Every Landscaper Needs These Tips (Business Advice)

Hey, what's up, everyone? It's Mike Andes and you're listening to the landscape business course. Today we are going to be doing a Q and A and I am answering the questions directly from the texting platform. If you want to become part of the texting platform platform, it's very simple. Just text the word landscaping to 360-227-6362. This is a different number than I used to have because this new one allows me to send pictures or whatever. Anyways, new texting number, 360-227-6362. Text the word landscaping and you can submit your question for the next episode. So I am recording this. It's like 2 o' clock in the morning right now, but I wanted to make some content because I asked for questions and a ton have come in. There's probably well over 80, maybe 100 even. So I'm gonna try to get through some of those now. I'll make more videos probably next weekend. I for the Q and A. And if you're wondering why I'm up at 2 o', clock, it's not because I'm just like working all the time. It's just that I did take a nap today. It's a Saturday. I took a nap and I'm feeling very good today. I had to got a lot done today. Got 14 interviews for general managers. We officially opened a location, a corporately owned location. I purchased three trucks in the past hour and put offers on two more. And, and in case you're wondering what they cost, sorry, it was one car and two trucks. The car was 5,000, one truck was 8,500 and the other truck was 12,500. So just in case you're wondering. And so very productive day. I'm feeling really, really good, getting a lot done. So I figured I should make a video because I gotta make content for you all. And Josh is out of town. Josh, congratulations to him. He got engaged today, so he's out of town down in Kentucky. So congratulations to him for all his hard work that he's put in over the past five or six months working on the media and the videos and things like that. So if you want to support Josh, drop a like, congratulations to him for being engaged today. He's got a great girl. So let's go ahead and jump into some of these questions again. If you want to submit your question, just text that number with the word landscaping and you'll be put into the group. And then when I ask for questions, you can submit now, if you last thing before we jump into the the questions, which I gotta open up my inbox here because it's very full and go to the third page, 108. Oh, mercy. Okay, we're definitely not getting those tonight. So we're gonna just go through like maybe 20 minutes of these and then we'll make another video. But what was I gonna say? Oh, yes. If you're wondering where this hat is coming from, this hat, is it gonna focus? Okay, this hat is brand new. It is made by my cousin, handmade with the leather. And everyone that is attending the virtual Summit, Landscape Summit 2021 is going to get one of these hats in the mail. So if you would like to get one of these hats, make sure that you sign up landscapebusinesscourse.com conference. And you know what's really interesting? I'm putting together a lot of my notes and things for the conference already in terms of spreadsheets, things like that. And I think some people ask me like, hey, what's different between the conference and just listening to podcasts? This is the difference right now. I walk over to my computer, I hit play, turn on these lights, and I start recording. With the conference, I spend four or five hours putting together a one and a half hour presentation. So it's very well thought out and I'm more methodical in the way that I can present instead of just trying to do like a 15, 20 minute video or even shorter 10, 10 minute video on YouTube or even on the podcast. So it is much more structured and is a lot more in depth because I can take an hour and a half on one subject that I would literally answer in 30 seconds on a Q and A. So really looking forward to it. I'm putting together a lot of my notes. I have probably half my notes done already and I'm really looking forward to it. But if you want a hat, you gotta sign up. We're gonna send these out in the packet in the mail for everyone that signs up. It's all virtual, so there's no excuses about, you know, snow or schedule or anything like that. Let's jump into it. Okay, Mike, okay, question here. Let's just jump into it, Mike. Would you recommend anyone opening up a compost site that sells compost and landscape materials? I would not. Unless you need to hire an office manager full time and therefore it keeps them busy. The problem that I have most of the time with the whole compost and landscape materials is you have to open up yourself to retail, and retail's a pain in the neck. You gotta be working on the weekends, evenings, and it comes in spurts as well as, you know, delivery truck. And then you got like a skid steer loader. And then that manager in the office also needs to be good at loading people. So sometimes, you know, you might get someone that is really good office and phones and emails, but they're not going to be able to use a skid, skid steer or a track loader or anything to load someone up with material. So it's a hard find. And then what happens is if as you get busier, because you usually get that, you get those landscape materials in the supply yard to kind of fill up the schedule for the office person to make it worth their while. But then what happens is your service side starts to grow and all of a sudden now you don't. You need that office person to be focusing on things in the office and not talking to customers for 20 minutes, about half a yard of compost. And the customer is wondering which one they need to get. So eventually it usually doesn't become super profitable, especially because we're not. That's not your primary business. And it usually ends up becoming a distraction. Unless, of course, you want to start landscape supply side of things as your main driving force. Unless you're in a specific market, usually you're competing and it's a price war against bigger players that can really cut into your margins. All right, next question. How do you use Gusto for his payroll if he doesn't integrate a service autopilot? Is there a report that he can use to export their hours? Okay, do we use QuickBooks or use Gusto? I can see where this question is going. So we use QuickBooks because it integrates with our.

Accountant and that's what they use. And it creates all together. It does not integrate with service autopilot. Gusto does not integrate with service autopilot. QuickBooks does. We do not use the QuickBooks sync in service autopilot, in case you're wondering. Too many problems, and I've heard this across the board with a lot of integrations with QuickBooks because they are very, very tight in terms of their integrations and so lots of problems. So we do not integrate with service autopilot and QuickBooks together. But in terms of our payroll, we use QuickBooks. That's what command center runs payroll on for the franchisees, et cetera. All right, what is best way to market online to get in front of the right clients? Okay, we're gonna talk a lot about this at conference. I'VE talked a lot about this before. I'm just gonna try to get through some of these. How do you handle on the job, damages, issues with clients such as broken windows from trimmers, et cetera? Thanks for everything. Yeah, the biggest thing is you gotta address the issue as as possible. It's all about speed of communication. If you can beat the customer to seeing the problem, like seeing the broken glass, seeing the broken irrigation head, whatever it is, seeing the skid mark, if you can beat them to it, you're gonna definitely diffuse them a lot better. And so our goal is always just speed of communication, using a voice note instead of long emails. Also really, really encourage that. If you can pick up the phone and call them, do it. Do not send them a long email. Don't do it that evening. Quickly try to address issues and especially if your crew has alerted you to the fact that, hey, I made a mistake, I knocked on the door, they weren't home, then you should definitely be calling them, leaving a message, letting them know of the resolution. So speed of communication, I would say, is really important as well as giving them a resolution like, how are you going to fix the problem? I've already contacted the glass guy. They're going to be on their way to do an estimate. We are coming back tomorrow to install some soil and seed in that skid mark, whatever it might be, being solution oriented, that's the best thing. The number one way to diffuse big problems is through speed of communication, though, and getting right on it and not letting it drag out for days or many days or weeks, like, especially on, you know, negative online reviews. Same thing. Address it quickly, address it as much as possible in person. You know, knocking on the door and asking for forgiveness and saying what you're gonna do below that phone call, below that voice note, way down the list. And any form of text or email communication is going to be misconstrued. They're going to think you're saying things that you're not, et cetera. I just always recommend getting as direct as possible with that type of communication. That's negative. All right, next question. We have four people on staff. What kind of winter services do you suggest for places without very much snow? In Missouri, we came out of the year bad on cash and really need to keep going until February. All right, so I'm going to talk a lot about this at conference. I'm going to take an entire hour on this in terms of winter services. But basically what you want to try to do is convert your mowing customers into what we call winter services where you're going to still come on the same schedule every other week or every week, whatever you plan on, they're going to get charged the same amount as mowing and they're going to continue to get other services besides mowing. So we're going to talk a lot about that conference in a lot more detail. I want to start a business. Next question. I want to start a business next year as a sole proprietor about what percent of income will be paid to taxes. So as a sole proprietor you do not have a separate income tax or a tax return. And so everything that you earn is going to be paid as if you were making wages. So profits are going to go to you and you are going to pay your income tax on them. So for example, if you're in a 35% tax bracket, if you make $100,000 as a sole proprietor, you're going to be paying $35,000 to the government. Now if you do an LLC in this situation, you're going to, you know, you're gonna have to pay self employment tax of 15%. And so, you know, usually if you're starting to make significant profits, that's when it becomes worth it to start an S corporation. An S corporation allows you to get around that self employment tax and it allows you to still have the benefits though of having liability protection, which you don't get as a sole proprietor. I always recommend people start off with an llc. It's simple to start, but you have the protection of the liability protection if something goes wrong in the business, a lawsuit.

You know, the business goes bankrupt, whatever your personal assets are protected as the business grows, you become more profitable and it makes it worth it to file a different tax return. There's more processing fees, licensing fees and just, you know, complication in terms of getting your articles of incorporation. Then I suggest going to an S corporation to prevent being double taxed by through the llc. So I have a whole course, a whole part of the MBA course on this, specifically going into more detail on different entity structures. And that link is in the description, but that's the short of it. That's my Cliff Notes version is start with an LLC because it's easy to start. It's not a lot of money to start. You don't have to do articles, incorporation and get attorneys involved. Most states you can literally go online, like literally. In the past 24 hours I've started three LLCs. So it's very, very simple. Start the LLC online, it's going to offer that Level of liability protection. But as you get a lot of profit, it's worth it now to actually pay for the extra tax return being filed. Pay for your corporation to get set up articles in corporation, usually you want an attorney to look over those, make sure they're all nailed down. With a corporation you have to have minutes technically annual meetings, things like that that you gotta keep track of. And so if you're gonna do it right, it does cost more, but the tax savings are substantial. If you're making a lot of profit and you want to get around that 15% self employment tax and if you're watching this in five or 10 years, that self employment tax is probably a different number. It's altogether different. And the 2018 tax changes really affected that quite a bit. I'm not going to go into too much detail on that. So anyways, next question. Hey Mike, have you looked into becoming a neighborhood sponsor on the nextdoor platform? Do you think it is a good idea? We have tested this only for about a month, so I can't say that this is across the board. What I would say only one or two of our franchisees have tried this. The sponsorship. Not a fan. I am not a fan of the newest form of next door next door advertising, which is the sponsorship. I have not seen. No, I have not seen any ROI on it. Not great. Next door local deals a lot better, much better compared to the other the sponsorship. I'm not a big fan of the sponsorship. I'll probably talk a little bit about this at conference when we come to the marketing part. But at the end of the day, from what I have seen and what we have tested in three locations is not performed very well especially compared to the local deals aspect. But there's better platforms to market on. Is there a contract that you send customers sort of outlining expectations, prices and frequency of mowing. We actually use our estimate as much as possible to do this. We don't want to add the friction of having to have a signed contract. Even if you're like, well it's not contract, it's just literally spelling out certain things like price or spelling out like when we're going to bill and frequency mowing and what we expect and all that sort of thing and liability. Like put that in your estimate, do it in some fine print, do it as simple as possible so they actually read it. And if at all possible, frequency of mowing should be determined inside of your estimate where you give them prices for weekly and bi weekly for example, and they choose one or you Only give them weekly and they have to ask you if they want a different, different frequency. So I really am a big proponent, especially on simple services. Make your contract inside your estimate. Even in our big projects, we use our estimate as a way to have this, the verbiage in there about okay, if we're digging that it's, you know, that the price will change based upon when we start digging that we will submit a work change order and that will need to be accepted throughout the project. If anything different from the estimate happens, deposit being required. If there's over a certain amount of money, the project need that 50% down. So I would use your estimate as much as possible. If you're going to do a contract, it does add another step to the sales process, which is friction. And the more friction you add in that sales funnel, the more people will fall out of the funnel. And so just keep that in mind. If you're at the point in your business though where you're not trying to grow, grow, grow, maybe you actually want to create friction like a signed contract to keep people you might not otherwise want in the funnel. But if you're wanting to grow, you want to reduce friction in the sales process. And having another step of like a signature of any sort or like another step of hey, before we get you on the schedule, we need you to look over these documents and reply back to us or anything like that traditionally loses. Reduces your close ratio.

Next question. Hey Mike, not a question, but thank you for the awesome content. The Craigslist video is great. I found some great details that, that I would never have thought possible. Oh, this is the Craigslist video. So yesterday or is it today? Okay, yesterday as in Saturday. I guess technically now it's Sunday. So yesterday I posted a video about. I actually showed me buying videos on Craigslist. Buying videos, buying trucks on Craigslist and looking through the ones I liked and things like that. Actually, you know what? The one inside that video which was yesterday, now.

I showed one of the trucks that I decided to purchase today. So that's kind of cool. Actually, you know what? That was Friday. My apologies. That was Friday. Today is now early, early Sunday morning. Okay, thank you for being such an inspiration and have role models looked up to. God bless you, Mike. Cool. That's a local number. I don't know who that is, but thank you. Okay, 507 number. Now how do you handle health insurance? My situation is part time lawn care company because I have a union job where I have a pension and great health insurance for my Family. My passion is lawn care. Did that full time for 16 years before changing jobs. Hard to walk away from the current benefits, but I don't really care for the job otherwise. Thanks. Okay, so how do I handle health insurance? So a couple things, I don't know if you're talking about your employees or yourself, so let me address those separately. So first of all, if you're talking about your employees, the hard part about health insurance when it comes to our industry is most of our employees are either covered by Medicaid or if they're young, they're covered by their parents health insurance. So the hard part is literally half of your staff usually don't even need health insurance and they have a better plan even if you paid for it and they're not going to use it. So I like the idea of doing a contribution like, hey, we're going to pay 70%, you got to pay 30%. That way they only get it if they need it. However, again, if someone has Medicaid, they really get no benefit of having that health insurance benefit. And it is costing you money at the end of the day. If it's costing you money to pay for some of the employees, it's kind of coming out of the pocket of the other employees because that money is being given to other employees. So I really a big proponent of profit sharing simply due to the fact that it's much more based upon merit and based upon their performance as well as the performance of the business. And not just like if you need a certain type or you don't need, or like if you have a family versus not the cost goes up. So that's where I'm at now. Definitely as a business grows and expands and like in our state, for example, over 50 employees, you have to have health insurance, then it becomes something to start really thinking about. But if you're gonna have a younger workforce, and for us, we were really trying to get younger people, cultivate them into becoming managers, general managers or franchisees or go on to do something in the industry that they're passionate about and learn from our place. So we don't really expect to have people on staff for 10, 20 years at the same location. So we haven't really tackled this problem from an employee standpoint. It's definitely on my radar. I'm literally right now getting quotes on health insurance. I've always been, it's always been a little bit on my radar. It is more now again, I'm kind of also seeing what happens in the healthcare system in the next year or so in terms of your own personal health insurance, I would recommend getting a high deductible insurance plan and then using an hsa. So an HSA is a health savings account which allows you to put money and there's tax benefits to putting money aside to cover the high deductible on that high deductible insurance plan. If you have a health co op like I do, I'm part of Christian Healthcare Ministries, which is a health co op where you share medical bills. That does not qualify as a high deductible insurance plan and therefore you cannot have an HSA which stinks because an HSA plan is great for tax sheltering and saving money from on taxes. But that would be my 2 cents. Either a join a health program, a health sharing program. I really am a big fan of these, especially from my experience with the insurance world and health and things like that. I really like it. But if you don't have access to a program like that or can't find one, I would get a high deductible insurance plan so that your premiums aren't exorbitant and then I would get an HSA to be able to put money that is tax deferred into an account where you can pay for the deductible using that money and not have to pay taxes on it. Super, super cool. That's would be kind of my two two cents. And obviously everyone's situation is different with their health condition, health history and you know, if maybe a high deductible program isn't good for you, how high deductible plan isn't good for you? But that would be my recommendation. Again, I'm assuming you're in the United States when you ask that question. If you're in Canada or somewhere else, it's going to be different. Next question. If you can grow your top line revenue with landscaping and hardscaping and work on profit as you grow, why not just focus on that instead of managing 500 lawn care clients? Okay, I see what you're saying. Yes, yes, yes. And work on profit as you grow. Why not just focus? Okay, so basically I think what you're asking is like, hey, why don't just do landscape and hardscaping, grow top line revenue while you're doing that growing really fast, you can start working the profitability and instead of having to focus on a whole bunch of mowing customers, which there's a lot more management of people because you got 500 lawn care customers in comparison to maybe 50 projects that you do over the course of a year. So here's why. Comes down to recurring revenue, right? If I go out and I do marketing and I have to pay money for a client and they're landscaping and hardscaping, I get them for one shot, I get them for one job. Whereas with a lawn care customer, I have the potential for recurring revenue on a weekly basis or over the course of 5, 10 plus years. And that is really where the ROI on the marketing dollars is so much higher is that recurring revenue. It's also a more stable source of income because I can depend on those 500 customers to have weekly or bi weekly service and I can literally project for the entire year what my revenues are going to be instead of just being like, hey, we grew X amount last year. I'm planning on X amount this year based upon if we get more leads and we get big jobs or we add more services to our hardscaping. And so I'm not against hardscaping, I'm not against landscaping. You can absolutely make it very profitable. I like the recurring revenue. And again.

This thesis is only proven true once every decade, maybe once every 20 years. And that's when we go into a recession and hardscaping gets whacked, construction gets whacked. And so yeah, the past 10, 12 years have been really good. 20, 20 kind of had a lull there in the spring. But most construction, landscaping, hardscaping companies bounced back and had one of their best years ever because the housing market came roaring back and property values went through the roof. And I'm super thrilled about that. I do not wish bad on any of those companies. But I'm also aware that literally once every 10 to 20 years, those companies get flushed down the toilet. The ones that aren't being run well, I should say, when they're over leveraged, et cetera. And that's a lot of that has to do with the fact that they do not have a recurring revenue model that allows them to pay the bills at least when big contracts dry up or when big jobs stop coming, when the leads stop coming in. Because honestly, if recession happens tomorrow, the stock market just tanks. People will cancel $50,000 paver patios, but if they're retired, they are not going to be able to cancel their weekly mowing service because they live in an HOA and that grass has to get cut and they're physically not capable of doing it. So I'm a big F of having that recurring revenue. Even if it's only half of your revenue. I'm not against landscaping, not against hardscaping. What I would recommend in your situation, if that's something you're passionate about and it's growing a lot, is allow the growth of the hardscaping, the landscaping to continue, but do the marketing on the recurring revenue side of the business. Grow that side to really create a foundation for the business financially. And then when you grow maintenance organically, you're going to get more leads for hardscaping and for other landscaping type work. And then you can just grow top line revenue using that. That would be my recommendation, but I'm just a big believer in recurring revenue. That's really the bottom line. And maybe I'm wrong on some of those things. Why do you paint your trucks instead of wrapping them? Miguel from Arizona, thanks for all you do. So we do that simply due to the price as well as the fact that in five years I can just repaint a truck and it looked brand new versus having to peel all of the vinyl off. If I tear vinyl or it gets scratched. And for most of us, our trucks get worked pretty hard. We're working around rocks and equipment and all the rest of the things, scratch, dent, et cetera. A dent in a painted truck can get wiped down and painted over pretty easily. Whereas if I wrap my truck and it gets a dent, all of a sudden that water gets behind, it starts bubbling up, things like that. So, but the biggest thing is the price, right? If the price was created equal or the vinyl was even lower than the paint, I would probably go with the vinyl if everything was created equal there. However, for us, vinyl costs about three to four times as much in our market. I do know some markets are crazy expensive on paint. And then the vinyl is like way cheaper. Not way cheaper, but like comparable or even a little less in that regard. Then you have a really good argument in terms of going with the vinyl. But in my experience, usually painting is about half the price, if not a third. In our market, it's about a fourth of the price. And so that's really what it comes down to. In addition to the fact that I can paint a truck for again, I'm assuming a lower cost and it look almost brand new versus the vinyl that I'm going to. You know, usually if a nick scratch water gets behind, it starts to have issues. Especially if you don't get someone to install it right, then it can be some big problems. All right, let's go answer one or two more. I'm sure you've answered this before, but what are the steps for someone like myself at 20 years old. What should we do in order to get out of the field? For some context, I love commercial work with the 12 month contracts, but have done some residential work. All right, so if you're doing commercial work and you're trying to get out of the field, I would focus getting very, very focused on what type of commercial clients you serve and get really good at those because your margins are typically going to be squeezed as you grow due to the fact that there's bigger players in the commercial market. So that's just me. My quick $0.02. Ben from B and L Lawn Care in Ohio. How much information to share with competitors? Question mark. Currently four years in business and looking to expand, would appreciate a little bit input on buying contracts versus slowly growing our clients from marketing and being and business for a long oh and being in business for a longer period of time. Okay, so first question is how much information to share with competitors. So I'm a big proponent of sharing, but that has a lot to do with the fact that the goal of and the whole reason we're doing Augusta Lawn Care is to increase the level of professionalism in the industry. So like I literally share my P and L and yes, all my competitors listen to that. I share all of the things we do at Augusta and everyone hears that. So I'm a big proponent of sharing because I'm very much invested in this industry becoming better. And I feel the only way for us to be better is to share financials, what's working in the marketing world, how to increase the level of professionalism with our crew, training, et cetera. So I'm a big proponent of it. It also helps on the back end. Let me just say this from a, you know, if you're like, oh, I don't care about that and I just want to make more money. Okay, well here's the breakdown. From a money standpoint. If you share with other people and you give them value and you're always there for your competitors. Competitors, if you're always there to support them when they want to sell, they're going to come to you. And that's literally what ties into your next question about buying contract, buying contacts versus slowly growing your client database. You can buy and acquire customers, but a lot of times the only way you're gonna get really good deals is if you're doing deals that they aren't putting them on the market. They're literally just coming to you. And the only reason they just come to you is if they know they can trust you. That you have their best interest at heart and that you're not going to embarrass them if they're going out of business and you're gonna respect them. And that only comes.

Their expectation of you in that regard is only going to come if you have shared with them, communicate with them, helped them. We bend over backwards if a competitor reaches out to us for help, whether it be advice or whether it be needing help, like when we used to do materials, if we needed to stay later or come in and help them, we would do whatever we could for our competitors. And that comes back to you. I'm a big believer, you know, goes around, comes around. And so if you're going to be good to them, if they wanted to sell, they probably come to you first in, in, in opposition or in contrast to going to another competitor that has said negative things about them, throwing them under the bus in front of customers, stole their clients, stole their employees.

Stolen stuff from their shop. Like all sorts of crazy stuff. It's happened. So I would say number one, share. I am a big proponent of sharing information with your competitors, having meetups, all the rest of it. And that usually leads into having a better deal when it comes to buying contracts. When it comes to buying contracts in contacts, it usually comes down to what you're going to place the value on that contact is versus a contract versus just a mowing customer. So traditionally we were going to put a premium on a buying a mowing contact or buying a mowing contract, for example, a mowing customer. I would put a premium on them versus my customer acquisition cost simply due to the fact that I don't have to go do the estimate, do the pricing phone, you know, go there or do a phone call even. There's no like office administrative, get them set up. It should just be plug and play. Like you should have their card information from the previous, you know, provider. And so that definitely is saving you time. Like you said, you can grow faster. And so time is an element as well as you not having to do all of the back end legwork of setting up the estimate, et cetera. So that's when you just got to balance out customer acquisition cost versus the cost per contact or the cost per customer of that potential acquisition and then weighing that out. So I'm going to go ahead and cut it off here. Tons of more questions. I'll get some more of these up next weekend, but thank you so much again. If you want to submit a question, just text the word landscaping to 360-227-6362 make sure you like this video. Share with another landscaper. I would really appreciate it. I'm Mike. Until next time. Be great because nothing else pays.