Chapter 8 - You’re Wasting the Off-Season ( Total Business Turnaround Book )

Hey, everyone, it's Mike Andes here. We're gonna be reading chapter eight of the total business turnaround. We're gonna be talking about the off season. And I honestly believe those are like, bad words in the home service industry. It makes so many home service business owners poor. Is having an off season. We're gonna talk about how to not have an off season and actually be able to consistently produce revenue. And I genuinely believe this is one of the best chapters. If you could do me a massive favor and share this with someone else in your industry, maybe not a competitor I know can feel like you're giving away secrets and things share on a Facebook group or on a WhatsApp group or with someone else that you know that could use this message even if they're not in your industry. Maybe it's someone you know from church or from a peer group that could could learn this. Because I genuinely believe that 50, 60% of the closures in home service businesses happen during the off season because people run out of money. And so I want to fix that problem today. And if you could do me a massive favor and share this message. Share this episode. Just go up, click the share button, copy the link, send it into another group or another business owner. I'd really appreciate it. It's completely free for them and it's free for you. And that's the price of admission. Is sharing this episode. I appreciate you all. Let's dig into it. Chapter eight, you're wasting the off season. Why you don't build a million dollar business. Reason number eight, you're wasting the off season. We talked about Mr. Sudsy in an earlier chapter about collecting on overdue invoices for a refresher. Mr. Sudsy is a window washing and Christmas lights company. The business had a major cash flow problem. They couldn't afford to buy Christmas lights in the off season when they could have saved up to 30%. They also had more than $80,000 in unpaid invoices. Unfortunately, that wasn't the full extent of Mr. Sudsy's problems. Blaine, the owner, also paid his whole staff full salary for 10 weeks. They had almost no work during that time. He did this for a reason. There were three employees Blaine felt very serious about retaining. They were very good team members. One had been with him for a long time. The other two were new but showed great promise. Employee turnover does cost money, but it doesn't cost the $30,000 a year Blaine was paying just to keep three guys during the off season. Between this added expense and his unpaid invoices it was no wonder why there was so little money in the bank. The off season was draining any profits he accumulated throughout the year. I tried to get him to look at the math a different way. I told him to think about the $10,000 he was spending per team member. Divide that number by the 1500 hours a full time worker puts in over nine months and and it becomes $6.67 an hour. I suggested he raise their wages by $5 an hour during the busy season. Then he could lay them off when things got slow. That would let him save money during the off season. At that pay rate, they would certainly come back. If they didn't, Blaine could attract a better candidate with the higher wage. From a cash flow view, paying wages for inefficient or unneeded labor during the off season will drain your bank account. Many times businesses cannot capitalize on the spring rush and busy season due to the lack of cash. They spend all the cash in the off season. So the business cannot afford to hire more people, run more ads, or buy more equipment once the leads start to pour in. This is a common problem for people in the service industry. We want to keep our employees. We don't want them to leave. We want them to feel secure and be able to provide for their families. We take this to mean that we need to keep them full time 12 months out of the year, even when they only work for nine. In the first few years of starting Augusta Lawn Care, I would save 70 to $100,000 by the end of fall. But I would then burn through it in the winter. I burned through all my profit during the off season. I did everything I could to keep my crew busy. I didn't want to lose them over the winter. We invented things for them to do despite having very little work coming in. I'd have the crew bring free firewood or cookies to customers. We would provide unsolicited property maintenance quotes to commercial properties. We would pressure wash our mowing customers driveways for free. We would organize and reorganize the shop and equipment. Most of the hours my team clocked were wasteful or inefficient. I knew it too. But I worried that if I didn't keep my team busy in the winter, they could leave. Then I'd go into the spring rush without experienced team members. I realized they didn't even want to be working in the winter. The weather was cold and wet. They would have preferred to work indoors and then come back in the spring. At the same time, I got into A few services that were very specialized. These services took a lot of time to train employees to be efficient. They also deepened my belief that I must keep the employees on payroll at all costs to keep the crew busy when snow was on the ground. I got into snow plowing and salting services. But in my market, snow only comes a few times a year. It was another thing I did to keep the crew busy at the detriment of the company profits. Snow services required me to invest tens of thousands of dollars in plows and salters. I had to buy thousands of dollars worth of rock salt months in advance by and store it. It also doubled my liability insurance premiums for the year. I was able to get out of these complicated services and keep only a core group of year round crew members. We focused on other simple winter services. These included trimming bushes, installing Christmas lights, cleaning gutters and doing property cleanups. These services did not need extra equipment or special training. Best of all, we would keep our recurring revenue in the past. It would stop once the mowing season ended. For our recurring mowing customers, we would keep them on the same weekly or bi weekly schedule. But we'd seamlessly switch from mowing to winter services. Winter services included other property maintenance functions needed. Despite the grass not growing, picking up branches after storms, blowing off walkways, edging the lawn, pulling weeds, raking out the beds, removing leaves, trimming shrubs and trees, putting down ice melt and shoving the snow. If present, we would do these services for the same price as mowing. They would be on the same recurring schedule and we would spend the same amount of time on the property as we would if we were mowing. In fact, we were able to sell recurring winter services to people that were not even on the mowing schedule. It worked well for snowbirds and retirees. They wanted their property looked after while they were gone in the winter. I simplified our services. I focused on profitable work. This allowed me to pay laid off employees more when they returned. We implemented extra benefits. Pay for performance, profit sharing, gym reimbursement, health care insurance. We could afford the incentives. We were no longer inefficient during the off season. Bottom line, if you don't have work for employees in the off season, I recommend laying them off for a while. You can build this in the job description when you are hiring. State that it is for a six to nine month season. Whatever it is for your business, make sure they understand they won't get guaranteed full time work during the off season. You could even include a three month option. They can work Part time with you as needed or go find another job. This eliminates the chance for surprises. It gives them time to find other work. Say everything up front so expectations are set. The goal is to use seasonal labor to match seasonal demand. If you don't have year round work, you don't need year round employees. At my first Augusta location, our off season is from December through February. During those three months we lay off most of the team. We give them a guaranteed start date before March 1. Sometimes it helps to offer a cash bonus to incentivize their return. You won't need this if you are able to pay higher wages or benefits than alternative job options they could get. You may also improve retention by proactively helping them find off season work. I've seen lawn care businesses give employees to Christmas light installation companies. They also give them to snow removal services. These industries have the complete opposite seasonality. This helps reduce stress for your staff knowing they will have year round employment. This also eases your worry they will find another place to work, but once you need them to start again, they will be available. That being said, the winter months often offer good opportunities to find seasonal work. There are lots of retail positions that open up at that time due to the holiday shopping rush. Keep the off season in mind when you are hiring throughout the rest of the season. Some business owners find leads spiking late in the season. They wonder if they should hire to meet the increasing demand. There have been times when I was hesitant to hire in September or November. I knew that I soon wouldn't have enough work to keep them busy. I should have mentioned to job applicants that it was a two to three month position in the listing. This would have given me the labor I needed to finish the season out strong. It would have sped growth and let me use the influx of leads that comes late in the season. There are plenty of people who are happy to work contract based jobs. Some employees just need a job before they move, go to college or have a life event planned. In some cases they can take an eight week job and make what they would have earned in 12 weeks otherwise. If someone is willing to work on a contractual basis, you can pay them more. It makes talent acquisition much easier. Everyone wins. Having a pool of team members willing to work small periods of time is very beneficial. These are people you can tap into during the spring rush as well. Remember, some people will see this as a great opportunity. They like the idea of earning good money for a few weeks and then taking it easier for a while. A three month contract lets them give it their all. Then they can slow down and take time for hobbies, outdoor activities or travel. The government has programs for seasonal workers. The workers can immigrate and work in the country for a period of time. These programs continue to have their challenges and risks. But could you pay extra to convince employees to travel from out of town or out of state to work for you? This would be during only the spring rush. Seasonal demand requires seasonal labor to maximize profits We've talked about how to avoid mismanaging your off season. What I really want is to challenge the idea that there has to be an off season at all. In the past, I have thought of lawn care as a seasonal service. True, it is the primary service offered nine months out of the year. But it doesn't have to be the punctuation mark on your year. The goal is to decide what to do during the other three to four months of an off season. They usually drain all your cash reserves. Can you find an in demand service to provide during your off season? Something that would allow you to expand instead of laying people off? At Augusta we serve mowing and landscaping customers. We serve them at all our 150 locations. During the busy months, we pivot into other season specific services. We treat those months as our second busy season. I challenge Augusta Nation to think as if the company's name was Augusta Winter Services or Augusta Christmas Lights or Augusta Snow Services. If it was, that would actually be the time to hire, advertise and grow the business, not retreat. For example, with the offer we give our customers to transition to winter services. Many of your mowing customers will appreciate this option. It keeps their property looking nice year round. The holidays are coming and you'll have lots of guests. Customers are thrilled to pay us to come and spruce up the property. Having us come bi weekly during the winter also saves them money. It's more cost effective than a couple large one time property cleanups in the fall and spring. For those one time projects, there would be extra debris removal costs, estimate fees, et cetera. With winter services, their property stays looking good the entire off season with recurring visits every other week. I use winter services in the lawn care industry. As one example, many Augusta Nation owners plow snow. They also hang Christmas lights and do junk removal. Regardless of the industry. Get creative. Come up with season specific offers to sell season specific services to customers. Sell services that have a higher demand during your primary services off season. You know what? Drop the idea of an off season. Go on the offensive during the period when your business used to hibernate off seasons keep you poor off seasons are the root cause of many business closures. Off seasons keep you from building a million dollar business don't have off seasons. It sounds blunt, but it's true. Why accept the idea that you can't make money from three to four months out of the year? Instead of having an off season, make a mowing season and a Christmas light season. A mowing season and a snow plowing season. If you paint fences during the summer, consider painting indoors during winter. If you build outdoor decks and fences in the summer, consider offering bathroom or kitchen remodels in the winter. If you do house washing and pressure washing in the summer, consider offering window cleaning in the stormy winter. If you clean pools in the summer, consider offering maintenance and repairs in the winter. These are some examples, but each industry has many options. It will take creativity to match the season specific service with a season specific offer for your customers. Do this and you won't have to lay people off. You won't need to burn through your cash reserves and paying people to do nothing. You'll be able to grow while your competition is in defense mode. You may even hire people your competitors laid off for the winter. Buy equipment at a discount. Advertising costs may be lower. This is all because you're making moves while everyone else is lying low and playing defense. The off season is the best time to handle these logistical concerns anyways. It's harder to find good trucks to buy and good employees to hire during the spring rush. That's when everyone else is doing it too. Being offensive all year gives your business flexibility. It lets you make moves when your competition cannot. Seasonality keeps you flat footed and takes you further from making a million dollars. It makes it harder to create continuity within your culture. Team members will be shuffled around and replaced often. This will happen each season if you lack a strategy to keep employees or get them back after the off season. It stinks to lose all your employees every year. If you spend a fortune to keep them and burn all your profits, that stinks worse. These are also issues that will take you further from your million dollar business. When you step out of the seasonality death spiral, it gives you a huge advantage over the competition. When they are hibernating, you're hiring. When they're shrinking, you're growing. They are paying for equipment they can't use, you're expanding your customer base and marketing to their customers. The seasonality issue is easier than most problems to diagnose. Simply put, if you have a period each year where you aren't generating revenue. It's a problem. Expand your services, Expand your offers. This is the solution. It doesn't need to be complicated or costly. You can focus on many winter services. They will need few if any extra pieces of equipment. Earlier I mentioned gutter cleanings, property maintenance and Christmas light hanging. These are potential service areas for lawn care pros. We have the ladders, gloves and basic tools for adjacent or similar services. In the last chapter we said the spring rush is a great time to market to repeat and recurring customers. It's easy to catch fish when the pond is full. During the winter months there might be fewer fish, but there are also fewer fishermen. You will just need better bait. That bait comes in the form of season specific offers to attract customers. Stop thinking that you have off seasons altogether. Expand your services while your competition is taking their foot off the gas. By conquering the off season, I can continue to keep my crew busy with profitable work when no one else can. I can continue to get more customers when no one else can. And I continue to invest into my business when no one else can. Doing this will improve the odds of building a million dollar business.