He is One Customer Away From Losing EVERYTHING

There's been so many times where I was like, we are done. Because that's really where I'm at. I'm like, what, what is the point?

Today we're in Tennessee visiting Cameron with Erosion Masters.

We just prevent sediment from getting where it shouldn't go.

He's on track to make over $1 million in revenue this year.

I would love to get to, you know, $10 million at some point.

But 80% of his revenue comes from just 2 customers.

If we were to lose them, we're in a very bad position. That's kind of the breakdown.

Whoa.

Yeah, you don't have to say that loud. Like, potentially not being busy enough to close the doors. It's not under contract. Uh, they can get rid of us anytime they want.

He has lost all motivation for the business, and his first baby is due next month.

I want to take care of my family, but if I'm destroying myself and my mindset and my sanity in the process, then, then what's that worth?

This is the Business Turnaround Show. My name is Mike Andes. I'm the founder of Augusta Lawn Care, and and Homework Software. I travel the country fixing struggling businesses. Our goal is to give Cameron a strategy to turn around the company in the next 6 weeks. I would highly recommend figure out like, why are you still doing this? Yeah. Otherwise you're going to build a $3 million business and feel the same way. Okay, so a little bit of background. Cameron applied and then backed out and then joined again. So he was a little nervous, I think, about us coming, which is understandable. So shout out to him for letting us come out. But they've been in business for 4 years. They have $760,000 in annual revenue. They do erosion and sediment control and residential street sweeping.

Interesting. Basically, you know, we just prevent sediment from getting where it shouldn't go. There's a lot of different methods of installation, but we use a trencher because the ground in Tennessee is so hard. Watch out for this water meter. So we use this big trencher attachment. It's got these crazy rock teeth on it. Uh, see how these teeth are like thicker? But yeah, so since this silt fence obviously got trampled over, it looks like another machine came through here.

For example, this chunk guy, if there's somebody parked right there or something, they'll just run right through the fence because that's the only way they'll be able to get to the whatever they're trying to do, you know.

Mike's just gonna go through and retrench that area so that we can put, put new silt fence in.

I think of it as a good thing because it's more work for us.

So, you know, regular silt fence with wood stakes on it. This stuff here has a wire mesh material attached to it, so it makes it a little bit more sturdy. And then you use the metal T-post in the ground and attach it to this. So all that old stuff, we'll, you know, we'll tear it out like that, we'll throw it in the trash, and then we'll put fresh new silt fence right there in that area so that, you know, this— all of this dirt and stuff stuff doesn't run off onto the road when it rains this week. Usually like 8 to 12-inch trench, and then you put the, the silt fence into the ground and then backfill the silt fence. You know, when water hits it, sediment hits it, it captures it so that it's not going where it shouldn't go.

If you don't got erosion control, none of these houses would be able to be built.

We get paid to put it in the ground We get paid to repair it, and then we get paid a lot of times to take it out and throw it out too.

Okay, let's go ahead and look at his application video.

What's up, Mike Andes Gustination? My name is Cameron French. I own an erosion and sediment control company here in North Nashville area. I've got 5 full-time employees excluding myself. They're all great. I can't say anything bad about any of them really, but Mike has been my right-hand man. As far as personal issues hurting the business, I would say motivation is probably definitely a big one right now. In this space, there's a lot of loss leader type services that are kind of a tough pill to swallow. And then we're also just fighting a battle with these large private equity companies doing things at like a really, really low cost. Also super blessed and thankful to say that I'm having a baby girl in June. So my wife's due in June, but definitely want to start delegating some things and be present during that time because there's been certain circumstances where I, you know, things have happened and I wasn't able to be present in. It'd be, it'd be nice, and I know my wife would love it for me to be able to just like completely like step away from it for a couple of days so that we can enjoy some time together. And we haven't been able to do that for 3 years.

So, all right, so this is one of those rare cases where when we're doing a turnaround, it has nothing to do with liquidity in the 4L framework, which is cash on hand. And I think the biggest risk here is that he has huge amounts of customer concentration. And that is with 80% of your revenue coming from one customer. If that person leaves, you have no business. You're laying people off. You now all of a sudden this debt is an issue. If you have $150,000 and furthermore, he can't go back out in the field because of his injury in his back.

Like there's like 3 discs that have just been worn to nothing. I joked with my wife all the time. I was like, if Mike leaves, I'm, I'm done.

It's extremely risky. And if a business is risky, it's not worth anything. So you can't sell it, it can't run passively. And so that's why he likely is losing motivation. It's like you have money, so there's no like immediate pain to make change, but you're having a kid, you got to delegate, but you're also afraid of the fact that one or two employees leaving or one or two customers leaving and my business is kaput. So we want to get that monkey off his back and give him systems in place that the business can run without him so he can spend time with his kid. And his family, but also that losing one customer or employee is not making him lose sleep at night. And if your business is in that position, just like, it's a horrible business to run.

So oddly enough, this is, uh, well, I guess it's not really odd, but half of our fleet is like down right now. So perfect timing. But well, we've been having truck issues. So one of our trucks has been in the shop for like coming on 2 weeks now. And then one of our other machines is just getting serviced. This is our little area that I rent from a realtor. And, you know, we just kind of check, check the loads in the morning, make sure we've got all the material on the trucks. And then these guys hop in and and roll out for the day. So thanks for, thanks for being on time, buddy. Yeah, here's closing up. One day we'll be closing some big doors to a facility. What's up, Mike?

What's up, man?

Good to see you, man. Good to meet you, dude.

That shop space you had is great. Like Right on the road, but kind of a little rural. Yeah. Give me a little bit of background on the business. Yeah, I know I kind of caught up, I saw the monthly P&Ls.

Yeah, yeah.

But maybe kind of give me like the origin story, like why, how'd you get even into the erosion side?

So it really just stemmed from me building houses for a production home builder. So I was in charge of like several different subdivisions and like basically our entire vendor base. All of my expertise comes from the construction side of things and managing people and timelines and budgets and all that kind of stuff. I just was looking at all the different vendors we used. I was like, all right, what would be something that I could make money that would be easy?

Haha.

The goal was to become a division president, and they had, you know, they basically were saying like, hey, you're on that right path and all that stuff. And I just got to a point where I was like, I don't think I want that. But something that, you know, I could get behind and I felt like I could deliver a good service, maybe where service was lacking. And for whatever reason, erosion and sediment control just kind of lined up as that. I don't know, there's just something about it, and I always had this, you know, I guess the bug to, to do my own thing. And yeah, I just kind of went out and just started this, and here we are 3 years later. I did not think I'd be here 3 years later, I'm not gonna lie. There's been so many times where I was like, we are done. And then right as I started mine, all these like private equity companies started coming in here and just buying people out, and And then from that, those buyouts, some people that worked in those companies branched off and started their own. So then all of a sudden, like, there's all these erosion companies. So I've got some really fierce competition. Yeah, for sure.

And is that competition mostly around like, like the silt fences, or is it— or are there like slope erosion? Is it the cleanup part? Like, what is the— all of it.

Really?

Now what I've tried to do to kind of separate myself a little bit is we do do site cleanup, which Some of them do, some of them don't do.

Is the bread and butter the site cleanup, or is— you think it's mostly like street sweeping? What's the breakdown?

No, I would say the site cleanup is just kind of like an extra. We do street sweeping, hand scrape the curbs, blow off the curbs. The guy in the machine will come and scrape the street, but he's getting a lot of it in that bucket so that he can dump it on the other side of some silt fence somewhere where it's off the road. Inlet protection. So this is a, a dandy sack. So if you see like a storm drain in a subdivision or along the side of the roads, on construction sites we'll put this in it and then this will still allow water to drain through it. Kind of works the same way as the filter sock, sort of like water goes through it but it contains the sediment in it. These always stay where you need them to and then you just grab the inside of the metal and, and take them out. What else did we do? Concrete washout services. I think I said construction entrances. Yeah, these big concrete washout bags we set up so that the concrete washouts can wash out their chute. This is where a concrete truck will pull in, you know, clean out his chute because concrete contains a bunch of chemicals, so you want to try to contain that stuff. Stabilization services like seed and straw. We'll put up these perimeter controls until they do stabilize it, you know, like another lot where they put sod or seed and straw down, and then, then once it has, you know, vegetation grown, you know, no sediment really is going to run off into the streets anymore. It's weird, like there's a lot of services in it, but you have to kind of do them all, otherwise you're not going to get the work.

Yeah, and those mostly then general contractors that you're working underneath?

Yeah, yeah, like just all the large home builders. Yeah, you know, like, you know, all of them.

So the biggest ones, or is like, like someone who's building 3 houses in a year?

No, no, no, the big boys.

Okay.

Yeah, what we find ourselves basically losing money a lot of times is when we're going out to a job, we're putting one construction entrance and like 100 feet of silt fence. It's like not worth it, right? Um, it is worth it because then we're making money servicing that subdivision, right? Doing the street sweeping and repairs and that kind of stuff. You know, if we were down in Florida or something I mean, you're running thousands and thousands of feet of that a day because the ground's so soft. Where here, like I said, you're breaking your back literally trying to get these stakes in the ground sometimes. And there's, there's some customers that we have where they're like, hey, install 5,000 feet of silt fence and 30 construction entrances. And it's like, sweet, we're about to be here for 2 days and make good money, right?

That's a 2-day job? 30 entrances?

Yeah, we can do it in 2 days. Yeah, we're, we're fishing. Yeah, we might charge anywhere from, you know, $2 to $3 a linear foot to put this stuff down. You know, the wire-back silt fence, depending on the job, you know, we might charge anywhere from, you know, $2.50 to upwards of, you know, $4 a linear foot to put that stuff down. I really hadn't bid for jobs at all. Like, all of this business so far is built has been built strictly through just relationships and word of mouth. I recently started doing some bids, but man, even those have the time I'm like, am I just giving this number to this guy so that he can throw it into a spreadsheet and, and have the numbers so that he can bid for the job?

You know what I mean?

Is that the contractors you're calling, or like HOAs being like calling you?

No, no, it's, uh, it's usually the project manager on the job site.

Got it.

So they're like usually in charge of it, and you know, so they're the ones that coordinate with. Well, I coordinate with.

Got it. Okay. All right. That makes sense. Cool. All right. Well, we'll use the 4L framework to kind of move through it. The 4L framework explains the 4 reasons why every home service business stops growing. It's either a lack of liquidity, money in the bank, it's a lack of leads, more customers, it's a lack of labor, which is your employees, or a lack of leadership. I think from like a liquidity perspective, there's not a problem. Like I know you mentioned like paying off the debt, but I don't think that's a problem at all. Cause like based on what I'm seeing, like if there's like $350K, it's all in cash, there's $178,000 or something approximately of debt. But all that debt is the trucks and the skid steers.

Yeah.

Yeah. Okay, cool. From a leads perspective, when like right now, is it like huge customer concentration with these, the big contractors or is it pretty distributed between a bunch of different customers?

Customer concentration is the big issue because, yeah, like, it's like a handful of our customers have just like— it's like all of our work. So like, there's really a couple of them that if they were like, hey, we're not using it anymore, we're done, right? That's a bad position.

Got it. And is that like that big contract, like for example that 5-year one? Well, or is that more like a recurring?

It's not It's not under contract. They can get rid of us anytime they want.

Oh, okay. So they can just— they just agreed upon price and they're giving you work.

Yep, exactly.

But if tomorrow they wake up like, we're pinching pennies, we're gonna go get Jilly Billy down the street.

Okay, all right.

Yeah, I mean, they're just constantly, constantly beating you up on price. And so it almost feels like your customers are dictating your price. And that is a terrible place to be. And it's not just that one customer or even the other couple that we've gotten in with. I mean, it's all of them. I mean, it's a constant battle of like, hey, how can we get this done for free?

Basically, how much of your revenue do you think comes from those one or two big players?

A lot.

Like literally all of it, or like 80, 70, 90%?

That's kind of the breakdown.

Whoa.

Yeah, you don't have to say it out loud.

350 on top.

Wow.

So it's like 85%.

Now I will say this, this customer here, we are growing with them. Like they have some stuff coming up. They've been awesome. Like I would love to grow with them. They don't, you know, they're not penny-pinching too much. Like they don't hound us too much. There's a really good relationship there. So that's going to help. And then we just got our foot in the door with this customer here. And that was the first job we did with them. So that was, that was a big job.

Right. And how did that customer 4 hear about you? Used to work with them.

Okay. Really?

Used to work with them in leadership at the other company I worked for years ago. Years ago.

Because you're not really going after the home builder that does like a few houses. You're going after the guys.

I've been going after the big boys.

Yeah. Yeah.

Okay.

And how many more of them are there?

Oh, there's a lot of them.

Okay. Okay. So realistically, could we have 20 customers? Like, is that even possible?

Oh, 100%.

Okay. All right.

The problem I run into is like, I'll cold call these people and I'll talk to them and I'll follow up with them. They're just like, you got to get to this price. And I'm like, there's just no way. Like, I just can't do it. That or I follow up with them so much and then they're like, oh, we ended up using so-and-so at, you know, the same price I bid. And I'm like, what the heck? I'm like, have I not been annoying enough? Like, I can be relentless. And it's like, I don't know, maybe I annoyed him too much.

Yeah, yeah. Okay, so customer 4, just because this is the new one. Yeah, what happened to this previous erosion guy where he's like, I gotta call Cameron?

Again, same situation. Someone that I used to work with, uh, they saw that I was actually posting stuff on LinkedIn, you know, the minimal marketing that I did do. Uh, someone from LinkedIn who I used to work with, uh, saw what I was doing and You know, they started working for this, this builder and they, they had the division president for this builder reach out to me and we just grabbed lunch and, and headed off. And right from the rip, he gave me 2 jobs to start servicing. And since then, we've, we've just delivered a good, you know, quality job for them. And they're, they're going to continue giving us more work. They've got, gosh, I think 3 in the pipeline coming up soon. So they've been a great partner. I can't say enough good things about them.

So really, this is like a relationship business at the end of the day. It's like, who do you know? Who knows you? Yeah. And who's calling you after the storm?

Yeah.

And that's, that's partly why you feel chained to your phone though, because like that's your kind of your stream of keeping in contact with these guys.

Yeah, yeah, yeah. Well, that and I'm— and I do everything else. Like I take every phone call. Like there is no one else that does it. Which, you know, again, it's fine. I mean, I can't be there forever. Yeah, it's never been just like, oh man, we got a consistent flow of stuff, man. It's like, it's always like, how are we going to get all this done? Or, man, what are we going to do Tuesday and Wednesday this week?

Right?

Like, I just have no idea.

All right, we will come back to that. Leads right now is, I think, the biggest opportunity because like having 85% of our revenue from 2 customers and 95% of it from 4 customers is just like, it's hurting my soul.

You have no idea.

It's just so hard to—

You probably do. Maybe you've been there, but it's crazy.

It's almost hard to want to grow because like you could double this business, but if it's all from one, you know, 2 customers, let's call it, then you're still like always in the back of your mind, if they leave, I can't grow any infrastructure. It's like getting an admin person is scary if revenue could drop 90%. Have you ever built the relationship with the county inspector?

Contractors?

Um, a couple of them. A couple of them I've talked to, and I have like a couple of their phone numbers and stuff.

You need silt fence, erosion, to pass inspections of all these houses. So if you don't got this— this is the first thing that they do after they grade and do whatever— if you don't got erosion control, none of these houses would be able to be built.

So I've reached out to some of those companies, and I'm like, hey, this is this is what I'm doing, you know. They don't do installation or maintenance, they only do inspections. I'm like, throw me some leads, I'll throw you some leads, and like, let's try to help each other out. And the conversations were really, really good. No leads. I've thrown them leads.

Yeah.

What is the obstacle for you also doing site inspections?

Price.

Um, well, they're just like the bottom of the barrel.

Yeah, it's all right. But I think what they're, they're kind of using that to their advantage a little bit, which I guess the integrity in me kind of— I don't know, there's something about it where they're like, they go do their own site inspections and then they're just writing a laundry list of stuff so that they can get paid to go fix those things. They're definitely not making money doing inspections, but they're making money doing the work.

There's a lot of things that come with inspection, um, making sure that the fence is a certain amount of height under the trench. If it's not a certain amount of height or not covered good it's not going to pass inspection, it's not going to do what it's supposed to. For example, keeping everything from getting onto the road, etc. T-posts, we got to put those every 5 feet.

Because I think inspectors, like, if you're going after new customers, they kind of control the lead flow. And to your point, that's why they're doing the loss leader is because they know they can go sell all this work behind it.

A lot of the big companies do do it like the big wigs.

I think that's an opportunity.

The inspections.

Yeah. And I think, I think the reason is because I imagine that inspector can get licensed pretty easily.

Super easy. Like my, my crew leader right now is— I got him certified. Yeah, it's literally like a 4-hour class.

Yeah. I almost think though, instead of your crew leader, that becomes your admin person. The person rolling around all day long is able to now pay their wages using the inspections, but also take that off their plate. I understand that Cameron wants to avoid low margin work or loss leaders, and so he's been avoiding the idea of doing inspections, but that's the top of the funnel because the inspectors are the ones that determine what work needs to be done. And so if I'm trying to get the work, it might be required for me to go out and do this, quote, lower margin work. I happen to believe it's really low barrier to entry for him to get an admin person that can do those inspections, but then keep funneling that work to him instead of him depending on inspectors to not be doing the services themselves and shoveling the work off to him. So it's like, hey, here's the number of inspections, like our target number of inspections, our target number of upsells, i.e., revenue coming to the business that is profitable. Yeah. And here is admin tasks that they can get done.

Ah, okay.

Because now their office becomes mobile. It's, hey, here's a truck and I'm paying your wages and you're going to get an extra commission based on anything you sell on the back end. But we've also got to complete all these inspections. The inspections alone could potentially get to the point down the road where it covers their wages.

Yeah.

And then you also have a lead source of the revenue that they're selling on the back end of those inspections.

Yeah.

On the website, like, I think all of this comes back to the website. The web. Drill me.

Tell me.

Tell me about it. All right. So let's see his website. Erosion Masters LLC. Oh, man, this site is brutal. This doesn't scream, I want customers. At all. Yeah. So like if you come here, for example, protecting our waterways and fisheries from sediment and stormwater pollutants. I don't know, man. I don't know if that's why people come here. I think they're like, I have a mess on my, on the road. I need, I have erosion problems. So sometimes because you get cash in the bank, you stop doing the basics and that keeps you from the next stage of growth. And so he's comfortable, he's lost motivation and it's evident on the website because the only way to contact him at the very bottom is his phone number and it's not even clickable. So on a mobile device, I can't even click on his phone number.

So.

All right, well, we'll find out tomorrow. I know it's bad. I just have to have a website. Yeah, but like, I think the website becomes, hey, we do, we do two things. We do inspections and we do erosion control.

Yeah.

And because we, we need new leads with the inspection side and we need to rank for that. But then we know if we get them on that, then we get them on the erosion control. The challenging part is like you don't need to like be ranking well. You, you do need to rank well, but not for the local area and local homeowners and getting thousands of clicks and traffic. You need that when 10 people look at in the local area for like those contractors look in this area, they find you.

Yeah.

And then it's really clear what you do.

Yeah.

And I would say like right now your website is built for the inspector. It is not built for the contractor.

Yeah.

If you look at your site, like the first thing is all about environment. Like the contractors could care less about the environment.

Yeah, it needs to be something like keep your erosion inspector off your back.

Yeah, 100%. Yeah. Or keep the city off your back. Don't avoid site closures. Like what's the, what's the worst thing that can happen if they don't do inspections or you use you guys?

Yeah, site closure. So like up in, in White House, Tennessee, they have a really, really strict process and they shut the whole city down.

All this sediment and stuff actually goes to stream buffers, and then from there it goes to like bigger rivers around the Tennessee area, which I mean, if there's like cement or random stuff going into the rivers, like the population of the fish would be dying and all this ecosystem stuff, like it would just be going bad, you know.

Even doing guarantees to the builder on like, hey, guarantee no site closures. Yeah, you get your money back if there's a site closure.

Oh yeah.

Now, now I need to have the inspection to be able to guarantee them that if there's this constant flow of inspectors above you, there's always the chance that they do cut you out. This is also like customer retention, because if inspectors are walking in every single day and all of a sudden there's an inspector that's like, hey, I'll do this work for like $5,000, you're $10,000, all of a sudden they have to think about this.

Yeah, no, I think, I think that's a great point.

Okay, so I'm going to put website and what I want to do is speak to pain speak, to pain of ICP. So ideal customer profile. So we're talking to the contractor of a large subdivision. And when we're building the website, we— that's all we want to think about. They do not care about the environment. Builders are like the last people in the world to think about the environment.

I think the business owners, there might be some that do care, but I mean, there's other— some that they just want to make money. Make money and more money. But I mean, it's something that's necessary also. Like, we need places to live, and there's a lot of people moving down here too, for example, from California, Texas.

So speaking of the pain of the ICP currently, but then just having a better website will allow for the commercial to kind of start coming in. Yeah. And then that is not necessarily recurring revenue, which we love, but like, it's reoccurring.

Yeah.

Which is like, there's always new contractors, new things, stuff being built, apartments, etc. Yeah.

It's just tough with like such a small staff, like even because we've had calls before where it's like, hey man, like we need a bunch of stuff since it's a big commercial job. And I'm like, man, I'd love to do it, but if I do, these guys who are feeding us, um, something's gonna lack there and we can't, we can't do it.

What about temporary labor though?

Yeah, I mean, I, I gotta find it.

Okay.

Labor's been a big thing, a lot of turnover, right? Um, all my guys are great. I do like working with all of them. All the other people, they've either gotten fired or quit or just, yeah, mostly not showed up. You're either full-time with us or you're not, because it's hard enough getting full-time people who, yeah, this is their job to do it. You need them to do it sometimes. I think honestly it's just when it hits summertime, I guess that's the worst part. You know, you get darker.

Being in the sun all day, pulling fence, hammering all day. And I guess, yeah, that's the hardest part.

Oh, and then you have to like wake up early, I guess, too. You got to put your part in too. Everybody's putting their part in.

Our guys right here, if you're used to it, like it's cake to us, you know, especially for me. Like I've been in this business for like 4+ years.

So and then it's like, all right, now I'm going to bank on a guy who's part-time, who doesn't need to show up.

Yeah, but what if you had your core 4 to do recurring work that is more stable, but then you had a whole bench of people that you had them on a WhatsApp group when you're like, okay, we got a big job coming. Hey, who wants 3 days of work?

Yeah.

What is it, WhatsApp?

You can use like a WhatsApp. I'm just saying you get a bench of people that you put into a group. Yeah. Text group or WhatsApp group where it's announcements only and they're not able to communicate. Like, hey, you could put up job listings, which is, hey, I'm going to pay X amount, which would be significantly higher than your current rate. Temporary, this is $10.99. So you get some Joe Blow does junk removal, for example. Yeah, he's slow. Like, hey, I'll put you on the roster. And then basically what's going to happen is when a job comes in, I will put it on the chat and whoever responds first back to me gets the job. You'd have one of your guys, one of them with like 2 or 3 temporary guys putting in the silt fence. Because I'm going to go on a limb and stuff like that is easy to do.

Yeah, yeah. It's not rocket science.

Yeah.

I mean, the hardest part is just knowing how to run, like, the equipment and the attachments.

Right here is the wheel that spins when you grease it. It basically just greases everything on the inside so it doesn't grind on, on itself, on metal. These 4 bolts hold the trencher in together on this side too. And then when you're going to grease it, tighten the chain. You got to take these off and then we grease it from right here and that tightens the chain. We used to have an old trencher. That one was a pain in the butt too. The other one, the chain would always pop off.

You're a master.

I'd say like at least 3 times a week.

Is there something that y'all use that you recommend? Because like Indeed is— man, you get so many, but it's like, yeah, you're going through like 200 of them and you find maybe 2.

Yeah, you want to create some more friction to the process. Yeah. And so like we use software called Spark Hire, but you could just use like Google Forms even. So in Indeed, when they apply, you can set up an automation and you can just have, hey, when they apply, they submit their application, set up an Indeed automation that sends them this link. So you're like, hey, thanks so much for applying. Really appreciate it. You've advanced the next stage of the process. Click this link and fill it out. And part of that, you know, Google Form or however you set it up, could just be a video. Like, we always require video, so we have no in-person interview before a video submit.

So you kind of get an idea.

We cut it down from 100 applicants down to 10 real fast.

I love that.

That would be partly useful for even your current team, 'cause it sounds like there's churn at that level. But even fixing that churn, I think, can tie into our upsell strategy. Like, right now, I think I would, I would give a huge bonus for them to find upsells on job sites. Yeah. Because like right now it's strictly hourly.

Yeah.

Is there any incentives for them to stay with you longer?

Not really, man. I mean, in my head I have a— if I'm like, if you stay here, you're going to be this. If you stay here, you're going to be this. And I try to, you know, give that information to them too so that they feel that motivation themselves.

So most of them don't even last 3 months?

Um, like the bot—

the, the bottom—

there's been a, there's been a few.

Yeah, that—

yeah, 3 months is probably pretty fair.

And right now, do you have any comp structure? Is it like Basically, you hire them for what you need, and then if they ask for a raise, we're basically giving them.

I basically just started them out at a certain amount, and then I just kind of have paid them more as time went on.

I need to give them some way to be able to move up inside the company. But when you make it arbitrary or like they don't really know when it's happening, to them it doesn't exist. Yeah, right. They don't operate in the world of like, we're going to grow this business and one day you're going to become X, Y, and Z, I'll be able to pay you more. They don't operate in that world.

You know, Mike understands the vision because I know Erosion Masters is going to be a big thing one day. So I know I was there from the beginning and, you know, just making this, this company work.

The other guys, I don't really know so much. I, you know, they might— I probably haven't done a good job, you know, getting that out to them. I have a cousin who does concrete. And I just go in there and help him, but it's pretty far, so the money I make here, I use it on gas sometimes.

They operate in the world of like, how much longer do I need to work here to be able to get a raise? Yeah, right.

Yeah.

And like, otherwise it's just awkward conversations. When they need more money, they come to you.

Yeah.

And that's like really weird and awkward. And, and what I— what always is like the litmus test for me is like, if everyone in the business saw each other's wages, would you freak out?

Yeah, yeah.

The average of a machine operator, I'd say 23 and up.

I'm not sure I want to put how much I make out there, but I've been in situations with some of our folks where I like, I needed people so bad and I had to pay them.

You had to pay more?

Yeah, yeah. I was like, Mike, you're not leaving. So I just like bumped his pay up to what he was asking for, and I don't regret it at all. It's like, man, you're get paid really good.

So we got it. We got to create a comp structure. And I think for now I would just build it around Tenor. And so I would create the WhatsApp group for the whole team, but then I have another one for upsell videos. That way it's just, hey, when we're doing chatting throughout the day, someone's equipment, flat tire, I have a problem, whatever, group chat. When you are over here, you're making videos of stuff you see on job sites that can be upsold. You send them here. And then I will take those and try to sell them to the customer. And if they sell it, if they buy it, you get a percentage.

Yeah.

Now, do you think, uh, 10 or 20%, whatever, like, makes sense? Does it go to the whole group?

How is there usually 2 or 3 on the job site?

Usually 4 guys in a truck right now.

Oh really?

It's, it's overkill. It just depends on how busy we are. Um, you know, like a job like this, I like to have 4 guys because you got, you know, these guys are staying busy, right? It's not like someone's standing around with their, you know, hands in their pockets. Like, Mike's on the machine, these guys are doing repairs, you know, he's throwing something away. It makes it more efficient. Uh, but there are times where it's like, hey, maybe we're coming out there just to sweep, and then maybe we only do send, you know, 2 guys in the truck, and we have 2 guys in the other truck going to hit another job.

This is what I would do. I would do whoever hits the 2-year marker is eligible to get the upsell bonus. Like that, right? So I have, hey, entry wage, and then I have 6 months, 12 months. At 2 years, you now get where you're— you should be kind of managing the crew. And I would also, each of those stages have a different title. That last one should be probably crew lead or something like that. Like, have so like a technician, 6 months is something else, 12 months, and then 2 years when you become a crew lead, that's when you're eligible for the 20% bonus. Yeah, down the road, that upsell video likely should go to the inspector. I.e., your admin person. Yeah, not you. Yeah, because they should be able to look at it and get that bid to the contractor.

Yeah.

So we have 2-year, we got crew lead, and then right now entry-level erosion tech.

Yeah, I like that, it sounds nicer.

Yeah.

And then we got, uh, we want a 6-month and we want a 12-month entry-level. You're erosion tech, you're expected to 3 things. Yeah, erosion specialist, you got to get— be able to know these things, and that unlocks the wages. Yeah, so it'd be 6 months plus tasks, 12 months plus certain tasks, yeah, 2 years plus certain tasks. Like, if you get someone with 2 years and they can't get a piece of equipment, they're not a crew foreman.

No, I'm not super hard on them, but I do think as we grow, I will start being a little bit more strict on certain things. That's only because I know that if I'm pushing them to do better, they're going to push me to do better. Right.

Like crew foreman and project manager. Who— what's the difference with the project manager?

Project manager at that point is probably like leading 2, 3, 4 crews.

Okay. So multi-crew leadership. Okay. All right. So each of these levels of tenor are going to come with certain tasks. And comp base pay for each of these.

Yeah.

Crew foreman is going to get, let's call it 10% when they do an upsell. Project manager is gonna get 10% of everyone underneath him.

Oh, okay.

That way we still have 20% here because that way the project manager can really make good money.

Mm-hmm.

If he starts teaching his foreman how to do the upsells, and getting the videos to your admin person, that's where he can make real money. Yeah. You could do something though around benefits.

Yeah.

Right? So it's like, hey, when you hit 3 years, if you're a project manager, you get benefits. Mm-hmm. And then you could theoretically just do comp increases up to here, to the 2-year. That way when they hit the 3rd year project manager, it's like, hey, you get benefits and you now get 10% of everyone below you. So it's easier to get technicians. You explain this to them when they come into an interview. Here's how it's gonna roll. Here's the stuff you're gonna learn. Here's where the company's going. Like, this looks really appealing for a new candidate. And then your current team also is like, okay, I know what's happening next year. I'll make more money. You're in— your two current guys that are like in this level have a place where they know they're going, right?

Yeah, I like that too.

Then you know that you're gonna have someone in a year, year and a half that's probably hitting this project manager side, and then you're gonna give them a roadmap. Become operations manager. That's when you stop showing up at the shop. That's when, like, when something gets broken, they're calling the operations manager. Yeah. So like, I think we're probably a year and a half to 2 years away from that.

I'll bet you $1,000 it's a year.

I agree, I agree. If you do this stuff, you will get there in a year. I agree.

I'd love it.

Cameron says he might have me like doing a little more of, um, doing the schedules for the guys, running errands, buying like silkworms, for example, and then dropping it off at job sites, checking job sites, etc. Not too long ago, I got my inspection card too. He might have me doing inspections also. I love being out here. Like I told Cameron, like, if I could be out here, like, I would be here all the time, you know.

The thing though, that's bottlenecking now, you're doing really low leverage tasks. You are not thinking about this stuff in the shower. You're thinking about, I need to go do billing. That could be all handed off to someone.

Yeah.

You have to find the right person. You have to go through 3 of them. It's going to be a pain in the butt. You have to figure out all the systems that are currently going through your head to figure out scheduling has got to be put in a system.

Yeah.

To do that, we're going to— you're going to pull up screen recording like Loom while you're doing the billing and figure out when— where they're there and look in the— just record it all.

Yeah.

And then that's going to be their SOP. That's going to be a standard operating procedure. Here's your training. Here's how we do billing. There's 4 videos in there of me going through different types of jobs we've done where I had to figure out where they were at in the billing per rate or the flat rate stuff and the hourly stuff. I figured it all in there. Watch those 4 videos.

Yeah, yeah, yeah. Now that makes sense.

So that's the first thing that's like tomorrow. This is also where like your wife says amen and hallelujah, right?

Yeah, she'll say it for sure.

The biggest part Whenever I hear someone say they lost motivation is like you changing that one thing unlocks everything else in the business. As soon as the entrepreneur is looking at other industries.

I don't even know if this is really the industry I want to stay in.

Is bogged down.

I'll never be satisfied, unfortunately.

Doesn't love the work.

It's tough work.

Is constantly afraid. Like fear is the most debilitating thing ever.

It stinks because, you know, 98% of what you worry about never happens.

You stop scaling and it's a self-fulfilling prophecy.

If you fixate on certain things, it seems like it does happen.

Because you'll cap out at 1.2, you can't handle the stress, someone leaves. It's just like this.

Yeah.

Horrible.

Oh, well, we've been there so many times.

Yeah.

Like I was telling your wife that. Yeah, there's been so many times where it's like, yeah, we're done.

Well, and when you're handling low leverage tasks like this and literally your thought process is like you're not thinking like, listen, listening to your wife, she's gonna get mad. She wants you to quit too.

Yeah, there's certain times where she's like, "What's the point of all this?" Right. What role does your marriage play in your business? Oh gosh, man, you can't tell me things like that, I'll get emotional. It's awesome because she wants me to push through the hard times and she helps me do it. I don't want to. She's been, she's been the best. But at the same time, she's okay if it doesn't work out. Like, she's proud of me no matter what. And what more could you ask for? I'll leave it at that. You're gonna get the clicks. You're gonna get the clicks.

I think part of it is like you have actually done everything you hope to do. You've created financial freedom and you provide for your family.

Yeah.

And so I think clarity on what the next step is important.

Yeah.

'Cause that's why you've lost your motivation too, is 'cause like everything you actually set out to do with this business, you've done. Like that's why you quit your job. Right. And you got in, was the accident at work? The previous, your back injury?

I was afraid you would ask that. When you're literally working like 5 AM to 9 PM getting a business started, and you're spending, you know, 8 to 12 hours of that, you know, however long that day is, just doing all the grunt work yourself. Yeah, it was literally the straw that broke the camel's back. But I had a day where I've like felt good, and I was like, man, I was like the best day I ever had. I was like, man, my back feels really loose. Like, this great. And then I went to a mixed martial arts class and it wasn't even doing anything crazy and just, it just went out.

If he could, I know he would be out here with us banging these stakes in and doing all this stuff. But yeah, I know, and he's still out here. I'm like, man, you got to catch a break. You got to go home and stay home, man.

But I would highly recommend figuring out like, why are you still doing this?

Yeah.

Otherwise you're gonna build a $3 million business and feel the same way. You're like, okay, so like now what?

That's my fear is like, I'm gonna go—

Oh, it will happen. It's not a matter of fear. It will happen. Yeah. So like getting clear on that is like super valuable. Yeah. And here's the— I'll put an asterisk now because I have this background information. You're having a kid next month.

I know.

A baby girl.

They say middle of June, but who knows? I mean, I should probably have my phone on right now ring just in case. I mean, you literally never know.

It's like that can become your why.

You know, I think it is. Um, that's obviously going to change my life, but I hate that I'm going through that situation. I'm blessed and so happy that we are, but I hate that we're going through it in a time where I'm still so involved in this, you know what I mean? I know the why with it is it's, is it's, it's my family. Like, I want to take care of my family, you know. Sometimes I wonder what the trade-off is, right? So it's like, I want to take care of my family, but if I'm destroying myself and my mindset and my sanity in the process, then, then what's that worth? Because I, like, I will be present. Like, I don't care if I've got to shut my phone off for that day. Like, I will. Um, it'll be fine. It will. Like, it's only one day.

I know I'm gonna be in that hospital room Have you played out what the worst case scenario is if you like unplug?

Oh, I probably didn't dive too much into the worst scenario.

But like, have you— like, sometimes it's important to play it out because it's not a big deal.

It's really not. Yeah.

The reason, the reason part of it is like you're afraid you're going to lose that one customer.

Well, any of those, like this one or this one too, like, you know, because we're growing with them and that helps us diversify. Like that puts us in a bad position.

Right. So not answering their phone call, they get mad at you.

Yeah. And it's like, they'll be fine.

Well, more importantly, you can just hire someone to answer the phone. You can afford it. If you had to spend— if you had to burn $40 grand getting this admin person, it's like they're not super efficient. They're not great at everything. They're kind of— that's fine. If you can start hiring someone for admin right away, get them up, getting started in 2 weeks, 2 weeks after that, they should be able to take calls. They should really do like the billing stuff. And then I would recommend where it's like, hey, at the end of your shift, You list the 5 things I need to be brought into and you send them a message. That way you're going to ask for 10 minutes while your wife's giving birth. You're going to go and you're going to answer 5 questions and that's it. But then you're not going to have this. Oh, because I also don't want you to be there with the phone off and not present. Yeah, yeah, yeah. And so the goal is that you take the, the reactive nature of a phone call, an email, I got to get billing done tonight off your plate. But there's still going to be things you have to address. But you know, it comes at 5 p.m. Yeah. And then you address them at 5.

Yeah.

Cool. So from a leadership perspective, delegate admin. And then this is the part I think I would recommend pulling your wife in together, figure out the why.

Yeah.

You also get more buy-in as you do make some of these hard transitions of like, now your admin person doesn't show up and the phone calls are coming to you. She needs to understand like you're in this transition part. You know what I'm saying? Yeah. And not buying into the pipe of, oh, if we just grow the business, it'll become better.

Yeah.

Because it won't. If you just keep growing the way you are now and you do $2 million next year and you're still answering that phone, it'll just get worse on a personal side.

Oh yeah.

And then you got a kid screaming in the middle of the night.

Yeah, yeah, yeah, yeah, yeah.

Like, it all gets bad, you know?

Oh, listen, I know. You know, it's just, it's really just trying to find out the why and, but stay on that path. I'm going to get reminded of it, you know, 100 times a day, especially whenever— her name's Faye— once Faye's born. The only reason I feel like, and I hate even thinking of it this way sometimes, is like sometimes I'm like, well, if this doesn't work, I know I can go get a job somewhere because I have, you know, the experience. Like I can go get a VP job. It's not a big deal. But I'm like, man, I cannot fall back into that. The why has always been that, but sometimes I lose track of it. And there's times where I go, well, do I take it the easy route and just go get another job working for someone? But then you got to think about that too. It's like, is— are you going to be happy doing that?

Dude, you are so beyond that. You're so beyond that. You have a million-dollar business. You have very profitable.

Yeah.

And do you only think that because you think you have concentration risk and you have a key man risk? You grow the business and both those things get solved.

As a man, sometimes you hold things in. And, you know, a mentor is kind of like a therapist in a weird way, sort of, right? Like, they're going to give you life advice inside of your business. Um, you have to, you have to be a little vulnerable and talk to somebody, especially someone that's been there and has done it, you know, just, just like Mike Andes. For you and like what you've built so far, like, what's kind of been your why behind it? Because I'm sure you've gone through gone through so many roller coasters, right? I mean, how long have you been in business now for yourself?

19.

That's a long time, right? You can't tell me that there's been times where you haven't been motivated, or you're like, dude, I'm done with this, like, I'm gonna go do something else, or I'm gonna get a job, or, you know, if you said you didn't, I'd be like, that's crazy. Like, what's, what's kind of been your motivation and kind of kept you going through it?

And I think a lot of times you can derive a lot of purpose from trying to solve the problems that you went through for other people. And so like, I had to leave— when I left medical school, there's a lot of pressure from like professors and like, what are you doing, mowing grass? You're gonna become like this young doctor guy. So I feel for the person that has a lot of pressure on them because I didn't have it for my family, but I know there's a lot of people that do when they don't want to be doing some industry. They're just like pigeonholed in this thing. Yeah. And I want to give them the opportunity, like, you can go do something else. And if you want to work with your hands, there's opportunity. That's the first person. That was when I was 18. But the 21-year-old version of myself is why I really focus on it, because like I had almost a million-dollar business, got in an accident, and basically if I would have had a family or kids, I would have been bankrupt.

Yeah.

And I had no systems. I'm on the hospital bed FaceTiming my crew, trying to figure out the next job.

Yeah.

So I'm just trying to prevent as many people as possible from getting to that 'Cause I know that pain, I can feel it like a ton. Like kind of like if someone says they have back pain and they really do, you know what they feel like. And you're like, dude, I know exactly what you're going through. So that's the way, same way I feel for business owners. And then the one part I can't really relate with is going through that experience with family and dependents and a kid. That's where I get very passionate about it. Like I could care less about the cameras, I'd be the same way because I feel everything you're feeling. The same way you would feel someone's back pain if they're like, yeah, it's out.

Yeah.

And so like, as you approach your why, yes, you can do it for like my family, my kid. Like those are important things. Those are intrinsic things. That's what's gotten you where you're at now. But as soon as you can revert that to like, how can I do this for someone else? Like that's when it unlocks a different level of effort and discretionary effort.

Yeah.

I do want to make good money, but not solely for the purpose of, you know, myself and my family. I know how awful it is to get a business just off of the ground from like zero, and to help someone else with that and help alleviate some of that pain in the future someday would be super, super cool to do.

It's like there's a certain point in every like airplane's journey, it's like, okay, if something bad happens, we actually have to still get to the destination. Yeah, we're not turning back, right? And so like, I would just like, that's like the point of no return, is like you get past this point where like Oh, there's no like, let's go back to Seattle, right? It's like, we got to go all the way to Portland. We're almost there.

Yeah.

And so I would just say like, you got to have definition on your destination though, because a lot of people like, they take off and they don't really know where they're going. And then something bad happens. So they would just turn around and go back.

Yeah.

Versus being like, oh no, like my destination is right here. And for you, I would say like, you've already hit a lot of the goals you have. So it's time to like change what is the next destination, get clarity around it so that you can point the you know, past the point of no return and just go all in on it.

Yeah, yeah. To be completely honest, a lot of this stuff is kind of still in the works. Didn't really get implemented as soon as I'd liked it to. One, with the baby coming early, that threw a huge curveball. But then also we've had like the wettest months that we've ever had, um, which makes our job just super crazy. The good news of that is with that crazy came a little bit of a diversification with some of our current customer base, which was, you know, obviously our biggest issue. Um, so that's, that's kind of helped a little bit. Definitely hasn't solved the problem, but has, has definitely helped alleviate that pain a little bit. As far as, uh, admin goes, still working on that. You know, what me and Mike Andes talked about was having, you know, maybe a part-time time admin, and we had someone in mind and it, it just didn't work out. Um, and you know, we all, we knew that was going to be part of the process anyway. We just hadn't found that quite yet. Um, do have another person in mind for it, but there's a little bit of a time constraint there with that person. More so recently, uh, I have noticed, you know, probably a good like hour or two of my day just getting sucked, um, because of, you know, billing and, you know, certain things with insurance and stuff like that. So I do think that we need to hire that person like ASAP. Um, just with, you know, some of those different things that happened, it just hasn't happened yet, unfortunately. Also, the curveball that kind of got thrown at us with, with hiring an admin was, um, you know, Mike Andes talked about maybe having them doing some site inspections for us. And the current customer base that we have, the The one that I thought we might be able to get our foot in the door and do those inspections with, because they're currently doing it with a third party, the person that was in charge of it kind of pushed away, so to speak. You know, they got fired in short. So now there's someone else that's running it and they're like, man, that's like not even at the top of my priority list right now. And he's like, but once this other person gets his foot in the door, like it might be something to have to conversate with them about. So it's kind of on the back burner, unfortunately. I do still have plans to do that. One thing that we, you know, I did jump on right away, uh, that actually should be going live this week, um, is our website. Kind of the same thing with the website. We, we went through a couple different people that just weren't really doing a good job. Uh, I was like, man, I can't win here. Um, but finally found someone that has been really responsive, and we're like pretty much 99% done with it. Just has to, um, add a couple testimonials to it, which, uh, Mike, you know, suggested we get. Hoping that really starts to get the phone ringing a little bit more. You know, kept the theme the same because I did like the theme of it, and, uh, but we, you know, we, we branded it more to where, you know, I created like a new logo, uh, so we ditched the LLC at the end. Like Mike was talking about. I'm going to do instead of erosionmastersllc.com, it's going to be something along the lines of— I think, I think we came to the conclusion it has to be erosion-masters.com because erosionmasters.com was taken. So we did that. So as soon as you get onto the website, you know, it kind of screams more of, hey, we do residential and commercial. Erosion control services rather than kind of like Mike was saying, hey, nobody really cares about the environment. Not nobody, but a lot of contractors don't. And you're targeting that, you know, right from the get on the home page. And then same thing kind of with the truck wraps. That was another thing on here for the 6-week plan. One of the trucks that wasn't here whenever you guys came to visit, we finally got back 4 weeks after your visit.

It.

So, you know, just another one of those things where the, the shop had it for a long time. I feel like I'm making a lot of excuses right now, but these are all like legit things.

I'm—

I wouldn't lie to you. I have a design that I've put together. I've gotten pricing, all that kind of stuff for, you know, the, the new logo on the sides of the trucks. Um, but I'm, I'm still kind of shopping around to figure out exactly what trucks I want to, um, use. Something that really wasn't on the 6-week plan but was on, you know, the, the 4L framework was temp labor. Have implemented that a little bit. That's been a huge help. You know, we've had just kind of word of mouth, even guys that know people that, you know, are, you know, might do roofing or something. But, you know, they have a day where, you know, either it rains or, you know, they don't have work. And, you know, if we've got a big job coming up, we've utilized them on that and we've paid them a little bit extra. And that really saved us last week, actually. We had a pretty big job that kind of got thrown at us last minute, which tends to be the name of the game in this industry. The one thing that's definitely helped the biggest was the WhatsApp. I still feel like an idiot for not knowing what that is. All my guys were like, yeah, we got it. And I was like, are you serious? And, you know, the one guy with the Android was saying, yeah, I haven't been able to see all these pictures and videos. I've been looking on the other guys' phones and I was like, man, I wish y'all would have suggested this to me earlier. We've slowly started to transition again, just with so busy as we've been, um, to transition into, you know, doing some of the upselling type stuff. So we haven't fully implemented it, but we've, we've definitely talked to like the, you know, my crew leaders, like, hey, this is kind of what we're thinking about in the future. You know, right now we're just so busy that they're getting great hours and they love it. I've already noticed it, like we haven't even implemented it yet and I've noticed them like sending me stuff, uh, which is great, but it's like, hey, love that you're sending me this, but we already have way too much we have to do today. So we just need to get a little bit more consistent with the workflow and then really start to utilize that. But I do think that's going to be a big game changer and you could tell that um, just them knowing that that could be coming in the near future, it's motivated them. It was definitely way different than I anticipated it being, in a good way though, for sure. Uh, it, it was, it was a little bit more in depth than I thought it would be. And then, you know, the time with Mike was, was really good. I appreciated that. Uh, but even the time just with, uh, the cameraman— Terrell, was it? But even afterwards, like, he was telling me, he's like, man, your team really likes working for you, and they're like super motivated, and like you can tell that you have their respect, sort of thing. So it was cool to just, you know, hear that from an outside source. Um, you know, sometimes you kind of get lost in the weeds of things, and you, you don't tend to see those kind of, kind of things. So it was, it was nice to, um, have that, you know, brought to my attention.