Hardscaping Projects VS Lawn Care Maintenance! | Owner, Manager, Estimator, Team Discussion

Hey, everyone, it's Mike Andes. You're listening to Landscape Business Course. And today I have some guests on the show, and we're kind of rigging together the audio. We have only two mics, so hopefully this works out somewhat decently. But today we're going to be talking about projects and doing projects versus maintenance. I know this is something I've talked a lot about before and showed the pros, the cons, and today I wanted to bring some different perspectives in. So before we get started, let's go ahead and go around now. I'm not gonna introduce myself. You all can introduce yourself. Tell a little bit about your relationship with Augusta, what you do, and then we'll jump into what's happening.

I'm Liz. I'm the operations manager at Augusta in Bellingham, and I've been with Augusta for four years.

Yes, I'll go.

I'm Lee. I've been with Augusta for about two years and eight months now. Started as field worker, project manager, and now the estimator.

I'm Josh. I've been with Augusta for four years. I started the same day as Liz, and I do a lot of the mowing and training new employees and kind of showing them the culture and what to do.

Cool. So I've talked about this sort of stuff a lot, but I wanted to bring the perspective of someone in the office, an estimator, as well as someone out in the field, and we'll spitball some ideas. We really have no agenda. We have no long help. We have no idea how long this is going to go or what we're going to talk about. But we know we're going to talk about projects and versus maintenance and some of the things you might think about when you consider doing projects and especially as you grow in scale. So let's preface this entire conversation by saying everything that we're talking about today is not to demonize projects or to lift up maintenance or vice versa, or to say you should or should not do one or the other. We're going to talk about the pros, the cons, things you should think about. And this was really brought about by a question that came in from Textedly, which is the platform I use for the texting platform, which everyone. Everyone should, of course, text. But we had this on the last episode. We did a Q and A on it, but I wanted to talk about it more in depth to all of these wonderful people. So I'm going to read the question again, and then we're going to go through and see what kind of topics we discuss when it comes to projects. The complexity of projects, the profitability of projects, from an estimating standpoint, from a crew standpoint, from an owner standpoint. And hopefully it'll be helpful to everyone out there. All right, question was, currently doing low margin landscape maintenance and lawn care work. I have no experience with landscape construction or hardscape. I really want to grow to a point where that's a big part of my business. How do I start learning and gain experience with this offering? So on the last episode on the Q and A, I referred to the fact that we're going to talk about this a lot more. So that's hopefully what we're going to talk about today. And before we jump into it too much and have Liz kind of give you the brief rundown of Augusta, of Whatcom county, our first location in terms of our relationship with projects over the course of the past four years that she's been with us. So take us away.

So typically, Mike will go out now, Lee, and do an estimate with the customer and it comes back to the office. We source the prices of all the materials and we put together an estimate and send it to the client. And. And if it's a big project, over 3,000, once they've accepted, they pay 50% down. And we set up the date. Over time, we've streamlined it a lot more to be able to execute the process from the beginning to the end. Who orders what? I make sure that I'm making sure their plants are ordered and ready for pickup or delivery. There's soil coming. I make sure there are blocks for the walls and pavers and everything are ready. I talked to Lee. So let's say the job is going to be next Monday. I would talk to Lee the week before. What day do you want your soil? What day do you want your blocks? And I have everything planned for the delivery, and that's my job. And then the night before, Gwyn Lee does an estimate, he does a video for the crew. So the night before I send them the video, all the notes from the job we do paid for performance. Paid or performance. So they actually see the price and the hours. And then I set up the job for however many days. The guys know how many days it's supposed to take and the price. And then the day of, they all see what truck to take and what people will be on that crew. I try to keep the same crew leader and helpers, sometimes alternating the helpers if we need them for mowing routes. But that's typically how it Works, and then once the job is done, we do a final walk through with the customer to ensure their satisfaction, and then we send the invoice for the final invoice.

Very nice. Okay, so from an estimator standpoint, Lee, you've been doing full time estimates for almost nine, ten months? Something like that?

Yeah, something like that.

Projects versus maintenance. Tell me a little bit about that. The learning curve. I know for you and I, it was pretty straightforward because the way we do the system with the estimate, which you can kind of explain if you want, in terms of hours, materials, things like that, but from a project standpoint versus maintenance, which is more around bed maintenance or mowing. Kind of your learning curve as an estimator?

Yeah, the biggest learning curve, I guess, was figuring out time. So when you look at a lawn, it's easy to guess. You know, 3,000 square feet, 4,000 square feet, 10,000 square feet. And then, you know, with service autopilot, we use the system where we can measure it. So it's really easy for me to either guess just based on previous knowledge of Moe's, or to use that service autopilot function to measure a lawn and know exactly how big the square footage is and about, on average, how fast our guys can mow. So that was pretty easy to jump into. Having mowed for, you know, a year and a half, two years before I started estimating, I had a pretty good feel for all the properties we mowed. So it was easy to get those times down and know how much debris was coming out. Switching over to projects, the learning curve is a lot harder because project timelines can be 1 day, 2 days, 8 days, 30 days, depending if you want to do those projects. So that was a really big learning curve for me, was just figuring out how to time and price those jobs. And it's hard to know, you know, if you want to charge for price or if you want to charge for time. And that was the hardest thing for me to get used to was when I would step on a job site, meet a client and walk through the job. I wanted to think of a price originally. Like, I was like, how much would this cost? But really it's how much time will this take? And then, like Liz said, you know, listing those materials, figuring out when we need those materials, is it on the first day, second day, the scheduling. So it's just a lot more that was thrown at me all at once versus having, you know, a mo. It's very straightforward. Oh, clean out those beds, rake up those leaves. It's like, that's going to be a truck full of debris, and it's going to take a guy four hours.

Right.

But a project is going to be, you know, sometimes three trailers, debris, 60 yards of soil, you know, something crazy like that. So the learning curve, just figuring out my materials and my time was really tricky. But over time, you just kind of get used to it with experience.

Now, from a perspective of P4P, it complicates things a little bit more because as the estimator, if you're budgeting 100 hours on a project and you're 20% off, you're 20 hours off, which is three days worth of work someone really doing for no extra pay on P4P. So what kind of either stress or like. Because the flip side happens, like this week, you know, someone beats the budget hours by like 30, 40%.

In terms of estimating what kind of pressure or like, what. How do you think about that?

Yeah, there's definitely pressure originally and actually in our kind of P4P testimonial video we did that Josh shot, actually, when Josh interviewed me for that, I shared a little bit about that, you know, pressure I felt from the guys because I was worried. I, you know, at that point, I felt like I was in control of their pay, which I'm not, because there is a base rate and there are always variables in jobs where someone might hit budgeted hours, someone might not. And so I just kind of had to roll with that, essentially. But it is nerve wracking to think, okay, this job, I might think that with my experience, could get it done in eight hours. But a new guy, it might take him 12 hours, he might need that whole extra half day. So it's part of it is knowing yourself, knowing what you and your business is good at. So knowing what we at Augusta are good at was what I had to really learn. Like, what are we good at? What's our wheelhouse? What are our core competencies? And then from there, I could kind of standardize my hours. Whether it's a new guy or an experienced guy, once we know what we're good at, it's easier to figure out those hours. Scaling that to a larger job, obviously, is harder. But if just because it's a larger job, just because it's bigger numbers, doesn't necessarily mean it's not scalable or it's not still your core competency. If we're building a two course high retaining wall that's 200ft long, that's really not that hard. It's just Going to take a lot of time.

Right.

Because it's 200ft long. So it just kind of depends. There's a lot of flexibility with it, but it's just knowing the team, knowing what we're about was the biggest thing I had to focus on. And in order to make sure those jobs would stay profitable and guys could hit their budgeted hours.

And then there's the weather. That's determinant for. If we're in the spring and we're actually bringing soil in and using skid steers and track loaders, it's gonna be pretty muddy. We're gonna need more time, right?

Yeah. And that's something I have to think about, you know, with weather and the conditions and, you know, is it like, access, like, thinking about, like, gates? Are there two gates? Is. We just had a big project this week that I budgeted for almost 80 hours because it was all in the backyard, and we had, like, a windy front pathway to get to with a tiny side gate. So all that debris that was in the back had to come through that tiny side gate. So you have to think of those things and account for that. Otherwise, that job, you honestly probably could have cut the hours almost in half. But I was planning for him to have to take all that debris through that side gate. So little things like that is a big learning curve to making sure you can keep your guys profitable while actually getting the job done.

So before we throw projects under the bus, because that is the ultimate goal of this episode, before we do that, let's talk about why we do projects, the positive parts about projects. And I'll kick it off by saying the biggest reason we do projects is to keep everyone interested in their job, because most people do not want to be mowing for six months solid every day of the week. Josh, from your perspective coming, really, for four years ago, we didn't do a lot of projects. We mostly did mowing. We had a. We had a tractor four years ago, didn't we? So we never left the shop. You're right. So now we do bigger stuff we have done, and we can do bigger things. Your perspective on the aspect of having a project. Positive. Let's think about positive things.

For now.

We're going to get to the negative, but projects, maintenance things, stuff like that. Talk.

Talk away.

Go ahead. Like, do. Like seeing your name on a project right now versus maintenance or mowing, like, how has that impacted things?

I personally am more of a maintenance guy myself, so I'm probably the wrong person to ask.

But, yeah, it Is kind of refreshing after a while of mowing for, like a couple weeks straight to see a project. And I think with enough prep and if you like, listen, she sends out those videos. And Lee is very detailed in how he goes over this video. So I think with enough of that, it's nice to see. And I think a lot of it depends on how your prep and how.

You go into it.

And Lee said he tries to get as many of those factors in. So that's kind of my.

And then sometimes I'll ask them, hey, do you feel comfortable if we take this job for this wall? Would you want to be on it? Are you? You know, no, no, I. I just want to mow. I need a break. Or usually I just assign them who I think would be good for the job. But sometimes some of them would like to try or like to help. And then, you know, if I really would like Josh on it, then ask him, you know, you feel comfortable doing this one?

We're getting sidetracked. Positive parts. No, no.

Yeah.

To kind of raise off what Liz said, Like, there will be. Sometimes I'll bid a job and I'll be like, it's just technical enough for maybe this guy. Yeah, let's make him a project manager. So we had one. It was a really tight kind of back alley in, like, a suburban city street type neighborhood. So tight streets, tight alleys. And they wanted some flagstone steps out the back of their kind of back gate with some gravel installed. And I said this would be perfect for this crew member because I think it's going to push him a little bit. It's going to be a little stressful for him, but I think he can get it done. And he ended up succeeding. He made a couple mistakes along the way, but, like, he ended up succeeding.

What are you talking about here?

So, no, it was really good for him. And that's a huge positive, right. Because I could knew that I could manipulate that job enough to allow it for a crew member who had enough experience with some of the machinery and some of the tools, but really allow him to kind of take his own as a project manager.

And it does give you a sense of accomplishment, like, after you've done months for, like, a couple months straight, Especially when, like, the summer comes up, you're not seeing as many lines. Nothing looks quite as good. You're like, you kind of, like, lose a little bit of the pride when you're just going through the motions every day. And then when you get a project that you can see some, like, Instant gratification that you took it from looking not good like 1, 2, 3 days ago to looking spectacular and the customer loves it. That gives you real self accomplishment too.

Okay, so we talked about some of the positives, but I look at it as twofold. One is an attractor for talent, the fact that they can do landscaping jobs. Because a lot of times the people that apply to us are having mowing experience. They've worked at a place where they mow every single day. They worked there for a year or two and they're like, hey, I want to do more. And project based work. You can pay them more usually. And you also need to if they're experienced because they have the skills of equipment and they know how to build things and blah, blah, blah. And so a lot of times it's a great attractant for hiring. And that is the fact that we do mix up our mowing crews with the mate with the building and the construction project side of things.

And then you should add that everybody does everything. We don't have a just a crew for that and just a crew for mowing.

Yeah. And so like a lot of times that's a really positive thing for people coming in is they're like, yeah, I don't mind mowing, I like mowing, but I want to be able to go do a project once in a while. And so usually how we've pitched it in the past is like you might be mowing like three days a week and then on a project like two days a week. And so that's a positive. Retainment is a positive side too, because you don't have, you don't have someone doing the same thing every day all the time. They don't get tired of doing the same routes all the time. That's also why we mix up their mowing routes. And in doing so, we know that there is a loss of efficiency. And so I talked about this at conference. Like, yes, I know that we're probably losing 5 to 10% efficiency due to the fact that we change up people's mowing routes and we juggle them between projects and maintenance. But the biggest reason we do that is because for most people, let's not say everybody, but for most people doing the same 50 jobs every single week, day in and day out, yes, they'd get efficient at it. Yes, they might even make a little bit more in P4P because they get so efficient at it. But they're gonna go like brain dead. And usually the type of person that we're wanting on our team is not the type of person that wants to be brain dead all the time. And so I really look at the fact that we do mix up projects and maintenance as more of a retainment and attracting talent than anything. It's a loss on the P and L in terms of efficiency and the guys make a little bit less on P4P because they aren't doing the same job. They don't know the jobs like the back of their hand. They don't know all the shortest routes between houses and things like that. So there's a loss there. All right.

I think it's also good to have fresh faces on projects too, because we only have the same couple of people doing projects. Like, sometimes someone totally new will come in, they'll see a totally different way of doing something that's more efficient because their face hasn't been stuck in it for a couple days. And then you're like, oh, that makes sense. You were just like so caught up in it, you didn't see it that way. So I think that helps too.

I was going to throw out another positive kind of taking a different direction from the estimator standpoint for especially addressing the guy who reached out to my guy or gal about, you know, wanting to get into projects. It's a really good way to get into neighborhoods because sometimes, like, you'll have like really nice manicured communities that they already. Their lawns are taken care of. Either mom and pop shops doing it, or they just have a really nice mower because they like it dialed in, but they can't put in a patio themselves. So we had one last summer, older couple, retired right in our target market, moved up here because they have grandkids now here. So I knew it was going to be a great project to bid on. It's a patio in the front, complete renovation in the back, things like that. And basically now we have three or four mowing clients in that neighborhood. So that's a huge positive because all those people who were mowing were like, well, Augusta's here. And we saw the product they installed for our neighbors. We want that quality on our property. So we did that big project and then we did another patio down the strip on that one house, like on the side of the house, we did a big, like paver walkway and just like. So it brings in more money. Definitely. If you can nail projects and if you know what your core competencies of projects are, like, you can nail those things down and just get into neighborhoods and start just dialing everything in.

Okay. So a couple more positive revenue. Revenue. So you can easily do a lot more revenue, especially starting out. Like. Like even the franchisees, the ones that have gone out and sold these big jobs, like, they're gonna do half a million in revenue this year. Right. This is. So this is. That's a positive. Another positive. This is actually a big positive about projects, and that is maintenance changes on budget hour. We keep the same budget hours, the same pricing for our customers per cut, for example, for mowing. But the time it takes to actually mow the lawn changes dramatically throughout the year. So right now it's April, May, grass is growing a lot. Like, to hit budget hours is an achievement. Whereas during. In the summer, July, August, everything's pretty dormant. Some people switch their mowing schedule, some people cancel. And then for most of our customers, it's like half the amount of time to mow their lawns because you don't bag it. The edges are established. You don't have to partly blow it because there's no clipping. So, like, the amount of work is dramatically reduced. And therefore projects can fill in the gaps. And so I think the biggest, you know, downfall that we'll talk about of projects being not recurring is also its biggest strength. And that is when you have gaps of time in terms of maintenance and you're not busy, you can just go sell more projects, fill up the schedule for the guys. And that's really always been the reason why we keep projects, is because during the slow months, whether it be winter or summer, when maintenance is slower, we can fill the schedule with projects. And then when it is growing really fast, we have lots of maintenance class customers and we're just bogged down, it's raining, whatever, that we can just move projects off. And they're. Because they're flexible in schedule, Whereas a recurring MoW, you need to show up every single week.

It also depends on the goal of your business. So if you have really high performers like us, and if all you did was mow, they would be bored. And so they would want a little bit more challenge. It depends. Like, we've shifted the goal of our business. If you had the owner there every day, and we were all there every day and we were bored, we'd be like, oh, yeah, let's try this new thing. And we would be. We would need that stimulation. So everybody has to be kind of united on their vision. And also over time, we've gotten a lot better at them.

Yeah.

So for instance, I used to spend 12 hours. We had this one gentleman that needed all these native plants, there was 1200 plants. We can say nature.

Just say Mr.

So and so.

I can't remember. It was a few years ago.

I might remember.

I spent many, many hours trying to source them from all the different nurseries. And I did that before we did the bid. Now, we tried to get estimates out within 24 hours. There was no way I could try to source all those because not everybody's like us and answers their phone and gets right back to you. So I couldn't source them all from the nursery that fast to get an estimate out. So one thing we've done over time is we tell them, here's the bid for all this. So Lee has the time included to plant those 1200 plants. But we tell them that it will just be tacked on to the end of the invoice.

The cost of the.

Yeah, so like, the gentleman, he's talking about older gentlemen, he really wanted to know the price. So I said, as soon as I source them and buy them, I'll tell you what the price is, but I'm just gonna put it on the invoice at the end. So at least he could still budget. But I didn't have to have it done in two hours, which is impossible with us trying to do so many other things to source 1200 plants from six different nurseries. Yeah.

And kind of coming off that as the estimator, especially if you're trying to get into projects and you're going to have to learn how to estimate those projects, one of the biggest things is you decide who your clients are. Honestly, as the estimator, and I've learned the hard way how to not say no. That's one of the hardest things that.

Mike said to teach you. How to not say yes.

How to not say yes. Yeah, right. How to not say yes. How to say no. So you can kind of vet your clients that way. So, like the one Liz was talking about there. And I would say his name, but I honestly don't remember his name. But basically, I knew that they had already said yes to us. Like, right when I got to their house, they said, yep, we already researched you guys. We watched your videos, we saw other projects. We called someone that's used you, and they were already sold on us. They invited me into their house. Like, they gave me a drink, everything. So I knew that it was worth our time to, like, give them that plants list. I was like, liz, this. We're already sold. They haven't said yes yet. But they're right in that pipeline. Like if we give them those plants, they'll say yes. And within I think a few hours of you sending that list, they said, yep, let's do it and put it on the schedule. And they're on the schedule in like three weeks.

So now another positive from a field perspective, which I am just going to put words in your mouth, Josh, and that is that it is nice to have different projects, different things you're installing. And just like you said, see change, See walk away from a job and be like, wow, we changed that. Have a really cool before and after picture besides just stripes in the lawn, like having some sort of a wall or a patio or like a redone landscaping. So we've talked about positive. Now we can't I get to talk for a few minutes because we're going to talk about why projects are the worst thing in the world for me as the owner and why I hate them so much. And so again, this is not for everyone. This is for our business model and the way that we're trying to set up.

And again, it took a little while for us all to be on board and get an agreement and moving 100% in the same direction on this point.

And when we say projects, like, we're also saying like big projects. I'm talking like we still do cleanups, we do tree trimming. Those are project based.

And we can do a gigantic wall that takes a long time. It would still be a large dollar amount, but it's not, you know, a six week job like we did at the Donahue.

And we've taken steps, like six weeks.

Six, eight weeks with multiple, multiple things.

Yeah. And we've taken steps to reduce the variability of projects by only offering certain types of pavers, certain types of wall.

Blocks, and then recommend somebody else for the fence too, if we don't want to take that on.

Yeah, but even the stuff that we do, we simplified the process trying to simplify that as much as possible. But from the perspective of the owner, the reason why I don't like it so much is to do the fact that it requires so much hands on from you and you and the project manager. Whereas like mowing, you can sell a hundred thousand mowing. And as long as someone knows how to mow grass and follow the notes on their CRM, they can go out and mow. Right. And you can just, it's infinitely scales. Whereas as you have projects, you need project managers, you need someone, the office to be constantly going back and forth. You need to have like way more the selling process Is way longer because you're usually editing it. You're going back to doing work, change orders. You're back and forth. There's more things that are broken. It's harder to schedule when you go over budget hours, like, oh, we're 40 budget.

And then you have another project that's.

Supposed to be starting and you have deadlines and timelines where with maintenance, it's like you can move things around a little bit. But I think the biggest thing is scalability. And so for someone like myself as the owner who wants to not be there, which is different for most landscapers who want to be in the field, they like actually doing landscaping. And for them, projects and landscaping and hardscaping is going to be like, this individual might be the right thing to do, right? It might be the right thing to do because you're going to have pride of ownership. You're going to enjoy making things. You're gonna go home and twist your brain around in pretzels over 12 hours over how to like, put together the design of these pavers. Right? But that's like not what we're trying to do, right? And that's not the model of Augusta for the franchisees even is like intricate high touch projects that are custom. Like, the word custom is usually like, cool. I hate it in landscaping. Like, we are. We don't have anything to do with it. And there's gonna be the person out there and we recommend all the time for estimates where people start talking about their intricate wall features and water features and all this other stuff. And irrigation is like, hey, you should go get. Someone does design and is going to be here the entire time. And usually that's the owner. And so really, if I was there every single day and I knew what I was doing, which I don't, or if I cared enough to go educate myself and know how to do walls that are super cool and pavers and build all these things, and then I might want to be there more. And that might be a great way to grow your business. But the bottom line is you cannot scale that. It's very difficult to scale someone that knows all about patios and walls and water features and irrigation and be able to scale that into a multimillion dollar business or even just like several different crews. Like, you could not do a $80,000 project like we have done, but have five of them. You just could not do that without having multiple levels of management. And the way that we have it set up where it's very flat level and people are moved around and you gotta have low skill level type of work in order for that to work.

So you're saying it's very skill dependent too.

It's harder to find the people too. Like if we, like for example, we hired two people the other day, it'd be very difficult if our requirement was you need to have certification for wall building and you have a certification for like aqua pavers and Belgard and you need to have like we need pictures of the drainage systems that you're. They'd be, they'd be worth twice as much per hour.

Right.

And they would have taken 15 years to install that work, which means they're going to be an older individual that's probably not going to want to listen to an estimator. 24, 25. And so it's just the culture as well as the way we're building the model. And that's why I'm careful like most of the time on the podcast I'm not so negative about products because for most owners who are going to stay in their business, that's what they should do to grow the revenue. Right. They can grow to a million in revenue, have a few crews, have two projects going a week and they're bouncing back and forth. But if you're not going to do that and you expect to be able to get out of day to day operations, there's just no way you can do projects that are big and custom and change all the time. Right. So that's just my two cents.

No, that's good. And it's also, if you had two guys that were really good, one, good at walls, good at pavers, and they're the only two. You're so dependent on those two people that if they left you wouldn't even be able to finish the job.

Well, this is where people get into the part where there is a cancer in their culture. But they keep them because they literally can come to this individual due to the fact that they have a skill that no one else has.

Right. And then you feel so dependent on them that you have to cater to their weaknesses and the poison that they're spreading in the team because their attitude and that sort of thing.

And none of us are thinking about one individual right now. Okay, so let's go back to the infamous job, the Palmer job that you did several weeks ago. 80,000. No, this wasn't that 60 something after.

All the workload changes. 60 something.

Great. Okay, fantastic. So we lost a lot of money.

See as an estimated real quick, that number is so exciting to See, when you put that bid together, you're like, ooh, 60,000.

Yeah. Wait, even you get two or three of those in a year. That can be revolutionary for someone's top line revenue growth goals. Three of those goes from you working by yourself to having two employees if you're just getting started. And that's exciting. Right.

So you're saying there's the thrill of the sell.

Yeah.

When you go to there, and it's so hard to say, no, we don't do this or no, we don't do that, or it'll be two months before we can get to that. Because you want it so bad.

Yeah.

Yeah. So we did this job in January. We collected 50%. Now we got started in February. We expected to finish the job in February because. And we were willing to take it because we wanted to fill the guy's schedule.

Right.

February is a slower month for us. We're like, hey, we want to give them the hours. So wonderful people like Josh were able to get hours.

Yeah. And that was like a management decision by Liz and I. She was like, do you think we can do this job? I said, yes. She said, great, this will give us the core guys hours for the rest of the slow season, and then we'll jump right into mowing.

So the problem was that we got frost, we had rain, we had a bunch of delays. So we collected 50% in January. We do most of the work in February, we finish it off in March. We then get paid 50% in March. What that. What happens though, from a financial perspective on the P and L is you got a bunch of revenue that's unearned in January. Right. And then you got February, where you do the work and you have all.

This money going out to the guy.

Labor costs, all the product showing up, equipment, blah, blah, blah, blah, but no revenue being realized. And then in March, you get this money too, and just like, oh, cool, great, we got more cash. So what happens in terms of a monthly cash flow perspective is you have a really good month in January, and then you have a really good month in March. But February is like a negative massive number because of a huge amount of labor materials. And so from a cash flow perspective, another negative of having projects is you have to have much more money in the bank to float the costs. Now, that being said, most people say, well, you get 50% down. That should cover all of those costs. Great, that sounds fantastic. But you don't ever get your profit for maybe a month or two later. Whereas with maintenance, you mow, you're getting paid. You mow, you're getting paid. And it's not. We're not talking about hundreds of thousands of dollars. We're talking about 40, $50. And so your cash flow is much more consistent with maintenance. Whereas projects, you might sell that 60,000 job the next month, you sell nothing. Then you sell two $20,000 jobs. And so your financials a lot more up and down, and you got to carry a higher cash balance just to float the cost due to the fact that you have fluctuating labor and materials. And then you get 50%, you got to hold that money and conserve it over the course of two months before you get the rest of the money. And so you go over budget on a big, big job like that, and if you don't have cash in the bank, you're gonna run out of money, even though you're gonna get the rest of your money at the end of the job. And so walk us through that job a little bit. What happened, etc. Like, we did not actually lose a ton of money on this job. I think we actually accomplished the goal, and that was to keep the guys busy. The problem that happened is it went longer because of the rain. It went longer because of the frost, and it went into March, which was our busy season.

And Lee can explain the introduction of a new product which we thought would be easy to use, and then got into it.

Yeah. Doing something we'd never done before. Yeah, got it. No.

That'S what I was going to mention.

We learned. So kind of walking through how it started, it was just normal estimate, meet the client, go over. All they said to the office was, landscape project. So let's go. I got my measuring wheel. I got my product booklet. Like, I'm ready to show them. I'm ready to show them the blocks we install. I'm ready to show them the pavers we install. I'm ready to show them the plants we install. Get there. They like the blocks. They like the plants. They already picked their pavers, which was.

Not in the standard. Two different types. No. One type of blonde that we usually install. Yeah.

So I, you know, and they wanted irrigation, and I already said no to that. So I'm feeling confident. I feel like I got my skis under me, you know, like, all right. I said no to the irrigation. Like, I sold them on our blocks. I sold them on our plants. And then it gets to the pavers, and they have a sample. And right then and there, I should have said no, but I was like, I grabbed it I picked it up, I looked at it. It's porcelain paver. We've never done it before. And I was like, no, I think, you know, we're slower. So as the estimator, I can probably hop back into a project manager role. I can be here a lot more. That was totally wrong because we got busy a week after I sold that job, so I wasn't able to be there as much. I wasn't able to help the project managers who were there as much. So that was the biggest mistake, long and short of it. We got the walls in. The walls were okay. And then we installed soft form and everything. But the patio became this massive demoralizer for the team that we just lost so much productivity. I mean, just drained the energy of the team. There were some technical steps that attached to the patio that if we didn't have to do those specific pavers, we could have done the steps really fast. But because they had to align certainly with a certain way, with these pavers, it just became a massive headache that probably 40 plus hours of labor just went into trying to figure out how to put in three simple steps. So it just slowly went downhill. And then you have the elements of frost, heaving, and rain and just not ideal conditions to install hardscape product. It just slowly went downhill.

So what if somebody, a listener is stuck right there in the middle of a project? What did we do at that point when we knew we were resolved to.

Never do projects again?

Okay. Okay. We resolved that right in the middle of it. We're like, we're never doing this again. We get where Mike's coming from. We're not doing this anymore. But at that point, you have to recognize that you're out in the medical field. We call it your scope of practice.

Yep.

Ate a lot of crew.

Yeah. Yes. And I. And this is when your relationship capital comes in and how well you've cultivated the relationships within the landscape industry, which is what we're trying to change, which is so incredibly important. If you're already networked with these other people and haven't treated them like competitors, but treated them as, you know, cohorts to serve the community, then I can start calling. I can start calling. Jesse. Hey, can you come give us a bid? We're pretty sure we're out of. We can't do this. We can't finish it. Can you come give me a bid? I called, you know, two other people. Can you come do this? The irrigation. We don't want to do it, but we have good relationships with other guys. Who do the irrigation. So we are able to work through the project with them to do it. So at this point, we saved ourselves. We lost money, but we had very happy customers in the end because we called in these guys and. And we were just honest with them. But because we have a good relationship, you know, one threw us under the bus and, you know, told us, you can't do this. And I said, yeah, we can't. We're going to get somebody who knows we paid a lot of money. And then there was another stamped concrete portion. And we. I called around to the other gentlemen that we work with until I got somebody really good. And in the end, all that mattered at a certain point was that the customer was happy. And we wanted, you know, we wanted them to be happy. So we spent the extra, and we learned to never do that again. But we called in people that were more skilled than us. And that comes into where Mike was saying, we kind of ventured into something that we thought we could probably figure out. And then we tried and we knew we couldn't. So if you're right in the middle of it. Yeah. Be willing to eat humble pie.

I think it was important for the crew, too, to reach out and not just try to have so much pride that they felt like they could finish it with a few little mistakes here and there that they think they might slip by the customer or something. And then a huge disaster happens, and.

Then we have to rip it all out.

Rip it all. We're getting callbacks, we're getting bad reviews, all that stuff. Just, like, get it resolved right at the beginning and take that initial pain and then.

Which we don't usually. Be honest, Josh. For the people that were on the job site, once you knew you were hundreds of hours over budget hours, you weren't thinking about P for P anymore.

Oh, no, no.

You're just trying to make it through and really basically begging, don't put me on this job tomorrow. And when you see that in the guys.

I wasn't saying that from PfP. I was saying for, like, the company's reputation stance.

Right. And that's where.

Because we are talking about the negatives, I'll bring it kind of back to that. If you're in that, like Liz said right now, like, if you're involved in a massive project like, this could be a huge negative. This job could have turned into a massive, massive negative for us if we tried to forge ahead, put our heads down and pat ourselves on the back and say, we. We sold this job.

We can finish this job.

It would have been the biggest mistake we could have made. And that would have been a huge negative, honestly. And so that's a huge negative from that project. Another one, like Liz said and Josh said, because Josh was one of the project managers on that job, is that those hours, as they start adding up, it just demoralizes the crew. I mean, we had one crew member we just didn't even send back until it got finished. We just said he's honestly not going to go back for the last couple weeks because he was texting us how he was losing sleep and things. And we just said it's not good for him. And that's such a neg. And that hurts me and Liz as management to know that, like, we're actually, like, physically affecting this guy and making him feel horrible that he can't even sleep at night. And yeah, I mean, that's a huge negative, honestly, for trying to sell his projects. Because if we love that he cares about the company that much, but if he does care about the company that much, it is going to affect him. You know that hard when it's. When it's going that bad.

Right. And it's not so negative even for the customer to come to that point because they had so much respect for us. As Mike has said before, when the estimator even comes and he says, no, we're not that good at that, not very good at that. We could try that, but your price is going to be like three times as much. Or we can recommend somebody else and give them a name. Like, if you have good relationships with people in the community, then like Micah said before, that, you know, you actually look better to the customer because you're so honest, they know you're going to be really good. So Lee's done that before. We're really, really good at walls. We can do this. We're not so great at that. And they appreciate that. Yeah.

So the main reason I want to make this episode is for someone like us answer asking this question that is allured by the appeal of hardscaping, big equipment, skid steers and excavators and all this other stuff. It's kind of a warning, not necessarily to say you shouldn't do it, because I do feel like there's people that are going to do it for the next 25 years. They're going to be in the field every day on every one of these projects. They have a lot of pride of ownership. They're going to love the before and after pictures. They're going to Love the process of using equipment. They like big equipment. Even if they could use a shovel and do it in 20 minutes, they'd like to do it in 18 minutes with an excavator. They like to do that sort of thing. But on the other hand I think there's a lot of people out there that have a vision of scaling a business that is doing multiple millions of dollars revenue, have 10 crews and they don't have to come to work every day if they don't want to or they're doing something else. They have another size, another business, they want to go on vacation for a week without having to be there, whatever. They have that in their mind. But they also have this whole project thing in their mind. And that's where I get scared by the allurement of project based work because it is so cool to share on Instagram. That is what gets the likes is all the big equipment. You look at the biggest influencers in this market, it's the ones that have big projects, big equipment, big bad things happen and that becomes then a social thing to share and like cool videos. Whereas like mowing lawns is not that super cool. Like it's not super exciting. And I feel like, I feel like a lot of people forget that like to get started hardscaping you need equipment, you need a bigger truck, you need a different type of trailer, like a dump trailer. You're going to need an equip equipment. Either renting or you're going to be operating. Your liability insurance is going to go through through the roof. When you start doing hardscaping versus maintenance. If you start doing tree work and you start going above a certain height, that's going to like triple your liability insurance. And so there's a lot of factors in terms of financial that I think people don't take into consideration. And if you're going to scale, it's very hard to find 10 skilled hardscapers versus 10 people that I can go find if they have good work ethic and in three or four days they can be profitable on a mowing route. And that's my biggest concern for people starting and from revenue standpoint. Like I said, you can get to a million dollars in revenue with hardscaping. You get a couple big commercial installs that are 100 grand a piece. You can get temple agencies to give you labor and you install the work right. But when that job is done, you have nothing left. And right now as we go through coronavirus, we're seeing all of that work dry up nothing and People have no recurring revenue and they're laying everybody off because like, hey heart, sorry, I know you have a ton of skilled labor, but I can't even afford to put you on a mowing route because I'm paying you 30 bucks an hour because you have 40 years of experience on an excavator.

Well, you've mentioned before, like this gentleman, you said, like the mows are your bread and butter. Like they're the base that's always recurring. So if you were him and you wanted to start out trying to do that, how many mows do you think a person should have like to sustain themselves before they would branch out even into small things. Now how big project are you talking? Over 5,000.

Well, like I've talked about with Lee, like it's less about dollar amount, it's about what are we doing right? Because if it's a two foot wall that every one of our crew could basically install and it's straight and the same legacy, front face, like flat face, flat side, whatever it's called, straight line, like that's different and it could be $50,000. But if we're talking about a terrace and then steps planting, which I hate.

So like this gentleman should build a base of recurring mows and learn how to do the wall and maybe just start with the wall.

Okay, so something simple and like, I.

Think it depends like Lee was saying, like have learned when to say no and stuff. Because if we had just gone to that Palmer project and done, you know, ripped out the old sod, put in the new sod, put in just those couple of walls in the beds and the wall going around, I would have been so proud of that project. It looked, it would have been a moneymaker. It looked gorgeous. I wouldn't proud, but going back three Saturdays in a row and redoing the stuff we did last Saturday on the patio absolutely destroys you. And you don't want to go to sleep the night before because you don't want to get up and go to that project. But if you're going and it's like the stuff you're familiar, that you're down with, that you know, can be taught fairly quickly, like leveling out the wall and going, not having to do a bunch of patio stuff and everything, then like you can take a lot of pride in that. It's just I think kind of finding that balance of when to cut it off and not keep going and going and then all of a sudden you find yourself out of your league.

Back to your question. I would if I was starting, I would really focus in the spring on selling recurring jobs. Maintenance, mowing, cleanups, cleanups, all that stuff. Right. But more about recurring jobs, more about like weekly, bi weekly scheduled work. I would focus on that. Then come times when things get slower. I would then put more focused time energy on the project based work to fill in those gaps. But I would really, really be focused on one question that is, could my recurring labor keep all my guys busy 30 hours a week?

Yeah.

Okay.

Or where I have to lay them off, like that's my biggest thing. Like if we ever had to the point where like 70% of our work hours wise was hardscaping, right now we'd be in a really big hard challenge with this whole coronavirus because like we, there's nothing, there's no leads. Like we're gonna get a franchisee that coming in here in the next couple months. And he's coming because literally for the past four weeks he has had zero leads for hardscaping because he does custom. He's done it for 25 years, like really nice work. But he's come to the realization that I'm gonna like half my business here if I'm lucky and I'm gonna have to lay off all of my guys if I don't get work in the next few weeks.

Yeah. So like for us, if we have 12 guys going in the field, I have to know that I have like let's say 8 or 10 that have enough mo's to fill their day. And then I know that these two and these two can be on a project. We usually try to only have two on a project. It's most efficient that way. Then you don't have anybody standing around. But you'd have to know how many guys you have. You have to have enough mows to sustain people and then you'd have to have a couple extra people to do the project. But you want to make sure your core people all have enough mos, something recurring to come to work and do every day, not just one. Oh, you're not working tomorrow because we don't have enough MO's and we don't have a project.

The two things I look at too is when you look at the top hundred companies in this industry in terms of size, most of them are maintenance. Whether it be commercial, residential, whether it be weed control, commercial maintenance doesn't matter. It's mostly recurring work because it scales so fast. As well as selling your business, a lot of landscapers start a business, they think they can grow it to A certain size and sell it in 10 years for the. So they can retire. Guess what? As we just found out last year, when we went out and bought a business that's been around for 15 years, his business was worth squat. And the reason that a lot of times that happens is because your business is only as valuable as your receivables, right? So you have a good receivables when you have 500 jobs booked out for the rest of the year every single week. You know, it's like, money's coming in projects. Like, if I buy a business, I gotta go sell the job tomorrow, right? I might have all the employees and all the equipment and all the other junk. Like, I gotta go sell that work. It doesn't. Like it's not there. Yeah. It's not an asset I can sell. And so I think that in terms of acquisition costs, as well as just scalability of a large firm, it comes down to maintenance.

One thing I was gonna say, because if you're watching this video and you think a little bit like me, you know, I said at the beginning, when I was getting into estimates, it was, I always wanted to look at a price. I wanted to have a number, and I had to learn to look at hours of materials. Don't look at a price. Liz makes the price. A lot of times I don't even know what the job comes out to be unless it's a massive job like that one. And I want to know. I've had clients say, like, how much was that part of the job? And I honestly looked them in the face, said, I don't know, because the office, that's a price. So if you're like me, though, if you want to know where we did one point to last year, looking at doing 1.6, 1.7. I know our wheelhouse a lot of times, the ones we make really good money on, usually anywhere from 5,000 to 15. That's kind of our wheelhouse at this point for the scalability of our company, our core competencies. We can put in really nice patios, some small walls, a couple plantings here and there, and knock out that 5 to 15,000. And we usually consistently make good money on those size projects.

So what do you say to somebody who's grown pretty big or they started, they got services? No. So they already. They already have all their mowing base.

Oh, yeah.

They meet somebody or they hire somebody who's really good hardscaping. They bring him in, they kind of use him. They start growing, they start getting a lot of Projects and now they're big and now they're overwhelmed and now they're listening to something like this and they're like, oh my goodness, we can't do this. We have to learn to stay. No, how do you. How do I go back to just mowing and maintenance and cleanups?

Well, Josh can explain because he's seen the past, even four years at the local shop. Us really build up projects and then completely obliterate them the past year and a half as I've stepped out of day to day operations. So like, yeah, you can answer that question. Like what have we done in the past couple years in terms of like we built. We were just adding services. Right. Like we were just growing and everything. And then we took a year where it's like, we didn't grow revenue wise, but we cut out probably 50% of our services and focus on our core competencies, therefore make it as much more profitable. Therefore not making me have to be there. Tell us about what services we cut out.

Turf.

We cut out turf. We cut out. We made it. So like there was only the one set of pavers.

Yep.

Right.

What was the other one? We cut out delivery.

Deliveries.

Delivery materials.

We're limiting like boulder walls.

We sold the tree chipper and then.

We also closed off our yard from people coming in from retail because that was taking up all the office ladies time. When you have 10 trucks coming in during the summer, then they can't focus on the crew and stuff like that.

And we cut. Oh, irrigation.

Irrigation we were going to get into.

Yeah, yeah, we had started with that and then we cut that out too.

Yep. And part of the reason of that is, is if you only have one person who can oversee artificial turf and they can't be there, what are you going to do? You have the job scheduled. Their kid is sick and they're not there. And we have deadlines and the same with the irrigation.

Yeah. I would say if someone. Back to your question. If someone is doing maintenance right now and they find this hired person, that's like, I have experience on an excavator, I can like build walls. It's very tempting to hire that person to get started in that because you will grow the business from a revenue standpoint very quickly like we did in the first two, three years. Like really quickly.

But you gotta ask yourself the question, like, is that person replaceable? The reason McDonald does so well is the fact that they can get a 14 year old in there and within a day they're profitable.

Yeah.

What if, what if they have all these jobs and they're realizing that this guy is an absolute jerk and they kind of need to get rid of him and like pull everything back.

Yeah.

I would say a lot of people are in this spot.

You got to take a hit to your ego and that is that you don't. You're not going to have a growing business for a year.

Yeah.

And you're going to have a flat year. You might even have a less. But it's like from a profitability standpoint, it's better like focusing on a few services and getting core competencies that you can really dominate, be really profitable, really scalable. But in terms of someone that's in that position, they're gonna have to take a big step back in their ego. Cause they're not gonna have a growth year and they're not going to have these big flashy trucks and big equipment that is really cool to have. It's cool to be like, yeah, today I'm an excavator, blah, blah, blah. And that at the end of the day is not scalable. And so to wrap all this up, unless anyone has anything deep and profound to say, I would say the fine print behind all of this is that our model is not the right thing for everybody. If you're wanting to stay at 5, 600,000 revenue, do a lot of the projects yourself. You're on every single product. You the estimate, you're the office person and you're the.

Project manager. You're gonna be all of that on every project. You can still scale the 6, 700 grand.

Yeah.

You're having big amounts of material cost and you're having equipment in there. But like you can get that big revenue. The appearance of a big company like we bought out last year because it looked big. Everyone thought it was successful. But it's built on the owner and once he's gone, everything's over. And so I think for some people that are wanting just to get to that point and they like the pride of ownership, they like buildings up, it's an awesome business. You can make 50, 60 grand take home pay easily on a business like that. You're just not going to be able to sell it for anything. It's not going to work. $2 million is. You're not going to be able to have 40 employees doing those projects. You're not going to be able to go on a vacation for two weeks without the business being closed down or falling apart if you're in the middle of your season. And I think most people are literally a day away from either getting hit by a bus. You know, if someone got coronavirus and they had, they were the office manager, estimator and project manager in all their jobs, guess what? They don't have a business right now. All their employees are laid off. And I feel like from a leader's perspective, from owner's perspective, you're letting down your team when you have such an Achilles heel of you being around. And that's what I think about too.

I know you're trying to wrap up, but I think this would be something I'll do. I'll go first, give you guys a second to think. I think if I were listening, I would want to know, especially if I had a company that was a little bit bigger, that had an office assistant or an office manager, had a project manager I trusted, and then maybe say.

I was the owner I was.

From each of your perspectives and then as the CEO as well, what's from your specific field of work? What is the biggest pro and what's the biggest con that you can think of for projects? So for me, as the estimator, the biggest pro, money, 100%. I know I can make good money if I have a client who has already done their research on me, who's already watched my videos, who got a reference from a friend, that we're an upstanding company, that is money in the bank. I'm going to bake in hours, I'm going to give them 100% service. Like they're gonna get a great product and we're gonna kill that job. The biggest con for me is stress because as the estimator in the way this company operates, I'm pretty hands off. Like I said about that big job, I thought I was gonna be there more. That wasn't the case. And then I ended up just going and pulling 14 hour Saturdays with Josh because it was the only time I could be there to work on that job. So the stress of projects, especially when you get pretty big, it really eats away at you and it eats away at your crew. So from the estimate standpoint, those are my two.

And it can be like less efficient too. Like if you're the only person that knows about that thing, then when you have your crew that's supposed to be helping you, but you're spending all day like training them how to do that, telling them what to do and babysitting, you're double checking their work, you're showing them how to do it in the first place, you're losing efficiency. There as well.

Yeah.

Do you have a pro?

The pro, like I said at the beginning, would just be like the instant gratification, you know, just like a two, three day project. You see it go from just looking terrible to just perfect. And like, that makes you feel real good and you're proud of your work and stuff for sure.

But yeah, over time I've come to the realization that there isn't a lot of pros unless you have a lot of, you know, high performers. And they need the stimulation and the owner's going to be in the game. The con is that you can't give this one customer everything and.

You have the possibility of losing them because now the irrigation guy's on their property and they're like, oh, I could do your thatching and your aeration. I'm here, I'm already taking care of this.

Or even the customer from the onset's like, no, I want the same person you.

I want my yard taken care of from cradle to the grave. You heard that one lady say.

And you can't be that to them. So the only way, like all we do is not rocket science. The only way is to be a massive communicator and caring for them and giving them people to take care of that. People who you already have trusted relationships that they won't take the other services away and work with you.

My biggest pro is that you can fill in slower times to your crew and stabilize their work schedule because maintenance is fluctuating as well as quick revenue growth. The biggest con is cash flow and asset utilization of bigger equipment that might sit there for a week and then you use it for a while and you need bigger trucks. Just from a cost structure. It's much more capital intensive than maintenance where you can have a trailer set up for under 10, 15 grand and you're out making money the next day with someone that's low skilled.

Yeah. So a con is that I am there till 9 or 10 making sure every little thing is set up for them and he has that trailer and he has that and nope, he can't do that because we need two yards in that and. And all of that goes away when you're just doing 122 mows like we did yesterday. It's just mowing like it's just helping. And everybody can jump in and you can move them around and it's not that way with projects.

I would say if you're an owner right now and you're working Saturdays, Sundays, evenings and weekends, and you're wishing you didn't you need to start cutting out services? You take the ego hit, that is going to come so difficult and you need to focus on what service you're gonna be good at. And in the long run, maybe it's 20, 24 months, you're going to be better, you're making more revenue, you're going to attract better talent and you'll be more profitable. And you want to work those hours because things will.

You'll be able.

You can't systematize a hundred different things. Right. It's easier to systematize a few and get really good at them, make them profitable. And so you don't have those variability of hours at working projects. And just like everything.

And be assured you can still make a lot of money and scale your business and grow if you're working on tight routes. And like we did 122 mows yesterday and there's not very many of us. And it's all a matter of shifting everybody who's close and tight routes and selling all those mows and having so many and pulling it off together. You can tighten up your teamwork and your communication. I think you can still make as much because you'd be so good at your core competencies.

Definitely.

Love it. Cool. Thank you, everyone.

Thank you, people.

Go ahead and comment below. I know there's a lot of people that disagree with my premise that project's not the best thing in the world. But again, I'm not saying this is right for everybody, but for a business that's scaling, a business that wants the owner to not have to be there every day, that's definitely what we're pushing at Augusta Lawn Care for our franchisees. But comment below what your experience is. And you can like, please like this, but this video, if you don't dislike it, do one or the other. Don't do nothing. Don't be lazy. And thank you so much for watching this video. Have a great day.

Bye.