Chapter 13 - You Treat Your Business Like a Side Hustle ( Total Business Turnaround Book )

Hey everyone, it's Mike Andes. And today I'm going to be reading my book, Total business turnaround chapter 13. And we're going to wrap it up with this one with a conclusion as well also after and I want to say thank you for listening this far but this chapter is going to be good and honestly I wanted to make it the first chapter because if you don't get this one right, the rest of the chapters really don't do you a whole lot of good. And that is treating your business as if it's like the side hustle. And one of the biggest things you can do is commit all in and actually start becoming a student of the craft that you are engaged in in the industry and talking to other business owners and networking with them and connecting. And so that's why we actually have a conference where in person, I'd like to invite you to it. It's bluecollarsummit.com it is all for blue collar business owners, entrepreneurs that want to grow a million plus dollar business. So if the book has been helpful so far, I really believe this will be an awesome place for you to come to meet other business owners. I, I'll be there speaking but also doing a workshop to help you grow your business. And I generally believe those three days that you come out to Blue Collar Summit will completely change your business. So go check it out. I genuinely believe that connecting with other business owners and then really treating your business like a full time career instead of a side hustle is gonna be a massive unlock. So let's jump into chapter 13 and get this party started. Chapter 13, you treat your business like a side hustle. Why you don't have a million dollar business. Reason number 13, you treat your business like a side hustle. Jesse is from Edwards Landscaping in Missouri. A year before I arrived to do a business turnaround, someone had dumped him. His girlfriend moved out of their house and in with another guy immediately. Jesse moved out to California for eight months to sell solar panels. He wanted to get away from the business, his town and his house. That reminded him of the pain. He'd heard that selling solar was a way to make a lot of money in that line of work. Unfortunately, those rumors proved inaccurate or exaggerated. Especially after legislation changes in California. Jesse did not make a lot of money and soon moved back to Missouri. He found his business there waiting for him. Two employees had managed it in his absence. The problem was that he didn't like the way it was being run. The two team members led the business while he was In California, they felt underappreciated and underpaid. Jesse's approach to management and his absence from the shop each morning aggravated them. They had recently switched to salary and they didn't like it. Jesse would only show up at the office once a week. He worked from his house, performing estimates remotely. Even on the day we arrived for the turnaround, we couldn't find him anywhere. The crew was loading up their trucks for the day. Jesse was still 15 minutes away at his house. Delegation, of course, can be a good thing. We talked about that in the last chapter. Jesse's approach was a little different. He was mostly absent from the business. He was shirking his duties as a leader. Until your business has a general manager to lead it, the owner will likely need to work there daily and be hands on. I got the sense that Jesse wasn't very interested in the business. He wanted to get into real estate and other investments and projects. Lawn care wasn't something he hoped to stay in long term. For admin, he'd hired a woman from town who was working remotely. But she was very inefficient. Many times tasks would not get completed. There were days that Jesse wondered if she worked at all and why things took so long to get completed. When I showed up for the turnaround, he had a whiteboard filled with at least 50 questions. It included pay for performance and his shop space. It also covered the software options he was considering. These are all important factors but. But I thought Jesse needed to focus on two things. First, I thought he needed to be a better manager and leader. His business made $470,000 per year. He was trying to run things remotely without in person leadership for the crew. The difference would take the business from 470,000 to a million dollars. It depends on whether there is a strong manager and leader at the helm. The second thing I suggested was that he find a new girlfriend to regain his confidence. It was clear that he hadn't recovered from his recent breakup and since that time he had neglected the business. Jesse lacked confidence and it was bleeding into how he ran the business. He was indecisive and not showing strong leadership in his business. He had no pride in the company he owned since the time his ex girlfriend had left him. Jesse loved personal development, books, coaching and self help content. All fine, also distracting. This had led to all the dozens of questions he had. Business owners have a lot they need to focus on. I wanted Jesse to zero in on his managerial responsibility. In reality, he needed to focus on that. Many of the other X'S and O's would fall into place if he stopped running the business. And like a side hustle at the turnaround, I found out that he had booked a 10 day cruise for April for lawn and landscaping businesses. That's the heart of the spring rush. I asked him if going on that cruise would get him closer to reaching the two goals we had identified. Would it help him be a better leader or manager? Would it empower him to find a meaningful life partner? He admitted no one on the trip would be a long term partner. He also understood that leaving during the sprint rush was a bad look to his team. Everyone else would be working overtime. This includes the two employees that had run the business without him the year prior. He'd be sunbathing while they were working hard. While Jesse and I didn't have exactly the same journey, I could relate to his mindset. He was running Edwards Landscaping as a side hustle When I first started Augusta Lawn Care, I thought I could do everything and run a bunch of businesses at once. I started Augusta Cleaning Services. Six months after starting Augusta Lawn Care. I lost $75,000 on a lease for a business idea called Reset Mind and Body. The business would have focused on red light therapy. It would have cold plunges, yoga saunas and float tanks. I started a keto snack company, Ketosis Cups. A couple of weeks later, the COVID 19 pandemic hit. We canned the business. I worked as a sales rep at a credit card processing company while I was starting Augusta in my MBA class. As a project, I started a company called Bioshakes. We made protein shakes from a vending machine. In college, I filmed and edited a series of video workouts. I turned them into a mobile phone app called 30X. I did snowboard waxing, cologne, dropshipping. I understand the excitement Jesse was feeling. You get an idea, you want to run with it. He had ideas of real estate, solar sales, and getting into other industries. Meanwhile, the business that made all the money remained neglected. The team lacked organization. The business's processes were inefficient due to lack of attention. Entrepreneurs loved the chase. Starting new things we don't always fall in love with running businesses. Starting businesses is not profitable. Running them well is how you make real money. At one point, I had eight different businesses. I cut four of them that were not related to home services. The four that I focused on doubled their revenue within 12 months. All the side projects I mentioned were distractions, things that kept me from finding success and building my lawn care business into a million dollars of revenue. If other ventures interest you, that's fine. First you need a financial pillar. Something that makes money or is a sellable asset. If you are making a million dollars in revenue and have a decent profit margin, you can afford a manager. That manager will be the leader for your business. This will give you the time and money to try new things. The first five years at Augusta were ineffective. I wasn't making money. The business had literally almost killed me. The next five years led to systems, procedures, franchising, expansion to 150 locations around the world. Locations I owned that were generating money without my daily involvement. We developed software, a web design and tax prep firm, and courses. We started a conference and media company. How? Focusing 100% of my attention on home services only. No distractions, no side hustles. The key to going from where you are to where you want to be is reps. Not only time. Sitting around holding your breath won't help the business. More estimates, more projects, more follow up calls will. The best plan doesn't win. The best execution does. Execution creates progress. Progress is the currency of success. Progress over perfection every day of the week. At CoPilot, we have three user categories. It shows why home service entrepreneurs get distracted. The first stage is zero to $200,000 in annual revenue. At this stage, the owner is focusing on excelling as a great laborer. They do the work themselves. Their stress is physical. Every day is hard on their body. They feel drained. They work in the heat, the cold and the rain. Between 200,000 to 800,000 in annual revenue. The owner's primary role becomes that of a manager. They scale. They have employees, systems. Their stress is financial. The owner no longer works in the field. They don't produce any labor revenue. Their profit margin compresses. The top performing employee from stage one has stopped generating revenue. The business owner is that top performing employee. Now they are an overhead cost to the business. Many find that they bring home the same amount of money they earned when they were a solo operator. This is why many retreat. They go back to being a solo operator. Less revenue, sure. Also less financial stress. I call the second stage of business the wilderness. More employees, more pressure, More risk. Same profits. In the third stage, we reduce financial stress. The business generates 800,000 plus in annual revenue. At this point, the owner needs to be an architect. They need to build good teams, organize systems, help the business move forward. This could be by creating HR programs or buying out competitors. Even at this point, there is stress. The business is so big that there are always problems. Customers complain. Trucks break down. Employees call in sick at the last minute. The business gets a bad Google review. Every single day something bad is happening. This creates psychological stress. It's easy to think the grass is greener on the other side. The person with a small business wants more customers and more revenue. They are tired of enduring physical stress. They fantasize of working on the business instead of in it. The person with a big business wants fewer problems and a simpler life. They want to get rid of their overhead costs. They dream about the good old days when they could just wear headphones and work all day. Stress never goes away. It only changes as the business grows. Why bring this up? Understanding these stages helps you focus. It's easy to get distracted by the shiny object syndrome. It's easy to wish for a different stage of business or to believe that a different industry will cure your current stress. Labor Manager. Architect Focusing on the wrong thing as you grow, the business will stunt your growth. It will cause financial issues. It will also cause frustration for you and your team. Often when business owners jump from business to business, this is why they experience new stress. They think there must be another, better way. A new venture or industry that will be easier. At Augusta Lawn Care, we have defined seven stages of wealth. I hope they serve you well. These will help direct your attention and steady your focus. Stage one is growth. During this stage, the goal is for franchisees to grow past $500,000 in annual revenue. Stage two is profit. At this point, you want to build two months of payroll in cash reserves as a safety net. You have scaled up fast and getting some cash reserves is healthy. Stage three is systems. Owners. Get out of the field. Focus on selling and delegate all their admin to command center or an office staff. Stage four is scale. Focus on exceeding $800,000 in annual revenue. This could also mean getting a second location. Doing this would prevent the need for many layers of management you would otherwise need them as you scale a location past a million dollars. Stage five is gm. Hire a general manager. Install a profit sharing program. This will limit your involvement in daily operations. Here's my who do employees call when they can't come to work? If the answer is you, you're still involved in daily operations. Stage six is repeat. Start building out multiple locations. Become an absentee owner. Hire a regional manager to handle five to six locations each with a GM in charge of daily operations. Rinse and repeat. Do not reinvent the wheel. Do not get distracted. Stage seven is invest. Take the money you have at Augusta Lawn Care and put it into new business ventures Real estate, stocks, bonds. This will be a tax shelter. It will diversify your net worth and and it will let you pursue your passions outside of the business or current industry. For Edwards Landscaping, Jesse had not yet reached the first stage of wealth at Augusta Lawn Care. The first stage is to grow to $500,000 in yearly revenue. Yet he already thought like he was in stage seven. He was trying to invest and diversify into other industries. Treating Edwards Lawn Care like a side hustle almost cost Jesse his business. It definitely cost him growth. He wanted to increase revenue, but by stepping away for eight months, he made that very hard and almost lost his business. That distance kept him from seeing the issues within the business. He would save $50,000 a year. He would do this by taking over admin work from his inefficient remote worker. It would also ensure the admin work got done right. It increased his close ratio. Then he could begin to ascend the seven stages of wealth. Staying focused on your business brings you closer to making a million dollar business. It ensures you have time to execute the things we are talking about in this book. The steps described in the last 12 chapters are doable, but they require your full attention. Competitors love it when other business owners lose their focus. They will eat your profits for lunch. They will take your best employees. Many people say they are too busy to fix their business's problems. They don't have time. Those same people treat that business like a hobby. Running your business part time is a sure way to get beaten by a competitor. They have laser like focus and will outwork you full time and then some. Are you treating your business like a side hustle? If your other businesses make less than 50% of your revenue, the answer is probably yes. Those side quests are costing you big. I was at a meeting hosted by a mentor who is a billionaire. A business owner asked if they should focus on their painting business or on their coaching business. The coaching business was making $100,000 in monthly revenue. But it was growing quickly. It had just started three months prior. The painting business brought in about $4 million in annual revenue and had been in operation for five years. It was not growing as quickly, however. It was steady. It operated on systems and procedures and had management in place. He knew if he divided his attention, neither business would do well. He asked my mentor which business to choose and focus on only. Instead of answering with words, my mentor turned and drew two lines on a nearby whiteboard. The first line shot up the graph and then plateaued. The second line grew gradually but grew Steadily and exponentially over time. He assigned the painting business to the second line. It did not grow as fast, but it was steady. It had enterprise value. Investors could buy it later. This would happen when when systems were installed, profits grew and revenue exceeded $10 million. The revenue was predictable since the demand for painting would always be there. The coaching business offered high profit margins and was very easy to scale up. But it did not have that enterprise value. It was a commodity attached to the business owner's name. It was not a sellable asset. The demand for that service could dry up fast. The mentor did not say a word. Yet he showed the power of focusing on one thing for an extended period of time without distraction. Bottom line, if you are distracted and treating your business like a side hustle, someone else will seize opportunities. They will have their full attention on your customers and your team. There is always a competitor waiting in the wings hungry for your lunch. If you want to build a million dollar home service business, you must be prepared to give it your all. Grow, build up your revenue. Stay focused. Once you've built a business with systems, you can explore new opportunities. Expect distractions along the way. They come from stages one through six of the seven stages of wealth. Other, more attractive business models will seduce you. They will entice you with better margins, sexier business models and easy money. Just remember, no one ever became a billionaire from a passive stream of income or from doing a side hustle. Conclusion Dig, Build, Bury if you are feeling like you're working hard and not seeing results, it can be discouraging. Even if you follow the advice in this book, you will experience a period of time when the work is very hard. There will be times you question if you should stay in business. There will be times you want to quit. There will be times you struggle to make payroll. During the first three to five years in business, these obstacles are common. This is especially true if you don't have lots of startup capital. As you grow to a million dollars, it will take a lot of time, energy and money. You will often feel depleted in these areas. Let me say this. You are building your foundation. Dig, Build, bury. A foundation is not seen by anyone. Everyone admires the structure of skyscrapers, houses and buildings, but no one admires their foundation yet. The foundation is critical for longevity and to allow for a taller building. You can't build a 200 story tower without first spending resources to dig deep. You have to build a foundation and then bury it. No one will ever see that work again. When people come to the tower, they will look up and admire the beauty of its height. They will not look down and see the foundation beneath the ground. You are building your foundation. The first three to five years of business and and as you grow to a million dollars in revenue will be hard. You will likely go through difficult times that you never want to relive. There will be thankless jobs, sleepless nights and very long hours of work. You will never get recognition or applause for this work. There will be times when people doubt you, laugh at you, and you want to give up. Why? You have no evidence or track record of success. You have no tower to point to as a monument of achievement. News Alert. The tower is not possible without the foundation. I want to give you encouragement to stay in the game. Keep fighting, keep digging, keep working on the required foundation to the success you want to build. Dig, build, bury. So this is where the party ends. If you have made it to the end of the book, I just wanted to say thank you. Thank you for your time and attention. I hope that something said unlocks the next stage of growth for your business. If you are struggling and would like me to come do a turnaround in person, go to mikeandys.com turnaround apply to be on the Show I want to use Copilot CRM. In the future I will use it to give personalized feedback using your business's numbers. Any CRM easily tracks all the metrics. From that, I can quickly identify which of the 13 constraints in the book apply to your business. I encourage you to sign up for a free version of Copilot CRM. You can test drive the KPI Cockpit. It shows all the key numbers in your business at a glance. In the future we will make 3D notifications. That stands for Data Driven Decisions. The software will take in all those metrics. It will then give you advice and recommendations for your business. This will include giving answers about when to hire someone. It will also cover which customers need a price increase and when to send upsell emails. The principles of this book can be overwhelming, but the key is to know the one obstacle and constraint in the business. Focus 100% of your energy and attention on this one thing using CoPilot and AI. My goal is to tailor the advice and identify the main constraint in your business. I wanted to ask for a quick favor. Could you leave an honest review of the book on audible for me? This is the best way for other struggling business owners to hear the message inside of the book. After you leave an audible review, send a screenshot to bookikeandys.com I will give you free access to an online course. The video course has eight plus hours of content. It has me teaching the concepts of the book on a whiteboard. This allows me to show much more detail and break down things with pictures and graphs. The course is usually $599, but if you leave a review, screenshot it and send it to bookikeandys.com, i will give you free access. If you have enjoyed the book so far, the online course will take it to a whole new level. If you want more tools and resources, visit mikeandys.com we have conferences and I look forward to meeting you in person in the future. I hope to hear that you have built a service business that produces a million dollars each year in revenue and over 20% of profit. A quick word of thanks is in order. Dr. Trevor Cashe helped me shape the book's ideas and create a digestible framework to share them. I am very thankful for his coaching and guidance. I am grateful for his mentorship and friendship. I aspire to be the man of character he is. He has demonstrated to me how much effort must go into becoming world class.