go in the hole, right? Say one, we're investing a bunch in trucks or whatever one quarter, does that, does that carry over to, like, subsequent quarters? In terms of sharing, is it like a cumulative thing throughout the year? And we tell the crew, like, oh, sorry, guys, we're still on the hole, or is it like. No, like, we start fresh at the end of the quarter and then we share 5% starting fresh the next quarter.

We do, we start fresh, right. And the reason for that is because the guys otherwise get disillusioned when all of, all of a sudden, quarter two, even though we were profitable, they don't get profit sharing because then it just becomes like an annual thing, almost like maybe two quarters of the year you're profitable. So we, we clean the slate. That being said, that really incentivizes making sure that during the winter you don't dig yourself a massive hole. Right? So that's why it's like, get through the winter, really try to make sure you have Winter services, you're getting as close to zero as possible. It incentivizes that behavior. And then also it's a matter too of like going into a quarter where you're crushing it. That's when you talk to your guys. Okay, guys, we got a lot of profit sharing. Let's go ahead and buy the truck now so that next quarter when we're going to be a little more skinny, we're going to go ahead and, you know, not have that big capital expenditure in that quarter.

Okay, and what kinds of things have you done? So I've been really bad about tracking KPIs. Like, truly what's kind of saved me is P4P, I think is just making sure labor. I'm really tracking that because the stuff system. But what KPI should be kind of tracked maybe on a quarterly or monthly basis because they're going to have more interest now and how the business is doing. So what would you suggest in terms of just two or three things that we review and look at and analyze and see where we get better?

Yeah, like ultimately the only thing, because like, I know you're going to keep a handle on fixed expenses, so I'm not worried about that. You're very frugal. The only other expense is labor. That's variable and that's what P4P is going to help with. The only other thing that I really, that does not help with is close ratio. And as they are involved with the sales side or creating the estimates or even customer satisfaction, the two things you need to do is inputs and outputs. So input, you need to track the close ratio of your estimates and output, you need to track the attrition, especially because Michael's going to be involved in customer service. And that's simply just. You can literally just on a whiteboard, track the number of recurring customers you have and put how many canceled and how many were gained every month. Like the red and green every single month and then the net over the course of the year.

Okay, okay. And what does profit sharing look long term? Because do you keep it at 5% for like those that the office and Jose and then the. In the next years it's like, well, we either grow the business or we get more lean and have more profits and raise. But then eventually they may say, well, I want like 10% or I want. You know what I'm saying? How does that look long term? And does that only change when the roles change and the organization structure changes?

Exactly. So if they ever say, hey, I want 10%, that's when you say, okay, great, here's the things that I need you to take off my plate for you to earn that right. And that's when you. That that's probably going to happen in a year or two. But at that stage now, you need to start offloading. The same thing we're trying to think about and prepare for next spring is going to happen next year when, now you need to start outsourcing and giving off and handing off the actual estimate itself, like meeting the customers, that whole side of things. And so you're going to need that. I would not be concerned about that because when that time comes, you'll be willing to give away more profit sharing in exchange for them taking more responsibilities.

But.

That'S when. That's the joy. That's a beautiful, that's a beautiful thing about business. Right? That's where you want to be at. Because then, then you're going to make the decision. Because at that stage, like, hey, I want to be in the business, I enjoy doing estimates. That's when you say, no, like, this is kind of where we're stopping. Right. And that's your ultimate decision as the owner. But then it's, it also opens up to, okay, well, maybe I give them more responsibility. I only show up to the office a couple days a week and I'm going to go do something else, whether it be on the business or a second location or investing or whatever you want to do. Right. Or it's a matter of you enjoy it, you stay doing it, but you don't have to be doing it. And they might leave you at that point because that's what they're buying into right now is the growth. And that's like I'm on this treadmill of growth because I have a bunch of people around me that if I stop growing, I would probably leave. Right? Yeah. And so that can be addictive. But you just gotta be determining what you want from the business. And that's a beautiful place to be in, is when you're now setting the parameters of what you do and do not want to do instead of right now. And over the past two years, it's been the business tells you when you work, the business tells you when to show up, and you work like crazy hours to make that happen.

And what are the last things you usually delegate?

The office person sales, the actual estimates itself, creating the pricing. That's the last thing. It'll be the last thing you do probably towards the end of next year. And if I had to guess, it's probably someone like, or potentially be Michael. And that is handing off the actual in person, the creation, creating budget hours. Like that is the funnel, the top of the funnel that creates the whole infrastructure of the business. But creating budgeted hours. Right. And so when you hand that off, that's the hardest thing to do. It's. It will like, you'll literally have to, you might have to be on the boot camp to do it because it's a matter of like, you just have to cut the cord. You, you have to trust the person and you have to walk away and don't look at it. And so especially like June and July of next year as like we get past spring rush, what's going to happen? You'll need to start focusing on creating systems around that. Creating systems around the sales process, creating systems around the estimating so that you can hand that off and it not fall apart.

Okay, cool.

Hey, brother, it was great, man. It was great to connect with you again and I'm sure we'll, we'll definitely be seeing you again soon.

Yeah, no, I appreciate it. This helped a lot. I really appreciate it. Good stuff, brother.

Take care. Have a great weekend. Happy Halloween.

Yeah, same to you.

Bye.

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

Sam.