Hiring All Star Crew Leaders! (Mike Andes Coaching)
Mike Andes (founder, Augusta Lawn Care) coaches a garage-door and window manufacturer on hiring crew leaders and structuring compensation. He advises offering employees a choice between a "risky" package (lower base + large profit-share — e.g., up to 50%) and a "safe" package (higher guaranteed salary with smaller profit-share), so hires self-select based on risk tolerance while protecting the owner’s downside. He also recommends scaling via crew growth, creating an operations-manager role as departments expand, pivoting toward direct-to-consumer sales and branding (shop tours, open houses, local PR) to capture higher margins and reduce contractor dependency, and cautions about guaranteeing pay or changing compensation after growth.
Chapters
Hey, everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 150 locations around the world. But today I'm doing a coaching call with the garage door and window manufacturer that also does installation. It's just a small segment of this coaching call. Let's go ahead and roll the tape. We had something like this where it's like, hey, we have the risky option. We have the safe option. And inside of each of these is a base and a bonus based upon, over here, revenue. This is kind of the package I'd be kind of presenting them is like, hey, so for the risky option, your base is going to be 40. I'm just making numbers up. I know you, you would figure this part out. This is going to be your base for the safe option. I'm going to give you 70k. I'm going to give you 80k, I'm giving you 90k, for example. And you, you could make this as much as you, you would want, even make the base lower than the risk one. But the bonus over here is like, okay, I'm going to give you 50% profit share over here, and then over here, I'm going to give you a 15% profit. Profit share. Something like, this is what I'm thinking. And then just giving them the option. And then this is going to be determining how much do you actually want them to take the risky option. I would pitch this honestly as like, hey, look, guys, we're going to be growing the business a lot. And because your family, like, I just don't want to put that in jeopardy because, like, we know there's economic kind of clouds, and I don't want to ever put that in jeopardy, but I'm willing to literally do 50% of profit sharing, which is if they owned 50% of the business, they'd be getting the same amount of distributions. And so I want to mitigate your risk by giving you a salary. But then I also want to give you the option. If you want to take a little bit of risk, I'm willing to give a very big chunk of the profits. In fact, half of it. You could even say, hey, look, this is for your crew, right? So buy your crew. This is the revenue you're producing for your crew. That's how I'm going to do the scale for your pay. Because if you're, if you say, hey, we're going to be two crews, then what's going to happen eventually, if you grow the department big enough, they'll eventually, like you said, Become operations manager or something of that nature. And then it becomes a different pay structure altogether. If they ever get their revenue where it's so high in their crew, they're like hey, we need a third crew. But we're gonna need. Now you're gonna like okay, well great, I'm gonna need an operations manager. Then you create a very similar scale but for the entire department instead of just the individual crew. And then that way too, they feel like they chose their compensation package. Right. You're gonna incentivize massively the risk you want because that's what you want and what the business can afford right now. They will make the decision. They have you have full buy in instead of you presenting one. And now they're like, well okay, yeah, I kind of want to work for you. I didn't really like this and this but I'm not going to say anything. And then you hear about it in a year or two, are they in it to actually like the long haul? And they want some risk and I'm going to give them the a little bit of risk without the downside risk of going out of business and losing equity. As long as you can grow the business, we should have confidence that the 50% we would otherwise give them would be greater than what you'd have to spend in marketing to ramp up that division until you feel pain enough of I'm giving too much away in terms of profit sharing. Whatever that amount is determined by how much do you would you otherwise have to pay in marketing and your own investment to ramp the location up fast enough to compensate them for a higher base pay. If you're going to pay them $120,000 and they want the safe option, you are probably going to be in a world of hurt in terms of financially for the business. You probably have to go to loan for 40, 50, 60 grand to then bridge the business until they're busy enough. The 50 or 60 grand as a debt is comparison to I'm giving away 40, 50, 60% of the profits. That's the risk profile you're looking at there. Increase the profit turn. You're like I don't know if I really want them to take that anymore. I'm willing to go take the risk myself. Get the loan and bridge the business until they're busy. You want to be careful because like if they are very long term minded, what they're, they're going to be apprehensive of if they have been treated incorrectly in the past is that you're going to change it up on them in a bad way. Basically I start guaranteeing their pay as they go up. Because what they're afraid of is let's say they take the risky option, you're giving 50% of profit sharing, they just absolutely explode this division into they're doing a million million and a half with two crews. What they're afraid of is that you come in like hey, time to change up the pay compensation package. So you want to be careful with just like basically saying like this is a starting, we'll come back to it. But then you can also just be like hey guys, this is brand new. I, I, I will absolutely do what's right in terms of like making sure you make more if the division is doing well. But this is a starting point and I can't guarantee anything right, because the business is struggling. Like you're gonna have to, you're have to reevaluate and you can always reevaluate comps and like at the end of the day because you're an owner and they don't have any equity. You always have the, the card if you need to let someone go. You can if things go sour. But you have a lot of trust with them and it sounds like they really believe in the business and they want to join. So then just a matter of like which option do they want? And let them choose it because much more in control. Like the, the business constraint is not you because you can't install the, the garage door. So hiring someone like yourself, this business needs to be $3 million, right? It rarely works out where you bring a ex entrepreneur in and they are able to be an operator. Because, because if he was such a good operator, why does his last business go under? I think that type of hire is probably in a few years. Like if I take these two gentlemen, I would run with them. I double the size of the business and then you're starting to think okay, how to go from three to five, how to go from three to seven. That's going to become probably hiring someone more similar to yourself. But that's not the constraint right now. The nice thing about services in general, whether it be customization to a homeowner or if it is even customizing the doors themselves and then selling direct is like you are not going to be a commodity to them. Whereas with the contractors that you always be like what's the price? And they're all grinding it down and you got big manufacturers, they're going to try to undercut you versus as soon as you can offer A service to the customer in addition to the product. That can be like the, the price variation is so much wider. If you get these two really good guys, I, I'd be like, hey, can I slowly pivot the business towards this other model where I don't have as much price sensitivity and I can have a brand and people care about the brand and want to pay for it. Sometimes growing the business is actually the best insurance because key man risk is removed simply due to the fact you have more redundant pieces. And the challenging part with like custom work in general is just like the knowledge required for them to be able to do the skill. However, if you have like four or five people versus one or two, the risk is just so much lower. I'd be like getting those anchors, giving them whatever incentives long term is needed to be like, hey, we're taking this thing over or the other thing is too. Like if you're, if you're have contractors have a problem with you selling direct, you could always start a secondary brand. Like this whole model, when people go custom, they like to see the people making them. And so the people that you're currently supplying, they would rather buy from you because they get to come see the shop, they get a seat. Like it instills so much more trust than someone who just shows up at their house in a truck. I would just slowly build it to the point, okay, I'm very confident. I think with the new website it's almost gonna become an obvious decision. In six months you can just dip your toe into this market, right? You can do a little bit of marketing, see what comes in. When you go direct to consumer, you already know your margins on it. So you already know like you can sell half as much, make just as much money and have half the amount of headach. More importantly, you're in control of your entire sales funnel versus right now. You are depending on contractors running their business correctly. And in a downturn, if two of them go out of business, we've got big problems. I would just rather have you in control of how many one time jobs you get versus depending on them. It seems recurring to you, but to them they are still doing one time jobs. I would just go for the margin, go directly to the consumer. I think shop tours going out to the local community. I'm getting every single baby boomer in there to come. They just want to come see it. It's cool. You just move to the new shop. I'd be trying to get into the local newspaper, have a big open house showing everyone how things are made. I'd be having them being, you know, whether it be stripped down or painted or whatever cut. Like I'd be just trying to make a big deal of getting people in there because that's how you build the brand. And I genuinely believe, like, let's just assume the contractors you're servicing are okay during a recession. They're the ones that get hit hard during recession, people that are really on the offensive. And if that's going to be, you actually can grow the business. But you're handicapping yourself because right now if they don't sell jobs, you don't grow your business. You could get to 2 million without getting a whole lot more overhead. You have the shop space for it. You have the equipment. You have the admin person. Like all your profit is seeing between 1.1 and 2 million in revenue. So unlocking them for whatever is required would be like my 100% recommendation.
