How much money do I need to make per person? (Coaching Call)

What's a good per body number to shoot for?

Yeah, so. So there's two aspects of this. One is, is it possible? And two, what do you need to get to get there? So the needing to get there part is you have a lead constraint. You need to get more customers. Right. We can talk about that separately in terms of is it possible? We can just run the math. So we take 250,000 and what's your hourly rate?

Right now we're.

We're 80. About 80. 80 per man hour.

Okay, cool. So basically, you need to sell 3,125 budget hours worth of work every single for the year. Now, if I divide that by two people, you and your son, that's 1562. Now let's just assume you work full time only you're not working overtime, or I should say over the course of a year, you work 2,000 hours, you're not going to work. You during the spring rush, you're probably working 45, 50 hours. During the slower season, you're maybe working 30, 35 hours. Okay, now if I take 1562 and I divide that by 2000, which is like, let's just call it full time. That's 0.78. That's what we call a 78% efficiency score. That means the main thing I'd be focused on is can I be producing revenue on the job site, making money 78% of my day? And so this is going to come down to do you have an efficient route? Do you have good systems in place to be unload and load up your stuff in the morning? And like, can you spend 78% of your clocked hours on the job site? Yeah, because. Because mathematically it's very possible. I didn't even account here. Material cost estimate fees, dump fees, and everything else you might tack into this revenue. This is if it was all just labor revenue, it's very possible.

Yeah.

We, we. I call that a shrinkage rate. So basically, what's your shrinkage? My, I factored my shrinkage about 19 last year. So perfect.

So you should be at 81, you should be 81. And so 78, you'd be just fine.

Yeah.

Okay.

All right, so definitely possible. Then it just becomes a matter of like, how do I get enough customers to double revenue?

Right now we got to figure that out. So Google leads, Facebook, everything, we're just gonna. Do you spend. Do you recommend spending most of that money at the end of Q1? We're in the Northeast, so we're not going to start Doing anything honestly. Until last week in March. Beginning of April.

Yeah. So your customer acquisition cost is inverse of demand. Which means when demand goes high, customer acquisition cost is low. So if you have cash available and you have capacity ie you have. You can do more work. You want to spend your money when customer acquisition cost is the lowest. So if there's a three to four week period, that's when you spend the money. Yeah.

That makes sense.

Yeah.

Okay.

You got it. Anyway. Cool.

Thanks.

I mean you got it.

Hey Mike.

It's Blake. How you doing?

Good. You're kind of muffled. I don't know if you have a different mic or if it's just your. Maybe your headphones but I can't hear you. So you go ahead. Nope. Go ahead. I can hear you.

Okay. So I got two questions. One of them is about P4P but the other one. So we were pretty profitable last year at about 330. $300,000 mark. 330. 30 of its uncollected. About $70,000 profit. We spent. So we went into the winter with 50 to 60k in the bank. We spent. I'm trying to figure out how much we spent. Probably 10,000 in cash and 30,000 in debt to replace mowers. We haven't sold off the old mowers yet. So going into the season. What I'm trying to figure out is what your recommendation. I know like a year. A month of cash on hand in the bank of revenue is good. So we're usually pretty good with 30 to 40k in the bank. I'm worried about my fixed debt expenses. What's your number for? Because I don't like to spend the cash in the bank. I prefer to have 0%, 2% loans on the mowers and whatnot. Says a monthly payment. What's the top figure you're comfortable with for that monthly fixed expense?

000 ideally. So. So what's the risk?

Risk wise?

Yeah.

Yeah.

You're basically adding risk when you increase fixed expenses. The reason you're adding risk is because we have seasonal businesses. And so if you have high fixed expenses during your off season your. Your break even point goes higher. So. So this is the problem with having debt. Everyone will have, you know, $50,000 or $70,000 is profit on the P L. And then they're like well, where's the money? There's no money in the bank. And the reason is because you don't see debt, debt, expense. Blake, can you meet yourself? It's. Yeah. You're good. Cool. The Problem is you only see interest expense on a P and L. You don't see the actual debt pay down. And so especially if you have zero percent interest, this is why everyone's like, oh my goodness, it says I have X amount of P and L, but I don't see any money in the bank. It's simply because you have all these fixed expenses, that is debt payments, there's no interest expense, it's all coming out of your balance sheet. So, so yeah, cash is coming out of the bank, but you look like you're supposed to be profitable. And so I'm very hesitant to add fixed expenses in any shape or form. Whether that be people on salary, whether that be fixed expenses like a shop space, whether that be subscriptions, whether that be.

To your point, like debt. Because as soon as I add that fixed expense, I need to produce a revenue at my profit margin. For example, let's just say you're 15% profitable. If I'm going to add $1,000 of debt payment, that means I need to create $7,000 in revenue approximately every month to just cover that, that $1,000 of fixed expense, I. E. The debt payment. And so now I just increase my break even point during my off season by $7,000. And so this is why so many of us go bankrupt during the off season. Because we go negative, we make less than our break even point is because we have high fixed expenses. So I'm like hardcore against fixed expenses is a matter of what your risk tolerance mount. My risk tolerance goes up if you fix your off season. So if you, if you have an off season revenue source that you don't go negative, you're not going tapping into cash, into your cash reserves. I'm much more risk prone because I know that you're not going to go negative cash flow. Go ahead.

To that point. We, I wouldn't say I'm a master at it, but like we've maintained the ability to hit close to 25, 30k a month in the off season. Like I've got a lot of year round customers and a lot of winter services. We usually sell a couple big projects, we switch from mowing maintenance. So we've maintained better than break even for the past couple offseason.

Yeah. So then, then just this function of like taking on this debt, I'm adding risk. By adding this risk, how much faster am I getting in my goals? Right. So by getting this piece of equipment, you are likely going to shave off, you know, six months of. Otherwise you would just been like, okay, let's just raise prices. We're at capacity. I needed this piece of equipment, I need this truck. I'm just going to raise prices and stack this cash and then buy it with cash. So you're adding risk for the, for the cost of speed. And so only, only you can determine do you want more risk and do it faster or you want a little slower with less risk. And that's when like it comes like, hey, do you have a family? Do you have personal assets that are at risk? Are you going to collateralize your house? You know, how does your spouse feel about you taking on this risk? That's when it comes like a very multi layered question.

Gotcha. Yeah, thanks. Second question was I don't know what the deal is, but we were at 90 bucks a man hour and it works great for mowing. But every time we bid like a $10,000 project, we're way under efficiency score, usually like 50, 60% at best. And I man, I've got it priced pretty dang well. Is that common at all? Like I can't figure out where we're losing so much efficiency when we're doing bed tear outs and planting and rock install and the whole thing.

Well, if it's consistently that your budget hours are way less than your clocked hours, then it's an estimating issue. Like we're not baking into account the fact that things take longer. I have to wait for materials, equipment, there's going to be work, change orders, I'm going to make a mistake. I have to redo parts of the job. Like we're not baking into the estimate now. If it's infrequent, like it's sometimes really good and sometimes really bad, then I'm looking for commonalities like is there a certain crew, is there a certain crew leader? What type of services are these? This is a big reason why I don't like big complicated projects is because the variability is too high. If I have a 300 hours, sometimes I'll do it 150 and sometimes it's gonna take them 500. I don't like that. I don't want them to start digging and all of a sudden because of the soil, it doubles the amount of time the job takes. So it just depends on what kind of business do you want to build. I would start building this into your estimating though. If it is a function of always being like, if you say hey, it's always, then I'm going to be like, okay, great. I'm always going to account for more budget hours on these projects. And if the customer doesn't accept, who cares? I don't want to lose my shirt. But if it's infrequent, that's when I'm starting addressing like, what are the variables that make them successful? What are the variables that make them where they go way over budget hours.

Yeah, and I don't know if I said, but that's on P4P. And yeah, I hate them too. I absolutely hate it. But I don't think I can win these jobs at better than 10, $12,000 of price tag. Like, people already like, it's just tough to sell them higher.

So, okay, what's your close ratio? What's your close ratio now, Blake? On. On the project?

You think our blended close ratio is 60? Close ratio on big projects like that, maybe 40, 50%. But I will say I only try to sell those in the off season. Like we're at 80, mowing, maintenance, and in the middle of the. I just can't do them.

I'd be tempted. If you're blended is 60 and your projects are 40 or 50, that means your recurring is 70 to 80. I think you'd raise your prices and recapture all of your profit margin and without having to do projects. Because if you're closing 70 to 80%, it means you could raise your prices and probably not lose any customers simply because the customers are yelling at you that your prices are too low. And so you might be able to raise your prices on recurring all of a sudden fall in love with that enough to be like, all right, I'm just going to cut this whole project thing. It's too variable for me. So tomorrow, Blake, there's a. There's. I have a course I'm dropping. It's totally free about the off season. Listen to it. There's like five different tracks. You're going to be. You're going to be trying to determine between one and two.

To two different options. And so watch that. It'll give you more clarity because I want you to break down your fixed expenses, what your break even is per month for the off season and which route you should go. So check that out tomorrow.

Thanks so much.

You got it.

Hey, Mike. Zach with Precision Lawn and Timber, a question about your thoughts on when to rent and when to buy for land. Out here in Salt Lake City. The property is pretty expensive. You're looking for to rent a lot that could actually store all of our trucks. We're actually 80% trees, probably 20% lawn. So very, very little. And it kind of Comes with a bit more equipment.

Equipment, yep.

It's. I'm looking at prices like on the low end, real poor security, like 5,000amonth all the way up to close to like eight or nine. And but buying it's probably million plus starting point. So just kind of curious, like, at what point do you think it's worth going down that route?

What's your revenue per. Per year right now, Zach?

So last or last year we did 603,000.

And what do you think 20, 25 is gonna look like?

I'm hopeful we're gonna break 8, but probably closer to like 750.

Okay.

And we had 200, 200, like 5,000 in profit last year. It was pretty decent.

Yeah.

Or compared to previous years at least.

What was your rent last year?

So right now everything is out of my property. So nothing.

Ah, okay. That's where I'm concerned. It's like I don't want to burn half of your profit and 10% of your revenue on a fixed expense like rent. Like it's a different business. Right. So like if you buy this, you're basically your payments. I'm going to go out in a limit. Guess is like 10 to 11, maybe $12,000 a month. And then renting, we're looking at 6 to 8,000. So 6 to 8, so 12, like you look at between 80 and 100 grand a year to rent this to.

That'S like literally half your profit. So there's two ways to do this. One is you could say, okay, it's going to cost me 100 grand. I'm going to rent this bad boy and 750 divided by 100, I need to raise my prices by 15% and the price increase pay for this extra cost. And then you're basically going to try to skate by. The question is, can you raise Your prices by 15% and get 750,000? So then it might be okay, well, do I need to do redo my website? Do I need to fix my marketing to get enough leads to where I can still make that happen? But I think, I think very rarely do people buy land in home services and the business does better because I'm not actually worried about the monthly payment of being like four or five grand more a month for you buying I'm. Because that will siphon off a big chunk of cash. But what I'm mostly concerned about is the down payment, because if that cash was spent on the business, I happen to feel you do more than 750,000 next year. Like the amount of Equipment you could buy the trucks, you could buy the expansion. You could have with say 150 to $300,000 of down payment. We have very like, we have good sized business now. So I just realizing that real estate is a different business and it is a different industry.

Okay.

Yeah.

So, so you probably would recommend going full rental. The problem that I'm running into now, I don't think our close ratio is consistently through summer. We're pretty good 60 to 70% for spring and fall data. Some were dead and then obviously winter we're real slow.

But like winter we're probably 30 to 40. Close ratio, it's, it's pretty bad. And we're not gonna leave to begin with. The, the other issue is expanding. It's like Myers. I've got every square inch of my property filled with something and all of them run every week, most of them every day.

Have you, have you thought about trying to have your employees take their trucks home?

I have. One of them lives over an hour away, the other two do not. There's most rental properties in Salt Lake don't have room for trailers.

Could you park the trailer at your house and have them take the trucks?

Yes. Then that, that. The main reason I haven't gone that route thus far is loading and unloading equipment every single day. They are not in safe enough areas to really store like we've had. I've taken things in the past and I've lost probably 12 blowers at this point.

And just loading and unloading, it's a 20, 30 minute time sink every morning. Getting everything in those trucks, that's definitely, that's definitely an option, but I haven't wanted to deal with that yet.

So here's the thing. 12 blowers is going to cost you six grand. So that's one month of rent. I would, I, I would look at your stolen as a cost. It sounds horrible, but that's what I do because it's six grand. Sounds a lot better than 100 grand a year.

Yeah, yeah, no, that definitely does.

And so I appreciate it. One, one thing you might want to think about Zach too is you might be able to park the trailers in a secured storage area and then they take the trucks home. You might be able get everything off your property and then now you're going to pay for like say $100 per month or $150 to just park a piece of like a trailer there or a piece of equipment or even the trucks. Like if you're just looking for security, you might be Able to get away with under 1500 dollars a month for like three trucks and trailers. Just there's probably aspects of like having a shop space that are nice, but is it worth half your profits?

Yeah, probably not. Have you had any issues with theft on like, do you guys download trailers? Because I know you use a lot of those gated storage units on your different franchises.

At least we even had problems. And again, like I would, I would look at this as a cost doing business if someone did steal something. I also think if you look at reviews on secured storage, you can tell very quickly whether that stuff is stolen. Because if someone gets something stolen unsecured storage, they will tell everyone. And so I would look through reviews and if as long as everyone's saying it's safe, they've never had any issues. You're going to pay 100 to $150 truck, you're probably going to pay $50 to $100 per trailer. And so even if you had like a, a container that you dropped there for storage, they'll usually let you do like a 20 foot storage container. You're going to pay four grand for that storage container. You're going to lock that bad boy. It's very hard to get inside that thing. And you're going to pay a whole lot less than one or two months worth worth of rent.

No, you could do. Yeah, no, that's, yeah. A lot of good ideas.

And one idea too, Zach, is you might want to actually position potentially those storage spaces throughout your service area. Because usually with trees you get pretty wide with your service area. You might actually spread them out a little bit.

Okay, perfect. Yeah, I appreciate it.

You got it. Anyone else, feel free to unmute yourself.

Hey Mike, I got a question more about service agreements. I'm trying to build. I had, I went to Bootcloth Summit and I'm just really trying to build my reoccurring revenue. Obviously on window cleaning is not as reoccurring as mowing, but right now I just have like biannually they get 10% off and then quarterly 15. But we're really trying to push quarterlies. So also they get free track cleaning and unlimited rain touch ups. Is there anything like you think you want to add to that or to.

Make it a better offer? Make it just a way better offer. Increase the price of the other one way more like you wanted to make it like it's almost stupid not to take the offer. Okay, so like if you want something, you're going to make the offer so incredible. It's like why would you even take the other one now to do that, you might not have the margin to be like, oh, I'm going to reduce price. Great. Make the other one really expensive. Right. So it's like, hey, you can do a one time job. I'm gonna make up stuff. $600. All right, great. Or you can do it if you schedule annually, it's gonna be 500. Or if you do it quarterly, it's gonna be 150 bucks. Like you could do that. And so it just comes down to a matter of you knowing what your actual time is, how long it takes on a quarterly versus annual, and be able to run the math on what are your cost of goods sold.

Yeah, a lot of it is like after the first cleaning, that's when the savings are. But the first clean is most like dirty. So I wouldn't cost them.

But yeah, yeah. So what you could do is you could say okay, I'm assuming you get a lot of people like one time job, say hey, can you come clean my windows?

Yeah.

Great. So keep the prices as they currently are, assuming your close ratio is decent. And then you know that you know in the future it's way faster to to cleaning. And so I was just like, hey, right, today you, you just paid me $600. Great. If you get on a quarterly basis, it's going to cost you 150, which if you add up 150 times 4, it's literally $600. So either you come out here, have me once a year, or just have me come every single quarter. And your, your property, your windows always look good and it's the same price. Kind of hard to say no to the quarterly when they literally just paid $600 for the same service.

Yeah, yeah. And one thing, if I do keep the free track cleaning per year, if I use P4P, how would I kind of do that? Would I just have to make like a manual adjustment for that one cleaning?

No, because be part of your quarterly services. So.

You'Re only going to sell that if you're doing quarterly. Right. Like if they're a one time job, you're not doing that. It's completely build different.

Well, a lot of them will just do pay on service. Well, they'll just split up and yeah, do that hundred. But then one of the times if, because it's a free track cleaning per year, they'll have to do the track cleaning. So that will have a lot more budgeted hours for the same price.

I got you. Yeah, I would either do a manual Adjustment, like, so, for example, I'd say, hey, if there's. If there is window track clean, I'm gonna say 40% versus their usual 30%. I do something like that. Really basic. Yep.

All right, Sounds good.

You got it, man. Go ahead, Josh.

So you know lawn mowing, we got our reoccurring customers, the yearly customers, so they sign up for that contract for the year. So we normally do, like, lawn applications, shrub pruning, mowing. We do everything across the board for them. So do you bid out at the end of the year, like to get them on track for the following year or. Because we've always waited till like January 1st and then we send out all of our new contracts for the year and this waiting game of until March hits when we start our first round lawn apps for our pream. Like, who's signing up, who's not? Like, where are we going to be? Like, this limbo guessing game drives me nuts.

And Change it to April 1st. Change it to April 1st. The reason is because if you have your April 1st is renewal date, you've already show up at their property a couple times. They're like, well, yeah, you're already here. You've already started the season. Also harder for them to switch because everyone else is super busy. So getting a bid alone could be taking them a couple weeks. So they're almost forced to go in with you again. It just makes sense for them too, because they need you to show up next week versus in January. The reason you're in limbo, because they don't really need you around. Right. So do your annual contract renewals during peak demand, April 1, May 1, whenever it is, I would just shift it to that because then if you show up with their property a few times the growing season, they're not switching.

Right. Okay, well, maybe I'd start it. Well, because we always start our first round lawn apps in March for the pream for crabgrass. So I could always bump it up then that way I get them on board.

And yeah, if you're like, if you're already half, like, you've already started the, the cycle of applications 100, like, they're not going to switch. They're just not. First off, all your competitors are busy. They're not getting back to people. They're not answering their phone. They can't find enough employees. So do it then. And also there you won't be in limbo because they need you to show up next week.

Right.

They'll definitely feel free. Like I would say this in a Small market. The thing is, the reason is a small market also means you have less competition. So how many people in your local area, Josh? Like in terms of population.

Like our town is like 7,000. The neighboring town's two, the next town's a thousand.

So like, yeah, what's cool is you probably know all of your competitors, like there's probably five or ten of them. Yeah.

So, well, there's so many new guys, Chucks in the trucks popping up that come in and undercut us and it's like, all right, you know, but the nice thing is we're the only company in this area that's really doing the lawn applications and doing snow removal and doing one stop shop type things thing. So we're able to retain a lot of those bigger commercial clients where we're losing out on a lot of our residentials do these small.

Yeah. So then it's a matter of like, okay, if there's small amount of competitors I want to dominate on Google, like there's no reason for you not to be number one spot on every single service that you offer when they type in your service name. And like if you look at Vort and Columbus, like I guarantee you if you put lawn care in that Columbus or Vanworth, like they're going to show up first. And like you have to in a small market because you need every lead coming through you. And then what I would say is like, just lean into the fact that if you're the only guy in town that has a legit operation, can do full service, has been around for 10, 15 years, you just lean into that and like, are you tired of someone not showing up for service this spring and then you just dump money into the ads. So basically promote yourself as like the go to if you're tired of your, you know, weekend warrior that doesn't show up half the time.

Right. Okay.

Because in my market I have probably five really good operators in, in, in like some of those markets you mentioned, they are the only claim in town that if you want legit insured quality been around going to stand behind their work. And so the advantage that they have is that they have a brand behind them that's large. So when someone has landscape that doesn't show up like, okay, I'm going to call someone, I don't care about the price, I just need them to show up. I'm going to call a bigger brand and they're going to go to Augusta. You just need one to position yourself as that bigger brand that when every time their small Guy leaves or doesn't show up, they want to call you and you get the price. Let's just. They're very price insensitive.

So in order to be able to that top personal at Google, is it by getting people to get reviews or repaying ad money for that or how does that all work?

Are you on, on the first page now?

I don't even know.

Okay, what's your revenue last year Josh?

We did just shy of 600,000 in year four.

Okay, like, okay. I'm very, I rarely ever promote anything but I do recommend booking a call with Tori longcairwebdesign.com call. He'll look what you're currently doing and give you some suggestions and see if it's a good fit. But like I just guarantee you like your size of business at 600,000 if you're not on the first page of Google that gets to a million just by getting the first page of Google. Like and like I'm talking like the first few pages you have in the first few spots. But yes, getting reviews will help. Driving ads and traffic will help. But ultimately search engine optimization and like making sure things are set up, you should be in your market. If you're the only main player in town and there's 7,000 people, you gotta be the first person on the on the page. And I think you can do it very easily. Cause you have enough traffic, you have enough customers, you have enough brand awareness and cause that's what separates you from the other truck on the truck is the fact that when they look you up, there's a great looking website. You demonstrate your reviews, you're showing pictures of your truck, pictures of your crew. That's what separates you from all the other people. And so if they want to compare you on price, yeah, they can go find them. But if they want a legit operator, they need evidence of that on your website.

Website.

Okay. Like your website is your storefront. So the same way you would go buy a storefront, it looks a little bit shabby or that you can't really see through the windows. You're like ah, not gonna really go a little bit shady. It's like so you have no differentiation between your storefront and theirs because theirs doesn't exist. And so I would really recommend like any dollar you spend on marketing should first be directed at your website because it is your storefront. And if you don't get in the door, I get to your site. They don't see it because it's not ranking well on Google. It doesn't matter. You can spend all the Facebook ad money in the world and then tomorrow you turn up your ads, you'll get no leads and you're just renting space from them constantly. And so I would highly recommend again your size and stage. Like think about your. Like I wouldn't spend a dollar on marketing until that website is dialed in. Regardless if you use us or just take what Tori says on that call and just like implement it yourself. You gotta get on the first page of Google. That will do way more for you than spending 2, $3,000 a month on ads. Okay.

Yeah, because we literally just got a website together about seven months ago and everything we've already done has just been word of mouth. You know how we've grown this big.

So yeah, I can't regardless of whether you use us. Like I could care less. Like just get a great website. It'll be the best dollars you spend. Yes, you could go run Facebook ads and Google Ads tomorrow, et cetera and you'll get a little bit of traffic to your site so it helps a little bit with your ranking on Google. But get a great SEO driven website. Within six months you'll be on the first page. No, within the first six months you should be in the top spot in your market. 7,000 people has the size of Blaine Washington. If you look it up about 7,000 people there May 6,500 and we grew to 1.1 before moving outside of Blaine by my very first location. So like it's possible you just got dominate online. You got to anyone look at lawn care landscaping, they're going to see your name. Okay, thank you. Got it. And then make sure you set up a really good automation for collecting reviews inside copilot. Every single time someone completes a job you're sending at request for review and say basically it's like hey, was your service satisfactory? You have? Yes. And that links to Google review? No, that links to a Google form for you to collect information. This is going to be baked into the customer portal coming out next month.

By the way.

I had a quick question. So we're Heart and Sons Landscape in Washington and we're, we're trying to right now we're in the process of buying our data out and so a little bit about us. It's we're a little bit small for a three man admin team so it's been kind of hard to afford it. Like we have only two employees right now in the winter and we're making, I think we made 520,000 last year. I know we just need to get more crews out and going, but we're trying to figure out budgeting for affording the admin costs and I'm not sure, like.

And the payout amount.

Yeah. And like trying to bring all the pays into something that's realistic that we can afford going forward. I know that's kind of vague, but do you have any insight that we can have going forward?

Yeah. So out of the three of you, can all three of you work in the field? If needs be.

Just us too.

Okay. Yeah.

And we want our dad to be like completely retired and like we're gonna take over. So I mean, we have the ability to work skilled for that, but we also know that it's more important to work on the business and not in it.

And so is he working and contributing in terms of working on the business or is he basically silent partner is passive.

Yes.

Got it. Okay, cool. So realistically you have two overhead positions. You also have a partner you're trying to buy out that's outside the business. Right. So the question becomes like at 520d, two full time admin people, the answer is no, you can't, you can't realistically make money. If you were both paying yourself a salary, like the actual net profit of the business, if you both took a salary would be too low. And so I would be looking at both of you as what I call working general managers. If you want to split this, this role is what it would look like if you wanted to separate the roles and be like, hey, you're going to do sales and admin, I'm going to do operations. That's a different topic. But I think the working gm, like are you guys very similar in your nature and like your roles in the business or like you have very delayed roles right now?

Finances and operations.

Got it. So Nathan, you're basically doing sales, admin, phone calls, emails and. Sorry. And your brother is doing all of the out with the crew, essentially.

Yeah, yeah. He isn't doing labor. He's actually doing emails and like CRM work. I'm doing like all like payroll, marketing, doing the estimates, things like that.

Yeah. So you're top heavy. I think, Nathan, you could be able to take all admin functions and sales functions and then allow your brother. Sorry, you don't have your name. I apologize. What was it?

Kyle.

Kyle, let's go. Kyle is going to be a working gm. He's going to be out in the field with the crew. We're going to expect 30 budget hours of production from Kyle. Every single week we're going to minus out one hour for every in person visit to a job he has to do or if he has to interview anybody and training. So, so for example, I'm gonna start 30 budget hours I expect Kyle to do. It's like the internal, you know, scorecard that you guys have. He's gonna be able to do all that now Nathan's gonna be super busy cause he has to do all the sales, all the admin stuff, et cetera. At $500,000 you can do that. And if, and if you don't, if you're like, that's way too much, we gotta systematize, we gotta look at like efficiency and how you're running your day time blocking things like that, automations. But then I would be saying, okay, Kyle's gonna be operations, Nathan's gonna be sales and admin out in the field. Operationally we expect 30 budget hours complete every week. We're going to subtract one hour for every in person site visit or customer had to go meet a customer or an hour away for every interview and an hour away for any sort of training. So now all of a sudden you have a few site visits, you got to do some training, got hire and interview a few people. Okay, we now expect you 18 hours the last week. Okay, let's look at the dispatch board. Did you complete 18 budget hours? There's your metric for operations that will be much more balanced in terms of the business because right now you have two people in the field and two people out and like this won't work. Right.

So also another note is that this is just the winter and like it's really slow. We usually get up to, I think we had like max six employees last year. But then, then it does take two full time employees for admin. So I'm like, I know we want to get back to that point and obviously we're trying to bring in more leads and everything.

Totally. Yeah. So like what services do you get? Anything? Is it lawn care, landscaping?

Yeah, Full, full maintenance.

All maintenance?

Yeah.

Residential or commercial?

Residential, mostly. Residential?

Yeah.

We have like one or two commercial.

Yeah. Like I'll be, I'll be really honest with you. You don't need two admin people for 500,000. You don't even during the peak season.

Okay.

If we're trying to like shoot for say we want to grow to like 750 at the end of this year. Is that something that's more for two admins?

I would say during the spring rush, I'd get a part timer and then you'd be full time. So I would be full time for you 12 months of the year obviously. But then for four to six months of the year you get a part timer to come in and do the entry level, answering the phone, checking email, the basics. And so I would look at all your current, what you guys are currently doing. I'd say hey, what is $20 an hour tasks? What are $40 an hour task anything $20 per hour tasks. We're going to, we're going to hire a part timer to do those tasks during the spring rush. Because outside of that, even at 800,000 annual revenue, that means that you're probably doing during your off season 20 to 30,000amonth in revenue. You do not need two people. So just get part time help. That's only going to cost you, let's call it 25 grand for that four to six month window instead of having two full time, the most experienced people doing admin and then that frees, frees Kyle up to be better in operations which will help streamline things. Right now getting out in the field, hands on with the crew and actually producing revenue.

So I left the field summer of 2023 and doing that allowed us to start working on the business to build the automation. So we have a bunch of stuff set up to expand and grow. So, so you're suggesting that I go.

Work on producing more revenue before we hire to fill in. So like would you suggest that before we hire like two, three, four people to produce that revenue that would cover the admin cost?

Well, my assumption here is that we don't have loads of cash sitting around for you to burn through while we're inefficient with two admin people. If we have, if we have 100 grand in the bank, this is a very different conversation. Am I wrong in saying that we don't have that money?

Correct, you're not wrong.

Right. So that's why I'm pushing more to profitability. I'm trying to think about how do we make more money. Like if I had the indication you had 100 grand sitting around, but great, your sales, your admin and then we're gonna go find an operations person, we're gonna go to a million. Right. But if you're strapped on cash to make more profit, you get, you turn overhead into revenue producing labor and that's by getting Kyle back in the field. It's streamlining things. Like setting up automations is a half a day task you set up the automations one time, and then they. They work, and then it's a matter of. Okay, well, what's causing all this admin work? Is it the fact that one or two services that we do always causes callbacks, is always causing customer complaints? Do we cut those out so that we can literally free up what would otherwise be an overhead cost that now generate a hundred thousand dollars in annual revenue?

Okay, gotcha.

Okay.

All right. The conversation looks very different if. If you were like, hey, we have plenty of cash. We're expanding and we're growing. I'm trying to think of how do we make more profit so that we can. You can buy out your dad, right?

Yeah.

Okay.

Thank you.

Yeah, that's. That's helpful. Thank you.

I know that's not fun to hear, like, especially because you work so hard to work on the business and, like, get out of the field, but I genuinely believe if you want to make more profit, you get back in the field at 500,000, maybe next year, $600, 650. But you make a really good profit because you don't have to go hire three more people. You just like the three or four people you hire so you can get that old money goes into your pocket.

Now.

That's 150 grand, right?

Yeah.

Okay.

Sounds good.

Cool. All right.

All right. One more question from. From anyone and everyone, and then we will call it a day.

Hey, Mike. John. Hey, John here from Buda, Texas. We do mowing and treatments and.

Oh, hey.

Hey.

Did you talk to Ryan? Ryan's coming. He's starting a location. Did you talk to him at conference?

I. I didn't get a chance to talk to him.

Oh, man. Okay, cool. Yeah, he has several locations, so he's awesome. Make sure you connect with him.

Awesome. I sure will. Thank you. So we have two packages for our treatment program. We have a basic package and a premium. So our basic package consists of eight treatments throughout the year, and our premium consists of 18 treatments. What the premium includes is insecticides. We do insecticide and fungicide and soil amendments.

Okay.

So what I want to do is right now we have 18 clients on the premium package, and we have 54 clients on the basic. I'm trying to move my clients in the basic. I'm trying to move them up to the premium.

And I'm trying to figure out a way to make it sexier, you know, to where they can, you know, move up.

Everyone likes it sexier.

That's great.

Yeah.

And so we do have an aerator machine, so I Don't know if adding that to an already like build up premium package, you know, so what, what do you, what, what do you recommend or, or what do you think?

Yeah, adding in, adding another service to an 18 service package is not going to change anything. It is a matter of making the offer sexier. So, so for example, I'll just use my, my own example here. Right. So inside of copilot we guarantee someone will grow their business by 10% or in terms of revenue or 10 profit. And if they don't and on their way to out the door they want their money back, I'll give it all to them. That is a guarantee only for enterprise. And so if I told someone, I will guarantee your business will grow this next year. If you pay me 270 bucks a month, most people will take me up on that. And if it's a hundred dollars more than the package below that, they'd probably do it just for that guarantee. And so I would be asking yourself what can you guarantee customers to solve their problem if they choose the 1818 service package? So for example basic package, here's everything you get. Let's go by the way, this 18 treatment package, here's a really good discount. And by the way, I will give you all of your money back if within 12 months your lawn doesn't look like this. And then, and then that, that refund that you're gonna once in a blue moon is the cost of marketing.

Okay, I like that guarantee that, that's, that's, yeah, that's good stuff right there.

Or, or you can say if you're afraid of money back guarantee, you can simply say we will treat your lawn for free until it looks like this.

Yeah, no, I'm, I'm, I'm positive, I'm, I'm, I'm sure it's gonna look real good. And so that's what I want. And, and I want my guys mowing on real beautiful lawns too, you know. So, so yeah, and, and I, I, I can, I'm pretty confident on that guarantee. And, and I didn't even think about that. You know, I was thinking of adding services and maybe removing it, bringing the price down.

So I like guarantee I would also create a third tier. So you've basically done the good and better. I'd do the best model and you'd wrap in mowing with it so you can increase the annual customer value significantly more and give them a big discount. So you say hey look, there's the eight step, there's the 18 step and then there's the 18 step plus. So it's basically good, better, best. And your best model is going to include the cost of mowing. And so now I'm assuming out of the. The customers who have the 18 customers that use the, the like the, the great version, how many of those do you Mow?

Probably like 75%.

Okay, awesome. So. So then I would be trying to get all of those people up another step because the other 25%, I want to unlock them to another level of. Of revenue. And then I'm going to take the eight because right now you only have the two steps. I'd be trying to create three. So that way. And I. I didn't make that. That top. That top tier look so incredibly stupidly good.

Yes. Yeah.

That moing will really.

Yeah.

That'll make it look nice and awesome.

Yeah.

That man.

Thank you.

Thank you.

You got it. Make that. Make those packages. Packages sexier.

Let's go.

Yeah.

Everyone, I hope you all have a fantastic weekend. I appreciate all tremendously again share this with someone else. Even if you go on the Facebook group, share it with someone else on there. I do recommend it. Filling out that form. It's super cool to look back years down the road and kind of look at your progress. But I appreciate all tremendously. Have a fantastic rest of your weekend and we'll see you in the mastermind and the Facebook group. Take care. See ya.