Confronting a Keyboard Warrior That Challenged Me on How I Pay Employees!

It's Mike Andes. This is crazy. You gotta check it out. This is not gonna disappoint. Alright, so on the Facebook group called Lawn care Millionaires, which if you're not a part of and you're in landscape industry, you gotta join it, check out this post, it's crazy. So this is like a few weeks back, a couple weeks back, guy named Rick says Mike and he's do you want to come on my Facebook group on a Zoom call and talk, pay for performance to lawn applicators? So looks like he has a Facebook group here. 2,600 members, mostly doing lawn care, applications of fertilization, weed control, et cetera. I didn't get this for about a week and a week later I went in here and made a comment. I said on my YouTube video descriptions there's a link to email me. All right, well, his response was Mike Andes, I practice radical transparency, so I am not into backdoor deals like you do with Tiger and Gertz. Seriously, if you want to talk P4P, I will set up a Zoom for Thursday December 20th at 7pm Central Time on Zoom, broadcast live the Facebook group I bought. He bought this Facebook group with 2600 applicators in it. Otherwise I assume I will assume you are scared. Very strange approach, honestly, for trying to find get someone to join an interview.

At the very end of this video. I refer back to this in a tongue in cheek way of how I got someone else on my show.

By simply emailing them nicely and following the system. So I responded. I think someone here or a bunch of people jumped in kind of jumping on him a little bit.

Let's see here, let's see here. Then he says, the more I think about it, my invitation is set.

You can choose to show up or not.

Just reply yes or no or give me a date that works for you and I will do any date. I've implemented your P4P concept with my spraying company and it works really well. I read your book, I bought your software, although I don't think the software works that great yet. But the concept of P4P in my opinion works better for spraying even than lawn maintenance. My Facebook group I just bought has 2600 lawn applicators in it, et cetera, et cetera, Respects me, et cetera. That's cool. I appreciate that people going back and forth in the Facebook group. It's awesome. I'm so confused how this approach is supposed to work. Mike, would you come do an interview, send me an email. Oh, you must be scared. It's like asking a girl on a date. Then she wants to check your schedule, then she, she wants to check her schedule. Then you are instantly on the offense. It doesn't sound like a good strategy. And then Rick Rufic average begets average. Damon replied, confidence is great, but arrogance make you look like an idiot. Learn to be humble. It works well if you want successful to help you. I like that response. Let's go. So anyways, all of this to say I forgot about it today. Brad sends me a text and said, hey, are you gonna hop on this call tonight? So he must have like remembered somehow or somehow made a reminder. I totally forgot. So I emailed a meeting that had with Lee, said hey, can we do an hour earlier? I want to hop on this call. So sure enough, 5pm My time, 7pm Central Time, I jump on the call and this is what I saw. I just was waiting and waiting and waiting for 15 minutes and nothing. So it turns out what happened is he didn't actually end up doing the, you know, setting up a call and.

Then just like decide, you know, I.

Can show up or I can't show up. He there was no actual call set up. Oh and by the way, my response to him originally was not a good approach to get an interview. Tigran has no backdoor. Since when has emailing someone not been transparent? Do you do all your business and communication through public Facebook pages? You can show screenshots of the emails if you really think that is needed. Lol. The email is a way for me to send invites instead of the call on my schedule since I miss notifications on Facebook all the time. So anyways, that was the prelude to how this conversation started because this is what happened. He got a notification I had joined his Zoom room and he just hopped on. He just literally hopped on and the conversation started. And that's what I'm gonna be showing you today. I'm gonna cut out the very, very first part because he didn't know we were recording and we addressed this a little bit more in depth. But you'll actually get the conversation that we had.

I think it was really, really helpful.

So if you do any sort of lawn care, landscaping, if you're thinking about p4pssoftware.com pay for performance, we talk a.

Lot about how you should do your.

Billing, what frequency and why, and doing sales emails and open rates. There's a ton of good stuff in here. And hidden behind this drama, hidden behind this drama of what happened in the Facebook group, this is a gem of an interview. And what's cool is it wasn't prepared for it. It was literally just off the cuff because he was not planning it for it, I was not planning for it. And I think it's a really, really good jam. So without any further delay, we're gonna give Rick just.

Just hold, you know, before you cast judgment, you know, because Rick, you know.

Using some hot water, I wasn't happy. You'll see. I wasn't happy on this call for like the first 10, 15 minutes especially.

I was, like, kind of annoyed because.

I'd never do this. I never just hop on calls to people that challenge me or say that I'm. I'm scared if I don't show up to it. So I was a little bit annoyed because I'm busy. I spent the entire day working, doing zoom calls, doing a lot of stuff, and here I'm wasting time in my mind at the beginning.

So anyways, I hope it's a value.

I hope it's a value to obviously, the group that Rick has purchased, and hopefully it's just helpful. So without any further delay, the interview with Rick, the guy from the Facebook group.

Well, here we are with Mike Andes. The famous. The infamous Mike Andes is on Professional. What is the group called? Professional. On the repetitors. There he is. Let's go.

Did you.

So did you buy the group recently, then?

Well, there. I can't actually. I can't say exactly. I may have traded for a lot of Twinkies, you know, that's all I can say. I can't really go into, like, legalities of that, if you know what I mean. So.

Okay.

I don't know. Cool. I can't answer. I'll take the. Can I say I'll take the fifth. Fifth?

You plead the fifth?

Yeah, I plead on that. So.

So you've been doing. Have you been doing any P4P in your business?

Kind of.

Give me a little background.

Yeah, yeah, we actually.

So earlier this year, I've actually read your book. What's the name of your book?

P4P the why Hourly is a failing formula.

Yeah.

Okay. And it's a pretty simple read, you know. What is it? It's not very. It's not, you know, 100 and something pages. It's pretty. Pretty to the point. You don't waste a lot of time.

So I've read that book and.

We use it in our business. We tried it with the maintenance, but it. It just seemed to like. I think there's a difference between nor. And you can correct me If I'm wrong, you know, and tell your experiences. But like it's, it works easier with like northern style lawns cutting grass, but in the south it's a little bit harder. But then when we applied it to our lawn spring.

Business, it worked really well.

What challenges were you having with the, the southern kind of side of things for the maintenance?

Well, 33% is a pipe drain on, you know, you can't hit that. You're gonna. We're gonna. We'd have to adjust our labor up to like 40. 40 something percent. 40. You know, but I think, you know, with Northern, with northern companies, like I've been in a peer group, we've examined their numbers. Like they'll do.

You know, they'll have a higher gross margin, but in the winter it'll get sucked away by, you know, because they're not working. Whereas we have. Maybe we don't make as much per man hour, but it's flat all year round. So.

It was just difficult to hit the numbers that we needed to hit. And there's also. I could see it working better for per cut stuff versus like, you know, the, the, the man hours. Like we have a certain budget amount of man hours that need to be spent pruning, spraying weeds, pulling weeds, cleaning up annual beds and then, you know, but if it was per cut, then I think it would work a little bit easier. But.

But I don't want to spend too much time on maintenance because that's not what this group is about. They're about spraying. So. So I don't want to bore them too much with that kind of stuff.

But you know, with spray. And it works. I think it works great.

No, absolutely.

Yeah.

Like what we, what we've done for.

A lot of our franchisees that do.

Spraying and maintenance is because our crews kind of alternate between the different services is we still give the same percentage, but then what we do for, for spraying is we just assume that 50% of the revenue is not labor revenue. So whether they're doing corporation or dethatching or fertilization or whatever, it's like, okay, let's say it's $50 an app.

Okay.

Only 25 of that's considered labor revenue. And so that's just a straight across the board. So theoretically, if you do the math on that, it's like you're really giving them about 16, 17% of gross revenue on that. Which we don't want to change that percentage because we want the guys to be able to just do the math in their head. But they just know that all, all fertilization applications, if 50% of the revenue is considered product cost.

With an aeration.

With anything, so, so anything that's treatment wise, so dethatch aeration, and then any fertilization or applications we do that for. And then how we basically explain to them is like, hey, on the dethatching, that covers your debris. It covers the fact that there's a piece of equipment that we don't use every single day. There's more maintenance on an aerator or dethatcher. So they just know that 50% of it's considered labor revenue. And the other 50% is consider either, you know, product slash maintenance on that piece of equipment that we don't use as often.

That seems complicated.

You know, not too bad.

So, so basically just think like if, if you're an employee, you just always know that 33, you know, a third of labor revenue, you divide every piece of revenue you make for the business by three. On projects, you know that there's product cost and there's estimate fees and dump fees and everything else. But we just, they just know, hey, how many budget hours do I have? And I multiply that. The hourly rate they know that we charge the customer. There's your labor revenue. So on a, on a fertilization or.

Application, they don't really care about what.

We'Re charging the customer. They want to see budgeted hours, right? So let's just say we charge 80 per hour. If they see 0.5 budget hours, they know that there's $40 worth of labor being made and they're making one third of that. So why not?

I mean, I guess, I mean.

What is it? Is it, is it. What's that saying? That says like an engine, you know, an engineer makes.

What is that saying? It's like, makes says. An engineer says a simple thing in a complex way, but an artist says complex thing in a simple way. Have you ever heard that?

You know, I 100 agree that, you know, simplicity extremely important. And that's why we don't want to change that percentage between services. So what we do is we alter the product costs because it's not part of the labor cost.

What if, if you. Let's just say, let's say in theory you had just a spray company and this was just like. Instead of having three different divisions because you were talking installation, maintenance, and then spray. So like most of these guys on this. Well, I don't know about most, but a majority of the guys on this are 100% spraying.

So.

You know when you're saying 50, well, I'll tell you how we do it. And then, and this is kind of, you know, I took kind of what I've learned from you in the book and then. And how we applied, you know, basically your model. So we found a number. And I think it, you know, the number the labor cost varies from, even from location to location because you have different demographics, different cost of living. So like when I throw out my number, like it's going to be different for everybody, I guess just, it's just like pricing. Right. So we found a number that. And we've been experimenting with it for the last year and I've been, I've been actually hand calculating myself so I could, I could see how it's working every, every month. But like our, we pay like in one location, it's like 17% off the top is what we pay. And then the technician looks through service autopilot and they see the bottom like what they can calculate how much money they make every day based off the job, the job cost. And there's no, there's a, there's a, there's an app. You know, there's transparency in that.

What's funny, what's crazy is so I would disagree with you on one point that is that it scales across. It's different for different industry, different regions. And the reason for that is because like you, you pay 17.

Right.

We're.

That would be the equivalent of us at 34 because we're just basically taking half the revenue and considering it product cost. So the same amount that you give of 17%, it's basically the same as us giving 34% because we consider half of the revenue product cost. And what we have found is because you're giving 30% of labor revenue that scales what you can charge the customer is going to scale with what you're paying your employees. So cost of living, it's higher.

Great.

That typically means I can be charging, let's just call 100, $120 per hour. But that also means I'm going to be paying significant need to pay my guys significantly more. So the percentage in, based on what we've done, you know, with all our locations, Augusta doesn't need to change a whole lot like maximally a few percentage points based upon the different markets. Because if, if it's, if you're in a higher cost of living area, your cost, the customer will be higher, therefore your wages will be higher. So it scales pretty well. I do 100 agree with like the wage part does move 100. I agree with that.

That's a good point. It's. I sort of. I can see that. I can understand your point, and I can see that working in some cases. But then, but then there's, like, different regions that material costs are higher. So, you know, if, like, we're treating all St. Augustine. So like, one program we have is like fungicide, insecticide and fertilization, herbicide, all built into one program. So now. But then we're in a location where the cost of living isn't that high. Like, we're in, like, Daytona Beach, South Jacksonville. That's one of our locations. And, you know, I think you actually, we've ran into one of your Augusta guys in Nocatee, kind of like South Jacksonville, St. John's County. Yep.

He's awesome.

Yep. Ran into him one day. One of my guys did. And then, but there we are. Material costs. Like, so we're bringing in, you know, more per day. But then, like, I feel like we have to adjust our, Our, our percentage down from 17% to, like 15% because cost of living isn't higher. We're just making up for that material cost.

Yep.

And that's why, like, inflation crushed a lot of people that were using P4P and doing a percentage of total gross. Because really, ultimately, all you want to give the employee is a percentage of labor revenue.

Right.

So what you're doing is. Works just fine as long as you're just doing applications, so you're fine.

Right.

And. But then there'll be fluctuations between regions based upon product cost. I don't want anything with product cost to do with anything with the guys. So that way, when it comes to my estimate, I'm looking at budgeted hours separated from my supply cost.

Right.

And that's why I only want to give them percentage of labor revenue. But by doing that, you have to have budgeted hours. And so your way. You're right, is 100% more simple. 100%.

Agreed.

It's what I wanted to do for years and tried to figure out how we could. Like, what's that number? Can we bring it off of 33 to account for the fact that we're giving a percentage of labor of product cost. But the problem with it is, especially when you get into hardscaping and landscaping, when your material cost is making 30, 40% of your job, it inflates the guy's numbers so much, and then, then they're just left at the whim of whether the estimator is not based upon performance.

Right.

Yeah, I could see. I mean.