FLAT RATE or HOURLY? Lawn Care and Leaf Cleanup Pricing

Hey, everyone, it's Mike and you're listening to the Landscape Business course podcast. Today I'm going to be answering questions that came in on the Facebook group. Before we jump into those questions, it looks like there's like 18 so far have rolled in. Before we get into those, though. Thank you to everyone that has joined landscapebusinesscourse.com coming next week is going to be the Landscape Business course edition for P4P, showing access to version one of our software, the whole nine yards. Little hint, if you're watching this right now and you haven't become a member, you want to become a member this week because the price is going to go up next week. And all of those funds is what goes to support Josh, who started this week, creating new content. And that's why next week all of that P4P content will be made available on the course with more content coming. So check that out today. Landscape, sorry, lawn carewebdesign.com I think a couple people joined this past week. We're building your website and really looking forward to doing that. Check that out if you haven't. And in three weeks, we got a new group of franchisees coming to get trained for Augusta Lawn Care, if you are interested in that augustalawncareservices.com franchise. I think right now we just have one franchisee actually coming in August because the border's still closed, so our Canadian franchisees can't come down. And so definitely if you're interested in that, go to augustalongerservices.com franchise. And that one is coming out of just outside Jacksonville, Florida. So really looking forward to having Alice there here in August. And we do training every two months, so the next one's gonna be in October and the following will be in December. So. All right, let's go ahead and jump into questions and answers. Here we go. So if you're not part of the Facebook group landscape Business course, just check it out on Facebook on the groups. Let's jump in. Constantinos, sorry, Konstantinos asks lead generation, apps, methods, techniques, et cetera. If you look on the Facebook or. Yeah, on the Facebook group. A couple, like a year ago, someone asked me this and I actually listed off, like 25 different types of softwares and applications that I use. I'd say, like the ones that come immediately to mind in terms of lead generation, obviously it's gonna be like ad products like Google and Facebook and things like that.

Apps, methods, techniques get a really good CRM service. Autopilot is good. Lawn Pro is good. Yardbooks is good. What's the other one? I'm just blanking on right now. LMN is good. It's really depending on what your service mix is. And so check out the Facebook group. Look around, see which one's gonna be good for you. I've done a couple videos on that before. Doug Morse asked, I'm watching day two of the Summit videos. You talk about the 33% of revenue part. I'm assuming that's based on the revenue of that particular crew for that week or. And do you break it down to hourly or just the amount and say revenue for crew was $900, does that mean each crew member gets 300 or they split the 33%? Yes, they would split the 30. They would split the 33%. And there's lots more of this. Since you are watching day two of the Summit, that means you're in the course. You can also check out there's a new tab called P4P. Check that one out and it will answer more of these questions about that. But yes, you're correct. You would split up the $900. So if you get $900 and a third of that revenue is going to the employees, that'd be $300. That would be to the employees. And if there's two people working on that job, that'd be $150 for each person. Amity Morales asks when P4P who gets trucks and equipment ready, are they clocking in when they arrive at the shop? So yeah, they're clocking in when they arrive at the shop. And over the course of the whole week, that's what they get paid base pay on is the amount of time that they're clocked in. So they are getting paid for all of that time. And if they're on a big job and the project manager is coming early to load up materials or get equipment or do a walk through to the customer, all of those things. We account for that in the P4P system with Project management bonuses. And again, if you're in the course, there's a new tab there. Check that out. Lots of good information there. Next question from Amity is for next day. When does the crew get truck ready? Same day or before next morning. Okay, so this is a good question. If you have the same trucks and trailers, equipment allocated to the same crew, I would recommend they get the truck ready the night before because generally at the end of the day, the guys want to get out of there as soon as possible because they want to get home Whereas in the morning they're more likely to be kind of dragging along, they're tired, etc. And so if, but however, like for us, we don't do that. They do it in the morning of because we switch trucks around, we have landscaping and long hair guys intermingling and we move people around, which I know is less efficient but helps with retention of employees and people don't get as bored. And so in that scenario we do the morning of because during the evening things get moved around still, who's working with who, which jobs are on what, et cetera, who's behind things like that. And so morning of is when our crews load up for the day. And that's just gonna come down to again, whether or not you have designated trucks and trailers to specific employees. And on P4P, that is the winning part of P4P is like when they're loading up and loading, unloading their truck and loading clippings or fueling up or going to the bathroom, they're not making any extra money. And so it incentivizes them to do those wasteful items more efficiently. Will Vanderhoeven asks, who do you recommend using as a debt collector? I don't have anyone specific to recommend that's online or that kind of would serve the whole country I'd recommend. And you just look up credit.

Credit collection services and then your city name and see what pops up. Usually a local collector is more, a little bit more intimidating to a client when they get a letter from them because they actually have an office. They actually have a place that's close to the client instead of just like a random online service. That's just my two cents. We use a local collection service as little as possible, but that's what I would recommend. Dylan Moy asks, what are the top three to five technologies you use to help manage your business? Thanks, Dylan. Yep. So we kind of talked about that already. Really good CRM, having something like QuickBooks to track your payments and things. I like Mint because if you have a bunch of different bank accounts with different banks, Mint is nice to kind of keep track of everything. I really like Robinhood for trading stocks. I like Zillow and Redfin for looking at real estate. So those are fun. Clarissa asks recommendations or tips or advice on people who complain about what you're not doing, then decide to stop service and not pay you for what they owe because they think you haven't been servicing their lawn. But in all reality, you have. It's their word against yours. So this is really going to come down to the person. Every single case is a little bit different. On this one.

When people are overdue or not paying, we have a collections automation they go through. And so that's typically when these type of people get brought to the surface, they're like, oh, I don't owe you because you didn't do X, Y and Z and blah blah, blah, blah. And so that at that moment you got to determine whether you want a long term relationship with that client and you're going to eat the cost and make maybe the job notes more clear or specify what's going to happen more. Take pictures on every visit to prove that you did the service. But that would be like if you determined you wanted the long term relationship and keeping that customer. If you don't really care about them and you now you kind of think they're a jerk and you don't want to be on their property anyways, then at that point you're just going to let them go to collections. And collections is going to impact their credit if they do not pay you. And again, if you send someone to collections, you're usually only going to get 70% of the bill because 30% of it will go to the collections agency on average. 30%. And so my recommendation is to have a really strong onboarding like focus on that side, more like clarifying in your estimate being very precise in terms of what is included. And if they say you weren't doing those things and it's not about how you did it, but if you did it, then it's a matter of do you have a tracking service on your trucks to track that they were there for certain times using your CRM or an actual tracking device in the truck to be able to say, hey, we did come to your property on these days, at these times, on these time periods and this was who was on your property. That kind of information is really powerful. If they're just questioning whether or not you did or did not do something or did or did not show up. If they're questioning whether or not you did something the right way, like how you did something and then there's disagreement, it's not clear in the estimate. That's when it becomes a decision of is this person annoying and I'm just going to send them collections or is this someone I want to work with in the long term and I'm going to eat the cost, make it more clear on the estimates notes going forward and eat the, you know, the loss of revenue in the short term.

Jose asks what are the top five KPI to track? So KPI is key performance indicators. It's very difficult to say that because it's depending on your service. But let me try to come up with a few. I've done this before. I think the biggest one is revenue earned for the company divided by the payroll of your employees. You've seen me do that before. Actually, you know what would be the best thing for you, Jose? Is go back a few videos ago because I do a zoom call and I think it's called like zoom call with a failing lawn care business or something like that. And I actually go over several KPIs and we track certain days with that owner and show what's good and bad. But things like total revenue earned divided by total payroll, that's a really good one. If you're doing P4P your total payroll, you use the base rate amount.

And so other KPIs are going to be profit percentages at the end of each month. I'm going to be looking at budgeted versus actual hours on all projects. Those are all things I look at. Brandon 2 Beck lead generation lists versus every door direct mailing really depends on where you're getting your list from. So what Brandon is referring to is you can go to certain online services and get lists of addresses.

And then send it to them based upon certain demographic like age or income or certain things like that. The thing about every door direct mail is you're gonna get like a whole neighborhood, but you can see the income and age demographics for those neighborhoods. So it's usually pretty targeted. And then the thing about every door direct mail is better than lists is the pricing. Your pricing on every door direct mail is gonna be about 16 to 18 cents per door versus lists. Usually you're gonna be 40 to 50 cents, but again, just depends on where you're getting lists from. If that list company is also providing postage and then they have a backend kick from the usps. All those things are.

Things to consider. Whether or not you're considering every door direct mail or lists. Brent Williams asks, besides pay or financial benefits, what are some other things you have done to help create your culture of motivation and hard work? That's a good question. So yeah, culture is huge. I think caring for the employees, actually caring for them is important. So. So instead of just looking at them as like physical labor and you have X amount of labor hours for the week and you get X amount of people and you push them into jobs like caring about where they're at in their mindset, caring about their long term success. I made a video about this a week ago about retaining and attracting great employees. A lot of that comes down to culture and actually caring for them as human beings, as family people and trying to do your best. There's just sometimes you can't accommodate everything. Obviously you can't accommodate things, certain schedules or if someone's always calling out late because they have a headache, like there's certain things you can't do. You gotta have, you know, just gotta eventually cut the person. But I think just caring for them is one of the biggest things. Having off site meetings and doing open book management is also huge in my mind. And talking about numbers and profits and revenues. Plenty of companies that I know of, they will not share how much a job is worth to the company. Like what's the customer paying? They're afraid that the employees are going to make that big issue. They're afraid to show how much they're spending on certain things. They're afraid to show profit and loss. And you wonder why there's no buy in or culture of ownership from the team because you're not giving them the information they need to be owners. And then like I've talked about before, if you want someone to think like an owner, they need to be compensated like an owner. And then you need to have the information of an owner. So P for P, compensated like an owner. When they do really well, they make more money. When they don't do really well, they make base pay, which is better than an owner, but it's similar. And then information, and that is in the form of knowing the numbers, profitability, what you're charging on jobs, what your hourly rates are, things like that. Kevin, when you go to conference, when you go to a conference, what is strategy besides at least learning or taking one thing away? Cool. So yeah, Landscape Summit is coming up by the way. And if you go to landscapebusinesscourse.com, click the conference tab, tickets are now available. So if you want to book your tickets and your hotels very, very, very cheap right now, so check that out. But in terms of conference in general, when I go to a conference, it's less. It just depends on the type of conference. But a lot of times it's less about what's being said and it's more about the people you're meeting because you're bringing together a bunch of people that are interested in learning about the same thing as you, which, which means you have a bunch of like minded people, which means if you're going to a Landscape Summit. You're gonna be around a bunch of landscapers that are trying to improve their business. That's the old, right? Like learning from them, hearing things on lunch break, hearing in the morning. I'm the guy that sits in the front row when I go to conferences and takes notes. Like, that's me when I. Obviously, if I'm leading the conference, I'm not in the front row taking notes, but I'm saying, like, when I go to a conference and. And I go to quite a few, I am trying to absorb as much as possible from the speaker. But then it's in those little ten minutes in between. It's on the lunch break, it's during breakfast. So that's why at Landscape Summit, we provide lunch and breakfast for all the attendees. Cause I feel like there's actually a lot of value in there for people to talk to each other. And I think just in general, all those people that are there, they are usually thinking forward. They're not the people that are like, oh, I've done this for 20 years. Always the same, and I'm always gonna do that forever. Just the fact that they're going to A means they're wanting to learn, which is huge. It means that they are wanting to be on the cutting edge, they're wanting to improve, they're wanting to change, and those are the type of people you want to be around. Jeremy Guevara, how do you set up a franchise, and is it worth hiring a company to do it? I'm assuming you mean, like, setting up a franchise like I have done. If you're wanting to set up a franchise, you need to have a bunch of money. You have really good lawyers and attorneys, and you need to not think about making any profits for a few years. It's. Yeah, that's what I would say in terms of. Actually, I don't know if you're meaning, like, set up a franchise, like with Augusta Lawn Care. If you want to do that, you should contact me@augustalongcareservices.com franchise. Set up a call, and we'll see if it's right for you. BJ Babineau asks, what have you done for restrooms for trailerless setups? We have tried a couple of ideas, just looking for other options. All right, so I know some people, they'll put the portable toilets inside of enclosed trailers or on enclosed trailers. So it's really. We don't do that. So trailerless setups or trailered setups. We do not have a Portable toilet on our cruise. The reason for that is because they are usually going to stop anyways once or twice a day to go to the bathroom or sorry to stop from get a water or snack or something and they can just go to the bathroom. Then it doesn't save them a whole lot of time. Unless they're going out like some way rural area where there's no gas stations and they can't go to the bathroom. There's no toilets around. But even like if they're driving, even in the suburbs and there's construction sites, there's always portable toilets there. And so the amount of smell and mess and just hassle of having to deal with a portable toilet in a trailer or not on a trailer, I just rather have it where they stop occasionally. And on P4P, I know why a lot of people put the portable toilets and that is so they can tell their employees not to stop at gas stations. But if they're on P4P they're not trying to SAP the clock and spend 30 minutes at a gas station traditionally. And so we don't worry about it too much. All right, Shane Jacaruso. Oh, he has a video. Okay, let me play this video. He had a couple notes here. It says no. Our three man team generates 21k in recurring maintenance revenue and 3 to 6k in projects. Okay, so that's like what, 25,000, say a month. And then our hourly rate of completed work ranges from $48 to $63 per hour. Alright, let's watch the video. Oh, volume up. Whoa, watching the volume. One second. Here we go.

What's up, Mike? Got a quick question for you. We're a three man operation. It's me, I got a business partner and then we got one full time employee. He runs for four days a week for us. We're about to expand into getting a fourth guy and running our second truck more regularly. We're only running in about a day and a half worth of routes right now. And the question that I have is how can I or what would you recommend to compare our financial profitability and see whether we're on mark for a three man crew and this fourth guy is going to be beneficial to us or is this fourth guy going to be more of a burden? What would you recommend to compare those numbers to to make sure that when I go to hire this fourth person on that it's a move in the right direction. I appreciate any feedback. Have a good one man.

Okay, good question. So you're making about 25,000amonth you have a three man crew which includes you, another owner and one employee. And you have two trucks. This is my personal opinion, that is get your trucks to where they're operating at full capacity before you go get the employee. And if you're growing really fast, maybe go get the employee. Now if you know you're going to fill that second truck and it's going to be always running. But if the truck is running one and a half days a week, that means that right now you're doing a three man crew in one truck. What I would recommend doing is you go use the second truck and when you're full, having your owner, you as an owner in one truck and then the other owner and the employee in the other truck, that's a full route. Both of those trucks are moving all day long, five days a week. Then I would go get another employee to hop in the truck with you and make you more efficient while you're working.

I would not get a fourth employee.

When you don't have enough work to keep the second truck busy. So my first step would be split up your crew of three to be in two trucks the whole week and then when you fill the schedule for those two trucks, then go get the fourth employee. That would be my two cents. And obviously I'd need to know more to give you exact numbers and stuff like that. But that would be my. In general, I'd say you're making decent money with your 25,000amonth. I don't know your local market. Like in our market we try to hit between about 10 to $13,000 per month per employee in the field in terms of revenue, but your market might be a little bit lower than that. And your hourly rate is pretty good that you've said you're achieving. So it's not really whether or not you can afford a fourth person because I think if you're growing, you should get a fourth person. It's just I think you should first focus on asset utilization as you bought a truck. It's there, it's sitting there. You can improve your efficiency by simply splitting your crew of three into two trucks all week long. Do that, fill your schedule, then add the fourth person to hop in the truck with you. All right, let's get a couple more of these and then we'll hop out of here. Alright. Jaeger asks, what do you guys do in the fall winter to keep busy? And what's your hourly rate in the fall winter? Best way to advise for fall, I have a bunch of videos on this, just look up fall work or fall or winter services or any of those sort of things. Lots of videos on that. All right, last question. Let's see here. Whoa, I accidentally clicked the wrong button. Ah, here we go. Last question. Kyle Wright. Our recurring bed maintenance, hand weeding, shrub trimming, and recurring leaf cleanups jobs. In fall, we do weekly hourly leaf removal for all mowing customers for eight to 10 weeks.

Have always been billed per man hour and been quite profitable. Okay, so I get it. So basically for eight to 10 weeks out of the year, you do leaf removal for your customers and you just charge by the hour. What would be the first action to shift the pricing model or dive into service autopilot data you would take to switch from hourly to flat rate for those services? With the implement intention of implementing P4P, could any adaptations to your model be made? I am weary of the variables associated with leaf cleanups in particular. In our, in our areas, trees can drop leaves drastically overnight weather, wind, et cetera, tremendously unpredictable. With all other flat rate work, project work, et cetera, your model works and makes sense. But I may be taking a huge risk on my most predictable revenue per revenue profit per man services. Okay, so basically what Kyle is saying, he gets eight to 10 weeks where he services his customers, does leaf removal at an hourly rate. And he's worried about doing flat rate on P4P because someone's lawn could change overnight because if the wind blows like crazy and all, their lawn is twice as many leads as was expected. So couple different things you could do. Number one, you could average things out. And traditionally when you average things out, customers are more likely to accept it because it takes out the fluctuations. So you could do that, and that's what you're afraid of right now.

And I would assume too that when you do standardize like that, your crews are gonna become more efficient if they're trying to hit a budgeted hours versus just like, hey, go work and clock how long you worked there. If you take some sort of an average or a little bit higher than average of budgeted hours over the course of those eight or 10 weeks and gave it specifically all, there's gonna be ones that are a little bit higher, the ones that are a little bit lower, but they're always gonna be working somewhat faster. You could think of it like that. Or two, this is something you can do with P4P and that is you're still gonna give the employee a percentage of revenue, but you're just gonna charge the customer an hourly rate. So let's say you are charging $50 per man hour, and let's say you're giving 50% of it to the employees. Every hour that goes by, you're charging the customer 50 and the employee gets 25. And I'm okay in that scenario, because the longer they take, the more the customer gets billed. The problem is there is no scarcity there for the employee, and they can SAP the clock. And in this scenario, that then turns on the customer and they might freak out at the price if your guys are dragging their feet. So now really, it's where I never like hourly charging by the hour because now the customer becomes the boss of the employee. And that means they're always, like, watching everything they're doing and making sure they're staying efficient and all of that. So those are the two things. Two options you can do. One, you can standardize and just average out. Okay? On average, it's gonna take three hours per service. We're gonna do it on average 10 times. That's 30 hours. And. And we're just gonna divide it up over 10. So it's gonna divide it an average of three. And sometimes it can take an hour, sometimes it's gonna four hours, sometimes two hours. But on average, this is what it's gonna be. And on P4P, the times it's longer. Yeah, your guys aren't gonna be happy, but they've gotta realize that there's a other side of the coin, right? Which is the next week they show up and everything is taken care of, or you do where you do charge the customer hourly, you still give a percentage of that labor revenue to the employee. But again, now you're dealing with the issue of that customer being the boss of the employee and kind of like watching everything they're doing. But if it's worked for you in the past, maybe just stick with that. But give the percentage of the revenue to the employee, and that might make it better when there's a ton of leads. And they kind of dreaded it in the past. Now they're making a percentage of the revenue, and they actually like the fact that they're able to stay there for a long period of time without drive time. So just something to think about. All right, that's all the questions we got time for today. Thank you so much for watching Landscape Business Course. Thanks for watching. Make sure you check out landscapebusinesscourse.com join this week because next week the prices are going up. We'll see you next time.