Employee Churn Is Destroying His Business | Confession Booth
In this episode of the Confession Booth, host Mike Andes fields calls from three small‑business owners—a lawn‑care operator, a fencing contractor, and a moving company—who are all struggling with high employee turnover, unclear role definitions, and scaling bottlenecks. Across the calls, Andes repeatedly stresses the importance of (1) setting realistic expectations during hiring, (2) separating sales, operations, and administrative responsibilities into distinct, hire‑able roles, (3) automating or delegating sales and admin tasks to free the owner for high‑leverage activities, and (4) building career‑progression ladders so technicians can grow into managers without being thrust into sales or admin work prematurely. He also walks through concrete financial trade‑offs, such as hiring an $80k operations manager to unlock $1 M of revenue for a fencing business, and shifting ad spend to increase lead volume for a moving company. The overarching advice is to simplify the business model, focus on recurring revenue, and create a structured hierarchy (technician → manager → owner) that reduces churn and enables sustainable growth.
Chapters
I have gone through 2 general managers in the last 6 weeks. Both of them started the season with us.
Most of the time when someone leaves in the first few weeks is a mismatch of expectations versus reality. And so getting really clear with what the job actually feels like is important.
I fired him this morning. He was not performing.
He was doing less than $20,000 in sales and he was just managing one guy. I want you to step back from it instead of being CEO. And be head of sales and fill that role, the highest leverage role of the business before you step out of the operations. Do that. And then underneath, you create the scripts and the systems that a sales associate, much cheaper, much easier to find, much easier to ramp. That person's going to come get their teeth cut. And I guarantee you, if you hire 3 or 4 or 5 of them, they'll probably be a savage that wants to become the head of sales that replaces you at $1.5 million. So you can get to $3 million and you step out of being the head of sales.
Here's what I'm going through. I have gone through 2 general managers in the last 6 weeks. Both of them started the season with us, excellent employees. I asked for a year-long commitment from them because we were going to take on some large contracts. Both of them gave that, and then within 4 weeks of each other, so they're quitting and going off to do something else. And so that means I am looking at stepping back into the field. And I'm curious, what can I cut out so that my business does not suffer so much? We do mowing, we do fertilizer, weed control, and then we make a little bit of money on the upsells and other services. But if I can no longer be in the office selling those on a regular basis, the upsells are gonna suffer. What is my solution? And the other thing is, how can I stop losing general managers at such a great speed?
Okay, are these two different locations, or did you burn through one GM Hire another one and burn through them.
Burn through one GM and, uh, hired another one, and then he, 2 weeks after taking on the GM position, said he's gonna be leaving here after a number of weeks.
Did they say why they're leaving, or they just like, "Hey, I got another job," and they didn't really give you anything clear?
The first one said, "Hey, there's no future in grass cutting. Um, there's no future in lawn care," which tells me that I didn't do a great job of painting the vision for him. The second one really has not given a reason as to why he's leaving.
So, two things I would do is whenever someone says there is no future, I love the fact that you took ownership of like the hiring process. The other part of it is though like you've technically won that game of, 'cause you got them on board. So, there's hiring, then there's onboarding. And I think what you're currently struggling with is the onboarding ramp. And so, there needs to be career progression once someone is inside of a role that does seem monotonous. And for example, when it comes to home services, I'm assuming like, are they managing like 6, 10 employees? How many are they managing?
He's managing 6 employees. Yeah.
Yeah. So like, when you're managing 6 guys and you're doing the type of services you are, there's not a huge amount of variety and newness between days in the week or weeks in in the month. And so it can very much become like their first couple weeks, they realize, oh, this is going to be the same thing all the time. So the first thing I would do is reset expectations during the hiring process. Most the time when someone leaves in the first few weeks is a mismatch of expectations versus reality. And that could be expectations around the compensation, that could be expectations around their role, that it could be expectations of what their day-to-day looks like. And so getting really clear with the expectations of what the job actually feels like is important. This is why for us, a lot of times when I hire a GM, I want them in the field first for at least a year before I move them up into management. The challenging part, sometimes you can have an excellent manager that doesn't want to be out in the field. At 6 technicians, I need my guy, my general manager, okay with being in the field a little bit. And so I would reset expectations during the hiring. Go ahead.
Both of them have been in the field. One was 5 years— in the years for 5 years before he became the general manager. He was my one of my first hires, uh, and the other one has been in the field for 2 years. So I— they, they know what they're getting into. They're working GM alongside myself. I just couldn't handle all the employee phone calls and doing sales and, you know, client calls as well. So I was trying to— I guess technically you could call call them an operations manager over a GM, right? Yeah, like, but I was trying to get them more into the GM role where they handled sales and stuff.
Got it. I will say this, if you— this could actually be the reason then. If you're pushing someone to do sales and they've been in the field for 5 years, they almost always will push back because they're so used to— and obviously for 5 years as they've been in the field, they're okay with the work. If you're pushing them to do something that's completely out of their wheelhouse and makes them super uncomfortable, That's when they're just like, I can't do this. And they don't— they might not say that to you, but it's fact that for 5 years they're okay with the, quote, monotony of doing this actual physical labor. When you put in front of them the progression to have to do sales or those— the office and admin work, they've never done that before. And so I really like the idea of like, this is more of an operations manager role, and you don't have to do sales, you don't have to do admin. That might mean down the road you hire a virtual admin or you take on sales or you try to automate more of your sales, especially around pools. Sorry, it's not pools. Sorry. Uh, especially around like if you do fertilization, lawn care, you can get a lot of this to be like instant quote, over-the-phone estimates. I would push that really hard so that you don't require them to have to do sales.
What should I be— in the fact that both of these fellows are leaving, that uses up my queue of solid people to put into that role. So obviously, I'll have to step back in. What should the business look like for the rest of the year?
Yeah. Can you convince them?
We focus on mowing and fertilizer weed control.
Right, can you convince them to stay on as technicians? Or they're gone?
They're gone. They're gone. One of them's committed to another project that starts August 1st.
I think for now, I would definitely hire technicians. I would make sure that you step into the role of GM, which is doing operations and sales for the time being. I would focus— if you have to cut anywhere, yes, I would focus on the recurring revenue side to prevent you from having to be in operations as much, because operations with one-time projects is far more intense. I would then start restructuring the business to automate sales as much as possible and automate admin as much as possible. I get it off the plate of the future leader of the the business because I happen to believe you're really solid leading your crew and it's evidenced by the fact that you had someone stay with you for 5 years. What is happening though is they're being brought into a quote, GM role and they are feeling like they should be getting an easier job, it should be better. And then they're hitting with the reality of you gotta pick up the phone and do upsells. You gotta go do estimates. You gotta meet and talk to customers. And that's something they are not comfortable with. You gotta pick up the phone. To some of them, it's more, a lot more scary than going back to a customer's house after a yellow slip or a callback.
Right, that makes sense.
I know it's not, it's not a fun one, but I think, I mean, I think after, after you, you take a step back, you put yourself back in the operations and sales side of things and get some solid technicians out in the field, I would just focus on a year of how do I simplify this business, how do I make sure that most, as much as possible, is recurring If I do that, I can then make sure that the sales and the admin is more streamlined, that can be farmed out, delegated, or put online via like instant quotes or over-the-phone estimates. And then I'd be taking one of my technicians and moving them to a role where most of their job is managing the team. Because that's something that is very hard to automate. Like, no one wants to have their one-on-one meeting with a robot or with AI. They want to have a manager. And so you're trying to replace yourself there, but So you're also asking them to do sales and admin, which they are not comfortable with. And so I do not require, when I have built a location and I'm handing it off to a GM, I do not want them to have to do, like, switch from doing the work to, like, selling tons of jobs, doing follow-up phone calls, because the likelihood of them going and doing their own thing, they're entrepreneurial, if they can do that, if they can start up and spin up a business and grow it fast, that's a very, very talented, very expensive person. If I can build a location though to the point where it's mostly recurring revenue, I'm able to get sales basically automated or over the phone and then get sales and admin to be farmed out, delegated, hired elsewhere. Then their main job is to manage the team. Hire, train, and make sure the work gets done. Operations. And I wanna keep them out of sales and admin as much as possible 'cause they're not comfortable with it. And if you're going to go out and try to find someone that's good at sales, operations, and admin, you're looking for a unicorn. And they exist, they're just expensive. You're going to have to pay six figures. You're going to have to pay six figures for someone that can grow a business, that can get all the crew online and you never answer a phone call, and admin to also make sure that emails are being handled, payroll is being handled. If they're going to manage all of that, it's a very expensive role. And so I love the idea of having career progression for your technicians to move into a general manager. Once they're there, I need more career, uh, advancement. So you And you're like, well, what if they want to be able to do sales and admin down the road? I want this GM starting out here on level 1, and then maybe after 6 months, after a spring rush, they go to level 2. Maybe after an off-season of being profitable, they go to level 3. And each of these could unlock more compensation, but at least have a different stage or career progression for this GM to move up into. And maybe they even want to do sales one day. Maybe they wanna start their own location for you. Maybe they would like to figure out admin and how this all works, great. That would just be down the road. And what's happening is we are throwing them in at stage 1 with sales, operations, and admin far too soon, and it puts them out of their comfort zone, and they're bailing. When in reality, if they stay with you for another 5 years, they might actually be able to do that for you down the road. But right now, their expectations of what a GM looks like is very different than what the actual job description is once they get started. 'Cause you're expecting them to do sales, and admin, and that makes them very, very uncomfortable. And so either A, you simplify the business and you try to get sales and admin off of their plate so they can just focus on operations, or you get them started and then you slowly bake those other aspects into the business as you back up. There's no right or wrong, either one of those will work. One of the ways we've done this at Augusta Lawn Care is build out the 21 stages of success. So it's 7 stages for technicians, 7 stages for general managers, and then 7 stages for owners. And regardless if someone is just getting started at their very first stage as a technician, or if they already have multiple locations and they're diversifying as an owner, you're on the board. So it means the general manager's on the board, the owner's on the board, every technician's on the board, and creating, creating that camaraderie and that community around getting to the next stage of the, of your career allows you as you build a bench and you build a team to be able to have people ready to go to take management positions because they've got to the next stage of their career and they're ready to go to the next level.
Hey, so my question is, uh, basically like what comes first, the chicken or the egg, right? So we do, uh, fencing here in Rhode Island and we did like $2.5 million last year. Profitability is low, we're at 8% after I pay myself, um, we're at 8%. And I know the bottleneck is myself because I run production, I'm also the general manager. So I'm like, I need to hire a production manager, but if that costs me, you know, a good one to do what I do, maybe $80,000, um, like, then I don't make enough money as the business. So I'm kind of like, do I— like, what do I do there?
Okay, so right now, if I asked you what is keeping you from $5 million, is it getting more customers? Is it getting more employees? What's the current constraint?
So the constraint is because we subcontract everything, like, I don't want to train new people. It's kind of like I'm already like lost that touch. So I'm not bringing on new contractors because so many people cheat. So we need to babysit them, but I don't have the time to do that.
So this ops manager would basically babysit the subs, is that correct?
That's what I'm— Yeah, exactly.
Okay. Right now, how much are we spending per year on marketing?
$100,000.
Okay. If you didn't— if you did not spend that money on marketing, do you think your business would go in half?
Yes.
Okay. So what are you doing for advertising right now?
LSA. We're the number one Google-rated in the state and Facebook. Got it. Meta.
How much are you spending on Facebook ads right now?
About $40,000 a year.
Got it. So $100,000 in ads is generating, let's just call it $1.2 million in annual revenue. And so that's a 12—
2.5.
Yeah, I know, but I'm assuming half of it's from the ads. So if half of that's going to ads, right? And so I'm trying to find the constraint. And so I believe that if you can figure out how to spend more on ads and go from $100,000 spend to $200,000 spend, And we fight and we go to $5 million. Well, let's just call it $4 million because we figure out how to— You're saying the constraint is you've got to go get an ops manager to manage all these subcontractors and babysit them. Is that correct?
Yeah. Yeah.
Right now, are you— When— How much of your time is spent on sales versus doing this job? Operations manager.
Right now, I'm the op— I do none of the sales. I have a sales guy who already does that. I'm focused on operation and then I'm all like CEO-level stuff too.
Got it.
Okay. Not much, but yeah.
No, I get you. I happen to believe though that if you hire this person for $80K, I understand that right now it's scary because that's going to take you from $200,000 in profit to $120,000 in profit, which starts to get really skinny. I understand that. And especially with like the fencing industry, you have a lot of accounts receivable. That can be very scary from a cash flow perspective. The thing is this, you spending now, probably unlocking 70 to 80% of your time that you're currently spent doing operations manager for an $80,000 position is a steal. You unlocking this person is probably going to put you to $3.5 million just by you focusing on stuff other than management of subs. Like if you just went— if you just focused on sales and unlocking more opportunities, you would probably take this to $3.5 million without increasing your ad budget. And so a lot of times it's easy to get wrapped up in the client.
Should I expect myself to do other production?
You're right at the size, right before $3 million, where I still like to see you in sales. Now, before I say that, do you feel like you're not good at sales?
No, I'm okay.
Okay, okay. So I happen to believe that if you're able to get someone for $80,000 to manage the subs, you focusing what right now is probably 70% of your day Just shift it to sales, that alone will get you to $3.5 million. And if you're like, "Well, I don't know if we have enough leads." Okay, great. Let's go ahead and just move your ad spend by 20%, move that to $120,000. I happen to believe though, if you, even if you just spent time on sales—
Yeah, we have the leads.
Okay.
We're turning away so many people because of the labor constraint.
Okay, and is the labor constraint at the sub-level or because you can't manage the subs?
I can't manage them.
Okay. All right, my friend, I promise you, hire an operations manager. If you can get them for $80,000, you're gonna have a very short term, like probably 30 days of less profit. You focusing on things besides operations is going to unlock this business, I can guarantee you, to $3.5 million. And it'll make you more profitable because this $80,000 is basically your ticket to unlocking $1 million of revenue. And if you're doing sub work, I'm going to guess you're 40 to 50% gross profit on that. And so you will likely be— I'm going to call it 20 to 30% profit on the extra million dollars in revenue because the only thing standing between you and that is getting an $80,000 overhead person, which is scary when you have low margins. I understand. But the next million dollars that you're going to unlock is likely 20 to 30% profit because you already have the leads. Leads are not a constraint in the 4L framework. If leads are not the constraint and you're like, "I just gotta get labor. I just gotta get people to do the work, but I can't manage them." Now leadership becomes a constraint. If you hire that leader, you will likely unlock $1 million of revenue without spending any more money on ads. And this $1 million in revenue doesn't mean you have to go higher, get more trucks, more equipment, more overhead. You're just gonna make 20% to 30% profit. And now this 8% blended will go probably to about 15% profit. All of a sudden, a 15% margin business on $3.5, you're looking at $400,000 in net profit, and that, my friend, is a fantastic business. Last call of the day on the confession booth. Welcome to the show. Thank you for coming on.
I own a moving company in Toronto. Last year did half a million. In September last year, I hired a head of sales, you know, in order to just, you know, grow past a million dollars. But the things turned around and he was not performing at all. So my goal is to be, to do $1.5 million this year. So far we have done $200K till date. Um, and I fired him this morning is because he was not performing. He was doing less than $20,000 in sales and he was just managing one guy in terms of sales. So I'm out of, I'm a little bit out from sales, not fully. I'm doing about $10-15K on and off. I have operations covered. I have good guys who's taking care of operations by themselves. So I'm not even looking at it because it's, they're fantastic of what they do. So my question is like, I'm spending about $5K $1,000 a month in ads. I'm— I— lead is not a concern at all for me. I'm getting good leads. So what can I do to, to be at 1.5 in this situation? I have a couple of people out offshore in Philippines as well. So it's a cheap labor and they're also performing really nice as well.
Yeah. So you have delegated admin very well. Awesome. You said operations is covered. No problem. Leads we're fine with. And so the thing that gets you to 1.5 is you focusing on sales. "Ah." And so, this head of sales, the reason it didn't work out is because he likely didn't have someone like you showing him exactly what to do to get to $1.5 million. And he's probably not the caliber of person to build your business for you because you're probably not paying him what he— what a head of sales that grows $1 million of extra revenue does. 'Cause if he was capable of that, he'd do it himself. And so, I think personally, you focusing on sales is going to be the best thing for your business. You'll get to $1.5 million. And then when you're at 1.5, that's when I say you go find someone to do sales.
Okay. Okay. So I, my, my maximum that in a month, in 30 days, I can, my capacity of maximum is doing over $35K, right? On, on top of that, I cannot do anything more than that. So in order to hit 1.5, I need to at least $100K a month. So that means for other stuff, I have to keep on hiring more people who can do at least $10K, $20K, $30K in order to fill that $100K, $120K a month gap. Do you think that's possible? That's reasonable?
Totally. When you say that, when you say per person, is that per salesperson?
Yes. Yes.
Got it. So that's, this is actually the thing then. This is a mismatch of titles. This is not a head of sales. This is a sales associate.
Mm-hmm.
You are gonna become the head of sales. You will hire sales associates to answer phone calls, sell jobs over the phone. Like these are likely very low-skilled salespeople. And if you call them a head of sales, you will overpay and they will be disappointed with the type of work they do. You are the head of sales and you're gonna go hire absolute savages that are good at sales associates and you're gonna give them scripts of exactly what to do to be able to sell jobs. This person, head of sales, felt like they were walking into a job where they're gonna be a manager of salespeople. They likely walked in handling most of the sales themselves. And so I want you to step back from it instead of being CEO and be head of sales and fill that role, the highest leverage role of the business before you step out of the operations is I am selling. Do that and then underneath you create the scripts and the systems that a sales associate, much cheaper, much easier to find, much easier to ramp and not expecting this incredible white collar job, that person's gonna come get their teeth cut and I guarantee you if you hire 3 or 4 or 5 of them, while on your way to 1.5, they'll probably be a savage that wants to become the head of sales that replaces you at $1.5 million so you can get to $3 million and you step out of being the head of sales.
