How Large of a Business Can One GM Handle? (Q&A w/ Mike Andes)

Next caller is coming in from 205. Welcome to the show. Thank you for coming on.

Hello, Mike, how you doing? This is Jose from Champions Landscaping out of Alabama here in Birmingham. I just had a question on. Well, I had a couple of questions. We did 700k this year and we're shooting for profit mode 2025 at 750 and I want to get a GM in place. Would you recommend.

Just one GM? Do you think it's something that one GM can handle.

And go to 20? Well, 2026, get a GM in place. Would YOU recommend. Do you think 1 million is something that a GM can handle or do you think I need to be looking at office person and the gm?

Yeah. So if you look at sales, operations, admin is a three function of business. If you're gonna hand this business off and you're not gonna be involved, you're gonna need an admin person and a GM role at that 750,000 level. I really like that level because the man, the GM can handle operations and sales. Typically as soon as you start pushing that million marker, I consistently see you needing another person for just sales and an operation role has to be split. So I'm a big fan of taking what you currently have, staying in profit mode, hiring one full time office person and then a general manager. That general manager is responsible for everything that hasn't, doesn't have to do with admin. So all operations, all sales. Now the question I always lead to though is like what's your role going to be in the business?

So I wanted to just keep it as a passive sort of income and just, yeah, do just keep as passive sort of income and want to get into real estate and other business ventures.

So you throw this thing into profit mode just like you have like throw this thing into profit mode, raise your prices, do not buy more trucks, do not buy more equipment, keep your crew size under 8 so that general manager can actually effectively manage them. If you start needing 1012 people to make that 800,000, it's going to drive that GM. Like the level of competency for that GM has to go dramatically up because difficult to manage that number of people. And if someone's listening to this right now, like, well, I'm an owner and I have 15 employees. Yeah, you're the owner. Once you hand this off to a general manager, I consistently see if they have more than eight people in the field. And there's plenty of studies to say that six to eight people is how much someone can effectively manage. If you start having me 10, 12, 15 people out in the field, the one general manager alone usually cannot handle it. And so if you're going to, you know, try to make this passive, my current situation would be like admin person, full time general manager over everything. I'm trying to get where no more than eight people are needed in the field, which usually means you're going to have to raise prices or to hit that marker. And that's usually our 7 to $800,000 business is perfect in my opinion to make that mod work. Next caller. It looks like they're a local to me. Three, six. Oh, welcome to the show. Thank you for coming on. Oh, looks like you called already today. How's it going?

Hey, my name is Fernando. I appreciate you taking my call. I work as a mobile mechanic. So I made. I. So I just have a few questions. Sorry, go ahead. My first question is I currently make about 7,000 to 10,000 in revenue as a single operator and my two questions are I want to grow my business as close as I can to 100,000. So I'm thinking about renting out an office space so I can have a Google location. Just so when customers search up a mechanic I can show up on Google Maps, if that makes sense. And my second question would be how can I.

Increase my prices to be competitive but not as expensive as shops?

Yeah, totally. So first question, in terms of getting an address on Google, I do recommend doing whatever you can to get an actual address so that on the Maps it shows you in your local area. Highly recommend. So I would not go spend $1500 or $2000 a month on rent just to get that. But if you can sublease from someone, if you can split a shop space or an office with someone to get a physical address, it does pay dividends in terms of how do you separate yourself? And a bit more price competitive. I just make it like your marketing message needs to be. I would suggest focusing on the difference between you and a shop because you know the benefits from a cost perspective as well as from a.

Customer service perspective why they would choose you over a shop. And I would just emphasize everything on that and I would address the pain point of like, are you tired of getting two to three times like 2,300% markup on your, your parts? Are you tired of waiting a week or two weeks? Are you tired of having to tow your vehicles to the shop? Like address those pain points is really what I would be focused on like on your website because that's really why someone would choose you Over a local shop. Does that make sense?

Yeah.

Yeah, Very cool.

Okay, that makes sense. And one last question, if you don't mind.

Go ahead.

So when it comes to the office space, I was kind of debating on getting something.

Those virtual offices, I'm not sure if you heard of them, where you just pay like $99 a month, something like that. Would that be more beneficial than having to spend like you mentioned, go on 5050 at an actual shop location?

Yeah, it's definitely not a bad thing. Most of the time you can get into a Regis or other, you know, co working space, get a real address and that make that your office. I've seen sometimes they get declined on Google and it takes a little more reverification. So I've seen it work and seen it not. But it's definitely a better bet spending 100 bucks a month than going out and spending 1500 to get an address. Be very careful. I would say about one thing and that is making sure that that address is in your service area. Because from a Google Maps perspective, you just won't show up if you're literally 30, 40, 50 minutes drive outside. Or worse yet, a different city name or zip code. So whatever your city name or zip code is, I want that to match my address with my actual service area. Next caller is coming from 805. Welcome to the show. Thank you for coming on.

Hey Mike, how are you?

Good, how you doing?

Good. Also, so I actually run a pool service company in California and I watch your turnaround that you did with the co crew pools over here and I was seeing that a major problem that we have is that our prices are way too low for what we offer. As far as chemicals and that stuff goes, I'm thinking about raising my prices 30 to $35, which I think is a big jump. But.

Pretty much my question is I'm stuck in the owner operator mode right now where I'm making 25% profit, but that's with me doing a lot of the work, a lot of the repairs. Do you think that price increase would allow me to hire an admin slash route manager or is 30, $35 too much of an increase and I'll end up losing way too many customers? I just kind of want to know since you've done worked with a lot of companies before and doing all this kinds of things.

Yeah. So first question is, what was your rev. What's Your revenue in 2024?

Revenue is 300. About 300,000.

Cool. Yes. You're in a tough spot. It's One of those spots where it's like you kind of need an admin, but you can't really afford it yet. Okay, and then my next question is, you say you're gonna raise it by $35. What's the current price for that same treatment?

Right now we're around 170 average.

Is that per hour or per customer per month?

That's per customer per month.

Got it. So you're basically gonna try to.

I mean, after our chemical costs, we're probably at like 20. No, we're probably like 40 an hour once we account for all our customers.

Yeah, okay.

Which I think is low.

Very low. So basically we're trying to go from 170 to 210 or so to 205. Okay. Right now it's like 2024 was 300,000. What was 2023?

2023 was about the same. So we've been condensing our service route. We've just been focusing on more local customers. So we didn't do much of growth in revenue. We just kind of streamlined and got closer to where we have all our customers very close to us.

Got it, yeah. So the challenging part is when you're not growing revenue, what that usually means, assuming you weren't cutting out customers like that is you have less, you don't have enough lead flow to replace customers if you lost them. That's. That's a bit of a concern because usually if you grew last year by 20, 30, 40% now. And I know even if we raise prices and lost 10, 15% of customers, we will replace them within a matter of several months. And so what I would be thinking about first and foremost is if you just raised your prices the way you want on a portion of customers, you'll get confidence before you raise it on everyone. So like, because like right now you don't have a huge amount of leads pouring in that will replace these bad, the customers that will leave the lowest paying ones. And so my concern is that we raise the price on everyone. We lose 30% of our customers, which I actually don't think would be a bad deal because you're going to raise prices enough, you'd make more profit if that happened. However.

Cutting revenue by 30% would definitely set you back right now because you're not, you have no leads to replace the ones that are leaving. So like right now I would actually focus first on how do I get the lead flow higher. And so like your website, you know, I'd be dialing all that in. So that way, instead of getting, let's call it 15 leads a month, I'm getting 30, I'm getting 40. Then I have way more confidence knowing that If I lose 20 or 30 customers during the price increase, I'll be able to get them all back within a matter of like a couple weeks. And so right now, do you have a great website? Has that really been dialed in in terms of like the online side?

Yep, yep, I followed all your tips. So as soon as people go to the website, they have a contact request form where they can put their number, address.

And which way they want us to contact us, whether it's email, text or a phone call. So I've done all that part and I don't think I'm too afraid of not getting enough leads because we actually have the problem of when peak season comes for us, we're not even able to get our phone calls because we're too busy taking care of the customers which aren't even paying enough to begin with.

So I would, yeah, I would raise prices. Yeah, I would raise prices. And right as you're going in the busy season and you could even stagger it so your number of customers don't change. Because if you know, okay, like as soon as we hit, let's just say March, April, May, we know we're getting all these leads that we usually don't service, well then what I'm going to do is I'm going to say, okay, I'm going to raise 20% of my customers prices every single week for five weeks. And by the end of those five weeks we'll have a higher margin and you have lost your lowest margin customers, but they've been replaced as those five week, five weeks went on with those incoming leads that in the past you never even could get to. And so you now take the business from 300,000 to 380,000 next year, but 80,000 of that straight profit because like unserviceable leads, they don't cost you anything, except especially if you're not marketing. But what they do cost you is the extra demand that would otherwise be able to replace your lowest paying customers. And so that's why when people say, like, I don't, I have so much work coming in, I just don't answer the phone. I don't get back to them. I think it's insanity because what we should be doing is raising our prices and getting rid of customers enough to be able to take the incoming leads that are willing to pay the higher prices. So I think it's crazy when someone turns off their leads, if you turn off your leads, the business has structural problems, it has lack of systems. Because ultimately if you're raising prices and you're at capacity, sorry, if you're at capacity and you can't do any more work, you should raise prices immediately to cut customers out that are your lowest paying. Massively improve your margins, like by raising your prices. What you said by, let's call it, it's about 22, when you want 22%, by raising your price by 22, you're going to double your profits. Double. And so literally if 30% of your customers left and you didn't replace them, you'd still be better off from a profit perspective. And so I am a huge proponent of. As you ramp up with leads because you're at capacity, when you're at capacity, you raise prices or you grow and expand and get more trucks and equipment. You're not growing trucks and equipment. And I know that because you're turning away the leads. And so you gotta raise prices, you gotta get rid of your lowest paying customers and then replace them with people who are willing to pay the price. And if you do that for one year, if you do that for one, even one season to where now you're making 380 on the exact same customers that you had last year, same number of customers. Now you have the profit margins to grow and expand. Next caller is coming in from 770. Welcome to the show. Thank you for coming on. 770. Welcome to the show. Hey, how's it going?

Hey man, can you hear me?

I can. What's up?

How's it going man? Good to see you. From Atlanta, Georgia, man. I wanted to ask you a question, Mike. So practically I wanted to talk about lead flow. I honestly don't have a lot of leads coming in from my, my business. And I wanted to ask you if we are under, if we're on the site, how much would you recommend to put into marketing or. You know, I know, I know right now I don't have a website. I know I've got a priority to top on the list. But like what do you recommend besides like door hangers and just recommending, I guess more word of mouth from my clients that I have right now.

Yes, there's, there's two things I'll be doing here. Number one is I don't spend any money on marketing until I have a great website. The reason is because it's compounding effect. My customer acquisition costs can be halved or even more just by having a great website that when customers hear about me, there's something that actually will pull in the lead. Because like if I, if I went into the market and was like Coca Cola is the best, Coca Cola is the best. And I was like, okay, cool, we now believe Coca Cola is the best. And then I didn't tell them where to go buy Coca Cola and there was no store for them to go buy Coca Cola from. It would be a useless marketing campaign. And so what I recommend is focus on the store first. Like build the distribution. That is the website that will then take in the incoming leads. Because if you do them, give them a door hanger. Yes, they might call you. But I know that more than half of our leads come from directly from our website and they never touch our phone, they never touch other mechanism, Facebook or they come right from the website. And I also know that if you have a website and you do the door hangers, they might call you. But before they do, they'll go check out your website. And so this is why a store. Go ahead.

I'm sorry, sorry to cut you off. Do you recommend using your. Your. Like if I'm under 200k, do you recommend for sure. Going with the. Well, honestly, I think I might be. Yeah. Oh, okay. Do you recommend going to your, your website like doing your. Because I know you make. I mean you have a company where you guys make websites for 500 bucks a month.

Yeah, yeah. Like long care web design and home service web design are awesome. Like I just see consistently the amount of leads that someone gets before and after. So like, I don't want to downplay that. I would also say the only people we recommend get use it is if they're trying to expand past 200,000. It's literally the number I'm not making up because of you. That is the number I tell people and the team will tell you if you talk to them is like if you're not, if you're doing under 200,000 and that's like where you want to stay, I would just recommend doing, optimizing your Google listing, doing upselling your customers. So like I would rather you be sending out text blasts and emails to your customers and upselling them. You're going to get better return than spending $500 a month. That being said, if you're going to spend a single dollar on marketing, I'd rather the website be done first because it'll double or triple the impact of your marketing spend. And so unless you're trying to get over 200,000. Like at least 3,5400 next year. And I think that happens by having the website because you just get way more leads. And so I don't want to sell you on it. Like, look at what you got there, like on our site, our work page. But, like, I just know when we on average Almost double within 12 months the amount of leads a company will get. And so if you doubled the amount of leads and you just took that cost of, let's call it $500 a month, and you were getting an extra 15, 20 leads, all of a sudden it becomes like, if you were getting leads for 15 or 20 bucks, you just do it. But we don't because it's easier to be able to go to Google or Facebook. Like, I'll give you 100. I'll give you 150. And it's insane how much we're spending on leads, but then we won't spend the money on the website. And so I would only do it if you're going to grow and expand. So, like, next year, what's your kind of target? Or, like, are you trying to grow the business? Or, like, is 200,000 kind of where you want to stay?

1, 100, man. Next year, like, I want to go all in. Like, I'm definitely want to go at least. You know, my goal is to, if I can. And this is probably me limiting my beliefs, but, like, I want to go. I want to go to the million dollar at least.

Yeah.

Eventually down the line.

Yeah.

You know, five.

Yes. Like, I would say. Sorry, I did catch up. I apologize. Sorry. I got to keep the queue open, though. I would say is if you did door hangers and you were spending $500 on door hangers. Sorry. Here we go. I've got you back on. Sorry for cutting you off. What I was going to say, though, is if you're going to spend $500 on door hangers, and that's probably going to cover, let's just call it three to four days worth of labor plus the printing of the door hangers. And so if you did that, you would probably get. If you did really good, you'd probably get 10 to 15 leads. I happen to believe if you spent that money on a website, you would get more than 10 to 15 leads a month. And it is now passive. The part about doing door hangers, you do need to still manage that person out doing door hangers or you're doing it yourself.

Okay, okay. I mean, honestly, man, if I'm making more than 500amonth just with. And I'm using you guys like, I don't mind it. I just definitely, I want to, I want to. I'm thinking more for further down the line because I definitely want to get past the, this year, you know, if it's possible. I want to get past the 250 or the 300. And right now, yeah, I just want to. I thought I want to progressively get better, man, I don't want to. I'm tired of staying so low, I guess I would say.

Yeah. So, yeah, I just say your best marketing dollars is going to be that website. There's a reason why people, you know, retail stores have a front, a showcase of their products. And that's what your website is. It's a place for people to validate everything that you've told them on that, that door hanger, everything you've told them on your truck, on your marketing everywhere else. And so I highly recommend it. Obviously, I'm talking in my own book here. We have lawn care web design, we have home service web design. Go on to the site. You can go under our work and see the type of stuff we build. But I just know what the businesses do and no one like the, the turn on long care. We're design home service webinar is so low because the amount of leads that they actually generate and I can retract that all the time. But I am talking my own book. Next caller is coming from 41 7. Welcome to the show. Thank you for coming on.

There's Shannon.

Hey, how's it going?

Hey, Great. Wow. I watch a lot of your stuff. All right, got a question for you. I know you use gas mowers. Have you thought about using the Greenworks commercial series?

Yeah. Like the bottom line is, you know, switching from gas to electric is simply a, you know, fuel source. There are some benefits in terms of like, in terms of the efficiency, you save money on fuel, etc. Right now, I don't see a lot of sense for it in terms of making me more money. I can't charge the customer. Most customers are not willing to pay more for it unless they're municipal or commercial. And we don't service a lot of those customers or if they have restrictions around that, then they require it. But I, I do not yet see, see the benefit of switching enough for me to be able to go through the pain of the initial cost. I also, I talked to a company recently that does the batteries and I said, look, the way you guys market this, the positioning of the battery space is really brutal. The reason is because as an operator, the only thing I care about is making more money and saving more money. And if you don't answer that question very simply for me as to whether or not I save money or make more money, then I'm not gonna buy. And so batteries, in my opinion, will not make you more money. It does save you money though. And so one thing I recommend, like any battery manufacturers, like every time you pitch the fact that Your trimmer costs $600 versus the similar thing for 250 or 300 that's gas powered, you should just put right next to it how many hours of operation it requires for you to break even on this investment because it costs more for the batteries. But it also, you save money every single moment that you're driving the thing instead of paying for fuel and using it. So like if I know that after 300 hours I break even on the initial investment expense and additional cost incurred by buying batteries, I might start making a decision. But a lot of these, these manufacturers are still hung up in my opinion on like our performance is like this much better and we get so much more volume per.

I just want to know how, how long do I need to use this thing before actually save more money than what I spend on the initial upfront cost? But what was your kind of question behind the question? Are you thinking about doing good?

So he's mowers. So we, we invested into this company just as an electric mowing company. And so specifically what we're looking to do, and we're trying to figure out a couple things here, is that these mowers are not, not the Walmart ones. Go buy, you don't go buy an 80 volt battery and pop it in. No. These mowers are measured in kilowatts, right? So they are, they're GPS driven, they're, they're Bluetooth and they have WI fi connection and LTE. So they're connected sailor 30 high end mowers. And for the guys who are listening who don't know, the cheapest mower is 13,000. It goes all the way up to $27,000. So for the big one it's like 60 inches. But the point of the story is.

In your opinion, does it obviously you measure cost hours and there is maintenance issues that you have a gas that you don't have with electric. For example, when you run mowers on hill gas mowers, the oil runs off to the side of the mower and I mean in the platform, you can actually Blow the mower longer versus like electric where the power is always there as long as it doesn't run out. You could say that, had that argument. But there's no real maintenance on it if a. So there's. You don't have to worry about the same stuff. You don't have belts, you don't have all that maintenance. All it is is the charge. And a lot of these come up to like the big windows. Up to 24 acres on a single charge. I don't know if you've seen these big, big ones. So the question comes in is, is there really a marketing advantage? Associated Motors run exactly the same. There's any kind of price out. Is there a marketing advantage to electric when it comes to like hoas and government work where you need to be more quiet like school systems. A lot of school systems can't mow during school time hours because of the fact that the kids are in school. So you have to mow them after hours. Is there an advantage and can you see an advantage into investing in just electric mowers for different types of applications?

Have you already purchased the electric mowers?

Yes.

Yeah. So like at this point we're confirming our decision. Right. So I would say if you've already purchased them, I would lean into it. I would try to market this to hoas, commercial municipal. I know from doing a lot of these bids they are usually not willing to pay a dollar more. So unless you can make sense of it on an operational perspective from the savings, they don't care. Like, yes, there'll be one out of 10 that are like, we only allow electric. As soon as they do that, they just became super price inelastic or price elastic because so many people don't have electric. So it's very, very uncommon for them to be like, we are willing to pay 25, 30, 40% more for these. For someone that only uses electric, I would also say that there is still significant amount of sound caused from these machines in terms of like the mowers because the blades are turning like blowers, for example. I see a lot of benefit in terms of sound. Like when we video around electric equipment, for example, versus gas powered equipment. We can have an interview and they're walking right next to us. Was a gas. Gas just blows everyone's eardrums out. And so I would lean this in the marketing. You can definitely use this, like basically, hey, zero emissions, etc. Etc. The customer is not willing to pay any more. And so you're basically making a value prop. You're not making a price competitive. And so there's a really good book called Simplify and I forget the name of the author but like this is, this would be a version of you are not simplifying from a price perspective. You are from a value perspective. So I think you could definitely market this and you're going to create a differentiation between you and competitors. That's great. Customers aren't willing to pay for it, they just aren't. And so they want their grass shorter, they want their bushes trimmed. And when they get two estimates they're going to compare based upon price. Now are there going to be the municipalities or the HOA, etc. That might might say hey, we only allow electric. Yes, but they aren't willing to pay any more for it. So it still will come down to does it make sense financially. So if you've been able to make sense of it financially over a period of time, then great. But I do think you can differentiate. Like I would if I, if I already had bought the equipment, I would definitely use it in my marketing. I would really make a big deal of it. I would show the benefits. I'd show how much fuel is burnt on their lawn every week when another contractor comes versus ours. I would really lean into it because simply because it's a differentiator. You just want to know your usp, your unique selling proposition. For some people it's because they're young. For some people it's because they answer their phone 24 7. For some people it's because they have a great looking website for. For some people it's because they showed up in a decal truck. For some people it's because they're all their employees. Speak English like figure out your USP and if for you, that is you have battery operated equipment only, that's definitely something I would lean into. Next caller is coming in from 405. Welcome to the show. Thank you for coming on.

Hey Mike, it's Jake. My name's Jacob. I'm coming to the blue collar. Super excited to see you there.

Let's go.

My question for today is how to get that first employee. So I'm hitting that 10k a month mark in my auto detail mobile auto detailing business.

Okay.

I'm just wondering what's the best way to get that first kind of first employee and then start like part time and then start moving into full time and how to do that and get ready for the spring rush.

Yeah. So like if you can have a backlog of work ready to go And I would say for example, as you go into spring rush, like okay, March 1st, I'm going to hire someone. They're going to probably start like March 15th, I'm going to have to train them for a week or two. But starting April 1, I'm going to schedule my jobs as if I have that full time person. Now there's a little bit risky in case they don't work out. But this is also a matter of like how you make sure you're actually profitable very quickly once you get a new employee. Cause like you're basically almost doubling your production. So if you don't have enough lead flow, that's like the first thing you're looking at. It sounds like to me you have that lead flow. Especially during spring rush, you can step into that full time employee. And so is your question more revolving on when to do it or is it more about how to find like from a, you know, ad perspective getting employees?

It's a little bit of both. Since this is my first employee, I don't know where to find this person at and what to do there and when to get them.

Yeah. So a good hack on this one that you obviously can use indeed. It's going to be a little more pricey, but it's definitely the go to right now. You can also just do a Facebook post on your Facebook page and basically make it a job post. Back in the day Facebook actually had job postings. Now they don't. But turn that just make the post into a job listing, your description, your compensation, blah blah, and, and you have a link to your website for them to fill out a form. Or you could just do a Google form for all I care for them to sign to for them to apply. And so this works great because then what you can do is boost the post and do it to the like 4 or 5, 10 mile radius around your shop and do it to only your demographic you want, for example 20 to 40 year old males. You can just target only those people around your shop. This works really good. Like if you boost that post. I'm not a huge fan of boosting posts in general, but this works. I would do that and then I would do indeed in terms of finding them and, and then in terms of making sure that once they come on, I'd be like how do I create systems to be able to take the four or five services that are most common, simplify them, standardize them. They have a system for training and then I'd be hiring someone, two weeks later they start and Two weeks after that, I have a full time schedule booked out as if they're going to be working with me full time. And I would assume they're only about 75% efficient because they're not going to be you. And I would assume that in terms of how many hours you put on their schedule.

Amazing. Thank you so much.

Merry Christmas. You go have a good one. The next caller is coming in from 78 1. Welcome the show. Thank you for coming on.

Hey, Mike, I'm a big fan of yours. I've been listening to you since. Oh God. Since you started.

Just, I've been having some problems on the part of dealing with employees.

Okay.

We're just about to close the deal the season at around 700. And just my problem now is just how to understand employees and how to deal with them because I'm very target focused and that causes a lot of rift between me and the employees because I'm the bottleneck of the company, you know. So you have so many employees, I'm sure. How do you deal with so many people and how do you go about that?

Yeah. So first off, I would ask is, do you have pay for performance for your crew out in the field yet or not?

No, we don't use pay for performance. We do everything by the hour. But this season I'm looking to integrate the pay for performance since we use copilot with you.

So like, I would like. I know everyone thinks I have like this one track minor on pay for performance, but I know it did for my business because I was in your exact shoes seven, eight years ago running an unprofitable business, but more importantly, working 80 hours a week. Because I was constantly running after my crew and I was tired of tracking their truck, them showing up late, them doing a poor job on customers property, and I had no money. And so P4P was born out of complete frustration around what you're feeling right now. And I just know that if this one thing was changed in your business in the next 12 months, it would completely change the way you feel about your team. Because what you said in terms of how do I manage them and you know, you feel like you have your target focus and they're not, it's because they're incentivized to work longer. You're incentivized that they work shorter on the jobs cause you make more money per job. And so by aligning the incentive of the crew, they become target focused. Like if you want to see them also get that same hunger of making more money Give them the incentive, which is the harder you work, the more money you make, instead of the longer you work, the more money you make. And so, like, as much as I.

Could go ahead, go ahead.

This year in payroll, I did just, just under 300,000, you know, and I believe that everybody's getting a pretty good chunk of change. There's five, there's four of us, you know, five with me. So 300,000 between four guys in my, I think, in my opinion, is a good chunk of change, you know, and. But I feel like that's like, I'm just having problems. Like, they're like, oh, you're just, you're pretty much riding us through it. You know, you just. And I've been just. That's where I'm stuck in it. And like, I'm trying to maybe I was gonna go through that, the paper performance and see where we can do better. And yeah, I just, I'm at my west end right now, you know, I get it.

No, man, I, I have been exactly where you're at. I know exactly the pain. And so, like, the only thing I can say is if you're at the point of, at your, at your wit's end, you just have to determine that changing to P4P will be extremely painful. It's gonna require you to change the way you estimate. It's gonna change the. Have to change the way you communicate with your team, et cetera. But it is so worth it. You will no longer have to micromanage people. And the reason that they feel like you're riding on them is because your incentives are not aligned. You want them to work faster so you make more money. They want the job to take longer so that they make more money. So like, they, Even if you pay them enough, let's just say right now you're paying them great, great wages. They're still gonna always feel that way. And it'll always require you to be on their tail, be tracking their trucks, be checking on their jobs all the time because their incentives are not aligned. Even if you make the same amount of money on P4P versus hourly, if their incentives are not aligned with getting the job done faster and doing it at a high quality standard, that will not happen. Because we are, we are incentivizing them, right, to work longer on the jobs. So you telling them to do otherwise, that is work faster. You're just constant collision. And so like, it will be painful to make sure everything's on budget hours. It will be painful to train your team on what P4P is, this is what will happen, in my opinion. You will probably launch this to the team. You will lose one to two employees. The amount of efficiencies gained from the other crew members will be able to get all of the work done. And you'll still pay out that $300,000 in wages, but you'll do it with one or two less employees out in the field. And that money that they otherwise would have made will go to the team members that are now working harder. And they will be able to make even more money by working faster and harder. But more importantly, it'll unlock you and your time to be able to focus on growing the business, on the sales, on the strategy, et cetera. At your size, that's what you should be starting to focus on. You'll only be able to do that now. They're going to be self regulated out in the field. They will want the customer to be happy before they leave because if they don't, they get a yellow slip. They will want to get out of the shop within five or ten minutes because they want to make more money. They will tell you when someone's sleeping for two hours in the truck because it impacts their paycheck. And so as, as much as I've been screaming in the wilderness about P4P for years now, it's very difficult to implement for most people. But if you can get through that pain, the promised land is like 100% worth it. And people always wonder, like, how do you do multiple locations? And like, I've no, I don't show up to my locations. I haven't been to my locations for months. One of my locations, I've never even showed up to the shop. But the reason I know that it works is because the crew, when they show up every morning, makes more money if they act in the best interest of the business. And so by doing, by them doing that, I can pay them substantially more. When you can give someone a thousand dollar bonus on a paycheck above what their base pay is, they're gonna, they're gonna operate within that system. And so I would do whatever it takes. Like this is the slow season. Like I would be watching P4P University and like watching the videos, like figure out how you can switch because it's painful. I know that you gotta structurally change the way the business operated, but it will completely revolutionize like your relationship with them and the business.

Okay, I gotcha. Yeah, that's, that's where I've been. I'm gonna start looking into Your paper performance and start going in there, you know, and start listening to all of that.

Yeah. Wow. I appreciate it, Mike. Thank you very much.

You got it.

Thank you for everything.

Absolutely. Mikeandys.com P4P, everyone. It's a free course. You can also get a free month of the software. But, like, even though you don't use the software, it's completely free for the, the training. And then if you go on to p4psoftware.com, you can book a call with Lael and the support team and like, as you're setting up your system and like, you're going to hit bumps like, what about the budget hours for this? What happens if, you know, there's a crew leader? What happens if someone doesn't have a driver's license? How do I adjust their base pay? All these little things is why we don't switch to P4P. I know, because I didn't do it for years because of all the little reasons as to why I couldn't do it. What about blade sharpening? What about shop maintenance? What about if there's a really experienced person with someone that's not experienced? These things have been figured out and it will be difficult for you to change, I can promise you that. But it'll also unlock like this, man. It just. If I could just. I do anything to be able to convince people that it will change your business. And so, yeah, please check it out and I think it'll help. Next question is coming from 9, 7, 8. Welcome to the show. Thank you for coming on.

Hey, Mike. How you doing, buddy?

Good. How you doing?

I'm doing good. So my name is Hector. I own a company in Massachusetts, Alvarez Landscaping. And I have a couple questions. Last year we made 550. And. And me and my wife were going over. I was telling her because I've been listening to you, watching you. And I was telling her it's time for us to up on the price, you know, and my wife is scared that we're gonna lose so much clients over that, you know, and so I was. We're afraid, we're both afraid that we're gonna lose clients over upping the price. And I was telling her because I've been watching your videos and doing all that. 20, 23, we. We made about 400. 2024, we're 550, you know, so I'm assuming 2025, we should be in the 6 to 700 range. So my question to you is when should I know? Or.

You know, I don't even know how to ask the question. Should, when should I not be scared to up the price on my, on my customers?

Yeah. So there's two things I'm looking for. Number one, if you watch the content, you know when to raise prices and that's when you hit capacity. So when, like right now, could you do $700,000 without buying more trucks and equipment?

Yes, yes, we have enough room. We have, we have four trucks, brand new trucks, 20, 23 and up. We got trailers, we got over nine pieces of machines. We have more than enough guys and new equipment to take care on the rush.

Okay, next question is from a cash perspective. Are things tight right now or is it decent enough?

It's, it's good. Last year we made 180 profit out of the 550. So you tell me is that good or not?

Like cash on hand. Like is there enough in the bank right now where like you're just fine getting through the off season. Your wife is comfortable with that amount in the money in the bank. Like a cash on hand perspective, not profit. Cash on hand.

Cash on hand. No, because we put everything back in the business.

Got it.

So I told my wife we're reback investing. So all the money we got, we bought new trucks, new trailers, new everything that, because I find the old trucks when I first started off and it started breaking down and, and I wasn't being able to service my customers. And like in snow contract we have like commercial buildings right now for snow that we did pay monthly for our services that we need to be there no matter what. And I couldn't afford having trucks breaking down.

Yeah. So there's two ways to tackle cash in hand. That one's tough. Okay, so there's two ways to do this. One is extremely conservative and you're going to make a bunch of money. The second one is going to be aggressive. You're not going to make as much profit, but you're going to grow the business. So here, start with the aggressive one. The aggressive one is that you're going to grow to 700 plus in revenue. You're going to get to capacity because you always raise prices at capacity when you have as, as so many leads coming in, your trucks are full, you have all your equipment's being used five days a week. Like we're hustling. At that point you raise prices because if you actually need customers to leave in order for you to replace them with new customers that are coming in from new leads. So the ultra growth fast, like let's go to the moon situation is next year you're all gas, no brakes, keep growing this thing. The reason I give you license to do that is because you already have the fixed expenses, you already have the trucks, you already have the equipment, and you just need the work to get to 700,000, 750,000, et cetera. The more conservative route here from a cash flow perspective and from a profitability perspective is that you actually sell one or two of the trucks, you get down to capacity so that your three trucks now are being used all of the time and you can only grow to about 600,000 in revenue. Now you're going to hit capacity sooner. And by hitting capacity sooner, you can raise prices then. Now that will make you much more money profit wise. So if you're really, really cash strapped, I would actually recommend that. And especially if your wife is very, very concerned about this, this is actually the move. Right now you have probably 300,000 plus in excess capacity, meaning you could probably do $800,000 in revenue without buying more trucks and equipment. Now that makes me scared because it does tell me that if you raise prices and you lose customers, we even have more excess capacity. And so I always am trying to hit capacity and then raise prices. And so these are the two routes. I go ultra fast. I grow as much as possible. And because I need to grow to capacity, I'm not going to have a lot of profit next year because you're in growth mode still. And then the other option is you literally let go of one of your trucks, you get to where your capacity is around 600,000. You raise prices in next spring rush because you have so many leads coming in and you only have the three trucks. And that's going to be much more profitable route because you'll raise Your prices by 15% immediately draw $80,000 to the bottom line.

Amazing. Thank you so much. I really appreciate that. Helped me a lot. I really appreciate you. You do your great. You're amazing. All helping us out. I'm signing up for the summit right now.

Hey. Oh, we'll see you there, brother. Best of luck to you. I can't wait to see you and your wife. You have a good one.