How to Hire in a Brutal Labor Market (Interview)

Everyone, it's Mike Andes and today we're going to be doing an audio only version of the podcast. This is not going to be on YouTube or anywhere else, it's just going to be here for you on the podcast. It's actually a part of an interview that I had with Scott from Million Dollar Landscaper and on his podcast he was interviewing me about the labor market, pay for performance and new technologies. I see coming to finding and retaining great talent. Now, even if you're not in lawn care, this can be super beneficial when it comes to understanding the labor market, the dynamics of it and what you can do to make sure you attract great employees. So without any further delay, audio only version just for you here in the pod.

Let's roll it.

Welcome back to the Million Dollar Landscaper podcast. Today we have a very impressive guest with us today. Today we are joined by Mike Andes. And not only did Mike Andes start college at age of 13. Yes, you heard that right, 13. But he is also the mastermind behind Augusta Lawn Care. Now Augusta Lawn Care has grown to 155 location, which is amazing to hear. That's so awesome. And he is also the founder of Copilot CRM. So again he's not just like in the landscape game, he's actually a pioneer in this industry. So Mike, we appreciate you being on the show today.

Thanks for having me on, Scott. I appreciate you.

So Mike, just for those, if they're not familiar with who you are, you might just give me a little bit more of a background of how you got in the green industry, how you kind of got started doing all this stuff.

Yeah, so I started mowing grass with my brother when I was 11 years old. I think like a lot of landscape business owners started young. I did that because we had to pay our way through college. And so I started college when I was young, like you said, at 13. Did, did mowing grass all the way through college. Paid my way through. And then when I was 18 was planning to go to medical school and after doing a, you know, six week stint over in Africa doing a bunch of medical volunteer work, I decided I didn't want to do it in the US Mostly because of insurance. I didn't want to do the same four or five procedures for the next 30 years of my career. I want to do surgery. And so I ended up like, you know, I don't know anything else but mowing grass. So that's when I started Augusta Lawn Care. And that was 10 years ago this year and five years ago we Started franchising, and it's just grown from there.

That is amazing. And like I said, you're at 155 locations. And is that still continuing to grow today?

Yeah, our goal is a thousand. I think if we hit that 1,000 locations, we'll kind of get enough. Our goal is to change the level of professionalism in the industry. And so when I first started Augusta and I started incorrectly, and I started really poorly. And a few years in, I had a work accident where I was underneath the dump truck and got my hoodie stuck in a pto. And so it put me out for a couple of weeks in the hospital. But during that time, I realized my business was built on my. Myself instead of systems and procedures. And so after that is when I started making content. But for those first. That first year or two, you know, people look to you as, like, a content creator. They don't look at you as someone who really cares about their business. Look to you more of a consultant. And I didn't like that. And people just weren't implementing pay for performance or other things that I was seeing completely change my business. And so that's when I said, okay, great. Well, if I compete with them all, they'll listen. And so that's when I started Augusta Lawn Care so I could franchise, and the franchisees would feel like I have skin in the game. I. I am part of the same brand with them. So when I say something, I genuinely want them to win and so that it would be executed on. And so that's why we started. And I think if we get to a thousand locations, it'll be enough penetration on all markets to kind of change the industry a little bit.

That's awesome. I imagine, too, it helps you get input to help you create more content and create more programs like you've been doing.

Yeah, lots of stories. Every single day, problems are happening. Things are happening with business owners. And so you got a lot of stories in the back of your head to be able to pull on. And. And just. Just. Just a lot of numbers to be able to see and then be confident. So, like, when we do the turnarounds show, for example, a lot of people like, well, how do you know, like, what to say? It's like, once you've seen it a hundred times, this is not a matter of being smart. It's a matter of just being like, oh, this is the pattern it follows every single time. And so I think business is very, very systematic. It's very like, no, none of us are special. Snowflakes and it will just follow the process and money will follow attention. And so, yeah, that's kind of been the ethos of it all.

Awesome. Well, I guess that kind of leads into today's topic is today we wanted to kind of chat a little bit about one of the toughest things out there right now, and that is hiring in this labor market nowadays. And I would love to kind of pick your brain a little bit on why you think it's so hard to find reliable workers. People are going to show up on time and do what you need to do. What's kind of going on? What do you think is going on in this industry?

Well, I don't think this is not necessarily this industry. I think all labor positions are getting harder and harder to find. And why, you know, if you want to take a jaded perspective, you could be like, oh, it's the younger generation and everyone is soft, et cetera. I'd say there's some valid points. Now. I also see people that are willing to grind and hustle. And so whether or not maybe their population is declining, that's to be debated. What I do know is that it's not going to get any better. We're not going to suddenly wake up and everyone want to work labor positions. I also know that labor will continue to get more and more expensive. And so one of the things that I've been very, very bullish on the past five years, once we started franchising, like, how do we pull our resources together to actually get ahead of this technology? When it comes to robotics, when it comes to CRM, software, automations, marketing technology, to be able to get leads like this is the ability, this is what separates, in my opinion, a very, very segmented and fragmented market. Like we care and landscaping, and there's over 600,000 landscapers in the United States. How do you differentiate yourself? How do you avoid this war to the bottom? How do you get employees when there is such a finite number of them that are willing to work and be out in the elements and work hard? And so it's more a matter of like whether or not that is happening and why it's happening, I don't really care. It's more a matter of like it's happening. It's not going to change what am I going to do about it? So whether that be implementing software, thinking about robotics, the ability to be able to have pay for performance as a compensation model instead of paying people by the hour, I happen to believe that if you pay people an extra $10 an hour, you'll find employees. And so, you know, how do I build a business model and how do I build a compensation system that actually allows that to happen? And then I solve the problem of there's no one that wants to work hard.

Yeah, I agree with that. And I guess, yeah, that definitely was a kind of a multifaceted question there because it's. You can go in a ton of different directions on where the problem lies. But I think too, like, one of the things I always find is that.

The employee is looking to work for somebody that they want to be around. That is inspiring. That obviously pays well. That's definitely important, but the culture is built up. Is that something too that you find with the companies that you have as well?

Yeah, ultimately, in my opinion, a lot of times we as owners will work out in the field. And then it's like, man, why can't the employee just work as hard as me, be as efficient, efficient as I am? Think about the crew, think about the employees, think about the customers, think about my equipment the same way I do. And the bottom line is there's two things that missing from most businesses when it comes to why the employees don't care like you. They don't operate like you. They're not as efficient as you, and is they're not paid like you. In other words, they don't have equity, don't have profit sharing. They get paid an hourly wage. They get paid to come clock in to work and warm the seat in the truck. And then secondly is they don't have information that you have. You know that things are tight this month and you've got to finish this job today. You know that Mr. Jones is $5,000 overdue and you're gonna make sure this job goes well till he pays. Today you have all the information of an owner and you're compensated like an owner. And so my thought is like, how can I boil that down to make a system to where my frontline team member is paid based upon how hard they work? In other words, they're paid like an owner. The harder they work, the more money they make. And then how can I give them the information using open book management to share about my pricing, share about my costs, my expenses, my P and L, the finances of the business. And then I can expect, hopefully that someone rises to the occasion, actually treats the business like theirs. Cause they have the information and compensation of an owner.

Yeah, I love it. And again, the communication portion, like you said, is so, so vital. That's something I can personally Relate to. I can remember this is probably 20 some years ago. I remember speaking to some of our employees and be like, hey, we're struggling in this area. You know, we're looking for some ideas and you know, just whatever it is, we did this a couple different times. But you know, how to improve. Just getting out of the shop faster, just opening that communication door to those people. It's amazing. Some of the ideas they can give you, like how to get the job done faster, just they start giving you all this information if you build that culture around it. That was definitely hard at first because we didn't have that set up that way. But once we started doing it and communicating with employees, it was kind of amazing, the turnaround we had.

Yeah, I think the culture is like a byproduct of paying people like an owner and, and giving the information of an owner. Because if I pay people like owners and they pay based on performance, it means that I'm not paying people based upon when they ask for a raise. If I know them, if I like them, if they work hard in front of me, it simply comes down to do you produce more revenue for the business. That seems like a much more of a meritocracy and most people are happier in that environment. And then secondly, if I share information, like I happen to believe that people will like me more if I don't lie to them and hide things from them. And so this culture is a side benefit, is a byproduct of sharing the information, having open book management, having paid for performance. And that culture of trust is then trickles up and down the chain of command.

So as far as the pay for performance, would you mind elaborating a little bit for those that may not be familiar what that is and what that model entails?

Yeah, effectively it's the team member gets paid more the harder they work. And how that, how that breaks down is they get a percentage of all the labor revenue that they bring to the business. Now it's not a percentage of total revenue, that's just labor revenue. And so if there's materials or there's other fees and things that you charge in, that's not included, but labor revenue, they get a percentage of that. And so as long as you go to a job site and say, this is how much I'm charging for materials is how much I'm charging for labor, and you put that together and give that to the customer for an estimate, as long as you do that, you can use the system. Now what everyone immediately goes to is well, what's going to happen if they all go super fast? Well, then you have the yellow slip system. And that is where you basically, you can remove performance dollars or manually adjust their pay. Again, this is their P4P down. If they make damage cases, callbacks, lose customers, et cetera. And so it's really a way to be able to take. I always wanted to pay people by how much, how hard they work. And I always, like, I know there are people that are making $2 more an hour producing twice as much revenue for this business. And that doesn't seem fair. It doesn't seem fair that someone that worked, worked, works here for a year and is hustling, making the company a bunch of money, is making less money than the person that's been here for 10 years but sits in the truck, takes 5,000 smoke breaks, and stops at every single gas station they pass. It doesn't make sense that they make more money. And so ultimately, it came from the place of like, I had no money in my business. I was running 70, 80 hours a week out in the field with the crew, and it came down to someone asking for a bone of asking for a raise and me knowing that they deserved it, but me not being able to afford it and knowing that there are other people in the organization getting paid more than them. But because I had no system in place to actually measure and then compensate based upon performance, it was an absolute, you know, shoot in the dark. And so it was really out of frustration, it was out of not making any money, we instituted pay for performance. And it's just a way to pay your employees based on how hard they work.

Now, do you find the P4P program can work for pretty much any realm or any aspect of the green industry?

100%. Like, people will come up with, you know, like, reasons why it can't work. Right. Whether that be, well, if the guys work fast, then they're going to get hurt. We have never had a workplace injury because of someone working too fast. It is usually they are doing something out of negligence or they're just doing something way past the safety protocol. Secondly, I would say there's things like, okay, what about when they do shop maintenance or they do sharpening the blades or they start doing oil changes? Great. We're going to manually adjust their P4P based upon how many hours they work and you can manually change that. Well, what about there's two people in one crew and one person's really experienced and the other person's less experienced. Great. Now you're going to have a trainer bonus for someone that's more experienced. And it's gonna be on a per hour basis and it's gonna be a manual adjustment to P4P. So what we had to do is like ultimately everyone wants to pay their employees by performance, but it's all these little things that we think about. It's like, ah, it's just too much. And so what we had to do is kind of dissect what are the 10, 15 things that what was causing us not to be able to do that. And some of it came down to simplification of services simply due to the fact that if I can't accurately estimate a job now I'm throwing my crew under the bus. It's not just the businesses taking the hit because now they can't hit budget hours. Now they're not going to make as much money on this job. And so it started to get me to have to actually build the business in a way that was on numbers and based upon systems and using budgeted hours. And so that's kind of in a nutshell.

Yeah, I love that. I love the fact that you're, you're helping learn how to estimate based on budget hours. That's something we teach in our program and to me that's like the only way you can track this productivity and like you said to reward the employee for that. And I think this is awesome that you have implemented in your system. Has that been an issue or concern when you're trying to teach people how to do this or how to implement it?

I should say in terms of the budget hours aspect.

Yeah. How to actually do that because just from some of the people that we've talked to in our programs, they've rarely have used when they do estimates to figure it in terms of hours. They just think in terms of dollars and cents. This job, 50 bucks or whatever it is to mow this rather than, okay, it's going to take an hour or half hour, whatever it is to mow it.

Yeah. So when we first started pay for performance software and it's going to sound like a plug, but it's not. I gave all the training away for free. But like when we first started, we were using budget hours exclusively. And I realized that to your point, a lot of people don't use budgeted hours. So we instituted the thing called simple P4P. So like when someone joins the software, they can use simple mode or they can do advanced mode. Advanced mode is use budget hours. It's ideal because I can Track efficiency scores. I can do all sorts of really cool stuff with the backend AI to tell, like, who's most efficient, who should work with who, stuff like that. But the simple mode is essentially, I just need to know how much revenue is being produced from labor. And so as long as you can break out labor from materials on a job, you're good. Now, if you're just walking up to a house, like, it'll cost $5,000 for that paver patio, I can't help you. But I need a percentage. I need a dollar amount. Like, is that $3,000 in labor and $2,000 in materials. Okay, now you can use simple P4P. That's going to be $3,000 in labor revenue. You're giving a third of that to your employees. That means they're making $1,000 on this job. Regardless if it takes them one day, two days, three days, or four days, it's up to them to figure out how fast to do it. And so I put that power back in the employees to figure out, you know, what are the most efficient ways to get the job done. But yes, there are. There are a litany of reasons people don't join, and one of them is, oh, I don't do budget hours. So we create a simpler model.

Okay, that's good to know, I guess. For those that are still a little nervous on this, what are some of the first steps they can take if they want to implement P4P in their, in their programs?

Yeah, so like, first, understanding the system. Right? So like, my book is free. You just go to the site, you can literally fill a form, I'll send it to you. Secondly is like, the training is free too. So like MyKandy.com P4P I know it sounds like a plug. I'm sorry, but, like, it's free. So, like, you can watch all the training videos and understand the system, and you don't need to use the software. You can literally use Excel spreadsheets. We made this, made the software, because as we started growing the business, it was starting to become more time intensive to actually get all the numbers every day, create time cards, etc. In Excel. So we created software. Yes, it's for sale, but you don't need it, especially if you're smaller. You just need to know, okay, what percentage of labor revenue I give to my employee every single day. I'm going to track how much revenue they made and how much they earned based upon P4P. And every single day, like I always already do, I'm going to track how many hours they're clocked in. I either base pay and every single pay period, I'm going to take the higher of either base pay plus overtime or P4P. It's that simple. And so it's all inside that, that training. It'd be a good place to start, I would say.

Okay, great. Now, the other thing you mentioned a little bit earlier was a little bit about profit sharing. You mind kind of elaborating on that.

A little bit more? Yeah. So P4P, one of the biggest things that I was concerned about when I instituted originally is like, it's very individualistic, which means if I work hard and I'm crushing it, I will make a lot of money. And I was very concerned about the team aspect because I remember, like I remember specifically the week before we switched, I saw a crew come back, they had a load of clippings in the back of their trucks. We have to bag clippings in our market. And so one of the other crew members just went out and helped them unload their clippings. And I said in my mind, like, wait a second. On P4P, there's no incentive for that person to go help that other person because they're not making any more labor revenue. And so that's when we started profit sharing. And profit sharing was essentially, you get a percentage of all the profits split amongst the team. And it also covered for the fact that on P4P, if I was a crew, let's just say it's me, one other person, and I show up 20 minutes late. And Scott's there, but he's on time. The truck's ready to go, tools are in the truck, the trailer, everything's ready to rock and roll, materials loaded. I show up 20 minutes late. Technically on P4P, we would make the same amount of money on, on the day because we cut a percentage of labor revenue. So what we did is say, okay, if you're not on time, you lose half of your profit sharing for the quarter. And so we do quarterly profit sharing across our team. We share usually between 10 and 50%, depending on how the location set up of profits with the team. That'd be the general manager, frontline team members, et cetera. And so they're going to get a cut. They know what that percentage is and they know if they show up late or if they call out one time, that's halved. And then if they do it twice in a quarter, then they lose all of it. And there's been times where one minute has cost someone literally six, $700 because they're late by a minute. And that's just the hard cut off.

Now, like instituting, I guess, both of Those programs, the P4P and profit sharing. What have you seen your employees or how have you seen the effect of that with your employees?

Yeah, like the downside is if they're late all the time after twice they don't, it doesn't really impact them. But fortunately P4P keeps them efficient on a day by day basis. Because the goal of P4P is how do I get compensation as close to performance as possible. But when it comes to profit sharing, it's a little bit more long term. It's the whole quarter. And so one of the impacts, as long as assuming they're showing up on time, they're involved and they're doing well, they really start to care about the profit and loss statement. And so when we have open books, no one cares about your P and L until they get a piece of it. And so again, I wanted to open my books and I realized no one cared until I was like, oh by the way, you all get a chunk of this at the end of the quarter. Then everyone cared. And then instead of wanting new trucks and new equipment, they're like, we can make do because that's going to affect this quarterly's profit sharing and we want that. And so again, they started thinking like an owner. And the only reason they had to think like an owner is because they had the information of an owner through open book management.

So I'm kind of curious on this because we, we did some profit sharing in our business and years ago we had, I mean it was, looking back now is pretty elaborate. Like it entailed them showing up at times on their skills, doing performance evaluation. It was like quite a bit of process and is honestly kind of a pain to do. How are you tracking this? How are you, you know, getting us all set up with your team? And how are they knowing where they're at without them being concerned? You're not giving the profit they deserve.

Yeah, the litmus test for profit sharing program is if you're a frontline team member after two weeks of working for. You cannot explain it in two sentences. It's a bad program in my opinion. And the reason for that is because if they don't understand it, do we really think it's going to move the needle for their behavior? And so I need to be able to say, look, you get 10% of all the profits in this Business, we keep track of it every single week. We talk about the numbers, anything of that bottom line, you get 10% of it. Just show up on time. If you don't show up once, half gone. If you don't do it twice, all gone. It's really, really simple. And then the P4P side takes care much more of the efficiency and daily productivity of the employee. The profit sharing is really, I want them to care about the company. I want them to think about when so and so does a mistake and they damage equipment. Now it affects the whole team because that's coming out of profit sharing. And so, yeah, they're going to yellow slip and they're going to get a damage case on their P4P and they're going to make less money, that employee. But now it also starts to impact the whole team. And the bottom line of a correct system where you have you're sharing information and you're compensating. People like owners, is they start to keep each other accountable. So if someone's slacking off on P4P, they're going to get like smoked out so fast because no one wants to work with them. And then on profit sharing, if someone's making damage cases, they're always making skid marks. They're making callbacks to customers. That starts to affect the profit of the company and therefore everyone's paycheck. And now the team starts to be your quality control. The team starts to be the one that makes sure everyone stays accountable and works hard. Instead of me micromanaging them and tracking their trucks and having dash cams and recording their conversations like, that's. I never wanted to be that guy. But I came to the point where I was like, I'm not making any money, I need to do that. Or I've got to open up the books and pay people based on how hard they work.

Yeah, I love that. And I love that it's helped keeping the team as a team that they help encourage each other. Like, hey, you messed up here. Here's how to fix it. I think that that is awesome. And then that just, to me is a game changer in the culture itself. Is that something you found too?

Yeah. And people are concerned about sharing the numbers with the team. And so I always like to, hey, let's take it to the furthest extremes. Let's say you're losing money, you're not making any money. All right, Should I share numbers with my team? They're gonna get afraid. You're right, they might get afraid. And someone Might leave. But here's the thing. You can also use this as a stump speech and rally the troops and be the underdog mentality coach in the back at halftime. Your way down. Like, guys, we got to come together on this. Also, if you're in that situation, all of your team thinks you make a bunch of money. And until you prove them wrong, they will find evidence, whether it be buying more equipment or buying more trucks or hiring more people to think that you're making a bunch of money. They don't see hundreds of thousands of dollars worth of debt. They don't see the payments, they don't see all this other stuff. And so they're going to find the evidence to think you're making millions of dollars. I'm the poor guy. You're making money off of the back of all my hard work. And so I'm going to sat the clock. I'm not going to come with creative ideas because you have lots of money. So if you're not making money, share the numbers. Secondly, if you're making tons of profit, the alternative, because this happened a few years later for me, I was like, I was never showing up to the office, and here I'm making over $300,000 in distributions, and I got team members with the base pay of 20 bucks an hour. And like, how is that fair? They're working all the time. And so I've got to stand up in front of them during a quarterly meeting and talk about how I deserve $300,000 and they get a small cut of that. And so this is the thing that's when I institute the profit sharing because, like, I need them to get a piece of the pie. And so if they can make 2000 bucks on a quarter right before Christmas because they get a piece of the. The chunk of profits, they're usually much more invested. Secondly is I wanted them to actually, I had to change my mindset on this one, Scott, because, like, I always thinking, man, it's such a big number, it's gonna be really tough to share with them eventually. I was like, look, if I'm giving the information of an owner and I'm educating them and we have an audible program, we try to get them on podcasts and training, we talk about money and personal finance. The number one thing I can do to actually convince them to take this seriously is show them that it's worth the squeeze. Hey, I made $300,000 and never show up to the office. And the reason for that is, cause all the stuff we talk about and all this stuff we talk about the podcast and the Audible program and the weekly optional meetings around personal finance. If you follow those, this is what this becomes in 10 years. And so I started to look at it much more like a motivation for them. And that was very helpful for me as someone who has started to actually make a lot of money and be able to share the numbers still with the team.

I love that. Have you found, I imagine through your franchises that.

To have somebody that's owner trying to implement this open book policy or open book management to their team, they have to do some education with the owners too. So they actually understand it. Because I found that some people just don't understand how to even interpret or read some of the basic things of a P and L or a balance sheet.

Yeah. And look, it's nothing. It's not bad to tell your team. Like I don't understand everything. I think because we feel like this pressure that we need to know everything is why we don't share our numbers, it's why we don't share our pricing, it's why we don't open up the books to the team is because we don't know everything. And that's fine if you want your team to think that you are God. Yeah, don't open up your books because either it's going to be really, really bad and it's going to show you you're not God or B, it's going to be really, really good. And then I think you're the devil for taking all their profit. Like so there's just realize that like opening up your books is going to create trust within the organization and if you're losing money, it's going to allow you to be able to share that burden with your team. If you're making a lot of money, you're going to share the benefit of that profit with your team and it's just a win win. And I've just consistently seen people very afraid to share to your point because they don't know their numbers. But what's really cool is when you start sharing numbers and someone asked you a question in your team and you're like, I don't know that. But I'm going to do some research and I'll get back to you next week's meeting and I'll figure it out and I'll have a better answer for you because I don't know what cogs are. I don't know what the difference between direct labor and the office labor is. I don't know if taxes are included inside the payroll line item, these are the type of things they're like, you might not know and that's fine, but just tell your team, like be a leader. That is just is okay with not having an ego, ensuring you don't know everything. And that's why your business isn't making money. And so a lot of times ego gets in the way of us doing the right thing for the business. And certainly true for when it comes to open book management.

I'm a huge fan of open book management. I actually remember I was at a conference from Greg Wittstock, the owner of Aquascape, long time ago. And one of the things he mentioned was doing this and he actually, I recall him saying this to this day, that he actually helped save one of his top employees that's still working with him today by doing this and sharing with them some of the information. Because that that employee at the time was honestly thinking of leaving and going to start their own business. And by him sharing some of this information, the employee saw like, holy cow, insurance costs this much. It costs this much for payroll. And they started thinking, wow, maybe being a business owner isn't for me. And they stayed there just because of that fact. And that kind of really inspired me and actually started to me start teaching our people the same thing in our business. And it was a game changer for us.

Yeah, we ended up starting what we call the 3F program franchise fee forgiveness program because of this one thing. And that is like I want it to be so good on the profit where they want to go start their own business. I want them to get to the next level of the career. I don't want them pushing a lawnmower or laying pavers for the next 20 years of their career. And so like basically if they work for two years in the field, they can join the franchise for free because like, and now there's a bunch of people that have done it because I want it to be where it's motivating to them and I don't want them in that entry level position forever. And so it's either A, we create a large enough company where they can grow up inside the organization, or B, we give them the tools, resources and education to move on from our business in the next three to five years. And a lot of us are afraid to talk about it. And for that reason people leave because they see you as a dead end job. And so if we just got honest with like, what is the actual expectations of these frontline team members are they really thinking about five years? No, they're not. They're thinking about two to three months maybe. And so how can we serve them? And if you serve them well, they will in turn trust you. It will in turn probably work for you longer because you're a good boss, a good person to work for. And so I think, you know, doing the right thing is always the right thing, you know, in this case.

Yeah. So out of these kind of these things that you mentioned here, what would be your recommendation? What would be the first thing that you. If nobody's doing any of these things that we talked about, what would be the first thing you'd recommend that they do to get started and to keep people?

Yeah, I think the number one thing is to get focused on what is most important in the business. There's 100 things that you can fix in the business, like hundreds, like depending on the size of business, thousands. Like there's so many little things we can focus on. There's probably only one or two that you can focus on now and do a good job at fixing. And so I consistently see the size of business is very indicative of what we should be focused on. Because someone's listening to this right now, they're solo operator and they're like, I should do pay for performance and open book management. And guess what? It has no implication in your business whatsoever. At zero to 200,000 revenue, annual revenue. The only thing I want someone to focus on is be a great laborer. Like figure out the most efficient way to do things, what equipment's going to serve you well, which tools, how do I make sure I get from job to job as efficiently as possible. Accurate budgeting, be a great labor. As you get past 200,000, up to like 800,000 annual revenue. Now I need to be a great manager because now I have to hire people. And that comes with a whole nother bag of, you know, problems with it. And no longer am I actually doing the work, I'm actually managing the people that do the work. For me. That's a whole other skill set. That's when P4P becomes very important. Profit sharing, etc. After 800,000 of larger business, 1.52 million, whatever in revenue, now the owner really is focused on the role is that of an architect. You step away from the business, you focus on systems and procedures and really nailing your cogs. And what are your direct expenses? What, what are your fixed costs for the off season? How do you make sure that we don't go into negative cash Balances. This is the architect. They step back and they analyze things in the business perspective. And then they have managers in place to actually go manage the laborers. And so I find often the times we have laborers trying to act like architects, and we have architects out in the field with their crew being laborers. And so it's like, what are we focused on? And it's important to know what size of business we're at to be able to determine what to focus on.

I agree with that 100%. Is there anything else that you can think of as far as ways that we can get employees and attract employees that we haven't kind of mentioned here today?

Yeah, like, I think in the long term, it's a matter of like, why are your employees coming and working for you? Ultimately, every single one of us, they want money. And so I've always come back to this because it's like, man, well, do they want, like, nicer uniforms? They want a nicer truck? Yes, those things will usually retain people. I agree with that. But what they actually came to your business. For the vast majority of us that don't have a brand or don't have a big business where everyone knows us and we have referrals from our employees, et cetera, coming in, people are coming to you because they can make more money. And a litmus test of this is like, try not paying their paycheck next week and see if they come up the next week. They won't. They're there for the money. And if we just embrace it, we will then create compensation plans and we'll create systems in place to make sure everyone makes more money. Because I happen to believe that everyone wants to make more money. Now, will that keep them? No. If you have a toxic environment and a bad culture, they're not sticking around. But in terms of attracting talent, build a system, Build a business model that can afford to pay people more money, whether that be paid for performance or instant pricing or all the other things we talk about, automated follow up, et cetera. It's how can I make more money in the business so I can then pay employees more money? I happen to believe if you pay people $10 more per hour, you'd find better employees.

Yeah, and I would agree with the point that you have to have at least a good culture and not the toxic environment like you said, because in our family business, we had another company, excuse me, in a town over, they came and poached some of our crew leaders, and they offered them quite a bit more money than what we were Paying. And they did leave. They left for. One left for about two months, another one left for a little over a month. And they actually came back. They said the money is good, but the culture there was terrible. So it is a little bit. Money's good, but that, that drew them in. But you have to figure out how to keep them and keep them happy on the other end.

Exactly. Attraction and retention, two very different beasts. Right. And so the attraction part, to your point, they all left, it attracted them. But like they didn't have the culture that would actually keep that employee.

Yeah, yeah, because they offered them. One was like $10 more an hour. I think the other one was like eight something an hour. And I get it. They came to us and. Well, that's not. We can't match those and we couldn't do that. But we offered them. We did have a bonus system in place. Or I'm sorry, system in place. You can make more money here if we do on the backside. But they didn't. They wanted that money right then and there, which. Okay, cool. But they came back. Yeah. So. Well, Mike, this is, this is awesome. I think this is a great bit of information here for those that are interested in the P4P program. Can you recommend where you can go to learn more about that on your website?

Yeah, so just, just mikeandys.com P4P it's a free course, completely free. It'll walk you through all the basics, how to roll it out, the process. I recommend for kind of like sharing it with your team, et cetera. So that's all completely free. Also, if you just go to pfubsoftware.com There's a webinar. I talk about it and in there I give the book. You can just fill out a form and I'll send you the book for free. So I don't want the cost of any of it to be prohibited. Why you implement. There's software there if you're scaling up and you want to save time, but you don't need it when you're first getting started. So just understand the fundamentals. And even if you're starting and you are solo, like build the business with budget hours, you know, listen to people like Scott that are sharing about how to know your numbers so that when you have employees, you can roll the system out.

Now, Mike, you have something pretty exciting coming up. You mind sharing a little bit about that?

Oh, this summit. Yeah. So blue collar summit's coming up in January 2025. John Taffer from Bar Rescue is going to Be there opening up the keynote. But more importantly, or in addition to, I should say on Friday, it's a three day event here in Seattle. Blue Collar Summit's gonna be a whole bunch of different blue collar industries, home services. But on the Friday I'm taking a full day workshop. So it's not just gonna be all keynotes. That full Friday, the entire day is just a workshop. And the ultimate goal is to make sure that you do not have an off season. And we're gonna go through five different ways to fix it. And I'm gonna have templates, we're doing role playing, we're gonna come up with different ways to attack the off season because it kills the green industry. It is just a horrible thing that the vast majority of us have to lay off employees, less leads, revenue drops off a cliff, we have negative cash flow and I think it's an absolutely solvable problem. So we'll be going over that in depth.

Blue Collar Summit, that's awesome. And where can people find out more information about that?

Yep, just blue collarsummit.com okay, so Mike.

A couple last questions here. What do you think is going to happen in the future? Do you think as far as hiring and what is going on in the overall market? What do you, where do you expect it to be heading? Do you think we need to be taking advantage of these tools like you said, or is there anything else that you can see coming up?

Yeah, I think personally short term software will be the differentiator between those that can attract the talent and do not, mostly around profitability. I think in the long term, like 10 to 20 years, robotics is going to become more and more of a player. But I believe that it'll go to the companies that are already thinking about software. They're already implementing many of these strategies that know their numbers, that are implementing pay for performance. And so I believe that over the next 20 years we're going to see a big consolidation in this industry. And I think that we're going to go from 600,000 landscapers to less. Not like half, not way less, but a little bit less because we're going to have bigger players that will take bigger market share. Now that being said, if we go into economic recession, it's easy to start a long care business, easy to start a landscaping business. But I think the fighter for the separation of good companies and you know, the under the table average Joe is going to get more and more separated because the, the, the professional company that has a website is going to get leads way cheaper. They're going to get talent way cheaper. They're going to be able to use software and things that customers will begin to expect. We've gotten by in this industry being so far behind the curve when it comes to credit cards on file and automations and softW, but I don't believe the customer is going to take that in 10 to 15 years. I believe they're going to expect to call 24, 7 and get an AI agent to talk to. I expect, I believe that they're not going to want to talk to an estimator. They're going to want a price over the phone, on the website, instant checkout. Like I believe that's where we're going. And so I don't think it's going to be anything I do or anything in the industry does that is going to change the industry. What's going to happen is the customers are going to start to expect those things and when they start to expect those things, that's what will separate the shaft from the wheat in terms of this industry. And I believe it'll happen the same way it happened with the cab industry and uber and Lyft 15 years ago.

Yeah, I agree with 100%. I feel as a whole we are kind of behind in the green industry. I mean we're catching up. But like even comparing to like H Vac or anything like that, or plumbing, even like the software and things that they are using, we seem to be lacking at least as a whole in the green industry. Would you agree with that?

Yeah, I think a big reason for that one specifically like H Vac has been in the past few years a huge.

Recipient of venture capital and private equity. And so as that money is poured in there, you have smart money going in. They're going to infuse it with cap, use it with capital, but also infuse it with technology, software, robotics, et cetera. And I believe the reason they've gone into that, that specific home service, speaking of H Vac specifically, is because it doesn't have an off season. You have a perfect balance of when it's cold I do heating, and when it's hot I do ac. And it balances out really, really well. And so I believe that having a business that had demand a higher multiple is more, more appropriate to be able to sell it looks good to venture capital and private equity is a good business to have. And I think that the number one thing we can do right now in our industry is fix the off season. And that's, that's obviously why we're focused on at Summit.

Yeah, I think that's. That's wise, I guess. Would you mind elaborating a little bit more, I guess, on the off season? I mean, I don't want to give away what you're talking about in the. In the Summit, but what are just a couple of things that people can think of to. To keep themselves busy or to keep money coming in during the off season?

Yeah. So it's a matter of, like, first off, do we need to even be open? Can we just completely shut down? Because you can, assuming your fixed expenses are low. So if you have debt, if you have a really nice shop space, if you have people on payroll that are salaried in the office, very, very difficult to shut down operations for three or four months is your fixed expenses are so high, you have to make a certain amount of revenue just to be able to pay the bills. And then it's a matter of, like, can I just keep selling more of what I'm currently doing at a higher customer acquisition cost? For example, if you're in a market, let's just use mowing for an example. You can still sell mowing, or you can still do landscape projects, but they're not pouring in like usual. Okay, can I just become a better marketer? Can I just pay. Instead of $200 a lead, am I willing to pay $400 per lead? Well, not if my. If my lifetime value of the customer is 1,000 bucks, but I can. If the lifetime value of that customer. Did I just turn off.

Shut up. Audio or video?

The video did shut off. Yeah.

All right, you're good. One second. Let me show you what's going on here. Oh, you know what? One second.

And we're back.

Yep.

I think it overheated. Yeah. So, like, you know, for some people, it's not even possible to shut down during the off season. And so it's a matter of, can I upsell customers? Can I cross sell customers? Can I completely add a new service to my existing offering that compliments my demand curve? So when landscaping and lawn care goes down, what else can I do that has a completely different demand curve, just like heating and air conditioning, and so there's different ways to do it. Sometimes you do need to add a new brand. Like we added Augusta lights.com and we add this whole new Christmas night vision and trademarks and training and all this stuff, because it's a perfect inverse of lawn care and landscaping. But I don't think everyone should do Christmas lights because in some Markets, you should use snow. Well then how do I make sure I grease every single wheel to upsell my mowing customer into a snow customer, my landscaping customer into a snow customer. I don't want to do snow. I only do projects. I don't do any recurring service. Great. How do I take what I have, a one time project and sell them a recurring package or a warranty or a maintenance package that is monthly and I'm only going to show up quarterly. I'm going to do an inspection of their property and I'm going to guise the inspection as value to them and I'm going to upsell them five other things when I'm at their property. So I'm going to come do a site inspection of my massive retaining wall $50,000 project. And while I'm there, I'm going to recommend that these five plants be removed and they change out their irrigation and the drainage over here on this side of the property can be changed. And so it's getting creative with like how whether you're one time service business and projects or you're recurring, how to just fill in that gap is super important. So those are just a couple of the things.

I love that. Those are some great ideas there. I'm a huge fan of upselling. Like you said, going out visiting past clients, it's to me it's easy. You've already built that trust and that relationship with them. There's surely something on that property that could be done. Pressure wash or whatever it is. Like it was easy. Like we did that for ponds. We did a lot of water features. Hey, let's add some more lights in here. Let's add this other waterfall or whatever it is. You can easily add stuff on with the customers and keep it affordable. Yeah, absolutely. I agree with that. Mike, is there anything else that you think we needed to add or discuss here today that we didn't kind of go over?

One thing I think is interesting, kind of on that same topic is like a lot of us get in this industry very much allured by the next shiny customer. And we're always trying to spend money on ads and grow, grow, grow, that's fine. But ultimately you can forex your business without getting a single any additional leads. Compared to last year, it's number one. I'm going to double my close ratio from 15% to 30%. Okay. That just doubled my business. Okay. Now I'm going to take my average customer that spends about fifteen hundred dollars per year with me and I'm going to offer another service or do a better job of upselling or cross selling and get them to 3,000. So no different number of leads, no massive marketing campaign. Same number of leads. But because I closed twice as many of them, 15% to 30%, and because I increased the average customer value for the year from 1500 to 3000, I just forex the business. Like, well, how do I go from 500,000 to a million? You go to 2 million if you just do those two things. And so that's without any sort of new ad campaign. And so I think the next shiny customer, the next shiny service in this industry is very dangerous. Gives a lot of landscapers poor. And I hope that we focus on what's actually moving the needle, which is getting customers to buy more often and more frequently from us.

That's great advice, Great advice. Well, Mikey, Mike, thank you for being on the show today. And just a quick recap. We mind sharing a little bit more about the summit you have coming up just for those that are listening.

Yeah, it's going to be great. Three days, probably about 500 different business owners and from all sorts of home service industries. So I'd love to see there. The workshop is I've been working on for months. It's going to be a six month project of just pouring into that and I guarantee if you don't, if you come and you come to the whole workshop and you don't think it's worth the ticket price, I will give you your money back. So.

Oh, looks like your camera shut off again.

Again.

Cameras overheating. Goodness gracious.

Sorry. It's all right. All right, Mike. Well, again, I appreciate you being on the show today and thank you for sharing all this great information and thank you for all the work that you do for the green industry. It is amazing to see the progress that you've made just personally with the franchises and helping out all the people. We actually have a local Augusta lawn care business near us, which is awesome to see. So, so thank you again for that, Mike and thank you for being on the show.

Thank you, Scott. I appreciate it.