Copilot Mastermind 11/15/2024

Ladies and gentlemen, welcome to another copilot, Mastermind. Hope you're having a fantastic weekend. We're going to go ahead and get started. Looks like we got nine questions that came in today. Per usual. If you have a question any time of the week, you can submit the question. In the description there is a link you can use that you can also go in the Facebook group to the very top of the page there is the featured post posts and inside the featured posts you can find a Google form link for the mastermind to submit your question. So anytime of the week you think of something, you can get it submitted. But let's go ahead and jump in. I wish I could make myself a little larger, see if this works. There we go. Let's see if you can still read the questions half decently. Okay, that's not so bad. All right, first question is from David Cunningham from Cunningham Lawn Care LLC in Copilot Serum under items and services is rate charged to client for P4P. Our normal hourly rate, we charge the customer and then P4P software will calculate the percentage off of that. Yes, you're 100% right. Now originally back in the day when we had the sync between P4P software and Copilot, we just used your rate. The problem with that is some people have an hourly rate that they charge per hour to the customer and they don't assume that is all labor. So they would have $100 per hour rate and they would use that rate on the estimate and say like okay, 100 and then they have a quantity of six and then it'd be a $600 estimate. But then only $80 per hour was considered labor revenue and that's what goes on P4P. So technically the rate charged a client for P4P is can be blank unless you're using the sync for P4P software. So rate otherwise is going to be what is used on the estimate as a pre filled inside the field. So good question number two. I really want to scale my business and focus more on running it versus being out in the field all the time. Do you have any suggestions for creating systems, SOPs, etc. My problem is we hire someone for lawn mowing, we train them and they seem to get it pretty well. Let them loose and they always come back and call me on and off all day with questions that I have either answered already or come up with something that a little problem solving or common sense should answer. All right, one second. I have an idea. I'm going to show you something Got to grab my remarkable.

So.

This is how I think about making systems.

Sorry, this is a live. This is what you get in your live, live stream. Okay. So I think about creating systems like this. And, and I've shared the first part of this, but now the second part. So I have, I have not fully developed this idea. So if it comes out a little choppy, that's why. But this is how I think about systems. Boom, Boom. All right, I need to have the different. Pencil, pencil, pencil, pencil, pencil, black. Okay, cool. So this is how I think about it. We got ourselves a quadrant. Now when we talk about systems, I am trying to think about how do I simplify.

Simplify.

Okay. I would usually connect to this. I'm not going to take the time to do that. Don't waste your guys time. Okay, Bottom line is this to create a system. Basically the definition of a system is I want to create a repeatable outcome. So I have certain inputs, I want to have the outputs be the same every time. That's what a system does. I take certain things input, I create something on output. For example, you have a system of creating a car. I have rubber, I have metal, I have glass, I have plastic. Those are inputs and the output is the car itself, the machine of the car. The system is what makes that repeatable process happen every single time. So how do we create systems? The easiest way to create systems is to simplify and standardize. So. So everyone's like, well, how do I create system? System, systems. I hear this all the time, how do I simplify the business and how do I standardize the business? Now what's the opposite of simple? Complex. What's the opposite of standardization? Custom. So if you look at a quartile on a quadrant basis, which I was gonna draw for you, but I don't wanna take your time trying to kick the thing. I would be in a perfect world, I'd be simple and I would be standardized in the horror. In the worst world, in my opinion, I would have complex and I would have custom, which means every single time I do things differently. That's what a custom is versus being standardized. Where every single time I do it, I do it the exact same way. Now it is easier to create systems for something that you do the same way every single time. And it's simple. So I would start there first. I would say, okay, why are they calling me? Can I simplify this? Are the services too complex? Do I have too many? Variety of equipment, variety of trucks, did it take me too long to train them? Because of that, and therefore they have to keep asking me questions. So if you're going to take ownership of this problem, it would be a matter of can I simplify, Can I standardize more so that the systems are easier to create? It is very difficult to create systems for a business that is custom and is complex. So I'd start there. All right, Mr. Anonymous from Roth Co Lawn Care. Hi Mike, I want to create a system around equipment maintenance and cleaning, etc. Would you recommend each team member has their own dedicated equipment that they are responsible to look after Or a rotor.

In which I'm guessing means system. There a system in which they share the equipment and use a different set each day. If they are swapping equipment each day, should they share trucks too? For context, we use budget hours and P for p yellow subs. Thanks. Yes. So in the perfect world. In the perfect world, I would have every crew member have a truck and their equipment dedicated to them. They'd probably take it home so I wouldn't have to have a shop space. That would be the perfect world. Now, the real world is that people call out, people take a week off, they take two weeks off, etc. And I don't want to have to have an extra four trucks for my fleet of 10. I have to buy four more trucks simply because I need to get the work done. I need 10 trucks worth of work being done. Well, if half the time there is someone's someone sick, someone two, three, two, three people on vacation, etc. All of those trucks are idle. That equipment is idle because I've locked the equipment or that truck to this individual. And so that's the only reason I wouldn't want to do this, and that is have GOVERN trucks and govern equipment for individual employees.

As you scale up the size of the business in terms of the hourly rate, you can start to make sense sometimes of the time savings of not having to drive the shop. For example, like give them the truck. But let's assume nothing goes bad with them taking the truck home. There's no sort of like misuse, et cetera, et cetera, et cetera. All the reasons why people don't let's assume that doesn't happen. Let's just assume that they call out once in a while, they take two weeks off. Guess what? That truck and equipment is locked up. Like I can't use it. So my asset utilization usually drops dramatically if I'm going to make the truck and equipment dedicated to a specific crew member. Because if they're gone for a Day if they are call out. That truck is now useless to me in the business. So personally, I know I can get closer to my asset capacity and max asset utilization if I share the crew between my existing limited supply of trucks and equipment. Now the question is, are you more limited on equipment and trucks or are you more limited on labor? If you're more limited on labor, I would probably spend the money to go buy the trucks, buy the extra equipment. But if you're limited on cash and therefore the trucks and equipment that you can buy, I would then take my labors and filter them between the trucks and equipment. So it really depends on what your constraint is. But if your constraint is capital to buy more trucks and equipment, I would definitely take my labors and adjust to the trucks and equipment that are available that I have fixed for the day. Instead of trying to hope and pray. Like if you have eight guys and three people don't show up because sick call out and vacation time, all of a sudden, three, that's like 35, 40% of my asset capacity is useless for the day. So, you know, asset utilization just drops.

Adam Burkett has a question from pristine green lawn and landscape. Question one, when will blue collar summit tickets go up? We have thresholds of how many tickets have to sell. So I don't think in the next call couple weeks. I think, I think we're having a sale for Black Friday. If you're buying multiple tickets, like more than two, I think then we have a sale for Black Friday. But I would get your tickets now, honestly mostly for the hotel because we only have I think 100 rooms that we're able to get for the hotel. It's not a huge hotel. It's nice Hyatt right on Lake Washington. But I would get the tickets now because they will go up. But more importantly, the room block might go get filled up and then you have to go like to the Hampton Inn down the street or something, I don't know. Number two is what are your thoughts on doing straight up profit sharing with your team members? If you just pull up a P and L for the last quarter and explain what the P and L is, all the categories and the profit left over, it doesn't take into account debt payments to the principal, any asset purchase that will be depreciated and things like that, which can make the business look better than it really is from a cash perspective. Obviously you can tell them these things to them, you can tell those things to them. But does it really make sense to do conventional Profit sharing of 10% profits split among frontline team members. When that number doesn't take into account a lot of other factors, is it worth it to try and do a distributable cash bonus? Any money left over after working capital or something like that? Or when, when do you think profit sharing makes sense for frontline team members versus it just being a waste of time and a headache to explain all the details of finances to them only once capacity is reached for location. Okay, so this is my opinion, opinion you can do with it as you may. So distributable cash that is going to be how much money is in the bank account and anything above a certain threshold is distributable. That's the quote part that you would share the team profit sharing. On the other hand, you're looking at your P L and you're going to give a percentage of that. Now what Adam is saying here is hey, if I have debt, it's not going to show up on the PNL because only thing that shows up in the PNL is interest expense. You don't see the pay down of principal on a P and L. So the cash could be. The company could be cash poor because they're paying down debt but then look profitable on paper. So how do we get around this? Well, you would ideally do it based upon distributable cash if you have significant amounts of debt or non P and L items that are popping up on the books. Now personally I would not do that for frontline team members because they are going to get very confused and they're going to think that you're manipulating the numbers. I want to be able to explain the P and L. I want them to be able to see the number at the bottom, divide it by 10 and know that I'm telling the truth. Also, I would say it is your prerogative as the owner to determine whether or not you go into debt. It is not their fault. So if you want to grow the business faster, great, that's fine. But if I'm going to tell everyone that I'm going to do 10% profit sharing, I'm going to do it based upon what the money is coming in, not because three years ago I decided to buy a bunch of trucks. They shouldn't really have to pay for that in my opinion. To keep it simple, yes, you could explain it all and you could do deductions of loan payments, etc. But typically I like to just take the P and L, take the bottom number and divide it by 10 because like I do this, I do this even at like my gym. The same thing. It's like, here's the P and L bottom number. See that number? Divide it by 10, it's going to split between the team members. So that would be my recommendation.

Is do, do a profit percentage for the team on a baseball P and L for general managers, typically they're going to be much more involved in the number, understanding the math, etc. I'm going to potentially put them on distributable cash. But for frontline team members, they just typically do not understand that. And I don't expect them to and I don't expect them to have to understand or know the numbers because years ago I decided to take debt out and leverage the business and grow it faster. So that's just my personal opinion, but I want to make it as simple as possible. I don't. The last thing you want to do is you're trying to open up the books. And because you open up the books in a way that they think is, you know, you're doing something nefarious or changing things up or it can backfire on you very quickly and then they actually think you're like not telling and you're like, I'm trying to do a good thing and it'll be taken incorrectly. So I would just be as straightforward, honest, clear cut as possible. And the P and L is usually the easiest way to do that. Caleb Bartlett from Spruce Lawn Care. Oh, and to your point, if you're like, well, I don't want to be doing profit sharing and technically I'm not making any money on the back end, I would not do profit sharing then. Right. Profit sharing is what the business is winning. Until that point, there's nothing to share. So I personally don't start profit sharing programs until the business has been profitable very consistently. And then like if a business is bouncing between profitability and unprofitability because growing quickly, same thing. I usually try not to do profit sharing because like the team, they're, they're, they're here to do a job. They want stability if they wanted to have a business where, or wanted to have a job where they made bunch of money and then no money and back and forth they go start their own business. So I try to give them more stability. Caleb Bartlett from Spruce Lawn Care has another question. Will giving discounts to customers affect the value and perception of our brand? I rarely give out discounts, but with the season slowing down, I'd prefer to have a busy schedule rather than empty one. My only worry is that if I give out discounts to customers that refuse to accept their estimates over time, they'll expect that when they need another landscaping service completed in the future. You are correct. Now, a couple things you can do. Let me see if I can make this bigger. Ao. Now we're talking. Okay, so a couple things you can do on this, Caleb. First off, people know that free is unsustainable, so you could give things away for free. For example, if you do this property cleanup, I'll give you a correction. The coration is a hundred dollars of value cost you $20 of labor, and they know you can't give them a free aeration every single year or whenever they want. Now, what I would recommend is tying the discount to something scarce. Time is the easiest one. So, for example, you say, hey, Mr. Jones, if I can get you on the schedule for next Thursday, I can give you 15% off. I would usually not say 15% off. I would say a dollar amount. Like, I can give you 80 bucks off. And I would only do this if they say that price is their objective. Don't assume that that's their objective until you actually get that objection. So if you call them and like, well, I'm still thinking about it. That does not mean you give them a discount. Well, I would do first, like, well, I have a spot cam available next Thursday. Can I we go and get on this? Like, do you want to go ahead and claim that now because we're booking out for fall cleanups, for example, I'll go first with scarcity, and then I'd do discount and I'd tie it to the scarcity. So I'd say, hey, Mr. Jones, I got a spot came available next Thursday.

If you go ahead and get on schedule right now, I can give you. I can give you $80 off on the cleanup, for example. I would always tie your discount to something scarce because next time when they call, there's not a spa available next Thursday. The price is what it is, but they have to do it now, and they have to do it on a specific day. So if they accept tomorrow, you say, sorry, like the discount was for Thursday. And you can make that clear on the phone before you get off so there's not an awkward conversation later on. Just be like, okay, just. Just to make sure I am going to fill the Thursday spot, like by this evening. So just so you know, if you do contact me back tomorrow and accept I can't give the discount, then you set. Set the expectation.

Keaton from SOS Exteriors. Love the name. What are your most Recent thoughts about P4P with residential snow removal? I've heard you say before it's very important to implement with snow, but curious if you have got any updated thoughts or procedures lately as to how that's getting Sorry by the way by the background noise. That's Lindsay, head of operations. She's amazing. She's doing a call, so sorry about the background noise. We have an open office setting which is great. I love it but sometimes she's on a call when I'm on a call. Anyways, do you have any locations that run P4P with snow? Like in one process we're thinking of, we'd have various quick dispatch routes built for different amounts of snow with proper budget hours for Those amounts and P4P would run off of that I guess putting in text. It sounds simple but the logistics might be harder practicality because sometimes we're expecting to 3 inches instead of getting 6 plus so in snow. So then crew and truck numbers increase as well. If you do have locations doing PVP for residential snow, could you give any insights into how they have set it up in context? We're in Alberta and our snow amounts vary heavily and can be very unpredictable. So the logistics is tough. No P4P software yet, but as we have finished out the summer fall season, we started doing paper pen simulations of P4P working on corrections and internal changes for full implementation in spring 2025 for sure. But just curious about how we could continue building the framework during winter here or even possibly implement during the winter. Another context our area is famous for the monthly flat rate contracts is the general norm which keeps consistent keeps income consistent and those make up easily 50% of our business. But of course that means profitability changes on the weather. There's clauses for extreme conditions, but we always have some pushback when we try to charge out on top of the monthly fee fees so we just generally avoid it unless we push into actually losing money while shoveling. We have per push properties too which keeps up the cash flow, but the majority of relied upon income as the monthly contracts. So on the note of P4P, how do you implement it if you are working with a short with a sort of fixed budget monthly versus actual labor revenue? That might not have a simple straight answer, but any thoughts are appreciated. Appreciate your time. Thank you. Okay, cool. So I just talked to one of our owners out in Alberta not too far from you, out in Calgary, north of Calgary. They do a ton of Snow. What they do is actually a P4P but it's kind of like they give a percentage of the labor revenue based upon the contract value. So if someone's paying a flat monthly, they give their employees that flat monthly amount, a percentage of that. And it's like, hey, you're expected to show up. And if it's a ton of snow, yeah, we're all going to take the brunt of it. We're all going to work, you know, around the clock to make sure the snow is cleared. But it'll still be a matter of.

Making sure that the percentage of P4P is still fixed. So that's what they do. You would alternatively do the budget hour method where you put the visits on. You have budget hours. The budget hours could hinge on the depth of the snow, for example. So like 6 plus inches is going to increase the budget hours more or something. You could do that. You could, you could do that, have a quick dispatch for like larger amounts of snow. Quick dispatch for less than six inches, for example.

Then you're going to take more of a swing on whether or not you're profitable on your fixed amount that you're making every month. I think the part you know in that case is going to be a lot more admin time. So again, there are you ask like locations I've seen do P2P. They are giving a percentage of their labor revenue as a form of percentage to their employees regardless of whether or not it snows a bunch or a little bit. So that's like taking it to the extreme. It's going to be the most level for you. But it can definitely also lead to employees getting pretty frustrated when if there's a big snowstorm. So assuming your contracts are built correctly with your customers though, I would just give them a percentage of that. I consider all of it labor revenue. I'd give a smaller percentage of it because there's a lot more liability, a lot more equipment involved with snow plowing. So I wouldn't be giving them like 33% of the revenue, but I would personally consider all of it revenue. If you're not doing it by the push, you can still put in the budget hours and use budget hours to determine your how much your rate is or how much your labor revenue is.

So feel free to book a call with Lael. She is on the P4P software team. You also get a free month so you could get started now, do a few services, get synced up with Copilot so it bring the budget hours across the team would Actually start their night snowplow or day whatever. And they'd be able to see how based on how many jobs are in Copilot how much they're going to earn for that day. Very helpful. As they complete the job they can see how much they're making. It's definitely motivating when. Especially when you're doing 12, 15 hour days and nights doing snow plowing. So I do recommend try out the software, connect it with Copilot, try out in your kind of testing period, try that out. But those are the two methods I have seen either a budget hours based upon depth and it varies or to a fixed percentage of revenue to the employee. Regardless of how much it snows. They love you when it doesn't snow. They hate you when it snows a lot. But it's kind of like they take on the risk also with you.

Number six is from Sam Dunn. The Lawn Ranger. Was P4P an operating system you fully created or something you adopted and made your own? I built it from like the code. The code we built from scratch. It's been like four years. PvP has been around for a long time. It's like our third version of the code and now it's built in React which will allow us to be. Which allowed us to connect to Copilot. And the stuff that was coming is coming out in a couple months from Copilot will be built on that same platform. So they'll be like super interactive. That'll be good.

Number seven is from San Roth. From Roth Co Ltd. How do you structure your one on one meetings? Team meetings and often. And how often do you schedule them so one on ones? I don't do one on ones. The operations people like Lindsey, they do them usually monthly with every team member. They have a system around that. Depending on the team size is how you're going to determine what a one on one looks like. I've had people that are operations managers that literally have 40 to 50 reports to them and it took two weeks for them to do their one on ones out of every month. Like half their job was doing one on ones. If you have four or five or six or ten people reporting to you, you're gonna probably spend a little more time, you're gonna go a little more in depth with them because it takes you a day or half a day to knock out your one on ones. I think it's important that everyone have one on ones in terms of the GM to your frontline team. And then I usually will have weekly meetings with the people that you know, their managers. Right. So like my regional manager, I have a meeting with him every week, but then he stays in touch with the general managers and the general managers are responsible for the one on ones that they have. Now typically I have seen field crew members revolve more around a quarterly basis on one on ones and that's fine. But again, I think they're super valuable. Probably the most valuable thing you can do as a manager is have a one on one with the team member. So I would, I would go for, I would go for weekly, I'm sorry, monthly one on ones if you have a team that's less than 10 and then if it starts to scale above that or for whatever reason, you go quarterly. But nothing less than that in my opinion. You want to know what their goals are. You want to align the goals of the company with their goals. Make sure you're getting to them, the next stage of their career. What are the bottlenecks you want to figure out? Like, you know, what can I do to help you? You know, in six months you're leaving. Great. What can I do to make sure that you're set up for that? That's the type of thing that I think really helps. The culture gets buy in from the team, especially during really hard times like spring rush or busy seasons. The ability to have that connection with the team is super valuable. Will Kelly from Military Lawn Cuts Number one, if you wear my shoes, would you paint your trucks military tan color or military green? And why.

I would flip a coin.

I think the tan color would probably stand out more though.

Yep, that's what I'm going with. Unless you did matte. If you did matte green kind of cool. Number two, once a GM goes through training and takes over location, how long does it normally take to get them up to speed or doing their job? How long should I be doing twice a week coaching calls with a new gm? If you're doing twice a week coaching calls, I think they probably aren't ready yet. I would get them trained up to where the point like once a week check in is good. If they have. If you're checking with them like every single day, they're not a GM yet. Like they are a glorified octopus tentacle. Like you are telling them what to do all the time and if that's the case, they need to be trained more. In my opinion they should probably do ride alongs with you. They should stick with you longer. If it's formal or informal or on the job training. I would say it needs to happen more if you're still contacting them every day or even twice a week. Like once a week should be like metrics, KPI's a scorecard to go over to track those things. Anything more than that, you are, you are the serving gm. They are simply taking out orders and I usually have not seen that work out super well. So I would probably focus more on longer term training them, shadowing someone like yourself doing ride alongs in person on job training stuff if required so that it's a more a once a week cadence once they're a general manager. Sam Dunn from the Lawn Ranger has another question. What can we expect a feature? When can we expect a feature that shows you if an accepted estimate is on the calendar or still needs to be scheduled? This is going to be the wait list. So when can you expect it? You can expect in.

A week next Saturday the 23rd to have a pretty good idea of when this is coming out. That's what I will say.

Yeah. So next Saturday we got some cool stuff in terms of actually showing what we're going to be doing. Haven't done that all year. And when the first release will be happening in December, kind of major release. Obviously we have little enhancements and fixes and stuff like that, improvements we made this year. But the first real big release coming out in December, showing you what that looks like. It'll be going through the customer advisory board and testing in December and looking forward to being able to share that with you. But again that's next week. We will have that announcement. We'll be doing a webinar but then I'll be sharing obviously here on the Mastermind all the changes that are coming up. So that's it for today everyone. I think that's it for today. Yep, nine out of nine. Let's go. Love you all. Have a fantastic weekend and we'll see you next week. Make sure down below description is a link to get more questions answered. Go to the top of the Facebook group and you can also from there see a post that is pinned and featured for this Mastermind. Take care. We'll see you next week.