Mike Andes (podcast, June 1, 2024) presents the 4L framework for scaling a home service business: liquidity, leads, labor, and leadership. For each constraint he contrasts slow/systemic fixes (e.g., price increases, referrals, internal promotion, culture) with fast/cash-based fixes (loans, ads, higher pay, hiring experienced managers), arguing that money can rapidly remove constraints and enable repeated growth cycles. Closing CTA invites viewers to a longer talk.
Chapters
Hey, everyone. My name is Mike Andes, and today in your home service business, we're going to learn how to take piddly peasant cash and turn it into racks and racks of cash. This is what we call the 4L framework. It's a beautiful thing. I'm going to walk you through it. Basically, it's this. Your business is going to stop growing at some point. It's going to slow down. I'm going to show you exactly why today and what you can do to keep growing, infinitely grow a massive business. Okay, so the very first thing is liquidity. Liquidity is a fancy word for more cash. So if we have liquidity, fantastic. We can grow our business. The fast way to get more liquidity is get a loan. You can go to the bank and be like, Mr. Jones, I would like to have more money. And they will say, here's more money. They'll charge you a bunch of interest, but they'll give you more cash. You could also get a partner in on your deal and give them equity in your business. And hopefully they also have some liquidity that is cash. So those are fast ways to get more money. Now, moment of silence. Most of the time in your business, cash and liquidity come slowly. And that's gonna come in the form of raising your prices. And slowly, over the course of time, increasing your prices, gaining more cash, and putting it aside. Another thing you can do to get more liquidity in your small business without going on getting a loan or getting a partner. And you just get bigger and higher credit limits on your credit card. Yeah, it's not great to use your credit card, but you can immediately get access to more liquidity by doing that. All right, so now you're telling me, okay, I got a loan or I got money. Cause I set it aside. I've been saving for a long time. How do I grow my business? Well, in order to grow your business, you need more customers. In order to get more customers, we're going to need more leads. Why you call it leads? Cause the 4L framework, we start with L in all of them. So we got liquidity and we got leads. So how are we going to take our liquidity and make leads? Well, we can get leads the slow way. Leads. The slow way means we don't have any cash and we don't have any liquidity. So what are we going to do? We're going to ask for referrals. We're going to go talk to all of our customers and ask them if they have any neighbors that we can do. Service for that'll give us more leads without spending any more money. We'll also ask our existing customers for upsells, try to sell them more of what we're already offering, and be able to get more leads without spending any money. Another thing you can do to get more leads without spending any of your cash is get more reviews on Google. That alone will get you ranking higher on Google and you'll get more leads because of it. Now, as with all things, money solves everything. So if we add more money to the situation, we can get more leads because we'll be able to go into Facebook. What? We'll be able to go onto Google and we'll be able to do things like every door, direct mail campaigns, and get more leads by spending money. And so this is this 4L framework. It starts with liquidity. We take our money, we spend it on Facebook ads, we spend it on Google Ads, and we get more leads. But then we still eventually stop growing the business. What is the problem?
All right, so you have a bunch of leads, but now we have a problem because we have so many customers, you can't stay up with the work. So the next constraint in the business and the next step of the 4L framework is labor. You're going to have to find more employees. You're going to have to find someone to actually do the work for all the leads that you got from over here. Now the slow way to be able to fix this constraint of labor and get more employees is going to have like a referral system for your existing employees to get like a $500 bonus if they bring someone in. You could also just have a really good culture, have one on one meetings with your team, have a compensation plan that pays people based upon their performance. You'll be able to find more employees and fix this constraint of labor. But it'll take more time. The fast way to solve this constraint in the business is simply take more money and solve the problem. This is the fast way of solving it. How do you do that? Well, well, instead of just focusing on good culture and one on one meetings and having a great place to work, just throw money at the problem, increase everyone's base pay, give them more benefits, give them health care benefits, give them dental, give them paid time off. These are all things that money will solve because again, money solves all your problems. Okay, so now we're three steps through the 4L framework. We have liquidity, and then we took that liquidity and we bought more leads. But, but we got so many more Leads that we needed more employees, and so we hired more people. But because of that, the business can still stop growing. Why? Because.
We need leadership. Because we have so many laborers now, we've got to get managers in place to be able to fix all of their problems and make sure that they're efficient throughout the day. Now, the slow way to fix the leadership problem is simply hire from within your company, train people up. Might take them a year or two years out in the field working, but then they become leaders, they become managers. But it takes more time. So if you don't have time and you have lots of liquidity and cash, dump it on the problem. Because money solves everything. And what are you going to do? You're going to go out and you're going to pay more to hire someone who has a bunch of experience, a bunch of leadership experience and can run the business without you ever being there. But they're going to cost a lot of money. Now we solve a problem. Now we've gone through the entire 4L framework. We've got liquidity. We turned them into leads, all of those leads. We had to get more labors and hire more people. And because we had more employees and more people to manage, we had to go get a bunch of leadership. But guess what? If you're growing your business, you'll constantly just keep going in this cycle. Because as soon as you get leaders in place, the business keeps growing. Guess what happens? You have cash constraints and you need more liquidity. And then once you get more liquidity, you're gonna wanna keep growing the business and getting more leads. And so if you're ever finding yourself, like, why do I feel like I'm just beating my head up against the wall and I can't grow my business? Try to think about the 4L framework and ask yourself, which of these constraints am I currently experiencing? And then go back to the video and ask yourself, do I have money or do I not have money? If I have money, I can solve this problem faster. If I don't have money, it's. It'll take more time, and I'll have to actually have systems and processes in place to fix each of these constraints. But if you fix every single one of these, you'll be able to grow the business infinitely over and over and over again. Now, if you think this is absolutely a joke, and you're like, why are you rolling around the floor in cash? Go watch that video over there, and I'll actually be on a nice stage and I'll talk all about the 4L framework in much more detail. Go click it right now.
