From 1ST Employee to $1M+ Business: A Masterclass on Hiring

Today I'm going to give you the blueprint for hiring employees for your home service business. I'm going to give you the financial test to use to determine if you can hire your first employee and how to keep hiring to grow your home service business past a million dollars in annual revenue. My name is Mike Andes, I'm the founder of Augusta Lawn Care. We have over 150 locations around the world and do over $50 million in annual revenue. I'm also the founder of Copilot, Seal CRM where over a million dollars are transacted every day. So let's go ahead and jump into the fact of how this presentation will make you money. Number one, we're going to go over when to hire your first employee. I'm going to give you the exact reasons and the exact test to ensure you're actually ready for it. And this is usually going to happen between 0 and $200,000 in annual revenue. So until that point, you probably don't have employees or you're in this process of finding your first employee. Then we're gonna talk about how to scale up to become a manager of many employees. Cause now you're doing $200,000 to $800,000 in annual revenue. You're not just gonna have your first employee, you're gonna have multiple employees. And you're going to need some sort of management skills to be able to keep them in order and make them profitable and efficient. Then we're gonna talk about how to hire even more employees so you can get out of daily operations. So you're not in charge of having to be there every single day. And, and when employees call out, they're not calling you, they're calling a general manager, they're calling somebody else. And usually this is going to happen once you've passed $800,000 in annual revenue. So I recommend get a notepad, sit down, listen to this one a couple times. Cause I'm gonna be moving really quickly. First and foremost, should I hire my first employee? This might be basic to you if you've already built a big business. But let's build the building blocks to actually building a seven figure business. Should I hire my first employee? Well, I recommend using a three part sniff test. And I'm gonna go over these three different tests that you can use to determine whether or not you should hire your first employee and if you can even afford it. Cause we all want to have an employee and have them take things off of our plate. But can your business actually afford it? Is the question I'm really trying to dig into now. The first sniff test is going to be your P and L or your profit and loss statement. I'm gonna check that and see if you can actually afford to, to hire an employee. What happens if you add employee wages? Because remember, we're between zero and $200,000 in annual revenue right now. I'm asking, if I look at my P and L and there's only $20,000 in the bottom line profits, if I hired someone, can I even afford to do that? What happens if I add employee wages? Well, we can actually determine this by what would you be having to spend to pay yourself the going rate. So say, for example, you'd have to pay $20 an hour or $25 an hour for someone to do the work that you're currently doing as the labor in the business. If you take how many hours you work in the week, multiply it by that rate and then take that amount out of your bottom line, would you still be profitable or would you have really, really thin margins like 1 or 2% profits? Because this is really a good determination and a good indication if you are running a profitable business model or, or you just have a good paying job. And there's nothing against having a good paying job if you enjoy doing the labor. If you'd rather just work for yourself compared to getting a job for someone else, this might not be a horrible option. And that is simply having a good paying job. However, if we're trying to scale to a million dollar business, it's not going to work well. If as soon as you take out your labor and if you just paid yourself a regular wage, you've made no money because now you have a good job, not a profitable business. So the second sniff test is what would happen if we had daily revenue and assumed that an employee was now doing the work, but 30% of their day went to waste? Because I happen to believe not only are you probably working more than 40 hours a week as the owner operator, you're probably also working extremely quickly and efficiently. When you hire an employee, one of the things that always jolts people and kind of gets them agitated is the fact that that employee is not going to be as efficient as you, they're going to stop more often, they're gonna make more mistakes and they're gonna have generally more waste because at every single stop they might look at their phone when they're loading and unloading for the day, they're gonna dink around a little bit. These are things that add Waste to the day. And therefore they make way less revenue per day. And so if I took how much you're making now in total revenue, like, let's just call it $300. And we take out 30% of that, which is 90 bucks. Now let's assume that if you're gonna hire an employee, they're only gonna make 210 to your 300. And now I take their wages, let's just call it $20 an hour, multiply it by eight hours in the day. All of a sudden they've earned $210 in total revenue and 160 of that went to wages. And I'm not even including like payroll taxes, fuel, insurance, the cost of maintenance on the truck and equipment. All of a sudden you only have $50 to work with and pay all those other expenses. It's unlikely you're gonna have any profit whatsoever. So this is another sniff test that I can determine whether or not my business is actually financially ready to be able to hire an employee. This is a good indication again, if you have a profitable business model or a good paying job. Now, the third sniff test is the rule of 25%. And I believe this works across many industries. Anytime labor is part of the equation. Let's look at this. Is your dollar per hour to employees or the wages that you spend per hour less than 25% of what you charge customers? For example, if I have a wage of $20 per hour, I gotta charge at least $80 to the customer to hit the rule of 25%. You can just multiply it by four. If I have to pay $25 per hour to get an entry level labor to work for me, that means I'm going to have to charge at least $100 per hour to the customer. And so this rule of 25% I see consistently working across home services, and that is you must charge at least four times as much. The rule of 25% means no greater than 25% of what I charge the customer can go to the employee. Ideally, it's more like 20% or 15%. The most profitable home service businesses are able to get that number down. But when I see that number go above 25%. So in other words, they haven't. They're charging their wages $20 per hour to their employee, but they're only charging $50 per hour to the customer. They don't pass the 25% rule. And so if you haven't got your prices high enough to where you can charge the customer enough to make the rule of 25% work. We have a problem. We're not going to be able to hire employees. And you can always make the rule of 25% work by just, okay, well, if I'm only charging $50, well, I guess the rule of 25% means I've got to hire employees for $12.50. The question is, can you actually get employees to work for you for $12.50 an hour? Probably not in most markets. So you gotta ask yourself, what is the wage? I need just to attract talent as a base wage in my market. So now if you're like, well, I looked at all three of the sniff tests. I don't pass one of them. For example, I looked at my daily revenue or I looked at my P and L. And once I took out the fact that I'm working 60 hours a week in the field and multiplied that by $25 an hour, I realized I wasn't making enough money to actually hire an employee. So what do we do if we don't pass the sniff test of getting our first employee? The first thing we can do is increase efficiency. How do we do that? Less drive time. We can reduce drive time by having a much more compact service area. So instead of traveling out like 20, 30 miles, 50 miles away from home base, I'm going to make sure my service area is much tighter. I'm also going to make sure I have better route density. If I'm doing maintenance jobs where I stop frequently because a lot of waste is between all those jobs and starting and stopping every single visit in is what causes so much inefficiency. So I wanna reduce my drive time. Getting better equipment will also increase your efficiency. Less breakdowns. Being able to get more output per hour. So larger mower, you know, if you're gonna get more output out of a 50 inch mower compared to a 21 inch mower, seems pretty basic. Getting better equipment that doesn't break down as often. So newer stuff as well as more efficient, bigger, usually equipment is going to increase your efficiency and make sure that every hour of labor gets more output. On the other end, getting better equipment, training employees, training yourself more is going to increase efficiency. If you're just getting started and you haven't passed the sniff test to find and hire your first employee, like you can go into YouTube University and figure out ways to be more efficient, how to be able to your craft more more efficiently. Cause ultimately the customer is paying for the end result. If you can get that same result in half the amount of time we Have a good thing going because we can get more customers without spending any more time. In our day, we are able to get more customers because we reduced drive time. We were able to fit a couple more customers in. We got better equipment, so we got the jobs done faster. So what we able to do, Add more customers in. And so we can increase efficiency to make sure we pass the sniff test and hire our first employee. The second thing we can do to make sure that we pass the sniff test is to increase prices. In other words, same number of customers, but make more revenue. Same exact thing will happen. Because if I can increase the amount of revenue that I'm making in a single day without having to get any more customers, any more equipment, any more employees, all the sniff tests will eventually get passed. I'll be able to pass the rule of 25%. I'll make more revenue per day. And so I'll be able to make that math work out. And on my profit and loss statement, I'll make way more profit to be able to make sure I pass all three sniff tests and can hire my first employee. The reason I talk about the sniff test and the reason I talk so much about when to hire first employee, I see so many home service business owners getting their first employee and then all of a sudden realizing they don't make any money, the business is unprofitable. So what do they do? This is horrible. I hate employees. I'm never gonna hire anyone again. And they go back to being solo. When reality. If they would've just looked at the sniff test and actually ran the math, they would have known before hiring employees that their business couldn't afford it. So we're gonna take a little quick turn here and talk about inefficient labor, because inefficient labor is the reason many home service businesses are not profitable. And I see every single day dozens of profit and loss statements, Dozens of home service businesses that are not profitable. And the number one thing is inefficient labor. I'm always looking at, like, immediately on a profit and loss statement. What's the top line revenue? What are the bottom line revenue? That is profit. And then how much of their revenue is going out just to paying wages for the laborers? This is a huge reason why home service businesses fail. So how do we measure efficiency? If you're like, well, if inefficiency is horrible, how do we measure it? Well, this is one way to do it. Budgeted hours divided by clocked hours. Budgeted hours is simply the estimated time we Expect the job to take for it to be completed. The clocked hours is simply the amount of time from the beginning of the day to the end of the day when we clock in at the shop to the time that we clock out, it's considered the clocked hours. So for example, if we have a job that's going to take six budgeted hours, when we did the estimate, we said, hey, you know what, let's take six budget hours, multiply that by $100 an hour. I charge the customer $600 for labor on that job. Well, I have six budget hours, but it takes eight hours to get the job done. In terms of when the time I clock in at the beginning of the day, the time I get back to the shop, unload and actually clock out. So six budget hours divided by eight clocked hours equals a 75% efficiency score. And this is the way to measure efficiency. How much of my day is actually spent being efficient and producing labor. That is budgeted hours compared to just being clocked in and drive time and unload time. Because guess what, you don't make any money for completing clocked hours. You only make money for completing budgeted hours. Work on the schedule. So if you're mowing, when the blades are turning, you're making money. If you're a painter, when the paint is being put on the walls, then you are making money. If you are building a fence, when you are pounding in posts and you are putting up panels, that's when you're making money. All the drive time, load time, talking to the customer, doing training, and all the other things we do is straight waste. And so how do we reduce those things and how do we measure this efficiency is the efficiency score. So what's my definition of, of efficient? Well, here you can see if we take budget hours divided by clocked hours, we get a percentage. We just talked about 75 percentage points as the efficiency score. And this is how I generally break it up. If that score is under 50%, that is far below expectations. And I've almost never seen a home service business where they have under a 50% efficiency score and they are profitable. Which means if you just look at from the brass tax of it, more than half of their day is not producing revenue. So if they have an eight hour day that they work, they only complete three budgeted hours. That's less than 50% efficiency score. And I rarely see that business ever make money. Now 70% is kind of meeting expectations in most home service businesses. Depending on if you have multiple stops or if you stop a long time at one project, usually 70% is a decent amount of efficiency score to be able to target. And that's like you're meeting expectations. Now, the best businesses that I've seen, the ones that are the most profitable and are able to pay their employees significantly more on pay for performance, have above a 90% efficiency score. Which again, just boil this down to the fact that out of 10 clocked hours, they will complete nine budgeted hours, which means more than 90% of their day is being efficient and actually getting work done and not driving around doing nothing, not standing around the shop twining their thumbs, not driving back to the shop because they forgot things or they have yellow slips and callbacks. This is above expectations. But if you can get an efficiency score above 90% for your crew, they will make more money and the business will be very profitable. So getting new employees to become efficient and profitable quickly is very important. Otherwise, employee churn is extremely expensive. I recently saw employee in a Facebook post when I was talking about hiring employees. Someone was extremely afraid of hiring their first employee because they're afraid that, well, by the time they're actually profitable in a few months, they're probably gonna be gone. Realistically, they're only gonna last a month or two. And honestly, they're right. Frontline team members, entry level laborers in most home service businesses don't last more than a year. And so the goal should be, how do we make them as efficient and profitable as fast as possible? So even during a really tough labor market, and even if there is employee churn, we can make them profitable quickly. Otherwise, the cost of them leaving is abhorrent. Because if it takes five, six months for them to become profitable, that means that if they leave after one, two, or three months, I've actually lost money. And this is why so many people will hire their first couple employees and then retreat back to being solo is because they take so long to get their employees up to being profitable that they leave before they ever actually make one single dollar of profit for the business. So I want to track something called time to efficiency. This is how long does it take for a new employee to become profitable and efficient. So my goal is how can we get them above a 70% efficiency score? Cause I need them to at least hit that in order for them to meet the standards of efficiency. So here's a few ways you can the fastest ways to decrease time to efficiency. And that is how long does it take to get a new employee to be efficient and make money for the business. The first thing you can do is just hire really skilled laborers with a lot of experience, like they already know what to do. They've done this for 10 or 15 years. They're coming to the business from day one. They're efficient because they already have a bunch of experience. The problem with this is more, more expensive. You're gonna have to pay a lot more in wages to get someone who is skilled and has a bunch of experience. The second thing is they're really hard to find consistently because they usually have a job, are doing it themselves, like go to start their own business or they've been working somewhere for five or 10 years and that's where they got the experience. So they're already taken. And it's very, very hard to find these type of people consistently that have the skills you need and, and already have tons of experience in your industry. The second way to be able to decrease the time to efficiency is simplify services. Now the reason I like this one is because you actually are able to find laborers that are cheaper because by simplifying the services, it's easier for them to actually do the work. I don't need really skilled laborers in order to be able to get the job done. Secondly, it's easier to find employees because there are more people at that entry level than, than the people that I would otherwise need a bunch of experience years in the industry, a bunch of skills. They know how to drive tractors, they know how to drive excavators. Those are hard people to find. So these ones that have no skills or less skills, easier to find. Also, this is the thing I really wanna focus on when it comes to decreasing our time to efficiency is it requires less training time to get them up to being profitable. Cause you're like, well, if they don't have skills, I gotta train them. True. But if I simplify my services and I don't make it where I have 50 different types of things, I offer customers and instead I only offer five or 10 maybe services to my customer. Now I just took it from 10 months to be able to get someone efficient and profitable down to one month. And that will decrease the time that it takes to be able to make a new employee efficient in the business. So let's go over a case study of McDonald's. McDonald's can make a teenager, someone who's like 16, 17, 18 years old. They can make them efficient and profitable within two days. Within two days they can figure out how to make the burger, get soda, the fries, the cone. You can see in the picture, they're basic services. They've simplified things. There is literally thousands and thousands and thousands of different options that they could have on their menu. And they boil it down dramatically. And one time, actually, McDonald's went through a big turnaround because, because they had a lot of lagging performance and bad performing locations. The first thing the CEO did when he came in is cut off 20 to 30% of the menu items and simplify services, in their case, simplify the menu. But McDonald's can make a teenager efficient and profitable within a matter of just a couple days of working for them. But the average employee at McDonald's generated last year over $128,000 of income for McDonald's last year. These are teenagers. These are frontline team members. These are not people with a bunch of experience and a bunch of skill. They're entry level workers. Now, if we assume that they have an efficiency score of about 75%, which means they actually do work for six out of eight hours on a shift, the other two hours are training or cleaning, doing other things in the business besides generating revenue. If we assume they have a 75% efficiency score based upon what we've already talked about, that would mean that the average employee inside of McDonald's earns for the business $85 approximately per budgeted hour. You're like, wait a second, that's pretty close to what we're charging in the home services. And you're right, but there's one difference. Here's McDonald's checklist. Stuff fries, fill a cone with some ice cream. Pour coffee. Flip a burger. Stuff, swipe a credit card. That's their checklist. That's like the thing that they've gotta figure out while they are in training. And oh yes, they have to also learn that. Yes, the ice cream machine is still broken now, but home services, my goodness, we've gotta figure out gross vehicle weight, the difference between 110 volt versus 240 volt. Navigate traffic with a big truck like a dually. Like, what's a dually? You gotta figure that out. Back up an enclosed trailer. What, I gotta use my mirrors? How do I do that? You gotta build a wall, like with cinder blocks. Operate an excavator. You're gonna have to install a curtain drain. You're gonna have to understand what backflow means if you're doing irrigation or some sort of plumbing. You gotta understand all of these things and follow architectural designs. Like, look at this blueprint and be able to do a big project. Get above like get up on top of a roof, 10, 15, 20ft above ground. These are like much more difficult items to train. Oh, and by the way, do all of this without killing yourself. And so the only difference between the person that makes $85 per budget hour at McDonald's and the person in our home service businesses that also makes $85 per hour is how long it takes to get them to become efficient. Because for the person at McDonald's working, they literally have to do these four or five things and they can immediately become efficient and profitable for the business. Whereas for us, I've seen some home services, you've got to really work to like 6 to 12 months just to become an efficient, profitable team member for the business. And if you leave before that, you've actually cost the business money. So far we have covered one, you can afford to hire your first employee after passing the three sniff tests. And that was the daily revenue, that was the profit and loss, and that was the 25% rule. We also covered that once you hire an employee, your first one, your first few, it's extremely important to make the most profitable and efficient as soon as possible. This is what we call our time to efficiency. And we can do that by simplifying our services and standardizing the types of products and services that you offer. But after we hire and we train our employees, how do we now then use employees to be able to grow past seven figures? A million dollar business. How do we lead and manage multiple employees? Very different than finding our first one. Very different than, okay, we passed the sniff test. We got one, two employees, but now we're getting a bunch of employees. Now we need to manage them. Now we need to become a leader. How do we do that? Well, there are three roles that an owner plays as the business grows. If your business is doing between 0 and $200,000 in annual revenue, really the role of the owner is a labor. You're producing revenue, you're working crazy amounts of hours. You, you're usually working out in the field doing the work. And this period of time is extremely stressful when it comes to your physical stress because you are doing the work the majority of your day. And then you try to fit in office work and things on the weekends or in the evenings. But the vast majority of your day is spent being a laborer. That's really the role that an owner needs to play. And if you get these roles mixed up and if you're trying to become like a really big entrepreneur and thinking like, well, I'm working on the business, you, at this stage, you're probably gonna lead unprofitable business that can't pass the sniff test. So you've gotta really focus on, okay, between 0 and 200, I'm just gonna become the best laborer possible and generate lots of revenue and become super efficient. Cause as the owner, the role that I should be playing is that of a laborer. But as you grow the business, and now we've passed the sniff test, we got a few employees. Now your role becomes that of a manager, which means I have employees underneath me that are doing the work for me. And, and this is usually between 200,000 to $800,000 in annual revenue. But then I begin to grow the business even more. And this is now where the role of the owner switches into being an architect. The architect doesn't build the building. They don't even manage the employees that are building the building. They step back away from the building and start to think about, where should I put the crane? Should I get another building put in this position? Acquisitions, who should I hire to become the manager and, and manage the labors? The architect steps back from the building as the business grows past 800,000 into a million dollar business. So there are two transition periods that I see being the big bottleneck and the hardship of scaling up and getting a bunch of employees. The first big transition is going from a laborer to a manager. And then the second transition is going from a manager when you're supposed to be a manager and in there with the team, to becoming an architect where you step back and no longer are you with the team as much. So the first transition is going from a labor to a manager. This usually happens around 200,000 in annual revenue. You can put ranges on that. But around that number is where most of your time switches from being in the business, doing the work, producing revenue, to now actually having to manage other laborers that are doing the job for you. So here are some of the problems that come up during this transitionary time. First off, increased callbacks and damage cases. Because when you were the laborer, you did everything perfect. Like there were no damage cases. You never messed stuff up. You didn't have bad online reviews. Customers were always happy. The work was always done right and to a high quality standard and done efficiently. And here we are with callbacks and people being mad and saying they didn't do this right at the property and you gotta go back and fix their mistakes. Decreased efficiency and profit margins. Because now as you transition from labor doing the work, producing revenue As a manager, you're actually overhead to the business. You're not producing any revenue for the business. In fact, you cost the business money because you're driving around all day managing employees, but not actually producing any revenue. So your profits go down dramatically. And this is again why so many people retreat back. They're doing 3, 4, 500,000 annual revenue. They'll go back to being a laborer because they're like, I'm working with all these employees and all the headache and the callbacks and negative reviews, and I'm not making any more profits. The reason for that is even though you doubled the business, your profit margins got cut in half because you're no longer producing revenue out in the field. And guess who was the most profitable, most efficient laborer? You. And now you're stepping out of the field, hiring people that are less efficient, less profitable. And now you are actually at expense to the business, doing estimates, doing admin, answering the phone, and trying to grow the business.

Accountability for your work. Like now with these employees, you've got to actually have something, what we call a yellow slip system, which means if they make a mistake, if there's a callback, they're going back. Because I, as the manager don't have time to, to constantly running around fixing all the mistakes for my team. I want them to take accountability for their work. And I'm going to use what I call the yellow slip system. So if someone has a callback, customer complains, it's gonna go on a yellow slip. That yellow slip is going to be red at the next team meeting in front of everybody, so that the team member who makes the mistake has to take accountability. And they're the ones who go back to the property, not me. I'm not the labor anymore. I'm the manager. And that could be a tough, difficult, trouble transitionary period. To stop jumping in and helping your team, you need to step back and manage. And if there's so many things breaking yellow slips and damage cases, it's a process failure on your part as the manager to train your team and to create systems like the yellow slip system to be able to make sure your team is actually held accountable. There's this massive feeling of loss of control when you become a manager. Cause you don't feel like you're in control of the labor anymore. And, and you're right, you've transitioned from your role as a laborer to being that of the manager. And so you're going to feel like you've lost control of the labor because you're no longer in the weeds of labor, you're in the weeds of management. And how do I actually get these people to show up on time? And how do I actually make sure they do the job without making a bunch of mistakes? That is a massive transitionary period. And this transition period is why a lot of people will give up on growing their business. They this transitionary period. The second transitionary period is when the role of the owner needs to switch from being a manager to that of an architect. And this is usually around 800,000 in annual revenue. If someone's a really good manager, sometimes they can go to like 1.2, $1.5 million still as being a great manager. But if you're going to continue growing your business sustainably, you've got to now become the architect. This is also a very tough period and transitionary point. Why? Because now you've got to delegate sales, operations, or admin. Typically, you're going to hold on to one or two of these still as the architect, especially to 800,000amillion. But if you're going to 2, 3, $4 million in annual revenue, you're going to have to delegate, in other words, give off these responsibilities to someone else to take on sales, operations, and admin. These are the three different parts of the business that I see you having to work on as a manager, but as the architect, you can't do all three of these. Well, sales is basically anything to get the job, operations is anything to get the job done. And admin greases the wheels in between. So, like running payroll and sending out invoices and answering the phone. These are the three kind of general categories. If you grew the business to pass 4 or 5 million, some of these would get segmented. But these are the three basic categories to get past a million dollars in annual revenue. But the question is, what? Well, which one should I delegate? First off, which one are you good at? A lot of times the one you're really good at. You should just focus on that thing. Which one do you enjoy? Cause you're like, well, I'm not great at sales, but I literally despise admin. Every time the phone rings, I get anxiety and I do not want to answer the phone. I'm really afraid of unhappy customers. Great. Delegate that then. So you can focus on sales. And if you're, like, not sure, you're like, I don't really care, or like, I don't really know. I'm at 8, 900,000. I'm kind of feeling stressed. I know I need to delegate some of these things, and you don't know which one to delegate. I recommend holding on to sales. Typically the owner in the architect phase, as they begin to merge and grow the business more, they'll still do the sales. That's usually the last thing that they'll delegate as the business grows past a couple million dollars in annual revenue. So the second thing is, you're there. Their 80%. Like the employees that you're hiring at this stage, their 80% is your 100%. So you're like, I want it done 100% right. If you have this notion, you never become an architect. You constantly are stuck in manager mode, and you're constantly micromanaging. And that's where the term micromanaging comes from, is you're not okay with someone else's 90, 85, even 80%. In my opinion, if someone can do 80% of the job compared to you, then delegate it. Like, let someone else take it. Why? Because progress over perfection. Instead of trying to make everything perfect in your business, focus on directional progress. Like, does I need to make more revenue? Will hiring more employees to do the work make that possible? Yes. Will I be able to do 40 estimates a day? No. I will need to delegate this task either to someone on the phone to do over the phone estimates or find an estimator to delegate. So be okay with someone else not doing as great a job as you, because if they're as great as you, guess what? They'd go start their own business and they wouldn't be working for you. And so ultimately, if they can focus 100% of their day on something you is one of a hundred things you're juggling, they'll probably end up actually doing a better job than you at that one thing. Like, if you're trying to answer the phone, answer text messages, do sales, do invoicing, do estimates, dispatch, manage the equipment, manage the crew. All these things. If you just delegated to someone who can do 80% as good of you at the phones, they'd probably, over the course of time, do a better job than you because they're focused 100% of the day on just answering the phone instead of all the things that you're trying to juggle. Systems at this stage are extremely important. If you can't become an architect, when you step back from the business and daily operations runs without you. When I say out of daily operations, I mean that when someone calls out or they're sick for the day, they don't contact you. That's when you're out of daily operations. In my opinion, systems are everything. Systems need to be put in place for everything. And I would also say, how do you create a system? Well, a system just basically makes a predictable outcome. You have certain inputs, predictable outcome. How do I make that easier? How do I make systems in my business simplify and standardize everything. You will create a expected output that happens over and over and over. So you've gotta be able to do this. Cause otherwise, as the manager, you're always inclined to be the system. Everyone comes to you with their problems. Everyone. Every unhappy customer, every employee that has a problem with someone else, every underperforming employee comes to you because you are the system. But you've got to get systems to replace yourself if you're going to go from manager to a architect. Accountability of the manager without micromanaging. So as you begin to grow past a million, you might get a general manager or an office manager or an operations manager, depending on if you are delegating sales, operations or admin. And when you get this manager, you're gonna have to make them accountable. So they have to drive results and metrics for the business. But you don't want to micromanage them. And it's a fine balance. This is very difficult as you switch from manager to architect. And this is why metrics are your friend. Cause they will be the thing that tells a manager whether or not they're doing a good job. Whether it be profit, whether it be response time, whether it be the close ratio, whether it be how much accounts receivable there is. Every single person you delegate something to in the business in terms of sales, operations, admin, make metrics the benchmark and then make them fully accountable and take ownership of that. Because then I don't have to micromanage them, I don't have to tell them how to answer the phone. I don't have to tell them to do follow up phone calls when they're doing sales. I don't have to tell them to do the equipment maintenance because I give them a metric that if they do those things, the output will be consistent with positive results.

The feeling of loss of control and the team. Because as an architect, as you move past this manager role and into that of an architect, you have less one on one time with your team. You might not even hire your frontline team members anymore. As you passed a million dollars in annual revenue. You don't even know their names. Sometimes you might not only see them but once a week. They're new to you new to the business, you didn't train them, you didn't hire them, you didn't fire them. And you start to feel like you're losing control of the culture and the management and the team. And this is simply a function of being in this transitionary period where you're going from manager, where you're very hands on, managing the team, to where now your role is actually to manage the managers, who they are the hands. They are the people that actually will deal with the team one on one. And this is also a very tough time. Cause you feel like you're losing control. Like I don't even know some of my team members. I feel like the quality's going down. But really it's a matter of like you are now managing managers and you will feel somewhat out of control when it comes to the labors. Now, these transitionary periods, these two that we've talked about, at 200,000 and, and 800,000 approximately in annual revenue, these are gonna be tested the most during two times of the year. That's during the spring rush when you're getting tons of leads just pouring in. And then also the off season when there's not leads coming in and you're actually losing money and cash flow is negative, which is horrible. And so because of that, I have full training. You can watch this video right here where I talk about the spring rush and the off season, how to manage this to make sure that those transitionary periods don't wipe you out and you don't retreat back to being a solo operator.