how to IMMEDIATELY double the profits of your service business

Hey everyone, my name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 85 locations around North America. And today I'm talking about how you can double the profits in any service business by using simplification. And if you're already like, why do big projects, I do construction, hardscaping or big construction jobs, just hold on to your seat because there's going to be something for you to here to make sure you double your profits in your business.

So first, let's start off with a story. And that is when I had to make the very hard decision to really pull the plug on complex jobs at Augusta Lawn Care. So if you don't know, I own a lawn care business. I started mowing lawns when I was 11 years old. When I was 18 years old, I started Augusta Lawn Care. And over the past couple years we franchised it. So we have almost 90 locations around North America. And so in that time though, before I figured out a lot of the different systems that we use today and a lot of those run by themselves in terms of locations at General Manager and they run on the systems before that, it ran mostly on my personality to be able to sell my personality to be able to do the jobs myself, be involved in every project, sell every project. And so back in the day, in order to grow, we would add services. And if you've heard my content before, you know that the two most, you know, most effective ways to grow, but also the least profitable ways to grow in terms of top line revenue is going to be growth of services. So adding more services to your service mix as well as adding how far away you are geographically willing to serve. So how far is a radius that you're willing to go away from your location to actually serve people's properties. And so at the beginning, when we started ramping up Augusta Lawn Care, we added artificial turf. We had a tree chipper, we had a massive dump truck, like a 10 yard dump truck that would take, you know, five, six yards of gravel. And it was just a big bun, it was like an F7000. Then we got a F600, like big dump trucks. And there's lots of different services that we just kept doing that nowadays now we would never do. We would use excavators with flail mower attachments. We had three skid steers and track loaders. We just, we had a tractor, an actual tractor. Like we just all sorts of equipment and just a ton of different services. Basically our philosophy was like, look, if, if we can get done on your property. And it was landscaping and hardscaping related. We could do it anything. We could do paver patios, we could do walls, we could do boulder walls. We could do. We could do just like anything. And that was great to grow the business from a top line revenue standpoint, but from a profitability we were suffering. We were not making a lot of profit. I was definitely not making a lot of distributions actually after my salary, like there wasn't a lot to be had. And so now though, like the business, that same location, that very first location, does a similar amount of revenue, like 1.6, $1.7 million in revenue. But it's going to kick off over $300,000 worth of distributions after my salary. And I'm there for less than an hour a week because it runs on systems. And we've used this method and that is simplification. So although I'm talking about doubling your profits instantly, realize that this really 10x'd my profits over the course of several years. But the changes I'm gonna talk about today are things you can do instantly in your business to simplify your services, simplify your business, and make more profit. So very first thing happened here, and that was artificial turf. So we were doing artificial turf and putting greens, and we started buying a lot of turf from a manufacturer. And we were installing putting greens from small ones, like with a couple holes for people's backyards. And we had other larger projects that we do, entire lawn and we would replace all the grass in their yard. And so artificial turf was great. I actually really enjoyed it. But the problem was it did take more complicated labor. It did take more training. And so we had a manager that I specifically had trained up for artificial turf, and we paid him more. And we say, look, we're going to go to artificial turf. We think this is the way of the future. And the thing is, it costs. It's a very expensive product. By the time you actually dig it, if you do it correctly and you dig down enough and you replace the soil with gravel and you do good drainage, it's expensive. And especially when you're starting, starting out, you're going to be making a lot of mistakes. And we did. We made a lot of mistakes. There's a lot of times we had to replace turf areas and replace parts that we had messed up on. But we figured it out and we were doing pretty well. And then all of a sudden, this specific manager left, and it was under good terms. He got a really good job a few hours away, and Needed to move. And so that was great for him. But the problem was we had jobs sold on the schedule. Like big putting green jobs that were 30, $40,000 that I literally had to call the customers. I specifically remember the one that was really mad. I don't know if he left a bad online review or not, but he was really mad because this is so unprofessional. And we had taken his deposit, we had taken 50% down. And here I'm canceling the job. And that was difficult because look, we already sold the job. We've done the hard part. Why don't we just go ahead and install it? Well, the thing is, we lost this manager. And in that moment, I just realized I had made a massive mistake by adding all these services, adding complexity and building my business around one person. Staying and adding any service in your business where it requires one person person to stay is extreme. You're leaving your business extremely vulnerable to what happened to me. And that is a rug pull. Like all of a sudden one day realizing that person's gone and I can't get this work done efficiently. Like I can't. My employees don't know what to do. I'm not going to be able to be on the property the entire time because I have to run the business still. I'm still in daily operations. And that was a horrible moment. And honestly, if the owner has to be on every single property and every single sale is made by the owner, that business is vulnerable to the owner getting sick, the owner having to leave or go away for a week or two to recover or whatever it might be. And so how do we create our businesses that are built on systems instead of just one person being there, whether that be the employees or a manager or a boss, like the owner. Like, why build a business with that as a bottleneck? And so I realized, look, I got to pull the plug on this thing. And yeah, made this guy really unhappy. He had a $36,000 job. We were going to elevate like this area, kind of like a, kind of an oval shaped area, lift it up, put like a 2ft of 2 foot wall around it, and then build the whole thing up and build, putting green on top. So it's going to look really, really cool. It's going to use backyard. His house was worth millions of dollars. And so here's this really, really wealthy, successful person basically telling me I'm running my business wrong. So yeah, of course you question yourself. You doubt yourself. I knew it was right. And just simplify the business. So the question is like why do you, why would you simplify the business? What's the point of doing that? So I kind of came up with five reasons of as to why you would want to simplify your is labor. Finding labors for simple services is much simpler. Think of McDonald's. They have simplified making a restaurant that pumps out millions of dollars worth of food, but they've systematized it so they can get a 14, 15 year old flipping a burger or turning fries, or filling up a soft drink. They figure out all of these things and simplified it in order to get this individual up to profitability as soon as possible. So with labor, it's not only can you find someone that is has less skill, but also you're getting them the profitability faster because the search services that they learn are simpler and they can get to efficient levels of production faster. So labor is the first reason why you should definitely simplify your services. The next reason is because when you do find those individuals, training is much easier. You don't have to train them for months or weeks on end. Like for artificial turf, it would take a couple months for someone to get really efficient at knowing how to do the grade, knowing how to do drainage, know how to do the base layer, know all the different types of turf and what, how to take care of it and all the rest of it. It would take a long time. And so when you're in a market, a labor market, where you have a big churn, where people last a week, two weeks, three weeks, a month, or two months, like it's very difficult if your training, if your learning curve takes them a month or two months to become efficient and profitable. So getting them to profitability as fast as possible is extremely important. And you can do that by making sure that the training required to get them to an efficient level of production is as low as possible. Another reason why simplicity of services is so important is there's waste that is cut out in the form of materials. So if you use any sort of materials for your projects, you realize that if you simplify your services, you're going to be able to use the same products and materials on every single job. Because you've reduced the number of services that you do. And therefore the same products, the same materials are used on every single job site. Therefore you don't have one off types of materials, one off types of block, one off. Like we'd have pieces of turf and we, we, even when we closed down the turf division, we had a thousand plus square feet of some different types of turf. Well, that was thousands of dollars in wasted materials simply because we needed to warehouse those in case we had jobs in the future. Well, when those jobs stopped, we were left with all those wasted materials and we'd have materials sitting there for years because well, this was a one off type of material that we use. It was a one off type of turf. There's a one off type of putting green that we use and therefore it's wasted because we can't use it again and again and again. And one off jobs become wasted materials. Another reason why you should absolutely simplify your services is because of management. If you have a very complex system, complex services, lots of different service areas, and you have a whole bunch of different services you're offering customers from excavation and grading, to artificial turf, to mowing lawns, to trimming bushes, to installing mulch, to using excavators and grading. And like, if you're doing all of that, you're gonna have to have a lot of management and you're gonna have to have very qualified managers that know all of those things. Because a lot of people are like, well I'll just have different divisions in my business and I'll have three or four people or a crew do mowing and I'll have a crew do hardscaping and I'll have a crew and that's fine. But the person that's managing those individuals needs to know how to do all of those services so that when their questions arise, that they know what to respond and how to give guidance. So therefore it's much easier to get managers and management that is able to do a few services that can really focus on leadership and hiring and developing the team and not well, I need to know all these different services. And furthermore, if I'm going to get an estimator and a manager that's going to sell well. Now they've got to really know these services, they've got to understand the equipment, they're going to understand the machinery in order to give an accurate bid. So again, simplification of services allows me to get a manager that doesn't need years and years of experience. And typically managers an estimate and salespeople in the service industry are the most experienced person and they're the most highly paid person, but they don't actually bring any revenue. They're overhead for the business, but we have to pay them more because they have all the skill, all the experience, all the know how years of knowledge in the industry and that's very, very expensive when that becomes the overhead part of the business and they're not actually producing any revenue. The last reason why you should have simple services and simplify your business is because there's going to be more accurate budgeted hours on projects. So if you have any sort of budgeted hours that you use for your estimating, that's going to be much more accurate. When it's a service that you've done over and over and over and over again. If you go to your core competencies, the few services that you do in your business, you're going to get very, very accurate. When you look at a project to know exactly how many budget hours it's going to take because you do it all the time. It's not like there's one off things that pop up in the job and surprise you because you've never done the certain type of wood, you've never done the certain type of block, you've never done this type of equipment. And all of a sudden there's like new things that are hurled at you from during the job that take up more time and cause delays and slow the project down. That doesn't happen as much when you do the same type of project and the same type of service day in, day out, over and over again. You're able to look at projects and very accurately know budgeted hours, which is also important if you're using a pay for performance model like we do@p4psoftware.com have you stuck around until now? I did promise you that if you do big projects, I was going to give you something because a lot of people, they hear simplification of projects and simplification of business, they're like, oh, that's just for the guys who mow grass or people who do simple services like janitorial or pressure washing. It's not for complicated projects where we have fences and decks and we have paver patios and retaining walls and ponds. And I would really push back on that. I really believe that when it comes to projects, it's not so much about simplification, it's more about standardization. Because if I'm going to install something complicated like let's just say paver patios can be very, very complex. But what I would recommend you do is standardize the different types of offerings of pavers that you offer. So what I mean by that is don't offer every single type of paver under the sun. Maybe you offer a select few different options and a few select different colors and you don't give the customer a Manual with a thousand options and 10,000 different color options and 4 different design options and 48 different products and brand options for those pavers. Like, focus on the one or two different products and colors and designs that you want to install, and you can become very efficient at those things. So even though I take a complex service like installing paver patios, I can simplify it, quote unquote, by standardizing the type of materials that I'm willing to install to the customer. So what that means is our local shop, for example, has done paper patios. We do retaining walls, but guess what? We use one type of block for retaining walls only. There's no leeway. There is no, like, oh, I want a different color, I want a different shape, I want rounded, I want curved, I want different size, I want different caps. That doesn't happen. It's one type of block, and 98% of people are just fine with it. It's a middle of the road price, middle of the road design. It works for 98% of projects, and most customers are happy with it. Same thing with paver patios. We install big paver patios, and we've done projects that are 70, $80,000 of just installing pavers and driveways. And guess what? Same paver, same color, same design. We never, ever change it. And it's the same exact thing every single time. And it's easy to sell because we can show lots of pictures. And every time people see paver patios on our Facebook, on our social media, it's the exact same type. And everyone likes it. 98% of people are just fine with it. But if they want some porcelain, they want some sort of tile and slate that we've never installed. We're not touching it. And we learned the hard way. I still remember a project that was about 60, $67,000, if I correctly. Took us like three months. Because this type of paver that we were installing these massive slabs of porcelain or whatever this it was, I never. I never was on the project, but I heard about the project because it dragged on for months due to the fact that we didn't really know how to install these massive slabs. But furthermore, like, it was hard to get the product when we ran out. We had to wait weeks to get it on site. And then we ended up having to hire a subcontractor because we got so far behind on the job. We need to get other jobs done, and we had to bring a subcontractor in. We lost. I mean, I wouldn't say we lost money on it. But we definitely didn't make a lot of money for the amount of headache that that massive project entailed. How could we have fixed that? Just not accepted the porcelain. Just say, look, we got the one type of block that we always use and this is what we're going to stick to. And for us, like I said, same color, same design and same product every single time for pavers, same thing for walls. So you can get massive, complex type of services. Excavation. I've seen service, I've seen companies do it the same way. Pools, tree services be like, look, these are the only type of things we're gonna do. Here's the boundaries and stick to it. And if you have options for customers, it causes them to have option fatigue. They start to wonder. It's like when you go to McDonald's, you have like a thousand different options, all the menu and everything. And it gives a perceived value of cheap because there's so many different options. Whereas you go to a five star restaurant, you're like, hey, here's the three entrees. Choose one and you're paying ten times as much. But it's a premium service that is going to really get focused on a few dishes and in your service based business, stop trying to be the McDonald's and wonder why people want discounts. It's because you're offering everything. Like, yep, we do everything. We do cheeseburgers and salads and we do cookies and we do ice cream. Like you're trying to do everything in your business. Stop trying to do that. Be the five star restaurant that can offer a premium product, a few select services and go and have really good margins. That's how you double your profit very quickly. But I know for some people they're like double profits. Yeah, right. How is that going to happen? Let me walk you through before we end this video, how you're actually going to double your profits using the simplification and standardization of services in your business. The first is that the level of skill that's going to be required for an employee to start with your business is going to be less. Therefore, not only is their starting wages going to be able to be less, but also they're going to become profitable sooner for the business after the training process is over. Also, another reason you're gonna double your profits is because every single time you don't use all the materials on a project, you can warehouse them at your place of work, at your office, at your shop, and use them on the next job because you know it's gonna be the exact same product, it's gonna be the exact same design, it's gonna be the exact same color of paver or wood or block or type of boulders. Like when we did boulder walls back in the day, only one type of boulder. We didn't have the 15 go to the quarry and start picking out with the customer. Same thing as plants. Like look, if it's not in These list of 20 plants, we're not installing it. And we got really, really good at those 20 plants. And so those materials that you use on a project, if they are not fully used, which they never are, you're always going to have some level of waste or material that is overage on a job. But you can now reuse that within a couple of weeks. As long as you're doing the same type of service, same type of product being installed at every single job. Another reason why you'll double your profits using simplification is because you're going to be less prone to people leaving the business and putting you in jeopardy and the business in jeopardy. Like what happened to me with my manager with the artificial turf. Because it's a very nerve wracking thing to have an employee in a position where if they left, it would put the business in shambles. And I did that. It was my fault. I did that to myself and my business by building a division and a service based around one individual. And when they left, that whole division had to leave and we had to crush down and simplify the business. And that's horrible. That's hard. And you don't want to have handcuffs to any person. And that shouldn't includes you as the owner. The business should not be handcuffed to you, making sure if you're not there that everything falls apart. And if you don't have your knowledge and your sales ability, then the business is going to fall apart. It needs to run on systems and it's a whole lot easier to systematize simple than it is to systematize complex. And the last reason why you will double your profits by using simplification is because the profit margin will become more predictable. You're not going to have jobs where you crush it. One day you whipped budgeted hours and the next day you just like lose your shirt on a job. It'll take out the big high highs and low lows and make it more of a predictable profit margin. Simply because you're going to be more accurate on how much materials used, you're going to be more accurate on how many budgeted hours and estimated labor hours are going to be required to get the job done. You're just going to be overall more accurate on those jobs. When it comes to scheduling, no longer we have to have massive buffers between projects because you don't know how long it's going to take. And you don't have to plan for unexpected delays of not knowing with material is going to show up or not be, you know, things that go wrong on a job site that will happen less. And therefore, even when it comes to scheduling, the predictability of your business will improve. When you're able to have a simplified service that is repeatable, you can keep doing over and over and over again and that always leads to more profit. Predictability leads to a higher profit margin business. It's better for scheduling, it's better for ordering materials, it's better for finding labor, and overall it's gonna be better for your customers because you're gonna be able to know six weeks in advance the exact day that you're showing up. Why? Because you don't have to always add in all these buffer times to projects that are one off. And custom. This and custom. I don't like custom. I like high profit margin and custom. There's not a lot of money in custom. Custom makes great money. But it also is very, very hard to systematize because you're never doing the same thing the same way. And every single time, it's always, every single project is different. And at the end of the day that reduces profit margins. Now, I told you today about one time when I made a mistake in my business, but click this video here for the most recent massive snafu that I did in business. And hopefully you can learn from my mistakes because this one cost me over $100,000.