Everything I Know in 17 Minutes

Eighteen years ago, I started a lawn care business. This year, that business, Augusta Lawn Care, will make over $50 million in annual revenue. I'm going to share in this video today everything that I learned in the past 18 years. Home Services and the industry at large is low barrier to entry, low barrier to exit. It's low barrier to entry because you don't need a lot of money, you don't need connections or education or a fancy license to start a home service business. But because it's so easy to start, a lot of people quit very, very quickly. Within a matter of two or three years, most home service businesses don't exist. And I feel it's because people don't have a lot of skin in the game. It's easy to get started, but because of that, it's just as easy to quit when the going gets tough. And so for far too many entrepreneurs, I believe they get out of home services way too soon. They go after the next shiny industry, online marketing, or I'm going to start a gym or sell real estate. And they realize in another industry, they just hit the same exact ceiling, the size of business they hit up right up against it. Because the scale that you get in home services apply to all other businesses, whether it be marketing or hiring or leadership or sales. These are skills that can be applied to other industries. But switching industries does not give you the skills. And so what I've learned over the past 18 years is that competitors come and competitors go. The people who really win in home services are the ones that simply stick to it. One of the revelations that I had in the past 18 years was that ACV is more important than CAC or, or CAC. CAC is customer acquisition cost, and most people know what that means. How much do I have to spend in marketing to get one new customer? But I found a much more valuable term is ACV or annual customer value. How much revenue do I produce from every single one of my customers on average? The reason I think this is important is because customer acquisition cost gets a lot of attention because it's getting new customers and we're always in pursuit of the next shiny customer. Brand new customers that never have done business with us before. I would rather just take the customers I currently have and sell them more jobs. Upsells, cross sells. So instead of them spending $1,000 with me every year, they spend $2,000 with me. Get this, you can double the size of your business without getting any new customers. If you just take every customer that spends $1,000 and you upsell them and you give them more services to make it $2,000 per year. You don't have to do any marketing. There's less time of the estimator spent doing new estimates. You don't have to spend as much admin time getting information and getting the customer set up with their credit card information on file because they're already in your database. And so we neglect the easy low hanging fruit of customers that were already on their property. They've already exchanged money with us, they've already told us that they know like and trust us. They've given us a five star review online and we won't ever offer them any more services and instead we'll go give that money to Google and Facebook and Thumbtack and Angie's List and all these other providers to get new shiny customers. And all the while we neglect and don't spend any attention on the customers inside of our database that have already proven they're willing to buy from us. After seeing over 150 locations start and grow at Augusta Lawn Care, I've realized that there are just two skills that are required to build a million dollar business from zero to $500,000 in annual revenue. Growing any home service business. The success and speed at which that is done hinges on one skill alone and that is sales. The ability to be able to sell your services to your customers. The person that can put on their boots or walk down the sidewalk, knock on doors, put on door hangers, talk to their barber, their accountant, the person, random person at the grocery store, and just sell their services. I've seen people leave training at Augusta lawn care at $0 in revenue and within two months be making almost six figures in monthly revenue because they were able to sell anything. The ability to be able to sell will get you from zero to $500,000 in annual revenue. Now that exact same owner, once they pass $500,000 in annual revenue, had a hard time growing the business. Why? Because there was a second skill that and that is leadership. The ability to manage your team and actually lead them. Be able to explain the ability to be able to train them and actually give them the skills that you have. That's a different skill than what it took when you were just getting started and you were selling and doing door hangers and knocking on doors. And that skill will serve you well. But if you're going to grow past $500,000 in annual revenue, the ability to be able to lead and get work done through your team is the skill that is required to get past a million dollars in annual revenue. Now, there's a lot of other skills you can learn to make your business more efficient while you're growing. Whether that be the mechanical side and working on the trucks, or the marketing and funnels and clicking and emails and text. These are all valuable skills. But really all of it boils down to sales and leadership. If you have those two skills, you'll be able to grow past a million dollars. And if you don't have those skills or you don't have the time or desire to learn those skills, you might have to go get yourself a partner. And this is where I see the most valuable partnerships being born in home services, where one person is really selling but stinks at being a manager, but then the other partner is a great leader and they don't want to get in front of customers and sell. That partnership together is able to build a big business because you have sales and you have the skill of leadership, and that is a powerful combo. After being in the home Service industry for 18 years, I've realized that the very first marketing dollars should be spent on your website. I like to think about investing in my website, sort of like owning a house. If I own the house, I'm willing to improve it, fix it up, and invest into making it better. The value of it goes up in time. Whereas if I'm renting every month, I'm just kind of flushing that money down the toilet. It's just going to the landlord. And in business, I think of your website as owning the house. I own that domain. It's my real estate online. Whereas if I go out and I spend money on Facebook or on Google or on other platforms, I'm just renting the attention or the space on someone's screen for a moment in time. Once they've seen the video or they've seen the ad, it's gone. And so I've seen time and time again in home services and, and I saw it in my own business the first few years when I was spending over $200 per customer on these ad platforms because I didn't know what I was doing. The middlemen in this industry are sucking out all of our profits. Thumbtack Angeles, Google, Facebook, all these middlemen that are basically doing the job of us as marketers, they're the ones winning. And so they have great mobile websites. They look great on a phone, they load really quickly, they rank well on Google. When, if we just built a great website, we'd be able to do that ourselves. And yet we keep Paying the landlord every single month for something that is just renting. Go own the domain. Own your website. The beautiful thing about having a great website, if it has search engine optimization and is ranking well on Google, I don't have to keep spending money on ads. And leads just keep coming in. I'm ranking well for keywords like lawn care, landscaping in my area. And because of that, people find my website, submit an estimate request form, and I've designed the site in a way where I maximize the amount of leads being converted from that webpage. And if I do that, I don't have to keep paying the middleman and I keep getting the leads. So before I spend any money on marketing, I would first make sure I've built a great website. And then when I go and spend money on advertising, they'll be brought to a website that looks really professional, that actually gets their lead information. And so now the marketing dollars that I do spend will be much more effective. I get to see the financial statements and the profit and loss statements of hundreds of home service businesses every single year across many industries. And bigger does not necessarily mean better. Trust me, it's easy to be able to trick your neighbor or your friends or your competitor as to whether or not you're successful. And how do you do that? Buy more trucks and you hire more people. Everyone's trying to get more employees and more trucks because public facing metrics like that make you look successful. And I understand that chip on your shoulder. You want to prove people wrong, you want to look good in front of your competition because you're hoping that it makes them defensive. But ultimately, the number I really want to know is how much money are you making per employee or per truck? Ideally, I've seen across the board, as a general rule of thumb, I want to be making at least $100,000 in revenue per frontline team member out in the field. Now, this is the thing about this number, this revenue per employee number. No one sees this. Only you do. Your competitor doesn't see it. Your mom and your dad don't see it. Your spouse probably doesn't see it. So all the public validation that we're looking for does not come when we actually look at the what's the revenue per truck, the revenue per employee. And if that number's not above $100,000 per employee, I consistently see home service businesses struggling with their profit. And look, I was completely guilty of this when I first got started with Augusta Lawn Care. I bought way too many trucks, way too many trailers, and had pride in the fact that my vendors for trailers and for equipment, they knew me like the back of their hand because I was always going in and buying new stuff, and I valued those relationships, and it didn't make me any money. If those trucks, those trailers, and that equipment is not being utilized every single day and it's not making me money, who cares? Ultimately, the business that is trying to go after the public metrics of hiring more people and getting more trucks will eventually lead to bankruptcy. Most of the time, these are the companies that go deep into debt because again, they're trying to put this facade of looking successful. And I understand the desire to get that recognition. However, focus on this number. Revenue per employee, revenue per truck. Track that over the course of the next few years and watch your business succeed as that number grows. I was so busy trying to look good in front of other people, and I want my shop tour to look awesome. They were oohing and ahhing over the amount of trucks and how fast we were growing and all the employees that were running around, but no one saw my bank account. Stay focused on the things that matter in business that your bank account and the revenue per truck and per employee. Over the past 18 years in home services, I've realized this statement build to be absent. In other words, build the business in a way where you don't have to be there all the time. And this could take 5 or 10 years to get the business to this point. But I believe the objective of every small business owner should be to have systems, procedures, and people in place that can allow the business to run even if I'm not there present. Even if you're planning on being in your business for the next 10 or 20 years, make sure that there are systems in place that if you did have a heart attack, that you did have to leave for a week or two weeks, that you did get injured, that the business would continue to run. I learned this the hard way when I got caught underneath a dump truck in the pto. My hoodie did, and I was out for a couple of weeks. I realized the business didn't have systems, it didn't have procedures. It was all going through me. All the decisions had to be made by me. And I'm literally at the hospital on the bed, and I'm FaceTiming my crew because I needed to walk them through the project. Build a business that you don't have to be there every single day and it's going to take longer to build. You'll probably have to simplify your systems. You'll probably have to simplify your services. You have to create standard operating procedures and how to train your employees. It'll be a bit of a pain in the butt to build, but build it in a way that you don't have to be there every day because one day, one day you won't be able to be there. And whether that is your doing and you're trying to sell the business and we're all happy, or you get in an accident or you have a family calamity that forces you to be away from the business, make sure you build the business in a way where you are a spare tire, where if you're there, great, but if you're not, everything keeps running. No one loses their job. Jobs keep coming in and the business continues to grow. Personally, I would rather have a smaller business that was simpler services, but it could be ran without me being there than a big fancy operation with massive departments, a bunch of trucks and equipment, a bunch of moving parts. But I had to be in the middle of it. Every single day. I see time and time again businesses that are doing million, 2 million, $3 million in annual revenue. And I look at the owner and they're like an octopus. Everything in the business, they are touching. Will it be the admin department if someone doesn't show up, they answer the phones and they're going out and doing sales and someone breaks down, they're going picking up materials and they're going moving equipment around. They're doing everything in the business and the business would collapse without them. They'll never be able to sell that business. No one wants that business where you have to be the octopus. So build the business as if you will never be there in order to build a business that you actually want to be there because it's a pleasure and a joy to run. When I was 11 years old, I started my lawn care business. 18 years later, I'm 29. And what I've learned in that time is successful success is exponential. The first five, ten years of me mowing grass, I was making like five, ten, $15,000 in annual revenue. As time went on, that quickly became exponential as I gained more skills. The reason it's so important to understand that success is exponential is that so many people quit in their first five years because they have no evidence of success and that's why they want to give up. Because if you're looking at exponential curve, everyone wants the hockey stick growth. But I believe that happens in years eight through 10. And I see that over and over again. In home services. This is actually a screenshot from one of the owners inside of Augusta nation that 10 years ago started his business. And it's only been in the past few years where he's really seen the fruit of his labor. He's gained the skills, and he's now grown a big business that he can be proud of. But those first five years are horrible. And that's why many people give up. You look back in years one and two and three like, I'm not making any money. I should just go get a job flipping burgers. I'd make more profit. I'd make more revenue for my family, provide better if I just had a job. And that's why most people give up. And it's because they don't get to that sound barrier, that 5, 6, 7, 8 year old, where they actually start to see success and it starts to become exponential. And this is when you look at people that, man, they're just blowing up, but you actually look back and there was five, ten years of pain and long nights and weekends that were worked, and no one saw those. No one was looking at you. Then they just see the 8, 9, 10, 15 years in business and see you as an overnight success. And this is why it's so important not to compare yourself to others. Whether it's myself or other people you see online, you say, oh, well, they're so successful and they're making all this money and they're growing their business. And here I am, I've been doing this for three, four years. I still haven't made any profit. I understand your frustration. It's extremely frustrating. But realize I've been doing this for 18 years, and for the first 10 years, I didn't make a lot of money. I made just enough to get myself through college. And so if you're comparing yourself to someone else, realize they're at some other stage in the exponential curve. And if you know about them from social media or they're a big business owner, they're probably been in business for 8, 9, 10 years. So give yourself 10 years before you convince yourself that this is a bad industry or you're a bad, bad entrepreneur, or you should just go get a job because you stink at this entrepreneurship thing. Give yourself 10 years. Success is exponential. And most of the time, I see that success kicks in after year five. Over the past 18 years, I've realized that opening up your books is one of the most valuable things you can do in your business. Opening up your books simply means showing all the numbers to Your team, how much you charge, what your revenues, your expenses, your profit and loss statement, everything gets shown to the team. And I understand you might be concerned about, well, what if I'm not making any money? Well, if you're not making any money, I think is actually a perfect time to open up the books to your team. Why? Because I can guarantee you they're looking for evidence in the business to prove why you are making a bunch of money. They'll see a brand new truck or they'll see new equipment, and they just immediately think you're making money hand over fist. In reality, you know, there's a ton of debt, there's a ton of expenses, a bunch of fixed costs. You're spending tons of money on marketing, but they don't see that because you're not sharing the information with them. And so if you don't have a lot of profit, if you're still trying to grow and the money's being sucked back into the business, show them the numbers. Have that halftime speech in the locker room, the coach telling the team, we're the underdogs. That's get together. We got to stick together. Let's be a team, have that kind of mentality. And that underdog ideology will usually bring out the best in your team and bring a culture of togetherness and trust. Now, if you're making a bunch of profit and you're raking in the dough, you might be like, I don't want to open up the numbers because I'm making a bunch of money. Now, I've been at both of these places. When I first opened up the books, we weren't making a lot of profit. And it was a way to get the team together. And we really tried to make them understand the profit and loss statement and share how much we were losing and what we needed to do to make money. And then over the course of a few years, once we had pay for performance set up, once we had other systems in place, the business started to become very profitable. And I worked way less in the business to the point where now I don't even show up to the location. And yet I stood in front of my team and we had over $300,000 of distributable cash in profits that I took out of the business in one year. And I was hardly there. Now what I do, how do I share the numbers then? Well, then I give them a piece of the action. I gave them profit sharing, I give them a piece of the pie, and they still wanted to make more money. For the business because they got a piece of it. Also, I made sure that there was a way for them to actually own their own business and get to the next stage of their career. And at August though, we started the 3F program, franchise fee forgiveness, which means if they work for two years out in the field, they able to go start their own location for free. And we did this that when I'm standing in front of my team, I actually want the profit number to be as high as possible. I'm hoping that it's so good, it's so amazing, so high that it actually motivates them to get off their butt and take their personal development and their skills to the next level. I want them then to get to the next stage of their career. I want them to learn about profit and loss statements and how to run an efficient crew and learn about the pricing and the sales and how to talk to customers. But in order to do that, I need to open up my books. In order for them to effectively be able to learn these skills, I need to share them, what the numbers are in the business. And so if you're afraid to do it because they're not making money, bad move. If you're making a ton of money hands over fist, you never show up to the business. You're an absentee owner. Still a bad idea. Give them profit sharing. Make sure you have aligned incentives with making the business more money. And you can keep opening up the books, developing trust up and down the chain of command and making sure that you're actually investing in your team for them to get to the next stage of their career. Now, if you want to learn about more about OpenBook management and how it completely revolutionize your business, watch this video here. It's from a while back. It's one of the old videos in the archives, but trust me, it'll change your business forever.