DIVORCE almost ruined his $60K/mo Business

Today I'm sharing a piece of a coaching call that I had with a lawn care business owner that was struggling.

My name is Roy Franks. I am the owner of Chemo Lawn Maintenance.

He was having plans to grow his business to over $60,000 in monthly revenue.

But we're looking to do over 200,000 per year.

This year, however, due to a divorce and some personal issues, he's doing about a third of that and the business is really struggling.

Go in and save a business from failing.

And so we want to look today how we can turn the business around, make it more profitable, and hopefully get Roy, the owner of Chemo, out this slump. Roy, my man. How's it going, brother?

Hey, Mike, how's it going?

Good. Awesome. Well, hey, let's go ahead and jump in. Give me a little bit of background and let's hop right in.

Yeah, yeah, absolutely. So this is my second lawn care business. I, I had one in 2017. I built it up to 250,000 in revenue and with no systems in place, just I had had a Kindle and a calendar and that's how I did all my CRM with a Kindle and a calendar. So then after like three years, I got burnt out. Tired of it, moved to California, did an engineering job for a couple of years and met my family there and then brought them back here to Alabama to start another lawn care company. Just because that's what I knew how to do and I could do it fairly well. So funny enough, today is the one year anniversary of my, this company, Chemo. So I started exactly one year ago and really quickly we became the top rated in the, in the city, the highest reviews within a couple months. Like right now we're still the top rated. We grew to, right now we're, I think we're at 20,000amonth in revenue. But we hit a whole bunch of snags. It was supposed to be way better than that. I was projecting would be about 60,000 per month. And just a lot of things started going wrong this year with, with everything that we had going on. So I think April we hit 30,000 and then.

May we're supposed to, I think we have about 50,000, but then it was April 30,000, May 20,000. And I think we're gonna kind of level out at 20,000 right now. And we have three trucks, had a couple employees. Now it's just me and one other guy. And that's kind of where we're, we're sitting at right now.

Got it. Cool. What can I help with? Obviously I know disappointing when you don't do as much revenue as you want. But like, what do you think's causing that and what can I kind of help with?

Yeah, so a few different things. I mean, obviously some things probably can't help with. A big thing was my relationship was really affecting the business significantly. So we just recently parted ways actually last week it was pretty rough situation and it kind of brought everything down because that was my main motivation was to provide for, for my, you know, my family. And, and once that ended, I was just like, what is the point of doing this anymore? It's kind of how I felt for a couple days, but I was able to work through that and now moving forward, my, my main goal is to get back on track track to stay the top rated company and to. To grow significantly. Our company is like a breast cancer awareness based company. So I want to be able to do what my initial mission was and, and that's to fund a lot of stuff within the city to help a lot of people with mammograms and, and everything else. So like right now I just feel like, you know, we've been, I've been at it for a year, which is not that long of course, but at this point I, I wanted to already be doing some good in the community and we're just not there. And, and I feel like we're kind of getting stagnant. So.

Okay. And what sort of, what sort of do you think is the reason for that stagnation? Like what, what can I help with to kind of get over that hump?

Yeah, well, I, I guess I'm just kind of not sure on next steps. I'm not sure where I'm going wrong, I guess is the next thing for me because like I said, we'll get employees, we'll lose them. And I got one good guy now and kind of, I'm just, I'm. I put the brakes on. I, I tried to stop really even accepting new projects and just focusing on just getting through the year.

Because the relationship and everything. Yeah, yeah, just everything just, you know, kind of going downhill. So I put the brakes on. And I guess I'm kind of also worried about the winter time because right now we're doing okay in revenue, but we also have a lot of business debts as well. So I know when the winter time hits, it's gonna, it's going to be detrimental, I'm assuming.

And what's the debt? The amount now and then also payments.

Yeah. So payment wise, I didn't calculate it, but it's about a hundred thousand. I could probably give you five, I mean probably maybe like three, 3,000, let's say per month in business debt. I think that's a fair, I guess. But it's about a hundred thousand in debt across credit cards and everything else.

Of that hundred thousand, how much is credit card and personal debt versus just the equipment?

All right, so all of it is going to be.

Or none of it's going to be personal. It's all going to be business type debt. So I, I have about 40 to 50,000 in trucks. Nothing fancy as far as the trucks are concerned. So it just kind of adds up that way. And then the, the other about 50,000 is just with a little bit of equipment and, and just whatever else. When I look at a ramp rack, for example, is part of that, you know, one of those credit cards. Got it.

Okay. All right. And so right now we're doing about 20,000amonth in revenue. And that's you and one employee, is that correct?

Correct. And, and he's handling a majority of the workload right now. So he can actually handle a lot of that revenue. I actually tore a librium like I'm almost two months ago and that, that messed me up so bad. I'm just now barely able to, to kind of do halfway do tasks.

Right. Okay.

Okay. What's your plan and are you trying to go try to get more leads? It sounds like you're saying 20,000 till the end of the year. I'm a little concerned about the, the fixed expense of the $3,000 per month in debt payments throughout, throughout the winter when your revenue is going to drop a lot. What's going to your plan though now? Is it a matter of getting more leads? Are you going the offensive if you can handle most labor, Are you doing, going and getting more jobs? What's sort of the strategy right now?

Yeah, so right now we are, we are getting jobs. I think leads are good. We use lawn care. Web design and stuff is constantly flowing. So I think we're good on the lead front. The main problem would be, honestly, I'd probably save time. We just, we're having a very hard time keeping up with what we're currently doing. And it sounds like we need another employee, but every time we get somebody on board, it, it sets us back. Like we've done it multiple times and every single time the last a couple weeks and something goes horribly wrong, even if they last a couple weeks. So. And then on top of that, I don't really Think we have the, the revenue to justify another full time employee either. And then once we get them, it's just, it's just hard to, to keep, keep them and then also continue to grow without getting a major setback.

Okay, so are we, are we overbooked right now? Like, are you seeing so many leads you can't get to them or is that not a problem?

Yeah, I would say that, I'd say mowing is taking way too much of our, of our time. So that's where the, like we have projects that we can do, we just don't have the time. So I'd say we're kind of on the overbook side.

And how many, how many mowing clients do we have now on a recurring basis?

Roughly give, give or take, about 90.

Okay, and when was the last time we raised prices on them?

So for the most part all of the prices, I've never raised prices, but I've had high prices or not high, but above market value. Like our minimum is 59, so we're above market value. And then I do have a couple that are just under that that we're most likely just going to get rid of. We just don't like those specific clients anyways, so, but we're just waiting until the end of the year to, to part ways with them.

So if you don't really want to do mowing though, why would we not just do a price increase across the board on all these mowing customers and hopefully we lose 10 or 15 of them?

Well, I, I, the end goal is mowing. For me. I, I love that business model, the recurring business model. And that is the area that I want to grow and succeed in and projects are a nice area to grab a quick profit. But you know, for mowing, it's the long term play that I'm trying to build and, and I basically I want to build the company full of mowing trucks with very, very minimal simple services. So, so that's, that is my end goal. It's just, I think where we are currently, we don't, we're not making enough money on mowing to, to be able to afford like an expansion to just get over I guess, that hump that we're currently at.

Okay, so of that 20, do you think the current employee is doing 15,000 of that in revenue or how much of that?

Yeah, easily. Yeah, he handles a lot of the mowing.

And I help him and just whenever he needs help on that.

And of that 20,000amonth in revenue, how much is that? Is Mowing again. Recurring services versus the projects.

About 11,000 is recurring mode.

Okay, so there is still. Okay. There's some projects getting done. And do you then hope mostly on the project side then?

Yeah, yeah. So I'm primarily doing the projects that we can do. I'm on every project, actually. So, yeah, I'm doing the projects, basically.

Okay. And so if we got another employee, you're saying there's more projects we could do, though. Is that correct?

Correct. Yeah. I mean, things are constantly coming in. I mean, while I was waiting for this call, we got a lead for somebody that wants to paver Patio, for example. It's not really an area that we're in hardscaping, but I get those kind of requests all the time. So there's. There's a good opportunity to get a lot of. A lot of landscaping jobs if we had that extra help and we can kind of get through everything.

And so you're just kind of gun shy because you've had employees in the past, they work out for a week or two and then something bad happens.

Exactly. Yeah. I say that's one reason. One. One thing is I'm. I'm terrified I'm not going to be able to afford them. And that. That's would be the worst, you know, conversation that we hired you, but we actually can't afford you. You know, from my perspective, that'd be horrible. But also, just hiring someone that can actually maintain in the current conditions that we have is really hot and humid and nasty out here. And no matter what we pay or what I pay, it seems it's just. No, it's not enough for people to want to stick around.

Okay, do you want to switch to subcontracting? If you're getting all these leads but you're not able to perform on them, that.

That's an option. That's something we could do. I wouldn't. The reason why I started this company initially was just because there's no professionalism. In my area of central Alabama and surrounding cities, there's. There's not a professional market. People are really bad at showing up or answering, answering their phone. Like all the things that you do to succeed, they don't do. And that's kind of why we started. So I was thinking about that, but I'm. I'm worried I won't be able to find companies if I did subcontract that that would actually come in and handle the workload and then end up destroying our reputation.

So on a project, when you get a lead, when they Come in. What percentage of those can you actually close? Like what's your kind of general close ratio?

I. Pretty, pretty. I'll say about 50. I was going to say higher, but 1 and 2. And that is mainly just because of our, we're on the higher end of pricing. I price them to, to where if we get them, there's a good chance we're, we're going to make a fair amount of profit.

What if you did contract labor for someone who's pre experienced with landscaping? You. You gave them a significant amount of money. I'm talking like a very, very high hourly wage just to help on projects. But it was like they're not an employee. They're only working on projects with you when you have them.

And I do that as well. I do have two guys that, they're in the construction field. They can only work weekends. There's a little bit of a language barrier. My fiance, she, she was Hispanic, so she was able to like communicate with them. But now that I don't have her.

To help me in that area, it's a little bit harder. But we do have two guys that are really good. I pay them about 300 bucks each per day for their skilled labor. So. So we do have that on like for the example, the paper patio. I'd bring them on, but the only problem is they can only work on the weekends.

Got it. Okay. Okay. Do you think there's more of them that you could get more for projects? Because it sounds to me like we basically have, we have an excess of leads for projects. You don't. You're trying to like grow the business. And we have three trucks and we're way below capacity in terms of that is concerned. So it's really just a bottleneck of finding labors to perform the work.

I would, I would say that, yeah.

Okay.

Like, have you ever tried to hire someone more like them that's like. But once is willing to work full time during the week?

Never. I've, I've never. Well, both of them want to work full time. For me, I just, the problem is one, I've already paid them too much and so that's kind of what they're expecting. And I know I couldn't afford them full time. And then the next thing I just, I don't. I know once, like we get close to the winter time, there's just nothing to do here. We. I, I got there and I sell really hard and like when I first started it was kind of the end of the season. I'm able to get jobs, but they're just not paying. They're going to be very low profit jobs just to keep us busy.

So what if you just told them though, for six, for like, hey, I'm only going to give this offer this to you for eight months out of the year.

Yeah, I mean, that, that might work. And that's kind of something. I was planning on talking to him about it in March, I guess next year, because that's when they wanted to start with me full time. They're going to leave their current construction job. I, I could definitely throw that on the table. I just, then again, I just don't know if we'll have the revenue because right now we have 20,000 cash. And I assume by the time we hit winter, I'm gonna, it's not gonna really go up or down. It's gonna kind of stay stagnant at 20,000. But once we hit December, January, February, I think I'm gonna get bled dry. This is just kind of what I'm calculating. I'm gonna get bled dry and then I'm not gonna have money to hire or market or really do anything going into the next year. Right.

Well, I think it's a matter of like, if you have leads that are coming in, you have 90. Mowing customers is either a, we raise profits by like taking those 90 customers and mowing and raising prices across the board. And I think if you've never raised prices, I think you'd be shocked. If you raise prices by, you know, 10, $15 a cut, you would immediately bring a couple thousand dollars to the bottom line, which would really help with the debt. It's like, my first thing is like, if you've never raised prices on mowing, you have 90 of them. I'd raise prices at least $15 per cut. And I generally believe you'll lose less than 10 customers and you'll probably get 10 new customers in a matter of a month. And so that'd be one way to almost immediately just help with profitability because that money will flow straight to the bottom line and be able to cover some of these debts. I would then say secondly, like, if we got leads coming in for projects and the only constraint to getting more revenue, like, because I think we really gotta get to 40,000amonth in revenue. And so if the only constraint that is finding more labor, we've got to get creative. Even if that's a matter of advertising outside of your area and telling someone, hey, I'm. You're going to come here, work, I'm going to be able to pay you more, but you're only working for six months of the year and like getting creative with the fact that like yes, they might not be local but you might be able to get someone that's in a different market, three, four hours away where it's way cheaper standard of living. They would love to come work for you for just several months and then go back to wherever they are, college or whatever for the rest of the year.

Yeah, that's a good idea. I agree with that. So I guess, I guess every market is different. So this might not be a question you can answer. What do you think is just an extraordinary offer to get high quality paying team or high quality working team members, just like a financial offer?

Well, if you've already tried to offer significant amount more money. Right. So I'd say first and foremost have we tried being able to offer 25, 30 an hour? Sounds like you have. So then it's a matter of okay, it's not. People aren't talking about the money. It's like this is hard work and most people don't want to do it out in the sun. Especially in Alabama. I get it actually. Last year I was interviewing for a whole day of applicants interviews or in Alabama and it's brutal.

It's just very hot and no one wants to work. But I would then say the thing that you could do is the fact that most people looking for a job also, this is what they think. Oh man, I only need a job for like three or four months before my family moves from out of state or I've got to move or I've got to go to college or like we're getting married and I just need something for three or four months. I don't care what it is. But in their mind, like I can't go get a job because no one wants to hire someone for three months and then you're going to be there. And so I would, I would try to create job offers that no one else can. Like other positions aren't offering, hey, there's a three month stint, I'm paying $1,000 a week and, or whatever it is and you're going to come do projects and like this is not a W2 position. Your contract labor. You're in, you're out, goodbye. And it's three months, it's a month, it's whatever it is. But there's like I would just really try to get unique, like unique offers for labor. Whether that be like market outside of your area, like in your area is pretty high end. But if you go three, four hours away, there's markets where people might move to you for six months to work for you just during the on season, during summer. And they're willing to because in their market it's way lower cost of living and they can't find any work.

Yeah, yeah, that makes sense. Do you think it's I guess no better time than the present? Do you think it's, it's better just to go ahead and do it now and, and try to get somebody and.

Well, the bottom line is if we have leads coming in that we're not able to get to and like we generally have too many leads than we we know what to do with. That's why it's like on mowing side, make it more profitable immediately by raising prices. Like I generally believe that should happen. And you'll way less people than you think and you'll make enough profit just to help with the recurring expense of loan payments. And then on, on the project side because if we have leagues that we are not able to get to simply because we don't have laborers, we've got to get creative with the labors. Not about the money side because we've tried that. Like can we market outside of our, our area? Can we go to other landscapers and just say okay, I got a job. Are you willing to do it for X amount? Yes. Now they bring the labor or like it's them and their cute kids or whatever it is, but you can still make a thousand bucks on the paper patio. That's a five thousand dollar job. Right. So it, it will be require being more creative. But if you have the leads, you have leverage.

Right.

And then it's a matter of getting creative. Like if we look at the 4L framework, you know, if we've got the leads and we just need the labor, we just got to get creative with how we find that. And not everyone's looking for a full time position. Not everyone is looking for a W2. Not everyone wants full time five days a week. Right. As you have with the guys who work on the weekends. And so I just get really creative with like how do we solve this problem? Because we don't want to waste those leads. I think we've got to get to at least 35 to 40,000amonth in revenue just to make sense of that debt payment.

Definitely.

Now during the busy season we're paying 15 of revenue or sorry we're paying like. Yeah, like 15 of revenues going to this loan payment. I would imagine during the off season, that's as high as 30% of revenues going to this debt payment. And that. That'll just crush you.

Yeah, yeah. And then, of course, personal expenses as well will jump on top. Like my mortgage, for example, it's like 1500 so and so I know, like.

I know that going through the, the, the relationship, things of. That's brutal. Like, that just takes, I can tell, like, you're super deflated. And I get it, like, that it stinks. But if we're going to step back, okay, from a business perspective, we're going to, we're going to fix this. The solution is be ruthless on pricing. When it comes to the mowing. We can absolutely get an extra two to $3,000 a month straight profit and be able to help out, like, especially in the next six months while we're still mowing, or, you know, four months while we're mowing grass. We've got to make that money. The guy, it's going to be hot. This guy seems like a workhorse, whoever's doing your mowing. So if you give him a little bit of that money, like, I'd be all over that. And then we can't let these leads that are coming to you that we already have in our pocket go to waste. We've got to sell them, and then we've got to get creative with how we get. We actually perform the work. And if that means going and finding five smaller landscapers in your market that you're like, hey, they're the best marketers, they're not the best branding, but they can work for me and do the work for a 5,000, $6,000 project, do it for three or four grand, and then you're just the manager of that labor.

Absolutely. And then do you think, like, for phones, for example, should I just get like a phone answering service or.

Because before size at this size, just take the. Take them, Take them yourself. Like, if you really, if it started to become really bad, I would do something like where when they called in, it's like, hey, press one for sales, press two for customer service, and then if you're just overbooked with work, let sales go to voicemail and just have customer service coming to you.

Okay.

And then vice versa. Like, if you're like, hey, we need work, great. Have sales come to your phone now. And then let customer service go to your voicemail if it's really bothering you. But at 20,000amonth during peak season, we don't have the money to be spending on admin, especially because there's that fixed cost already of 15% going out to the payment on the loan.

Definitely. Yeah. I think it's probably more of a mental, mental thing than anything. Once everything on with, with the phone calls, any kind of complaint would just horrible.

I know, dude, I know.

You gotta fight through, I guess, you know.

I know. I'm sorry, dude. That stinks. Like, I. Look, I agree that this is mostly a mental thing and if without that you would have scaled the business. So like, I just really encourage you, like outside of business, whatever you got to do to fix that side, like fix that hole, like, whether it be new relationships, new friends, like whatever you got to do. Because if that whole stays too long, it can then affect the business to a point where it's irreparable. Like we have a quite a bit of debt. We've got to, we've got to grow. Like you're not going to be able to do 20,000amonth and be able to chip away at this debt very effectively unless you were doing all the labor yourself. And so I just really encourage. I know it's tough, man. Like, this is, it's, it's just, it's easy to know what to do, but then like, you just, you need to do it and it's just, it's not. You don't got it. But like, I just really encourage you take action on the mowing prices, take action on getting creative with how we fix the labor side. And you know, keep your head up this year if you can just, if you can get like, hey, if we get above 30,000amonth in revenue, we'll be fine. Because then during the winter I think we can at least do 15,000, like 12 to 15,000, which at least cover like mortgage payment, the debt, the, the employee, and we'll like barely skate by. But if we're at 20,000 all year, if we go down to like 5 or 6,7000 during winter, it's gonna be very, very scary.

Oh yeah. Oh yeah. No, I, that's probably what I'm the most worried about is I had the big plans, so by the time we got to winter, we're gonna have plenty of cash reserve. Everything and everything just went the wrong way. So it's. And I would, I definitely wouldn't have gotten all this debt if I, if I knew things were going to work out like it did because I just, I was able to calculate how, how we were going to grow and it just, you know, it didn't happen that way.

Whatever you can do on the personal side to reset, you know, whatever that is. And, like, every person is different in terms of, like, you know, how they see this, those sort of things. Like, whatever you can do if it. Whether it be physically, like, getting into new habits, new patterns, new relationships, like, whatever you gotta do. Because, like, once you have that and you have that relationship and it's a good thing and you lose it, it's very difficult to be motivated. Like, it's just. This is, like, we can get, like, you know, say, you know, just stick through it as much as you want. But, like, I. I'd focus on, like, how do we repair that? Either. Either not repair, but, like, get new. Replace that so you can get that motivation back.

Definitely, yes. Something to keep. Something to keep working towards, you know? Yeah, I. I think I'm just too simple. Just, you know, I did all this for someone else, and I should have been doing it for myself, and that would have probably. Probably not put me in this state that I'm in.

I get it. I know it's tough, man. I know it's like you rethink everything and the value of everything and all that. So. Thoughts and prayers with you. I know you'll get through this, though. Stay strong. You know, really focus on those personal aspects, too. Because as much as you just want to barrel through, like, you obviously have a heart for, like, whoever you love. And so go find something, someone else to love so that you can go back into that mode, and then the business will be fine. But you're right, like, you know, build it for yourself. Like, who cares what other people are, you know, what they're going to do, however they say, whatever. I believe in you, man. You got this.

Appreciate you. Appreciate you.

Okay, man. You have a great rest of your weekend. We'll stay in touch.

All right. Thank you.