He Built a $3M "Monster" with No Systems... Now he's Heading for Trouble

In this video, I'm talking to 10 home service business owners that are trying to get their business to the next level. We talk a lot about budgeted hours and how important that is to make sure your pricing is correct. We also talk about having a $3 million business, but it's still being chaotic and being ran on paper. There's a lot of really good nuggets. Let's go ahead and roll the tape.

I'm trying to figure out how to do the taxes and how to— whether I should switch, because in Florida, if you're an LLC, You're a sole proprietor, and that hurts me with business credit. I've watched a lot of your videos about franchising, and we're sort of a franchise, but not legally, not legally at all. I know I'm heading for trouble if I don't get this fixed, because really, I sit in this office most days, or I go in a truck and pick up whatever equipment or go see customers, and I'm trying to make it a properly functioning business, but we've grown so fast. In 5 years that I've done everything on the fly. But I also know that we're going the wrong way. And if I don't get it fixed, I'm going to fail them, let alone probably get myself in trouble.

Yeah. Just to be clear, Jeremy, are you saying you have— you own the LLC 100%? Is that correct?

I own the LLC 100%.

And so you are basically giving them 20%— you get 20% of the revenue, essentially.

Well, my location, I get 100%, but then like my Tampa location, it's my tree climber, his cousin and his sister, and they do the trees and the mowing. Whatever they make after it goes to the bank, I take 20% out, pay their bills, and they get the rest and they see it. Then Alex, my buddy that runs everything down in St. Pete, same way.

Do they have their own equipment and trucks or is it yours?

Well, it's mine legally, but it's theirs. They keep it at their house. All their equipment and everything.

What's the total revenue across everything, Jeremy?

Across—

well, Tampa made $1.2 million, Holiday made $1.3 million, and St. Pete made $893,000 in total. My lawyer said, Jeremy, you're heading for trouble. You got to fix this. I said, well, I've got Mike Andes coming in, so I'm going to pick his head and see where I need to go.

Yeah, like on the legal The legal structure side, I'd follow whatever your lawyer thinks is best. I think you kind of got an accountant and a lawyer together because this isn't just liability, that's your lawyer. It's also how taxes are gonna be handled, right? And so at that size of $3 million, the difference between $3 million and getting the next level of $5 million or beyond or having someone else run the business is having all of this buttoned down. And it's boring and it's horrible and no one enjoys this stuff, but like having, making sure you have either A, 3 different S-corps or an S corp with LLCs underneath of it. Like, that's what the attorney will help you determine what's going to help you with the best when it comes to liability protection. The accountant needs to be brought into the conversation, though, because there's a huge discussion of how, how are you going to handle this from a tax perspective, right?

So they're saying I'm just scared of that stuff.

I know, I know, I know. And that's the thing. Like, you are, you are super really like amazing at sales, getting the work. You're really, really solid at operations, doing the work. You guys, they're awesome. The admin side is where you have a lot of holes. And it's, and it's okay just to recognize that moving into software like HomeWorks is gonna give another level of professionalism to be able to automate a lot of the admin tasks you're not good at. And then so like over time—

I gotta stop doing this.

Yeah, no kidding.

I'm so tired of this.

Yeah. So I, I just take one thing at a time. Like for example, Jeremy, I'll be honest, if tomorrow we had instant quotes, I'd tell you not to use it cuz there are more important things in the business to systematize around admin before you keep doing what you're good at. Which is sales.

Okay.

And so all of us as entrepreneurs have tendencies to do more of what we're already good at and let other parts of the business sink because we don't really enjoy that part and it's kind of scary. And so you are good at sales and operations, right? But I need you to just focus 100% getting off of the paper onto HomeWorks so that— because here's the thing, if you talk to an accountant right now, they're going to look at me like, paper, really? And they might not even want to work with you because they're like, no, I don't even know what I'm dealing with here.

That's already happened.

Yeah. So I want you to focus on homework, like get everything off of paper. Paper should know— like, you can't see any paper on my desk. And it's because, like, it needs to have a system, it needs to have a place, it needs to be documented. And once you've done that, then you unlock the ability to be able to hand over QuickBooks or someone to an accountant and they actually know what's going on and understand the tax picture. And then you can always go back to sales. Like, next time, this time next year, we have instant quotes. You can go gangbusters on it. But I wouldn't grow the business a cent past $3 million where you're at now. Without having these things nailed down because you are opening yourself up to a bunch of liability.

Yeah, that's what I'm really scared of. And I feel like I shouldn't really take on nobody else, that we should get organized and we need a straight direction and more of a system. I have systems for their routes and systems for their trucks and all that stuff, but everything in the office is, it's catastrophe. I wake up in the morning, I'm not sure what I need to do next. It's not on the board. I'm like, huh?

Yeah. And Jeremy, at your size, if I was you, to be perfectly honest, I would hire someone who's really good at systems and in the office, right? Someone who's worked in the office before, et cetera. And you're like, their job description is not run my systems. It is create my systems because they'll come in, they'll laugh at you and you'll feel bad about for a second about paper. But then like their job is get us inside the software, have checklists and protocols, use video inside the mobile app. Like these are all things that they will just think in that way already. and that might take you 6 to 12 months to feel really comfortable with it. But once you get that, you can always go back to focusing on sales and operations. But at your size, if I was you, I would hire this. Like, I would hire the person that is— they, they like— you hate, you know, creating systems around admin and like all the office stuff and accounts receivable and payable and automations. You hate that. Someone else will come in here and that's all they love. They just love saving 10 more minutes a day, 3 more minutes a day, standardizing the inbox like that. They love that.

Like, find that person.

Yeah.

All right.

I appreciate the advice.

You got it, man. Great job. Eric, you're up next.

All right. I got a couple of questions. Uh, first, uh, letting you know, but I am a full-time firefighter, so I have that income coming in. So this isn't my primary income right now. So that's going to dictate some of the answers, I'm sure. But I have, um, I just bought a mowing truck and I had a guy that mowed for me last year and he did it pretty much on his own. And then now I have another guy that's coming on for— through an acquisition. And so my question is, do I put both guys in the same truck or would it be better to separate them and let them do two different routes? Because I have everything for two different routes or two mowers on one truck.

Yeah. Like, the thing is, your last sentence is important because you have already purchased the capacity for two trucks. Like, it doesn't matter if you use the second truck or not. It's going to sit there. You're already paid for it. You're paying insurance, you're paying for storage. So like, I always am trying to think of how do I utilize all my trucks and equipment? Because all of your profit is sitting between where you're at in revenue now and your, your max capacity. So what's good, Eric, is you could technically get 2 more employees without buying any more trucks and equipment by just simply taking the 2 trucks that now have 1 employee each and doubling them up.

Right now, the one truck with the, the new employee coming on, he was using his own truck with the guy he was mowing for before. So I technically only have one truck and then my daily driver, um, but I have one truck and an employee, and then another employee that's coming with his own truck.

I would, I would nix the employee with the own truck thing. Okay, um, again, you're just opening yourself to liability. It works great until it doesn't. It is— if they get an accident, they don't have commercial insurance, right? So now they're towing your stuff around. Guess who's going to be on the hook for that? Right. So again, like, it makes great sense in the short term. And if nothing happened and everything in life was perfect, it would go well. But I've just seen it happen the opposite too many times. And your size of business, that could wipe you out or at least prevent you from wanting to keep going with the business. So I personally then put them both in the truck you currently operate and own. It's easier to maintain quality control as well as cultural control with them both being in the one. And them starting the same place. If he has his own truck, he's starting from home. You can't maintain quality of uniform or anything. He could be intoxicated. Who knows what, right? So I would just put them both in the same truck for now. Okay.

Should the labor rate be different for commercial properties than it is for residential properties? Like right now I'm running at $80 a man hour and I use that for— last year I didn't do that. Last year was just my growing year. So I just got to the yards or whatever I get them for. But now I'm trying to get more standard. So I'm using that $80 a man hour for both landscaping quotes I'm doing now and lawn care. So would that be different for commercial properties?

I mean, I already have all the insurances and everything anyways, but yeah, like ultimately the only reason that commercial typically you can get away with a lower rate is because you're not stopping and starting 50 times on a route. You're doing 1 or 2 properties a day, therefore their efficiency score should be higher, right? Because they should be working most of the day if they drive me 1 or twice between bigger jobs. So in that case, your hourly rate, quote unquote, might be lower, but how much they make per day should be about the same because they have more— they can be on the job site longer, right? And there's less drive time when you take out residential stop and starts. And so I just be careful because again, all the big guys in town have huge amounts of trucks and equipment, um, that can usually be far more efficient than you on those larger properties.

Yeah.

And so you lose out to them, and if you're beating them on price, you're likely not making any money.

And I'm not going after the commercial side. I just did some snow removal for an apartment complex that takes 30 days to pay, so that scared a lot of people off. So now I have a relationship with them and I send them a quote and it would be— there's two apartment complexes and right next to each other. So it'd be a full-time, all day for two guys to mow and stuff. But I charged them at $80 an hour, $80 a man hour. And I don't know if that's really competitive around here or how to find that out, what the competitive rate is around here.

Yeah, like on your first few, you're somewhat shooting in the dark. One way you can find out is actually trying to get people's bids. Like talking to the property manager, hey, like, I want to make sure we're comparing apples to apples. So like, I'll just look at what they're doing and I'll tell you whether or not I can beat the price and what my price is. And I'll be honest with you. So that's one way to do it. You could also, you know, it's tough to get bids from your competition if they're bidding on your customers' properties. Like, that's difficult. So commercial is a little more difficult. I'd say in general, when it comes to commercial, if you aren't confident in the pricing, don't do it because you just can lose your shirt on it. and now you're likely in a signed contract. And so you could be really over your skis. So I would say until you're very confident in your pricing, I wouldn't touch it. And then, you know, secondarily, just people getting the commercial— go ahead.

I quoted it high. I mean, not high, but I quoted it where I could pay my guys, pay all the bills. Like, I figured out what it takes per hour breakdown for truck payments, everything. So I still make money on what I submitted. I just don't know if it's going to be competitive or not. And if it ain't, no big deal, because like I said, I'm not targeting I'm targeting residential, I'm not targeting commercial, so I'm not too worried about— I just didn't know if there's a way or a trick to find out what the average rate is.

Yeah, like usually close rate is the ultimate determining factor for your price being competitive, right? If you did 20 of these and you closed 18 of them and had 90% close rate, I'd be like, I don't care what your prices are, they're too low, right? But if you do 20 of them and get 1 or 2 accepted, you could pretty much assume, hey, I'm probably significantly higher than everyone else. So I would use that as your gauge. In the short term, it's more difficult with commercial because it's just more difficult to like call people and get bids for your own house, for example. That's easy with residential. But I would be— if you can build up rapport with a property manager, whereas, hey, I just want to make sure I'm comparing my quote apples to apples. Usually you can do that if the— if the— if the property manager or maintenance manager is unsatisfied with their current provider and you're like, hey, let's save us both time. You just give me what they're doing and I'll tell you whether or not, you know, what our prices are. And then if people say no, if you build up a really good rapport with them, if you say, hey, I'm just really curious, I would love to see what you're currently getting charged for my own education perspective. Again, that is like you're going to take kind of a humble pie situation there because you're basically saying, I don't know what I'm doing. But at that point you've lost the job. So.

Right.

You might be able to.

Right. Okay. And then the other question is I have signage and stuff, yard signs, door hangers, website, and uniforms. I didn't know if there's anything else that I should be doing for advertising. I haven't got into any of the Google or Facebook ads because I know those are somewhat wishy-washy. The way I understand the Google ads, it kind of— you have to spend quite a bit of money to get a good return. Is that kind of the right way of thinking.

Yeah. Like before I spend a single dollar on ads, I'm always looking at my website. Now I'm very biased because we have home service web design. So take that with a grain of salt. But the ultimate thing is anytime you pay traffic, what you're doing, you're paying for attention. And if when you get the attention, it's pulling them towards a bad website, the conversion, you're just going to drop way down. And so we see consistently people that have conversion on their website, like 1 out of 100, 1 of 200. Once they changed their design, same amount of traffic, but now it's 1 out of 50, 1 out of 60 as a conversion rate. And they just tripled their business because the site was no more traffic. So I would do that first, Eric, before you spend any money. You're at the size too where like you're at that $200,000, $250,000, I'm guessing. Is that kind of where you're projecting this year?

Yeah, I'm looking to be right at $200,000 to $250,000 this year.

Right. Yeah. And so like when you get at that stage and you start doing paid ads, people jump to paid ads because like tomorrow you could be set up with Google Ads, tomorrow you could run Facebook Ads, tomorrow you could do door hangers. And so people go, going straight to that versus like, okay, I'm gonna take a few months, make sure I have like my branding in place, my website set up, because doing that long run is the best spend of your dollars. Okay, in the short term, you're just not going to get any, any new estimates tomorrow because you set up your website, right?

I got you. Okay, I think that's all I got question-wise.

You got it. All right, this was a great question by Eric. I wanted to share a quick resource. I built this little tool for all of you to use. It's completely free, and you can actually see me break down your website If you go to homeserviceaudit.com, it's going to show you the things that I talk about all the time— design, speed, and conversion of your actual website. You don't have to put in your email, you don't have to sign up for anything. It's completely free. It's a tool I built for all of you. Go check it out, homeserviceaudit.com. Put your URL in and get a full analysis of how you can get more leads from your website. Daniel, go ahead.

So my question is basically For spring cleanups and fall cleanups, I just charge— when the clients call on the phone, I quote them an hourly rate, $189 per hour for a crew of 2 to 3 of us. Normally it's 3 of us, um, so it's about like $63 a man hour, right? But with P4P, it's hard to do it with an hourly rate. So how would you go about doing that, um, for my business?

Yeah, I would do like a quarter, half, and full day, and I would definitely not say 2 or 3 people. I would say 2. And then what includes— so for example, if for, for people that do this, it's like you got to have a quarter, a half, and a full day and includes 1 pickup of debris or 1 trailer load of debris. Anything over, whether it be time or debris, is going to get more money.

So, okay, so if it's a quarry, it would be— I try to, to book, you know, 4 jobs like that for the day, right? Okay.

Correct.

Okay.

Okay.

Yeah, I would tend to do half as your minimum. Like half day is your minimum. Yeah. Like what? Right now, what's your minimum for like a proper property cleanup, for example?

Right now it's $250 minimum.

How often? $250 versus like $500, $600.

How often is it $250? Yeah, like our average, our average cleanup last year was about $450.

Okay. Yeah. So you could do quarters or you could do like a third day, for example, like one third. Which is basically, you know, 3 hours, for example, you could do that. You just basically like, if that's pretty low price. Okay. So yeah, you'd probably, you'd probably need a quarter day. Just know that if you do a quarter day, they're probably not going to get 4 jobs done. They're clear. Cause now you're adding a lot of stop, stop and starts. So you usually won't get 4 jobs done in like an 8-hour day.

Okay. Okay. Okay. Yeah. Cause the thing is we have like, if I do a minimum of half day as well, It's going to be hard because we do lots of cleanups. Like last season we did both 300 cleanups, spring cleanups, and 300 fall cleanups. So it's a lot of cleanups, right?

So yeah, you get like a $299 package, a $499 package, and a $799 package. I'm just making up numbers for quarter, media, a quarter, a half, and full day. And then just be like, hey, all of those include 2 people and up to a pickup load of debris, for example.

Okay. Okay.

Okay.

And then I would just have a visit form on the Field Force mobile app for your crew that whenever they're on the property, you attach the field, the visit form. So it's like, how much debris did you have? How long did you spend on this job? You know, you have the clock in, clock out times already, so you can validate that, but you'd still have them put that in there. So they just know, like, was this actually a quarter day, a half day, a full day, etc.? Malia, you're up next. Go for it.

So we updated our pricing this year. We increased it and then we screwed ourselves and increased our current customers way too much.

So how many did you lose?

23%. Yeah.

Okay. And when did you roll that out?

I sent the message out 2 or 3 weeks ago, but apparently half of them never got it. So then I had to resend it like, ah, yeah, like this week when we—

you said the first email from Homeworks was basically saying, hey, Okay, got it. Okay.

Yeah. So it's been a, it's been a crap show. Um, so this week they got the, hey, your price is going up to $80 and we're starting tomorrow. Sorry, you never got the message a few weeks ago.

The good news, the good news is you will make just as much money and you'll do 23% less work. That's the good news.

We haven't thought about it like that. Thank you.

And then I'll also say what that means is you're going to be able to increase the number of customers Basically, any customer that replaces them is free profit for you. So as you go into spring rush now, all your new customers, you'll have plenty of capacity. You'll be able to backfill them. I can guarantee you in 8 weeks from now you'll be like, that was not a bad thing. So I know it feels horrible now, but you were— if you run the math, you're going to make just as much money now as you did before.

Okay, thank you. Most of them are good customers too, and like the area that we want.

So question, when you raise the price like that, and then they responded being like, nope, we're out. What did that sound like? Were they all mad, or was it just like, hey, we don't need your services, you're too expensive? What did it sound like mostly?

There—

I feel like it's like half and half. We've had a couple that were like, that's ridiculous, like, we're not paying that. So I don't know.

But you guys start mowing next week?

We started this week.

Okay. Um, 23 people, or 23%? How many, how many actual customers is that?

Oh God.

Um, like 20, 25 out of 108 from last year.

Cool.

So out of those 25 that canceled, 5 of them, you know, are— let's just call them idiots and you don't want to work for them anyways because the way they responded back to you, right? The other 20, I would respond back to them and I would say, hey, we, we had to increase prices because of all the extra costs, but we don't want that to be a reason why we can't move forward and serve you and your property. And so we're going to honor your old price until you could say May 1st, for example. And I think you will get people back if you're just— because they will see that you are wanting to serve them, but you're not being greedy.

Yeah, we have responded to a few of them like, hey, you know, we don't want pricing to be the reason you're leaving us, so we can meet in the middle at $70 biweekly because like we've realized we were not charging enough. Based off of the math I have been doing. Yeah.

And I want to stick to the math. Like, what— maybe you meet them in the middle, but I'm more of the opinion, like, you know, you need to charge this higher price to make the business sustainable. And so, but you can still win back some people if you want to fill some initial capacity, you know, gap that you have. You could fill it by going back to them and simply saying, hey, like, we did this because we have all these costs, but we also don't want it to be a reason why we can't serve you. And we are happy to honor your existing price until this date. I would just make sure it's in the middle of spring rush when you know they're not going to leave and you know that, um, you're going to start getting so many customers, you're kind of going to need some people to be leaving.

Yeah, that is true. That kind of brings me to my next question. We never knew, like, how to, I guess, figure out how much we need to charge per hour. We always just kind of— I don't know how my husband figured it out, but he— I don't know, he did something. And I actually went through all of our expenses in our revenue from last year and everything from last year, um, and I don't know, did a bunch of stuff and figured it out. So with a 25% profit margin, we need to make like $135 an hour for the company.

Um, two people or one?

Yes, two people.

Okay, cool.

All right, that's— which is a totally different thing and you've talked about before, but you're fine. Um, that's with me and my husband paying ourselves, but him not being out there with the crew. So we have 2 guys working for $18 an hour. Um, my thing with that— okay, we raised our prices, but yet we're still not making nearly $135 an hour with mowing. So like, I don't under— I don't get it. It's not— it doesn't make sense. And it's properties where If we charge more, or like if the property takes an hour, they're not going to pay $135 an hour. Like, it's not like that big, but it takes an hour, so, and they can't really do it any faster. So I just, I don't understand.

Yeah, like it could very well be that in your market that service is extremely low margin, right? And so if it's, if it's mowing, for example, it might be that other of your competitors are so low priced. I will also say Budget, like your hourly rate is a function of how fast your employees are working, right? And so I would look at your husband as the actual determining factor of how long jobs actually take, because until you pay your employees down the road, pay for performance, they're going to go a lot slower. And so you can be led to believe that it's going to take an hour. In reality, if they were both actually hustling, it'd get done in 35 minutes. That's very possible. And all of a sudden the math makes sense.

Yeah.

And so, um, for now, Malia, I would just mostly focus on the basics, which is, you know, you need to raise price. Let's execute on that. And then as you go throughout this, this season now in HomeWorks, you're going to see clocked hours versus budget hours on every single job. Like, are you putting budget hours in for every single mowing visit?

Yes.

Cool. And are you doing it based on one person?

Yes.

So like when it says BH, I want you to assume one person is there. So if it's like, for example, if it is a $65 cut, you should be putting one budgeted hour in there.

Why? If we're trying to make $135 an hour.

Okay. Sorry. $67.50. My bad. So $135 divided by 2, $67.50, right? So I want you to think more in terms of per budget hour of labor. You need $67.50, meaning any time. So $80, Mo? 80 divided by 67.5, it's going to be like 1.2 something. That's what you're going to put in the visit. Because when now your crew shows up at that property, you're like, oh, I don't want— it's only $80 mow. It's 1.2 hours, but just for one person. Great. Field Force automatically halves it because there's two people assigned and tells them they need to be done in 0.6 hours or 36 minutes or whatever it is.

Okay, I'm so confused. I'm not going to lie.

You're fine. So what I want you to do, Malia, is, is, um, have you seen Landscape Business Course at all or not?

No.

So Landscape Business Course is free. Just, just go sign up, go to the budget hours part where I explain all about this and run the math. I have some videos on YouTube. I just don't know their titles. Um, but you really, this is a fundamental cornerstone of all of HomeWorks is understanding budget hours. And if you can figure this out and then have your price increases, which you know you needed to have, Once you're done, next 2 to 3 months, you will have very clear data in terms of whether or not your jobs are actually hitting budgeted hours, i.e., $67.50 per man per hour.

So why is it $67.50 per man per hour?

Just $135 divided by 2. That's because you're trying— you said you're trying to make $135 per hour for 2 people, right?

Yes.

I'm just cutting that in half and saying it's per one is $67.50.

Oh, okay. I see what you're saying.

Okay.

Okay. So Kind of to go back, so my husband and one of our guys is working this week, and yesterday they did 4 properties that are all like right beside each other. They clocked each property, um, individually. It took 4.4 hours total to complete all 4 of those properties with 2 guys, and they made $309 for all of that. So that's $70 an hour. So is that good or no?

No, that's not good.

Right. Okay. So how do we fix that? Like, I don't—

Yeah. Like right now, Malia, you're trying to get ahead of yourself. I know where you're trying to talk— think about is where we need to be in a couple of months. Right now you just did a big price increase and lost customers.

I need you—

we know we need to do that price increase. So let's just focus on recovering those customers, trying to get our feet underneath us, start the spring rush because you don't even have the data yet to really accurately know. Just know that you are probably way underpriced, like to the point where like either A, you can't be profitable doing the work and you want to actually focus on other services and upsell them more higher margin services. Or two, it's because you don't have the equipment to do the work efficiently enough.

Mm-hmm.

So for example, I'm assuming your market, your average size of property is like over a quarter acre. Is that right?

For those properties? Yeah.

Yeah. And so the, like, if you could immediately cut the half, you know, time by 30% on those jobs and hit your target rate if you had bigger mowers. Right. So, so again, your hourly rate is a function of efficiency. It's not a matter of is my pricing too high or too low. If I go to push mower on those jobs, I would have gotten one of them done in the entire day.

Right. Yeah.

Right. So I want you to, for now, just focus on the price increase. We know we needed it. Let's get 2 months of data and homework. Make sure your budget hours are accurate. Every job. And when I say that, it's not budget hours at $135. So when you create the budget hours for every mowing visit, think $67.50. So if it's $80, it's 80 divided by 6,750. If it's a $40 lawn, it's 40 divided by 6,750. That will give you accurate budget hours to then actually know if you're hitting the numbers or not.

Okay, so I need to go back through every single visit that I have on the schedule and adjust the budgeted hours.

You got this. Plug in Spotify. Let's go.

Okay, cool. Thank you. I'm done. I'm sorry it took so much time.

You're good.

If you're trying to figure out how to grow your landscaping or lawn care business, go check out landscapebusinesscourse.com. It's completely free and has dozens of hours worth of training on how to grow a business up to $100,000 in monthly revenue. Austin, you're up. Go for it, brother.

Hey, thank you. So I've been working with Dad for about 14 years. About 3 years ago, we kind of did a reset, scaled back down, and we're trying to build up and make sure that we remain profitable while we build up. Currently, our hourly rate floats somewhere between about $140 an hour all the way up to $200 an hour. We do full design, install, build, as well as ongoing maintenance. The only thing we don't do in-house right now is mowing, and we sub that out to somebody we really trust for that. A couple of things. One, I feel like I'm always a chicken with my head cut off because we got so many irons in the fire. Second thing, can you help me establish where maybe we should be at on an hourly charge rate?

Yeah. So hourly charge rate is always going to come back to your close rate. If you're closing up— like, if I had to— if you had to guess, when it comes to projects, do you close like 50%, 70%? What do you think you're at?

Dad always says he closes 90% because he does a lot of elimination before he even goes to meet with somebody. So he doesn't like to waste a lot of his time. As far as what's actually coming through the door and what we turn away, I couldn't tell you that number based on the current software we've had.

It's—

it looks to be that we're closing 90% at the numbers that we're doing, but it's also low volume and I'm always wishing I had more work for the guys.

Oh, okay. Okay. Okay. Got it. The problem— the problem is, Austin, is you're trying to grow and you're also trying to do it profitably, right?

Yeah.

And so like, it's, it's to me that's speaking out of both sides of my mouth. Either I'm trying to grow or I'm trying to make more money. Because if you're trying to grow, we say, okay, I don't like a 90% close rate because here's the thing. Even if you're qualifying customers really heavily, price being the reason people cancel, I want to be cutting out at least 25% of my customers. And so I already know that your prices aren't too high because of 90% of people who see your price, if they're accepting, Even though you could say, well, we screen out like 20, 30% of people before they even show up. Okay, fine. But like the fact that people who don't see your price don't get a vote in this, like that's not even part of your close rate. Close rate is estimate sent versus estimates accepted very specifically. And so I would say you are underpriced. The challenge becomes then I can't— if I raise my prices and I don't have a 90% close rate, I can't keep my guys busy. And this is, this is usually where I would take your margin of raising your prices and getting your close rate down to more like a 70%. I would take the extra margin margin that you will make in doing so and put that into paid, paid ads, especially when it comes to landscape, hardscape. Are you only doing that mostly? Are you doing maintenance, like any sort of landscape maintenance at all, or not?

Yeah, yeah, we're doing landscape maintenance and fertilizing in-house. So fertilizing is probably about a quarter of revenue, and we had one guy doing that of our 8 team members that we had in the field last year. Uh, hardscape and landscape install, that floats somewhere around a third of total revenue, all the way up to half. And then we've got probably about, what, $200,000 in mowing. So that's probably another quarter. And then landscape maintenance kind of makes up that rest of that gap.

Yeah. So like, I think the long-term route of like trying to get away from the whole ups and downs is to build up the maintenance, build up the fertilization, anything recurring. And then again, like 90% close rate is— if that's what you were at, I 100% know you can raise prices. And then if you're like, man, I don't know, then we will lose some people.

Great.

Govern how much we're spending on ads. Like, do any paid ads right now?

We do a little bit. So I actually pay somebody locally here about $1,800 a month. They run our social media website and are getting us into Google Ads. So they do— they'll come onto our site. They do video work with us about 3 times a month and help us run like Facebook ads and stuff like that. A lot of it is not paid Facebook ads. We've been having trouble getting listed with Google because there's been discrepancy on our profile. But I think we just got that taken care of last week. So we're going to step more into that.

Yeah, like, yeah, it sounds like to me that they're really creating content, right? But in terms of like paid traffic, that's very different. Like, and it's fortunate it's solvable to fix Google and Facebook account issues. But like, it sounds to me like, how many reviews do you have on Google right now, Austin?

I think 50. It's pretty low.

Okay. Okay. Yeah. Like, I think validating that, adding, like, I don't know if they're adding the content right now to Google or not. Are they, or just social?

Media.

I don't know the answer to that.

It's fine. So just basically making sure that your Google listing is optimized and updated frequently. You respond to reviews, stuff like that. Great. What's, what's your website, Austin? Just out of curiosity.

PMLFW.com.

Cool. Like this background video. Let's go. I'm sorry, I'm not sharing my screen. One second. Sorry, guys. This one. Okay, let's see here. Is that your dad?

Yep, that's Jeremy.

Let's go. Cool. Cool. Oh no. Is this a one-page website? Please don't. Oh, it's not. Let's go. Downloadable content. Okay. Do they do— does that $1,800 cover building your web— like maintaining the website, Austin?

Yeah.

Okay. So I don't want to like dig into it too much, but like, uh, yeah, I would talk to them about trying to make this video where it's not a clickable thing. It's like just in the background. Like right now it's a huge embed. Um, because then what you could do is pull up complete outdoor services for Fort Wayne home and businesses and overlay it on top of this with an actual estimate request form. So it's like right when you get to the page. So there's definitely some optimization you could do around the site itself. Um, social media looks really solid, obviously super professional. I love that. I think, I think a few tweaks to your site could be made and then you could start running paid traffic. Um, I would just like, even if you went on to Upwork, for example, and you got someone that does CRO, conversion rate optimization, and ask them. It's what we do all— like, it's the first thing we do is like, is simply like, how do we get more traffic to convert? Because before you go spending money on ads, I want you to make sure it's actually going to convert well, the website. And it has the estimate request form above the fold. It states your service area and what services you do above the fold, things like that. It looks really professional, but it's not built for conversion. It's built for design, which is fine when you have lots of word of mouth, lots of referrals. And that's what you guys have. Lived off of. I just want it to be when you start paying for traffic that 1 out of 100 actually convert, not 1 out of 500. So I do think that you're ready for paid traffic once the site's optimized. And I would take any extra margin that you're making from these jobs by raising prices and not being at 90% close rate. Because again, if 9 out of 10 people, once they see your price, say yes, you're too low price. I don't care what your prices are. They just, they just are. And so If you then take the extra margin, put it into paid traffic. The reason this is important, Austin, because then you control lead flow. And the reason you've had ups and downs every year is because you don't have control of leads. You're waiting for people to refer you or word of mouth or people saying good things or seeing your, seeing your social media. That's fine. I just want to have control of it. So when I get slow, I turn that nozzle on and I fill up my schedule. And then second thing I would say, how many people in your, your contact database, Austin, right now?

I couldn't tell you off the top of my head. I know our standard fertilizer list is about 300 customers. Our rotating maintenance is somewhere around 100.

Contacts in your database is probably like 1,000 plus, I would imagine, over the course of all the years.

Yeah, somewhere around that number.

I would definitely be leaning to like the mass text and mass email side of homeworks, keeping them all warm. And the objective is to try to get them on maintenance, right? So you're like, well, I did a project for them 5 years ago. Okay, great. I'm going to have my monthly email based upon like sprinkler blowouts, time for pruning, all the CTAs, call to actions that I know I'm going to be able to sprinkle in throughout the year because that's how you'll generate way more than 10 or 15% in recurring landscape. Skate maintenance is just pitching them specific services throughout the year and then getting them on recurring after that.

Is there a way right now on HomeWorks— I just got signed up yesterday, so I've like not even logged in— but is there a way to get recurring monthly emails going out right now?

Yeah. So you can, you can mass message them very quickly. Like just go to your customer list, filter down whoever you want so you can change it by like, you know, city or if they've done a service with you, if they haven't done a service for you, you can filter it down, then just select all, send them an email. Same thing with text.

Okay.

I would probably do that before I run ads because it doesn't cost you anything and you could immediately start kind of like bolstering the recurring revenue. And if you do that, then you'll have the confidence to do the other part, which is like raise the prices, have a little lower close rate. Then you take that extra profit, you go run into Facebook ads. So yeah, you got it. Crystal, you're up.

Hi, Mike. It's nice to meet you.

You as well.

My husband has been following you for a while and we actually just signed up a few days ago. Me and my wife opened a lawn care and a cleaning company. So we're doing both and it's one business. Okay. So she's doing the inside, we're doing the outside, and we haven't done any marketing besides Facebook, you know, word of mouth kind of thing. We've never had systems in place, so everything's getting chaotic and we're at that right at $250,000. So we're just right there and it's— I know we need systems in place and that's why we're going with you guys. Before we get any bigger because I can't stand clutter. I can't stand disorganization. What is your tips for us? Us being cleaning and lawn care. Do you think it's a good thing? And what, what do you— what advice would you give for us to scale our business?

Yeah. Like, what are you optimizing for? You optimizing to both? Like, both do clean? Like, why not just do one or the other?

Well, the reason why when we first started was to kind of keep you— keep us busy in the winter. And it has— it really has kept us busy in the winter. But we've only been able to grow to a certain amount because everything's been so chaotic and it's just like we're plateauing and we're not— we're not able to grow anymore.

Yeah. Like, I think if both of you put your resources towards one or the other, you'd probably be more successful because like there's an unseen cost expense on every profit and loss statement that you can't see, and that is distraction. And so you all have doubled the amount of problems you're going to have in the business simply because you chose two different industries. And so I would love it for you to both be like, hey, which of these two are we going to focus on? Like, does cleaning keep you busy in the winter now? Yeah, but I also think you get creative if you both put your heads together in terms of how do we produce services during the winter for our— the lawn care side, or if we went all in on cleaning, you'd focus on— you would figure this out. I also think that the chaos comes because you will— you could have one of the businesses going really well, but other one's going to start falling apart. And you have like— everyone can make sense of this whole like inside and outside thing because it makes conceptually make sense. And some of your customers that you do cleaning for also have you doing their mowing. And so conceptually you can make sense of that. But it is an unforeseen, like unseen line item of distraction that if you both were like, hey, we're just both going to go all in. And a lot of times it makes sense when up to $250,000 because you all are both out in the field doing the work. When you start getting employees, you'll keep running up against this $250,000 thing because it's going to be very hard to now split. You've got different training systems for cleaning, different training systems for your lawn care guys. You got to create different billing structures. Like everything is doubled in terms of complexity. And so I believe that if you chose one or the other, either one, and you say, hey, we're both going to go all in on this. Now what happens is instead of you both staying in operations, one of you likely would do admin and sales and the other one would do operations. Now all of a sudden you can get 7, 8 technicians underneath one of you out in the field and build a million-dollar business.

Right. That's really good advice. And she actually just got out of the field. She's got 2 girls working in the field and she's out of the field and going to be learning the system and working this. So you would just pick one and just run after it.

And it's, it's always difficult to like cut the other one loose, right? And so, you know, is there a happy medium where, okay, let's take our top best customers of the one industry and just keep doing them? Or maybe we raise our prices that cuts out on a few of them and then we keep doing it maybe on the side or the weekend. That's fine. And maybe the 2 cleaners are really self-sufficient and like you can just kind of like put that one on ice, take your best customers, make sure it's not taking up your energy. But we're not going to be having 2 websites and 2 different QuickBooks accounts and 2 different bank accounts. Like if you just put all the energy towards one, if you just look at sales, operations, admin, you both are acting as solo operators and therefore you're getting the $250,000. If you just said, hey, we're going to do one thing, now all of a sudden you get one person in admin and sales, the other person in operations, and get 6 to 8 technicians underneath your operations person. Immediately get to $800,000 to $1 million.

Been really hard. We have two QuickBooks, by the way, and we're trying to just trying to merge everything together and being able to itemize from cleaning to lawn care. And that's when we found HomeWorks. At one point we had four different accounts because there was two for Brandon and two for me, and it was very hard for our books.

So, you know, what's funny is you guys, if you guys combine it, what will happen is your next bond, like you'll feel this is at $500,000. I am, because right now you guys are hitting— you're both beaters. You have a— you're both really good being solo operators. You're basically combined forces. You're going to get to $500,000 and then you're going to have trouble finding employees and like training systems and hiring, onboarding, retention, one-on-ones. That'll become the next bottleneck. But at least you'll be at $500,000, not $250,000, because you're— the way you're currently doing things, you guys will stay here because you're both really good at operations and doing the work. I happen to believe if Crystal was in the office doing all the admin, doing over-the-phone sales, took a lot of things off your plate, You'd be able to then focus with your team out in the field much more doing operations and probably be a good manager of them while you're out in the field working with 3, 4, 5, 6 guys. Okay, perfect.

Sounds good, brother. Appreciate it.

Zane, you're up next. Go for it. Last but not least.

So until, uh, last year I was working with partners, but I had 2 partners, they weren't carrying their weight, so then I kind of bought them out. And this is my first, um, year without them, so I've been looking to hire some people. I was thinking of doing like a daily pay. Do you have any thoughts on that?

The challenge with day pay is if they get done really, really early, you feel jilted. And if they take really, really long, they feel jilted. It's almost never like this happy medium because they just want a perfect 8-hour day. And if they finish early, then you're putting more on their schedule and they don't like it. They feel like you're trying to abuse the system. So I prefer hourly over day, and I hate hourly. So it's not saying much for day. I would rather it be where it's percentage-based, like pay for performance, if you can get there.

Okay.

Can you explain a bit more how to like set that up?

Yeah. So like I have a whole course on this. So if you just go p4psoftware.com, go to the training tab. I have a whole course on doing how to do pay for performance. Basically, it's going to be a percentage of the revenue they earn they get. So that way they're motivated to actually get more work done, not just drain away a day or hours, etc.

Okay. And you, like, say like a crew is out mowing a lawn and someone's walking by, they, they ask for a quote and like they land a job. Do you like give bonuses for that to the worker?

We usually do $50. Yeah, we usually do $50 for any new kind of new clients they get, they can bring on.

Okay, cool. Yeah, that's about it.

Cool.

Awesome.

Well, thank you all for being here. Have a great weekend. Take care. We'll see you guys.