Going from 9-5 Job to Full Time Business Owner

In this video, we're going to be talking to home service business owners about how you can make sure that when it comes to your marriage, you're on the same page dealing with a spouse. Okay. All right. We're also going to be talking about hiring your first employee and how to bridge that gap from solo operator to a manager. So I lost my first employee. It was pretty ugly. Like it was a friend of mine. And like we no longer talk, we're also going to talk about leaving your 9 to 5 to actually grow and scale a million dollar home service business. You will grow a business to that size again, working 50 hours a week. This is an introduction call that I have with all new members at Homeworks. So if you're interested in joining, go to Home works and we'll see you on the other side.

So right now I currently work a 9 to 5 job and this year I've done $75,000 in revenue. So the thought next year is there's two options. Either keep doing my 9 to 5 while I hire somebody or I quit my job and hire somebody also and the two of us go do it kind of. In your, in your opinion, what would it slow me down more if I just tried to stay working at my 9 to 5 or should I just pull the band aid off and go.

So it will 100% slow you down? It's a function of risk. Right. By you. If you don't have that slowdown of working 9 to 5, will you grow the business more and replace your current wage? Right. And so if you don't mind me asking, what's your take home from your 9 to 5?

It's about a hundred.

Yeah. Like that's well paying. Right. So like my, my thought process of can I pay someone 50 grand to go do the work that you would do? They're not going to work as fast and as efficiently as you. I would put them on PvP, but if you pay them someone 50 or 60 grand, you still make 100 grand net. That might be a good move as an intermediary between you going full time. This is now that we assume risk. Right. So like if you were more risk prone and you have plenty of cash, you might make the jump earlier knowing you'll grow the business a year faster.

Yeah, that's kind of what I've done is like I've lowered my personal bills and all that stuff as low as I could get them and I have a good little safety net. So it's like I'm kind of up in the air.

But I just don't like 100 take home for your W2. Let's just say after you know, you know, taxes, if it's 80 years, you're going to have to make 160 to 180,000 in the business. Right. And so you have to double the business. And so your level of confidence in that and then the risk associated with that jump is what you're trying to balance. And that usually comes with how much cash do you have set aside. Also, by bringing your personal expenses way down, you likely have reduced the threshold of how much you need to grow the business to cover your personal expenses. And so this comes down to do you need to like for example, if I was in your shoes and I had a wife and a few kids, I'd probably be a little slower, assuming I didn't have 100 grand sitting in the bank that I need to just like, let's take one more year and just grow sustainably. And flip side, next spring rush, you could very well double or triple the business if you just focus all of your time and attention on it.

Yeah.

And that's kind of where I'm at is the focus thing. If I could really focus, I think I could turn, turn some things on and get going.

But what does your wife think?

She wants me home more and right now I'm not home because I'm doing nine to five and then I'm doing both.

So if she had to choose between one, which one does she want? Does she want you to do full time the business or just stick with your nine to five?

She'd want me to go to the business because she could see the, the passion and all that stuff.

Yeah, just do that.

Okay. My second question, if I can, what are some common pitfalls that you see for people making that switch to being fully self employed and then some common pitfalls for hiring their first employee.

That's why I asked you about your wife is that's the number one reason. Because usually if the spouse is risk adverse and then the entrepreneur is going off and doing their thing, they make a bunch of risky decisions that is getting rid of a stable job that's well paying and then there's fractures in the relationship which then kills the business or the business struggles and then it fractures the relationship. So her support is why I said like that's, that's the cosign that you need because she will as assuming the expectation has been set that hey, it might be a little bit dicey for three or six months and you're not going to see me anymore for six months because during spring rush I need to get the business to the point where I can take money out of it. And it's going to take me the same amount of you not seeing me for six months during spring rush. After that, then I can commit to like we can dial it back. And then the whole objective of this business gets accomplished, which is you see me more and we make same or even more money down the road. And it's like that's why I asked that question.

Yeah.

And then what was the next part was about hiring. Sorry.

Some common pitfalls for your first hire.

Honestly, a lot of times first hires are good because they're really good. It's usually your second and third employees I see people falter with because the first employee you're with them all day long. So it's the system of eyeballs on person that makes it relatively easy to manage because you can see everything they're doing and they're not working hard. You just tell them like and they know you're the boss like so you don't need pay for performance because you're with them all the time. And so it's usually when second and third employees come that's actually the most difficult. So pitfalls I see on first employees is under communication of the expectations where the company is going and you end up losing that first employee because they're solid when you get to two and three employees and now you're no longer working alongside them. So I lost my first employee and it was pretty ugly. Like it was a friend of mine and like we no longer talk and it's because I didn't set the expectation I'm gonna go to this business and I'm not gonna be working in this truck with you forever. And so you really like that now. But like down the road that's not gonna be the case.

Okay, my question is there's a fertilizing company in our city, Springfield, Missouri. Really Premier Christian based value based company that has a very high price point value point type thing. And I'm thinking of setting up an offer. They don't do any mowing, they just do fertilizing, landscaping and tree service. And I'm doing some sort of affiliate program with them for mowing clients and mowing in the lawn maintenance side of it. And I'm curious how you would recommend to go about that.

Yeah. So do you do treatments at all right now?

No, and I don't plan to.

I think you could probably get away here with just doing a referral strategy instead of an affiliate because you have customers they need and you have custom, they have customers you want. And so I think this could be more of a referral situation. It's easy to track. It's like, hey, when you have a treatment client that you don't want, you give it to them with they have a mowing customer that they don't want, they hand it to you. And because both of you don't do the service, there shouldn't. Money shouldn't have to flow hands and just keeps it simpler. If you go the affiliate strategy, it just becomes a little more difficult because it's tracking, it's retention. There's a lot of things that will play into like what you're even willing to spend. I would say if you want to grease the gears of the referral engine, you would actually start giving your customers an incentive for them to go move over. So for example, you say, hey, you signed up for mowing. Welcome to the club. If you would like to do treatments, we don't offer that, but our affiliate partner does or a partner does. And if you sign up using this Link, you'll get $100 off or your first treatment free. Then it's very easy for them to track that as well. And that's the biggest problem I see with referral programs is you're getting customers from them that you don't know about. That's a referral and they're getting customers from you that, that you. That they don't know it came from you. So I want all credit when I give someone a referral because I'm building the will and hopefully they're giving. So I would try to set up more like what's the offer we're willing to give each other's customers in order to make this easier to track. Yeah, so like if they click a button, it goes to your form or like a specific form you make specifically for their customers. You could put both of your logos at the top of the form. It could be in goog Google form. It could be a. You know, you can just get as creative as you want with that. But I think that's the best way to grease the gears of the referral engine as well as make it easier to track. If you're trying to get started and you don't really want to spend a bunch of money on software yet at Copilot you can have up to 50 customers completely free inside the software and be able to do estimates, invoices, the whole nine yards. Also, if you're under 18 years old, you can get the pro version for free without that limited number of customers. So go check it out. Copilotcm.com book a call with Christian, head of our sales team and he'll make sure it's a good fit for you.

Couple more questions. One is in relation to the dealing with a spouse. So I've.

Those are strong words, dealing with a spouse. Okay. All right.

I'm dealing with a spouse. I guess negotiating would be the word.

Oh, negotiating. Okay, let's do it. All right.

So grew up in a lawn care family. Never scaled. Our family always worked from five to nine every day, all the time. And so that was all I was used to. My wife came from a family where her father was a computer programmer and he could be around way more. And we've been running a business for 3 years now. Sold a bigger. We were doing about 500k last year. Sold it because I was never home and everything just was not working out very well. And I'm trying to be home a decent amount with the kids and the wife while still growing. We started a new location around probably 100k this year and wanting to grow a lot to be the. To the point of being free and having. Being able to buy back our time.

Yep.

What's the best way you see to do that?

Totally. So just so I'm clear, you sold the 500,000 in revenue business because it was taking all of your time. Is that, is that the case? Okay.

Yes.

And was that business profitable?

About 30% profitable. But I was working in the field still a little bit.

Got it. And so it was still sucking seven days a week of energy that was causing a rift and you decided like hey, I just have to get rid of the business.

Yeah.

How are we building the current business this, this year differently to where that's not going to be the same outcome as we scale.

Well, trying to have higher prices. I'm currently the only one here. I'm doing all the work and just charging a lot for it and then trying to grow a little bit more sustainably instead of just grow to grow.

Got it. And do you have a chunk of cash from the sale of the five hundred thousand dollar business or is that basically you got out of the debt and just needed to get yourself some breathing room and save the relationship?

We're on a payment plan with the company that bought us out for 8% of the of the retained service for the next two years last year and.

Then two more years last year and two more years. Okay, and is that what, like two grand? 1500, two grand a month?

Depending on the month. It's like 1500.

What does she want? She wants time with you. Why did she allow you to start this business again?

Because I was really restless when I was not doing business.

So what did that.

I have too many dreams and too much experience with business to go work for somebody on a 9 to 5. And I have no college degree, so I can't get, I mean, I don't say I can't. It would be harder for me to get a hundred thousand dollar a year job or something like that.

Makes sense. So when you were negotiating, quote unquote, this like I'm starting this new business, what did you say? That she's like, yes, I support that, or does she not really support this? And she still kind of wishes you just go get a job.

She fully supports it. What the struggle is, is right now I'm prioritizing family time and trying to work maybe 10 hours a day, five days a week. And my struggle is that's working all right. But I'm trying to grow a point where I can have employees and be running something that's not just a job, that's a business.

So running a business at five days a week, for 10 hours a day, you will grow the business. You have the skill of grow to 500,000. We know that you learn things from that and skills that will allow you to be able to grow this business more efficiently, probably faster than you before and more importantly, have the systems in place that when you're at 500,000, you're not working seven days a week, you will grow a business to that size again, working 50 hours a week. If you work 70 hours a week, you will probably get there faster. The question is, when you get there, will you still have that relationship? And so in, in my, my 2 cents here is you will get there. And this is a function of time. I would recommend, and I think you are, you would agree, like, let's not try to squeeze getting to your goals an extra year or two and then losing the relationship, because that will actually hurt the business more than you just take an extra year or two. And working at 50 hours a week. 50 hours a week is, is sufficient to grow a business. Are you going to be able to. Again, if you did 75 hours, you'd get there 50% faster, assuming that you don't have any sort of drop off in efficiency of your work, which usually does happen. So I would think this Is a function of time. And then setting your expectation that this is going to take longer than you would prefer. But losing that would actually derail you and cause way more pain as well as like time in the long, in the long run.

100% no. That's a great answer and one follow up question. I want to take too much time. But I've been doing this for a while and I feel like my service is valuable, can do a good job and stuff. And instead of following your kind of roadmap that you follow at Augusta where you get to 500,000 raised prices, I'm just getting to a capacity for myself and raising prices as I get capacity. Do you see a price point where raising prices as a solo operator you raise them too much? Where when you get employees, the customers are like, well, you raise the prices all this much and now you're adding employees. Do you see a problem with that or a cap on what you should raise your, your budget hourly rate for?

No. Just know that's inversely correlated. So if I raise my prices a lot, it's gonna be harder for me to grow the business. So you might be making $250,000 as a solo operator and there are people doing that cause they just stay in profit mode and kept raising prices to make it 150 to 200 bucks an hour. The challenging is challenging part is like you might then go run ads cause you're like, I'm gonna go grow this business and get employees cause I don't wanna be in the field all the time. And then you run into this wall of no one's accepting these new prices. And the reason I've been able to get to this price is cause I spent 10 years getting one or two new custom just replacing churn. And then if I get ever more than that, I just raise prices again. High prices will cause you to grow slower. And so what you want to be careful of is growing so high in terms of price and eking every dollar out of profit and then switching to growth mode. So when you switch from profit mode to growth mode, you have to realize that if you don't lower your price, your close rate will be lower. Here's the thing, the vast majority of people are so afraid of that, so they don't raise prices because like one day I'll go into growth mode and what happens? Like they're afraid of what I just talked about. Like I raised my prices too high. People will keep saying no. Here's the thing. If your prices are 50% higher, let's go $80 an hour versus 120. Will more people say no to your estimates? Yes. If you charge 50% more, would you be able to spend more money on ads? Would you be able to drive two to three times more leads because you have the ad budget to be able to do it? Now all of a sudden, if you spent 20% of revenue, which is crazy, 20% of revenue on ads, but you increase your prices so much over the course of a few years, being in profit mode as a solo operator, it actually makes sense. Like I still go into growth mode and just do it with paid ads. So what I would say, Adam, is you can be in profit mode as a sole operator, go very, very premium and very expensive. And in the back of your mind, like, man, there's no way I can scale this. People will say no to my estimates. I will never be able to get three, four, five employees. I would beg to differ. Because what you will then do when you will go back into growth mode, yes, your close rate will be low, but you'll have the budget to go spend on ads and drive traffic. Then you will switch as much as possible to instant quotes or over the phone estimates, and then that will push your close rate back up. And so the trouble I have with people that go way, way premium like this is a bad problem to have. And your close rate's literally 10 to 15%. The reason I have a problem with that is because now you're spending a whole bunch of money getting estimates out and only 10% are getting accepted. It's very inefficient. But what you can do if you go back into growth mode is switch to instant pricing or over the phone estimates and having someone answer the phone and doing pricing for you throttle ads. And then now there's no drag on your estimator or you doing a bunch more ad and sending out quotes 100%. So I would see this as three phases. One, get to premium, get to where you're raising prices and you're at capacity as a solo operator making very good money. Then second phase, change the way I do estimates to get on. Like when the copy paste millionaire goes from like in person estimates, drive by estimates over the phone estimates and then instant quotes. I'm going to be going this way as much as possible so that when phase three, I turn on the ads because I now have the margin to do so. I actually have a decent close rate. Cause on instant quotes, once we have it in homeworks, this will be good timing for you. A card on File and accept the job is a hundred percent close rate of people going into that funnel. Right. And so that's how you can get around it. So I would not be afraid of that. This is why a lot of people will not go to premium. They're afraid the one day they'll go back into growth mode. And I just tell them if you spent 20% or 30% of that extra increase in price on ads, you be able to backfill your schedule with just as many leads.

Perfect. You're awesome. Thank you.

You're the man. Jeff Blue Sky Ferndale. He's like literally a couple miles away from me.

Let's go for a winter services roof and gutters and Christmas light type stuff. I don't have a problem myself doing roofs and gutters. Although some of the pitches on the roofs around here I, I don't like. But how do you, how do you deal with that in terms of your client tell and plus with your employees? Some guys don't like ladders and they kind of, I mean I, I love to put it on there because it's a good, it's a good deal, it's a good income source, but it's difficult.

Yeah. So like, you know, I know your market pretty good. You don't need Christmas lights. You can stay busy very well throughout November in our market with winter services. Now if you're going to start doing gutters, we just make it really simple. It's like we won't get anything above your first story.

Okay.

That way. The biggest ladder they're getting on is a 10 foot extension ladder leaned up against a gutter. And again we're just, we're just inspecting the gutters for winter services so they don't have to like move it along. They just go into the downspout and making sure that's still flowing. And so that would be like the lowest, lowest lift change.

Okay. That's it for now.

Awesome. We got a few more. We got Jared up next.

Hey Mike, how you doing?

Good, brother, how you doing? Love your shit.

Thanks, man.

So Mike actually is about winter services as well. So we kind of convert our, I'm in Cincinnati. Our last week of mowing is usually the week of Halloween.

Yep.

And then the first week of November we, this was the first year we really did winter services. We usually do leave removal, all that stuff. But our problem has been customers not being, I guess, totally satisfied if we're not getting all the leaves on the property in the amount of time that we're there for mowing. And then now we're dealing with snow. So they're not liking that. And we. So it's kind of a two parted question if we should, you know, move the service up if it does snow. Like actually our winter service schedule falls on this coming Monday. But we just got snow yesterday. So do I move that, does it up and then restart or how does that kind of. I haven't read the book yet. That's my January to do list.

Oh, okay. I was gonna say, I was like, this will get answered in the book. Okay. So when you read the book, it'll answer a lot of these questions. So first off, it's how you communicate to the customer about what winter services really is. The high, the more you communicate with them. And like for example, my location has hundreds. We go one by one by one and call them. We go one by one by one. If they don't pick up and we make loom videos and, and show the pricing difference, this leads to way less confusion. Also higher, higher adoption rate simply because the value is there. Like once they see it and understand it, they, they're good with it. If you just look, we used to do this is like we just rolled right into Windows services, all sorts of complaints, a misunderstanding, what included, etc. So I would definitely go through the book and like move up higher levels of communication on the upfront. And then in terms of like leaf cleanups, for example, you don't get all the leaf done. That's a perfect opportunity to upsell them into a cleanup. And how we, we just make sure on the upfront before, even when we're selling them winter services, we just make it very clear, here's how it's going to work. We're going to chip away at things and if we hit a point where you're like I need a cleanup, let us know I. E. They're mad, we'll get you an estimate to get it right back up to zero. But you can just say Winter services is a, a way to be able to maintain your fall cleanup and the look of your properties throughout the entire year. Or B save money by allowing us to chip away at your fall cleanup throughout the entire year offseason, I should say. So it's really about communication. The, the higher level you go, the better. If you just do email, you're gonna have a lot of problems. If you do a phone call. Better if you do a loom video and actually show them their property versus a comparable price and what they're saving and explain everything better. If you Go in person with a whiteboard and walk them through it the best. So like, there's levels here, right. And then I would say in terms of snow, we have a kind of a split of two different ways that people do it. One is they will just pull the next winter service visit forward. Some people will just pull the next visit forward. The problem is if you have six events in seven days, you just blew through all of your winter services. Right. I prefer it to be winter services are separate from snow. Here's all the things we do. And if snow is present and we're there, yeah, we'll get rid of it. We'll put down ice mill, et cetera. But if you want to be on the snow route, different service.

Yeah, that's kind of what I'm struggling with. Just because like I. Like I said, you know, it's coming up and we've got people that. So before we just did the Black Friday deal with co pilot. So I'm still getting into there coming from Jobber and we use the mailchimp email blast and got people signed up with snow that aren't our normal mowing customers. So I'm like, they're paying a premium versus people that are doing winter services. I kind of was bad on that. So.

So what I would do on your winter services comparison chart that I'm going to communicate every customer I'm going to have, here's the cost of your fall cleanup and your spring cleanup and snow services. And then if you want, you could then package snow into winter services. Or you say, here's fall cleanup and spring cleanup versus winter services. And also, by the way, if you want to get on snow service, there's this other thing. The reason I do that is because some people will just go straight to snow. Like, I don't want the fall, I don't want the winter services thing, but can I get snow again? This is going to take three to four minutes to explain to someone. But again, if you do that for 400, you know, even a couple hundred people, it's a couple days worth of work for massive improvement to on the revenue over the off season.

So do you recommend selling this more like in the October time frame or is this.

Yes. As you do not want people canceling mowing service prematurely without you pitches already. So we usually go six weeks before the end of our mowing season.

Okay.

So like I would actually if I was you, like end of September. Because what happens is you're getting some people to hit their October 1st bill, second week bill and they're like, they're canceling. I don't want to be on the 31st being like, oh, by the way, this winter services, I went like six weeks before. So they don't even think about canceling because I've already explained to them we just roll in this other thing.

Okay, cool. And that's the same goes for people that don't even really do clean. Like, we have a lot of moan customers that do their own mulch and cleanups. And I mean, you're still trying to sell them on that stuff, right?

So I am. And then I'm also. I'm also realizing, like, you have this add on of snow services that you get to kind of pitch them as well. So we have some people that will watch the winter services and they'll be like, yes, I want winter services and I want the snow. We have other people, like, don't like the winter services thing, but I didn't know you offered snow. Can I just get that?

Okay, cool.

Thanks.

Yep. And that kind of evens out your revenue too. So that way you have winter service revenue, but when it snows, you actually have a peak of like, you have something for the crew to do.

Yeah.

And then you can go back. Back to winter services, even if the snow stays on the ground for two weeks. Because part of our winter services is we put salt down on the steps, we will shovel the drive the walkways, we start doing like a plowing job.

Yeah. Okay, cool.

Awesome. All right, we got time for. Well, we have no time, but let's go ahead and do two more.

Okay.

So I had kind of a real quick question.

I'm.

I'm trying to. We're scaling pretty fast. So this is our second year in business. I've owned another business before, sold that, and that's kind of where we're at now. We're trying. So I'm day to day in the field running my crew. I'm trying to step out of that and hire somebody. And I kind of had the same question as one of the previous guys as far as. As far as hiring. Do you think it's better to hire somebody that is been. Has done the same kind of work, or is it better to hire somebody that's kind of fresh and younger and could grow with the business and kind of be able to train them into kind of that role and mold them to where they should be?

Yeah, like the manager role. Is that what you're talking about?

Yeah, like, I mean, as far as crew leader, if that, like, because.

Yeah, there's, there's some decision.

I mean, you're talking about trees over people's houses. Like, I want somebody that I can trust. Like, I don't want some guy that just, you know, doesn't know what he's doing.

Yeah, Like, I think there's pros and cons to both. If you can get someone that you can go from internal, usually they have a higher retention. Usually their success rate is higher, especially if you're moving them up inside the company. Right. It's like I'm always trying to hire my general manager from my technicians, and I'm always trying to hire, like, even, you know, outside of just my locations, like, I'm trying to hire my managers from people that started at the bottom. It's good for culture. It's good for people to see that there is a next stage of their career, there's somewhere to move into. The downsides are you are going to pay an ignorance tax because they don't have the experience at that managerial level or at that level that you're expecting. And so it's like, which one do you want? If you had no time and you had lots of money, I'd probably go hire someone, overpay them a little bit and get them in so they. You take it off your plate. Right. If you're like, hey, I'm willing to spend a little time, make sure they're a good fit, they're in the field, then I move them up into team leader, I would, I incline to go that direction more and invest a little more time into it.

I got you. And then the only other thing I had a question about is as far as running ads or what, what is your best, best bang for your buck? Basically, for as far as ads, every.

Single market's slightly different, whether it be Facebook or Google or yard signs, door hangers. The, the vast majority of people just need to do a test, figure out the top two, and then just keep refining it and making it better and better and better. Um, so like our first door hanger, when we made it like six or seven years ago, it performed at 20% of what it does now. So it's 5x. It's five times better now. So if, like, if I would have just wrote it off five, six years ago, I'm like, ah, it's not that great. Yeah, I agree. $150 is not a great customer cost, but now it's 30.

Yeah.

So again, it's just refining and doing more and better of what you're already doing is usually where people fail and they skip around from marketing thing to the thing. Instead of being like, we tested it, we got a good starting point. These are top two or three. Let's just make these better and better and better every year.

Yep. Okay. Sounds good. Cool.

Make sure if you ever have questions, the Mastermind happens every week. So, like, I just finished recording one this morning. It'll go up tomorrow, but you can always submit questions there. And I'll make sure I get back to those, and we'll see you inside the copilot universe.