HOW MUCH MONEY I MADE my first 3 years in business

Hey, everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 90 locations around North America. And today I'm going to be talking about how in my first three years of running a lawn care business, I made absolutely no profit. We grew really fast, but we didn't make any money. And I'll be talking about that today. Now, instead of just me talking here behind this microphone, which is all cool and fine, I am going to be we're going to be watching a lawn being mowed while I talk about my mowing business. Now, you've played the game before. This is the last time we're doing one of these voiceovers where you can have the chance to win something. So the winner of last week's competition was Jay's Lawn Service. He guessed exactly the amount of square footage on the property. Now, because of that, he is going to win a whole package to lawn care media.com the full package, $399 package for all of his door hangers, yard signs, flyers, postcards. It's a great place. Check it out. But Jay's Lawn Service is going to get a free package to be able to get all of his marketing needs met. Now, today you can be the winner of a full lifetime access package to landscape businesscourse.com or actually talk about how to run your business, how to your lawn care landscaping company, and walk you through the steps that I took. And you can win that completely free just by guessing exactly how many minutes it took the lawn technician, Jeremy, in this case, to do the property. We're going to watch him mow the lawn, and you've got to guess how long it took him to mow the grass. So we're not going to give you any other information. We'll give you an aerial picture. Sometime throughout the video, you're going to see some really good information. We're not going to give you a lot of information today. Usually we give you square footage and other things like that. None of that. Today you've got to guess how long it took him to mow the grass. So let's go ahead and jump into the video. And while we're watching Jeremy mow this lawn, you've got to guess how long it took him to mow it. And we're going to talk about how I made $0 the first three years of my lawn care business. Here we go. All right, so this is Jeremy. He is using our what we call trailerless setup. It is part of the ramp rack system where we just use Push mowers and we have some stand on mowers and zero turns that actually do go in the back of these trucks. 36 inches, 42 inches, 44 inches. But primarily we use them for our push mowers. Now he is using a 330 inch exmark and as well as a Honda 21 inch push mower. Gonna get started with trimming first, but today I'm gonna talk about how when I started my lawn care business, I started part time for my first year of Augusta Lawn Care. I had already been mowing part time, kind of on the weekends, after school, all the rest of it, since I was 11 years old. When I was 18 years old, I started Augusta Lawn Care. I did it part time while I was also a trainer at Anytime Fitness and the year after that. So when I was 19 is when I went full time for the first year. And in that year is just shy of $200,000 in annual revenue. I got my second truck, I got my first employee and really started to grow the business. And then after that it went to like 500,000. The next, just shy of 500,000 and then 800 and almost 900,000 the year after that. So those first three years, just massive growth stepping up like that. And I think the fourth year did like 1.1, 1.2. The year after that, 1.6, 1.7. It kind of has been a little bit slower growth after that. But his first three years I made like no money. And when I say like no money, I mean zero profit. And I'm gonna talk about why today. And I think it's really important to know this because a lot of people think they can grow a really, really fast growing company and be really, really profitable, but they don't realize that growth sucks cash. I say this all the time in my videos and somehow it doesn't sink in because people will be growing their business very, very quickly. They'll go from 0 to 40, 50, $60,000 a month in revenue. And they're wondering why they don't have any profit. It's like, look, growth sucks cash. Not to buy more equipment, you have to hire more people. You have to buy more trucks, buy more equipment, buy more shop space, not just because of those hard assets, but also because when you're growing really fast, it also leads to waste because you hire the wrong person. You aren't super efficient at what you're supposed to be doing. You don't know the ropes, you don't know your routes, aren't super dense when you're growing really quick, you might be adding too many services and you have to cut back later on. You make more mistakes when you're growing really fast because you're hiring people that might not have all the experience they really should be. You don't have the time to train them because you're just growing so quick, quickly. And so when you're growing really fast, it's not that you should be unprofitable, but don't expect that in year one, your goal is 500,000 in the first year in revenue that you're going to make like $150,000 in profit. It just doesn't happen simply because the capital requirements in terms of equipment, trucks, marketing, hiring, and all the other expenses are going to go into fueling that growth. When you actually make money is when you start slowing down growth because you don't have to buy more trucks, you don't have to buy more equipment, you don't have to hire more employees. And when you do that and you don't have to buy all that stuff, that's when you can actually be profitable. Now, this is the funny thing. This is what's crazy. Last year, 2021, from this location, the very first one that I ever started, Gusta Long Care, it was like its eighth or ninth year in business, and I personally took home over $300,000 in distributions in addition to a small salary that I take from the business because it is an S corporation. I take a small salary from it. Now, I took over $300,000 in distributions. Couple things. Number one, I only worked maybe an hour or so a week there. Two meetings on Monday and Thursday mornings. I go there for a few minutes, have a meeting. That was it. That was in 2021. Now, if I go back to my first three and four years in business, I was literally working 60, 70, 80 hours a week, easily. Easily like that first. That first year, I was probably working 90 to 100 hours because I had to do all the billing or all the estimates, all the email, all the phone calls, everything myself. And I would literally do that at night. And I'd still remember, like, I would be billing at 2, 3 in the morning all the time. I'd be doing estimates. I'd be doing emails, like, all the time. It was literally probably 90 to 100 hours easily on Augusta lawn care. And that was my first year. But then as the business grows, I got an office person. What's overhead? Okay, well, that fueled the growth, which is great. But then I needed a shop space. I went from Just being able to pay $40 per month to park my trailer at a storage facility. Then it went to $200 a month because I need a nice, I like it was 15 by 40, the storage facility. Then I had to upgrade further because we got like all these trucks in year three and four. I like 8, 9, 10 trucks. I had to go get a shop space for like $1,000 a month plus utilities and Internet. It was like $2,000 a month. That's expensive. So growth sucks cash. And last year I took more money in distributions that $300,000 in profit that I took in distribution. Like taking away from the business that I made. That was more than I made in the first five years combined of Augusta Lawn Care. And when I say that like the first three years were zero, they were negative for a couple of those years. And I really believe that it's important to stay patient because most small businesses do fail in their first three to five years because there is stress financially. And what I believe if you're growing a business is there's three stages of growth that you're going to go through and different stresses you're going to have when you're first. Like my first year, maybe my second year, I was having physical stress because I was outside mowing lawns. I was doing exactly what Jeremy's here and as a mowing the grass all day long and then going into estimates and then doing phone calls and emails and all the rest of it. And then as the business grows, like my second year, you know, we had three, four trucks now a couple trailers, we started getting a skid loader starting to get a little bit bigger. When we did that again, all that capital expenditure just depletes all your finances. I spent like $30,000 in marketing in that second year to fuel growth. And that was great, great growth but no profit because there was no take home after buying more trucks. Like three trucks, a skid loader, a tractor, two trailers, a dump trailer. There's just no money and I didn't go into a lot of debt. So like even further cash reserves were completely depleted. So if you're going through that phase right now, don't be alarmed unless you're not being profitable without those capital expenditures. Look at your profit and loss statement, say, okay, if I didn't buy the trucks, I didn't buy the trailer. I didn't spend a whole bunch of money on marketing, I didn't spend a whole bunch of on advertising. If I didn't do that, would I be profitable? That's important if you're not, then you need to raise prices. You need to potentially cut out services that are way further away from your core demographic, your core area, get tighter routes, et cetera. But just remember that after five years, in my opinion is really when it gets interesting from a profitability standpoint. And most people don't make it there because the physical stress becomes financial stress. And as you grow the business and get more employees, it becomes more psychological stress than anything else. So I hope that was helpful. If you're in those first three years, it's tough. Even year four and five, you're going through that financial stress period. It's really after year five, you can really start to cash in on all that growth and reduce growth in order to be able to be more profitable and take more money out of the company. So I hope that was helpful, but I hope you were paying attention because Jeremy was mowing the lawn and I hope that you were able to guess how long, how many minutes did he take to mow this grass. Whoever nails it to the minute first in the comments below is going to get full access to landscape businesscourse.com and I look forward to giving that to you. Until then, watch this video here because if you're in those first couple of years of growth, you're like, well, how do I know what should I be making? And all the rest of it. Watch this video here because it's actually a P and L, a profit and loss statement that I'm going over from a year ago of the locations as I grew those first few years. And you can actually see all my numbers for the first couple of years of this location that I just mentioned.