FULL COURSE: The Exact Systems I Used to Build a $1M+ Landscaping Business
A landscaping business owner shares the systems that built a $1M+ company: use budgeted hours instead of vague time estimates, standardized templates with a calculator, and pay-for-performance to track accuracy. Run monthly email campaigns to warm leads paired with hyper-local print and door-knocking. Schedule by weekly budget-hour capacity to forecast hiring, and track labor costs below 40% of revenue and recurring revenue above 30%.
Chapters
Alright, so in year number one, I want to talk first about the fact that when it comes to getting more customers, you're really going to have two different options when you first start your business. Either one, you're going to have money and you're going to spend it on advertisements in the form of Facebook, Google, Angie's List, HomeAdvisor, et cetera. Right? So you got either, you know, pay to play where you're going to spend money to go get these advertisements, or you're going to have time. Okay? Now if you're getting started and you don't have much money to go spend on ads, you're gonna have to spend time. So over here, again, pay is gonna be things like Facebook ads. And this carousel of different ad platforms you can use online is gonna always be changing. So this will always change as time goes on. But right now, Facebook Google Ads, and this can come in the form of YouTube, Google. Google has multiple different ways to advertise as well as the local services, et cetera. Also just obviously their AdWords platform. And then you have things like Angie's List. Angie's, you got HomeAdvisor. So all of these are online platforms to be able to spend money. We'll talk more About Angie's list, HomeAdvisor versus these other platforms down the road. But the second way that you can do this if you don't have money to spend on Facebook ads, Google Ads, et cetera, is you go spend time and that's literally knocking on doors that is going to be putting out yard signs, that's going to be putting up door hangers. So a great resource for this one again is going to be things like door to door. So door to door. And again, if you're going to go knock on someone's door, you might as well give them a price on a door hanger. So we actually have door hangers on lawn caremedia.com and let me actually show you one right here where we call them an instant quote. And these is what you can go and you have time. And while you're walking up to the door, you can literally fill out the price for weekly and biweekly search for mowing again. And then also put any notes that are relevant to the quote and say that the quote is good for seven days. Put the date up here. So this is a great formula to use if you're doing door hangers. Again, it's not taking you any money to do this if you're already going to the door and knocking on the door and they're not home, you might as well put something on there with a price so you don't have to call you for a quote, you don't have to come back for an estimate. It's already done for you. So we call these instant quotes. We got them for lawn mowing, we got them for molten installation, property cleanup. Just check out lawncaremedia.com you can get these templates, you can customize them yourself. And then all the customer has to do is literally take a picture of this and put their name and their address and their phone number, send it back to you and you have yourself a customer. So this is the type of thing you're going to do if you don't have a lot of money to go get these advertisements and drive a ton of traffic. Rather you have to spend time knock on doors, put door hangers, do yard signs. So anything that print media, flyers, postcards, et cetera, you're going to find that all on lawncaremedia.com so check those out. But even like postcards, you're going to have to spend it on what we'll talk about later, every door, direct mail campaigns and setting those up, that's expensive. So at this phase, if you do not have a lot of money, when I say a lot of money, if you don't have more than $500, you're gonna be spending a lot more time than money on getting your first 20, 30 customers because you don't have the money to go spend on all these advertising platforms. So you're gonna have to buckle your big boy boots on and you're gonna go knock on doors. Knocking on doors and talking to people is still the number one best way to get customers for a low cost. Your lowest customer acquisition cost is gonn on doors. Now this is not fun, it's not exciting, but hey, what's your option? You don't have the money to go spend it on getting free traffic.
Less sweat on your brow. This is going to take more money. But if you don't have the money, you're just going to have to do it with sweat equity. That's going to be knocking on the doors, talking to people. And when you go do that, when you knock on the door and you talk to someone, you don't have to be like super salesy. Just introduce yourself, say, hey, my name is Mike. I'm getting a lawn care business. Start in the local area. If you ever need anything, let me know if you're. And if they don't answer the phone or they don't answer the door. You're literally going to put a door hanger with a price on their front door knob. That's a fantastic way to do it. And by the way, if they answer the door and you've already filled this out as you walk up the driveway, you can literally say as you're introducing yourself, oh, and here's a quote just in case you ever need it. You don't have to be super salesy. Give it to them. If they are interested, they'll close the door, say thank you and goodbye. So that's what I would recommend you do. If you don't have money, use time. That's your first year. You're really going to probably have to be leaning on this unless you have a bunch of money stacked away to be able to do advertising. Now the next thing I want to talk about is the fact that your second spring rush is typically when you see a massive amount of growth. Typically that is when it really starts to, you know, hockey stick is in your second spring rush. Because a lot of times we'll get started in like our first summer, our first spring, we'll get our first 20, 30 customers. And that's all fantastic. You know, Augusta Lawn Care, I think our biggest first month ever from someone brand new. They got like 100 customers in the first month. That's not, that's not super common. And again, they had money in order to be able to spend on advertising. They didn't just have to rely on time. That time when you're knocking on doors and things, you're going to have to spend a little longer growing because you can't just immediately get a ton of customers. You have to knock one by one by one. You have to do yard signs. You have to get a little more guerrilla marketing. We'll talk more about that later when it comes to the marketing section. But in your second spring rush, this is typically what I see in most standard lawn care businesses. Your first year kind of goes like this. Then the winter kind of, it slows down almost to nothing. Like, oh my goodness. But then your second spring rush is when it really starts to take off. And so this is the second spring rush. And the reason for this is cause if you have a good website. So the reason for that is cause usually it takes six to 12 months in order for your website to start really ranking well on Google. And we'll talk more about your website, we'll talk more about getting Google reviews down the road and just how important that is to making sure that this Happens because again, all of this assumes that your website is really done well, that you do have a lot of reviews. So we'll talk more about that later. But assuming that you have a good website, assuming that you have Google reviews, your second rush, your second spring rush is really when you're gonna take your business to the next level and very, very quickly, you're gonna see massive amounts of growth. Exponential growth will happen right here. Because this is when demand for your services goes really, really high. For most of us it's like April, May, June, that' rush. And during that time, the reason you're growing so much is because now when people search for your services because there's demand that's higher now you start to pop up because your website is starting to rank well. So you can check out lawncarewebdesign.com we build websites for you. It's completely based on subscription. There's no long term contract, there's no 5,000, $10,000 up front that you need to spend on it. But that's going to allow you to get a really good looking website that will drive traffic to you. And after six to 12 months is usually when you're ranking at the top of your entire city, county, whatever you're targeting, your location is. And that's why your second spring rush is always when you take off. I consistently see this. Unfortunately, most people don't get through this lull right here, which is the first winter when you all of a sudden don't have any work, you have 20 or 30 customers. But it goes during three, four months where there's no growing season, there's no mowing, you don't have much of a brand, you don't have a very good client base to be able to tap into and be able to ask them for more work. So this is where a lot of people will qu, and that is their first winter. Because there's a lot of a drop off when it comes to the amount of work coming in. But if you have a good website and that website is starting to rank well by the year end of this year, 6 12, et cetera, going in when demand takes off, which is during the spring rush. As long as demand is high and you are the most relevant website in your local area, that is typically when I see a massive increase in the revenue and growth for a lawn care business. All right, now I want to talk about the fact that during your first six to 18 months, most of your leads are going to be some sort of paid marketing. Now that could be Online marketing that could be print marketing, like with postcards, door hangers, knocking doors, all that's marketing. Most of your leads are gonna come through that form of marketing in your first six to 18 months. And the reason for that is because you haven't been able to get your website to rank really high. You don't have any brand awareness, you don't have a bunch of trucks driving around. So, so people are not talking about you, you're not getting a lot of branding. You don't have people knowing about you. You don't have a large customer base that talks about you with their co workers and refers you to their friends and family. When that starts to take over after months six to 18, somewhere in here, you should be able to start getting most of your customers from existing customers, word of mouth and people just finding you on Google because of your website. Alright, so as long as you're investing into a great website, a great brand, doing really good quality work, typically the results really start to take off in that second spring rush. So I say that to give you encouragement cause this is a tough year. You put a bunch of money at the beginning, you're getting started, you're a lot of boots on the ground, working hard to get every single lead. This is very discouraging that winter time when your revenue dips down for that first time. Very, very discouraging. But that second spring rush that if you can just have a great website, get, get great good Google reviews, do good quality work. This is where now you have a brand, you have maybe 40, 50 customers going to that second spring rush that are talking about you getting friends and family. You might have a couple hundred people in your database that you can send emails to about your services going into this time. That's when you can really get a massive amount of momentum. Now the thing I want to talk about now is in that second year this is something you want to track over time and that is what percentage of of your revenue is coming from recurring services. So what I mean by that is if you take the amount of work that is project based work versus recurring, you can really break this down. Really simple. I said install.
Versus maintenance in the last one. But it's the same as saying recurring work or maintenance things that happen every week or bi weekly, you go back to the property. Recurring versus one time jobs projects. Okay, now what I want you to do is really try to focus as much as possible on building this recurring revenue. Now the thing about recurring work, this is mowing typically for us in the lawn Care industry, potentially chemical treatments, property cleanups, weeding services, et cetera. One time projects are gonna be like paver installs, wall installations, planting bushes and trees, pressure washing. All these one time projects, my goal is to increase the recurring work. But the thing with recurring is it comes like a trickle. For example, I might do door knocking next week and I got five customers and let's say two of them are mowing customers. Well, great, I just got two mowing customers and that might generate me $300 in the next month. Whereas those three other project based jobs might create $3,000 worth of cleanup, some mulch, install and some other planting some hedges or some bushes or something like that. So one time projects very quickly can ramp up your business and grow it and scale it very quickly. Typically, the landscaping companies that grow the fastest are the ones that focus on one time projects because you can scale it so much faster just because the numbers are larger. But what I want you to focus on is what percentage of your work is coming from recurring revenue and what you can do. How you can determine this is, okay, what percent, how much total dollars of recurring work is coming in every single month. So recurring dollars is what I want you to look at. And you can just usually use your CRM to filter out by service, your revenue by service, and then choose the services that are recurring, like mowing or treatments, whatever you consider recurring in your line of business, and then divide that by your total revenue for the month. Okay? And when you do that, you're going to get a percentage and it might be like say 0.46, that would be 40.
Of your work is coming from recurring jobs. Now I want this to be as high as I possibly can get it, but it's going to take a little bit of time to grow up. I typically see the first year in business someone only having a 20 to 30% of their work being recurring, because it's so much easier to grow your top line revenue using project based work. Now this is a trap you can fall into. You keep growing and growing top line revenue, but all of a sudden this number starts to shrink and all of a sudden you're doing 10, 15, 20% of your work is recurring. Now if your goal is to do just hardscaping and big projects and things, that's fine. But in my opinion, having a recession proof business, I want this number to be as high as possible. Even if I'm doing projects and recurring big one time hardscaping jobs, I still want at least 30, 40% of my work to be Recurring, even if it's, I'm not super passionate about it just to pay the bills because in a time of recession, recurring work mowing, those type of services are going to hold up much better than things that are with discretionary income like a new paved or patio or an arbor or some new bushes or whatever it might be. So I really want to try to focus on growing this. So this is a percentage, a metric that I want you to constantly follow and don't get discouraged. If your first year it's like 20, 30%, that's going to happen simply because it's so much faster to grow top line revenue using projects. And again, that is the tantalizing seduction that many landscapers will fall into is growing that top line revenue by simply adding more and more project based services. Okay, well we'll do paver patios. Oh, we'll do walls, we'll do water features. Oh, we will do tree services. Oh, we will install artificial turf. Like those are all different businesses. So just be aware of that trap of growing top line revenue simply by using one time projects and adding more and more services. We'll talk more about it later. But the two most unprofitable ways to grow your lawn care business is going to be through growing geographical expansion like servicing properties further and further away. And then the second least profitable way to grow your business is just adding more services. So I don't want to keep adding more services and taking more one time projects and different types of excavation. And now I'm going to do this and you keep doing that. Yes, you'll grow top line revenue, but you're not going to grow your profits because those are the least profitable ways to grow your business. I'd rather you focus on a couple services and go really deep and really, really scale those, even if it takes a little bit longer. I'd rather you focus on that recurring work and make sure you have that good base of recurring work instead of getting so focused on one time projects and just diversifying into all these different types of services. Try not to be a master of all when it comes to landscaping because otherwise you are literally running 10 different businesses. I would rather have one service that has $500,000 in revenue than a business that does 10 different services at $100,000 each. So I'd rather have a $500,000 business with one service than a business that does 1 million in revenue but 10 different services. Because that first one I can systematize, make it way more simplified. It's way easier to find labor and I can make it much more profitable. Now that third year in business is usually when you start thinking about salary. And as I mentioned in the first video.
Depending on how fast you want to grow, the business is going to determine what your salary is in year number three. Year three, you can usually start to make a decision, and that is, do I start to continue to grow and I'm going to really scale up past a million, or am I going to really focus on profit saving cash? And this is going to really be determined by your own personal situation. If you have family, if you're trying to invest in other things, if you're passionate about other business ventures or investing in real estate or something else, or you have family events that happen. Just keep in mind that if you're going to grow, what's going to happen is you're going to take as small a salary as possible and you're going to pump that in to capital expenditures like trucks, equipment hiring, marketing. That's going to be the formula for growth. And that might be what you want to do if you want to continue to grow, grow the business past a million. After year three, though, if you're like, man, I don't want to keep growing. I want to be a good general manager. What you want to do is focus on increasing your prices, which is going to increase your profits, and you're going to essentially increase your distributions in the form of owner distributions. And we'll Talk more about LLCs and S Corps down the road. But ultimately, an owner distribution is going to be something you take from the business, and you're going to increase that. As you increase prices, you're going to reduce your close ratio. You're not going to close 8 out of 10 of your jobs and get accepted. If you're raising your prices, but you don't care because you're not trying to grow the business. You don't want to have to go hire more people and buy more trucks and get a bigger shop. So these are the two different options you're going to have and the paths that you can go down, usually around year number three. Now, if you go slower, this might be year number five situation or year number eight situation. But just know that once you start getting the point where you have a salary, your salary, how big it is, is really going to determine which way you go. Because if you're taking a bunch of profit away from the business, you're not gonna have the money to invest in more trucks and more hiring in a bigger shop and more marketing and so you're gonna have to have a smaller salary if you're trying to do those things. So just keep that in mind and realize that if you are growing the business, just realize that you can't just say, oh, I'm unprofitable, therefore I'm investing all the money back in the business. No, if you're investing the money back in the business, it means you're buying equipment, you're buying trucks, you're spending money on marketing. If you're not doing those things, you shouldn't be very profitable. If you're not, it probably means you need to raise prices. It means you're doing things that are unprofitable in the business. You might need to cut out services, you need to raise your prices. You might not want to have an 80% close ratio, you might want to have a 30% close ratio but have prices way higher. We'll talk more about that in the future when it comes to pricing. But ultimately this is the sort of path you're going to hit. Sometimes around year three, but really depending on your salary and what you want from the business, this might be more of a year five decision if you've grown the business slower. If year number three, you're 1 million in revenue, this is probably the decision you're talking about. But if in year number three you're doing maybe 300 or 400,000 in revenue or 200,000, you're probably still in growth phase and you're going to be keeping your salary as low as possible, keeping your personal expenses as low as possible, and investing in the capital expenditures like trucks, equipment and marketing that are going to allow your business to continue growing top line revenue. If this is helpful, go to mikeandys.com where there's over 50 hours worth of online training completely free to help you grow your home service business. All right, so I add a little flavor to that by talking about LLC versus S corporations. So limited liability company versus an S corp. Now keep in mind that an S corp is what's called a pass through entity is not the equivalent of a C corp. How I've always kind of kept the two apart in my mind is C is the first letter of corporation and therefore it is a real corporation. That's not really the truth, but when you think about big corporations like corporate America, it's typically C corps, massive companies that have stock between hundreds of shareholders and they're traded on the stock market. Apple, Google, et cetera, those are all C corporations. But an S corporation is specifically built for companies with less than 100 shareholders, typically. Smaller businesses that are privately held, typically. And this is going to be a pastor entity, which means the income, the profit on this business is what you are going to be taxed on as your nominal income personally. So don't think that by putting in an S corp like you're somehow getting taxed at a different rate. You're not. That's a C corporation that you get a corporate tax rate on. Okay? That is not the case with the S corp. Any income that you get from an S corp is still going to be taxed at your nominal tax rate that you have personally. Now the thing that's different though is with an LLC you're typically you can take a W2 like pay yourself as an employee. Typically you don't. But even if you do, it doesn't mean it doesn't protect you from the fact that you're going to have a about 15% self employment tax. Okay? So any profits that come in the business, you're gonna have 15% tax right off the top and then you're gonna have your nominal tax rate. Okay? Now with an S corp it's a little different. I'm gonna have to pay myself a W2 or I'm gonna have to pay myself a salary or some sort of wage as an employee of the business. Okay? So some people are like, well, it's only savings that you get when you go to an S corp potentially. But the thing is, I also know I have to pay myself as a W2 employee and a W2 employee right off the top. I am paying into Social Security, I'm paying into Medicaid like all the other stuff. So I'm going to get taxed here like a regular employee, literally. So typically that's why what you pay yourself as a salary underneath an S corp, you want it to be as low as possible because paying yourself as a W2 employee is like the highest tax you can possibly pay. So to this day I have a very low and most CEOs and owners are going to have a very low salary because that's what you're going to get taxed the most at. So why in the world would I want to give myself a big salary? So when an owner that is a massive company, like I make $100,000 a year, it's like, yeah, that's your salary. No one cares. We all know that. We just have to do that for the irs. But you have to make yourself an employee, employee of the corporation under an S corp. So you do not have to pay the 15% self employment tax underneath this S Corp. However, you are going to if you file as an S corp from the beginning. So just hold on to your. Hold on for a second. If you file from the beginning, you have to do articles of incorporation which states like what happens if you know, certain you have a treasurer, you have a secretary, you have a president, all these different parts of the corporation and you have a board. And again at the beginning you might be all those positions but you still have to create the articles in corporation. And you also have to have annual minutes with an attorney to go over if anything's changed inside of the corporation. Now what's really, really cool is the fact that you're able to now file a form. This is for the US so this is going to be specifically for the US folks. Form 1120s, okay? And this is going to allow you to be an LLC that you started as an LLC but be taxed as an S corp. So you get the tax advantage of an S corp without having to file all of this stuff up front. Okay? So this is just a recent tax law that I would recommend you do. And that is start as an LLC and then talk to your accountant, talk to an attorney and when they think you're ready, any good accountant will know when it's the right time to file a form. L, sorry, Form 1120s, which is basically an election to be taxed as an S corp. And you can literally, what's really cool about this is you can file for this at the end of a tax year. So it's the end of 2025. You know, it's January 2026. I'm filing last year's tax return. I can elect in that year on the Form 1120s to be taxed as an S corp, okay. Without having to go through all of this stuff. Now this does cost money. Articles and corporation do admit that it's costly. So I actually would recommend you just file as an llc. And then after the first couple years, once you're consistently profitable, typically if you're making about 40,000 to $50,000 a year in profits consistently, then it's worth to do the Form 1120s and be taxed like an S corp. Why, why don't I just do it from day one when I'm a dollar profitable? Well, the thing is as an S corp, I have to file a separate tax return. So you're going to be paying 4 to $800 extra just to file the tax return. So there's definitely extra costs involved with an S corp. It's a little bit more complicated when you file for your annual report with your state, your secretary of state. If you're in the US you're going to pay more for this, you're going to pay more for that tax return to your accountant. Instead of just having a schedule C on your llc, you have to have a completely different tax return underneath this new form or being taxed as an S corp. So that's the kind of the difference between the two. Again, I always, almost always recommend you start as an llc and then you can always elect to be taxed as an S corp if it makes sense financially. Now, another couple things I want to talk about because we've talked about insurance, we talked a little bit about licensing and bonding and all that fun jazz. Now I want to talk about some things that are going to really impact your insurance that people don't take into account. The first being when it comes to buying new trucks, new equipment, especially if you have debt on it. What people forget is that if you have debt on a piece of equipment, like a piece of a truck or a trailer or something like that, there's a good chance that the person who owns that debt is going to require you to have a certain amount of insurance. So for example.
If I lease a brand new truck, I could literally be spending $250 per month on insurance because they require me to have very high limits and very low deductibles on my auto insurance. Now, if I buy a truck, maybe I have to spend more up front. However, now my monthly cost for insurance might literally be $100. So everyone always takes into account what you pay on the lease itself or on a loan. Same thing could go for a loan. Some people always, you can take that into account very easily with that monthly cost. But what they're forgetting about is the fact there's an extra $150 just in insurance per month, let alone the cost of interest or other expenses that come along with that lease or that loan. So keep that in mind. When people, a lot of times will forget about when it comes to insurance is when what is the cost of adding a piece of equipment that has a lease or a loan, not just in that monthly cost for the actual loan or the lease itself, but the actual insurance cost. Another thing that's going to affect your insurance is going to be the type of services that you offer. And a couple of the big ones that I always think of when it comes to insurance is trimming bushes and snow plowing, just trimming bushes above 12ft typically will be double or triple your general liability insurance cost. Also, if you are looking.
To do snow plowing, that might literally double your general liability as well. Those are typically services that have a high rate of injury and mistakes and very expensive mistakes. Like, if you're snow plowing, you could easily do $50,000 worth of damage by backing into a building or backing into a vehicle, taking a whole bunch of curbs out when you're snow plowing. Same thing with trees. Very possible you're dropping. If you're 15ft above the ground, very liable to get hurt. Very liable to be dropping trees and large branches that potentially hit a car or a house or a person. So those liability things, when it comes to insurance, adding those services, you might add 5, 10% to your revenue, but it might not be worth it if it doubles or triples, literally. I've seen tripling of general liability insurance from like 200 bucks a month to like $600 a month just by adding one or two services. So talk to your insurance agent and make sure that you are getting the right type of insurance for the services you provide. And then start working yourself backwards and realize that you might not actually want to offer all those services based upon the extra cost that it incurs when you add it to your policy. If you're trying to figure out how to grow your landscaping or lawn care business, go check out landscapebusinesscourse.com it's completely free and has dozens of hours worth of training on how to grow a business up to $100,000 in monthly revenue. All right, so I know when you watched that last video, you're like, truck costs have gone so much up and prices of used vehicles are so much higher. So that's irrelevant. I can't start a business for $15,000. Okay, great. But you started a wrong trajectory, and that is making excuses. So, yes, the cost of trucks have gone up since I went and made that video. Literally up until 2020, I never paid more than 6 or $7,000. I think the most expensive was $8,000 for any truck ever, using those parameters I just talked about in that video. But costs have gone up. So now a good decent truck is probably 12,000 to $15,000 just in and of itself. Now, to get started, I'd rather you spend on a junker five or six grand if it can just last you one or two years, because I really don't care about anything else than the money that you were able to Spend on marketing. Okay, so regardless of your budget, whether your budget for Your business is 5,000, 15,000 or 50,000, regardless of what your budget is to get started, I would recommend that you just simply focus on one thing and one thing alone. I don't care about your total budget. I care about how much can you spend on marketing. Because marketing was actually going to move the needle for your business and is actually going to drive results and get more customers. You can have all the trucks in the world, and I see this all the time, people will literally spend $50,000 on two trucks, a whole bunch of mowers, a trailer, a dump trailer, all this stuff. And, and literally they have zero customers. And they somehow think that getting the equipment and getting the trucks is going to lead to getting customers and creating a business with the complete opposite. You get a business by having customers and you just so happen to have to buy trucks and mowers and trailers in order to perform on the work and fulfill on the sales that have been given. So maybe very, very clear, trucks and equipment is all a means to an end. Getting line trimmers and gas cans and safety glasses and gloves and all that other stuff is simply a means to an end. And the end is doing work. And to do work, you must get customers. Getting more trucks and equipment does not move the needle for your business. It doesn't. You could buy all the trucks and have all the mowers in the world and your business would still generate zero in revenue. What creates a business is customers. So please, I'm begging you, stop thinking about your budget in terms of what can you buy trucks and equipment. Start thinking about what percentage of whatever budget I have can I put towards marketing. That's what's gonna be the propellant. Really? The propane, the gasoline. What's the word I'm looking at? Not propellant. The accelerant to the fire you're trying to build in the form of a business.
So if you're like, I only have $5,000, you might be saying, I have $500. That's fine. Here's how you can actually start your business with $0. And that is by focusing on the thing that actually matters and that's selling and getting more customers. So what you can literally do is go to people's house and you can literally sell them on project based work, like a property cleanup, installing mulch, and require 50% or even 100% of that project up front. Mr. Jello, it's going to cost you $700. You're going to Trim up all those bushes. I'm going to hollow those leaves off, I'm going to pull the weeds in your flower beds. I'm going to edge up this lawn. And you're literally selling something that you do not have the equipment to actually fulfill on. But again, you're putting in sweat equity to go get the customer. You're getting that $700, Mr. Jones. Fantastic. All I need today is a check for $720. We'll get this job done next Tuesday. That is what you need to be doing. And if I say next Tuesday, guess what I'm going to do? I'm going to go sell five more of the jobs for Wednesday, Thursday, Friday, next week as well. And what you're trying to do here is, number one, you're gonna go sell projects. Alright? So sell projects.
And you're gonna schedule projects and you're gonna schedule those jobs out in the future. Okay? So a week, two weeks, three weeks down the road, that's fine. That's gonna give you the more time you can schedule out, the more you're gonna have time in order to keep selling more projects and get more cash. And what you're gonna do, like I said, is gonna collect either 50% or even 100%, optimally, all of that project upfront. The third thing you're gonna do is you're gonna go buy the equipment. And somehow people do this all backwards. They go buy a bunch of equipment, then they start thinking about where they can do the marketing, then they think about getting customers. Completely backwards. If you have a whole bunch of money to burn, yeah, it makes sense to go get the trucks and equipment up front so you can literally sell the job today and get it installed and done tomorrow. That's great. But if you don't have the money, it's not an excuse. I don't care what your budget is up front. It's a focus on. You've got to sell first. Customers are the only thing that create revenue. Trucks and equipment do not create revenue. They actually cost you money. They are an absolute drain on the revenues of your business because they take fuel and you gotta fix them. And them sitting there and looking shiny does absolutely nothing for the valuation of your business. It is absolutely nothing to generate revenue. What does though, is sales. Alright, that's the only thing I want you to focus on. And what percentage of your total budget? At the beginning, I want you to think about how little can I spend on trucks and equipment so I can spend as much as possible on marketing? Specifically, why longcarewebdesign.com it's not a big front. Up cost, upfront cost. I want you to be able to get a great website when you're just getting started. And if you have the ambition to grow really big and do above 200,000 in revenue this year, you're a perfect candidate for long care web design because you don't have to spend $10,000 up front to get your website built. Same thing with marketing. Whether it be flyers or door hangers or Facebook ads or Google Ads. As much as you can possibly spend at the beginning of your business on marketing and getting more customers, that's what I want you to focus on. So instead of focusing on the price of the trucks or the how do you get the best deals on your mowers and if you should buy used or new, I really don't care. All I care about is are you spending money on marketing and generating new customers? Are you spending your time and your money on marketing? The only reason I really like financing my mowers, my dump trailers, etc. Is because as long as I can get 0% down, I like it because why? It frees up the cash so I can go spend it on marketing. I never regretted spending a dollar on marketing, alright? Never. As long as it's done correctly and I'm getting direct response and we'll talk more about that later to drive leads to my business. I've never regretted it because long as that marketing is being done right, I'm going to get a massive return on that money. I can't say the same thing about spending $20,000 a truck. If I spend $20,000 on a truck and it sits there, it ain't going to do nothing for my business. If I spend $5,000 on marketing, I expect that $5,000 to make me at least 50, 60, $70,000 in revenue this year. And if I sell it all recurring work, I can get another 50, 60,000 next year. So the return is much greater on that marketing dollars. Especially when you're talking about a small business. You need all the trucks, all the fancy trucks and equipment in the world. It will not bring a single dollar of revenue to your business. What will is spending money on marketing. And that could be as simple as having the money to print out some flyers and door hangers and things from lawncaremedia.com it could be getting a website from lawncarewebdesign.com or it could be spending money on Facebook ads and Google, Google Ads and Google local services and Yelp. Well, maybe don't spend money on Yelp. We'll talk more of that in the future. HomeAdvisor, Angie, all the different platforms. I'd much rather you be spending money there than the next shiny $20,000 truck where if you just spend half that money on marketing, like $10,000 spent on marketing will completely blow your business up. $10,000 extra on a truck is not going to get you any more customers. I'd much rather have a $10,000 truck and spend $10,000 on marketing than I would get a $20,000 truck. Then at the end of the day, when I get my $20,000 truck, guess what? It doesn't come with customers. Whereas if I have a, just a, if I just do a halfway decent job at spending $10,000 on marketing, I'm gonna get a lot of customers, a lot of customers and a lot of brand awareness that's gonna lead to, in perpetuity, customers coming to me so highly recommend. I don't care what, what your budget is. Ask yourself, how little can I spend on equipment up front to be able to just go start selling? And if you have $100 in your pocket, you literally should go get some business cards and maybe some door hangers and go pounding on doors and set up where three weeks later is when you actually do the work. So that way you can go buy the equipment based upon the down payments that you collect. That's how you should be doing your business. Get the customers, get the cash, then go buy the equipment and the trucks. Don't get it backwards. Buying trucks and equipment does not make you a landscaper. It makes you someone who knows how to buy stuff. And that is very simple. And it's all showy and everyone thinks you're great and you feel that warm fuzzy feeling because you got a bunch of nice trucks lined up inside your shop. And that does nothing for you. And that's why landscapers go broke, is because the appearance of success is what they're going for instead of the actual appearance of the bank account statement going up. Alright, so a couple things you want to keep in mind when it comes to your website, your logo, your branding, and that is the fact that it's not just about the text, the name of your business. It's also about the fonts, about the colors. It's about the things that are evoked, the emotions that are evoked when someone sees your logo, when they see your branding. Just the font, if it's a little more bubbly, like a bubbled text, looks more fun and Playful, or if it's more straight, it's more solid colors, it's lines are more vertical and horizontal and more boxy, comes across more serious. So whatever you want to evoke in terms of emotions with your branding is important to think about from every angle of your logo, not just the name of your business. And that's like throw whatever text we want on it and whatever font we want. But the colors are important. Like orange typically is going to be better for a younger audience, whereas dark blue evokes more trust. Like IBM, for example, their logos, dark blue. So all the colors, fonts, et cetera, go into a logo are extremely important. Now what my goal is, though, is to be able to take something that's more memorable than a name. So, for example, when you think about Apple, the logo alone, just the apple with a little bite out of it, that alone is enough for you to tell it, say, it's Apple. There's many logos that are created without the name of the company inside of it that we would all recognize, no problem. For example, with Augusta Lawn Care, even though this is Augusta Lawn Care, that's the text of it with the font. There's also the thing that actually people remember, and that is the part of the brand which is the dog, the mascot. That's what they remember. And the yellow trucks. Those are the only two things they remember. Oh, yeah, you're the guy with the yellow trucks and the dog on it. Those are the two parts of the brand that have become synonymous with Augusta Lawn Care. And your goal is to make it as easy for people to. To remember as possible. And the way that you make it easy for people to remember is you become consistent. So whether it be in your print marketing materials, your business cards, your online website, your online presence on Facebook and on social media platforms, you want your brand to be consistent so that people remember you. So that yellow, that dog is on all of our marketing at Augusta Lawn Care because we want to be consistent with that brand messaging so people remember us. Okay, so speaking of remembering us, I want to talk about your website for a moment and how you can make it better. Now, we@lawn careweb design.com Think about this stuff every single day. And some of you are going to be like, oh, you're just trying to sell lawn carewebdesign.com I don't want you to buy lawn carewebdesign.com if you're going to do a below $200,000 in annual revenue this year. So it might be a few years down the road for you and that's fine. But ultimately if you want, you want to have where the bulk of your estimates, the bulk of your leads are coming from non marketing activities where you're not paying for every single lead. After year two or three, you're going to have to have a great website that has great SEO. SEO stands for search engine optimization. And so some of these things I'm going to talk about here is about search engine optimization. Some of these things are when customers get to your website and they find you because you did rank well in Google, then what do they do? What does the design, what does the experience look like from there? So you can command a higher premium price from those customers. First and foremost, speed very important to Google. Now. It used to be back in the day you could put like your city name a bunch of times and you could put lawn care, lawn care, lawn care, landscaping, landscaping, landscaping and do a whole bunch of keywords and backlinks and rank really well on Google. Now they consider speed much more important because in growing economies like India, Africa, where they're also getting wifi, now they're also getting mobile devices. They don't have the fast Internet that we have in North America all the time. So what they do is they make sure that these are very light sites. They're fast to load. So if you have really a massive picture or video that takes forever to download and it slows down your site load time very, very bad. So speed very important. They don't like pop ups as well. Things like this in design is very important above the fold. Okay, now again, keep in mind you can use weebly.com, squarespace is another option. You're gonna spend 20, $30 a month. Totally fine. Don't think that you have to use lawncarewebdesign.com to get started. But I do believe that lawncarewebdesign.com is the best solution if you're trying to scale your business and get lots of leads without having to keep always be spending money for marketing. Alright, above the fold. That means that when you show up to the website, the first thing that loads, I want it to include the estimate request form. Because the estimate request form is the reason why I have my website. The purpose I have in getting the customer to my site is for them to fill in an estimate request form. What is the thing that you want your site to do? It's not just like a random place where you throw a bunch of pictures and you throw a bunch of information on there you should have a goal. And the goal should be to get more customers and get people to, to fill out an estimate request form, email you, give you a call. So make it easy to do that. And one of the best ways to do that is above the fold. When they first come to the site, what do they see? They should see your estimate request form because that's likely. What they're trying to find on your website is submit their information to get a quote. The last thing they want to be doing is scrolling to the bottom of your website or going to a different page. Put your estimate request form right front and center above the fold. It could be off to the left, it could be off to the right, but above the folds. You don't have to be scrolling a bunch trying to find it, etc. The next thing we're talking about is showing your brand. Not stock images, not random lawns with stripes in them. Show your brand. And your brand should be again your colors, your logo that should be on your truck, your uniforms show your brand. And I don't care if it's work that you've done, that's fantastic. But it doesn't matter if you're going to just slap on a, an image that everyone else is using on Google. Even if it is your own work, if it doesn't show your brand, they don't know that you didn't just grab it off of Google. So yeah, it's great work. You did it into great paver patio. The customer does not know you installed that paver patio. For all they know, you could have just stole it off of the Internet. So make sure that picture with the paver patio has your truck in it, has your uniforms in it. That's like your signature. Your logo, your uniforms, your trucks are like your signature. Make sure it's unique. Make sure it shows that hey, this is our work, that we did this. Otherwise customers are going just, ah, they could have just got that off a line. Who knows that? You know, I saw and I saw, I always got this. I saw that retaining wall on your website. I want one just like that. And you're like, oh great man, which one is that? So the fact of the matter is you just grab that picture off of Google Images and you threw it on your website. Don't do that. This is the most valuable real estate your business has is your website. So show your brand. That consistency of color text logo. Your trucks and your uniforms should be the thing shown in all your pictures and things on your website. Next thing, mobile friendly. Most traffic now is gonna be coming from websites that are being loaded on mobile devices, cell phones, tablets, et cetera. So make sure it's mobile friendly. And you should literally have two different designs, One for desktop, one for a mobile device. If you're using the same one, that's gonna mean when you get on a small screen, you have to pinch in and try to make it bigger. Google's gonna penalize you for that. So a lot of this has to do with the speed. The mobile friendliness has a lot to do with ranking well on Google and having great SEO, search engine optimization. But then the last one is, how about the picture, video and design of your site? Does it convey a premium product, a premium service that people are willing to pay a premium price for? If not, that's why you should invest in your website. People are like $399 a lot of money for longcurrentesign.com trust me, it is the best money you'll ever spend. Compared to $400 on a mailing or Facebook ads or Google Ads, that's $10 a day. Honestly, having great pictures, video that loads well. Design of your site. The way things slide in, there's a cohesive message. For example, we did Spencer Lawn Care's website and we took the little hexagonal image of their logo and we put that throughout the whole website, made it cohesive, brought the brand image together. I can guarantee you, if you have a great design, people are willing to spend an extra 10, 15, 20% more. They know you're a premium product before they even call you. They're not gonna call you being a tire kicker. Cause they're gonna see a great website and be like, oh, well, this person's not gonna be doing a $15 cut. And this is the whole goal with your website, is to screen out bad customers and only attract the customers that you want that are willing to pay a premium price for a premium product. Another thing is part of that mobile friendliness is having a phone number that's clickable. You don't want to be having that where they have to scroll in, copy it, paste it in their phone app. Like, goodness, you're literally on a phone. Make the phone number clickable, so when they click on it, it immediately calls you. The whole goal is to get them to contact you. So don't make it hard. Make your estimate, request form, your phone number, your email, your contact form, whatever. It is as easy as possible for them to actually fill out. Because you're literally going to get 30, 40 seconds for customers to be on your site in that 30 or 40 seconds, you've got to display the fact that you are professional, that you have great awareness as where the customer is going to click. And you've got to make sure that it exemplifies your brand, that they remember your brand. Not some customers clipart, not some great straight lines on some picture, but it shows your brand. This is very, very important. It's the most important thing I possibly could share when it comes to marketing is your website. So please just take time, take energy, set aside your marketing budget and look at what you can spend again. Weebly.com, squarespace.com, even shopify.com is a great way to be able to build sites for relatively cheap use. Lawncarewebdesign.com or once you are looking to spend more, you have a marketing budget that's more than $400 a month and you are wanting to do above $200,000 in annual revenue. This year we consistently see clients. Again, takes three to six months to rank well on Google. But then that second spring rush, if they have a long careerwebdesign.com site, they just triple, quadruple their business because they're starting to tap into those leads that do not come from spending money. Every single time I get a lead, If I get 100 leads from this every single month and I'm spending $400 a month on LongCourrecteSign.com, the cost of that lead is $4, whereas I might spend $50 if I'm using other sources like Google or Facebook or print marketing, I might spend $50 to get a lead. And I'd actually be okay with that in a lot of those instances. But I can do $4 literally just by having a great website. The local shop here last month had over 500. No, sorry, 400 estimates. That literally means we were paying less than a dollar per month. If I was paying 399 per month on lawncarewebdesign.com People always want to say I'm trying to sell things or whatever. Honestly, we make about $120 per month in profit and that goes right back into creating this content, creating free stuff on my YouTube channel. So I do recommend it. I believe in a lot. And that's why I talk about it here at the beginning, just to emphasize how important your website is as we go into digital age and after Covid 2020, 2021, all the baby boomers, all the older people, they got online, the people that were afraid to put their card information in. People that were afraid to go on websites and click on things and they were worried about their security. Now they were ordering things on Amazon and getting delivered to their front door. Now they were the ones that were on Facebook all the time. So that digital shift for that baby boomer just emphasizes how important, how important your website is in this digital economy. Now some people will say that the only way to start a business is just go in 100%, jump in the deep end and don't try to do a part time job on the side or keep doing your nine to five. And I think that's the right move for a lot of young people or people that don't have a lot of obligations. You don't have a lot of debts, you don't have a mortgage, you don't have a car payment, you don't have spouse, you don't have kids. These are things that are going to like, some people would say tie you down, but I don't believe that. I think it's a matter of like, you have obligations, you have things that are important that you need to take care of and you can't just throw every dollar back into the business. So I'm a big believer of you can ease into it, you can get started part time. Now another alternative to what I just talked about is where you still keep your 9 to 5 job and then you have someone else work the lawns throughout the week. You can literally get to almost 100 lawns because you could literally have someone out mowing in the field doing 10, 15 lawns a day. And then you help them in the evenings, you help them on the weekends and you can get a lot of work done, you get some projects done on the weekends with them and you really grow the business to 15,000amonth by just having a full time employee out in the field working while you do your 9 to 5 job and they're out doing the lawns. Now the way that this works is if you have a high paying 9 to 5 job. If you're doing 15, $20 an hour working doing roofing, there's no point in paying $15, $20 an hour for someone else to go mow the lawns for you. Alright? But if you're making $70 an hour, $80 an hour as a software engineer, it's probably a good investment to go hire someone for 15 or 20 to go do the lawn care. Alright? So if you have a high paying job and a lot of times this is what happens, you hate Your job and you want to have your own business, you want to have your own lawn care company, that's what you're passionate about. But in that first year, that first one or two years, you might actually keep your job and then have someone work for you out in the field at a much lower rate. So that's a good option. Again, a great way to subsidize and slow down, migrate over into business ownership. Because maybe you can't live on what you're going to make on that long care business. You can't put every dollar back in. So what you can do is keep your 9 to 5 hire somebody out and then your profit margins are going to be lower because you have someone to hire. But then you can take every one of those dollars in profit, shove it back into the business, keep growing it, and then eventually one day you're like, oh my goodness, I made more in profit on my lawn care business than I did at my 9 to 5 job. That's a good time to switch over, over to going where you now go full time. And that's a massive catalyst. A big shift to growing your business is when you go from part time business owner to full time business owner. So a couple things you gotta keep in mind though if you're doing this, if you're gonna hire someone else while you're out working all day long on your job. Now some people's careers allow you to have the flexibility to be in touch with your crew all day long. But most jobs, if you're in meetings or on appointments like you can't, there's gonna be hours of time where you can't actually interact with your employee out in the field. And that can be pretty scary. A little bit dangerous too if they have a flat tire, if they make a damaged case, if they get into an accident, and now you're not available for a couple hours. So ideally you're like working from home or something like that where you have more flexibility, but assuming that you don't, you're gonna need certain things to make sure that this employee stays efficient. Because the worst thing that I see is when, when people do this, they have their own job and they hire out the lawns. The thing I see the most is inefficiency. Okay, I see this all the time because now, inefficiency, I spell it wrong. Alright, whatever. What I see all the time happen is someone has their nine to five, but then the person that they hire is so inefficient, they stopping at gas stations, taking 20 smoke breaks taking a nap because it's unmanaged labor. And we'll talk more about this later. But unmanaged labor, which is the largest variable cost in your business, is labor cost. Especially if you have just one employee. You might make $10,000 a month in revenue on them, but like 4,000, 5,000, that's going out the door to wages. So you got to make sure that they're extremely efficient. And so what I recommend in order to combat this is use P4P. We'll talk more about this later. But especially if you cannot manage the employees throughout the whole day and you have your own job, you better make sure they're getting paid for performance. They're getting a percentage of the labor revenue that they make for the business every single day. You can check more about this@p4psoftware.com I own this company. The training is completely free and we're going to talk more about later in the course. But it's extremely important that they're on P4P. So that way when you're working and doing your job, you know they're being as efficient as possible. They're not taking three hours to go get a belt because it broke on the mower, right? You need to be, okay, how can I most efficiently drop by the shop, drop by the dealer, go grab the belt and get back to getting the work done. So P4P, extremely important. Now you could also do things like truck trackers. I'm less inclined to really care about truck trackers because guess what, if someone's a bad employee, they can still make, if they know that you're tracking their truck, they can still make it look like they're working. They'll just now be on their phone for five minutes after every single job in the truck. Alright, so people getting truck trackers and recording their employees and audio recording. Honestly, if I don't trust them to drive my truck, I'm not gonna track them and do audio and video and all the rest of it. Now I do like having a GPS on the trucks, mostly for the fact that most truck trackers now that you plug into the computer of the vehicle, you can see a live updated map of where they're at. So if they do get into trouble, if they get in an accident, you know exactly where they're at. It also gives you really good mechanical information. So if you're out working your job, you know, okay, the tire pressure is low, the oil needs changed, there's a part on the truck that needs to be fixed and replaced because you're not in the truck every single day. A truck tracker might be actually a really good investment for you. If you're doing your business, you're doing your work, and then the business is being ran by somebody else working out in the field. But this is the one that's going to be the best in terms of making sure that the employee is thinking about the business's best interest throughout the whole day, because it aligns their best interest. They make a percentage of the labor revenue they earn for the business every day. So being on P4P is extremely important. Now, I do recommend if you're doing this option, it's important at least the start of the day. But optimally, the start and end of every day, you still make connection with the employee, especially the start. And I just find so many times when an owner that is working their own 9 to 5 doesn't get the day started, doesn't get their crew started in the morning, it's very difficult for that crew to get their day started off correctly, have the tool, tools and equipment they need for that day. They just need someone to kind of check home base with, check in with, see what they need for the day, ask any questions that prevent so many damages, so much downtime, so many unhappy customers, if they can have someone they can just start the day with. So my recommendation is, if you're doing this kind of split start where you're doing your nine to five and you hire one or two people to do the lawns, try to at least get them started in the morning, connect with them, go over their route, touch base with them, make sure you have great communication. If you're doing this with a WhatsApp group, you're communicating with them throughout the day. And if you're not able to communicate with them throughout the day, you better make sure they're on P4P and you better make sure that they have some sort of accountability to the profitability of the business so that they don't just sit around for two hours because, oh, my tire was flat, so I sat there for four and a half hours until you got off work. You've got to have someone that's accountable, someone that's on the ball and really trying to get their job done. And I don't mind if I have to pay them a little extra. I don't mind if I have to pay them a bonus or a profit sharing to make sure that the work is being done profitable. Because a great employee can easily do two to three times as much work as A C level horrible employee, an employee that you can't trust, an employee that saps the clock is on their phone all the time. So trust me, having these things is very important. Important. If you're going to have that hybrid model where you work a 9 to 5 and you hire someone else out again, I'd only do that if you're making probably more than $40 to $50 per hour at your 9 to 5, your current salaried position, your job, then it makes a lot of sense to go buy get someone for $15 or $20 an hour. If you're making 20, 25, even $30 an hour, it's not worth going hiring someone for a little bit less because you're going to be the most efficient employee. So even if you're paying someone $20 an hour, if you're making 30 or another job, I just start your lawn care business. Honestly, you're going to be way more efficient than any other employee because you have the business ownership and equity in the company. So keep that in mind. But it's a great option if you want to grow this business up. Even if two, three, four employees before you actually become full time down the road. Are you tired of paying Google and Facebook a whole bunch of money and not really seeing any leads? If you want a custom website built for you in the next six weeks, go check out homeservice web design.com all right, so I want to elaborate a little bit more. I know that first video is most about Lawn Pro and that was the focus several years back. But I want to go to go over other options when it comes to your CRM, your customer relationship management tool, it's going to be the driving force of your whole business. Like it's important decision. I understand sometimes funny how people always debate about the best software. Usually they just sticking up for the one that they chose. So let me kind of give my unbiased opinion on this because I do not have any shoe in the game and I've tried a lot of these out. So a beginner company, you know, doing under 400k. I still kind of stick to the belief that Lawn Pro is a good option for you. And they've changed their subscription now to it's not a one time payment, it is more of a subscription. So Lawn Pro or Yardbook is also a good option. Yardbook, there's actually a free version of Yardbook. So that's why I recommend for a beginner if you're gonna do up to 400k and that's as big as your business is gonna ever get. I'd just stick with one of these bad boys. You're gonna be looking at like between $30 and $50 per month in terms of cost. Okay, then if you're a mid sized business, and when I say mid, I'm talking like 400k to 1 million in revenue, that's what I'm going to recommend. Jobber. Okay. Jobber is a great platform, but you are going to be looking at 100 to $300 per month in costs. Okay. So again, if you're just getting started, but you think you're going to get here within three years, I'd probably just start with Jobber. Like if I'm just getting started, but I know I'm going to scale really quickly and then we get to, you know, 5, 600,000 relatively quickly. I'd probably just start with Jobber and realize that the extra several thousand dollars I'm going to spend on the software is going to save me a big transitional period. But if you're just trying to get to say 250 grand, like that's doing on the side one or two employees, I would just stick with lawn pro yard book. Okay. Now if you're going really big, whether that be in the future, like you're doing this, you're just getting started and your plan is to get to. If you're planning to grow, I would just start with that software because the transition is a pain in the butt. Switching from any software to another, you're gonna lose a lot of card information, typically you're gonna lose a lot of customer data, job notes, et cetera. So if you're planning to grow to a million dollars anytime in the next five years, I'd just start with something larger. Now I used to recommend service autopilot. I can't recommend that anymore because I don't believe they're gonna be on the cutting edge in the next five years. So the ones that I recommend now are ServiceTitan as well as ServiceNow. Now the reason I recommend these companies is not because I think they're the best necessarily. Right now I believe when I'm looking at CRM, I'm looking like five, 10 years down the road, what's gonna be the best option? And when I look at ServiceTitan, which has bought out a ton of other companies, is very well capitalized and is taking over the service industry. And then when I look over at ServiceNow, it's a publicly traded company so it has access to massive amounts of Capital in Wall street and is a multi billion dollar company. Both of these companies are gonna be huge and they're gonna take over the market. Okay. We're gonna see a massive consolidation in the CRM industry around the service based businesses. There's other CRMs that are much larger like Salesforce, but it's not gonna be super beneficial for most lawn care landscaping companies. It's gonna be most beneficial for sales organizations and they have service versions of Salesforce for example. I wouldn't actually mind putting Salesforce in here honestly because now they're getting very, very customized and niching down on service based businesses and they're customizing their software for service based businesses. However, I find that these, these other CRMs that are very specifically for the service industry, they're built in a way that it's just better than something that's very, very customizable like Salesforce. If you're really into integrations, these larger softwares are gonna allow you to integrate with Zapier into calendly, into mailchimp. And if that means absolutely nothing to you, then you're fine, you're not gonna be there. Stick with these guys up here. But if you're really getting a large company and you're doing multiple million dollars in revenue, you need to be with a company that's gonna be on the cutting edge of automations. They have a lot of money that goes into development. I know from developing p4psoftware.com that software development is extremely expensive. You're paying hundreds of thousands of dollars for a developer per year. So you've gotta be with these companies that are going to be on the cutting edge. They have lots of money to invest in the best talent and creating the best software and something like service Autopilot. Five, ten years ago I thought was great. Now I just don't see them being great in five to 10 years because of their leadership. So I can't really recommend them anymore. I think they're great now. Even now I think they're pretty good. But I think in five to 10 years they're not going to be ahead of the pack. They used to be in terms of their automations. It was like kind of cutting edge first in the industry but now everyone else is catching up if not surpass them. And I don't think believe in five to 10 years they're going to be ahead of the pack. These are the companies I feel like that because of the consolidation that's going to happen and is already happening in this industry, you're going to see these companies really take off. And if you're going to stay smaller, just stick with one of these. Because the cost is so much less down here. These large companies, you're going to be paying $300 plus per month easily. You might be paying upwards of $1,000 per month by the time you get integrations and automations and a whole bunch of other options, but that's gonna be necessary. If you have 20, 30, 40, 50, 100, 200 employees, it's worth it to spend a couple thousand dollars a month to get that efficiency, that automation, the integration with other types of software. But again, for most of you, if you're doing this on the side, if you're just growing a couple employees, I'd stick with Lawn Pro or Yardbook. And I don't have any affiliate with any of them. I'm not paid by any of them. This is just my unbiased opinion. If you're doing midsize and this is the goal of your business in the next five years, I'd just stick with Jobber. Very, very user friendly. This is like the best in the world. The only reason you'd ever want to get outside of Jobber is if you're growing so big, where you need a lot of integrations, you want some customizations, you want to do a lot of stuff that is outside of just the realm of a regular CRM where you're bound to certain where the button's at and you want some customers customization, you're going to want to jump down into a more premium product, enterprise level software. So hope that's helpful. All right, so my opinion is somewhat evolved, especially when it comes to the trucks because I'm not a big believer in having white trucks. I believe that you got to stand out. There is a bazillion white trucks on the road. Every single white work truck is there's a bazillion of them. And you've got to stand out and you've got to make your brand synonymous with your truck. And so I want you to either wrap your truck or paint your truck. At Augusta Lawn Care, we paint them yellow. You'll figure out what your colors are with your logo, your fonts, your mascot, and then figure out the color and either wrap it or paint it. And for some people it's like super dependent on where you live. There's some places with Augustin Lawn Care, they can paint their truck for 500 bucks. And there's other places that cost 3,000. So whether or not you should decal or paint is really going to come down to your local market, get a few different bids. If you're, you know, in our market. Cost me about $1,000 to paint a truck, to do a wrap, A vinyl wrap on the whole truck would cost like 4,000. So it's very easy for me to figure out paint now if they're comparable in price. You know, vinyl looks really good up front. And the problem I have with vinyl wraps, though, is if they get dented, scratched, ripped, and then they start to peel, it's not like you can just like replace a small part of it if it gets damaged. Like you get, you know, if you knock into something, it can literally start to peel the whole thing off, where with paint, you can buff it out and then you paint over again and it looks brand new. So I kind of like the paint if everything was held constant. But I know in some markets it's $1,000 to do a vinyl wrap and $2,000 to paint. Well, then you should probably just do the vinyl wrap because it looks really good. Vinyl wrap looks fantastic. But again, if you dent it, if you scratch it, if you run into a side panel of a fence and scrape off some of your vinyl, it's not like you can just cut it out and replace that one part. It'll start to peel, it can start to wrinkle, can start to rip off and not look good in the long run. So I like painting the trucks and then doing the decals as like the phone number and the logo, things like that. That with being done with vinyl wrap. And we usually spend like a few hundred dollars on that portion because those are just stickers. You can pop them on there really easy. And most people think that our trucks are wrapped completely because the yellow. But we paint those and again, we've had accidents where something gets smashed. It's like, hey, the quarter panel, let's just buff it out and repaint that one side. It's a lot cheaper than trying to rewrap the whole thing. Okay. Okay. The next thing is enclosed trailers. I am not as big of a fan of enclosed trailers I used to be, mostly because the cost of them have gone up so much. But also do the fact that they're really thin sheet metal. Like the metal on those, those enclosed trailers is so thin, unless you get really, really expensive ones. But then they get so heavy and like. Yeah, like most entry level enclosed trailers, very cheap materials. Both the flooring, like the plywood, we would double. Like, if you're gonna do an enclosed trailer, I would double up your plywood on the floor. I would also put like a, a liner down as well. Like it helps. I would recommend that because if you don't and you're putting zero turns in and out of a very thin plywood, it gets warped over time and it's really, really bad. Especially if you have clippings and water that comes in there. It just can warp that plywood. The floor, the base of the enclosed trailer super quick. And we had that happen all the time. So we ended up doubling up with sheets of plywood and then re putting a rubberized layer down. It was great. But it costs like thousands of dollars to do that right correctly every few years. And the sheet metal gets dented really easily. Like you hit a rock going fast enough, it's like a baseball sized rock. It can like literally smash the side of the trailer. And if you have to paint the trailer and decal the trailer and all of a sudden like we're looking at $10,000 for an enclosed trailer, getting the flooring done correctly, putting the decals and painting it correctly, it's a lot of money. So I've actually transitioned away from liking enclosed trailers and I've actually preferred trailerless setups. Now if you need a trailer, you can get an open air trailer. But there's still downsides. Things can get stolen easier and it's not that self kind of storage of an enclosed trailer. The reason I would get an enclosed trailer is if you're parking that trailer at your house or a place where there's not great security and you can't have it enclosed, you can't put your tools indoors. That's when enclosed trailer is the way to go for the sake of security. Other than that though, you can for half the price. You can get a utility trailer, an open air trailer and much, much cheaper. But again, you're going to assume that you're going to have to take the tools off each day and put them indoors or you have some way to lock stuff up because it's not very good security. The best way though, in my opinion what we've really tried to stick with is what we call trailerless setup. That's where you don't have any trailer. And this is only going to work as either a you are using zero turns is fine. You can literally get like a 52 inch zero turn in the back of a truck and that's fine. But you're not gonna be able to do that and have clippings. So in our market we debe clippings Therefore, we're not able to get big mowers in the back of our trucks, because we also have to put clippings in the back of the truck. So keep that in mind when it comes to getting a trailer setup is do you have to bag clippings? If you have to bag clippings, you're not gonna have a big mower. Then you're gonna need to get a trailer. So what do we do? We have either a ramp rack, which is between 2000 and 3000, now 3500. To get one of these big ramps put in the back of your truck that come down, and then it gives you an extra few extra feet on the back of your truck, too. So that's helpful. That's what we use currently, but it's gonna be pretty expensive. You can get the sport edition for under 2000, but the full version that we like is like 3500 plus with shipping and everything like that. You can also use a cargo carrier, which is what they actually use most time for, like wheelchairs. It goes on the hitch of your truck. But you're only gonna be able to get a push mower on there. Like, a 21 inch push mower is what you're gonna be able to put on there. But that's only gonna cost you a few hundred bucks. So these are great. Trailerless setups are really, really good for urban areas. We have tight neighborhoods, lots of houses in one area. You don't have to do a lot of driving. You don't have big mowers. Trailer setups are great. You get a cheap truck, you don't need as big of a truck because you're not hauling a massive trailer with a whole bunch of equipment inside of it. And better yet, you can get more setups for the same price. Instead of paying $100,000 for two setups, because those two setups have two zero turns each and a big trailer and all the rest of it, you can literally get like five or six setups because you have a trailer setup with smaller mowers on it. Okay? So another reason why I don't like enclosed trailers is you got, like, the axles, the brakes, the tires. You go through tires on those enclosed trailers, like, like crazy. Like, we would go through tires, a set of tires, like, every single year. Because if you have a tandem, like, two axles, they're constantly being turned and being rubbed incorrectly. And, like, the tires all the time. Then you got brakes, and you gotta make sure they're plugged in. You have a Trailer brake system from your truck cab. And you would have to put new. Install new controllers in there like it was a headache. I don't want to deal with it. Trailer setups are fantastic. Okay? I would recommend doing that unless you need the. The enclosed trailer for security or two open air trailers and utility trailers for the sake of having large mowers and need to bag clippings or have multiple. If you need multiple mowers, like big ones, you're not gonna do that on a trailerless setup. Okay? All right. Last thing I wanna talk about is when it comes to mowers is using residential mowers instead of commercial. I talked about in the previous video about, hey, the most important thing is your dealer. And that's important. But we found that actually instead of trying to use a commercial mower for say five years, I'd rather maybe use a residential mower, like a push mower for two years and then just throw it away. But if the mower is literally like 25% the cost of the commercial mower, it might actually make more sense. So we always used to use 20 inch Honda push mowers, but the cost of those went from like $1,100 to $2,000 plus. And we couldn't find any because the shortage in 2022. We couldn't find it anywhere in our entire state. It was horrible. And they were like six, eight months booked out. So we started using residential Honda mowers that were only 6 or $700. And all of a sudden we started realizing that the guys liked them more because they were light. And the same stuff broke on the commercial mower versus the residential mower. And that's the pool string, cable, stuff like that. But it was so light that the guys enjoyed working with them so much more because it was less wear and tear on their body because just so much lighter, the whole mechanism was probably like half the weight. So I'm not against having residential equipment. Just know you're gonna have to switch it out more often. And typically the things that break on it are plastic pieces instead of metal, which you're getting on the commercial model. So if you're okay with less long longevity, but having a lighter workload and less wear and tear in your body, not a bad idea to use to use some residential equipment. I've seen the same thing done when it comes to zero turns. You can get a 3, $4,000 zero turn that's residentially rated, but last a few years versus one that might cost 10,000 for an equivalent size that's commercially rated. And yes, the deck will never, you know, have an issue wherever it's, you know, welded instead of stamped, for example, stamped being the residential cheaper model. But again, if I can get three of one for the cost of the other commercial, it's like, my goodness, can I literally burn through three of these mowers before this one even goes out? Or is it just a matter of like it's only twice as longevity. But this one has, I can get three for the price of one. So you've got to do the math. I'm not opposed to using residential though. I'm really not.
Just make sure that you're getting a good brand again that you can get your dealer to fix. But if a motor goes out on a commercial mower, I'm still throwing away the mower and I'm getting another, a different one. Well, if that's happening occasionally because people forget to put in oil or do something stupid, I might as well do it on a mower that is one third the price a residential mower. But most importantly, we've seen the wear and tear of on people's bodies for the push mowers. People actually really prefer the residential mowers. So I take it back a little bit of what I said years ago and that is use commercial mowers only because as the cost of them have gone up through the roof and as they're harder to find and they're very, very expensive, it starts to make sense when they're three or four times the cost of a residential push mower. You've got to do the same math when it comes to zero turns. Just remember it's all about your dealer having a good relationship with them to when something breaks down, they give you a loaner. When something breaks down, they get a part, they got stuff in the backlog. Instead of just using something from Home Depot where literally you either replace the whole thing or you know, go figure it out, go find online parts. Good luck. That's what you don't want. Alright, so this is the beautiful thing about making updated videos and that is the fact that back then I said no less than $30. Honestly, I truly believe now that number is $50 minimum in order to charge and be a profitable business. I've seen businesses is try to go below that, especially in the commercial maintenance kind of sector. But it's very, very thin margins. I just, I don't want to be in that kind of business where I'm running a 5, 10% margin. And so I think instead of $30. I'm updating that officially to $50. Honestly, the goal with Augusta Lawn Care is we want to be charging over $100 per hour, but 50 minimum to just make a half decent business. Now, with the cost of labor going the way it is, once you hire someone, pay taxes, pay all the different things associated with hiring employees, Social Security, unemployment, payroll taxes, you're looking at $25 an hour just to have them there. So you can't be charging no 30 bucks an hour. It's impossible. So if you're going to run a legal business with insurance and everything, you got to be charging $50 plus an hour, in my opinion. And in my opinion, I don't want to be running really low margin business. That is just not a game I want to be playing in. So the next thing is something else that has evolved with time is the fact of determining the hourly rate. Okay, so determine hourly rate. In the video in the past, I talked about hourly rate, et cetera, and how it's your secret sauce. It's something that you don't necessarily tell the customer what your hourly rate is because we're giving the customer the job, the quote, based upon budget hours, and we are determining how many hours we're allocating towards the job and multiply it by some number. However, we don't tell that number to the customer, we don't tell them how much we charge per hour. It doesn't really matter to them. They're just looking at the dollar amount for the job being completed. But the thing that I never really talked about is, well, how do you determine your hourly rate? In my opinion, this should quite correlate directly with pay for performance. Because with pay for performance, what you're doing is you are basically taking a number that is typically fluid, and that is the percentage of your revenue that goes towards wages. And you're making that fixed number by giving a percentage of that revenue to the employees. So in the past, if it rains, bad luck happens, customers pick you, whatever it might be. You might spend 56% of your labor. Revenue that you charge for labor on that job might go to the wages of the employee. Whereas if you just crush it, the weather's perfect, everything goes well, you might be paid 10, 15% of your labor. Revenue that you charge for that job might go to wages for the team. By fixing that number, you take a variable expense of labor based upon weather and whether or not people feel good or whatever, and you fix it, you can make your profits much more dependable. And also it should really come into how you determine your hours rate. So this is what I want you to think about. The hourly rate that you hourly rate that you pay employees.
On base pay of P4P. We'll talk about base pay and P4P in the future. But basically, when it comes to P4P, they get a base pay that they cannot make less than per hour. That amount right here, divided by the hourly rate.
To customer that we're charging the customer. I want this to be less than, less than.
25%. Okay? I've seen this across the board in service based businesses. Be something that is a good benchmark. All right. For some people that are gonna scream at me, oh, 20%. Oh, it should be 35%. Whatever it is, this is a really good benchmark. Okay, what do you have to pay your employees on base pay? And then what are you charging the customer per hour? Should be less than 25%. So for example, if I am charging, if I am paying my employees $20 per hour on base pay of P4P and I'm dividing that by what I am charging the customer, let's just say it's $80 per hour. That equals 25%. Let's change the math up a little bit though and say, all right, well, I'm able to get away with $15 per hour and I'm able to still attract talent. $15 per hour is my base pay in P4P and divided by 80, guess what? I'm like 20%. What is that, 20? It's like right around 20% now is my percentage here. So it's less than 25. Great. The lower I can get this number, the better. Usually means I'm gonna have better margins. And it's also meaning that on P4P, the majority of their pay is gonna come from performance dollars instead of just their base pay. And you might be saying, well, that's so bad for the employees. No, I'm giving them a percentage of this revenue here. But my base pay is right here. Now, this number right here is gonna be determined usually by your local labor market. If you can get employees at $15 per hour base pay, that's the number you should have as base pay on P4P. Now you might give them say, a third of labor revenue, which means they're going to make a lot more than $15 per hour as long as they're half decent. But that number needs to be less than 25% of the number you're charging the customer. So in this case passes the litmus test. Now, it does not pass the litmus test is if you're charging, let's just say $60 per hour to the customer. And then in order to get employees, because your labor market's really hot, you've got literally offer $20 per hour as a base pay on P4P. If you do that now, all of a sudden you run the math here. 20 divided by 30, we're gonna come up with 33%. Very bad news. I consistently see this, and I see this as being a very hard business to make any money and any profit on because not less than 25%. We'll talk more about P4P in the future. But ultimately you need this base pay per hour that you're paying employees to be less than 25% of what you're charging customers. So the question is, well, how do I determine my hourly rate? Very simple. Ask yourself what's the kind of average going rate for labor in your market? If it's $20 per hour, that means in order for this equation to work where I'm going to be at 25% or less, it means that my hourly rate to the customer needs to be $80 or greater. And if I can't do that, I've got to figure out either A, I'm going to lower my base pay or B, I've got to increase the value to my customer. Have a great website, have great customer service, have someone answer the phone that's live, have a web chat on my website, have a great truck that's painted, you know, uniforms, training employees. My marketing's gotta be in point. That all generates value to the customer. Where I can increase my hourly rate to the customer to where this equation works out.
So in my opinion, your hourly rate to the customer, that's always the golden question. What should I be charging per hour? Should be determined by your biggest variable, cost, which you are basically reselling to the customer, which is labor. You are selling an hour's worth of someone's labor and marked up rate. And I want that rate to be at least a 4x. Alright? So at least a 4x is the equivalent of saying this ratio 20 divided by 80 equals less than 25%. Now, the greater this number can be in terms of right here, if I went if still I had $20 as my base pay and I was able to make this 90, well now guess what, this is now going to be like 22, 23%. And that's great. The lower this percentage can be, usually the higher your profit margins are going to Be. And Most importantly, on P4P, the more their base pay is going to be further away from what they're actually making on P4P. And there's going to be a more and more bigger piece of their paycheck that's constituted by performance dollars instead of their base pay. We'll talk more about that when it comes to P4P pay for performance. But this is what you are going to use to determine your hourly rate. Your hourly rate needs to be determined by the going hourly rate for employees just to get them onboarded. I believe that in this case, for example, this is a local shop right here. Let me show you what we have at our local shop. Now and again, this always goes up. But 18 is what we charge we get for employees locally in terms of their base pay. And we charge $90 per hour to the customer. So that's like 20%. Very good. Passes the litmus test. Very profitable. Awesome. And you've got to realize that this number here is probably going to go up with time. The $18 per hour. Just what you need to attract them. You want that number to be high enough to attract talent, but low enough to make sure that this number still works. Because guess what? On pay for performance, I'm going to give 33% of labor revenue to the employee. So they're not going to make 18. The average employee at the local shop makes like 2325 for $25 an hour. But I want to keep this base pay as low as I can while still attracting talent, because this base pay is going to attract talent. And by raising this number, I'm really only giving more money to my lowest performers because the highest performers are already making way above $18 per hour. So raising base pay on P4P doesn't really help your best performers. We'll talk more about that when it comes to P4P. But that's the first thing is determining your hourly rate should really be determined by what's your going rate for labor in your market. Making sure that this equation equals less than 25%. So you can literally work this backwards. Oh, you know what, Mike, in my market, I don't know what I need to charge per hour. What should I be charging to my customers? Go on Craigslist, go on Facebook, look at all the landscaping and lawn care companies. What are they offering per hour underneath hourly wages? Just as an average. So it's $15. Great. What do I need to be charging my customers per hour in to order for this to work? At least $60. Is what's going to allow this equation to still work. Ideally, it's 65, 70, 75. And this number gets. This percentage gets even lower. Next thing I want to talk about, because I talked about price quite a bit there, but what I want to talk about is in general, in your business, there's something called levers. And levers are something in your lawn care and landscaping business, any business, really, that allows you to make a small change and have a massive impact in another part of the business. So if you look at this, this is what's called a fulcrum. And then we're going to have this kind of like a teeter totter thing here.
Boom. Like this, okay? This is the fulcrum. And you have two different weights, right? So you might have a weight here and a weight here. Okay. Now, when you have this kind of dynamic, what. What happens if I move this side of the equation by, say, 2 inches to right here? If I do that, it's going to move the fulcrum.
Or the other side of the equation, I should say it's probably going to move it by like 4 inches. So if I move this by 2 inches, literally has a 2x impact over here because the distribution is so great with this lever. This is the lever. So the question is, in your business, what can you do that is small changes that leads to massive results. And the two levers, or three levers I want to talk about today are gonna be the things that in your business you can make small changes on. And they're gonna make massive impacts on your bottom line and in your profit. The first thing I wanna talk about is retention.
Retention is simply the opposite of attrition. So If I lose 10% of my customers every single year, that would mean that I retain 90%. I lose 10%. That just means I retain. I keep 90% of them on. If your retention is really low and it's like 20, 30, 40%, well, let's just say it's 50%. If your retention is 50%, that literally means that 1 out of 10, 2 customers leave your business every single year. That is bad in the lawn care and landscaping industry. What's typical in our industry is about.
20% attrition, or I'd say 80% retention. Why? Because about 20% of your customers are gonna leave every single year because they pass away. They move, they sell their house, they go, they downsize, whatever it might be, and you lose a customer. So about 20% is going to be inferred. Now, this is why it's so impactful because if I have a 50% retention rate, 50% of my customers I keep every year, but I lose the other ones, I lose half, there's a 50% attrition, 50% retention, that would mean that the average lifespan of a customer is two years. Now, if I take that same business, but instead of having a 50% retention where I lose half my customers every year, I only retain 50%. Instead of my retention being 50%, let's have a retention rate of 80%. Kind of average for the industry. How can you improve that number? Well, you can have better customer service. You can make sure that you make the customers happy, you have great office staff, you answer the phones, you take care of your customers. Those are all ways to increase retention. Have a credit card on file, that's how you can increase retention. So instead of having 50% which would assume imply a two year average lifespan of a customer, if I change the retention to now being 80% where I only have an attrition of 20%, that would now lead to an assumption of five year lifespan of a customer. Okay, so just by changing my retention, I'm able to increase the lifespan of a customer by literally, literally more than doubling it. I'm more than doubling the lifespan of my customer. So if I make a thousand dollars per year on each customer, I go from $2,000 per customer. That's the value of the customer, the lifetime value of a customer. Or Sometimes you do LTV lifetime value of the customer at $1,000 per year, two years is the average. I made $2,000 on that customer. I can literally turn that into $5,000 simply by making sure that I increase my retention. I keep the customer. So I'm going to more than 2x my profits just by retaining my customers. And Instead of losing 50% a year, I lose 20%. Little changes in the business, improving the way that you communicate, having automations, having credit cards on file, having where you talk to the customers, sending monthly newsletters, all of this allows you to increase your retention. Little things in the business that lead to dramatic results and profitability. The second thing I want to talk about is close ratio. I talked a little bit about it in the previous video. But when we talk about close ratio, this is a massive, massive lever in your business, especially when you're first getting started. I truly believe this is the only thing you should care about when you're scaling your business from 0 to 250,000 in revenue. Now in my opinion, you should have a 30 to 50% close ratio. If you are in profit mode, remember, go back to the previous videos. I talked about the two different directions you can go with your business. Either profit or growth. If you are in profit mode, you are going to be thinking about 50 to 30% margins. If you have higher than that number, it means that you can raise your prices. If you have lower than that number, you probably have a serious flaw with your business or your prices are too high. Whereas if I'm going for growth, I'm going to have 50 to 70% close ratio if I'm trying to grow the business fast. And the reason I'm going to do that is because my prices are going to be a little bit lower in order for me to have a higher rate of growth. I'm getting more customers now. Why do I not want over 70%? Because if I'm over 70%, I'm literally leaving money on the table. My prices are too low and I need to increase them. So for everyone out there bragging that they close every single single job, or 95%, you are leaving money on the table. And the next thing is going to scare you by what you're leaving on the table in terms of price. But this is the general rule of thumb that I'd be using if I was you. I'd be trying to use this to at least 250,000 revenue. Assuming you want to grow a million dollar business, if you want to grow to a million faster, you might literally use this 50 to 70% close ratio until you hit a million. If that's really a big goal of yours as growth, that's what you want to be at. Not higher than this, because then you're leaving a ton of money on the table, but not less than this because you're going to really inhibit the rate of growth and you're going to really not grow as quickly as you possibly would want to. So again, you've got to determine do I want to profit and have a higher margin, increase my prices, charge estimate fees, charge dump fees, really increase my hourly rate back to what we just talked about, increasing that hourly rate to the customer, or do I want to go into growth mode and have a higher close ratio? And close ratio is simply one estimate.
Divided by total total estimates. Okay? That's how you're coming up with this number. The number of estimates that you won divided by the total number of estimates is going to give you the percentage that you've closed or your close ratio. Now the third lever in your business, again, these are the things that make massive impacts in your business, because literally, you could run the math on this over the course of four or five years. If you have a 30% close ratio versus a 70% close ratio, your business will literally be a third of the size in a few years if you just have a close ratio of 30 versus 70%. So trust me, close ratio, very important. How can you improve close ratio, Have a better response time to get the estimate to the customer? Maybe you do it over the phone instead of meeting them in person. How can you make sure that once you do meet them in person for a project, the estimate gets back to them within a day or two instead of a week or two? All of these little things that you can do to improve your close ratio, your communication skills when you're on the property with the customer, your online reviews that you send with the proposal so they get that feedback, that social proof that they need to make the buying decision, all of that increases your close ratio. These are three things that you must be focused on. And the last one is most relevant to what we're talking about today, and that is price. Changing the price on your work is going to dramatically improve and affect your profitability. Let's assume real quickly that we have a $40 per cut lawn that we are charging on all of our lawns. As an average, we're charging $40 per cut, and we're gonna just assume that we are making 25 profit margin. So not bad, right? You could scale this up as big of a business. You could have 100 customers, 1,000 customers, whatever. Let's just assume we're doing an average cut price of $40 per cut at 25% profit margins. That would assume that we're making $10.
Per cut. Okay, now let's assume that we have 100 mowing customers and we mow everyone's lawns four times per week. So let's just do the math on this. So four cuts per week times 40 equals 160. And that's the amount of revenue per customer. Multiply that by 100 is going to equal $16,000 in monthly revenue that we're making from mowing. And if we assume a 25% profit margin, our profit is literally going to be $4,000. Pretty cool. Hey, check this out. Let's go ahead and erase these top two real quick because I want to emphasize price here is a massive lever in your business. And really, ultimately, your goal in your home improvement lawn care business is to be able to increase your prices. Okay? That's ultimately the goal of your Business make a very sticky service that people do not want to leave. And the pain of leaving and finding another provider is way greater than the pain of a price increase. And we'll talk more about price increases down the road, but we have a letter inside the templates and documents. We raise prices consistently almost every year to our customer base. And we usually have 2 to 7% attrition people that leave because of our price increases and usually it's more around the 2% marker. So you gotta keep raising your prices. But the only way you can do that is having a very sticky service that customers do not want to leave and go change providers and risk making the wrong decision on finding another vendor, finding another landscaper that is $5 cheaper a month, $5 cheaper per cut. But they don't show up sometimes and they don't have a credit card on file and they don't have automatic billing and everything is done with check underneath the front porch mat. All of that is value to the customer. So you can raise prices and your service is sticky enough to where they stay with you. So you've got to have a high enough value to the customer like we talked on the previous video, in order to be able to charge higher price. You can't just be like, I'm just gonna jack my prices up. But again, remember, the transaction will only go through as long as value is higher than price. If you just jack up price, this is when you lose customers. So instead of on a race to the bottom, of always making the price lower and lower, focus on how do I focus on improving the value. Having a better website, having a great experience for the S4 request form, having a great automated response system for the SVR request follow up. All of these things are improving the value so that you can increase price. As long as price price is lower than value, the transaction will still take place. And my goal is to have a premium product where I can charge a premium price and still the transaction goes through. So comes down to price. Let's take this example here. Now instead of $40 per cut, we're going to charge $50 per cut. So now the math is this. Four cuts per month, so still the same amount, but now instead of $40 per cut, we're gonna charge 50. Okay, that's a lot. No, it's 40. Anyone that accepts 40 is usually gonna accept 50. It's a very marginal difference. You might have to keep them for a year and then raise the prices in year number two or three or something like that. But the goal ultimately Is watch what happens here. A little tiny change in price. We're gonna increase the price by $10 per cut. Watch what happens here. So now it's gonna equal $200 for our whatchamacallit here. Our $200 is our cost or sorry, revenue per customer. Now down here we can assume that our expenses equal. Whoops, equal $12,000. My goodness, I can't write. So because I know that I have $16,000 in revenue and $4,000 in profit, I can assume that I have a $12,000 in expenses. Now what's really cool about raising your prices is it doesn't change your expenses. I'm still going to have $12,000 in expenses on all these customers. It doesn't change anything to raise price. It's a lever, I change it and massive change in profit and I do not have to change my expenses. But check this out. $200 per customer that I'm gonna make and I'm gonna have 100 customers. Whoops. Not a thousand. 100 customers that I'm going to be able to keep. These customers, they have great value. I'm going to retain them. But instead of $40 per cut, now I'm charging 50. Now it's going to equal $20,000 in monthly revenue minus $12,000 in expenses is going to equal $8,000 in profit.
Check this out. By raising my prices $10 per cut, I am literally going from $4,000 profit to $8,000 in profit. So a 25% increase in price resulted in a 100% or.
A doubling of my profit simply by raising my price. Small change in price, $10 per cut literally doubled my profit. That is the power of pricing. That is the levers that you must focus on. And that's why it's so important to build value with a website. Build value with uniforms, Build value with great trucks that are painted and have a great brand and your uniforms and you have a great CRM and everything is functioning on automations. You've got to do all that so you have the ability to raise prices and not lose these customers. That is the whole goal and ambition of starting your lawn care business is create a recurring revenue stream that you're able to have price insensitive customers to be able to raise prices and literally double your profit. That's a lever. This is what you've gotta focus on when it comes to your lawn care business. You gotta focus on. These are the three levers that we talked about retention. Keep those customers, have good customer service. All the rest of it. You've gotta do that. If I'm losing 50% of these customers every year, guess what? What? You're not gonna have any confidence to raise prices. You're not gonna have any confidence to be able to retain recurring work and be able to keep growing your business. You gotta have a high retention rate, close ratio, second lever. You gotta focus on this. It's the most important thing. You've gotta track this every single week and month in your business is simply what is the number of estimates that were accepted divided by the estimates that were given equals your close ratio. You've gotta track that number and base it based on if you want to grow or if you want to be profitable. There's got to be a balance there. And you can switch back and forth. You can change your prices. Like if you're 7, 8, 9, 10 weeks booked out, you probably don't need to be worrying about growth. Have a lower close ratio by increasing your prices. Increase your prices, get them up higher and you'll have a lower close ratio. Now last thing is price. Massive lever in your business, and that is literally the reason why we get into lawn care is to have a recurring work that you can keep keeping the customers around by raising prices, being able to charge a higher price and doubling profits. Massive levers in your business. Recently we surveyed all the owners inside of Augusta Lawn Care and asked them what their favorite part about being inside of Augusta Nation was. And one of the things they mentioned was the Mike Minutes mastermind. Every day, a mastermind with me, a live stream with all the owners of Augusta Lawn Care where we talk about investing, business and strategy. If that's of interest to you, go to Augusta Lawn Care Services.
Now back to the video. All right, so a bit of my thought process on mowing over the phone has changed and evolved. Now I do believe if you only have 15, 20 customers, it's not a good idea to try and do things over the phone. Because especially if you have really, really thin margins and like every dollar counts because 5, $10 difference on mowing price is going to happen, you're going to be off by 5 or $10. Occasionally if you're doing estimates over the phone. The reason you do estimates over the phone is when your volume is so high and speed is more important than accuracy, you are going to close more jobs. If you get, if all things are held consistent, if you get the job, get the estimate to the customer faster, you will close more jobs. The question is, how accurate are you on that estimate? That's going to come with time. So typically when you're first getting started, you're not going to be able to accurately know how many square feet of lawn you get cut per hour, per minute. And you're not gonna be able to look at a 3,000 square foot lawn or a 8,000 square foot lawn and know accurately how long it's gonna take you. So I'm a little bit hesitant to tell people like you're gonna use hourly. You can do it over the phone when you have five or 10 customers because you might lose a customer that would otherwise be really good. But because you did the wrong calculations, you're charging $80 when they should be 60 and you lose the customer. So a couple reasons why I believe that you should do over the phone is if you're getting lots of estimates, you're getting like, literally you have 100 plus mowing customers and you're getting lots of leads every single day. And driving around with all of them is a waste of time. If you're getting multiple estimates every single day, multiple leads for mowing, probably a good idea to start thinking about doing it over the phone because the time it takes you to drive to all of them is killing your margins, is taking your time. And ultimately, if you can save 30 minutes and be on a job site where you're charging $80 per hour, it's not the 30 minutes it takes to go to the client's house, it's $40 worth of labor that you would otherwise have gotten because the opportunity could have also been that you were on a job site. So just realize that there is absolutely the value of your time. And if that's becoming 1, 2, 3, 4 a day, now you're spending two hours driving around doing estimates. You should just do those over the phone and realize that you might lose an occasional job or be inaccurate slightly. Now, worst case scenario, you do an estimate over the phone, buy square footage, and you are off by $5 or $10, and you just tell the customer, be honest with them, and you reset the price. You might lose a cut with some of them, but most of them, they realize, hey, they're doing it over the phone. They never showed up at my property. They realize that you might have to edit the price. Okay, so don't think that's the worst case scenario is you do the wrong price over the phone and you have to edit that with the customer. It's not a big deal.
And so again, what you're trying to do is save time and you're willing to sacrifice perfection of your estimate and accuracy in exchange for speed not usually necessary or something I would recommend if you have a really tight route and you're literally all of your jobs within a few miles, like you're literally passing all of of your estimates every day, you might as well just drive by the property, get a more accurate estimate, build a rapport with the customer. Like at the beginning, you actually want to meet with the customer because you can build a rapport and you'll get a higher close ratio. Whereas when you're getting 5, 10, 15 estimates a day, you do not care about rapport, you do not want to talk to the customer, you want to pump these bad boys out. It's all a speed game because you might only be able to do several appointments per day at a certain time, Whereas you can pump out 50, 100 estimates a day if you're just doing them over the phone. So number one, I would be looking at if you start getting multiple leads per day for mowing, probably want to start thinking about doing it over the phone via square footage. Have a rate matrix that based upon their square footage is a certain price per week and for bi weekly. Now the other reason you would want to do this is if you have a very, very large area that you service, which I don't recommend you do, you should have really good route density. But if you don't have good route density, it's going to push you more in the direction of doing it over the phone. Because now it might take you an hour to go drive to the property and that's horrible. You're wasting a ton of time and money going and driving and the fuel and your time has otherwise been on an actual project. Lots of costs are going just to get the estimate of them. So that's going to push me more in the direction of doing it over the phone. Now over the phone is most impactful. Doing estimates over the phone, we call them OTP over the phone estimates. Most impactful when you have an actual live agent, a live office person on the phone. Because think about it from the customer's perspective. If they give you a call, they leave a voice message, they submit an estimate request form, and the next day they get an estimate in their email. That's no different to the customer experience. If you get an over the phone estimate like you did digitally over satellite, or if you drove by their property and gave to them the customer, their experience is the same. Now what really sets OTP apart from everything else is when they can call in and get an estimate on the phone, close the job, get a credit card on file, get it scheduled and rock it and rolling. This is what we do at command center for our franchisees at Augusta Lawn Care. Every single day, thousands, not thousands, every day, hundreds are sold every single day of jobs that are called in. Customer wants a price. We literally measure it live, give them the price, send them the estimate, get a credit card on file and schedule the job. That's the real power of over the phone because it actually changes the customer experience versus if you're going to get an estimate to someone the next day using satellite imaging, not as impactful because you could have just drove by the property. So the customer experience doesn't change unless you actually have a live agent or someone that gets an extra request form in on email and five minutes later is measuring the property and sending the estimate back. That just blows people. And it makes it more relatable when you do need to change the price on the job because they're like, okay, obviously when I called in, they gave me a price over the phone and told me they were measuring via satellite. They're more receptive to a price edit or change occasionally when you need to do that because of a miscalculation via satellite. So the real power of OTP happens when you have a live agent. If you're just doing over the phone the next day or that evening, or getting out a day or two later, it's not super impactful, honestly to the customer because it doesn't change their experience. They don't know if you drove by or if you just did it over the satellite. So I recommend really focus on otp. When you have a live full time office person, that's when you can really cash in on otp, but you're going to go that direction more. So even if you don't have a full time office person that's live, if you have a really wide route, a really big area geographically they're servicing, you don't want to be driving 45 minutes out the of one direction to go do an estimate for mowing. So keep that in mind. Now when it comes to over the phone estimates, a lot of people wonder about, well, what happens if it's overgrown? What happens if I did price it wrong? Just charge on the first visit, just charge a per minute rate. So just say, hey Mr. Jones, it's going to cost you $60 for weekly service, $90 for bi weekly service. Great, we're going to get set up for weekly service. Just so you know that first visit in case Your lawn is overgrown, we're gonna edge it, dial it in, get it to where we need to be near where it needs to be at. So if it is overgrown, we charge a dollar per minute per man in order to get it up to spec, up to our standards. And then after that it's gonna always be that $60 per cut. So that's how you can quickly get the sale and then make that indication. So that way if it's three feet overgrown, you don't show up to a $60 mow and take you six hours to get the lawn done. You don't want that on P4P, your crew will kill you. So you've gotta make sure you have that coverage, that if it is an overgrown mow, if their edges are way overgrown, you're spend five times as the usual time that you are covered in that instance. Okay, the next thing I want to talk about is the fact of the matter is there's multiple ways to do estimates. Okay, there's over the phone, then there's a drive by we call it. Then there is a scheduled estimate.
And then there is exact time estimate. Okay? We do not like exact time estimates. We do not want to set up the estimated for an exact 2pm we're meeting the customer. Very hard to schedule that, especially if you're the owner operator, especially if your estimators out in the field working very hard to get exact time estimates. Now, scheduled estimates, I'm going to give them some sort of a time range and I typically like this to be at least one hour. Some of our franchisees will be like up to four hours of time range. This is much easier to hit if the customer actually wants to meet you in person. So these are scheduled in person. I don't like these as much either though, because it means that I gotta actually make sure the customer's home, I gotta make sure I adjust my schedule and all the rest of it. Drive bys are my favorite. These are even for projects. I ideally like this because I can do it anytime I like, in the evening, late at night, on the weekends, whenever it's convenient for my schedule as estimator. And honestly I can do like 20 of these a day easily versus if I'm doing schedule, I might be able to get 8 to 10 a day because I got to make sure I hit all the windows of time. My route isn't as efficient because I'm just trying to accommodate people's schedules. So much more efficient. When you start talking about high volume of estimates per day, you Want to be doing as many drive bys as possible. Now your close ratio if you're meeting people might be higher if you're scheduling and talking to them and having an in person connection. Because remember people can know like and trust you, they're going to do business with you. Easier to make that connection and that rapport when you are meeting them in person, but you're just not going to get that volume in. So if you're just getting started, you might want to do the scheduled estimates to build that rapport, have a higher close ratio. But again as time goes on and you get tons of leads like our location Locally now, just 60, 70, 80 plus leads sometimes a day. We want to be pushing that as much in this direction as possible over the phone to the the most optimal. Because I don't have to send anyone there, I don't have to have someone drive there, I don't have to have an estimated expensive to send there, I don't have to pay for gas and fuel and all the rest of it over the phone is the best. Literally in five, 10 minutes I can get an estimate over the phone, get a credit card file, get them scheduled. I don't want to be spending 20, 30 minutes driving there, walking around and all the rest of it. I definitely don't want to be spending an hour meeting with the customer, yakking and talking about the weather and whatever and all the other projects they want to do down the road that you can't even service. I don't want to be doing that. So the goal is always number one, get to over the phone. If you don't have an office person, if you don't have a high volume of leads, start moving this direction. Especially if you're trying to build a rapport and have a high close ratio. If you're doing one, two leads a week, definitely schedule them. You want to close every single one of those bad boys, you want to meet that connection, build a rapport with the customer. You've got to build that exact, build that those scheduled estimates in. And at the very worst, I don't want you to basically ever do this, but sometimes with property managers or commercial work or hoas, they'll want an exact time for you to show up. But it's very, very hard to accommodate schedules. It's very inefficient for the estimator that are sitting around waiting a lot of downtime, not efficient at all to do exact time estimates. All right, ultimately density is gonna be the thing that allows you to be most Efficient on all of these. So if I do drive bys, if I'm super dense and route dense, I can do 25 to 30 of these a day. If I'm driving 30 minutes here and then 20 minutes here, I might only still get 12 to 15 of these a day. So really, route density is so important. Not only from an efficiency and profitability standpoint when you're out mowing than doing the jobs, but also just your efficiency in getting out estimates is much more efficient if you have a tight route. Okay, last thing I want to talk about when it comes to mowing prices is weekly versus bi weekly. In that video I talked about having $40 for weekly service and $50 for biweekly service. We would never do that. Now we always want to charge at least 50% increase on the bi weekly service. So if I'm gonna charge $40 for weekly, guess what I'm gonna charge $60 for bi weekly. Okay, if I'm gonna charge $50 per weekly, I'm gonna charge $75 for bi weekly. Why is this 50% premium baked in there? Several reasons. Number one, it incentivizes people to do a volume discount. How you want to sell this to a customer is, hey, look, you're gonna get a 25% cheaper price, a discount in order to go weekly instead of bi weekly. So sell it as a discount to go weekly and stay on that volume discount. Same thing goes when you go to the store. If it's like, hey, buy three, get the third one, get the fourth one 50% off. It's not like the fourth one cost them any less to perform or cost them any less to produce. The same way that it doesn't cost you necessarily more to do the second cut, but it's a volume discount. And usually when bi weekly service, there is more lawn to be cut, more grass clippings, takes longer to edge. But don't really focus on that. Just focus on the fact that it's a volume discount. If you do more services with us, we're literally doubling the amount of services. We're going to give you a discount, you're going to keep that lower rate. So when you explain it like that, customers are less likely to go to biweekly service and therefore we're able to increase our recurring revenue. And if someone it's slow during the summer, things are dormant or something like that, people want to switch, have a cheaper cost and lower their budget, great. We will still do their service for bi weekly. This will cost them about $150 per month versus up here. This is going to cost them $200 per month if we did it four times in the month at weekly. So it's still gonna save them money. It's still a cheaper option and we allow them to do that. But it allows us also to make sure that we're gonna be very profitable on this because we're literally charging 50% increase. Our margins are fantastic. We get plenty of budget hours when we show up at the property. And so I would recommend having at least a 50% increase. And explain that in the way of a volume discount, it don't get hung up on like, well, we need more clippings or take us longer. Just hey, look, every other business you go to when you buy more of something, you usually get a cheaper price. When you buy more services from us and more visits, we're able to give you a cheaper price. That's how you want to sell it. And this is going to help you with cash flow during those months when people are more inclined, when the grass is dormant, it's going to help you with cash flow because although you're doing less services, your profit margins are going to be beefed up to the point where your profits will still remain the same. You might have less budgeted hours on the schedule, but it's definitely going to pad your profit margins during those months when the grass becomes dormant. And you don't need to mow it every single week. So still allows them to have a cheaper option, gives them a discount for a volume, gives them a discount for volume, buying more services and it helps with their cash flow during those months when you might not need to mow every single. So definitely recommend at least a 50% increase on that bi weekly service. We literally hardly ever have people who have issues with it and it really incentivizes people to just stay on weekly service throughout the entire year, the whole growing season, because there's not a massive difference in the savings that they'll get. Alright, so let's quickly recap the ways that I was talking about the last video. And these are ways to do landscaping projects when you're first getting started. The first is the 1, 2, 3 method. This is typically going to be used best when you are installing mulch, for example, and say, okay, one yard of mulch delivered and installed, including all the materials, all the labor, etc. If it's easy like one, then it's going to be, let's say $100 per yard. So that way all I have to do is go to the Property and say, okay, how many yards? Boom, I have my number. Based upon the fact that simple. All right, so this is like easy.
Medium, and then hard. And this is literally difficulty and access that is going to go into those, playing into those. And you have a 1, 2, and 3 for each type of material. Mulch, gravel, soil, you know, cobbles, whatever you might have. You'd have a 1, 2, and 3 for each type of material. So this is going to usually work again for material based installations and you're just installing material. Okay. For medium, you might say, okay, it's gonna be $120 per yard because it's not right next to the front driveway, it's not right next to the sidewalk, etc. Hard, you might say, okay, it's gonna be $150 per yard because this is in the backyard, is down steps, whatever it might be. So you're literally charging a 50, 50% premium for just to be on a more difficult spot, etc. And you're just, again, you're really. Your unit of measurement here is the yard. Okay, so this works well for materials. The other way that we had talked about is using the quarter, half and full day method. Now this is really useful for small projects as well as projects that.
You might not be super confident in the number of budgeted hours. You don't know exactly how long it's gonna take, and you're not as confident, like when you're first getting started. This is a great method. It's literally like, okay, a course quarter day with two crew members. With two crew, I'm gonna have an X amount. I think in that video I had $299 would be what I charge. Then I had a quarter day, or, sorry, half day and then one full day.
And it would kind of give a bit of a discount. Like, for example, quarter day was not exactly 4x. I think this one was like 9.99. So there was a certain amount of discount if they had larger projects versus if they had smaller projects. Because you could work this out to be, okay, well, this is four budgeted hours. So if I take 300, divide that by four, it's like what, $74 per hour, something like that. And then if I take this one though, and I take this and I take one full day, eight, that's eight budget hours per times two, that's 16. So if I divide this by 16, now I'm only charging what, like 55 or so dollars per hour. So this is something that I would not recommend doing. Once you have confidence in finding your budgeted hours. So I'm just gonna. Mostly most this time, I just wanna talk to you. I'm not gonna do a whole lot of drawing. And the reason I want you to use budget hours is just way more accurate. Because I don't wanna have this sliding scale of what I'm charging per hour to the customer. I want to have a set hourly rate that I know I'm charging per hour of labor that I can depend on. That doesn't change. It's a fixed number that if I have X amount of hours, I know I'm making X amount of revenue and I'm making X amount of profit. And on P4P pay for performance, I'm giving a percentage of that revenue to the employees. They don't want that number changing. They want to know what that number is so they can calculate it themselves. So it's very important, not only because it's more accurate, but also because for P4P, you need to have accurate budget hours. You can't just like, oh, it's half a day and then sometimes that means it takes three or four hours. Sometimes that means that takes six or seven hours. You can't do that. You've got to be more accurate on your budget hours. If you're going to use pay for performance to pay your employees, they will hate it if your budget hours are not accurate. And so using budget hours instead of this methodology or the 1, 2, 3 mechanism is what I recommend you get to eventually. If you're just getting started and you look at a project and you have no idea how long it's gonna take, using the 1, 2, 3 or the quarter, half and full day method is okay. It's permissible. But even after 612 months, you should be able to look at a project and know exactly how long it's gonna take you to install the work, install the material, do the work. And if you don't, I recommend you don't do those services. If you can't accurately predict budget hours on an estimate, you should not be doing those services yet. I'd break into those services maybe when you're slower, et cetera. But if you're not confident on your budget hours, I would not be touching the work during the growing season. And when you're really busy, it's typically going to lead to unprofitability. And if you're using paid for performance, which I recommend everyone do, then you're going to lead to very disillusioned employees when they can't hit budget hours or they see inconsistencies and sometimes you're way over, sometimes you're way under. Okay, so what I recommend you do when it comes to landscape projects is go to the property, visit with the customer. If it's a project based job, if it's a drive by like a property cleanup or even just mulch install, all you need to know is like for mulch, how many yards of material installed for property cleanup, it should be pretty basic. Now if you're doing simplified services or you're even doing complex services, but you're standardizing what you're doing, then you should have a template of all the different types of work that you do. Now I recommend you have a Google Drive folder or even your notes app on your phone. Have a place where all of your notes are created for specific types of jobs. As a template, most property cleanups are the same thing. Trim the bushes, pull the weeds, remove the debris out of the flower beds. It's the same four, five, six things. For mulch installation, it's like the same few line items that you're going to have inside the estimate. So what you can do is type all of those up, make it a template that you can copy and paste into your actual estimate for the new customer so that way you're not typing it up new every time, and you can spend the time required to actually make those notes detailed instead of having to rush yourself and oh man, I got to get this estimate real quick. And you just type it up. Install 4 yards of mulch. Boom. $500. Boom. Send it out instead have it where you go to your template. You have mult install and you copy and paste the six or seven different things that are part of a mulch installation that specify that you are delivering the material. That includes material delivery and installation. The fact that includes edging and pulling the weeds before you install the mulch, all of that can be inside of a template. And you copy and paste it into the notes for the new estimate so that way you're not typing it up every single time. And then when you're rushed, it doesn't force you into bad habits. You need a very detailed notes. It'll save your bacon when it comes to the invoicing process. Most customers don't complain at the estimate process or even during the work. They complain when the invoice is sent. And the reason most discrepancies between client and the business happen is because the notes were not clear enough. They did not specify how many yards of mulch they did not specify what color of mulch, they did not specify how thick the mulch was going to be. They did not specify where the mulch mulch was going to be delivered. It did not specify what flower beds the mulch was going to be installed in. Just saying install 4 yards of mulch with a price does absolutely nothing. And it's going to leave it to a huge amount of ambiguity. I can almost guarantee you the customer is going to have a problem with it. Be as specific as possible. Which beds are included, what type of mulch, how thick is the mulch going to be, how many yards of mulch are going to be included? These are all things that should be in your template, not things that you have to type out every single estimate, make it where you copy, paste, and then you should only have to change a few things. Number of budget, hours, yards of material, and maybe a verbiage line here or there. If there's a specific type of tree or something you need to specify on the estimate, you can do that very quickly and still in a matter of a minute or two minutes, have the whole estimate prepared and copy and paste it into the actual new estimate. So creating an estimate template is extremely important. We literally have like a seven page document, it's all digital that our estimators use. They go in there, copy and paste it into the new estimate and then they change a few little things that way there's lots of verbiage, there's plenty of notes for the crew and there's no ambiguity. There's nothing the customer can come back and say, well, I didn't accept that. I thought there was going to be more mulch. I thought it was going to be thicker. It's like, well, actually in the estimate said we're going to install six yards of mulch, we ran out and we need three more yards. Do you want to pay more? Do you want a work change order? Because there's something in the document tying it to the six yards. Just doing ambiguity. Having a whole bunch of just, you know, very loose terms on your estimate or not explaining things is going to lead to unhappy customers. You can absolutely reduce unhappy customers and callbacks by simply making your verbiage more detailed. And most people don't make their verbiage detailed because they don't want to take the time to add more notes. So you shouldn't make a template where you make it very detailed so you can copy and paste it and change one or two little things and send it out to customer.
Also, when you use Budgeted hours instead of this method, it's very easy for the crew, once they've worked with you for a few months, to be able to give you accurate budget hours, especially if they're on paper performance, because on pay for performance, they want as many budget hours as possible because they make more money. So they're not just gonna skimp because they like the customer and the customer slid them a Gatorade. They're gonna make sure that they actually give you an accurate budget hours. If the client asks for more work and you say, hey, how long do you think it's going to take? They're going to give you a budget hours that is accurate because again, their pay is tied to that number of budgeted hours. And so, literally, after just a few months, your crew is going to be able to get very good at understanding, okay, how many budgeted hours is this job going to take? How many yards of material? That's the only thing I need to know when it comes to an estimate is budget hours. And then I have the supplies. Supplies could be your estimate fees, your dump fees, any sort of material markup, the materials that are required. But for your crew member, all they need to know is how many yards of material and how many budgeted hours. That's all they need to know. If they give you that information, that saves you a trip. Going to the project and doing a work change. Order a new estimate for the customer. If they want more work being done, just ask your crew how many budget hours. Any supplies that you need, let me know. You could literally create the estimate from that because you have a template and you have what you need in terms of inputs, which is supplies and budgeted hours. All right? And literally after a few months, crews get really good at this if they're on P4P because they're always. Every time they show up at a project, the first thing they're doing is they're looking at the budgeted hours and they're looking at the job and being like, is this possible? How long is this going to take? And so they get very, very good at being able to judge budgeted hours and know exactly how long things are going to take. So literally, in a matter of a few months, you should be able to ask them for work change orders and how many budget hours is it going to take? Or, you know, so. And so next door asked us to install mulch. How long do you think it would take? How many yards of mulch do you think it would take? It's a very simple calculation. Something that you're. They don't need to know numbers, they don't need to know cost, they don't need to say, oh, it's going to take 599. No, no. It's like how many yards of material, how many hours those things are then going to be inputted into an estimate calculator. So you have an estimate template where you're going to make sure that all the different types of jobs that you do have, all the verbiage where you can copy and paste it into an estimate and then make minor adjustments. That's the estimate template. Then you have an estimate calculator where you take those inputs and you assign a number to them, a dollar amount to them. And usually an Excel spreadsheet is perfect for this. Have all the different types of material, like one yard of mulch, one yard of gravel, one yard of sand, a five gallon plant, a five foot arborvita hedge, tree, whatever it is. Have all different items, services, all the different types of products that you offer, the budget hours per budget hour that you charge in an Excel document and then literally just have the price and then you should be able to calculate, okay, on this estimate, I have five budget hours. I charge $80 per hour for this type of work. All right, boom. $400 in labor supplies. Five yards of mulch, I charge $40 per yard of mulch. That's $200 more. So $200 plus my $500, they're $700. Well, I'm also going to charge an E fee or an estimate fee to cover the cost of getting the estimate to the customer. Let's just say that's $50. All of this is just in your estimate calculator. But the person doing the estimate, excuse me, doesn't need to know all those numbers. They just need to know the inputs. This allows you to be able to ask crew members for the things that are required, the inputs, and then you can do the math on the back end. That way they're not like, oh, 700, or is it 690 or I don't know, maybe it's 740. Don't get them into a numbers game. Just ask them how many budget hours, how many yards of material and then you're able to tackle an E fees or if they're dump fees, et cetera, that's all you need. Then you can create an estimate using your estimate template and your estimate calculator. So those are the two things. You must have an estimate template where you copy and paste the notes and then an estimate calculator where you take those inputs, those notes and you actually run the numbers and you take per yard, I charge $40. There's eight yards, boom, $320 for material. Whatever you're charging for per unit of measurement is what you're able to use as inputs. So if you're using one yard of material, then that should be bark mulch. One yard, $40. Okay, I have five yards, there's $200. Okay. If you're doing one bag of seed, one 20 pound bag of seed, I'm going to charge $100. Great. How many bags of seed? That's your input. So your inputs don't need to have dollar amounts. When the notes are being given from the estimator, you don't need to have dollar amounts. It can just be units of measurement, budgeted hours, yards of material, bags of seed, etc. Pounds of fertilizer. You don't need to know the numbers. And that allows you to be able to simplify your estimating process for your crew out in the field to literally do estimates for you. People that are low level experience can do the estimates because they don't need to know the math and the numbers, they just need to know the inputs. And most people, if you're doing simplified services or standardized services on bigger projects, they're able to do that very quickly. Now when it comes to standardization of big project hardscaping, you can absolutely still do your estimate template. It might just have 20 line items under pave your patio install. But instead of putting install paver patio in backyard, $5,422, now you're gonna have paver installation. Step number one includes 36 by 14 paver patio off backyard porch. Number two is gonna include this type of paver, this color of paver, this is when it's gonna be delivered. We're gonna excavate 4 inches of material, then we're install a base material, then we're gonna install sand. Like it's gonna all be in your template. You don't have to type that out every time. You're gonna copy and paste that and you're going to put the numbers in, change the square footage, change the amount of material cost that you're gonna have to charge and it should be the same. If you standardize like that, your crew will get really good at installing big projects, even though they're really complex because you're using the same method every single time. At Augusta Lawn Care, back when we installed paver patios and retaining walls, we Used one type of block and literally 98% of customers were, were just fine with it. It was middle of the road in terms of cost, middle of the road in terms of design and color scheme. It was gray and people loved it. And even though it was a complex design, like a five piece design for the paper patio, our guys got so good at installing and so efficient and we were able to be so accurate on budget hours because it was the same project every single time. So regardless if you're doing simple services or standardizing large projects, you can still use an estimate calculator and an estimate template to make your estimating process much more simple. All right, so again, just as a recap, there's really just when we talk about the inputs, right? Because again, the inputs don't require dollars. These are things that someone, just a field worker could literally give you and you know exactly how to do the estimate based upon these inputs. So first off, we have budgeted hours. How long is this job going to take? Okay, very important. And watch the video also in this chapter about breaking up. Actually on a property, breaking up the large projects, if you have a big cleanup, a massive cleanup, don't give them a price for $5,000. Do the whole thing. Give them $2,000 for trimming the bushes, $1,000 for weeding the flower beds, break it down, chunk the estimate into smaller pieces to avoid having to revise the estimate and get it down to their budget. Now they can just pick and choose the line items that they want. But back to here, the inputs we got budget hours. Over here we have estimate fees, we have dump fees.
These are all inputs. We have material costs.
With markup.
And then we have as well also our equipment rental. So any sort of equipment rental that you might have. So what you're going to do is you're going to ask yourself, okay, what's my e fee cost? $50. Okay, what's my dump fee cost? $20, whatever it is, material cost. Okay, what are all the materials that I'm going to have and what's my unit per yard, A bag per pound, whatever it might be, have that all in your estimate calculator. Equipment is going to be equipment rentals. So if you have to rent an aerator, if you have to rent a skid steer, all that, all of these should be in your estimate calculator. So that way you don't have to ask your crew, how many dollars worth of seed are we going to use? You ask them, do we need a 20 pound bag or a five pound bag, they're gonna say 20 pound bag. Great. You have it in your estimate calculator. And based upon the input, you can then give the output what's gonna be needed in terms of dollars on the actual estimate.
So we talked about pricing, calculator, your estimate calculator, your estimate template. All very important. Cause ultimately, you need to make sure that your notes are very clear for the customer, but also for your crew. Because the estimate notes that you give the customer should also be the job notes that go to the crew. So if your estimate notes are not clear, your crew will also be confused. So keep in mind, you don't want to have separate job notes for your crew compared to the estimate notes. Then what's going to happen? The crew is going to be on the job site, the customer comes out and they're unhappy, and the crew is like, well, it says this. And the customer's like, well, I didn't get that in my estimate. It didn't say that. You want the estimate notes and the job notes to be the same. So that way when the crew goes to the job site, they're on the same page as the customer. They know exactly what they saw, and they can literally communicate about it because they're both the same thing. Okay? So when they go to the property, you do not want to have to go back as the estimator. Your crew, when they go, you should be able to let them go and finish the project without you. How is that done? Really accurate notes in your estimate template, as well as secondarily your project management video, something we haven't talked about yet. And that is when you finish up the estimate with the client, you walked around the property with them, or maybe you did a drive by. You need to now take a video, just pull out your cell phone and make a video of the whole project. So now the crew is going to have, not only are they going to have the estimate notes, which should be very, very accurate, those become the job notes. They're also now going to have a video of the entire project from start to finish. Between those two things, you as the estimator should never have to go back to the property. They have the notes and a straight video that you shot right after talking to the client, right after being on the property. Now, in this video, you want to start at the very beginning of the project, walk your way through the project the same way that your estimate notes do. Don't be jumping all over your estimate notes in the video. Start from where you're going to be starting in the top. And again, you can do this because you have an estimate template. You know how those notes are formatted. Just work your way from the top. Okay. Hey everyone, this is Mike and we're at Mr. Jones property, 1441 Main street and this is where you can park your truck. Here's where you can dump the material. We're going to be installing mulch all along this flower bed. We're going to installing mulch underneath the flower bed underneath their front window. We are not installing, installing mulch on that side of the property. The neighbor is going to take care of that. Make sure you're careful of these irrigation heads. Make sure you go through this backyard gate. And then we're going to install mulch. That's the type of project management video you want to do for your crew. Now this video is for your crew. You're going to send it to them the night before they go to the property. Now you can upload this video to YouTube as an unlisted video and send them the link. Or you can just make a chat on WhatsApp and it will automatically compress the video and then save it underneath the customer's name. And you can make a chat to yourself. Just make a random group, add yourself in as the only person in the group, and then just call it estimate videos. Name the chat estimate videos. Every single time you go to a customer's property, you do the estimate, you shoot the video, you save it to that group with the name of the customer. Then the night before that job is being scheduled to go out, when it's on the schedule the night before when you're dispatching the jobs, you're going to send that video to the crew that is assigned to that project. So again, now they have estimate notes and they're going to have a project management video. Between those two things, there should be no questions and you as the estimator should never have to go back on the property. So hope that was helpful. When it comes to landscape projects. Make sure to watch the video now about where I'm actually on a property cleanup and I talk about batching different parts of a job, especially if you're doing a drive by. But even if you're doing a massive project and the customer's there, break it up into pieces. So that way if they have budget concerns or they balk at the cost of the invoice, you can then negotiate based upon which line items they want to take out instead of the overall price. Last month, the average location that was just getting started Inside of Augusta Lawn Care brought in over 50 leads in one month. And they're just getting started. Why? Because augustalongcare services.com has a domain that has national authority and ranks very high on Google very quickly. So if you'd like to grow your business, take it to the next level and scale with multiple locations, go to augustaloncareservices.com franchise and book a call today. Now back to the video. Everyone's Mike Andes. And today I'm actually at a real client's house and I'm going to be showing you a couple things they might want to do at property cleanups. This specific cleanup is a weeding and property cleanup. It's completely overgrown. You can see here weeds coming out to the beds. This tree needs to be completed, completely removed and there's a lot of work to be done. It's actually a drive by estimate and kind of use this a way to get as many notes as we possibly can from the customer so we can use drive bys instead of having to meet the customer and take way longer to get the, you know, you can probably get 8, 10 timed estimates in a day where you have a meeting with a customer. You can get probably 20 drive bys done. So this is drive by. I'm able to get enough data, make a video for the client, make a take a couple pictures potentially to clarify some and things. But you can see there's a ton of weeds in the flower beds here. I'll flip this around. See weeds all throughout the flower beds. And one of the things that I want to talk about today is how to do an estimate like this. What I would recommend doing is breaking up here in the back. You can see get a whole bunch of weeds overgrown inside of the sidewalk area. I can't even walk back there. This is called horsetail. All these massive weeds back here. But one of the things you want to do when you're doing an estimate like this is try to break it up. I call chunk it and that is how do I make sure that if the customer can't afford to do a $3,000 cleanup of all these flower beds, how can I chunk the estimate in a way that is easy for them to understand as well as potentially accept a piece of the estimate. So for example, in this estimate I'm going to do the front yard as weeding and that's going to include from this corner of the house right here all the way to the other corner. I just passed over there. That's gonna be the first line item. And this will allow them to be able to prioritize based upon their budget. So instead of giving a three thousand dollar estimate, I might give them an estimate that has three one thousand dollar options. Now I'm gonna make sure I bid each of these options though, as if it's the only option they accept. Because the last thing you want to do is the undecided from the, there's an angle in the back here. The last thing you want to do is have it where they accept one of the job line items, the one of the options, one of the chunks that you, you put in the job notes the estimate and they only accept one of them. And you're like, man, I, I put five different line items. I thought for sure I do, you know, three hours for one, four hours for another, five hours for another, whatever it might be. And they accept all of a sudden just a three hour cleanup. Now all of a sudden you're stuck because you're not going to be able to make any money on just the three hour cleanup. So what I would recommend doing is pricing each line item, each chunk as if it's the only part of the job that's going to be done so you can actually make a profit. Even if they only accept one option, don't assume that they're going to accept all of them. But what you want to do is do this. So that way instead of making a massive cleanup and they have questions like, hey, if I wanted to reduce the price, where could I cut all those work changes, change orders and all the rest of it can be eliminated simply by making sure that you take what's here, chunk it up. Because I'm not able to talk to the customer. They're not home. This is actually a rental for them, so I can't talk to them. What I can do is give them options, different line items of breaking the estimate into smaller pieces. And again, make sure each piece you'll be okay with doing the job by itself with just that one line item. So hope that was helpful. Take care. All right, so I talked about Lawn Pro and I showed you how to set up recurring service. And again, I really don't care. I'm agnostic as to what type of service you use in terms of CRM for your business. We've talked about all the different types, the pros, the cons, what you might want to use depending on the size that you currently have in terms of your business. Now the thing I want to talk about though is one feature that I want you to absolutely make sure that Your CRM has is the ability to mass market or mass email customers. Email marketing is something that was created years ago and really went through a period where there's a lot of junk, a lot of spam and still to this day there is. However, it's one of the most, the cheapest ways to reach a customer that's already in your existing database. And what I recommend is sending out what we call one click estimate emails. Now you might not have the technology to create a one click estimate email in every every single type of CRM. One click estimate email. Okay, and the goal of this email? Let's talk about the goal and then how you can build it inside of your CRM. The email is basically trying to pitch one service and has one call to action. And I want you to send this on a monthly basis. If you bill or invoice every single month at the end of the month you'd probably want to send the one click estimate email about right in the middle of the the month. And what you're going to do in this one email is you're going to pitch one service with one call to action. Now if you have a button and you're able to, you might have a little better of a grasp of your CRM. Have the ability to have a button that then triggers an automation. That's when you can do a one click part where it's a button, they click on it and then that triggers an automation that lets you know that they want a certain type of service. But even if you don't get that far, that's fine. I still want you to send an email on a monthly basis pitching one service and one call to action. Now the call to action might not be pressing a button or pressing a link if you don't have that capability. But at least send an email out once a month with one service and ask them if they would like that service. This is a way to upsell your existing customers into other products and services. It's also a way to get people that have been a year, two years outside of being a customer that were just a lead that you just did an estimate for, but they never actually could converted to being a customer. These people can be reactivated as long as they keep warm. Keeping your leads warm is extremely important. So sending a monthly newsletter or a monthly one click estimate email is very important. Now on these emails you've got to make sure, like I've said like several times, one call to action. One type of service do not have like five different services. And then Say, well, if you want to. If you'd like an estimate, give us a call or send us an email or email us back. None of that. Have one service. We're doing mulch installs. Boom. Highlight mulch installs. Pictures of you doing mulch installs. Why? Mulch installs are important for your grass. Not for your grass, for your flower beds, for your plants heaping out weeds, reducing your water that's required to water the plants. This is what you want to focus on. One service, just mulch. If you would like a mulch estimate, then have a call to action. One call to action. Not links to your website and links to your social media. And you know, give us a call, here's our phone number, here's our email address. No, if you want them to ask for an estimate, you might literally just say respond back to this email with the word yes and we'll get an estimate to you for your bark multinstall within 24 hours. That's the type of quick access that you want in a one click estimate email. Now ideally it's just one click, right? But if you haven't built that functionality into your CRM or it doesn't have that functionality, make sure that you have it as easy as possible for them to respond. We built it at Augusta where it's literally one click and it immediately triggers an automation, lets us know that they want this specific type of service and we're able to get that to them. And a lot of times we're able to do it over the phone and very quickly or even just send it to them because we don't even have to call them, just send it to them via email. But even if you don't do that, because that's not where we started. When I first got started, it was a matter of sending these monthly newsletters out. And all of a sudden I started realizing, man, we got like 2,000 emails inside of our database. And every time I send one of these I get 10, 15, 20 estimates. And if I strategically place them at the right time of the year, I can really increase my leads. And I don't have to be spending money on marketing. I just simply have to ride the wave of these one click estimate emails. And we send out a one click estimate email. Now with thousands of emails in our database and get 70, 80 estimates over one email. And what this allows you to do is now be the faucet instead of marketing. Be the faucet where when you need more leads, you turn on the faucet of paid marketing. Now when you need more leads, you simply send out a one click estimate email to all of your customers asking them for a specific service that you could upsell them into. Now what's really, really key is timing. What time of year do you send each specific service? I'm not gonna do a mulch install in the middle of winter. I'm not gonna do a mowing email in the middle of summer. Alright? Make sure that the timing of your services that you're pitching is very, very pertinent to whatever the climate currently is. So for us here locally, we really, our spring rushes, March and April, that's like most of our new mowing customers come on board during that time. So what am I gonna do? I'm gonna send my one click estimate email, my email for that service for mowing during the months of March and April. Alright? And then every single month I'm going to try to figure out a different service and you could literally just take a calendar all 12 months and just write on it. What service are you going to pitch for every single month? You can do two or three for the same service for mowing, we usually do two or three in the spring and a couple projects and molten stalls during the summer. Maybe do some fall cleanups and leaf clips during the fall, winter cleanups and winter services during the winter do Christmas lights or snow plowing. You can absolutely look at every single month and get a different theme and different service and you can literally just create one email for every single month. People aren't going to remember last year when you sent them a one click estimate email for a mult install. What's really cool about this, we had people that we hadn't done service for for a year, two years, three years, we'd just done an estimate they never accepted. All of a sudden they click on this button and accept a $10,000 job. All of a sudden they click on this estimate on the button or they respond back to this email and they literally we got them on service from Rowing. That cost of that customer, that acquisition was zero getting that email sent to us. Whereas you might go spend 20, 30, 40, $50 on a lead from HomeAdvisor or Google or Facebook and spending money on these ads from cold leads. Leads that you're gonna have to actually build a rapport with. Whereas these people, you've either done service for them or at least done a bid for them in the past, they have a much higher close ratio. They're usually less price sensitive. These are the type of customers you want the Ones that are in your database. So I highly recommend whatever CRM you use, make sure that you're going to be able to use this email functionality and send out these one click estimate emails. We used to be much more newsletter based. We talk a lot about our crew and behind the scenes and I do that like six or seven months out of the year. Now I'm going for the sale because my invoice is very much transactional. We've charged our credit card they the middle of the month. I am trying to build value now not so much in like behind the scenes as much as I am trying to build value in information about their landscaping. So when I pitch my molten stall, I'm also pitching why it's so important for their plants and for retaining the moisture inside of the soil and keeping the roots healthy. All these sort of things offers value. And then I ask for the sale at the end of that email. So. So in the past we used to do more newsletters. We've moved much more towards we pick a service, one service, one call to action. That call to action could be call. You could have them call you. But again, my problem with calling is what if they open up their email at 11pm and they're calling and there's no one to pick it up. So I want it to be where when they click on there, there's either an email response, you can respond back to this email with the word yes, something is simple as possible. I don't want to make them fill out a form or respond back with what services you would like on your estimate. Make it as simple as possible and if you can get it down to one click, great. I think down the road it'll be where you look at it and you blink. You're trying to reduce the friction of them asking for an estimate, asking for more work to be done. And this is the way to do it. This is the way to literally take your customer acquisition cost to zero and then just keep, keep farming your warm leads. Stop abandoning your warm leads. People you've done service for in the past, people that you've done estimates for in the past, people that already know like and trust you. Stop abandoning them for the next shiny thing, the next new customer that's completely cold doesn't have a clue who you are. And you have to build up rapport and convince them and go back and forth about price and all sorts of value and why you should choose us. Like just go after your warm leads. And that's why after several years, especially like a Four, five, six years, you really shouldn't be doing much marketing to new customers. You'd simply be taking referrals and then sending out emails that are farming those leads from your warm customers, the ones who have already done service with you in the past. When it comes to print marketing and Every Door Direct Mail, there's a few more things I want to add to what we talked about. And when it comes to Every Door direct mail and the program that they have, keep in mind that it doesn't matter if it's a flyer or a postcard in terms of the cost a delivery, only extra cost is going to be the cost of printing. So I recommend if you're going to spend 18 cents for delivery using the Every Door direct mail program, spend an extra 3 or 4 cents getting color on both sides and maybe a nicer stock of paper quality. And again, if you need more real estate, more space, an eight and a half by 11 is going to cost the same amount in terms of delivery as a postcard. So why not spend a few extra cents, get an eight and a half by 11, be able to share more information, have a larger picture, have a larger footprint. That would be my recommendation. We actually would do card stock for 8 and a half by 11 every door direct mail flyers, because it's like, look, I want to spend the extra 1 or 2 cents to get card stock versus a really cheap thin paper that's easier to throw away. So that'd be my recommendation. When it comes to print quality and Every Door direct Mail, keep in mind, what you're going to have to probably do once you go through their program is bundle them in hundreds. And then for each mail route you're going to have, you know, let's say there's 1,000 addresses, you're going to have 10 bundles of 100. Keep in mind you're going to need the Every Door Direct Mail stamp on all of those pieces of mail. Now, we've seen across the country it vary massively based upon the postmaster and who you're working with at the post office, whether or not they require the stamp. But to be safe, I'd recommend it. And on lawncaremedia.com where we have all of these designs for you to download, we have the stamp on everything because just in case. But if you're designing your own, please, before you print them off, like maybe print one off and take it to the post office and have them approve it, because you do not want to print off a couple thousand of these. And now you've wasted Hundreds of dollars. And they're like, oh, we're not going to send them because they don't have the EDDM stamp has like local custom customer and ERCWS on there. So highly recommend that you have the stamp on whatever design you're using. And again you can check out lawncaremedia.com has all the flyers, postcards, it has other things like door hangers and yard signs, but the flyers and the postcards is what you're probably gonna be focused on when it comes to every door direct mail and sending out those cam panes. Now when should you be using every door direct mail? When you should be using these print marketing tactics is when you have hyper localized marketing campaigns. You are not going to want to send this out to 20,000 people. The Bang for your bucket is just not there. Because sending out to 20,000 people is probably going to cost you $5,000. $5,000 spent on Google Ads or Facebook ads is going to get you a lot better return typically than sending out 20,000 flyers on every door direct mail. And so what I would recommend is use every door direct mail when you're really targeting like one or two neighborhoods. And if you're just getting started, that's what I believe you should be doing anyways. Don't try to boil the ocean and go after a massive 20 mile radius focus if you're just getting started on a few neighborhoods. Because you're going to be more profitable from the onset if your lawns are all close to each other, if your projects are all within a mile or two radius, that's where you're the most profitable. At Augusta Lawn Care, our territories are five mile radiuses. But when they come for training, I tell them literally one or two miles is all I want you to focus on because you'll be more profitable your first and second year if you're going after a very tight market versus a massive 5 mile, 10 mile something 20 mile radius. It gets so spread out it takes a long time and a lot of customers before you have adequate route density to actually become profitable. So I recommend going after a really tight market anyways. And if you're doing that, that's when every door direct mail can be very powerful. Because if you're going after say a thousand houses, now all of a sudden it's 200, $250 to get something delivered to their house, including printing and delivery. Well, you could do that four or five times for 1,000 bucks. That's a really good deal. And now I'd much rather personally have 50 customers in a one mile radius than a hundred customers in a five mile radius. I'd rather have half as many customers. But if I know they're all that tight, they're all that close to each other, I'm gonna be very efficient, I'm gonna be very profitable on those customers and it's not gonna take me years of growth before I get a correct amount of an adequate amount of route density where I can be profitable on those jobs. So I recommend every door direct mail, especially at the beginning. We haven't done every door direct mail for years because now we're spread out, but we have lots, hundreds and hundreds of customers and they're all profit. All the customers can be profitable inside of that 5 or 10 mile radius. But if you're just getting started, go after a very tight market. And that's when I'd use every door direct mail. Target those 5001000 homes that you know you can get customers from. And that's your ideal market. Because honestly, if you go after a thousand houses and penetrate them with every door direct mail, maybe put some yard signs up, door hangers, knock on the doors, we'll talk more about that in just a moment. But if you're going to do all that in a thousand houses, you could easily get one out of 10 houses to get you your service. It's a hundred mowing customers in just a few neighborhoods. That is where real money is made in this industry is when you have customers where you park your truck and you do four houses, you drive down the street a little more and do three houses. That's where you really start to make great money. That's when your employees down the road, once you put them on pay for performance, that's when they can really start to also make performance dollars, is when they're not driving. Drive time and windshield time is the bane of this industry's existence, especially when it comes to lawn care and recurring work. But even projects you don't want to be driving 45 minutes one way because what happens if you forget a wheelbarrow? Well, you're driving an hour and a half round trip just to go get the wheelbarrow now. So I really recommend every door direct mail. When you're first getting started, your first 50, 100 customers really go hyper localized, very, very centralized to a specific neighborhood, a specific couple neighborhoods, and target them only. Every door direct mail, door knocking, door hangers, that's the recipe for getting those markets that are really, really tight in those neighborhoods. And if I was you, I'd check out lawncaremedia.com for all of these designs. You can download them, customize them yourself, order them for printing or whatever it is. I think it's like 3.99 for literally like 60 different designs. So check it out today. I think it'll be really beneficial for your business. So you've already talked a lot about web design and the improvements and changes that you need to make to your site in terms of speed and just how important that is. Mobile responsiveness and the mobile design of your website. We've talked about that already. But I want to add a couple more things about Google specifically in getting reviews. So first and foremost, Google no longer exists. Then they called it Google My business and that's now being changed out to Google Business Listing. And what they're doing is they're merging with Google Maps. And as I see this happening, I'm seeing more and more of a dependence and an emphasis on your geographical location. Having an actual address instead of just a service area inside of your Google Business listing is going to be very imperative to actually show up on the map and actually be a part of those higher ranked locations and higher ranked locations listings on a Google listing at the top of the page like this is prime real estate. Even if your website hasn't ranked organically the best on SEO, you might be able to be in the top three that are shown at the very top of the page if you have a map to location as well as a lot of reviews. So getting reviews and having a map to location is extremely important. Now after Covid, when a lot of people move their businesses back to their house, we've seen Google be less restrictive about having an actual business location that has a signage and an office space. Back in the day, they would make you prove that you had a business by having a commercial space. And they wouldn't allow you to run a business out of your house and let it show up on the map. We've seen that relaxed and so there's still sometimes we see it being flagged, but my recommendation is try to make it where your business, even if it's your house address, has a physical address. Now you can't use like a UPS store box or PO box from the post office for an address. You can't do that. They'll get flagged. Usually. However, try using your home address if you're just getting started and it'll be massive for your SEO for your Google listing and your Google ranking. So number one, try to make sure you get an address even if you don't have a physical space, even if you don't have something outside of your house, just use your house address for now and try to verify it. And not very seen. About 80 to 90% of people be able to get their home address as their business address. And it does much better on Google Maps and Google listings. The next thing is getting reviews. You want to have an automated way to do this. Ideally your CRM has some sort of automation that when a customer's property is completed, when their service is completed, they automatically get an email asking for review. And those links are going to go directly to your Google listing page. Now, right on your Google listing page, there's gonna be a link that's the link that you can send to people via text message or email that will not only just send them directly to Google and into your listing, but it'll actually open up the review tab already and put five stars in there. So that's the part you want to copy and paste and give to customers that ask for it, but also make it part of the automated process that when someone completes a job, maybe it's every three months or four months, you ask them for an online review. Now ideally, you don't just send that to everybody. Ideally you have an email that goes to these people and says were you happy with your service? And then you have a yes or a no and you have buttons and the no. So they're unsatisfied, should go to a Google form where they can fill out their information that they're unhappy about. They're mad, they're freaking out and they can fill it out and it goes to you. The yes is what should go to Google reviews so they can leave a pause public review for everyone to see. Do not just make an online review system where if they just complete the job, it sends them and ask them for a review online. Because now you're gonna literally put that in the hands of every mad customer. And mad customers are much more inclined to take the extra two minutes and write a review if they're freaking out and they're mad. So I'd ideally want to screen those people out by asking them were you happy with your service. If they say no, that should go to a Google form. That Google form should go to you when they submit it, not online and publicly. So you're gonna be able to screen out all the people that are really, really mad and would otherwise be spewing online garbage for everyone to see on Google Reviews. You only want people going there that are going to leave you a five star review. And you can do that by having an automated sequence and email that goes out to these customers asking were you happy? Yes or no? They click, click yes. That's the only way that they get to the Google reviews tab. All right, so if you're going to do door hangers, I really recommend pairing that up with a very localized strategy. Again, if you're doing door hangers, we're probably knocking on doors, pounding pavement, and you're just getting started and you're really focused on a very tight market. So I want to pair that up with every door direct mail, yard signs, and other various forms of marketing that are also very localized and targeted. So if I'm going after two neighborhoods and I'm going to do door hangers on both those neighborhoods, I'm probably going to match it up the same week within every door direct mail campaign where they get a flyer in their mailbox. I'm also going to match that up with the same week I also put a bunch of yard signs around their neighborhood and all the different areas of entry to their neighborhood. So matching up the door hangers with those other forms of marketing is really the most powerful because you get a lot of penetration in most cases, take six to eight different touches with a customer in the form of marketing before they actually start to recognize your brand. So if you can touch them in the form of a yard sign and then door knocking, and then all of a sudden there's a door hanger on their.
Door and then there's a piece of mail in their mailbox, all of these things are different touches that allow you to get that brand recognition that you're trying to look for. So if you're going to do door hangers though, so I do recommend that if you're walking up to the person's house, you're walking up their driveway, you might as well give them a price while you're there. For most customers, price is the biggest question mark as to whether or not they want service. If everything was free, of course they want you to trim their bushes and mow their lawn. So the biggest question mark over whether or not they want you is the price. Why not give them the price on the door hanger? So this is what I recommend doing. Have a door hanger and you can get these@lawncaremedia.com we call them instant quote door hangers. And basically it is on the door hanger. It has a spot for you to put the price for either a mowing job, a property cleanup, or Mulch installation. And so literally, as you're driving, walking up the driveway, instead of just walking up to the driveway, walking up the driveway and putting up the door, the door hanger on the knob. Now you're looking around. Okay. Okay. This would be like a $40 coat. $40 per cut mow. Bam. $40. You go up to the door. I would knock on the door if I was you. If they come to the door, you can hand that to them, introduce them yourself like I mentioned in the last video. But if they're not home, you can now literally put that door hanger on the doorknob, and they are going to have an actual price for whatever service that you're trying to sell. Instead of you putting a door hanger that had a whole bunch of promotional material and says, give us a call, go to our website. Why? To get an estimate. Why not just give them an estimate? You're already at the the property, and most of the time you can. You can don't even need to go in the backyard. You don't need to see the backyard. Especially if you're in a neighborhood where there's a whole bunch of houses. They all look the same. You can look on Google Maps and see the backyard if you really need to and get a really accurate quote, whether it be mowing, molten installation or property cleanup. And you can literally have all three of those different types of door hangers. And depending on the type of property and what their needs are. Okay, this property looks like they need a lawn service. It's the grass is overgrown. Bam. I'm using instant quote door hanger for mowing. Oh, man, these trees are overgrown. Or there's a bunch of leaves in the flower beds. Okay, I'll do a property cleanup estimate. That's the type of thing you can do. And now the customer doesn't have to call you. Now what they're going to do is take a picture of that door hanger with the price and your quote is basically on there and email it to you on that. It's going to have their name, their address, and their phone number. And that's all you need to basically get started. The quote has been accepted by them. Sending that picture. The job is really ready to go on the schedule. So that would be my recommendation. If you're doing door knocking, be very localized. Pair it up with other localized marketing strategies like every door direct mail and yard signs. And then make sure that when you're doing every door direct mail. When you're doing door knocking that same week, that Same two weeks, try to put it all in one spot. So that way they start, man, I saw the in the mailbox, then I saw them on the door. Then they came and knocked at my door. Then I saw them out on the street on a yard sign. Putting all those things together really allows people to be like, man, they're everywhere. And you literally are just going after a couple neighborhoods and spending $1,000 or $2,000. That's the best strategy at the end of the day. Door knocking, hanging, door hangers, all of those things are just a numbers game. So people get very discouraged after knocking on doors. And they go through 100 and don't get a single customer. Literally the next three customers, your 101st, 102nd, 103rd customer, could all accept a job. And then now all of a sudden, you got three customers in the space of a couple hours. So I would recommend all those things. I also recommend knocking on the door, not just putting the door hanger on. And again, if they answer, you now already have a quote for them. It's really like, hey, Mr. Jones, I noticed you might need some things. I just wanted to give this to you, introduce myself. And if you ever need anything, let me know. But there is a quote. I actually. I wrote it up while I was walking up the driveway. You need anything, just let us know. And you just use a Sharpie and just literally write it right on there. That's all you need. And I was gonna get a conversation going. You're gonna have a much higher close ratio if you actually talk to the person. But if they're not home, you knock, there's no answer. You just put that door hanger with the quote on the doorknob and you're good to go. And you're gonna get a very small percentage of people that respond. One percent would be incredible. Half a percent likely. But again, if you 200 houses, there's your one or two customers. That's a really great return. At the beginning of your business, you're gonna exchange time knocking on doors, door hangers, things that are unscalable instead of money. Cause you don't have $10,000 to go run a Facebook advertising campaign, a bunch of Google Ads, and do a bunch of fan stuff on Spotify and a big newspaper thing. You don't have the money. So go localize, very, very targeted, and hit them from all these different angles and make sure that you're spending more time than money. Because right now, if you're just getting started, you have 10 customers, you have all the time in the world. You got plenty of time to go knock on doors, put door hangers out. You don't have the money. And down the road, as the business grows, as we'll get into in the future, you will go start spending money on marketing that's more scalable. Facebook ads are more scalable. I can spend $500 tomorrow and get a bunch of leads. I can't do that necessarily if I'm door knocking. But at the very beginning, you're not going to have that type of money to spend on ads. You're going to want to focus on spending time. You either have time or you have money. At the beginning of your business, you have time. So go knock on the doors, hand out the door hangers and pair those things up with other guerrilla marketing in the form of yard signs and every door direct mail. Alright, so we talked about Facebook ads and how to make those. One thing that's really important to note is that all Facebook, all platforms online, all social media marketing changes very, very quickly. So not only is it just like where the buttons go and where the links go and how the outline, outline of that ads that I just showed you, that I just showed you there, it's completely changed in terms of the way it looks, but it's not about having that down exactly because it changes all the time. It's about being fluid and testing out different platforms. And so Facebook, for example, not only looks different, but also their iOS 14 change a couple years back really changed the game in terms of privacy. And now it's harder to target people based upon their geographic location, their age, their like, things like that, because they can turn it off on an Apple device. They can literally block Facebook from tracking those certain types of things. Now I believe that platforms like Facebook will figure out ways around these privacy issues over time. And as their tracking and targeting has become less and less impactful, well, the marketers move away to TikTok or some other platform and now all of a sudden it's a good deal again. So it's all about just the price of the click. It's the price of the leads, the customer acquisition cost. That's what it all comes down to.
When I look at.
Marketing, I kind of think of it like a funnel like this. I got clicks that come in the top. These are clicks. And I have a cost per click, I can track that. Then I have a cost per lead. That's how many people actually convert from a click. And they actually click on something on my website, become a lead, they Fill an ask for a request form, they give me a call, they actually say, hey, I want service. That's a lead. And then you have your customer acquisition cost. These are the people that actually come out the bottom. And this is the main thing that you're trying to keep track of is what is my customer acquisition cost? How much do I have to spend in order to get one customer? Now at every single one of these stages there is a conversion ratio. I like to think of it as like a filter at these different stages. So the conversion first and foremost is what is your conversion? Your click conversion. Alright, so click conversion, what that means is what percentage of the people that come to your website the clicks convert into becoming a lead? Maybe that's 1%, 2%. Whatever it is, what percentage of your clicks become leads? That's your click conversion. Then you have your closing ratio and this is how many of your leads leads become paying customers. So your close ratio is very important. And that's what we talk about in how many leads did you have? That's how many estimates did you give out? How many quotes did you send out versus how many actually converted? That's your closing ratio. Let's say it's 50%. Well that means half of them would become customers and that would lead to what's our customer acquisition cost. So for example, if our cost per click is $1, let's just say for example, and our Click conversion is 1 out of 20, so just say 5%, that would mean that we're going to pay $20 is going to be our cost per lead. And let's just say our closing ratio is 0.5 or 50%. That means that our customer acquisition cost is going to be $40 per client. Means that I have to spend $40 in advertising in order to get one customer. So the importance on Facebook and different social media platforms, a lot of times it comes down to changing your creative because your goal is to always reduce this initial spend. This is where you're showing your ad cost per click is like I wanna get that as low as possible. How do I do that? I get a really good performing ad, a good picture, a good video, a good headline. And I recommend you change these out every few days, maybe once a week max, in order to make sure it stays fresh. Because otherwise people just start scrolling past it. They don't even see the ad if it's the same thing that they've seen 20 times in the past week. So constantly be changing your headline, changing your creative. When I say creative, I mean Your picture, your video. And honestly, a lot of times face to camera works really well. Sometimes a video where someone just has their camera, like hey, it's Mike over at Augusta Lawn Care. We're just down here at this property. And again in the background they're seeing local areas, local landmarks in your local city. And here we're out installing this irrigation. Just wrap it up. If you need irrigation done this this summer, let us know, give us a call. That sometimes does so well. Cause it's so anti commercial. It's anti kind of like the classic corporate look of what an ad feels like and can do really well. Because it again makes it feel very localized. Cause it shows you it's very organic, it's not super produced. So I've actually seen those do better than really nice flashy ads, banners and text and graphics. Trust me, something just face the camera does really, really well on social media. Remember, people are going to social media not to see ads or get sold. They're going there to see cats and funny videos. And so they're wanting to be entertained and they're wanting to see things that are real. And that's what social media is like connecting with other people. Not brands and businesses and money. They're focus more on the social connections. And that's why having a face to camera can work very, very well. And ultimately what we're trying to do is to get them to stop scrolling because they're just going through their day, their phone, going through, through their news feed or whatever. You need them to stop scrolling. And how you're going to do that is a face does really well. Fast paced does really well. Them being like, oh, this is local, that does really well. Because they're seeing every other ad for massive national corporations. And all of a sudden they see you like, oh, that's my backyard. That's like literally down the street from me. That is very impactful and a great way for them to stop scrolling. Very important. Sometimes even just using humor can be important. Having that low production value, but having humor. If you can somehow incorporate all of that with being local camera to face low production value. But like have a good message, be punchy, be fast paced, that can be really, really impactful in terms of the creative that you're gonna use on your social media ads. And when I say social media ads, it could be Facebook, it could be Instagram, it could be Snapchat, it could be TikTok. There are so many different platforms, they change all the time. But let's try to true of what Works on these different platforms in terms of the type of content and keeping it fresh and changing it is the best way to tweak it. Change it and you might all of a sudden get a killer header, title and header along with a great picture or video and it just crushes when literally you just change a couple little things on it. So again, the social media world is constantly changing. Literally just a year or two ago next door at a great ad platform and then they took away the ability to target by neighborhood. So I didn't like it. They might bring it back though. And now it's different. Google local services A few years ago I told everyone to get in on it. It's like the next thing and it's like the cheapest it'll ever be. And sure enough, it's now double or triple the cost per lead when it comes to Google Local services. So definitely check that one out. I still think it's a good deal, but it's continually getting more and more expensive. So the social media and online marketing is always changing. It's about keeping abreast. Listening to the podcast, the videos that I make is a great way to kind of stay abreast of what's coming. Every five years it changes, but every year or two it's shifting where the best opportunity, the best dollar, the best bang for your buck is. So keep that in mind. Right now I think Google Local services is probably one of the best. Google Ads are doing pretty good. Facebook's back on the rise though. Literally a year ago I would have said don't touch Facebook with a ten foot pole. It's starting to become a little better. When you're watching this in a few years, maybe it's not. So it's really about staying up to date, testing different things. If you're going to go online marketing Instead of spending $1,000 on one thing, I'd rather you spend $333 on three different things and see which one works best. And then spend your next thousand dollars on marketing on that one thing that did really well and one that really had a much better cost per lead or customer acquisition cost. And remember these different platforms, you might have the same cost per click or even have a way better cost per click compared to another platform. But remember that not all customers are created equal. So I might pay $40 for a customer that comes off of Facebook, but I might be willing to pay $80 for someone who came from Google who literally was looking for lawn care and landscaping and filled out a form an estimate form versus someone on Facebook who sneezed, accidentally clicked on my website and was like, oh. And then they accidentally put in there and I come to their house like, oh, I didn't want an estimate. So realize that your customer acquisition cost across different platforms might be different. So realize that the value of different customers from different platforms, depending on where they came from, can vary in what the long term lifetime value of that customer really is. So I want to talk about scheduling, using budgeted hours. All right, so this is what I would look at when it comes to obviously your calendar, Friday and Saturday. Now, we're gonna look at an entire month, and this is what I recommend you do when it comes to projects, recurring schedule, whatever it might be, look at an entire month. Have some way to be able to see the entire month at a glance. Some CRMs allow you to do this, to quickly see a month and see all the jobs. Very, very good. Ideally, though, what you wanna do is be able to calculate budget hours per week. This is the most accurate way, in my opinion, to be able to determine the schedule and not have unforeseen surprises or things that creep up on you or all of a sudden you're really booked out. This is the way to do it. And this is furthermore the way to be able to book out weeks into the future and know exactly when you can schedule someone's job. Literally four, five, six, eight weeks. If you're booked out, literally know the exact day that you're gonna put them on schedule based upon the budget hours that are on the calendar. Now this is what I mean by that. Now over here, what I would do is do budgeted hours on a Sunday, for example. And you can do this on all these days. Here, let me get a new marker. Budget hours are gonna be on every single week. And this is your capacity. This is your budget hour capacity. Now, I don't recommend running everyone in terms of budget hours at 40 budget hours per employee. I don't recommend doing that because you're going to burn everybody out. And remember, there's load time, there's gassing up, there's unloading time. So usually I'd recommend between 30 and 35 budgeted hours per worker out in the field in terms of what your budget hour capacity is. So let's say we have 10 employees and we're budgeting 35 budget hours. Again, that's like the max I would do, honestly, because you're going to go into overtime and if you want to be really conservative, do 30. Let's just do 30 all right, 30 budget hours per employee. That would mean that I have 300 budgeted hours for capacity. Now I might say, okay, well, I already have. Let's say if there's 300 budget hours, 10 employees. Okay, well, I'm going to assume that I have 40 budget hours of mowing on every single one of these days. Now, this scales up. I know I'm using 10 employees, which might be a lot for some of you, but this could be 50, 50 hours. And then you could potentially just do a few days like I mentioned in the video, like Monday, Wednesday, Friday, I'm going to do mowing, and Tuesday, Thursday, I'm going to leave it available for projects. Now, you could do that if you're smaller or you could even do it when you're larger. For example, instead of 40, 40, 40, 40, I could simply do three days a week of mowing, two days a week of projects. And simply to do that, all I would do is do Monday, Wednesday and Friday as 100 hours. Okay? So again, I have 100 hours worth of mowing on those three days. Again, those three would equal the full 300 budget hours though. And these days would be empty. Okay, so actually, what this would actually look like is probably something more along the lines of something like 60 budgeted hours on all these days. That equals 180, meaning I have 120 budgeted hours to be able to do with projects. And that's gonna be here. 60 and 60. Okay? So you could do this however you want to scale. This is totally fine. And it's just simply a matter of figuring out the math of what works well for you. So 60, 60, 60, 60, 60,. 60 times five, that's 300 budget hours. There's my entire week. Now you might say, hey, this is the mowing day. 60 hours. 60 hours. 60 hours. Now I know I have projects for these two days out of the week that I can fill up. Now, if I have a 15 hour project, bam. 15 hours, okay. Then I get an eight hour cleanup added. Great. Okay, then I get a 24 hour cleanup. Great. I can put all of these in here. And I know that because I know my capacity for this day and I know these days are filled up. So this is a great way. You could literally be like, okay, I know I'm filled up all of these days for mowing for 60 hours per all the way through. And, and literally as I now get jobs that are accepted one time jobs, I can start adding them in until they equal out to 60 hours. Right? So 15 plus 8 is 23 plus 24 is what, like 47. So I have another still 13 hours. So I can do another 13 hour job. And there I'm at 60. And you're never getting exactly at 60. You'll be at 61, might be at 58, but you can get as close to that as possible. And now it's like, okay, if a job was accepted right now, a 16 hour job, when would I get on schedule? I know it would go right here because this is filled, this is filled, this is filled, this is the next available day. And so what I would do is do this on a calendar where it's like immediately, you know, okay, that's booked, that's booked. And maybe even put a marker like a calendar date that says booked until this date. And so your eyes go directly there and you're trying to figure out when can I put this on this person on the schedule? A 16 hour job, bam. Alright, now all of a sudden, that same afternoon you get someone accepted for a 300 hour job. 300 budgeted hours. Well, guess what, it's very simple. We're going to be able to quickly calculate, okay, well if I need 300 budget hours, I'm going to need 60, 120, 180, 240, 300. All right, so literally now because of the mowing, I am scheduled now all of a sudden because that one massive three week project, the next available day that I can put anything on the schedule would be here. Unless there's some small jobs I could still fit in here potentially. Like so if that all happened now, I am exactly what, one, two, three, three and a half weeks booked out. Cause this is the next available day for me to put things on the schedule. And I know that because every single one of these weeks I can assume that my budget hours are at 300. So using budget hours is the most accurate way in my opinion to do schedule. I don't care if it's 60, 60, 60 like this, or if you have mowing all on one or two days, or if you spread out the mowing like we did originally, where there was like, you know, 30 or 40 hours every single day. However you want to do it in terms of mowing and projects, like for example, some people would say I'd rather have 30, 30, 30, 30, 30 and then have projects every single day. However you want to do it is totally up to you. It doesn't matter because all you're looking at is as budget hours. Budget hours is your capacity and how you fill that with recurring Jobs or projects is completely up to you. But this is the scary thing. This is the thing that people run into. This really will fall apart during the spring rush because what happens is like, okay, I'm three and a half weeks booked out. Great. Here's the problem. You're budgeting 300 hours every single week. But what you forget is that every single day or every other day, you're getting one, two, three mowing jobs. And what that is doing is slowly but surely adding to the budget hours. And you might be like five, six weeks booked out. And when you put them on the schedule, everything was working out in terms of the math of 300 hours. But now all of a sudden you get down here and all of a sudden you don't have 300 hours on the schedule. You have 330 hours. How did that happen? You got 15 other jobs accepted, other little mowing jobs. Because mowing jobs can't wait 5, 6 weeks to they're booked out. You put them on the schedule. Well, when you do that over the course of, especially the spring rush, if you're booked out far and adding mowing, you've got to bake into your capacity that this is going to go up. And you can forecast this, especially after a couple years of doing business like, okay, I might be here. I'm looking up here right now. I haven't filled out the whole month, but I already know I'm in the spring rush. I know I'm going to get on average, let's just say five new mowing customers a week. So I'm just going to that. Instead of my budget hours needing to be 300, it's actually going to end up being something looking like 310, 320 and 330. Okay, now I can adequately budget for the fact that my mowing days, in this case Monday, Wednesday and Friday. By the end of the month, it's probably going to be like 70, 70 and 70 because I'm going to get all bunch of new customers. So this is a great way to budget. But remember, during the spring rush, your budget hours either needs to go up, your capacity, that is, you're going to hire one new person in this month. You could literally just look at this like, oh, based upon my projections, I'm going to have to hire one more person in order to be able to account for all the new mowing customers I'm adding if I still want to have 60 budget hours available on Tuesdays and Thursdays. That's a great way to look at it. Another way to look at it is, well, actually I don't want to keep growing. I don't, I don't have the trucks or equipment, for example, I need to keep my budgeted hours at 300. Well, if that's the case, if you only have the trucks, equipment and you only don't want to grow your business in terms of number of employees, because that's the only really way to increase your capacity is increasing trucks, equipment and employees. If you don't want to do that though, then this is the thing. Now your Tuesdays and Thursdays instead of 60 budget hours might become 50 or 40 as you begin to add more mowing throughout the spring rush. So at the end of the day, you got to make sure in your CRM you're able to track how many budget hours do I have on for the week, how many budget hours is my capacity for the week is going to be the determining factor of how many employees I need to have. And either A, as you're growing your business, you're going to project forward and determine when you're going to need to hire people, or B, you're going to make sure that you project forward in terms of what you expect, how many jobs are going to be accepted in terms of mowing because that will decrease the number of budget hours for projects that you can put on the schedule without becoming overbooked. I see this all of the time during the spring rush. And as people like they're five, six, seven weeks booked out and everything looks great. March and April, right. And all of a sudden they hit May or June, it's like they're so overbooked they can't get the jobs done. It feels like their employees aren't moving fast enough. And the simple fact that they were booked out six or seven weeks and everything was good in terms of budget hours, but they forgot, excuse me, they forgot that as the spring rush went on, they were still going to be adding recurring customers. And all of a sudden, A month later, two months later, by the time they hit that seven week backlog, they had 40, 50 new customers that were mowing. Well, yeah, that's going to increase your budget hours. You're no longer going to be at 300, you're going to be at 330, 340, 350. And so, so keep that in mind as you're going to spring rush. That's the big danger of booking out using this method. But this is the most accurate way to predict what your schedule can be. Because if you do use this method, you can be very accurate in terms of knowing when someone calls me, I know I'm three and a half weeks booked out. I'm going to call them. I know exactly the day when I'm going to be able to get the job done. Because budgeted hours are accurate. That's why budgeted hours on P4P, and just in general when it comes to scheduling, is so important because the budget hours must be accurate. For P4P, yes, pay for performance. You got to pay your employees correctly based on the budget hours. But more importantly, from a scheduling standpoint, these numbers, your budget hours, got to be accurate. So you can accurately predict what your schedule is going to look like, months, weeks, at least into the future. That's the best way to be able to give someone a very accurate date. In terms of service, we book ourselves out months in advance, giving customers the exact day and time we're going to show up. Why? Because we use budget hours and we are much less likely to become overbooked. And you might say, well, what happens if someone doesn't show up, an employee doesn't show up? We're going to bake that into this number. So Instead of assuming 35 or 40 budget hours, we're going to assume 30 because we know that that's doable. And we're going to assume that one out of five people aren't going to show up, they're going to get sick, they're going to call out, they're going to quit. And so you've got to bake into your capacity. What your fudge factor in terms of labor is, and that is people not showing up, people being sick, calling out, leaving the job, walking off, getting, you know, just leaving, whatever it might be, you've got to bake that into your budget hours. So you might have an extra employee or two. At this size of business, with 10 employees, you might have an extra one or two employees that if everyone showed up to work, they would literally not have much to do on Friday. But that's fine because I'd rather be able to consistently know that I have a certain number of budget hours than run the risk of a couple people calling out and all of a sudden I'm way behind and works going from Friday into Saturday, Sunday or even the next week. That's what throws a schedule off. And why most people will not book out weeks into advance is because they haven't accurately predicted this. Budget hours using fudge factor of employees, labor's not showing up. And secondarily, as they add Recurring customers, it's going to keep adding to the number of budget hours that's recurring each week, therefore reducing the number of budget hours they can use on projects. Or they've got to actually increase capacity by hiring, getting more trucks or equipment. Alright? So when it comes to invoicing, the big question I want to talk about now is do I invoice daily, weekly, or do I invoice monthly? A lot of this honestly has to do with your CRM and how difficult they make it to charge credit cards. So if you charge daily, you're going to have to have credit cards on file. If you charge weekly, you're going to have to have credit cards on file. Okay? And the reason for that is because by the time you just send the invoice and they mail you a check or you get payment, if you're charging daily or weekly, you're not going to be able to do that because you're having them start bouncing up against each other, having two, three outstanding invoices. So if you're going to accept checks, you got to have to do monthly. Now daily and weekly. Daily is awesome because every single day you can literally charge everyone that you'd work for. This is the best for cash flow because literally you never have accounts receivable. Work is accepted, work is done, and the same day it is completed, you charge the cars. Now there's actually something even better than daily and that is prepayment. Okay? So you can literally charge people before you even mow their lawn, do their landscaping job, and they require all your money down, whether it be on a project or on mowing. For example, you might charge $200 for a 12 month contract every single month. You mow their lawn, you do their weeds, whatever, 12 months, $200. You might charge it on June 1st. Do all the services though for that payment throughout June. That works really well. Pre is the best from a cash flow perspective. But it's usually the hardest to kind of convince people of because they're less likely to give you $500 and then you have to do the services. Most people are much more willing to accept an estimate. You do the services and then they pay you $500. So how fast you want to grow is gonna be somewhat dictating of which type of invoicing schedule you use. Pre gonna add a little bit of friction to the sales process. Not a lot, but it's gonna slow down your growth a little bit. So what I tend to typically see anyone suggest is someone use a more laxed approach to to invoicing in terms of daily, weekly or monthly instead of prepayment. And then grow the business. And then if you ever want to slow down your growth and focus more on profitability and great cash flow, then go to pre. So we're gonna take pre off the table for a second. But prepayment, where you make them pay before they even do service and just focus mostly on daily, weekly and monthly. Cause this is the most common daily. A lot of admin time. That's the downside. So cash flow is a great side. The admin side though is a headache. Because every single day you're sending out invoices every single day, you cannot miss that. You cannot miss a few days and go invoice back for the past few days. You can't do that. A lot more admin time. Now, whenever you invoice someone daily or weekly or however it is, the more invoicing you do, the more admin time there is. Because there's more customer service calls. Because most customer service calls and complaints happen after you invoice and charge their credit card. So upside, cash flow, very good. Downside, admin, lots of admin work and just a little more headache. For example, if someone's credit card gets declined on a weekly, do you stop immediately? Do you wait two weeks? Well, what if they're out of town for two weeks? Do you keep mowing the lawn? So it's a little bit more admin time. Lots more calls back and forth. People's cards get declined more often. When you're charging someone's card four times more often than if you were monthly, there's going to be more admin work and that's fine because your cash flow is fantastic. So there's no right or wrong answer here. There's pros and cons weekly. Alright, so kind of decent cash flow. So still good. Better cash flow here. I'm going to charge my card say on the Tuesday of every single week for the previous week's worth of work. I like that idea. Now the downside of this side is there's less administration and less cash flow. So not as much admin is doing it every single day. Right. I can have a little bit more of a fudge factor. I'm going the next week and I'm doing my billing four times a week instead of 20 or 30 monthly. Really, really bad cash flow. Big down for cash flow. Okay, that's the worst part about it. Now again, as with the inverse of all of these, it's the best when it comes to Admin because you do it once a month and you're gonna have a whole bunch of calls and a whole bunch of stacked stuff on the first, second and third of customer complaints and stuff like that for the rest of the month. It's usually pretty smooth sailing. So there's no right or wrong here. This is what I would personally say. This is the best for a small business that has very low cash reserves. You might want to start with this one or weekly even, because you do the work and you get the cash. You can literally go back to your app probably and click charge card and get the payment and it's in your account the next day. That's awesome. And when you're running on 500 or $1,000 in the bank account, this would be a good thing to do. Now if your business is more established and you have plenty of cash in the bank. I like monthly and the reason for that is because not for cash flow. I hate it from a cash flow perspective. And even if you have a lot of cash, you still want your accounts receivably low. It's just good business. So what do I do? Well, the reason I like monthly in some regard is the fact that I'm not sending them four invoices a month over here. I'm sending them four to five invoices every single month over here. I'm only sending them once. What this does is if you're charging per cut and you're allowing someone to stop or pause service throughout the middle of the year when it goes into dormant season for us, I only need to remind them twice that are doing service with me during that time versus eight, nine or ten times if I was charging them every single week or daily. So every single time you invoice their card that reminds them like, oh, do I need this? Do I need this? Do I need this? Every time they see that charge, I don't want to remind them ten times throughout the summer months when the grass is kind of dormant, I just want to keep mowing and remind them twice. And we have a much less cancellation rate during the dormant season. But we again don't have contracts because we have a winter. So every single market is going to be different. Your climate is going to dictate this as well. If you are doing like mowing year round, pre works really well because a lot of times you do 12 month contracts, you do 12 month level billing. I should say, like hey, it's a certain amount per month that's easier to do Pre, that's easier to do weekly or daily. Whereas if you can't do contracts you're doing by the cut or you have a long amount of winter time, you might be looking more at monthly because you do not want someone to cancel for July and August when the grass is dormant and you can like crush budgeted hours and make really good money. You don't want them to be canceling service because they're being reminded four or five times a month that their lawn doesn't really need the lawn to be cut. Whereas like, hey, I just want to edge and blow and make it look pretty. And if the grass is not growing, I can make twice as much profit during those months if I just keep them on. As a customer, I do not want to re remind them every day. So the first reason in my market locally we do monthly is because I don't want to be reminding them four to five times a month when their grass is kind of dormant. I want them to stay weekly on weekly service or whatever schedule they're on the entire year. And so I don't want to be reminding them every single week about their bill. When people start seeing bills more and more and more on their credit card statement, it's just like they start to be more and more inclined to cancel it. When times get tough, they go to the subscriptions. The thing they keep seeing in their credit card statement. I just want to be off the radar, baby. Second reason why I like monthly is the fact that I want to send that one click estimate email, that email to the customer in the middle of the month and invoice them at the end of the month. So that means twice a month they're getting invoices or sorry, getting emails from me. One is a marketing email, the one click estimate email in the middle of the month and the other one is at the end of the month. And that's the invoice. I want them to open up the invoices. I want them to open up the emails because if they don't open up my emails because I'm sending them every single day or week, well then they're not going to open up my marketing emails because they're not opening. It's like, oh, well, yeah, just another invoice from Augusta. Just another invoice from Augusta. Another invoice from Augusta. Well, guess what? They're going to just pass by my marketing email that literally I need them to click on and click the button. I want them to respond to the service of mulch or trimming bushes or whatever like I talked about. In the one previously about email marketing, that is like my most important thing. As we've grown our CRM and the amount of contacts we have, most of our leads come from that email. So I don't want people to not go open up the email because they're so used to seeing so many invoices flooding their inbox. So if I can go from seven emails a month because I'm sending them all their invoices and the marketing email, I'd rather just go twice. One for invoice, one for marketing. But again, that comes at a cost because I have a much larger accounts receivable and you might not be able to do that. So what I would recommend if you're just getting started is start with a weekly billing so you get your cash every single week and you don't go off for months on end, like two billing cycles on monthly. That's two months of not getting anyone's payment, like if their credit card gets declined, if you keep mowing and all of a sudden you could be two months worth of work where you haven't got paid for. That's a lot less likely to happen when you're charging weekly because you might go two or three weeks without getting paid, but then you'll stop service so you're less likely to get burned. But more importantly, your cash flow is really, really good the closer you get payment to the work being done. So what you might want to do is if you're getting started, you're smaller, focus more on the cash flow side because you need to stay afloat. It's like oxygen. You got to keep cash as the company grows. Though as you do get better cash reserves, you might move to more of a, a monthly model in order to be able to make sure that the click through rate on that marketing email, that one click estimate email is increased. We've seen before when a company goes from monthly billing down to weekly, that the one click estimate email open rate goes from 50 to 60% all the way down to 10 to 20%. Why? Because they're so used to seeing so many invoices and emails from you, they don't open up your marketing emails. And that's very valuable because that's the majority of where most of our leads come from is that touch point in the middle of each month asking them for a specific service, telling them to have one call to action, like clicking on a button or calling or whatever you're putting in as your call to action. So very, very important. It's all about where you're at in the business. If cash flow is less important, I might move more this direction because I want most of my leads and my growth to come from organic marketing. I don't have to pay for anything. It's just simply free leads every time they click on that button. Whereas at the beginning if you run out of cash, you would die, you run out of option, you die. You can't run out of cash, so you might want to. And when you're smaller and don't have a lot of cash cushion, have a more frequent invoicing schedule. I know that's not necessarily the right way, but that's what I believe. And I think that for some people it's really mostly going to depend on your climate. Again, prepayment can work especially, especially in markets where you mow year round, where you do service year round. That's when things like prepayment might work. Climate has a lot to do with it. What other competitors in your local market. And just like the organic localization of our industry, what they're doing is also important as well. All right, so let's add a little more color to that and talk about the importance of QuickBooks. I really believe even if you're just getting started, you should have a QuickBooks account is going to be the standard for when it comes to taxing taxes. Your accountant, they're going to be looking for and if you go to a bank, you're going to need some good profit and loss statements, a good balance sheet and having QuickBooks is imperative. Now, even if you don't use this service that I'm about to mention, I still Recommend you use quickbooks for yourself. But we do have lawn carebookkeeper.com where we can help do this for you. In terms of payroll, your quickbook, your expense categorization, giving you quarterly reports for a balance sheet and your income statement, we can do all of that stuff for you. But regardless, Please get a QuickBooks account. Do not try to cheap it out and do an Excel or do it in some other software and keep track of your expenses. Hook up your accounts. So every single time you do a transaction through your checking account, your credit cards, then you just simply have to categorize which.
It'S called a chart of accounts, which account that is going into in terms of your profit and loss statement. So just get a QuickBooks account. Also when you do that, it's now really easy to add a receipt to the transactions. So if you go to the gas station, you swipe your card, simply take out Your phone, go to the QuickBooks app, take a picture of the receipt and it attaches it automatically using their algorithm. So it's really cool stuff. I'd highly recommend getting quick Cookbooks, even if it's the cheapest, like the self employed version or the small business version. It's like 25, $30 a month to get started. It's really worth it. If you start getting the payroll side, you're going to have additional cost of you like 40 to $60 for the subscription, plus like $10 to $12 per employee. And those costs go up and down based upon what type of promotion they're running, but that's the general cost for it. And again, if you need help with the bookkeeper side, because you're that not confident in doing that yourself, just check out lawncarebookkeeper.com and we can help you with that for a very set productized price. But let's talk a little bit more about knowing your numbers. I want to talk about several numbers, key numbers that I recommend that you know all of the time. And that first of that is what percent of revenue, what percent of revenue is going towards labor? Okay. And to find this number, all you're going to do is your total wages that you pay your employees divided by your total revenue. Okay. This is going to give you what percentage of your revenue is going out the door to wages. And this really varies based on service, what type of products and services you're offering. If you're doing.
Chemicals and weed control and fertilization, you might have a much lower number, lower percentage here, like, like 25 or less percent. If you're doing a lot of project based work where there's a lot of material costs, there's a lot of costs that are inflating your total revenue. Again, might be more like 20, 25%. Because so much of your revenue is actually coming from a markup on materials and equipment and all the rest of it. But when we actually look at most lawn care businesses, 40% and below is really what your goal should be be if you're Starting to hit 50, 60% of your total revenue going out the door towards wages, you're gonna have a very slim chance of making money and being profitable sustainably. Because if you take out 50% in wages and then you take out 30% for like fuel and overhead expenses, then you take out your own salary. Now you're literally like barely scraping by. And so I would recommend trying to get this number around under 40% and if it's above 60% you should have alarm bells going off and that's what percentage of your revenue is going out the door to labor every single day. I would track this on a daily basis if you can, but at least on a monthly basis. Simply look at your wages you pay your employees and divide that by your total revenue. Another number that I want to know about every single month is the percentage of recurring work.
And these are the numbers that we track for our Augusta Long Care franchisees every single month for them, because we think they're really, really important. What percentage of your revenue is recurring? How are we gonna figure this out? First off, you're gonna determine what is recurring revenue. So this could be mowing for you. This could be fertilization, weed control, whatever it is. You gotta figure out what is considered recurring and divide that by once again your total revenue. So what percentage of your revenue is recurring? This is really important because I really believe that for most of us, we want to run the business on systems and have a very solid base of recurring work. And the higher percentage of your revenue is recurring, the less massive fluctuations you're going to have. Because you know you can sell these and depend on that income in the future. If you sell these jobs today and you have enough for four employees to be able to do mowing, you know, for the entire mowing season, you're gonna have enough work for those four people. It's less up and down compared to projects that are like boom or bust. And so I really like making sure I'm tracking this. And I think, you know, the first year or two, when we start a location only maybe 30, 40% max of our revenue is coming from recurring work. A lot of times projects makes up the bulk of the revenue when you're first getting started. And then as you grow, that number can actually go down. Like because you're literally getting projects that are say $5,000, which might be more than, you know, if you have 30 mowing customers, that might be one project equals all the revenue you make for all 30 mowing customers. And so just realize that as you grow the business, this number of the percentage of recurring towards total revenue, you want to increase that. It's going to make the business more dependable, in my opinion. I want to have a larger and larger base of recurring work and that will automatically bring in the one time projects. But honestly, this is the number I really like to track is what percentage of revenue is recurring. And maybe you are projects only or you do landscaping and hardscaping. I would still track this number in Terms of, are you able to upsell people into recurring packages for maintenance on the landscaping projects, resealing the pavers, cleaning out whatever you are installing, installing or trimming the bushes that you're installing, the planting? I'd be making sure I track what percentage of my revenue is recurring because that's gonna be the most resilient in a recession. And I would like this to be at least 30%, just as a precautionary is a 30% of recurring revenue. Now when I'm trying to build my business to the point where I can walk away from it and have a manager run it, and it'd be based on simple services like mowing and things that are more recurring, I really don't want to be focused on big projects. And so I really want this number to be 70, 80 plus percent of my revenue coming from recurring and simple services. So those are two numbers you want to be looking at. Another number that we track all the time@p4psoftware.com is what your labor efficiency is. Ultimately, how efficient your labor is is usually going to be how efficient your business is, because labor, labor is one of the biggest costs that you're going to have as you grow the business. So when we look at labor efficiency, there's several ways to do it, but this is the most common and the most, the way I like to use the most, and that is how many budget hours were completed in a given period divided by the number of clocked hours for that same period. So maybe for a given pay period, and you say, okay, there's three, 300 budget hours, maybe have five, six employees, and we have 300 budget hours in that week. And we're doing one week of time frame. And divide that by let's say that they worked 400. So let's just say that there are actually 10 employees at this business and they all worked 40 hours. So that would be 10 employees times 40. It's 400 hours that were clocked, that was on the job, they're clocked. But the number of budgeted hours, again, we're assuming that we are estimating by budget hours is 300. When you do the math on that, that would assume imply a 75% efficiency rating. What that means is that 75% of their day, 75% of their clocked hours were actually getting work completed. Okay? So that would impute a 75% efficiency. Now, in my opinion, you want this number to be at least, least 70%. If it starts going lower than 70%, you're inefficient maybe your route isn't very tight. Maybe your budget hours aren't very accurate. Maybe your crews really need some training on being more efficient, stopping less, and just getting on the job site and being efficient with their time. And it could also mean that it usually also means if you're under 70%, I find that P4P starts to lose its shine to the employees because they're so inefficient. They're just not enough meat on the bone to get them excited about P4P because they've got to be able to beat budgeted hours significantly in order to make good P4P. So anything above 70% is a good thing. 70% and above is good. If this starts getting under 70%, I don't like it. If you're seeing like 90 to 100%, this is usually a very efficient, very profitable business. And your employees are typically getting paid very well on P4P in excess of 5, $8 per hour above base pay. Very, very achievable as the average pay for the employees on P4P if you're this efficient. So I always like to track budget hours for that week or month or whatever time period divided by the total clocked hours. Now, the last thing I want to talk about is something I alluded to in the first video, and that is about churn. Because ultimately, churn is an equation that will determine what size business you will plateau at. And everyone they think about plateau, it's like, oh, it's really bad. Plateauing is actually usually when you're the most profitable in your business because you're not trying to actively grow, grow, grow, and you can actually put money in your pocket, become really profitable, raise your prices, et cetera. But churn is actually just simply an equation, and that is the number of new clients per year. I'm just going to draw this here. New clients per year. And you could do this by month or week, even if you wanted to determine this. But let's just say for your new clients, though, divided by your churn rate.
Is going to equal the number of clients that you're going to plateau at, number of clients that you plateau at. So you can actually determine exactly how big your business will become before you top out. And here's how you do it. Let's just assume that we have, we're going to get 20 new clients for mowing every single year and that we have a churn rate of 25%, which means 25% of our customers leave every single year. Now, 20% churn is very common in this industry because people move, they pass away, they sell their house, whatever it might be. And so let's just assume 25%. Now you can also, by the way, use this number to determine that this would impute a four year average lifespan, average life of the customer. So the average life of the customer in this case would be four years. If this was a 20% churn rate, you could also say that the average years of the lifespan of the customer would be five years. And that's pretty common. 25, 20% is really good actually. With things moving in the economy, a lot of times it'll be more, more like 30%. But if your churn rate is 50, 60% for recurring customers, it's gonna be very difficult to ever build a profitable business when it comes to recurring work because you're losing, you're pouring all these leads in the top and they're all falling out the bottom. So you really gotta make sure that your churn is decent. Okay, 20 to 30% is very average. But if we have this, we're gonna get plus 20 new clients every single year and we're gonna lose 25%. That's our churn rate every single year. We can Simply do the math. 20 divided by 0.25 means that at 80 customers we're going to stop growth. How do we know that? Because at that point, at 80 customers, if we're at 80 customers, that means if we're going to lose 0.25 of them or a quarter of them, that would mean we're going to lose to churn.
20 customers. Well, at this point, the amount that we're churning is equal to our new customers. So 20, we lose 20 customers and we gain 20 customers. Well, that means that at this size of business, at 80 customers is exactly the point at which we are going to not get any more customers. Any net new customer, we're gonna get 20 new customers. I'm getting new customers, but just seems that they're not growing. It's because you're losing losing customers every year to churn. So when churn equals the number of new customers you get, you'll stop growing.
And so the only way to break out of a plateau if you're trying to still grow beyond 80 customers, is to either A, reduce your churn, ie, get better customer service, have someone answer the phone, A better website, make sure you're uniformed, respond back to customers, make sure you don't lose them, or B, get more customers, do better advertising. The website should Help with that, do some Facebook ads, Google Ads, whatever it might be to get new customers. That's the only way to break out of this number. Because this is simply a mathematical equation based upon your churn and how many new customers you get, you can determine exactly what size of business you will stop growing at. And just to really quickly show this on a graph, this is what it's going to look like. And I don't want to go too in depth with this because people get lost in the numbers. But a lot of times what happens is people will get discouraged because in years 1, 2, 3, 4, let's just do five years of your business at the very beginning, they just shoot off like this number of new customers just growing like crazy. And all of a sudden it starts to kind of slow down a little bit. And this is what kind of happens. And now they're in years four and five, and they're just like, why can't I grow? Why can't I grow? The reason is because up here now, your churn is starting to become higher and higher in terms of number of customers. So again, let's just say Here it was 20 new customers the first year. Great. Well, then next year we should have 40, right? No, because remember, we have churn. So now instead of 40, this might be more like 37. Because now we're losing some customers every single year to churn. And now in year three, well, it should be 20. 20, 20. We should be at 60, right? No, not necessarily, because now we, we have churn. So now instead of 60, this might be 50. And so this is the gradual curve that happens because as you grow more number of customers, you're also losing more customers due to the natural rate of churn. 20% of 20 is for customers. 20% of 100 is 20 customers that you're losing. And so as you grow in number of customers, you're also growing in the number of churn. And eventually those things converge. And when they converge is when you're in a plateau. That's the growth at which your churn, the numbers you're losing every year, is equal to the number of new customers you're getting every single year. So that's why it's so important to track churn. See how many customers are canceling limit churn or increase the number of new customers is the only way to break out of a plateau if you're wanting to keep growing. And furthermore, if you're growing really fast and you just don't have any cash, raise your prices. Why because that's going to increase churn. You're going to get rid of some customers and it's going to reduce the number of new customers coming into the business, but it's going to make you much, much more profitable. So this is simply. This can be charted. You can literally graph exactly how big you will grow until you stop your growth pattern without changing any factors of new customers or reducing churn. Very, very important to track churn, know what that number is so you can predict exactly how big you're going to grow as well as track it over time. Most of these numbers I talk about today, it's not about knowing or having the right number. It's about tracking it over time so you can see where the business is going and course correct. If you see it going in a negative direction. If you churn all of a sudden, go from 20% to 40%, hey, wait a second. Are we growing too quickly? Are we not doing a good job? Do we need to get someone in the office to answer questions? Do we need to make sure that we're connecting with these customers and asking for their surveys or something like that? These are the type of things you can do to reduce churn and improve that number. But every single one of these numbers is not so much a matter of good, bad, or this is the right range. It's more a matter of track this over time and see where your business is going. Are you becoming more efficient in labor? Is more and more of your revenue going out the door towards wages not a good thing? These are things that you want to track over time to be able to determine what needs to change inside of the business.
