Mike Andes, founder of Augusta Lawn Care (over 90 locations), explains why small home-improvement businesses experience a 'roller coaster' in profitability tied to seasonal demand. He describes a spring rush (roughly March–May) that drives rapid hiring of inexperienced staff and onboarding of many new customers, which together drop operational efficiency and cause elevated complaints and low profits. He argues most profit occurs later (approx. June–October) when demand and employee experience balance, and advises prioritizing employee retention, training, and even restricting lead intake during the spring to avoid burning out and failing after the rush.
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Hey everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 90 locations around North America today. I'm talking about why your small home improvement business seems like a roller coaster. Now a lot of people will talk about the roller coaster of demand. And that's tracked behind me. You know, during the winter, typically we don't. People don't need our services as much. This is very generic. Obviously you live in places like Texas or Florida. This might be somewhat more stable, might have more 12 month mowing schedule or people want projects throughout the winter, winter even, cause there's not much rain, et cetera. But for most of us, this is what kind of our demand curve looks like. We don't really have a lot of work in say January, February, but as we hit March, et cetera, it gets very, very busy. And this is what we call the spring rush. So it gets very, very busy. This is when tons of leads are pouring in, the phone is ringing off the hook. You literally cannot get to all the estimates. And it's really just a restraint of how many employees can I find. This is the demand curve of most home improvement small businesses. Now this is the reason why small business in this industry is so extremely difficult. Is that what we have to do in order to come and get ready for this demand, this massive ramp up right here? What do you have to do? You have to hire a bunch of employees. And when you hire a bunch of new employees, what's going to happen is they're gonna be less efficient. So now let's track on this graph what the efficiency of your employees looks like over the course of a. So this is gonna be efficiency. So efficiency is gonna actually start pretty high throughout the winter. Because your employees that are staying throughout the winter are usually the most experienced. They've been with you the longest. They were there all of last year and that's why you're keeping them on. And so your efficiency is actually really high, however, because demand is really low. You actually have the least amount of profit because there's not much demand. Your revenue's probably really low, even though you are doing it really efficiently because your employees are the most experienced. But this is what's crazy, and this is the part that I want to talk about. When you start hiring, you're getting ready for this ramp up demand. So usually what we do, we start hiring in March, February, March, et cetera. And so all of a sudden our efficiency drops. Why? Because we're getting new employees. They're not trained up, they're not efficient. They're not skilled enough. They need experience before they become actually efficient. If you're wondering about the watch, it's very big. It's from Ryan Payne, who is one of our owners at Augusta Nation. He got it for me, and I really appreciate it. It's very big. You know what they say about people who wear big watches and drive big trucks? They're compensating. Okay, so let's go ahead and this is what I want to show you. You're hiring all these new employees, and because you're getting all these demand new customers. What? Do new customers also bring more complaints. Why? Because the customer's been with you for a long time. They don't have as many complaints because they know what your service is like. They know the service schedule. They know how you do things. They know how your back end works. So as you're getting more customers in this massive demand of spring rush, also you're having less efficient customers and the customers, sorry, less efficient employees. And the customers that you're getting, all these new ones are going to be the ones that complain the most because they're not used of your services. So again, our efficiency is low. Now, as the time for the rest of the year goes on. Typically your efficiency kind of looks something like this. And that is, over the course of the year, the employees that stay with you throughout the year become more and more efficient. Now, there's two things I want to point out here. It's not necessarily to say that when your employees are the most efficient, that you make the most profit. Where most of us actually make the most profit in the home improvement industry is this part right here where we have sufficient demand in order to stay busy? We're not hunting for leads. They're still coming in, but it's not like we're 12 months booked out. We're not way booked out. However, our employees are efficient because they've been with us for several months. This is usually where most of the profits in the home improvement industry are made about. From about June to October. Those are usually the months where we're the most profitable because demand isn't crazy to we're getting all these new employees, new customers, everything's going wrong. Lots of callbacks. Cause customers don't understand things. They're getting mad about whatever. They leave online reviews. It's very stressful. At the same time that that's all happening, all these new customers, you got all these new employees that have no idea what they're doing. They break stuff, they mess Stuff up, et cetera. So this is the roller coaster of small business. And this part right here, this spring rush, usually kind of ranging between March and end of May, that kind of few months there, March, April, May, June, kind of in this area here, you're ramping up demand and ramping up the number of employees, thereby having a massive decrease in efficiency. This, this cross here, this double cross is where profits are their lowest. Absolutely the lowest during the spring rush. Why? Because demand is high. New customers, inefficient. New employees also inefficient. Cause they're not skilled, they make a bunch of mistakes. And that is why right now, as I'm talking right now we're in middle of May and for the past couple months, most people are in this trough, they're in this trough of efficiency, alright? New customers and new employees create inefficiencies and it creates less profit. So why am I making this video? You've got to remember this only happens if you stay in the game. If you keep your employees, don't let them, don't keep burning through employees, what happens if you do that? You're going to do this and you're going to be inefficient, you're going to be less profitable all year long. What you should be doing right now is focus on how do I retain my employees, how do I focus on keeping the customers that I got in this massive demand rush and keep them. So this happens the rest of the year. And that is why the majority of small businesses in the home improvement industry go out of business right here. And that's between May and July, because they've gone through spring rush, they've lost lots of money, they've lost a bunch of employees. All their new customers are really mad. They're super inefficient and because of that they start to give up. So I encourage you, keep your employees. If you gotta stop taking leads, if you have to stop this massive demand curve by saying, hey, you know what, we're gonna restrict leads a little bit, that's fine, just do this. And that way you can retain your employees, you can go out and train them and coach them and make sure that they are efficient and they know what they're doing and aren't making a bunch of mistakes so that you can keep them and stay on the trajectory of more efficient growth throughout the remainder of the year. I'm Mike Ades. Check the links in the description for more more information or go to mikeandies. Com. Until then, check this video out here. Where if you want the steps to get from 0 to 250,000 in annual revenue, this is really the only thing you need to know. There's a whole bunch of other cool stuff that I talk about, but this is the main thing to get you to quarter million dollars in annual revenue.
